Market Crash 2018????

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Tomanyiron
Posts: 4973
Joined: Mon Apr 26, 2010 6:39 am

Re: Market Crash 2018????

Post by Tomanyiron »

Octjan2 wrote:Why do I keep hearing comparisons to 2008??? Is the entire banking system collapsing? Did I miss that on CNN, CNBC, etc.
At this point in 08 you didn't hear it from those "Fake News" networks neither :lol: :lol:
But I'm not ready to except that kind of scenario myself. But my gut tells me it's going to get worse before it gets better.
History Does Not Repeat, It Rhymes.
Ernest Hemingway in The Sun Also Rises offered important insight into debt.
Bill and Mike are talking:
Mike: “Frightful blow … when I went bankrupt.” :?
Bill: “How did you go bankrupt?”
Mike: “Two ways, Gradually and then suddenly.” :shock:
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Tomanyiron
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Joined: Mon Apr 26, 2010 6:39 am

Re: Market Crash 2018????

Post by Tomanyiron »

Octjan2 wrote:Why do I keep hearing comparisons to 2008???
Well here's another one for you Octjan, The ‘Godfather’ says it's more like 1987. https://www.marketwatch.com/story/godfa ... op_stories

What triggered the 1987crash?
"Even in hindsight, it’s hard to pinpoint. A few proposed reasons include: a five-year bull run growing weary, stock prices looking too expensive, the economy slowing, inflation rising and investors getting pretty cocky."
"A good decision is based on knowledge and not on numbers." Plato
"Perfect numbers like perfect men are very rare." Rene Descartes

Octjan2
Posts: 332
Joined: Thu Feb 25, 2016 8:01 pm

Re: Market Crash 2018????

Post by Octjan2 »

I don’t think this is the big one. Don’t get me wrong, it is coming but not now. Rates are still way too low historically. The Federal funds rate historically averages over 6%. It is currently at 2.25%. In the early 80’s it was over 20%. There is still plenty of easy money to be made before we crash. I wouldn’t underestimate a big recovery before year’s end. Companies are getting ready to buy back stocks, we are entering a good time of the year to invest, and I think stocks will rise after the mid terms regardless of the outcome due to the uncertainty leaving the market. If you were lucky enough to miss this downturn and are still sitting scared in G or F you may be missing some easy money. I may be wrong but we will see. I don’t see any benefit to being in the F fund. This fake market is so skewed that bonds and stocks are moving in tandem for the most part. If the bonds do well stocks do better. Yes, you won’t lose as much on a downturn, but if bonds do well, which means treasuries are dropping, stocks are also probably going up 5-10x more. It used to be the other way around. People bought bonds as stocks dropped. We will eventually get back to that but it is going to take the crash first.

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Tomanyiron
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Re: Market Crash 2018????

Post by Tomanyiron »

Octjan, I like what you said. Let me ask you this, the seasonals are in C-rackerjack fund, and it is outperforming. What is your reason for staying in the S-lower fund?
"A good decision is based on knowledge and not on numbers." Plato
"Perfect numbers like perfect men are very rare." Rene Descartes

Octjan2
Posts: 332
Joined: Thu Feb 25, 2016 8:01 pm

Re: Market Crash 2018????

Post by Octjan2 »

I jumped into the S fund after it was already down 5% from all time highs (thought it was a good buy at the time but was wrong). Little did I know it was going to drop another 8%. I think small caps still have the potential to outperform the rest of the year with tariff threats continuing to loom. I also don’t like to sell a fund until I have recouped my 8% loss especially when I think stocks will recover. If some black swan pops up that makes me feel as though we may be headed for a recession (10 year going up at an uncontrollable pace) I may take my loss and go to G.

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Aitrus
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Re: Market Crash 2018????

Post by Aitrus »

Just a small tidbit from Paul over at TSP Allocation (he is an authority on business cycles as they relate to TSP and has a great primer on the subject):

"I certainly expect that we will see more volatility this year than we did last, which was extraordinarily smooth. It is almost as if so many outrageous things happened in 2017 that nothing mattered and everything which typically would have caused the typical 5-10% declines was ignored.

As at the beginning of every year, I will confidently predict we will see four or five 5% corrections, and probably a 10% correction at some point (because that happens pretty much every year). With history as a guide, I am convinced the timing of those corrections isn’t predictable, and that the market will recover and move higher in each case within a matter of weeks. In 75% of years in which the market goes up, the market drops below break-even during the first quarter."

Source: http://www.tspallocation.com/tsp-investing-2018/

The S&P 500 went from the high of 2,925.51 on 3 Oct to a low of 2,641.25 on 29 Oct. That's a 10.76% drop. That means that thus far this has been an entirely normal correction.
Seasonal Musings 2022: viewtopic.php?f=14&t=19005
Recommended Reading: http://tspcenter.com/forums/viewtopic.php?f=14&t=13474
"It's not what happens to you, but how you react to it that matters" Epictetus

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Fund Prices2024-03-28

FundPriceDayYTD
G $18.15 0.05% 1.05%
F $19.08 -0.06% -0.74%
C $82.21 0.11% 10.55%
S $82.43 0.30% 6.92%
I $42.57 -0.24% 5.95%
L2065 $16.38 0.02% 8.37%
L2060 $16.39 0.02% 8.38%
L2055 $16.39 0.02% 8.38%
L2050 $32.73 0.01% 6.95%
L2045 $14.91 0.02% 6.58%
L2040 $54.38 0.02% 6.22%
L2035 $14.34 0.02% 5.79%
L2030 $47.67 0.02% 5.38%
L2025 $13.15 0.03% 3.43%
Linc $25.61 0.03% 2.82%

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