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Right, because the market has never behaved irrationally. We've got student loan payments resuming soon, a steady stream of commercial real estate mortgages th

Right, because the market has never behaved irrationally. We've got student loan payments resuming soon, a steady stream of commercial real estate mortgages that are refinancing at higher rates for the next year or two, a population who's wages are still on average lower than they were pre-pandemic after adjusting for inflation, supply chain whip-saws as supply/demand continues to over/undershoot in some sectors, the federal reserve saying another couple of hikes are in order this year, and the boomers continuing to age into mass-retirement. You want to dollar cost average into the market fine, but I wouldn't take out any margin loans for at least the next year.

voisin 3y ago
It isn’t irrational if the concerns you’ve mentioned makes the market think the fed will have to drop interest rates again sooner rather than later. At this point the market is essentially a drug addict that just got a shot of Narcan and rather than atone for its sins, has gotten excited that it’s going to live long enough to get at least one more hit. There’s no discipline, no long term, fundamental thinking. Everyone is (and has been for a few decades) just another ape from r/WallStreetBets, even if he or she is wearing a suit and goes to work in a fancy office tower.
- scottLobster 3y ago
  Oh yeah, but the market's been predicting the fed will be "forced" to drop interest rates for about a year now, base solely on the taper tantrum from several years ago. Hasn't happened yet. What the market seems to be conveniently ignoring is that a world where the Fed allows itself to be "forced" into lowering rates to near-zero again is a world where the Fed largely ceases to be relevant. So the Fed is, IMO, going to keep rates at least where they are if not higher if for no other reason than self-preservation. They'll have to see complete market capitulation before they'll consider lowering again. Besides, one of their mandates is price stability. If they lower rates again, guess what happens? More inflation, and then they have to raise rates again because Congress certainly isn't capable of doing anything about it.
temende 3y ago
You conviniently left out all the good parts of the economy: unemployment is at all-time lows, inflation is down (but still not at 2%), consumer spending is at an all-time high. We obviously could still have a recession in the future but (a) we're not in one right now and (b) the economy has done much, much better than people were expecting this time last year.
- TeeMassive 3y ago
  Employment numbers are skewed because of people who wouldn't normally work working more to make ends meet and debt keeping on rising and inflation slowing but still unsustainable. Under the hood these numbers are not good.
  - douglasisshiny 3y ago
    Can you elaborate, maybe point to a data source on this? I'm not exactly sure what you're trying to say. The prime age labor participation rate isn't out of line with historical trends: https://fred.stlouisfed.org/series/LNS11300060 https://fred.stlouisfed.org/series/LNS11300060 Edit: Also wanted to throw this in: Average weekly hours of all employees https://fred.stlouisfed.org/series/AWHAETP https://fred.stlouisfed.org/series/AWHAETP
  - shagymoe 3y ago
    And probably also low because every unemployed person drops off the list after 6 months AFAIK.
    - 111111IIIIIII 3y ago
      Yes, but you aren't supposed to know that.
      - lotsofpulp 3y ago
        Oh shit, someone should tell the government to take these webpages down then. https://www.bls.gov/news.release/empsit.t15.htm https://www.bls.gov/news.release/empsit.t15.htm https://fred.stlouisfed.org/series/u6rate https://fred.stlouisfed.org/series/u6rate https://www.bls.gov/charts/employment-situation/civilian-labor-force-participation-rate.htm https://www.bls.gov/charts/employment-situation/civilian-lab...
riku_iki 3y ago
I am also wondering how government will be refinancing its debt with high interest rate.
- ec109685 3y ago
  It doesn’t need to refinance its debt. It pays what is necessary in interest payments.
  - riku_iki 3y ago
    yeah, but old debt has due date, and as gov doesn't have interest to reduce debt, they will need to take another debt to pay old debt. Maybe refinancing is not right word here.
Spooky23 3y ago
It’s annoying that the WSJ and others have political axes grind in constantly predicting doom and gloom. They’ve seriously been predicting recession around the corner for 3 years. Interest rates surprises suck. But the market purges the shit companies and adjusts. The economy was doing fine back in 2005 when rates were high too.
quags 3y ago
Margin is always a bad idea in my opinion. You can loose money in the stock market with out margin but no more than you paid. DCA makes sense to thee average investor. Unless you feel the market is insanely overvalued, keeping auto invest on makes sense. We have not retested most highs and if you had DCA you bought while things trended down in 2022 and bought in 2023 as it came up and are in a good position.
ttymck 3y ago
Why is boomer retirement a negative implication for economic activity? I can only think of good side effects.
- paulryanrogers 3y ago
  Perhaps a change in employment statistics? If a large cohort retires in a narrow window of time then numbers may spike until they all age out of the usual range.
  - ttymck 3y ago
    What numbers?
ChatGTP 3y ago
Once I bet against the stock market, I was miserable and lost a lot of money. A lot. I could’ve been a good part of the way to retirement now. So I hear you, but one must learn stonkz go up…even if you don’t like it.
lamontcg 3y ago
Inflation has also hoovered up nominal wage gains into fat corporate profits more or less confiscating all of that money. Consumers are about to come under a lot of stress. And interest rates aren't coming down any time soon, I just posted an article from a pair of Fed economists that predict rates being held high until 2026 (I expect we hit a recession which hurries that up, but nothing is going to hurry that up short of a recession).
shric 3y ago
> You want to dollar cost average into the market fine, but I wouldn't take out any margin loans for at least the next year. Six months ago I borrowed 3 years of my gross income (principal and interest, not margin) to buy more low cost index funds. The loan period is 10 years which was the max available. I fully intend to pay it off over 10 years, no faster. Wish me luck!

voisin 3y ago

It isn’t irrational if the concerns you’ve mentioned makes the market think the fed will have to drop interest rates again sooner rather than later. At this point the market is essentially a drug addict that just got a shot of Narcan and rather than atone for its sins, has gotten excited that it’s going to live long enough to get at least one more hit. There’s no discipline, no long term, fundamental thinking. Everyone is (and has been for a few decades) just another ape from r/WallStreetBets, even if he or she is wearing a suit and goes to work in a fancy office tower.

scottLobster 3y ago
Oh yeah, but the market's been predicting the fed will be "forced" to drop interest rates for about a year now, base solely on the taper tantrum from several years ago. Hasn't happened yet. What the market seems to be conveniently ignoring is that a world where the Fed allows itself to be "forced" into lowering rates to near-zero again is a world where the Fed largely ceases to be relevant. So the Fed is, IMO, going to keep rates at least where they are if not higher if for no other reason than self-preservation. They'll have to see complete market capitulation before they'll consider lowering again. Besides, one of their mandates is price stability. If they lower rates again, guess what happens? More inflation, and then they have to raise rates again because Congress certainly isn't capable of doing anything about it.

temende 3y ago

You conviniently left out all the good parts of the economy: unemployment is at all-time lows, inflation is down (but still not at 2%), consumer spending is at an all-time high. We obviously could still have a recession in the future but (a) we're not in one right now and (b) the economy has done much, much better than people were expecting this time last year.

TeeMassive 3y ago
Employment numbers are skewed because of people who wouldn't normally work working more to make ends meet and debt keeping on rising and inflation slowing but still unsustainable. Under the hood these numbers are not good.
- douglasisshiny 3y ago
  Can you elaborate, maybe point to a data source on this? I'm not exactly sure what you're trying to say. The prime age labor participation rate isn't out of line with historical trends: https://fred.stlouisfed.org/series/LNS11300060 https://fred.stlouisfed.org/series/LNS11300060 Edit: Also wanted to throw this in: Average weekly hours of all employees https://fred.stlouisfed.org/series/AWHAETP https://fred.stlouisfed.org/series/AWHAETP
- shagymoe 3y ago
  And probably also low because every unemployed person drops off the list after 6 months AFAIK.
  - 111111IIIIIII 3y ago
    Yes, but you aren't supposed to know that.
    - lotsofpulp 3y ago
      Oh shit, someone should tell the government to take these webpages down then. https://www.bls.gov/news.release/empsit.t15.htm https://www.bls.gov/news.release/empsit.t15.htm https://fred.stlouisfed.org/series/u6rate https://fred.stlouisfed.org/series/u6rate https://www.bls.gov/charts/employment-situation/civilian-labor-force-participation-rate.htm https://www.bls.gov/charts/employment-situation/civilian-lab...

riku_iki 3y ago

I am also wondering how government will be refinancing its debt with high interest rate.

ec109685 3y ago
It doesn’t need to refinance its debt. It pays what is necessary in interest payments.
- riku_iki 3y ago
  yeah, but old debt has due date, and as gov doesn't have interest to reduce debt, they will need to take another debt to pay old debt. Maybe refinancing is not right word here.

Spooky23 3y ago

It’s annoying that the WSJ and others have political axes grind in constantly predicting doom and gloom. They’ve seriously been predicting recession around the corner for 3 years. Interest rates surprises suck. But the market purges the shit companies and adjusts. The economy was doing fine back in 2005 when rates were high too.

quags 3y ago

Margin is always a bad idea in my opinion. You can loose money in the stock market with out margin but no more than you paid. DCA makes sense to thee average investor. Unless you feel the market is insanely overvalued, keeping auto invest on makes sense. We have not retested most highs and if you had DCA you bought while things trended down in 2022 and bought in 2023 as it came up and are in a good position.

ttymck 3y ago

Why is boomer retirement a negative implication for economic activity? I can only think of good side effects.

paulryanrogers 3y ago
Perhaps a change in employment statistics? If a large cohort retires in a narrow window of time then numbers may spike until they all age out of the usual range.
- ttymck 3y ago
  What numbers?

ChatGTP 3y ago

Once I bet against the stock market, I was miserable and lost a lot of money. A lot. I could’ve been a good part of the way to retirement now. So I hear you, but one must learn stonkz go up…even if you don’t like it.

lamontcg 3y ago

Inflation has also hoovered up nominal wage gains into fat corporate profits more or less confiscating all of that money. Consumers are about to come under a lot of stress. And interest rates aren't coming down any time soon, I just posted an article from a pair of Fed economists that predict rates being held high until 2026 (I expect we hit a recession which hurries that up, but nothing is going to hurry that up short of a recession).

shric 3y ago

> You want to dollar cost average into the market fine, but I wouldn't take out any margin loans for at least the next year. Six months ago I borrowed 3 years of my gross income (principal and interest, not margin) to buy more low cost index funds. The loan period is 10 years which was the max available. I fully intend to pay it off over 10 years, no faster. Wish me luck!