Some banks are failing, interest rates are up, the NYSE looks like 2008 all over again, our pets heads are falling off... and this thread is eerily silent. Is that a good sign, or one of impending doom? I moved some money to a nice safe-er money market; but instead should I be buying gold, or autocockers, or gold autocockers?..
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Yeah... The SVB collapse shook me pretty bad. I moved my Roth IRA stuff into bonds just to be safe. Not really sure what else to do. Plus there's also the debt ceiling problem that's ongoing. I'm kinda scared to do anything before that gets resolved.View my feedback or read about my Virginia woodsball club.
Let me make you something. I build pneumags, auto-response frames, and wooden pill cases. -
I emptied out the Robinhood account today.
I was up $148.
The long term stuff is still doing what it's doing.
But for now I'm stepping away from the casino.Attached FilesComment
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SVB failed because they back risky companies, (high risk = high reward) and those companies that soared in 2020-21 were hit hard by inflation and the fed raising rates. They started to pull out cash, which dropped SVB, who sold off assets to compensate, which triggered a run on the bank. That run was caused by fear. Not at all the same as when banks were bundling bad debt and selling it off in 2008. I won't go into a rant about market manipulation, politics, profits, etc. There is only one piece of advice at the end of the day.
Play the long game.
No amount of personal day trading is ever going to beat the market. By the time you've heard of something and want to make a move, the guys who do this professionally are already 3 weeks ahead of you.
Play the long game.
All you have to do is track one of the major indexes, like the S&P500. 1 year return? -14.26%. 5 year? +52.48% 40 year return? +2495.26%.
Play the long game. 😉Comment
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Not what I had heard head shot... SVB I believe it was said: Had too many people in charge who had no idea about banking. They tied up their $ in long term (10 plus years) mortgage backed securities. Normally, this is fine, and somewhat normal. The issue is, they did it with 97% of their cash and for a measly 2 to 3%. Measly now-a-days. That's what the problem was...
Now you can get treasuries at 4 to 5%, this back was locked into rates at half that. Customers wanted higher rates or they would take their money out. Now we have a liquidity problem. These people are locked in. Of course they could sell the securities at anytime, but it would have to be at a loss. You wouldn't pay $1000 for a 2% security right now like they did, but maybe you'll buy it at a discount, say $900, you'll get your 2% and the other $100 when it comes due.
That means they would have to sell at a loss, and they did. for liquidity they have to sell $20 billion at a 1.7billion loss. Talk about ouch.
The key take away is diversity and ladder your risk, ie, don't lock everything into long term if you're a bank.
I am the admin...Comment
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True, I was trying to oversimplify it, but I think the point remains the same. It was risky business, but not the same as the predatory lending and securities bundling that collapsed things in 2008. Yes it is still bad, and the overall banking system took a hit in the market, but you aren't going to collapse the housing market because a high end bank screwed the pooch. Your last point is excellent too, diversifying is very important! -
I'm reading all the same things. Too many eggs in one basket, and that basket was long term securities that are now rapidly out paced by inflation and increased Fed rates intended to curb it.
As interest rates increase and loans get harder, and more expensive, to procure I have to assume that will have an impact on home sales and values.
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I moved my retirement money into government bonds about a year ago. Going to sit there for the foreseeable future.
In my Fidelity fun account I've been buying fractional CDs and mutual funds. As the fractional CDs come to maturity I'm switching over to regular $1000 CDs. Right now you can get 5% on a 3 month CD.Comment
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So what am I doing? Staying diversified. I've been investing in real estate, putting more money into money markets (they are paying 4.46% as of my typing today - Fidelity Symbol FDRXX), I still have money in the market, I'm not going to try and time it, just keep dollar cost averaging.
I do believe changes are coming though.I am the admin...Comment
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Fructose! Buy fructose!
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RESPECT ME AND MY PINK RIMS!!!Comment
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