Investing Strategies. What is your move?

[Dave Hess]

Don't forget there are many other things that someone can invest in besides stocks.

Like starting a business.
Land.
Buying a semi truck.
Equipment.
Car wash.
McDonald's.
M&M meats.
Gas station.
Hardware store.
Auto parts store.
Golf course.
Indoor climbing gym.
Farm.
Gravel pit.
Excavation company.
Footings and basement wall company.
Antique furniture dealer.
Road grading and plowing.
Moving company.
Mini storage.
Power sports dealership.
Build an 8 plex or apartment building.
Driving school.
Equipment operator school.
Butcher shop.
Tire store.
Build jet boats.
Barber shop.
Teach first aid courses.
Mobile tire swaps.
Fire extinguisher refiller.
Pub.
Resort.
Vineyard.
B&B.


There are thousands of things a person can invest in, many will do better than most stocks.

Why own a millionth of a company, when you can own the entire thing.

It’s expensive to start a business today with all the rules, regulations, red tape, insurance(s), overhead, financial liability, Taxes, etc, etc….

I agree with you it can be very rewarding if business is successful. It can also be a nightmare if things go wrong.

I’m a small business owner.

 

[Dave Hess]

Hmm. I noticed the stock that I was holding had a good day before, so on Friday I thought I'd see if I could capture some gain. Put to sell at a number I thought it might do... watched as it dropped all day. Oh well, sit and hold I guess. But on Sat I got an email saying it sold, but won't be processed until Tues? weird. But I did snag it at a good price, so I can't complain, as long as it went through.

Debating what I'll do. Am thinking CD's as I suspect some portion is going out in the next few months as the oldest is getting ready for college. Don't know if I want to do a CD ladder but I think CD's wiser than doing day trading, as I have no background in that, and this is money I might need inside of a year. Pick short term CD's for minor gain. Try to pick maturity dates for when I need the money.

Maybe I could try to find something to dabble in, money I don't need over the next year. Will think hard before doing that of course. Market too volatile, and I'm getting into an expensive time of life (teen drivers and teens headed to college).

Short term CDs are a good idea with rates keep rising.

 

[CanAmAndMore]

It’s expensive to start a business today with all the rules, regulations, red tape, insurance(s), overhead, financial liability, Taxes, etc, etc….

I agree with you it can be very rewarding if business is successful. It can also be a nightmare if things go wrong.

I’m a small business owner.

I did two smart things in my life, becoming self employed, and marrying a good woman.

 

[PWMDMD]

I did two smart things in my life, becoming self employed, and marrying a good woman.

Ditto!

 

[JeffKeryk]

Interest rates are the Fed's tool to manage inflation and affect the economy. It is a poor tool at best. The real solution is the economy itself. The key problem has been the decimation of the supply chain. Truck drivers taking other jobs, product shortages across the assembly BOM hierarchy.

We are seeing inflation drop due to the supply chain healing; it really is that simple for the most part.

 

[alarmguy]

Interest rates are the Fed's tool to manage inflation and affect the economy. It is a poor tool at best. The real solution is the economy itself. The key problem has been the decimation of the supply chain. Truck drivers taking other jobs, product shortages across the assembly BOM hierarchy.

We are seeing inflation drop due to the supply chain healing; it really is that simple for the most part.

Congress is worse than the Fed, Its actually the Fed who is trying to clean up the mess Congress makes... such as free money.
Did anyone think pumping Trillions of dollars (actually tens of trillions now) in borrowed money to Americans would not result in inflation?
I do agree, rates should have been left at their traditional norms roughly 8% because even the Fed got involved with phony junk such as QE.

 

[SC Maintenance]

Since were talking central banking - this to me was worth the watch albeit very dry - simply because you don't see central bankers in this format often.

You can fast forward through the also ran's - they add nothing of value IMHO.

I made some notes of what I believe are the most important parts ::

25:50 Powell talks about ongoing inflation and social costs
52.20 Powell talks briefly about China
1:22:04 - spoiler alert - Powell doesn't predict 2% core this year or next - maybe 2025.

My take away - Powell thinks rates are now restrictive, is in wait and see mode, doesn't see inflation ending soon, core issue is now labor costs, he sees this as more like the 70's and 80's (40:11), and there tracking PCE and core, not headline.

 

[SC Maintenance]

Congress is worse than the Fed, Its actually the Fed who is trying to clean up the mess Congress makes... such as free money.
Did anyone think pumping Trillions of dollars (actually tens of trillions now) in borrowed money to Americans would not result in inflation?
I do agree, rates should have been left at their traditional norms roughly 8% because even the Fed got involved with phony junk such as QE.

The fed is the entity that enables the government to borrow money. Without Fed liquidity and balance sheet, there wouldn't be the capital available for govco to borrow.

Two sides of the same coin at best. Drug dealer and user - maybe better analogy

 

[PimTac]

Government spending is the big problem. They (we) are borrowing $63,000 each and every second.

https://www.fiscal.treasury.gov/files/reports-statements/mts/mts0623.pdf

 

[alarmguy]

Government spending is the big problem. They (we) are borrowing $63,000 each and every second.

https://www.fiscal.treasury.gov/files/reports-statements/mts/mts0623.pdf

This is a better illustration for the general public as they like animation = https://www.usdebtclock.org/

*LOL* The numbers are so big they most likely cant comprehend!

 

[CanAmAndMore]

They, the governments, don't care.

If I borrow money, it's after making a solid business plan that the money borrowed is for a legitimate need, and that it will help out revenue, and I've got a plan to repay it.
Any business owner knows that, or they go bankrupt.
Politicians for the most part are clueless about how to handle money, or when it should be borrowed. Furthermore they don't care, as its not their money, its our money they're wasting frivolously.

Borrowing money should be for things we truly need, or can make us money in the future.

Just giving people money for no reason, can be very harmful. People who work for their income appreciate it more, and will often ( not always ) make wiser spending decisions, because they had to sweat for it and get blisters...not just handed to them willy nilly for doing nothing.

That sense of satisfaction is amazing when you've worked hard, and bought your first car, home, business, aiplane, or whatever.

 

[SC Maintenance]

The debt numbers can't be comprehended. There is nothing in life that comes close.

The closest think I can think of is dividing the whole by the population and telling everyone that every man, woman and child owes almost $100K each - so my family of 4 owes $400K towards the federal debt.

It will never be repaid.

Also - of note - the last debt ceiling agreement was the first time there was simply a time - not a dollar cap. Essentially they can spend as much as they can until January 2025

"Temporarily suspends the debt limit​

The deal suspends the nation’s $31.4 trillion borrowing limit until Jan. 2025. Suspending the debt limit for a period of time is different than setting it at a new fixed level. It essentially gives the Treasury Department the latitude to borrow as much money as it needs"

Source:

New Details in Debt Limit Deal: Where $136 Billion in Cuts Will Come From (Published 2023)

Two years of spending caps, additional work requirements for food stamps and cuts to I.R.S. funding are among the components in the deal.

www.nytimes.com

 

[PimTac]

This is always a tough crowd. Perhaps a little late to the party, I agree that Powell has handled this about as well as anyone could, not that many here will see it. I mean, so many here still think the economy is in terrible shape as they're gainfully employed, inflation is coming down quickly, gas is reasonably cheap again, and as a bonus, they're riding their +10% YTD returns.

The inflation numbers are coming down per the media and government but everyday people are still seeing prices going up on things they buy.

The other concern is the increasing amount of credit card balances being held over. A lot of people including myself use cards for most purchases. I am fortunate to be able to pay each month to avoid interest charges but the numbers show that more and more are not able to.

Powell has alluded that he will raise rates once or twice before the year is over. He is walking a fine line.

 

[PWMDMD]

Congress is worse than the Fed, Its actually the Fed who is trying to clean up the mess Congress makes... such as free money.
Did anyone think pumping Trillions of dollars (actually tens of trillions now) in borrowed money to Americans would not result in inflation?
I do agree, rates should have been left at their traditional norms roughly 8% because even the Fed got involved with phony junk such as QE.

There isn't a person involved in the process that did not know this would cause inflation. It is just a basic principle of economics. It was a choice between inflation for 12-24 months or recession and deflation for years which is much worse. It was the lesser of two evils. This was written about several times as it happened but no one with a clue is surprised. I've said it before and I'll say it again - there was no coming out of CV-19 and not experiencing some significant level of pain. You can't shut down the world economy and expect to just bounce back. Arguments can be made that the Fed was late to the party or too aggressive or not aggressive enough but they had to do something.

 

[alarmguy]

There isn't a person involved in the process that did not know this would cause inflation. It is just a basic principle of economics. It was a choice between inflation for 12-24 months or recession and deflation for years which is much worse. It was the lesser of two evils. ...

Sorry, I am tired of hearing "lessor of two evils" (no disrespect)
I dont know how old you were in 2008 but it was the same verbiage. In fact to me, now standard operating principle. Federal debt ratio is now the highest in modern history at 128% ... at what point do we actually live within our means and that includes suffering when times are rough.

Sorry but my feeling is, we allowed the Fed/Congress to become our "keeper" to keep us solvent from our own irresponsible and unsustainable spending. The Federal budget is so full of holes it truly is non sustainable until the day of reckoning comes and it will come, the unthinkable will happen some day, the youth (40 and under) doesnt know what responsible spending is ... at what point where this crashes I do not know, we are at 32 trillion in debt, what is the magic number? 50, 60, 70, 100 trillion? and what happens since we are starting out at 33 trillion if another world event comes along shortly? AS it is, we are getting close to paying interest on the debt equal to or exceeding the entire defense budget.

No one can deny this, if it wasnt the case why has this number not start to reverse itself? Answer, it never will until the day it can no longer be paid, so if we think we would have suffered by biting the bullet back in 2008... what does one think it going to happen with this continuing unchecked? http;//usdebtclock.org

Where is all the cost cutting? Where is the restraint? It doesnt exist, we live in a fantasy world.
In the interest of this thread I will keep quiet on the subject now, this is not in any way a political post just cause and affect in our economy I dont want anyone to bring politics in and why I will bow out gracefully...

 

[PWMDMD]

Sorry, I am tired of hearing "lessor or two evils" (no disrespect)
I dont know how old you were in 2008 but it was the same verbiage. In fact to me, now standard operating principle. Federal debt ratio is now the highest in modern history at 128% ... at what point do we actually live within our means and that includes suffering when times are rough.
Sorry but my feeling is, we allowed the Fed to become our "keeper" to keep us solvent from our own irresponsible and unsustainable spending. No one can deny this, if it wasnt the case why has this number not start to reverse itself? Answer, it never will until the day it can no longer be paid, so if we think we would have suffered by biting the bullet back in 2008... what does one think it going to happen with this continuing unchecked? http;//usdebtclock.org

In the interest of this thread I will keep quiet on the subject now, this is not in any way a political post just cause and affect in our economy I dont want anyone to bring politics in and why I will bow out gracefully...

Yes, the Fed does not attempt to hide this in any way and it is the official position of the Fed during the start of significant economic downturns since the Great Depression has been to inject liquidity into the markets. That is not going to change any time soon because it is basically all the Fed can do.

You can be tired all you want, I'm not a fan of the consequences myself, but I understand why they did it because had they done nothing and we were in a depression with deflation it would be much worse.

The Fed is a blunt instrument with few options. I wish there was some other mechanism that could deal with downturns without adding to the debt but to date, no one has thought of it.

 

[alarmguy]

Yes, the Fed does not attempt to hide this in any way and it is the official position of the Fed during the start of significant economic downturns since the Great Depression has been to inject liquidity into the markets. That is not going to change any time soon because it is basically all the Fed can do.

You can be tired all you want, I'm not a fan of the consequences myself, but I understand why they did it because had they done nothing and we were in a depression with deflation it would be much worse.

The Fed is a blunt instrument with few options. I wish there was some other mechanism that could deal with downturns without addint to the debt but to date, no one has thought of it.

This isnt just the Fed, we now have employment numbers at historical highs and more. So why haven't we taken advantage and reversed borrowing by Congress to a balanced budget? The economy couldn't get better, so good the Fed is jacking rates up to throw people out of work and slow things down, yet, we are still running up the deficit. What is the excuse this time?
Its us as a people getting used to living on debt we dont want to pay anything back.
Ok, really, good conversation but I should bow out now !*LOL* (really this time)

 

[PWMDMD]

This isnt just the Fed, we now have employment numbers at historical highs and more. So why haven't we taken advantage and reversed borrowing by Congress to a balanced budget? The economy couldn't get better, so good the Fed is jacking rates up to throw people out of work and slow things down, yet, we are still running up the deficit. What is the excuse this time?
Its us as a people getting used to living on debt we dont want to pay anything back.
Ok, really, good conversation but I should bow out now !*LOL* (really this time)

These are two different issues resulting in the same ends IMO. General spending is out of control especially when we give tax cuts and don't pay for them. Spending when the Fed wants to inject liquidity to stave off an economic downturn is out of control. If only one of these was out of control we'd be much better off. If we didn't have a general spending/tax collecting problem we could endure the infrequent times like 2008 and 2020 when we needed quantitative easing.

But that doesn't mean the Fed made the wrong move. There was no other move to make.

Or, I guess, what would have done?

 

[PimTac]

Both consumers and the government need to look at their budgets. Many of those I mentioned before with reoccurring balance on credit cards can find ways to pare their spending.

Most budgets contain what is called mystery money. Take a sheet of paper and do a line item income and expense comparison. The mystery money part will be obvious. Tips, forgotten fees and such are in that category.

For the willing individual they can pare their budget back either for more saving or to reduce debts. It does take discipline to do it and to keep doing it. The government doesn’t have that discipline unfortunately. It will have to be forced upon them.

 

[PWMDMD]

This isnt just the Fed, we now have employment numbers at historical highs and more. So why haven't we taken advantage and reversed borrowing by Congress to a balanced budget? The economy couldn't get better, so good the Fed is jacking rates up to throw people out of work and slow things down, yet, we are still running up the deficit. What is the excuse this time?
Its us as a people getting used to living on debt we dont want to pay anything back.
Ok, really, good conversation but I should bow out now !*LOL* (really this time)

Honest question...you're the Fed. You don't control Congressional spending and the debt is what it is, and you have a mandate to manage price stability and maximum sustainable employment and CV-19 happens and the world shut downs for months. All economic indicators point to a massive economic downturn, recession, depression, and deflation.

What would you do?