Jackson Jambalaya

Time to hedge your portfolio.

I decide? I decided to look at a chart going back to 1950. I then decided that a diversified portfolio will hold up over time. It's dull, but I prefer dull success over exciting failure when it comes to the money I need to live on.

You can't be making investment decisions based on one chart or one asset class.....that is dumb as dirt. Like putting all your money in one stock or bond...ridiculous.

If you don't invest your funds in over 15 to 20 totally different asset classes that are non-correlated, you will never make money. The market will do fine. People allow emotion to get in the way.....they buy high and sell low all the freaking time!! Use math...not emotions!!

It's dull, but I prefer dull success over exciting failure when it comes to the money I need to live on.

Well put.

Buy an ETF like SPXU which trades at 3X the inverse of the S&P. It's a hedge against the downturn. Your stocks go down with the tide, with decline offset buy the increase in the SPXU.

Thank you, Iron Ghost.

I'm not trying to be a smartass, but can you really look at post WWII America success as long term planning for today? (I.E., "looking going back to 1950"?)

I guess I am asking do you see merit in taking that view of markets elsewhere?

Good question, 2:07. I was asking if of myself when I looked back at the S&P 500. Of course I'm nervous right now, like everyone else, but I'm optimistic that we're not revisiting the Dark Ages. We're not isolated from the global economy, and the global economy will be strong as a whole. It's not hard to see what's wrong with capitalism, but there's no better alternative. I laugh when I see journalists quoting someone saying "Marx was right." Sure Marx was right about the problems of capitalism, but he was terribly wrong in thinking he could come up with something better. We're not going to get a stable economy, but that's a good thing. Meanwhile we have a lot of simple pleasures that cost little to nothing.

Not having a stable economy is a 'good thing'? The only simple pleasure I know of that costs little to nothing is standing on the end of a pier with a string and a worm. Can you mention others for the unitiated among us?

TY Burke, I am one of those people who knows enough to be cautious, but is outside of his wheelhouse enough to possible get scared over things that might not be a concern...i.e. the above SPXU rec.

I know very little about those products, so I really have no opinion, but I read about them and think, ok...what if we all just lever up again...(and I'm not impugning leverage or etf's; this is more of an indictment of my laziness in learning about how they work). But 3x leverage that a dipshit like me can get in scares me.

I get your point with the fear mongering, it get old, but it has nearly caused me to flush the dream of retiring on Saba. Ha.

OK, you've got two rapid one-year delcines in the last ten years followed by a more regular slow growth. Both declines are based on specific circumstances.

The 2000 tech bubble burst finally caused all the day-traders to start looking at income generation, not revenue generation, as the basis for valuing stocks. Many companies were extremely overvalued based on price/earnings at that time and a correction was long overdue.

The 2008 housing bubble and mortage backed securities collapse also threw us into a major recession. You had a substantial amount of people flipping houses like the day-traders were flipping stocks back in the late 1990's. Again, stocks were being valued based on both flawed (the mortage backed securites were really junk, not AAA) and incorrect (predicted future growth stalled from the recession).

The current retreat is from the uncertainty surrounding sovereign debts of the United States as well as the European Union. It is too early to tell what is going to happen and if the risks of default are properly priced into asset values.

A lot is going to depend on what Congress does in a couple of months. If a bipartisan plan can be agreed on to increase revenues and decrease spending enough to stabilize our debt levels then I think the market will increase substantially. On the other hand, of partisan bickering grinds the negotiation process to a halt I think you will see a further retreat.

What you decide to do with your investments depends on how likely it is that the United States and/or European governments will continue to spend on borrowed money until the well runs dry and everyone is put in the same situation Greece was but with nobody left to bail anyoune out.

With the dumbasses we have in congress, I put the odds at 50/50.

There is no need for revenue increases. Prove otherwise.

8:31
it's only in retrospect that one can say "why" something happens. It seems obvious now but not so much then. Ten years after the next big bear folks will say, "the fed created a bond bubble trying to stimulate the Econ; and created run away inflation inadvertently". Or something like that.

Burke, how much time do you have? If your looking at a 60 year chart for guidance you better not need any money in the next 60 years. Bear/bull cycles last 14-18 yrs on avg. This bear started in 2000. This could be far from over.

" not isolated from the global economy"?

It's global economic theory nonsense and global economic interdependence rather than a focus on self sufficiency and a loss of focus on INDIVIDUAL ( as in a single person) freedom that IS the problem.

" Too big too fail" ( didn't we call them monopolies once upon a time ? OH, forgot, "diversify" and you aren't a monopoly...snickering about how euphemistic jargon becomes reality )IS part of the problem as it was in the 1300s. So a new "Dark Ages" is hardly a far fetched concern.

The global economic theorists thought if we were all economically interdependent we'd all join hands and sing Kumbaya in a capitalistic, worldwide Utopia. After all, money does buy happiness and is all the matters. Religion, thirst for power,scarcity of resources, greed,ego, pride,anger,insanity play NO role in the human experience...only MONEY.

Thanks for letting us see how all the INDIVIDUALS on the S&P are doing. If I'm to be at the mercy of the new monarchs, it's good to know which ones to back.

And , please, small business owners, please try to understand you are simply knights and as much at the mercy of the princes and kings and the rest of us.

That those who claim to be " conservative" have totally lost the concept of individual freedom appalls me. AND ,if any of you are entertaining the notion of explaining how corporations are owned by individuals, let me ask you how much stock ownership it takes for a single person to have an impact on a corporation? Please give me an example of how you , as a individual shareholder of say, GE, affected GE's policy or had a say in executive bonuses? HMMM? Indeed, how many institutional stock holders own enough stock to impact decision making?