Why has the economy not crashed yet?

[AndroAsc]

I'm not a market timer, and generally don't listen to financial news...

But I'm getting worried the market hasn't crashed yet. It's been long overdue by now, yes?

[soccerrules]

I put hot things in a thermos, they stay hot. I put cold things in a thermos, they stay cold-- how do it know?

[gips]

why are you worried the market hasn't crashed yet?

[Schlabba]

I'm not a market timer, and generally don't listen to financial news...

But I'm getting worried the market hasn't crashed yet. It's been long overdue by now, yes?

Markets don’t simply die of old age

[Brianmcg321]

Overdue?

Did 2018 not happen in your world?

[watchnerd]

I'm not a market timer, and generally don't listen to financial news...

But I'm getting worried the market hasn't crashed yet. It's been long overdue by now, yes?

Are you asking about the economy or the market?

They're two different things.

And have you looked at 2018?

Lastly, what's your definition of a crash vs a recession?

[whodidntante]

If you're hoping for a big drawdown, you'll get your wish eventually. You will probably not see it coming with any kind of accuracy. Stay invested and take appropriate risks.

[bloom2708]

People are working, people are making money, companies are turning profits, both have money to spend and invest and borrow.

Keep it rolling.

[watchnerd]

Overdue?

Did 2018 not happen in your world?

Well, OP did say they don't listen to financial news....

[bberris]

For brevity, "I'm not a market timer but..." posts can use

INAMTB

I admit it does not roll off the tongue.

[PluckyDucky]

It did decline 20% in December 2018.

Is that not enough?

To the moon!

[PluckyDucky]

I put hot things in a thermos, they stay hot. I put cold things in a thermos, they stay cold-- how do it know?

How is babby formed?

[ohai]

It did decline 20% in December 2018.

Is that not enough?

To the moon!

"Things are so volatile now, I don't feel like it's a good time to invest" -All the sideliners in 2018.

[HomerJ]

I'm not a market timer, and generally don't listen to financial news...

But I'm getting worried the market hasn't crashed yet. It's been long overdue by now, yes?

Why is it long overdue?

Dow went from 1000 in 1982 to 11000 in 2000.

That's 11x gain (not even counting dividends) over 18 years.

Dow was around 6500 at the bottom in 2009, it's at 28000 today...

That's about a 4x gain (not counting dividends) over 11 years.

Why are we LONG overdue for a crash?

[watchnerd]

I like all this fear and doubt about the market.

It makes me feel like we haven't peaked yet.

When we get to the point that people are asking if they should take out HELOCs to invest in the market, that's when I go 'uh oh'.

[scubadiver]

But I'm getting worried the market hasn't crashed yet. It's been long overdue by now, yes?

Would you be less worried if the market were down 30% and with 8% unemployment?

What's your asset allocation? Are you certain it's set at a level consistent with your risk tolerance?

[FrugalConservative]

Bull markets dont die of old age.

[PluckyDucky]

I like all this fear and doubt about the market.

It makes me feel like we haven't peaked yet.

When we get to the point that people are asking if they should take out HELOCs to invest in the market, that's when I go 'uh oh'.

The best time to do that is after the 70-80% crash.

[WhiteMaxima]

What do you expect? To the best of your interest?

[F150HD]

I'm not a market timer, and generally don't listen to financial news...

But I'm getting worried the market hasn't crashed yet. It's been long overdue by now, yes?

The stock market just booked its ugliest Christmas Eve plunge — ever Dec 24, 2018

US stocks post worst year in a decade as the S&P 500 falls more than 6% in 2018

[CheepSkate]

I like all this fear and doubt about the market.

It makes me feel like we haven't peaked yet.

When we get to the point that people are asking if they should take out HELOCs to invest in the market, that's when I go 'uh oh'.

So what I’m thinking is, I should do this now and exit the position when everyone else starts doing it!

[greg24]

Animal spirits.

[UpperNwGuy]

OP, what action do you recommend we take?

[Iridium]

But I'm getting worried the market hasn't crashed yet. It's been long overdue by now, yes?

Market: the market crashed at the end of 2018. While 2000 and 2008 were our last two crashes, they were unusually severe. If you look at the crashes that typically lead to the 'every 7-10 years' gut feeling, the 2018 type crash (a rapid downstroke, followed by recovery in about a year) is not unusual.

Economy: Honestly, something seems funky with our economy. Where is the euphoria? We ought to have inflation and/or rapidly rising interest rates, as companies pursue opportunities with reckless abandon. Instead, it feels like companies are still rather cautious, largely preferring to take their chips off the table, rather than make big investments in production, innovation, or attacking new industries. The only exception I have noticed are investors seemingly tossing money at every company that can cloak itself as a tech startup (i.e. WeWork and the even more ridiculous tale of Long Island Iced Tea Corp renaming itself Long Blockchain without actually doing anything on the Blockchain). Fortunately, it appears that such investors can either afford to lose those investments or are small/deleveraged enough that the losses don't spread to the rest of the market. Regardless, while I have only been an investor for a decade or so, the conservatism of this economy appears to be fairly unusual, which probably slows down typical rules of thumb.

Ultimately, there isn't anything you can do about it. As an equity investor, we contribute to the market a willingness to lose half or more of our investment. For that, we are richly rewarded relative to bond holders. Index investing has proved we can collect such a reward, even without picking winning companies. However, history has repeatedly shown that investors who try to welch on their contribution by avoiding the down turns while still collecting equity returns on the upswing do rather poorly. Use this moment to analyze how much of your portfolio you are willing to risk and adjust if needed. Just don't pretend it is a way to protect the downside while you collect the upside.

[Glockenspiel]

Fed and President manipulation of the markets.

[JoeRetire]

I'm not a market timer, and generally don't listen to financial news...

But I'm getting worried the market hasn't crashed yet. It's been long overdue by now, yes?

Is there a due date on the economy? I don't think so.

The economy is doing well. And the market hasn't crashed yet. Eventually it will. Nobody knows when "eventually" will occur.

Stop getting worried. And stop watching whatever source is generating this worry for you.

[HEDGEFUNDIE]

Fed and President manipulation of the markets.

The Fed’s stated mission is to keep the economy humming.

Is that “manipulation” or just how the world works?

[FrankLUSMC]

Fed and President manipulation of the markets.

In before the LOCK!!!!

[big bang]

Fed and President manipulation of the markets.

In before the LOCK!!!!

Never been in a thread that was locked.
Just using the opportunity.....

[Alaric]

The human brain wants to find patterns. I have seen a lot of people, especially among those old enough to remember the dot com bust and the 2008 Great Recession but not necessarily old enough to remember the preceding decade(s), apparently come to the conclusion that major economy and markets crashes (although you can have one without the other) come around about once a decade and wipe out around half the value of the stock market. So by that back of the envelope thinking, we are overdue for the next big one.

Link below to a recent L.A Times article on many Millennials missing out on potential gains due to fear of the past repeating. Which one day it will, but in the meantime, many people ~25-35 have been falling behind.

https://www.latimes.com/business/story/ ... ?_amp=true

That’s in part due to the financial crisis that shaped the economy during millennials’ formative years — and the habits and fears they adopted at that time have, to some extent, kept them away from this year’s runaway market success.

“They’ve been tarnished by the damage that Wall Street did 10 years ago, and it’s in their psyche,” said Steve Nielander, a San Diego State finance lecturer and a partner at wealth management firm Cerity Partners.

Older millennials also remember the dot-com crash of technology stocks in the early 2000s, which means they’ve witnessed two huge market plunges “in a 10-year period, and that’s never happened before,” Nielander said.

“These people grew up and watched that, and saw the pressure on their parents of losing money in the stock market, losing their homes and seeing the mass distrust of Wall Street,” he said.

There's also some off-base commentary in the piece about the virtue of DCA due to investors being able to buy more shares at low prices and fewer shares at high prices, but that notwithstanding it was a good read.

[MotoTrojan]

It did decline 20% in December 2018.

Is that not enough?

To the moon!

The economy didn't decline...

[3funder]

If you're hoping for a big drawdown, you'll get your wish eventually. You will probably not see it coming with any kind of accuracy. Stay invested and take appropriate risks.

+1

[dwickenh]

If you're hoping for a big drawdown, you'll get your wish eventually. You will probably not see it coming with any kind of accuracy. Stay invested and take appropriate risks.

+1

+2

[cashboy]

I'm not a market timer, and generally don't listen to financial news...

But I'm getting worried the market hasn't crashed yet. It's been long overdue by now, yes?

it is not like a pizza delivery

[willthrill81]

I'm not a market timer, and generally don't listen to financial news...

But I'm getting worried the market hasn't crashed yet. It's been long overdue by now, yes?

We had a brief but real bear market in 2018. VTSAX dropped by just over 20%. So the current bull market isn't that old at all.

I think that many, not necessarily you, let 2000-2009 taint their views for what is typical of the stock market. 50% drops have not been the norm. IIRC, U.S. stocks have only dropped that much three times in nominal dollars and five times in real dollars over the last ~120 years. There have only been ten bear markets (i.e. at least 20% decline) since 1920.

[TierArtz]

The collective national population is not scared. Most people who want a job have a job. Good fiscal policy. FWIW, my net worth has increased $1082 per day since 20 January 2017 I'll take some more of that!

[LadyGeek]

I removed an off-topic post. This thread has run its course and is locked. See: Non-actionable (Trolling) Topics

If readers can't do anything with the content of a topic other than argue about it, it does not belong here. Examples include:

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