Preparation for global recession

[dj230]

Anyone preparing for a global recession?

Ever since December I’ve been preparing for a possible recession. I’m fairly young so I havnt personally experienced one.

A few things I did was convert all my USD back to CAD, sold my stocks and put all my money into gold etf’s. 

Still debating if I will keep it that way, just looking for a low risk way to store my savings and hopefully beat out inflation this year. 

[Vince]

2 minutes ago, dj230 said:

Anyone preparing for a global recession?

Ever since December I’ve been preparing for a possible recession. I’m fairly young so I havnt personally experienced one.

A few things I did was convert all my USD back to CAD, sold my stocks and put all my money into gold etf’s. 

Still debating if I will keep it that way, just looking for a low risk way to store my savings and hopefully beat out inflation this year. 

Recession = bad stock market? 

Says who? 

[dj230]

10 hours ago, Vince said:

Recession = bad stock market? 

Says who? 

Recession as in decline economic activity  

inflation, increased interest rates, less borrowing/spending, more debt/defaults, less growth in companies, etc.  
 

Essentially people being able to afford less and end up with less money potentially

I guess some sectors will will perform but risk to reward tells me otherwise. I was thinking of trying to get the rebound in stocks that usually happen but don’t want to ride the down side. Some stocks are down 50-70% from their 2021 highs. I was lucky enough to not get caught in any as I usually hold cash or short term positions. 

[Vince]

9 minutes ago, dj230 said:

Recession as in decline economic activity  

inflation, increased interest rates, less borrowing/spending, more debt/defaults, less growth in companies, etc.  
 

Essentially people being able to afford less and end up with less money potentially

I guess some sectors will will perform but risk to reward tells me otherwise. I was thinking of trying to get the rebound in stocks that usually happen but don’t want to ride the down side. Some stocks are down 50-70% from their 2021 highs. I was lucky enough to not get caught in any as I usually hold cash or short term positions. 

Dollar Cost Averaging will help save you anxiety 

Investing in an index fund with DCA means you buy low and high. 

Avoiding downturns (or trying to) means you miss the upturns. 

Market economy disconnect:

 

 

[dj230]

4 hours ago, Vince said:

Dollar Cost Averaging will help save you anxiety 

Investing in an index fund with DCA means you buy low and high. 

Avoiding downturns (or trying to) means you miss the upturns. 

Market economy disconnect:

This is what the mainstream media tells you but from my experience it’s a false narrative.

[Vince]

3 minutes ago, dj230 said:

This is what the mainstream media tells you but from my experience it’s a false narrative.

Tell me more about your experience. What is the true narrative?

[dj230]

4 hours ago, Vince said:

Tell me more about your experience. What is the true narrative?

My experience is that just buying index funds and dollar cost averaging yields very low reward return on investments. My opinion is it’s just a false narrative to add liquidity to the markets. 

 

 

[Vince]

1 hour ago, dj230 said:

My experience is that just buying index funds and dollar cost averaging yields very low reward return on investments. My opinion is it’s just a false narrative to add liquidity to the markets. 

Please define "very low reward returns"? 

You mentioned your day trading approach in detail and it had a small reward goal, smaller than index funds if I'm not mistaken. 

[dj230]

55 minutes ago, Vince said:

Please define "very low reward returns"? 

You mentioned your day trading approach in detail and it had a small reward goal, smaller than index funds if I'm not mistaken. 

Very low returns meaning an average of 10% a year month over month that’s less than 1%. If you dollar cost average the returns significantly lower. 

My day trading approach usually yields 1-5% a day, albiet not everyday, but definitely enough to get much more than 10% a year on average. Some days I’ve made 15% returns, that’s more than a whole years average return in an index fund. 

Edited January 20 by dj230

[Vince]

10 minutes ago, dj230 said:

Very low returns meaning an average of 10% a year month over month that’s less than 1%. If you dollar cost average the returns are probably lower. 

My day trading approach usually yields 1-5% a day, albiet not everyday, but definitely enough to get much more than 10% a year on average. Some days I’ve made 15% returns, that’s more than a whole years average return in an index fund. 

https://www.businessinsider.com/personal-finance/average-stock-market-return?op=1

" The S&P 500 index ...[been] returning 13.6% annually." 

[dj230]

34 minutes ago, Vince said:

https://www.businessinsider.com/personal-finance/average-stock-market-return?op=1

" The S&P 500 index ...[been] returning 13.6% annually." 

It’s hard to just look at the past 10 years as it completely takes out the 2000 dot com bubble, 2007/2008 financial crisis and calculates all the good years. Those periods of the market have to be accounted for, for a more accurate idea of the average returns in my opinion. 

[BigHewer]

22 hours ago, dj230 said:

Anyone preparing for a global recession?

Ever since December I’ve been preparing for a possible recession. I’m fairly young so I havnt personally experienced one.

A few things I did was convert all my USD back to CAD, sold my stocks and put all my money into gold etf’s. 

Still debating if I will keep it that way, just looking for a low risk way to store my savings and hopefully beat out inflation this year. 

Great post. It’s a very interesting time and one of considerable opportunity. Jittery markets, inflationary pressure, interest rate increases on the horizon BUT… US election mid-terms in November and an absolutely inevitable economic recovery across numerous sectors as the pandemic ends.

From my end, I won’t be selling, but now is a great time to leverage low-interest cash options while they’re still available and then drip feed into the markets as they falter. 

There will be some suffering and I’m no way gleeful about that, but you have to look after your own and there are some good opportunities coming up.

[dj230]

1 hour ago, BigHewer said:

Great post. It’s a very interesting time and one of considerable opportunity. Jittery markets, inflationary pressure, interest rate increases on the horizon BUT… US election mid-terms in November and an absolutely inevitable economic recovery across numerous sectors as the pandemic ends.

From my end, I won’t be selling, but now is a great time to leverage low-interest cash options while they’re still available and then drip feed into the markets as they falter. 

There will be some suffering and I’m no way gleeful about that, but you have to look after your own and there are some good opportunities coming up.

Agreed, I was planning to still buy stocks on the downturn, but have sold them all since December. Right now I’m able to borrow against my gold etfs for a really low interest rate, it’s only 1% a year. 
 

Lots of high growth tech stocks down over 70% from all time highs which is insane. 
 

I was actually thinking of starting to buy stocks again (as soon as this week) any stocks you’re specifically looking at? 
I was looking at Nio and Asana right now. 

[BigHewer]

2 hours ago, dj230 said:

Right now I’m able to borrow against my gold etfs for a really low interest rate, it’s only 1% a year. 

Absolutely spot on. Citibank are doing 0.9% fixed 1 year or 1.9% fixed for 2 (larger amount). Either way it’s a steal. I see some banks are bringing forward their cash rate application deadlines to the end of January so they know things are brewing.

I won’t be buying this month, I’ll borrow now and wait till late Feb / early March when it’s clearer who’s taking the biggest hits and which of those are best positioned to recover. So at worst just a month or so of dead cash.

[dj230]

2 hours ago, BigHewer said:

Absolutely spot on. Citibank are doing 0.9% fixed 1 year or 1.9% fixed for 2 (larger amount). Either way it’s a steal. I see some banks are bringing forward their cash rate application deadlines to the end of January so they know things are brewing.

I won’t be buying this month, I’ll borrow now and wait till late Feb / early March when it’s clearer who’s taking the biggest hits and which of those are best positioned to recover. So at worst just a month or so of dead cash.

I think that’s a better plan, I was going to wait until the 10 year yield breaks 2%, but I’m hoping to make a few quick trades for a few % here and there. I might wait it out if I don’t see any good opportunities 

[BigHewer]

3 hours ago, dj230 said:

I was going to wait until the 10 year yield breaks 2%, but I’m hoping to make a few quick trades for a few % here and there.

That’s solid as well, good move. I would hold off until the scheduled Fed meeting next Tuesday / Wednesday though, with your finger on the trigger so to speak. Whatever comes out of that is going to push yields one way or the other. 

[dj230]

10 hours ago, dj230 said:

Agreed, I was planning to still buy stocks on the downturn, but have sold them all since December. Right now I’m able to borrow against my gold etfs for a really low interest rate, it’s only 1% a year. 
 

Lots of high growth tech stocks down over 70% from all time highs which is insane. 
 

I was actually thinking of starting to buy stocks again (as soon as this week) any stocks you’re specifically looking at? 
I was looking at Nio and Asana right now. 

Amazing close to 7% returns on Nio and Asana in one day

Edited January 20 by dj230

[Vince]

6 minutes ago, dj230 said:

Close to 7% returns on Nio and Asana in one day

What about the global recession? 

[dj230]

11 minutes ago, Vince said:

What about the global recession? 

I still think a global recession is to come, this doesn't happen in a day but more like a year, there's still time to trade in the market while fed is still buying bonds, I wouldn't be invested long term though. Trading and investing isn't a static though, you have to adapt with the economy, so if things change so will my investments and trading. 

Edited January 20 by dj230

[Vince]

6 minutes ago, dj230 said:

I still think a global recession is to come, this doesn't happen in a day but more like a year, there's still time to trade in the market while fed is still buying bonds, I wouldn't be invested long term though. Trading and investing isn't a static though, you have to adapt with the economy, so if things change so will my investments and trading. 

And you feel the economy and stock market are connected? 

[Fester]

On 1/20/2022 at 10:02 AM, Vince said:

https://www.businessinsider.com/personal-finance/average-stock-market-return?op=1

" The S&P 500 index ...[been] returning 13.6% annually." 

Looks like that this double digit spell is about to end abruptly.

[Vince]

4 minutes ago, Fester said:

Looks like that this double digit spell is about to end abruptly.

You mean because the economy and stock market are linked? 

 

[Fester]

On 1/20/2022 at 11:09 AM, BigHewer said:

Great post. It’s a very interesting time and one of considerable opportunity. Jittery markets, inflationary pressure, interest rate increases on the horizon BUT… US election mid-terms in November and an absolutely inevitable economic recovery across numerous sectors as the pandemic ends.

From my end, I won’t be selling, but now is a great time to leverage low-interest cash options while they’re still available and then drip feed into the markets as they falter. 

There will be some suffering and I’m no way gleeful about that, but you have to look after your own and there are some good opportunities coming up.

Highest inflation for 40 years and that's with an arguably low official figure of 7%. The last 12 years saw The Federal Reserve pumping easy money into the system (QE) alongside mostly zero interest rates.

There will be a recovery one day but it won't be next week.   

[Fester]

5 minutes ago, Vince said:

You mean because the economy and stock market are linked? 

Everything is linked.

[Vince]

1 minute ago, Fester said:

Everything is linked.

You mean like "The Force" ? 

Because my link above says the stock market is not linked to the economy.