Cashing out

[mmmmmbeeer]

This may belong in the financial news thread and, if so, feel free to move it.

 

I'm a bit of a politics freak. I have been for years and consider myself fairly knowledgable. I'm scared s***less right now with the whole Trump/Russia/Mueller show and there are a lot of rumors that s*** is about to come to a head by the end of next week. Rumor on the hill is that Trump will try to fire Mueller this Friday and, as a result, we'll be in a full blown constitutional crisis if congress doesn't step in and put Trump in his place (which I have zero faith in happening).

 

With the GOP tax bill already baked into the market (imo), I'm very fearful of seeing this bull market turn on its ear and turn full bear until DC figures out what the hell to do. I'm seriously considering liquidating any and all assets I have in the market this week and put my money on the sideline.

 

My question to you financial guys.....what exactly is the "sideline" in a potential s*** show like this? My brokerage and Roth accounts I can hide relatively easily in corporate bonds but my 401k just has bond mutual funds with high exposure to treasury notes. Not convinced that's the place to sock away money during a constitutional crisis lol.

 

What do you guys think? We used to have a PIMCO fund that was basically just a place to park money with the only risk coming from the ups and downs of the dollar. I no longer have that option. Should I roll the dice on the bond funds I do have available to me? Am I just overreacting?

 

ETA: I don't use a financial adviser or I'd just ask them. I'm reasonably money savvy so have never really felt the need to pay someone else to handle my investments. This, though, is waaayyy out of my league given how unique the potential situation is.

Edited December 17, 2017 by mmmmmbeeer

[caulfield12]

It depends when you actually need the money.

 

The simple plan is to allocate by age, if you’re 25, should be 75% stocks/25% bonds and vice versa at 75, moving to protect your returns.

 

Timing or predicting the market is impossible. Some very smart people here thought Trump winning would instantly signal disaster, and exiting led them to lose huge returns that might take another decade to equal.

 

There’s all kinds of different ways to go...REITs, hedge funds, international/emerging markets, small and mid cap stocks...generally, it’s best to have your eggs in as many baskets as possible. That diversification limits the upside but protects you as well on the downside.

 

In general, with interest rates rising again and close to full employment and historically high PE’s, most economists would predict 3-5% rates of return the next decade, assuming at least one major recessionary period will hit again and cutbacks in SS, Medicare and Medicaid will eventually depress aggregate demand in the economy.

 

So that leaves it up to Silicon Valley (AI, AR, VR) and alternative energy strategies....and our export economy to sustain the US. How confident should we be in beating China AND that the world economy will continue to grow at a 10% rate the next decade, especially SE Asia and India?

 

I have been adding Chinese stocks like baba, tcehy, tsm, zto, jd, ping an...to protect from a US collapse.

 

 

[mmmmmbeeer]

It depends when you actually need the money.

 

The simple plan is to allocate by age, if you’re 25, should be 75% stocks/25% bonds and vice versa at 75, moving to protect your returns.

 

Timing or predicting the market is impossible. Some very smart people here thought Trump winning would instantly signal disaster, and exiting led them to lose huge returns that might take another decade to equal.

 

There’s all kinds of different ways to go...REITs, hedge funds, international/emerging markets, small and mid cap stocks...generally, it’s best to have your eggs in as many baskets as possible. That diversification limits the upside but protects you as well on the downside.

 

In general, with interest rates rising again and close to full employment and historically high PE’s, most economists would predict 3-5% rates of return the next decade, assuming at least one major recessionary period will hit again and cutbacks in SS, Medicare and Medicaid will eventually depress aggregate demand in the economy.

 

So that leaves it up to Silicon Valley (AI, AR, VR) and alternative energy strategies....and our export economy to sustain the US. How confident should we be in beating China AND that the world economy will continue to grow at a 10% rate the next decade, especially SE Asia and India?

 

I have been adding Chinese stocks like baba, tcehy, tsm, zto, jd, ping an...to protect from a US collapse.

 

Appreciate the input and I like your Chinese strategy, especially in the long-term. Probably easier for you to stomach given you living there (or at least did at one time, if I remember right?).

 

I just want out for a few months. I guess the question will be if the securities market remains stable should we encounter a situation where a US President kills an investigation into his potential collusion with a US enemy and the Congress sits idly by? Seems this would introduce an incredible amount of apprehension globally in both the dollar and federal bond market. I don't have risk tolerance to place a bet on this happening by hedging the market or going full-bore on international stocks. If I sit out for a few months and lose a point or two of ROI over that period, so be it.

 

The Fed raising rates and raising inflationary concerns, an unfunded $1.5T tax bill about to pass, a terrifyingly strong chance at constitutional crisis within the next couple of weeks, all surrounding a nearly unprecedented bull market.....yeah, I want to take my money and run. I get the whole "don't try to time the market" idea but, FFS, it sure seems the writing is on the wall.

 

 

 

 

 

[caulfield12]

Well, yeah, you obviously have to know your risk tolerance.

 

Jerusalem/Palestine, Iran, Saudia Arabia, the Korean Peninsula, terrorism and European refugees...there’s a million potential powderkegs outside of Trump’s direct influence alone. Well, that first one was partly self-inflicted.