Kevin asks about effect of inflation. The standard and correct answer is that no one knows. Inflation itself will be less of a factor per se than how the Fed reacts to it. Before Thanksgiving, the Fed seemed to be leaning toward tightening. Now with omicron, who knows?
FWIW, my view: We had a once in a century pandemic. It is not over. Based on physics, a system like the economy will react to a major perturbation by swinging widely in the time period following the disruption. The time period here is probably around a few years (2 or 3). Given that, I believe that this inflation swing is due to the disturbance in our economic system and country caused by the pandemic. Also, I lived during the very long-lived "true" inflation of the 70s. The current numbers pale in comparison.
So we don't know and I personally don't care. In the long run it doesn't matter because we are aware of it. It's the things of which we are ignorant that cause disasters and large downturns.
Charlie Munger just stated that the current stock market is vastly more susceptible to a crash than even around 2000. Fortunately he is 97 and being old myself, I can say that we can "lose a step" when we get old. Of course experience and a sense of history count for something too.
Overall I am around 20% in cash. If I get a crash, I will go all in just for the sport of it. For people with a 20-year time period before retirement, just maintain your preferred asset allocation and ignore the news, if you can. Otherwise fiddle while the democracy burns. That is the biggest danger that we face.
Best wishes for the holidays and Good luck,
Tex
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FWIW, my view: We had a once in a century pandemic. It is not over. Based on physics, a system like the economy will react to a major perturbation by swinging widely in the time period following the disruption. The time period here is probably around a few years (2 or 3). Given that, I believe that this inflation swing is due to the disturbance in our economic system and country caused by the pandemic. Also, I lived during the very long-lived "true" inflation of the 70s. The current numbers pale in comparison.
So we don't know and I personally don't care. In the long run it doesn't matter because we are aware of it. It's the things of which we are ignorant that cause disasters and large downturns.
Charlie Munger just stated that the current stock market is vastly more susceptible to a crash than even around 2000. Fortunately he is 97 and being old myself, I can say that we can "lose a step" when we get old. Of course experience and a sense of history count for something too.
Overall I am around 20% in cash. If I get a crash, I will go all in just for the sport of it. For people with a 20-year time period before retirement, just maintain your preferred asset allocation and ignore the news, if you can. Otherwise fiddle while the democracy burns. That is the biggest danger that we face.
Best wishes for the holidays and Good luck,
Tex
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