Money Matters
vlagrl29
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
What is your outlook on the economy?
There has been a lot of guesses on some articles I have read about when the economy will tank again. It can't be as bad as 2008 right? I just wonder what you guys think about the economy.....good, bad, indifferent? Every time I talk with my mom on the phone I always end up feeling bummed out. I can't get thru a conversation with her without her bringing up all the bad stuff. They are planning to retire in the next couple years and she feels that it's such a sad thing what America has become whatever that means. She is afraid "they" (govt) will rob them of their retirement money. It's kinda frustrating for me.....today she asked me what I plan on doing to protect "our retirement money". It does make me think about it. I have heard that when unemployment gets to around 6.2% the feds will stop pumping money into the stock market so I've always thought that I would cash out my profits right before that happens. Ultimately I can't say that our businesses have gotten worse since the last recession. Both DH and I work in fields that are always needed so that has helped me think of saving more money instead of spending it and actually I think that this is the best time to be an "entrepreneur", we can always find work. I'm kinda rambling now, since this board is strong believers in pinching pennies I thought I would ask this question.
Re: What is your outlook on the economy?
So far the only portion of the stock market that is still recovering is a lot of the tech stocks that were hit in the tech stock burst of the late 1990's early 2000's.
I finally have a degree that is in need with a ton of engineers retiring over the next decade I should have good job security.
If your parents are almost ready to retire and they are starting to freak out that means that they haven't done the proper planning when they were younger. Both of my parents are retired and their retirement income is enough to cover all of their living expenses except for some traveling that my dad's consulting business covers.
I think many of our generation were scared away from investing by the crash in 2008. I was chatting with a good friend the other day who said, "I don't see the point in 401k contributions. I lost most of my money in 2008 and haven't looked at it since." When I mentioned that, if she hasn't looked at it since she's probably gained all the money back and then some, she was shocked. I just look at investing as a tool I can use to make things more comfortable for our retirement. If the big rich guys can use the market to get ahead, then so can I (with reasonable investments for my level, of course).
I'm still heavily invested in the market, And I don't plan to change that. I'm still around 15 years away from retirement, so we have time to wait for a recovery if there is another downturn. However, it makes my stomach churn to think of losing what we've saved so far, especially when I feel so confident it will happen one of these days. In addition to our stocks and mutual funds, we are still sitting on a lot of cash for precisely this reason. It's our hedge against a crash, to have the cash to buy low if it happens. We are split around 80% stocks and 20% cash now (not very interested in bonds with rates so low), and anticipate keeping that balance into retirement (though probably with some of the cash transitioning to bonds).
Inflation will rear it's ugly head. Taxes will increase.
Ditto Sisugal on inflation and taxes.
The DOW is dancing at 16,000. But remember, usually when the market soars so high, it has a mighty crash - this growth in the economy is not sustainable. And, when you see this sort of growth and the unemployment rate not go down concurrently, then you have a bubble being formed. The money being made on the market is not a true reflection of the ingenuity of the country's businesses. Bubbles are highly dangerous (think housing bubble).
I think we will have a crash again in the next few years and that it will be worse than 2008.
Just curious, but how would you pull it out before a crash? You can predict it that well?
Maybe your mom is so depressed because they were planning on that?
(I'm replying before reading any other responses, so I don't know if you came back and said more).
I agree with the PP who said that predicting how the market will go is a "fool's errand." I can't predict anything and the weather people cannot even get it accurate either. Side note: It's funny when they predict 6-8 inches or snow and people run to the store to stock up and we get a dusting!!!
"Prediction" probably isn't the best word. More like reading and paying attention to the indications and focusing on the whole picture is a better approach.
Big picture in the U.S. is a shaky economy, with the government printing money like crazy (Quantitative Easing [QE] to infinity), a ton of consumer debt, a devalued dollar, the government debts held by foreign nations (many not so 'friendly' to the U.S. [like China]), and a rapidly increasing market that is not balanced and moving concurrently with other important economic indicators. And, these are just the economic indicators.
We have huge social collapse problems too, which are destablizing our nation - weaker families, broken marriages, abuse on the rise, suicide (DH just flew with a pilot who is a fire chief in our town. He said the most frequent things they visit are car crashes and suicides), pornography, addictions, mass shootings, government dependence and a refusal to take responsibility for one's self and one's family.
DH and I are 30 years from retirement. We can weather storms right now. But, we are also very well diversified. We own stocks, bonds, and precious metals (both in ETFs and physically).
We aren't counting on SS in our retirements. If it's there, great...but we don't expect it.