For those in the U.S. confident that we’re in the midst of a recession, what have you done in preparation for that? Have you exchanged your growth investments for something less risky? I’m just wondering how much of this is F.U.D. and how much is genuine.
Timing the market is impossible. I’ve chosen an asset allocation I can live with, albeit I’ve got to say it’s not an entirely comfortable feeling. The itch to just sell it all is definitely there, but my rational side has control thus far. At 43 with three kids and being a sole earner in SF, that’s: * 45 % VTSAX * 10 % Small cap value * 25 % Total international Stock Market * 15% Total Bond Market * 5% Cash + 3 months as emergency fund
This ^
This is a pretty decent allocation except I disagree on the total bond market. In CA, your dividends (which are most of the gains) are taxed at an abysmal marginal rate of 43%+. Id recommend just gov bonds to provide better inverse to the market and forgo state tax. Or have them only in your retirement accounts
I don’t pay attention to talk. You are right that it’s best to observe what people do rather than say. It’s very expensive to sit on cash, besides you don’t know where is the bottom until you passed it
You cannot time the market so don't. If there is a recession buy more than normal. That's the only thing you "do"
Nice job! A market downturn means that equity can be bought at discount!
Layoffs seem to be picking up but unsure why besides poor earnings here and there. Trump will quietly cancel tariffs in order to keep recession at bay. He won’t care if/when he’s re-elected, which direction the economy goes so post 2020 will be telling.
I personally believe he deliberately slowed down the world’s economy and will beginning of 2020 unleash it again with big fanfare and get re-elected. At least I cannot rule such a manipulation out.
I think you give him too much credit. He took a gamble with the tariffs not understanding how they work, so now that he’s seeing problems with them and his presidency overall, he will have to reel it all back in but will get all to agree to silence until after the election. He also did not expect to step in it with Ukraine which tells me he’s very concerned about reelection so a smear campaign became the strategy. Now that’s backfired too. If there is a recession it will be short and mild compared to the last one and hopefully there will be better, more stable leadership.
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Literally around 80% of my assets are in cash right now. It’s been that way since 2018. I keep waiting for the recession to happen, but it seems like it’s all talk. If it does happen though, I’m gonna fucking buy up everything at rock bottom prices while watching the world burn.
USD Or other currencies? Wouldn’t the recession devalue the USD as well?
Mostly USD for me, because I’m in the US and I can control or use it better. The three other currencies I care about are not having a good time right now so my best option is USD. It’s been great for my travel budget this year though.