Buckle Up!
We’re in for a Bumpy Ride!
A death cross is formed when a stock’s 50-day moving average crosses below its 200-day moving average. The bearish technical move implies the rapid deterioration of a stock’s upward momentum.
DYI: This
is the type of fireworks DYI has been anticipating for longer than I care to admit; as valuations for the long term investor as opposed to speculators
has bumped us out of the stock market and in our opinion rightfully so! Is this the long awaited downdraft?? Maybe!? Who knows for sure?
What we do know stocks purchased or held
today, going to sleep like Rip Van Winkle waking 12 years from now your average
annual estimated return is – drum roll please – 2.80%. I’m actually amazed that the return is
positive. However this is a nominal
return before management fees, commission, trading impact costs, taxes, and of
course the biggest tax INFLATION! Factor
in a typical 401k with a managed stock fund with a 1% management fee with a
typical 0.50% trading impact drag on performance plus the Fed’s achieve their
2% inflation that equals 3.5%. Subtract
that from 2.8% nominal return you now have an estimated return after all costs negative 0.7%!
Updated Monthly
AGGRESSIVE PORTFOLIO - ACTIVE ALLOCATION - 12/1/18
So….If you have any debts such as a car/truck
payment, credit cards or student loans put extra dollars there first as those
interest costs are greater than the return from stocks. Hang on to your cash better valuations are
ahead. The Great Wait may have ended as
the long awaited bear market arrives.
TILL NEXT TIME
DYI
Here is the link to Money Chip all you have
to do is plug in the numbers – they do the math – to determine the estimated
average annual return for stocks.
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