Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Can he sit tight? Can he survive? Can the fed survive? The regime can replace Powell with Eric. Clearly dear leader now believes his powers are limitless. Anyone disagree? Prepare for heavy weather and put in a second reef.
"if you bottom-fished Thursday and if you bottom-fished Friday in 1987, you slept with the fishes on Monday..... I can’t think of a single reason in the world to buy a stock [today]."
It's tempting as hell, but I'm standing pat for now, having trimmed my trading account as much as I wanted to. Lots of red on my screen, but as I hold good stuff, I'm happy adding to them at fire-sale prices at the appropriate time.
Feel bad for those who stayed "all-in" this week. Many didn't believe he would be able to follow through on collapsing our economy by kicking off global trade wars.
Lots of talking heads the last few days recommending buying at these lower prices. The main lesson I learned about markets from the GFC is this - they can always go lower.
Don’t rush in. We’re not even 3 months Into Cheeto’s 2nd term. If he doesn’t experience the same fate as his idol William McKinley then cash is king for the foreseeable future (just my opinion).
In March/April 2020, Fed stepped in with monetary policy and Congress with fiscal policy. Helped backstop COVID slide ... and, then massively reverse it. Hard to see either Fed or Congress stepping in March/April 2025.
When I originally bought my Junk at precisely the wrong time, I rode out the horror and then back upward, all the while reinvesting monthly dividends. I'm now wondering if I should stick it out AGAIN, or move $$$ into higher quality paper. I own WCPNX in taxable. Hmmmmmm.... Maybe acquire a slug of that in the IRA? It has done well through the sudden "American Carnage" we've just seen, and will continue to see, until.... ?
Even though I had cash to invest during the pandemic, I hesitated - caught between wanting to exit or take a chance to buy while the market was low. I chose to hold what I had and invested only small amounts at the edges, kicking myself later for the missed opportunity.
So even though this time *may be different* I deployed dry powder at the edges on both Thursday and Friday, keeping enough in reserve to see us through the next 2-3 years if necessary.
The U.S. is not going out of business, but we’re all aboard a ship run by fools.
Even though I had cash to invest during the pandemic, I hesitated - caught between wanting to exit or take a chance to buy while the market was low. I chose to hold what I had and invested only small amounts at the edges, kicking myself later for the missed opportunity.
So even though this time *may be different* I deployed dry powder at the edges on both Thursday and Friday, keeping enough in reserve to see us through the next 2-3 years if necessary.
The U.S. is not going out of business, but we’re all aboard a ship run by fools.
Sounds similar to my thinking. My portfolio was off to one of its better starts with about a 4% gain thru the first 3 months of the year. Most (but not all) of that has been erased in 2 days. I too deployed dry power Thursday & Friday taking cash from 12% down to 4.5% at the end of yesterday. There’s considerable fixed income / bond exposure in the ”invested” portion, so that 4.5% cash weighting is a bit misleading. Still, it represents an uncharacteristically low level for me.
I’m struck by how universal across asset classes Friday’s selling was. By contrast, on Thursday utilities, consumers staples, most bonds were up. But Friday all hell broke loose. Little was up. (“Sell now! Look later!”) I’m thinking Thursday’s selloff was based more or less on fundamentals, while Friday’s selling was mostly sheer panic.
My portfolio was at its balance point at the start 2025. It is now noticeably overweight in cash and bonds and noticeably underweight in broad based stock etfs and oefs. (In aggregate, my dividend focused individual stock investments look fine.) This new market era is only 2 1/2 months old. It's still too soon for this buy and hold guy to do anything. Maybe if the S&P 500 gets to be down by 20% I will take another look.
Everyone’s financial situation is different. We are near retirement and thus we stay conservative in our allocation. 65-70% are in bonds and cash while the remaining 30-35% in stocks. Don’t think this drawdown has playout completely and there are more downside in coming months. We will stay patient and collect generous dividends from bonds and cash. Will buy more T bills this weekend as others mature next week.
Yes, we are also heavily in T-Bills and Treasury MMKT. There's nothing quite like the safety and security of the full faith and credit of the Trump government.
Here’s what Fido’s analytics pulled up for me this morning.
Domestic Stock 16% Foreign Stock 24% Bonds 26% Short Term 22% Other 11%
After 2 days buying I’ve moved the equity position from 35% to 40%. The “other” remained stable at 11%. Most of that is in a real assets fund. Somewhat more aggressive than those numbers however, because a good chunk is in CEFs which employ leverage. Friday was my worst day in years, off 3.22% - slightly less than what PRWCX lost (- 3.37%).
I’m not someone looking for positive annual returns. Willing to lose money over shorter periods (1-3 years) as long as I have confidence in what I own. I believe that over 3-5 years I’ll do better than cash. Investing entails risk. All the fund prospectuses tell you that. @Sven is correct that we’re all different in our needs, expectations, dispositions and past experiences.
Question for the members: What do you think David Giroux was buying Friday?
@equalizer - Thanks. Excellent article. Helps explain what happened.
I suspected some liquidity issues Friday (possibly part of the referenced ”margin” issues?) - just from the way everything except the very highest rated credits behaved.
Paradoxically, the Fed fears liquidity crunches. If anything can drive them to intervene / cut rates / open the spigot, that would be it - loath though they’d be to do so.
“I’m thinking Thursday’s selloff was based more or less on fundamentals, while Friday’s selling was mostly sheer panic.”
This makes sense to me and I’m hoping cooler heads prevail on Monday. If not, I’ve still got some more dry powder available.
My take: Thursday's sell-off was so pronounced that people reacted even more severely on Friday; both were more a case of panic, rather than the usual ("mere" ) overreaction to both good and bad news by "Mr. Market." Fundamentals are out the window until some sanity is restored. We are way past ordinary changes in policy.
Comments
Just saw a good quote from (gasp!) Cramer...
"if you bottom-fished Thursday and if you bottom-fished Friday in 1987, you slept with the fishes on Monday..... I can’t think of a single reason in the world to buy a stock [today]."
It's tempting as hell, but I'm standing pat for now, having trimmed my trading account as much as I wanted to. Lots of red on my screen, but as I hold good stuff, I'm happy adding to them at fire-sale prices at the appropriate time.
Now we know better.
Don’t rush in. We’re not even 3 months Into Cheeto’s 2nd term. If he doesn’t experience the same fate as his idol William McKinley then cash is king for the foreseeable future (just my opinion).
But today? I'm happy to just watch and let the bloodbath wash over me, somewhat comforted by knowing I have cash to deploy mightily when ready.
What happens when I push this button?
FAFO.
To remain topical - I’ve been liberated from quite a bit of money over 2 days.
So even though this time *may be different* I deployed dry powder at the edges on both Thursday and Friday, keeping enough in reserve to see us through the next 2-3 years if necessary.
The U.S. is not going out of business, but we’re all aboard a ship run by fools.
Sounds similar to my thinking. My portfolio was off to one of its better starts with about a 4% gain thru the first 3 months of the year. Most (but not all) of that has been erased in 2 days. I too deployed dry power Thursday & Friday taking cash from 12% down to 4.5% at the end of yesterday. There’s considerable fixed income / bond exposure in the ”invested” portion, so that 4.5% cash weighting is a bit misleading. Still, it represents an uncharacteristically low level for me.
I’m struck by how universal across asset classes Friday’s selling was. By contrast, on Thursday utilities, consumers staples, most bonds were up. But Friday all hell broke loose. Little was up. (“Sell now! Look later!”) I’m thinking Thursday’s selloff was based more or less on fundamentals, while Friday’s selling was mostly sheer panic.
The truck is in the ditch @Derf
This makes sense to me and I’m hoping cooler heads prevail on Monday. If not, I’ve still got some more dry powder available.
Wait... wait... let me think about that...
Domestic Stock 16%
Foreign Stock 24%
Bonds 26%
Short Term 22%
Other 11%
After 2 days buying I’ve moved the equity position from 35% to 40%. The “other” remained stable at 11%. Most of that is in a real assets fund. Somewhat more aggressive than those numbers however, because a good chunk is in CEFs which employ leverage. Friday was my worst day in years, off 3.22% - slightly less than what PRWCX lost (- 3.37%).
I’m not someone looking for positive annual returns. Willing to lose money over shorter periods (1-3 years) as long as I have confidence in what I own. I believe that over 3-5 years I’ll do better than cash. Investing entails risk. All the fund prospectuses tell you that. @Sven is correct that we’re all different in our needs, expectations, dispositions and past experiences.
Question for the members: What do you think David Giroux was buying Friday?
Maybe why gold and healthcare dropped on Friday because funds were selling liquid assets to meet margin calls.
https://archive.is/HEuGt
I suspected some liquidity issues Friday (possibly part of the referenced ”margin” issues?) - just from the way everything except the very highest rated credits behaved.
Paradoxically, the Fed fears liquidity crunches. If anything can drive them to intervene / cut rates / open the spigot, that would be it - loath though they’d be to do so.
This makes sense to me and I’m hoping cooler heads prevail on Monday. If not, I’ve still got some more dry powder available.
My take: Thursday's sell-off was so pronounced that people reacted even more severely on Friday; both were more a case of panic, rather than the usual ("mere" ) overreaction to both good and bad news by "Mr. Market." Fundamentals are out the window until some sanity is restored. We are way past ordinary changes in policy.
GARP stocks that went down to fire-sale prices, perhaps....?
Seeing how Asia opened just now, if it holds, I may start nibbling tomorrow.