Investment Thread

[budwom]

I think many with investment portfolios and/or 401(k)s representing their retirement money, would fail to see the humor.

Of course that's true, but hey, the market has been on a roll for such a long time now, it was inevitable that there would be a major bump...and as bumps go, this one shows signs that it may not (hopefully) be particularly bad. The last decade has been very kind to most investors I'd say...

[JNort]

Of course that's true, but hey, the market has been on a roll for such a long time now, it was inevitable that there would be a major bump...and as bumps go, this one shows signs that it may not (hopefully) be particularly bad. The last decade has been very kind to most investors I'd say...

and as long as we continue trickle down economics it will be predictable. 7-10 year boom/bust cycles

[YmoBeThere]

Growth staged a strong comeback this month, up 12.6% from its June 30th close of 83.70. Value was also up for the month but not nearly as much at 6.1% for the month of July. The market appears to have absorbed the 75 basis point rate increase from the Fed and is starting to focus on future growth. Personally, I continue to inch my portfolio towards growth from a value/cash overweight.

The market of large cap US stocks (S&P 500) since the end of November: (as of 7/29/2022)

iShares Core S&P U.S. Value ETF (IUSV) price at close 11/30/2021: 71.77
Dividend disbursement (12/17/2021): 0.383
Dividend disbursement (3/30/2022): 0.370
Dividend disbursement: (6/17/2022): 0.305
Adjusted cost basis: 70.712
Close 7/29: 70.97

Return during that period: 0.4%

iShares Core S&P U.S. Growth ETF (IUSG) price at close 11/30/2021: 113.07
Dividend disbursement (12/17/2021): 0.18
Dividend disbursement (3/30/2022): 0.200
Dividend disbursement (6/17/2022): 0.169
Adjusted cost basis: 112.521
Close today: 94.24

Return during that period: -16.2%

Overall value has outperformed growth by 16.6% during this time period.

[richardjackson199]

Growth staged a strong comeback this month, up 12.6% from its June 30th close of 83.70. Value was also up for the month but not nearly as much at 6.1% for the month of July. The market appears to have absorbed the 75 basis point rate increase from the Fed and is starting to focus on future growth. Personally, I continue to inch my portfolio towards growth from a value/cash overweight.

The market of large cap US stocks (S&P 500) since the end of November: (as of 7/29/2022)

iShares Core S&P U.S. Value ETF (IUSV) price at close 11/30/2021: 71.77
Dividend disbursement (12/17/2021): 0.383
Dividend disbursement (3/30/2022): 0.370
Dividend disbursement: (6/17/2022): 0.305
Adjusted cost basis: 70.712
Close 7/29: 70.97

Return during that period: 0.4%

iShares Core S&P U.S. Growth ETF (IUSG) price at close 11/30/2021: 113.07
Dividend disbursement (12/17/2021): 0.18
Dividend disbursement (3/30/2022): 0.200
Dividend disbursement (6/17/2022): 0.169
Adjusted cost basis: 112.521
Close today: 94.24

Return during that period: -16.2%

Overall value has outperformed growth by 16.6% during this time period.

Great info, thanks!

Sentiment seems to be that we are in the recession now and about to come out. Unemployment is low, consumer spending continues, and there have been aggressive interest rate hikes. The signal is the fed is likely to start easing those - like another 50 then another 25 for the year.

We are likely to still see volatility. But it doesn't seem so grim, as long as we also keep Putin under control

[budwom]

Great info, thanks!

Sentiment seems to be that we are in the recession now and about to come out. Unemployment is low, consumer spending continues, and there have been aggressive interest rate hikes. The signal is the fed is likely to start easing those - like another 50 then another 25 for the year.

We are likely to still see volatility. But it doesn't seem so grim, as long as we also keep Putin under control

Yeah, this is an odd assortment of indicators. Definitely agree with those who push back on the notion of being in a recession when both personal spending and business spending are rising, and unemployment is extremely low.
The Fed's challenge, of course, is to continue tightening without dropping a turd in the punch bowl. Caution is advised.
Even the inflation thing is odd, with a large contribution from Mr. Putin, and continuing supply chain issues. New car prices have risen roughly 20% in the last year because supply is tremendously low...you can't dicker with the dealer any more, and many dealers are adding premiums to MSRPs even when car companies ask them not to.

(We'd planned on getting a new car in early 2023 because we expected supplies to be back to normal by now, and they aren't. Not even remotely close to normal.)

[YmoBeThere]

I guess I should have included the performance of the S&P 500 overall which is essentially the performance of these two ETFs combined into one.

Growth staged a strong comeback this month, up 12.6% from its June 30th close of 83.70. Value was also up for the month but not nearly as much at 6.1% for the month of July. The market appears to have absorbed the 75 basis point rate increase from the Fed and is starting to focus on future growth. Personally, I continue to inch my portfolio towards growth from a value/cash overweight.

The market of large cap US stocks (S&P 500) since the end of November: (as of 7/29/2022)

iShares Core S&P U.S. Value ETF (IUSV) price at close 11/30/2021: 71.77
Dividend disbursement (12/17/2021): 0.383
Dividend disbursement (3/30/2022): 0.370
Dividend disbursement: (6/17/2022): 0.305
Adjusted cost basis: 70.712
Close 7/29: 70.97

Return during that period: 0.4%

iShares Core S&P U.S. Growth ETF (IUSG) price at close 11/30/2021: 113.07
Dividend disbursement (12/17/2021): 0.18
Dividend disbursement (3/30/2022): 0.200
Dividend disbursement (6/17/2022): 0.169
Adjusted cost basis: 112.521
Close today: 94.24

Return during that period: -16.2%

Overall value has outperformed growth by 16.6% during this time period.

iShares Core S&P 500 ETF (IVV) price at close 11/30/2021: 457.63
Dividend disbursement (12/17/2021): 1.498
Dividend disbursement (3/30/2022): 1.481
Dividend disbursement (6/17/2022): 1.283
Adjusted cost basis: 453.368
Close today: 414.28

Return during that period: -8.6%

[elvis14]

Yeah, this is an odd assortment of indicators. Definitely agree with those who push back on the notion of being in a recession when both personal spending and business spending are rising, and unemployment is extremely low.
The Fed's challenge, of course, is to continue tightening without dropping a turd in the punch bowl. Caution is advised.
Even the inflation thing is odd, with a large contribution from Mr. Putin, and continuing supply chain issues. New car prices have risen roughly 20% in the last year because supply is tremendously low...you can't dicker with the dealer any more, and many dealers are adding premiums to MSRPs even when car companies ask them not to.

(We'd planned on getting a new car in early 2023 because we expected supplies to be back to normal by now, and they aren't. Not even remotely close to normal.)

My wife's car died over a month ago. I have been looking for a replacement (new or used) and there are no deals to be had. We have an extra vehicle (my 2007 Tacoma with 190k on it is still chugging...we use it for our charity). That extra allows me to be patient but eventually I'm just going to end up paying more than I want to. I'm seeing cars that are 1 year old that are selling for more than the MSRP when they were new (Carfax has the original window sticker available). Also, I'm hoping to stay local but to get what I want, I might have to drive a few hours or be more flexible in what I want! Looking at new cars, you'll see the MSRP and then "market adjustment" - which is the dealer price gouging. I've seen it be anywhere from $500 to $2500.

[budwom]

My wife's car died over a month ago. I have been looking for a replacement (new or used) and there are no deals to be had. We have an extra vehicle (my 2007 Tacoma with 190k on it is still chugging...we use it for our charity). That extra allows me to be patient but eventually I'm just going to end up paying more than I want to. I'm seeing cars that are 1 year old that are selling for more than the MSRP when they were new (Carfax has the original window sticker available). Also, I'm hoping to stay local but to get what I want, I might have to drive a few hours or be more flexible in what I want! Looking at new cars, you'll see the MSRP and then "market adjustment" - which is the dealer price gouging. I've seen it be anywhere from $500 to $2500.

Same dynamic here...which is why the average new car price rose $8000 last year...no indication things will return to normal this year, dealer lots are virtually empty here, though they are very happy to take orders. My 16 year old Volvo is still hanging in there, there may not be another car coming in from the bullpen for another year or more. Can't see buying a car at MSRP, much less paying a premium.

[Jeffrey]

Made another bad guess. I thought Amazon would buy AAWW.

https://stocks.apple.com/Al8mfnA9fST-9FNdb0HjPTg

[bundabergdevil]

Wondering if we have any real estate folks post here. I got a letter and check from my mortgage lender today. The letter said that a recent review of my mortgage application revealed that they disclosed an incorrect value in my loan estimate and that the amount included an expected tax credit payable to me by the seller at closing. It went on to say the Loan Estimate should not have included the credit and to correct the matter, they're issuing me a check for the initially disclosed credit + compensation for the lost use of funds.


This is for a mortgage and closing on a SFH in 2017. The check is fairly sizable. I have reviewed all the new paperwork, as well as the original loan estimate, and I for the life of me cannot figure out what they are talking about and why I am getting a fairly sizable check for an error on mortgage estimate 5 years after the fact.

Thoughts?

[Jeffrey]

Wondering if we have any real estate folks post here. I got a letter and check from my mortgage lender today. The letter said that a recent review of my mortgage application revealed that they disclosed an incorrect value in my loan estimate and that the amount included an expected tax credit payable to me by the seller at closing. It went on to say the Loan Estimate should not have included the credit and to correct the matter, they're issuing me a check for the initially disclosed credit + compensation for the lost use of funds.


This is for a mortgage and closing on a SFH in 2017. The check is fairly sizable. I have reviewed all the new paperwork, as well as the original loan estimate, and I for the life of me cannot figure out what they are talking about and why I am getting a fairly sizable check for an error on mortgage estimate 5 years after the fact.

Thoughts?

I’d ask no questions and quickly cash the check.

OTOH, if they were asking me for a “fairly sizable” check, I’d ask many questions and be slow to write the check.

[YmoBeThere]

Thoughts?

So for 17 years, I was responsible as the product manager for validating and sending refunds for insurance premium errors for auto, home, umbrella, and sundry other property and casualty insurance products. I was given every calculated amount which I would spot check a dozen myself and then have my analysts do a few hundred more.

Hopefully, in the mortgage game they are as or more diligent. I do know some fellow P&C product managers who went into mortgage insurance only to have their companies go belly up in the Great Recession. So, with that in mind, I would hold on to the letter along with all the other mortgage documentation and then cash the check, quickly.

And no, I can't tell you what happened with your claim.

[Bluedog]

Maybe I'm strange, but I would call them. The phone agents might not be able to explain all the details but would probably be able to validate that it's legitimate. I've heard of cases in which people erroneously got money in their bank accounts from the bank itself and then later had criminal liability for not reporting it as it ended up being in error. I'd want to make sure it's above board so that nothing can come of it. Good luck!

[Jeffrey]

Maybe I'm strange, but I would call them. The phone agents might not be able to explain all the details but would probably be able to validate that it's legitimate.

Do you really believe that? Bundabergdevil is very smart, knows all the details, and he can’t figure it out. I’ve never had the good fortune of calling an 800 number and getting a representative smarter and more informed than Bundabergdevil.

I've heard of cases in which people erroneously got money in their bank accounts from the bank itself and then later had criminal liability for not reporting it as it ended up being in error. I'd want to make sure it's above board so that nothing can come of it. Good luck!

You’re describing an extremely different scenario! In your scenario, the people didn’t receive a detailed letter explaining why they were receiving money and they received much more money than they could have ever expected (such as, 10x Bundabergdevil’s total original mortgage). Also, they did not have the resources and willingness to repay the bank when the error was discovered.

[YmoBeThere]

Maybe I'm strange, but I would call them. The phone agents might not be able to explain all the details but would probably be able to validate that it's legitimate. I've heard of cases in which people erroneously got money in their bank accounts from the bank itself and then later had criminal liability for not reporting it as it ended up being in error. I'd want to make sure it's above board so that nothing can come of it. Good luck!

The difference here is the prepared letter and check. Those are conscious acts on behalf of the company. I know in my scenarios a check didn't go out unless I authorized the spending. Being able to find that person via a 800 number can be done, I know I fielded customer calls routed via 800 numbers, if they got the right rep on the phone.

[Bluedog]

Do you really believe that? Bundabergdevil is very smart, knows all the details, and he can’t figure it out. I’ve never had the good fortune of calling an 800 number and getting a representative smarter and more informed than Bundabergdevil.




You’re describing an extremely different scenario! In your scenario, the people didn’t receive a detailed letter explaining why they were receiving money and they received much more money than they could have ever expected (such as, 10x Bundabergdevil’s total original mortgage). Also, they did not have the resources and willingness to repay the bank when the error was discovered.

Fair enough, was just a thought but I agree with you that the person picking up the phone will likely know nothing ...still, I'm paranoid like that. I guess I'm not clear on the exact circumstances because if it was an "extremely detailed letter" I'd think Bundabergdevil would be able to figure it out. But I recognize sometimes mortgage providers are a bit opaque. I agree the scenario I presented isn't equivalent but was an example of something where "money appeared" when not expected and then the recipient was prosecuted so I just like being extra careful and a phone call can't hurt the situation but I certainly agree with you that it seems fine/above board based on what was presented.

On another investing note, long treasuries gained significantly today (EDV up over 3%). Are they finally on a more sustained upswing after getting crushed this year? I shortened my bond durations in mid 2021, but am thinking of shifting back.

[Jeffrey]

...still, I'm paranoid like that.

On another investing note, long treasuries gained significantly today (EDV up over 3%). Are they finally on a more sustained upswing after getting crushed this year? I shortened my bond durations in mid 2021, but am thinking of shifting back.

I understand and sometimes share your paranoia.

Rates have basically been falling for the last 40 years. At some point, we’re going to experience a long, relatively consistent, upward trend. Our government has basically been planting and fertilizing the seeds for the last 15 years. I’m using alternative investments and will be staying away from the long end of the curve for many moons.

[bundabergdevil]

Thanks for the responses. My original mortgage provider sold its book of business not too long ago so I’m wondering if that triggered the review.

Regardless, the check is deposited, paperwork filed away, etc. I’ll keep it cash for a bit to see if anything else comes of it.


But….if I get a letter another 5 years from now asking for it back I’m going to be pissed.

[budwom]

Hopefully there were not any conditions listed near your endorsement. Like “I hereby…..”

[budwom]

Thanks for the responses. My original mortgage provider sold its book of business not too long ago so I’m wondering if that triggered the review.

Regardless, the check is deposited, paperwork filed away, etc. I’ll keep it cash for a bit to see if anything else comes of it.


But….if I get a letter another 5 years from now asking for it back I’m going to be pissed.

Banks and mortgage lenders try to create an image of tremendous competence, but the truth can sometimes be a bit harrowing, and I say this as someone who was a mortgage and commercial banker some decades ago.

In 1990 my wife and I bought a new house, we secured a 30 year loan but had firm plans to pay it back in 15 years (Vermont law mandates that we could do this). For about a year we got clear mortgage statements from our bank showing how the extra money we sent in each month was credited to our principal...then (as so often happens) our lender sold the loan to some clown show in New Jersey, and they had the loan "serviced" by a company called CENLAR. We kept sending in extra money but no longer got a statement showing the current balance. So I contacted CENLAR, asked for an up to date, clear statement, and of course they had NO clue what was going on...they sent me some completely illegible photocopies of who knows what...I called them, they simply couldn't tell me my balance, they had just kept applying the extra money each month to a subsequent month's payment. Not good.

Thankfully, living in a tiny state with a responsive state government, I got the Banking and Insurance Dept to read them the riot act, and force compliance with the law. Had I not done so, I have no idea how screwed up our loan would have become.
The moral being it's a good idea to pay attention to this stuff.