Collapse of the United States: Running thread

It's going to be like Mad Max Road Warrior around here. People will be shooting each other in the head with cross bows to steal their gasoline.

 

The question about 401K money is a good one.

Histrocially speaking, it has always been the right answer to ride out market downs for the ups that inevitably have followed. If you move your portfolio to more stable investment options, you'll generally lose out in the long run by missing the waves of recovery. Now, if you happen to be closer to retirement (within 5 years), you probably ought to be shifting some of you 401K dollars to safer investments anyway

With that said, it does seem like there are dark storm clouds brewing (oil, the dollar, the mortgage industry) that could make for one crazy, painful ride in the stock market. Sure is tempting to think about trying to step out of the way of impending carnage.

 

Let's see how bad holiday sales are at the nation's retailers. Unless I find a Brinks truck backed up to my front door when I get home today, I can guarantee you I won't be spending as much as last year.

 

Tell it to the folks who bought in '28 and '29,

Lotta folks don't live out so-called thirty-year "long terms" . . .

Your last graf is dead on.

 

Your post spurred me to do a little research, as you have pointed out the one instance where the market outperforming other investments can be called into question

During the 1929 collapse, the Dow fell from a high of 381, down to 198 and and finished 1929 at 250. This was still 50 points or 20% above where it was in 1928, so even after the crash, investors could have been carrying a 20% return on their money.

The problem was the 30s and the Great Depression. The Dow ended the decade at 150, so essentially 10 years went by and you suffered a 40% loss. By 1949, the average had gone back up to 210, so you saw a 40% return over that time, which would have exceeded any other return you likely could have attained at that time.

So, really, only those confined to a decade long investment horizon in the 30s would be the ones where riding the market would not have worked.

Update: Dow down 366 (or essentially the value of the Dow in 1929).

 

It's really only been that way since 1945. We pretty much kept to ourselves, or at least on this side of the Atlantic, before that.

 

Understood.

I'm not busting balls.

But it CAN happen . . . and given where we are, how we got here, and what COULD happen (given current cloudy circumstances) . . . those in their 20s and 30s cannot blithely follow the same "invest in good common stocks for the long term, and you'll do well" advice that worked for the Boomers.

It's a long way down, from here.

 

Ben, actually those in their 20s and 30s can. Boomers didn't have the financial programs like 401ks as readily available, with employers matching funds, etc. History says the stock market will rebound, and it will.

Smart investors will be pouring money in at times like these, not taking it out.

 

I've got a couple of Emerging Markets mutual funds that have kicked ass over the last 2 years.

 

You catch the right pieces, with a couple of influential groups chasing each other up the tape, and you can cash in big, in the CRAPPIEST markets.

Kudos.

But if/when the thing cracks wide open, it'll be a signal that what may seem to some to be merely potential areas of concern are in fact near-term unsolvable . . . and, again, look out below.

 

Ramon Noodles?! Who the fuck is he?