Dow 37,000 New all time high

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peakbagger

Minister of Fire
Jul 11, 2008
8,835
Northern NH
Its been interesting watching the headlines on various major internet sites where the majority of the headlines are to get out of stocks immediately and that had been the case for the last 18 months. A broken watch is right twice a day but it is surprising the how the big names that are usually wrong get the press. Today the Dow set the all time record closing and broke 37,000 for a period of time. anyone watching the headlines for the past year and half would be sitting out on the sideline in money market funds or bonds and missing out on a pretty good run. Sure it is probably going to go down but look at the charts and the long term trend says you cant count stocks out. I handed off my investments to Vanguard PFS to manage about 5 years ago and they have done me well and have stuck with the same strategy. The main thing their advisors seem to do is take phone calls from clients that are reading the hype headlines and convincing them to stick with the long term plan.

Generally, the fed is very careful not to mess with the market in an election year and laid out today their plan for the next year. Odds are good that the Saudis are going to orchestrate an oversupply event soon to drive the US oil drillers out of the market again but that usually means low oil prices for a year or so before they go back up again.
 
With all the......external pressures being exerted against our economy is heartening to see us collectively flipping them of.

"The market is only this hot because of the free money" guess not
"We need to cool the economy down" consumers "hold my beer, i need both hands to buy stuff"

Our "experts" don't seem to be very good from my vantage point.
 
I am becoming more confident in my opinion that media and is out there to get clicks. Even the experts they bring on are not impartial. All the talk of a recession i never saw evidence's that it was heading in that direction. Sure I saw inflation right labor markets but all the data suggest lots of personal wealth was accumulated during the pandemic. Houses kept selling at higher and higher prices and then the IRA passed. Maybe I’ll log in and check my retirement accounts. I’ll probably still be disappointed.
 
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At the beginning of the year the cry was to get out of stocks, a recession is ready to happen. By mid-year it was get out of stocks, bonds are it. Now this silly stuff? Who's writing this stuff, Jim Kramer?

At this point I don't really care. Almost all of our stocks are dividend stocks. We are not market driven.
 
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The question I always ask myself in this situation is "what's the alternative?". Is there actually better returns elsewhere, I think the answer to that for the average retail investor is "no".

I guess what I'm watching for is large events that could upset the balance, and cause a massive withdrawal of capital from the stock market. War; Ukraine, Israel, and Taiwan stand out here. Consumer debt crisis; every western nation applies. Canadian housing bubble bursting 2025 to 2027 as all the low rate COVID mortgages get renewed at triple the interest rates (not sure if this will be be enough to cause a global phenomenon). Energy prices, large swings either way could have a destabilizing effect.

I think 2024 will be good, personally my investments accounts sit mostly as cash right now, I intend to have the majority of this reinvested by the end of January.
 
In an inflationary period, I don't think investments that give you a fixed return are the best place to be. That's not saying I didn't take advantage of the Fed's raising of rates to squeak out a bit more from cash reserves, its just that I think the stock market is where you want to be for investments.

If the cost to make products goes up, corporations will raise their prices. This leads to higher earnings. Higher earnings command a higher share price.

Long term, if globalization is dying, lots of business will be moving their manufacturing back here or to places that they have more control over production. I'm not convinced there are enough people to do these jobs and that will mean every worker is fought over. This will increase wages and that will increase inflation.
 
Short term, the markets will go up and down. This is often irrational, emotional behavior or even algorithm based institutional investors. In the long run, markets will creep up.
 
Something else to remember, most mutual funds do their distributions this week. Many folks have switched to ETFs, including myself, but I still have several funds including funds in HSAs that only offer mutual funds.

I am not sure why my HSA doesnt offer ETFs but they offer Vanguard mutual funds with minimal fees so I am not complaining compared to what a lot of the employer default HSAs offer.
 
At this point I don't really care. Almost all of our stocks are dividend stocks. We are not market driven.

I agree 100% with set-it-and-forget-it for good dividend stocks.

I left Colgate-Palmolive (CL) in 1999. Had some stock. Set it up for dividend reinvestment and let it sit. Pays a nice quarterly dividend after even with cashing out some 10 years to pay for half of the house on OBX.
 
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The question I always ask myself in this situation is "what's the alternative?". Is there actually better returns elsewhere, I think the answer to that for the average retail investor is "no".

I guess what I'm watching for is large events that could upset the balance, and cause a massive withdrawal of capital from the stock market. War; Ukraine, Israel, and Taiwan stand out here. Consumer debt crisis; every western nation applies. Canadian housing bubble bursting 2025 to 2027 as all the low rate COVID mortgages get renewed at triple the interest rates (not sure if this will be be enough to cause a global phenomenon). Energy prices, large swings either way could have a destabilizing effect.

I think 2024 will be good, personally my investments accounts sit mostly as cash right now, I intend to have the majority of this reinvested by the end of January.
Do Canadians buy a lot of variable rate mortgages?

I expect 20% growth in 2024 because it’s an election year and the party in power needs help. Lots of fake reasons that this could happen including oversupply of oil, interest rate cuts, end some wars, covert “reasons”, etc.
 
Do Canadians buy a lot of variable rate mortgages?

I believe I read somewhere that the US is the phenomenon in the world with 30 year fixed.

I’m also a firm believer in getting a good index fund and letting it sit. I have my entire Roth IRA sitting in VFIAX (S&P 500 vanguard index fund) and it hasn’t done me wrong yet.

You can’t time the markets. Just let it sit and ride and over the long term you will be golden pony boy
 
Do Canadians buy a lot of variable rate mortgages?

I expect 20% growth in 2024 because it’s an election year and the party in power needs help. Lots of fake reasons that this could happen including oversupply of oil, interest rate cuts, end some wars, covert “reasons”, etc.

Not normally, during COVID I think about 50% of mortgages were variable though. Canadians as a whole are somewhat financially illiterate, many don't understand the difference in a variable vs fixed rate, and only look at the payment at the time of signing.

We don't have 20+ year fixed rate terms like the US does. 5 years is the standard term, you can go as long as 10 years, but that term is penalized by significantly higher interest rates. 5 year is generally the sweet spot for the best rates.

For instance I have a 25 year mortgage on my house, we are almost 7 years into it. My first 5 year fixed rate was at 2.69%, I remortgaged 6 months early 2 years ago for another 5 years at 1.69%. I'll have to remortgage probably 3 more times if I carry the mortgage to term.

You can change lenders in this process, but that requires re-applying for financing, most people (like I did) remain at the same bank. For me it was a 15 minute phone call and a couple e signatures on my computer at home to renew for 5 more years at a new rate.

This is where this gets scary though, the average home price in Vancouver and Toronto is well over a million, imagine buying a home and financing the bulk of that at 1.5% (like many people did during COVID) and now 5 years later they go to renew except the rate is 6%. That's a huge payment shock to absorb, most families can't cope with that. Which is what I was referring to. The Canadian housing market is considered top 1 or 2 housing bubbles globally right now, this could cause it to pop, as housing de-values in the face of mass foreclosures, much like the US did in 2008.
 
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I believe I read somewhere that the US is the phenomenon in the world with 30 year fixed.

I’m also a firm believer in getting a good index fund and letting it sit. I have my entire Roth IRA sitting in VFIAX (S&P 500 vanguard index fund) and it hasn’t done me wrong yet.

You can’t time the markets. Just let it sit and ride and over the long term you will be golden pony boy
An ARM seems like an obvious solution. We bought our first home in 1984 during raging inflation. Interest rates were at 12+% and ARMs were common. We got a 5 yr ARM that had an option to refi at a lower interest rate which we did 2 yrs later. I think we started out at around 7.5% and refi at around 4.5%. After the 5 yr. term we financed for a 30 yr mortgage at a lower rate still.