2022 Market Sentiment & Positioning

[Dividends Warrior]

https://www.cnbc.com/2022/08/15/pre...ority-as-companies-battle-cost-of-living.html
This is an interesting 'recession' because there is still so much cash floating around - as shown by the article talking about Starbucks and MacDonalds getting good returns going upmarket.

I have been meeting up with friends for chats at Starbucks quite a bit recently - the cost of my drink is quite worth the 'rental' of the seat and the Starbucks outlets I go to are a whole lot more comfortable than say, Toast Box - but my nearest Toast Box is still super crowded though.

We share the same lifestyle, my friend.
I also frequent Starbucks.
Live better!

 

[narutos]

I plan to only hold 5 individual UK stocks capped at £325k so I don't have to worry about estate duty. So thats roughly S$100k+ per share. Hopefully due to inflation they will raise the estate duty exemption limit.

Everything else will be ETFs.

It make sense. Thanks.

 

[chopra]

xirr since start of 2019 5.73%


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[chopra]

No wonder so many of them seem miserable, hate their jobs and want to quit. What is life without coffee /tea / your choice drink?

But like I said, I don't buy coffee from Starbucks... I rent a space by buying a drink for social networking, doing work away from office. If it makes me more productive / maintains my networks, there's a return on investment right there. I've always believed that you have to spend money to make money.

move to places where there’s less hdbs, and u will find it a joy to avoid crowd


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[limster]

We share the same lifestyle, my friend.
I also frequent Starbucks.
Live better!

move to places where there’s less hdbs, and u will find it a joy to avoid crowd


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Now with so many jobs offering WFH options, I also scratching my head and wondering why I need to FIRE if I can stay at home 2-3 days on weekdays every week, go for a swim, use the gym in my condo, go Starbucks or other quiet place to check e-mails.

I always try to avoid crowds. Either less popular locations or more popular locations during off peak. During WFH, generally my lunch hour is flexible, so doing brunch/lunch at 11am at popular locations on weekdays, usually not crowded (workers in office/students at school...) just the retirees/FIRE crowd?

 

[sohguanh]

Now with so many jobs offering WFH options, I also scratching my head and wondering why I need to FIRE if I can stay at home 2-3 days on weekdays every week, go for a swim, use the gym in my condo, go Starbucks or other quiet place to check e-mails.

The key is how to keep oneself gainfully employed as you grow older if you don't want to FIRE. Most employers find senior aka old employees expensive. Without being gainfully employed what WFH option to talk about? Some junior employees have been complaining the senior aka old employee don't go/leave they cannot promote to go and sit in their position etc etc. So ideally while what you post is a bed of roses but in reality it may not be so. If you happen to land on a job that is almost guaranteed safe from retrenchment or ask to leave early then yes bed of roses indeed and maybe don't even need to FIRE.

Civil servant used to be in this "safe from retrench" category but times have changed. E.g HDB did retrench and my neighbor is one who take the golden handshake and FIRE. Almost everyday next door I hear him blasting his 70s,80s rock music enjoying life while I need to slog until age 55. He married late so besides blasting music he fetch his son to and fro from Primary school.

For self-employed aka be your own boss, welcome readers to share their experience.

 

[zzTiny]

The power of USD is scaring the **** out of me. Looking at Europe, oh boy. That dumpster fire place. If I ever plan to retire, I will never retire in Europe. That place is just filled with bonkers and insanity. I will never understand their policy.

 

[limster]

IWDA has dropped to $77.95. I am optimistic that there will be a 'higher low' and not retest $70.

I'll stick to my call that $75 is a good price and will buy more at $74.99 rather than waiting to see if it will retest $70.

 

[zzTiny]

Provided that earnings remain the same. I believe a further 5% down is needed to return back to "neutral" price where the upside = downside. My target price for S&P still remains the same at 3950 to 4050. It will be great if it can retest 3660 which I believe is the bottom and best price for this year provided that earnings remain the same. Anything lower will be even better of course considering earnings are just short term downside.

Edit: With regards to oil and gas, it also seems I have underestimated the would be loss of Russia oil and gas. I wonder how fast Russia could divert those oil and gas to Asia countries. Together, with the coming end of unprecedented amount of SPR release in September. Although, China remains as the wild card, it has also been impacted left and right, impacting earnings as well. A recession is a foregone conclusion and the needed solution for this goldilocks situation thereby impacting earnings. Or a definite policy shift which I am still hoping. It is in fact the best time to buy good companies at a cheaper price.

This will be lit for Europe, Asia and developing countries, literally.

 

[revhappy]

This time around the good thing is we don't have to rely on TINA. Fixed income also provides decent yield. So this is a good time to build a 60/40 portfolio and let the bonds provide you some returns and stabilize portfolio.

Also I think there is lots of cash still sloshing around and financial conditions are very loose. The crash in June was mostly hedge funds shorting the market and front running the market rather than long term investors panicking and selling.
This bounce back is also just short covering.

We have to see how inflation plays out, what FED does with balancesheet and are we going to have job losses.

As of now markets believe inflation will come down and FED will soon end it's hiking, so markets will just continue to rally as long as there is so much money sloshing around.

 

[revhappy]

The power of USD is scaring the **** out of me. Looking at Europe, oh boy. That dumpster fire place. If I ever plan to retire, I will never retire in Europe. That place is just filled with bonkers and insanity. I will never understand their policy.

It is funny how until Angela Merkel was there, there was no problem. Now she is gone all hell breaks loose. So it was her policy to depend on Russia for their oil and gas. When Crimea was annexed in 2014 they already could have started moving away from Russian oil and gas and that time oil prices crashed also. We had low oil prices for 6-7 years. Instead just look at the timing now

 

[0218crawford]

Now with so many jobs offering WFH options, I also scratching my head and wondering why I need to FIRE if I can stay at home 2-3 days on weekdays every week, go for a swim, use the gym in my condo, go Starbucks or other quiet place to check e-mails.

I always try to avoid crowds. Either less popular locations or more popular locations during off peak. During WFH, generally my lunch hour is flexible, so doing brunch/lunch at 11am at popular locations on weekdays, usually not crowded (workers in office/students at school...) just the retirees/FIRE crowd?

Nope. its not the fire crowd.
they are probably backpacking across Europe without a care in the world.

 

[limster]

I was thinking that maybe I should get some practice trading to see whether I can make any money and more importantly , train myself to press the sell button more, so I bought some Zoom tonite

 

[RedsYWNA]

I was thinking that maybe I should get some practice trading to see whether I can make any money and more importantly , train myself to press the sell button more, so I bought some Zoom tonite

The more you press, the more emotionless you get.

Consequently (assuming you are disciplined), the lesser you trade till the opportunity reveals itself.

 

[wira]

I was thinking that maybe I should get some practice trading to see whether I can make any money and more importantly , train myself to press the sell button more, so I bought some Zoom tonite

zoom today pre-market dropping though

 

[limster]

zoom today pre-market dropping though

Yup, I will use money I am prepared to lose to learn trading

 

[boroangel]

Anyone reducing their equity holdings during the last 2 months? Been selling and taking advantage of the recent runup to sell some stocks. Don't have a good feeling about Q4 leading into next year.

Was 60% cash, 40% stocks 3 months ago, and now at 72% cash. Trying to park cash in liquid vehicles and wait and see.

Wondering if the next 12 rolling months would be better for cash than the market.

 

[revhappy]

Anyone reducing their equity holdings during the last 2 months? Been selling and taking advantage of the recent runup to sell some stocks. Don't have a good feeling about Q4 leading into next year.

Was 60% cash, 40% stocks 3 months ago, and now at 72% cash. Trying to park cash in liquid vehicles and wait and see.

Wondering if the next 12 rolling months would be better for cash than the market.

I would say if your time horizon is long, then dont try to time the markets. If you feel 60% was over aggressive for you, then it is okay to reduce your allocation. I was quite aggressively allocated and the plunge in Jun/Jul made me uncomfortable and I reduced allocation to 57% in equities vs 73% before that. Now my plan is to just put new savings directly into equities and let my allocation grow gradually. So 60/40 sounds perfect to me. But for you it may be different based on your need, willingness and ability to take risk.

Ability, willingness and need to take risk​

Author Larry Swedroe defines asset allocation as "the process of investing assets in a manner reflecting one’s unique ability, willingness and need to take risk," with willingness referring to risk tolerance and whether investors have the “fortitude and discipline” to stay with an allocation during market downturns.[4][5][6]

Ability to take risk involves the investment time horizon, need for liquidity, stability of earned income, and the flexibility to adapt if there is a need for a plan B.[note 2]

Willingness to take risk is characterized as the eat well/sleep well trade-off. Taking more risk is required to enable the possibility of higher expected returns (eat well). However, if investors take more risk than they are emotionally able to handle, then it is likely that they will abandon their investment plans if their portfolios suffer sufficiently severe losses. So it is unwise for investors to take so much risk that they will be unable to sleep well during the inevitable stock market downturns.

Need to take risk is determined by the rate of return required to achieve financial objectives. Any investor deciding to take more risk because of perceived "need" should do so keeping in mind that taking extra risk could well backfire and lead to lower returns. Perhaps more importantly, once the investor has "won the game" by accumulating sufficient wealth, it is unwise to take more risk than is needed, since the value of additional gains is much less important than the consequences of severe losses.

https://www.bogleheads.org/wiki/Risk_tolerance

 

[boroangel]

I would say if your time horizon is long, then dont try to time the markets. If you feel 60% was over aggressive for you, then it is okay to reduce your allocation. I was quite aggressively allocated and the plunge in Jun/Jul made me uncomfortable and I reduced allocation to 57% in equities vs 73% before that. Now my plan is to just put new savings directly into equities and let my allocation grow gradually. So 60/40 sounds perfect to me. But for you it may be different based on your need, willingness and ability to take risk.



https://www.bogleheads.org/wiki/Risk_tolerance

Yeah for my long term portfolio stocks that are dividend generating, I feel that with T-bills at 3.3% and even banks giving 3.5% on USD, if I considering withholding taxes of 30%, this means I would need US stocks to be giving more than 5% to be remotely attractive.

Even for the 3 local banks that I will hold forever, I don't see much point of adding now as I believe T-bills rates will hit 4% by end of the year, and would be quite close to what the banks are giving out.

I still plan to get back to 60% cash - 40% stocks, but only after the FED stops hiking.

 

[revhappy]

3 more days for the month to end and Powell decides to screw up our PnL
Now all eyes on Aug CPI and jobs report. If the data is weak Powell continues to hike 50-75bps. But if it is very weak, then they may slow down hiking and that is the only hope for equity markets to bounce back.