Stock Market Sell Off

Balzac89

Balzac89

Undercover Mod
I used to follow these things far more closely and then I decided that it wasn't worth worrying about. I continue however to prepare for this inevitable collapse. (I'm not stocking up on toilet paper and baked beans like you're thinking) Unlike the average person I follow the market somewhat closely and their is a consensus among the majority of economists that the market is overvalued and not even close to stable. The same individuals who warned of the 2008 market crash are telling everyone to prepare again that none of the issues from 2008 were resolved.

I do not think that it will lead to a collapse of society or anything like that. Just that millions of Americans with their entire future wrapped up in the stock market and their only retirement is their 401k will lose 70 percent of their funds at a minimum.

I always chuckle when people think that their money evaporated when the market sold off in 2008. The money didn't disappear someone sold out before you and took a bigger slice of the pie than you ended up with.

The selloff would ultimately lead to mass unemployment and inflation now that the Fed is saying they are going to start raising rates. Probably to give themselves a little wiggle room when it does go down.

Anyone else put much thought into this?
 
ODanksta

ODanksta

Well-Known Member
Balzac89 said:
I used to follow these things far more closely and then I decided that it wasn't worth worrying about. I continue however to prepare for this inevitable collapse. (I'm not stocking up on toilet paper and baked beans like you're thinking) Unlike the average person I follow the market somewhat closely and their is a consensus among the majority of economists that the market is overvalued and not even close to stable. The same individuals who warned of the 2008 market crash are telling everyone to prepare again that none of the issues from 2008 were resolved.

I do not think that it will lead to a collapse of society or anything like that. Just that millions of Americans with their entire future wrapped up in the stock market and their only retirement is their 401k will lose 70 percent of their funds at a minimum.

I always chuckle when people think that their money evaporated when the market sold off in 2008. The money didn't disappear someone sold out before you and took a bigger slice of the pie than you ended up with.

The selloff would ultimately lead to mass unemployment and inflation now that the Fed is saying they are going to start raising rates. Probably to give themselves a little wiggle room when it does go down.

Anyone else put much thought into this?
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The stock market is basically a foreign language to me...
 
Magic Mike

Magic Mike

Well-Known Member
I gave up stocks more than a year ago. fuck that, it is going to crash .
I was looking at AAPL and do regret not buying that, it seemed overvalued, but in hind sight it went up a whopping 30%.

I am out until a big crash. As soon as there is a big crash that is when it is time to invest again. People who invested in 09 made a lot of 1000% gains on many different stocks.

until the crash, I decided my best investment is to buy down my fixed rate mortgage . That is 3.75% annual return 100% guaranteed with profits automatically reinvested since it is a fixed rate.

There are no bonds or anything other than a fixed rate mortgage paying 3.75 annual with zero risk 100% guarantee.

Provided one has enough equity to cover any market dips and solid real estate that won't tank in value
 
abe supercro

abe supercro

Well-Known Member
Magic Mike said:
I gave up stocks more than a year ago. fuck that, it is going to crash .
I was looking at AAPL and do regret not buying that, it seemed overvalued, but in hind sight it went up a whopping 30%.

I am out until a big crash. As soon as there is a big crash that is when it is time to invest again. People who invested in 09 made a lot of 1000% gains on many different stocks.

until the crash, I decided my best investment is to buy down my fixed rate mortgage . That is 3.75% annual return 100% guaranteed with profits automatically reinvested since it is a fixed rate.

There are no bonds or anything other than a fixed rate mortgage paying 3.75 annual with zero risk 100% guarantee.

Provided one has enough equity to cover any market dips and solid real estate that won't tank in value
Click to expand...
Yeah I just don't feel confident enough with the market to mess around. My efforts have gone towards reducing mort debt.

Are you saying you reduced the size of principal by 'paying it down', thus saving the 3.75 in interest? Or-

How do you get a return on your mortgage? what did I miss..
 
lahadaextranjera

lahadaextranjera

Well-Known Member
I've seen people's index funds fall rapidly in 2008. They could have switched into cash or gone into a commodity fund. They didn't.
 
ttystikk

ttystikk

Well-Known Member
Magic Mike said:
I gave up stocks more than a year ago. fuck that, it is going to crash .
I was looking at AAPL and do regret not buying that, it seemed overvalued, but in hind sight it went up a whopping 30%.

I am out until a big crash. As soon as there is a big crash that is when it is time to invest again. People who invested in 09 made a lot of 1000% gains on many different stocks.

until the crash, I decided my best investment is to buy down my fixed rate mortgage . That is 3.75% annual return 100% guaranteed with profits automatically reinvested since it is a fixed rate.

There are no bonds or anything other than a fixed rate mortgage paying 3.75 annual with zero risk 100% guarantee.

Provided one has enough equity to cover any market dips and solid real estate that won't tank in value
Click to expand...
What you're doing is putting money into something that isn't paying you, you're only paying slightly less in interest. It shouldn't be too hard to find some investment vehicle that pays more than your interest rate. Invest in THAT instead and you'll be ahead.

Why pay off a loan that's on such favorable terms any earlier than you have to? Especially considering that every dime of mortgage interest is also deductible?
 
ttystikk

ttystikk

Well-Known Member
I agree that the stock market is overpriced. My logic has more to do with the lack of spending power in the middle class. The upper class now makes most of the income, so maybe the Wall Street analysts are right; the average American really doesn't count anymore when it comes to forecasting economic prosperity. I disagree with them, so I'm waiting for the next 'correction'. Indeed, the underlying issues that caused the first crash have not been resolved; now they're WORSE!
 
Magic Mike

Magic Mike

Well-Known Member
ttystikk said:
What you're doing is putting money into something that isn't paying you, you're only paying slightly less in interest. It shouldn't be too hard to find some investment vehicle that pays more than your interest rate. Invest in THAT instead and you'll be ahead.

Why pay off a loan that's on such favorable terms any earlier than you have to? Especially considering that every dime of mortgage interest is also deductible?
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No because I am paying only to principle and that has a staggering effect on how much money that saves in interest. Zero goes to interest. 100% goes to principle meaning the interest is sliced a staggering amount. It is the equivalent of 3.75% annual with profits automatically reinvested. Do the math on that and figure it out and you will begin to see how much money in interest that saves and how good of an investment that is considering it is 100% zero risk.
 
Magic Mike

Magic Mike

Well-Known Member
abe supercro said:
Yeah I just don't feel confident enough with the market to mess around. My efforts have gone towards reducing mort debt.

Are you saying you reduced the size of principal by 'paying it down', thus saving the 3.75 in interest? Or-

How do you get a return on your mortgage? what did I miss..
Click to expand...
Yeah I did not specify, one needs to make sure they are buying down principle. When you pay down a loan be sure any extra payment goes 100% to principle. It staggers the loan in an incredible way that pays off and saves an incredible amount of interest because there is less there to charge interest on, and also less time to charge interest. Both of those things start working together and save a lot of money. Also the principle buy down goes straight to equity so that gets allotted to real estate gains.
 
Balzac89

Balzac89

Undercover Mod
Magic Mike said:
Yeah I did not specify, one needs to make sure they are buying down principle. When you pay down a loan be sure any extra payment goes 100% to principle. It staggers the loan in an incredible way that pays off and saves an incredible amount of interest because there is less there to charge interest on, and also less time to charge interest. Both of those things start working together and save a lot of money. Also the principle buy down goes straight to equity so that gets allotted to real estate gains.
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I don't get why people don't understand this. First thing I did out of college was pay off my loans in 6 months. I only had taken about 6k which I literally paid almost no interest on. I see others making minimum payments and in some cases their principal is increasing each month,
 
abe supercro

abe supercro

Well-Known Member
Magic Mike said:
Yeah I did not specify, one needs to make sure they are buying down principle. When you pay down a loan be sure any extra payment goes 100% to principle. It staggers the loan in an incredible way that pays off and saves an incredible amount of interest because there is less there to charge interest on, and also less time to charge interest. Both of those things start working together and save a lot of money. Also the principle buy down goes straight to equity so that gets allotted to real estate gains.
Click to expand...
Right, I'm on the same page completely.

Best thing I did was refinanced with a Harp Loan on a 15 year mortgage a few yrs back. finally, more than half of my regular monthly payment goes to principal. The first thing anyone should do is get out of PMI if they have it, or save (before purchase) for the full 20% down to avoid the extra monthly mort. insurance.
 
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