4 ms·

The DOW is a very poor indicator of the economy, it's just 30 "chosen" companies that somehow represent the whole US market. You're talking about precision and

The DOW is a very poor indicator of the economy, it's just 30 "chosen" companies that somehow represent the whole US market. You're talking about precision and you use one of the most derided economic metrics.

addicted 8y ago
Also the DOW constantly drops underperforming companies and replaces them with better ones. Further it would be interesting to see the Dow ex Apple.
darkerside 8y ago
You're not wrong about that, but I don't think it disproves my point at all. What value exactly are you going to get from predicting recessions within a two year window?
- Latteland 8y ago
  It does kind of poke a whole in your argument because the dow drops companies that aren't growing. So when it actually down there's a tremendous change. Otherwise they drop companies that are hurting, like ge.
- fullshark 8y ago
  A lot of people don’t even have 3-4 month expense savings in case they lose their jobs. Knowing a recession is coming at some point in next 4 years would help them.
  - null000 8y ago
    A pretty significant portion of those people lack savings for reasons other than choice (and I'd wager a significant portion of those who do lack savings because they just can't be bothered probably won't bother if there maybe might be a recession eventually, probably perpetually convincing themselves they can just put money into savings later)
  - vowelless 8y ago
    What can people do to prepare for a recession in the next 6 years?
    - fullshark 8y ago
      Without knowing anyone's individual situation it's hard to answer, but at the very least you should have 3-6 months expenses in a money market / savings account. You don't want to be in situation where you are forced to liquidate assets at below market prices.
      - jessaustin 8y ago
        But that's always the case, not only when the executive implements new tariff policy. Predicting a recession in the next decade is like predicting a sunrise tomorrow morning.
        fullshark 8y ago
        Sure it's always the case but not everyone does it. Most personal finance advice is based on the assumption that recessions are inevitable and people should prepare for them, in this case especially if they are likely to occur within 4 years. I'm not advising timing the market, several illustrative arguments in this thread showing how it can not pay off, especially if selling is a taxable event.

addicted 8y ago

Also the DOW constantly drops underperforming companies and replaces them with better ones. Further it would be interesting to see the Dow ex Apple.

darkerside 8y ago

You're not wrong about that, but I don't think it disproves my point at all. What value exactly are you going to get from predicting recessions within a two year window?

Latteland 8y ago
It does kind of poke a whole in your argument because the dow drops companies that aren't growing. So when it actually down there's a tremendous change. Otherwise they drop companies that are hurting, like ge.
fullshark 8y ago
A lot of people don’t even have 3-4 month expense savings in case they lose their jobs. Knowing a recession is coming at some point in next 4 years would help them.
- null000 8y ago
  A pretty significant portion of those people lack savings for reasons other than choice (and I'd wager a significant portion of those who do lack savings because they just can't be bothered probably won't bother if there maybe might be a recession eventually, probably perpetually convincing themselves they can just put money into savings later)
- vowelless 8y ago
  What can people do to prepare for a recession in the next 6 years?
  - fullshark 8y ago
    Without knowing anyone's individual situation it's hard to answer, but at the very least you should have 3-6 months expenses in a money market / savings account. You don't want to be in situation where you are forced to liquidate assets at below market prices.
    - jessaustin 8y ago
      But that's always the case, not only when the executive implements new tariff policy. Predicting a recession in the next decade is like predicting a sunrise tomorrow morning.
      - fullshark 8y ago
        Sure it's always the case but not everyone does it. Most personal finance advice is based on the assumption that recessions are inevitable and people should prepare for them, in this case especially if they are likely to occur within 4 years. I'm not advising timing the market, several illustrative arguments in this thread showing how it can not pay off, especially if selling is a taxable event.