Sign of things to come? SVB fails

[Rover]

Bonds aren't necessarily safe, they got clobbered last year and same happened in 2018 although not to the same degree. I lost money both times in "safe" investments. Edward Jones requires a certain percentage in fixed income, can't be all in equities in the program I'm in. The typical 80/20 or 60/40 portfolio with bonds is a crock, IMO. I am to the point I'm about to pull everything from Edward Jones and go with a more boutique approach. Fed is creating these boom & bust cycles within the markets with one extreme to the other on monetary policy and traditional investing probably needs to be reconsidered. Quite frankly real estate has held up by far the best of the asset classes during this current bear market. If you've got spare change throw it in a rental, value is tangible and can't disappear overnight. I

Don’t blame the government for bad investment advice. Bonds are entirely appropriate for many investment conditions. They aren’t good short term investment vehicles but intended for long term and income. Using them wrongly and blaming someone else is like blaming a car company because you bought a sedan and needed a pickup. Buy the right tool for the right job. People need to educate themselves on proper investment devices and strategies and quit blaming the government for their own mistakes.

Oh, and ask all those who invested in real estate how 2008 worked out for them. Assuming you can flee to real estate as a safe haven without understanding the realities is foolhardy as well.

[OKCRealtor]

Don’t blame the government for bad investment advice. Bonds are entirely appropriate for many investment conditions. They aren’t good short term investment vehicles but intended for long term and income. Using them wrongly and blaming someone else is like blaming a car company because you bought a sedan and needed a pickup. Buy the right tool for the right job. People need to educate themselves on proper investment devices and strategies and quit blaming the government for their own mistakes.

Oh, and ask all those who invested in real estate how 2008 worked out for them. Assuming you can flee to real estate as a safe haven without understanding the realities is foolhardy as well.

I can assure you I understand the realties much better than most. I also bought real estate in the great recession straight out of OU in 08- it was one of the smartest things one could possibly do looking back. Most people were afraid though, lets not confuse fear with opportunity. Opportunities like that don't come around often. Not unlike financing at 2-3% last couple years and buying the dip now in both the equities market & real estate. It's only going to get more expensive.

[Teo9969]

Theoretically completely safe but their capital requirements and limitations on types of investments may have dictated "cash or cash equivalents." US treasuries are basically cash-safe but if interest rates have moved against you, you just don't get as much cash if you're fire-sale forced to sell them.

That's my point. They were too conservative. Had they invested more in "riskier" asset classes beyond just Treasuries, they likely would have made some money and certainly would have had options in terms of what to liquify. The point I'm making is that conservative investing does not equate with smart investing even though we often hear that safe is the best way institutions, especially financial institutions, should handle their funds.

[Rover]

I can assure you I understand the realties much better than most. I also bought real estate in the great recession straight out of OU in 08- it was one of the smartest things one could possibly do looking back. Most people were afraid though, lets not confuse fear with opportunity. Opportunities like that don't come around often. Not unlike financing at 2-3% last couple years and buying the dip now in both the equities market & real estate. It's only going to get more expensive.

Yes , you benefitted on others’ losses. Good for you. But all those others that thought real estate was fool proof got fooled. Don’t mistake one lucky or good move with what generally happens. The same always increasing story can be to said about equities too. Generally the market always moves up over time. But timing and circumstances are everything.

[OKCRealtor]

That's my point. They were too conservative. Had they invested more in "riskier" asset classes beyond just Treasuries, they likely would have made some money and certainly would have had options in terms of what to liquify. The point I'm making is that conservative investing does not equate with smart investing even though we often hear that safe is the best way institutions, especially financial institutions, should handle their funds.

This. You're only going to get so far in life with conservative anything. You have to take risks. Calculated ones, but a good general rule is to do the opposite of what everyone else is doing. Do what others won't do and you can have what others can't have.

[Edmond Hausfrau]

And now, UBS buys out Credit Suisse. Are any of the great European banking houses still in power? I miss Credit Lyonnais. Looks like Lloyds is still hanging on.

[jackirons]

Bonds aren't necessarily safe, they got clobbered last year and same happened in 2018 although not to the same degree. I lost money both times in "safe" investments. Edward Jones requires a certain percentage in fixed income, can't be all in equities in the program I'm in. The typical 80/20 or 60/40 portfolio with bonds is a crock, IMO. I am to the point I'm about to pull everything from Edward Jones and go with a more boutique approach. Fed is creating these boom & bust cycles within the markets with one extreme to the other on monetary policy and traditional investing probably needs to be reconsidered. Quite frankly real estate has held up by far the best of the asset classes during this current bear market. If you've got spare change throw it in a rental, value is tangible and can't disappear overnight. I

I'd highly recommend switching to Vanguard, Fidelity, or Schwab. You can self-manage or get help from an advisor. I assume the fees are much more reasonable with those three compared to Edward Jones.

[OKCRealtor]

Markets didn't like what Powell had to say today at all, initially rose on the .25 hike. It sounds like we may get another small increase in May and then the hikes are done. Banks are going to do some of the work for them in lieu of higher rate. Honestly though they have little to no idea what direction this thing is headed and the future trajectory of things. It's no wonder we had a nasty sell off as Powell just kept rambling. I heard a lot of blah and blah. Hopefully the banking system remains healthy, it's crazy how much money has flowed out of banks and into crypto last couple weeks as people are scared.

[BoulderSooner]

Markets didn't like what Powell had to say today at all, initially rose on the .25 hike. It sounds like we may get another small increase in May and then the hikes are done.

hikes will only be done if inflation gets under control

[Just the facts]

hikes will only be done if inflation gets under control

Yep. Anyone betting actually money on interest rates staying level or even dropping will go the way of SVB.

[jn1780]

The Fed would also be admitting that the banking system is weak and cant take a 'modest' rate increase.

[Bunty]

Yep. Anyone betting actually money on interest rates staying level or even dropping will go the way of SVB.

Eventually, to get ready to be reelected, Biden will likely want to lower interest rates before very far into 2024. But the dollar will need to be strong internationally before doing that.

[jn1780]

Eventually, to get ready to be reelected, Biden will likely want to lower interest rates before very far into 2024. But the dollar will need to be strong internationally before doing that.

He can only provide suggestions to the Federal Reserve board. Their the ones who ultimately makes this massive deficient possible so its wise to not tell them how to do their job.

[Just the facts]

Or Congress could implement some fiscal discipline because a $50 trillion national debt isn't going to help. Biden did approve a bunch of new oil drilling which I suppose is an attempt to drive down fuel prices. Of course, that in turn will cut into the electric vehicle market....and round and round we go.

[OKCRealtor]

Eventually, to get ready to be reelected, Biden will likely want to lower interest rates before very far into 2024. But the dollar will need to be strong internationally before doing that.

Agreed, they'll find a fix before the election next year. Most recent poll today has his overall approval rating at 38% with only 31% of people approving of his handling of the economy. Yet things could still get worse before they get better but I think things will stabilize around rate levels now with the additional lending tightening simultaneously.

[BoulderSooner]

Agreed, they'll find a fix before the election next year. Most recent poll today has his overall approval rating at 38% with only 31% of people approving of his handling of the economy. Yet things could still get worse before they get better but I think things will stabilize around rate levels now with the additional lending tightening simultaneously.

lol this is going to get much worse before it gets better.... inflation is still out of control

[chssooner]

Are people honestly expecting deflation in order to correct inflation? Because that isn't how it works. As long as year over year inflation is going down, then it is working. Just may not be as fast as some would like.

[OKCRealtor]

lol this is going to get much worse before it gets better.... inflation is still out of control

Short the market then.

[BoulderSooner]

Short the market then.

have an will continue to

calls and puts are great things

[OKCRealtor]

have an will continue to

calls and puts are great things

Are you jumping in & out on daily action or playing it longer term? Hopefully you've made a killing if you've been shorting throughout the bear market.

[BoulderSooner]

Are you jumping in & out on daily action or playing it longer term? Hopefully you've made a killing if you've been shorting throughout the bear market.

i trade options quite a bit ... sell covered calls and use calls to get into a position

[jackirons]

Not an easy game to play, especially shorting the market. I'm taking the easy route and buying index funds every week.

[OKCRealtor]

Back to back positive inflation reports, should be good news for rates when Fed meets again in May. From their March minutes they are already expecting the bank fallout to cause a recession later this year so I wouldn't be shocked if they pause with the hikes.

[BoulderSooner]

r so I wouldn't be shocked if they pause with the hikes.

i think that is very very unlikely

[OKCRealtor]

i think that is very very unlikely

Why? If they expect a recession this year, which would be imminent at this point, why hike? A recession in and of itself should bring down inflation even more. A shallow recession is one thing, don't need them to trigger a severe one. If we do get another .25 I think that's the last one given the current data and information.