I don’t give investment suggestions @JohnN. ….. :)
Just don’t like people throwing out a bunch of largely unsupported assertions in an attempt to shutter somebody else’s stated point.
As I said on another thread, be careful. The downturn could go on for a number of years. (But might not). Don’t think you know all the answers. Nobody does. I believe Chairman Powell is quite unpredictable. He’d make a good poker player because it’s hard to know what’s really going on in his mind. So, people making decisions based on what he says or what they think the FOMC may do are taking a big gamble.
One non-investment suggestion is to watch some benchmark funds that you think approximate your risk level. (Don’t have to own them.) Than see how your portfolio holds up against those benchmarks. If you’re doing a lot worse over time, that’s something to worry about, Being very conservative I use a number of conservative allocation funds for guidance: VWINX, TRRIX, PRSIX, ABRZX and AOK. And I keep an eye on the excellent PRWCX even though I no longer own it. Some really outstanding long-term conservative allocation funds (like PRSIX) are down double-digit this year. Tells you something.
Generally speaking I’d rather buy something that’s down 40% over one year than something that’s risen 40% over the same time. But it’s not quite that simple. You really need to look at the stock or fund’s longer term history as well as the nature of the investment.

Curious...do you think the technicals would indicate something like $95B coming off the CBs balance sheets and the impact on stonks, rate hikes and the impact of policy errors contributing to inflation continuning on and on....why do many think the fed will pivot anytime soon with inflation still running so hot (and even hotter in reality than what the gov't says it is)....that 4% 1year Tbill looks purdy good to me right now...Baseball Fan

@Baseball_Fan - I’m trying to cut through your rambling macro analysis. Would you please address some of the following questions? Best Wishes
“Curious … Do you think the technicals … ”
What technicals? Not everyone uses technical analysis. Please identify which “technicals” you watch and base your investment decisions on? I’ve tried to help out by listing a few common technical indicators below:
- Moving Averages
- Moving Average Convergence and Divergence
- Relative Strength Indicator (RSI)
- Bollinger Bands
- Volume
- Exponential Moving Average
- Money Flow Index
“ … would indicate something like $95B coming off the CBs balance sheets”
Over what period of time? Do you have a source verifying this will be completed within a definite time period? It took over a decade for the Federal Reserve to amass their bond holdings, beginning with the near depression that threatened the economy between 2007 and 2009.
“and the impact on stonks” (sic?)
Not all stocks are the same. Financials? Commodities? Growth? Domestic or foreign? Also omitted here is any reference to time frame. Do you mean by the end or 2022 or are your concerns related to further out (5-10 years)?
“rate hikes”
Why would you consider rate hikes to be bad for equities? Financials tend to do very well when longer term rates rise. It is true that the most speculative areas tend to suffer as the cost of borrowing increases. (However, many are already down 50-70% this year.) But it’s not as cut & dry as you would have us believe. Rates have been extremely low for many years now. Bound to rise some day. Yet you and many others have over that time invested in equities for the long term - even knowing rates would someday rise. What changed?
“the impact of policy errors”
That’s a sweeping assertion based it seems on conjecture. Please explain why that risk is higher now than in March 2020 (the covid related financial crisis) or March 2009 (the beginning of the last bull market). Policy errors can occur at any point in time. So can other negative factors like war, political chaos, natural disaster. As investors in companies we’re accustomed to accepting those risks.
“inflation continuing on and on … “
Says who? Do you have some psychic in mind who can forecast inflation years out?
“(Will) the fed pivot any time soon … ?”
What particular “pivot” are you referencing? After you explain that, please explain why an equity investor should base long term decisions on this ill defined hypothetical concept.
“inflation still running so hot”
That’s redundant as you referenced it above. Here you seem to prophesy inflation will remain “so hot” ? … There’s no definitive way I know of to confirm / predict the level of inflation 1, 2 or 3 years out. Shall we base our long term equity investment decisions on such speculation?
“even hotter in reality than what the gov’t says it is …”
Isn’t this something folks have long ragged about on this forum and elsewhere? There’s been numerous threads over the years examining the various inflation measures (there are several). So, you’re entitled to your prejudice on that point. But why do you find the discrepancy between your own numbers and what the Federal Bureau of Statistics determines to be of greater importance today than it was 3 years ago or 10 years ago?
“that 4% 1 year TBill looks puffy good to me right now”
Good. Glad you find TBills a good investment for your needs. Bear in mind that’s for just 1 year. Equity investors by nature are investing for much longer periods. Contemplate that if you harvest your 4% TBill a year from now, you might find that stocks in general have appreciated more than 4%. I don’t think it’s at all unreasonable to think they might. (Some I own move 4% in a single day.) In such case, you will have lost ground and possibly face buying in to equities than at a net loss. If inflation is running as “hot” as you think, why are you comfortable with just 4%?

Yields........a chart view
This is not a performance chart, but a percentage of change chart in yield. I've peeked at this periodically for a number of years......for the chart perspective.
The chart is set for YTD. You may double click the 178 box below the chart, enter a different number of days and ENTER key; OR right click the box and choose from the menu.
The yield on any date will be shown with "hovering" the cursor on top of a selected chart line.
Pillow time.
Catch

Back to Crash's original question in the thread title: I watched most of JG's webcast today, and he was asked in the question queue what he meant. The answer was kind of muddled, but he's basically in the D. Rosenberg camp that the Fed's liable to overshoot and disinflation is likely to come on relatively fast and strong ... but not necessarily right away.
I like the data he presents each time, but take his predictions with half a cup of NaCl. Sometimes he's right on, sometimes he's too bombastic about something and it leads him astray, and sometimes he's onto something sensible but just way early. Like when he predicted, a couple of years ago, a major bump up in T rates ... like we're into now.
The positioning of his flagship fund DBLTX appears to be another "way early" call. I'd stay away until longer duration T's start to show some moxie. It is worth remembering that after the GFC, his old TCW fund and the new DBL version were knocking it out of the park for quite a while.
Summary: he's well worth listening to if you don't take it all as gospel.

@hank- Absolutely not... I thought that I was very clear on that: just hold them until this whole thing turns around. There's nothing intrinsically "wrong" with either of them.

Thanks @Old_Joe. Point taken. Generally, paying less attention to the ups and down of a holding is a good idea. However, if I owned something that had shed 43% of its value in fewer than 9 months I’d find it hard to “forget” about it. That leaves just 57% of the original pot. It would take, by my math, a 75% increase from there just to get back to even.
I hope I did not suggest there’s anything intrinsically wrong with TRP. I’m not informed enough or smart enough to know whether that’s the case. It’s a dog-eat-dog business they are in. Lots of top-notch competitors. To the extent investors have grown more fee conscious / fee averse over the years (owing in great measure to superb informative forums like Mutual Fund Observer), older higher fee management firms may well be at a disadvantage against some of their lower cost competitors.

Yup, Schwab has a bunch of stuff to finish the integration with TDA. I'm *still* waiting for ThinkDesktop to be migrated so I don't need to use that for streaming quotes/active charting and then switch into the website to place orders/trade. Hope that migration happens soon b/c the StreetSmart 'platform' they offer in my view is horrible and reminds me too much of the old Options Express (who they bought) active platform which gave me fits 15 years ago...I refuse to use it.

@LewisBraham
Unfortunately this is not the ugliest and most dangerous "completely false" tale being pushed out there, but it reinforces the others. ie the "Deep State" has control of the Government and is consciously trying to destroy traditional values of hard work, Christianity and "Capitalism".
The statistic that always impresses me is the % of the nation's wealth in the hands of the top 1% ( or 2% or 5%) vs bottom 20%, and the fact that for the lower 20 to 50% of the population inflation adjusted wages have not changed in 50 years

The other contention - that the "IRA" is significantly inflationary - is kind of interesting to consider, given that it's $350 billion over ten years, compared to say the defense budget, which extrapolates from the current appropriation to about $8 trillion over the same time span.
The trick is to cherrypick just the things you don't like in the budget and hang an "inflationary!" sign on them, and avoid mentioning the things you like, even if they cost more.

"I think feeding hungry people who don't have enough to eat is more important that whether I pay a little more for something"
Well, I'm sure that many on this board would agree with that thought, but certainly not all. And, without getting into a political debate, over the years it's always been pretty obvious who the non-believers have been.

@LewisBraham has it right. I’d add that for as long as I’ve been following markets (25+ years) there’s been a “push / pull” between the notion that the economy might teeter into either (1) a deflationary spiral or (2) runaway inflation. A debate old as time. And not an inconsequential one. We came damn near deflation during ‘07-‘08 if we are to believe top Bush Treasury officials at the time.
I’ll agree with @Baseball_Fan if he’s saying the Fed (mainly Powell) have oversimplified the situation. I myself hope they’re not really glued to the notion of 2% constant inflation because ISTM a good way to muck up the economy and possibly throw us into a deflationary spiral. (Sounds like something “central planners” inside the former Soviet Union might have concocted as their prescribed economic officialdom.)
Someone commented elsewhere there is “no deflation”. May I suggest that depends where you look? Stocks in companies are an “asset” valued in dollars as are milk and houses. When you saw off 15-25% of their value in short order, that’s a form of deflation. In fact, the resulting “lost wealth effect” typically causes consumers to pull back on spending which could lead to deflation in other areas.
I’ve said before that the worst conceivable scenario for retirees would be (1) to loose a substantial portion of their invested assets during a deflationary collapse and than (2) be hit with double-digit inflation shortly thereafter.

He would buy long-term Treasuries because the deflation risk is much higher today than it has been for the past two years
He owns European stocks and would buy emerging markets once the US dollar breaks below its 200-DMA

Don’t understand his logic either.

August CPI came in 8.3%, not much improvement. While gasoline price is down but food and others went up. Consumer spending remains strong. Core-CPI went up to 6.3% from that of July’s 6.1%.
Today, 10 years treasury moved up to 3.431% and the market falls.

Interesting discussion. I’m as confused as anyone. No real answer except be careful. Don’t throw your entire wad at this thing because it could last years. Technically the S&P isn’t even in a bear market yet - if 20% down is the criteria.
I’ve liked alternatives for some time as an (albeit expensive) replacement for equity and bond funds in a portfolio. The ones I own are down, but as a group they’ve held up better than stocks or bonds. Slow is the word if adding risk (ie buying equities or real assets). Nobody knows how long the market drop will last or how far it will go. A good start to knowing that might be to try and get in the head of Jay Powell. He’s holding most of the cards at the moment, though many other forces (economic & political) could intervene.

From this week’s Barron’s (September 12):
“The Federal Reserve now owns about a third of both the Treasury and mortgage-backed-securities markets as a result of its emergency asset-buying to prop up the U.S. economy during the Covid-19 pandemic. Two years of so-called quantitative easing doubled the central bank's balance sheet to $9 trillion, equivalent to roughly 40% of the nation's gross domestic product.”
What could possibly go wrong?

I noticed on the TRP website for the portfolio of PRWCX dated 8/31/22 that GE is no longer listed as a top 10 holding. Don't know if this is due to trimming the position a bit or total elimination of it.

Yes, and TRP is clunky when it comes to looking at a fund's portfolio beyond the top 10. In fact, I found it IMPOSSIBLE to find. Geniuses at work there, on their website. Clicking on the link labeled "See complete holdings" takes you around in circles---to nowhere.
Dated 30th June, '22, from Giroux:
"So why do we continue to hold GE? First, we have a large catalyst over the next 18 months as GE will be split into three companies. The health care business will be spun off in early 2023 and we believe this security will receive an attractive valuation given its mid-single-digit organic growth rate, margin expansion opportunity, double-digit earnings growth, and strong free cash flow. Second, the power and renewables businesses will be spun off in 2024. The leader who turned around the power business is now leading the renewables business and we have high hopes that it will be a mid-single-digit operating margin business by 2025–2026 under his leadership. Today, the market is effectively capitalizing the losses in renewables forever. The renewables business does not deserve to have an 11-figure negative value just because it is currently losing money. Third, aviation is a great business that should be poised for a decade-plus of excellent growth given how young its fleet of engines is (many have yet to go through their first or second overhaul). The sooner this business is freed from the renewables business, the better. Fourth, and maybe most importantly, even using conservative assumptions we believe the upside in GE is still substantial. When I look back over the last four years of GE, the company has had some incredibly bad luck between COVID, the supply chain, Russia, and a sudden decline in wind turbines due to a lack of renewal of the wind tax credit. But these haven’t been the only problems with our investment in GE; I have also made some process errors along the way. The range of outcomes and degree of predictability of GE has always been larger than many of our other large holdings, and as such it should have been a much smaller holding. While I continued adding to GE during periods of weakness, I was less aggressive reducing the position during periods of strength..."

I was looking for a way to understand the risk characteristics of my total portfolio and well as sub-sets within the whole.
This free app does all that. But it’s a “royal pain” to understand & use at first. I’ve spent close to 2 hours playing with it and inputting various portfolios. Handles funds and stocks. Easy to register. Use a nickname if you prefer and your choice of email for a confirmation code. Nothing else required.
What I’ve been able to do so far:
- Save 3 portfolios (the main one plus 2 sub-sets)
- Compare multiple years’ performance / volatility (including current) on a variety of formats (bar, graph, etc.) to a chosen benchmark (changeable when desired)
- By clicking “metrics” pull up a wide range of metrics applicable to a given portfolio. The benchmark selected defaults to a “beta” of 1. I found, for example, that my overall beta is about .95% of one of TRP’s conservative 40/ 60 funds. For those concerned about “drawdown” it calculates those numbers as well.
- It’s possible ro run some tests before registering. I used my “Alternative Assets” sub-portfolio with just 7 holdings for that purpose.
- Would be interested to know if anyone else finds this thing useful and in what ways.
https://www.portfoliovisualizer.com/

bee , here's what I'm looking at. After high sentiment in '90 & '08 the next two years were up as / S&P500. Will that hold this time around ? As you stated , probably more pain to come.
Guess I'll be upping my CD's after next rate hike.
Trying to enjoy the ride, Derf

I charted Vanguard Wellesley (VWIAX) against the Total US Market (VTSMX) over the time frame 2008 - 2013. @Derf, be prepared to give your investment the time for the market to recover (5 years or longer). That said, I think we are at a point where more "pain" will impact the market (via the Fed). Bearish Market sentiment may stay high for a bit longer.
My short term money is in VWIAX (for spending today)...My long term money is in the equity Market (for future spending).

I disagree a bit with the above analysis. ISTM what we’re witnessing with the reputed demise of the 60/40 is more of an abnormality - a “transitory” condition (to borrow a phrase). But that’s only my best guess. Further, I’ll side with Twain on the question: “Reports of my death are greatly exaggerated.”
This writer provides a lot of thoughtful analysis in the “free” version of his commentary, while hoping you’ll subscribe to the paid edition. I’m saddened to hear TR hasn’t performed well. Really enjoyed those things when I was about 5.
“The sad truth is that Tootsie Roll’s business hasn’t done very well in recent years. It’s been mostly flat. The company has issued 3% stock dividends each year for the last several years. (That’s effectively a 103-to-100 stock split.)”
I’m thinking demographics have a lot to do with the problem. I don’t see many of my acquaintances in the 75-90 year age group munching on tootsie rolls. In fact, if missing some teeth it seems to me they would be hard to chew. Might choke on one.