I was wondering why they were so high at the end, and the answer is that these graphs show the change from a year ago. July 2020 is a pretty low baseline. This is particularly the case for energy...
I was wondering why they were so high at the end, and the answer is that these graphs show the change from a year ago. July 2020 is a pretty low baseline.
This is particularly the case for energy which was very low at the beginning of the pandemic. It’s up 24% since last year, as shown here. You can drill down and see gasoline is up 42%. But most of the gain was before June.
It seems like a level chart is a more intuitive way to visualize this, at least for people used to looking at stock market graphs.
On FRED, which is what I linked to, if you click the big orange Edit Graph, you get to change the units to Index, which gives you the level chart. Unemployment and weekly earnings also show...
On FRED, which is what I linked to, if you click the big orange Edit Graph, you get to change the units to Index, which gives you the level chart.
The old me likely would have latched onto today’s high valuations and instances of risky behavior to warn of a bubble and the subsequent correction. But looking through a new lens, I’ve concluded that while those things are there, it makes little sense to significantly reduce market exposure:
on the basis of inflation predictions that may or may not come true, in the face of some very positive counterarguments, and when the most important rule in investing is that we should commit for the long run, remaining fully invested unless the evidence to the contrary is absolutely compelling.
There were people who saw the pandemic coming and made money by betting against the stock market. But that was over quickly. Since then, there has been a lot of terrible news, but if you were out...
There were people who saw the pandemic coming and made money by betting against the stock market. But that was over quickly. Since then, there has been a lot of terrible news, but if you were out of the stock market since a year ago you missed a 29% increase. (S&P 500.)
I’ve never been brave enough to be fully invested, but the percentage is growing automatically.
I was astounded at how quickly the fed cut rates, and by 50 basis points... I follow the rule of having your age in bonds, which with these negative real rates, means I have a lot of cash.
I was astounded at how quickly the fed cut rates, and by 50 basis points...
I follow the rule of having your age in bonds, which with these negative real rates, means I have a lot of cash.
I've never heard this before. Does that imply that at 34 I should have fully 1/3 of my retirement funds in bonds? That sounds insanely conservative to me at >30 years from retirement.
I follow the rule of having your age in bonds, which with these negative real rates, means I have a lot of cash.
I've never heard this before. Does that imply that at 34 I should have fully 1/3 of my retirement funds in bonds? That sounds insanely conservative to me at >30 years from retirement.
Agree that "Age in bonds" is very conservative. The asset allocation rule of thumb I've heard is usually given as Age - 20 in bonds, or 110 - Age in equities.
Agree that "Age in bonds" is very conservative.
The asset allocation rule of thumb I've heard is usually given as Age - 20 in bonds, or 110 - Age in equities.
Yes. You are entirely correct. The optimal investment strategy is to use leverage... https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1149340 So for you, optimal strategy, if you would believe...
For people who haven't heard of Lifecycle Investing, the idea is to diversify across time and reduce the impact of sequence of return risk. John Williamson puts it pretty succinctly in his article...
PCEPI
CPI
I was wondering why they were so high at the end, and the answer is that these graphs show the change from a year ago. July 2020 is a pretty low baseline.
This is particularly the case for energy which was very low at the beginning of the pandemic. It’s up 24% since last year, as shown here. You can drill down and see gasoline is up 42%. But most of the gain was before June.
It seems like a level chart is a more intuitive way to visualize this, at least for people used to looking at stock market graphs.
On FRED, which is what I linked to, if you click the big orange Edit Graph, you get to change the units to Index, which gives you the level chart.
Unemployment and weekly earnings also show unusual behavior if viewed as a % change from last year.
Frankly, I much prefer the potential employment gap as a way to measure unemployment.
about macro from a famous investor.
There were people who saw the pandemic coming and made money by betting against the stock market. But that was over quickly. Since then, there has been a lot of terrible news, but if you were out of the stock market since a year ago you missed a 29% increase. (S&P 500.)
I’ve never been brave enough to be fully invested, but the percentage is growing automatically.
I was astounded at how quickly the fed cut rates, and by 50 basis points...
I follow the rule of having your age in bonds, which with these negative real rates, means I have a lot of cash.
I've never heard this before. Does that imply that at 34 I should have fully 1/3 of my retirement funds in bonds? That sounds insanely conservative to me at >30 years from retirement.
Agree that "Age in bonds" is very conservative.
The asset allocation rule of thumb I've heard is usually given as
Age - 20in bonds, or110 - Agein equities.Yes.
You are entirely correct.
The optimal investment strategy is to use leverage... https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1149340
So for you, optimal strategy, if you would believe it, is leverage of 2x, or deep ITM LEAPs with a 50% strike.
For people who haven't heard of Lifecycle Investing, the idea is to diversify across time and reduce the impact of sequence of return risk.
John Williamson puts it pretty succinctly in his article about portfolio diversification: https://www.optimizedportfolio.com/diversification/#temporal-diversification-diversifying-across-time
I play a slightly less dumb version of the wallstreetbets game. 100% of my 401k is in high yield sector funds.