Does this change depending on whether they paid cash or took a mortgage? I wouldn't think it does.

Doesn't change.

But it does change the break-even calculation when comparing ST/LT gains from stock investments. ST investment gains at ordinary income, LT gains at the new rates.

$5,500 annually contributed in a roth make all your gains are tax-free, but it could potentially take a near lifetime to reach the level of gains compared to the home exemption. Plus income limits/phaseouts on roth ira contributions.

True, obviously the S&P will return 105% in the next 3.5 years.

obviously.

somigosaden,

Not only does the purchaser have any potential capital benefit, but they also will not need to pay for accommodation to live in.

Since such money (ie, rent) would otherwise be paid out of post-tax income they would otherwise need to earn, you might need to also include that in your consideration of this person's purchase.

they save rent whether they buy in cash or take out a mortgage.

If vanguard is estimating a 5.2% return on equities over the next 25 years (or more) they deserve to go out of business. Although I highly doubt they made the prediction. Source?

Take a look at side by side returns of the different investment classes over the last 100 years.

Why? The geometric mean of the Dow over the last 104 years is around 6%, or 3% inflation-adjusted.

https://www.macrotrends.net/1319/dow...storical-chart

...but really, what the market did x years ago shouldn't be an indicator of what it will do y years from now.

Totally irrelevant since DJIA excludes dividends

Given that the US is unlikely to go from an emerging market to an industrialized nation again, and it isn't exactly undervalued currently, the projection seems reasonable.

I'm not sure why you are shocked that a financial firm would have a team of economists looking at the global financial picture?

https://personal.vanguard.com/pdf/ISGVEMO.pdf

I don't know about a 25 year projection, but the 10 year projection is centered at 5.2%

"Global equity has rewarded patient investors with a 12.6%
annualized return in the 9½ years since the lows of the
global financial crisis. As part of this strong performance,
valuations are currently much higher. For instance,
valuations in the U.S. and emerging markets appear
stretched relative to our proprietary fair-value benchmark,
thereby making our global equity outlook guarded.
The ten-year outlook for global equities, similar to last
year, is centered in the 4.5%–6.5% range based on our
Vanguard Capital Markets Model (VCMM) projections."

https://pressroom.vanguard.com/nonin...iew-120417.pdf (page 27, or just search for "5.2")

Me again. Can anyone tell me why the stock market went down today when Powell announced the interest rate cut? I thought interest rate cuts make equities go up generally.

It was the Powell speech as is usually the case. He said that he didn't see a long term trend of rate cuts happening which freaked everyone out, expecting continued rate cuts. He later clarified that he still saw multiple rate cuts this year, which soothed the market.

The speech after the fed minutes is an insane clownshow where the market can swing $200 billion based on the minute phrasing of a sentence or even use of a single word that's later "clarified". Extremely profitable though. Sadly I was out today.

That's not exactly what happened. The market sold off 6-7 minutes into his speech, and he didn't say not to expect multiple rate cuts until much later, which may have added fuel to the fire, but doesn't explain the initial sell off. Nothing he said during those minutes was overly new or surprising. Labeling the cut as (merely) "an adjustment to policy" is probably the most hawkish thing he said in the first 7 minutes, which is mild at best.

More likely, it's possible the market was expecting language that would indicate further dovishness confirming more cuts before year-end. But in any case, the market can (and does) move even they announce their (often expected) rate decision, which is 30 minutes before they speak. I think it's just a matter of market participants being on the sidelines and/or liquidity evaporating during critical announcements/figures.




In Tooth's hindsight world, where all the 25 bagger winning trades are announced after the fact.

Thanks for the honestly, but we already know.

Ok, so historically it comes out to what? 7% inflation adjusted? it still doesn't support the claim that returns were significantly higher than 5.2% nominal in the last 100 years.

7% real is a ****ton higher than 5.2% nominal

That's what "a mid-cycle adjustment to policy" means.
Sometimes that's the case but not today. Today was driven by his comments.

No, it's called foresight. I have previously posted about how fed days are around 40% to be 3 to 30 baggers for puts bought after announcement, as later large selloffs are frequent. I also frequently talk about this opportunity in private chat. That was the pattern for all of 2018.

I'm not sure why it makes you so clown-level angry when I point out the great spots in the market for easy money. I'm sorry you are unable to profit from them, it must be frustrating for you - but this the newbie thread, try to keep your hatred of your betters in your pants.

So what did he say around the 20-minute mark which "soothed" the market?

Of course private chat, where all your winners go. Public chat is reserved for the losing trades.

The year you posted 1 trade and lost like $37.50 on some random day based on a news headline.

It makes me angry when I (and a lot regular posters here) know for fact your FOS yet when it comes trading. In fact, I think it's ban worthy. And this is coming from someone who opposed your ban that one time it happened for trolling.

Uh... it's relative. It's not high enough to suggest Vanguard should "go out of business", especially when the last year includes America's post war industrialization and tech bull market of the 90s.

LMAO at anyone using the Dow for anything ever.

I've got some shares in Boston Opera Hat, Amalgamated Spatz, and Confederated Slave Holdings if you're old school - only the blue chips!

Ok, which indices do you recommended looking at that go back 100 years?

A police officer sees a drunken man intently searching the ground near a lamppost and asks him the goal of his quest. The drunkard replies that he is looking for his car keys, and the officer helps for a few minutes without success then he asks whether the man is certain that he dropped the keys near the lamppost.

“No,” is the reply, “I lost the keys somewhere across the street.” “Why look here?” asks the surprised and irritated officer. “The light is much better here,” the intoxicated man responds with aplomb.

I saw an article claiming bonds would lose value. Is that possible when the Fed is likely to cut rates quite a bit to keep up with China devaluation?