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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

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The portfolio: risk, cheap money/margins, Robinhood'ers, government

No where to run to, nowhere to hide, eh?

Risk.....
One could write a small book about the state of investments today. Money market funds are backwards/dead monies, except for short term parking, pending other choices. Too many equity sectors are hot and interest rates/yields have trended up in recent months.
We don't re-balance our portfolio based upon end of year or other time frames. The markets help establish any changes.
We're at 45% equity and 55% bonds at this time. Yes, we could have found investment glory changing some investments at the being of April, 2020. But, we stayed firm throughout the year. Everyone has there own assessment of risk. There are 1,000's of combo portfolios among those at this forum. I won't agree with some of the choices, as well as many would not agree with our choices. Tis the nature of the investment beast.

Cheap money and those investing on margin..... I don't have any data about how much hot money is in the market place; using margin or otherwise. Reportedly, there are about 13 million Robinhood accounts in the U.S. I don't know how much money these accounts are managing. More to this point is that I will presume much of this money is narrowly targeted to narrow sectors or stocks within those sectors. Twitter feeds have likely pushed a lot of this money in the past year. I don't imagine many of these folks are reading the WSJ or similar publications.

Lastly, is that we generally have little concern for investing choices based upon elections or politicians. The machinations of Congress and the government in general move along with their compromises and decisions. Many of these actions have slow moving parts that may cause some changes in a longer term investing environments.
However, some of our investment considerations going forward as of January 4 find a new set of circumstances that are beyond the normal, at this time; and just when we thought that Covid was the primary game changer. The Georgia Senate election and what FORM of government will find it's place in the next two weeks weighs upon investments changes at this time.

Wishing all of you well; for a variety of reasons.

Catch

Comments

  • @catch - It all sounds to familiar. To your statement "Everyone has there own assessment of risk." at this juncture in my investing travails I'm less concerned with FOMO than I am in FOGMAK'ed.
  • Having cash/short term bonds help in days like March last year. Today's pullback is a reflection of COVID situation that is likely to worsen as people gather too much. The Georgia race is part of that too. Think the situation will improve on Jan 20th.
  • FOMO? Ork? Foreign Oleo Mothered Off?
    FOGMAK? Frikkin' Organic Grotchkies Made As Kiwi?
  • edited January 5
    Ya, wifey likes to remind me that we should give away money to family members in foreign countries after the New Year, every year, because..... it makes her feel good to throw away money? I dunno. Sometimes we must negotiate and compromise with each other: "No." ... Or: "That makes no sense. It would make sense to do "X" THIS way, instead, though. Let's do it this way, instead."

    After a good Market year, we began last year to give ourselves permission to take and use SOME of our profits. Growing up not just dirt-poor, but shit-poor, leaves its mark on everyone who suffers through such an upbringing. So, between us, priorities are quite different. The truism that "spenders and savers attract each other" is certainly true in our case. And though we have a nest egg, "wealthy" could not ever be applied to ourselves.

    But as for me: when you're finally where you want to be, the other stuff isn't such a big deal. So, our portfolio will never light the world on fire, either. But we DO use January on the calendar to "take some off the top" and use it for what we've decided upon. But after a bad market-year, we certainly do not need to take that stuff "off the top." That would be like shooting yourself in the foot. I suppose after all these years, I should be accustomed to wifey's inability to plan ahead. Her limit on that score seems to be about 3 weeks. And then things might change entirely. Good thing I'm the "money man," between us. :)
  • catch22 said:

    Cheap money and those investing on margin..... I don't have any data about how much hot money is in the market place; using margin or otherwise.

    "Margin debt—the amount of money borrowed against stockholdings to play the market—hit a record $722 billion in November, its first record high in two years. That sounds scary. But margin debt often hits record highs as the stock market rises, making it a notoriously bad timing tool. What’s more, margin debt as a percentage of the overall value of the market is now near a 15-year low, which suggests that investors aren’t overextended just yet. What has changed is the pace at which investors are adding to their debt. It’s up about 50% from its spring low, and that kind of surge has happened only six times since 1960."

    From a Barron's article last week.
    I was able to read this without a subscription. Link

  • Buying stocks on margin requires experience which I don't have. Thus I stay with mutual funds, ETFs and few CEFs and hold them for a long time.
  • Low Interest Rates are here to Stay (thru 2021):

    Some Quotes from the article (linked):
    The economy is poised for a robust recovery in 2021, particularly in the latter half, but Bloomberg Economics does not expect quantitative easing to be scaled back until 2022, leaving interest rate liftoff closer to 2025.
    How Central banks are planning for the year ahead:

    ultra-low-interest-rates-here-to-stay-2021-central-bank-guide
  • In light of the apparent changes forthcoming to the U.S. Senate composition, I'm placing the below link for a broad based overview of etf's in numerous categories (real time). I've placed this link previously, but you may find this of some benefit at this time. I use this page for reference at various times.

    Broad based etf categories

    Regards,
    Catch
  • With the two runoff wins in GA, Biden will now have both the house and senate on his side. His agenda will get thorough easier. Just today other sectors and small caps advance while the technology fell. Once the vaccine rollout quickly to vaccinate the general population we would start to return to normal perhaps by summer.
  • Sven said:

    With the two runoff wins in GA, Biden will now have both the house and senate on his side. His agenda will get thorough easier. Just today other sectors and small caps advance while the technology fell. Once the vaccine rollout quickly to vaccinate the general population we would start to return to normal perhaps by summer.

    Banks (Financials) seeing a rebound...

    treasury-yields-reach-1-nasdaq-futures-tumble-markets-wrap
  • But uncle Joe will not get a blank check from the likes of Joe Manchin (allegedly a "D", from West Virginia.) I lived and worked there for a number of years. Lots of Kool-Aid drinkers there. Allergic to helping themselves, by voting for anything that might benefit anyone beyond their immediate family. Still "rugged individualism." Whether it's really true or not. Manchin gets elected by not behaving like a "D." And the late (2nd) impeachment? He's just not there.
  • Manchin is different beast and perhaps that is the only way to get elected in West Virginia. Sometimes the moderate GOP senators are more amendable to work with.

    Will be patient for awhile since there was more uncertainty With the unemployment number released last week. The country needs to act fast on vaccination in order to stem the rapid rising COVID cases. We learned how devastating lockdowns can be.
  • Due to the West Virginia electorate, Manchin is both the best and only Democrat that could be elected as Senator from WV. The days of Byrd and Rockefeller are long gone !
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