Economic outlook

[mrmarket]

Unfortunately the inflation story has persisted and now the Fed has their sledgehammer out to squash the mosquito, claiming that the job market is strong and thus hiking rates can still stem inflation and lead to a soft landing. Unfortunately, the lag affect on employment is a significant lag and what they are doing now won't be seen in employment roles for another 12 months. Once unemployment starts to rise, it will be very hard to stop and then we'll see big layoffs and a bigger recession.

So, with regard to when $$$MR. MARKET$$$ will jump in again with quantitative modeling momentum picks:

1. We'll have to wait until unemployment begins to rise.
2. Then we will see a deep recession followed by a stock market stall and decline.
3. Then the Fed will lower rates.
4. Then we will see the rate of unemployment begin to decrease.
5. I will buy stocks again when the unemployment rate is still rising, but the change in the rate will start to decrease. That will signal the beginning of a very long bull market.

So it is written...we will see how close my prediction is in about 24 - 30 months.

[Louetta]

Not sure we'll actually have to see the Fed lower rates for the market to begin to rise, only that people begin to figure it's about to happen and then the markets will anticipate. Anyway, I've been parking money in 2-4 mo. Treasuries since about 12/15/22.

[mrmarket]

Not sure we'll actually have to see the Fed lower rates for the market to begin to rise, only that people begin to figure it's about to happen and then the markets will anticipate. Anyway, I've been parking money in 2-4 mo. Treasuries since about 12/15/22.

3 month CD's are paying almost 5%. Why even risk the market now?

[Louetta]

3 month CD's are paying almost 5%. Why even risk the market now?

I'm not risking it right now, just saying that when things get better there's going to be some anticipating.

I've set up a ladder of treasuries in my own account (Schwab) going out every week until 5/25, two and three month bills, and a couple of four months going out to July 5. I can make a little money on the interest and have some money maturing each week if I want to buy something. Still have a reserve of cash if I want to buy and don't want to wait 'til the bills mature and I can buy on margin temporarily if I need more money, and then gradually get off the margin as the treasuries mature.

[mrmarket]

I'm not risking it right now, just saying that when things get better there's going to be some anticipating.

I've set up a ladder of treasuries in my own account (Schwab) going out every week until 5/25, two and three month bills, and a couple of four months going out to July 5. I can make a little money on the interest and have some money maturing each week if I want to buy something. Still have a reserve of cash if I want to buy and don't want to wait 'til the bills mature and I can buy on margin temporarily if I need more money, and then gradually get off the margin as the treasuries mature.

Very sound and cogent strategy Louetta

[Louetta]

Bring me your finest meats and cheeses.

I have recently grown partial to salami and American cheese sandwiches. Think of you whenever I have one.

[jiesen]

I'm not risking it right now, just saying that when things get better there's going to be some anticipating.

I've set up a ladder of treasuries in my own account (Schwab) going out every week until 5/25, two and three month bills, and a couple of four months going out to July 5. I can make a little money on the interest and have some money maturing each week if I want to buy something. Still have a reserve of cash if I want to buy and don't want to wait 'til the bills mature and I can buy on margin temporarily if I need more money, and then gradually get off the margin as the treasuries mature.

I bought I-bonds last year that are currently paying 9.6%, and after 6 months will readjust down to 6.5%. Yeah, it's tough to justify buying stocks when bonds are paying over 6% interest.

[jiesen]

Note: Difficulty with this strategy is that I-bonds have limitations. You have to open a Treasury account, which is a pain, and the max you can buy/year is $10k. So I got some for my kids' college funds, too.

[Websman]

I'm sitting in cash for now. I'm not about to lose the nice gains that I've made.