Cryptoking (@Testo-Investor) on getquin

2Mon·

*Interest rate cuts the death knell for our portfolio

I don't want to beat around the bush, the past has shown that after the first interest rate cut, statistically after 195 days the low of the "correction" on average of 23,5 % was formed.

How are you preparing for it? What is your exit strategy?

My thoughts on this:

Keep an eye on GDP, inflation data, unemployment numbers to spot recession
If first rate cut comes in September then:
Most of the portfolio will be sold at the beginning - middle of December.
Watch further and then gradually get out of the market by March

Crypto:

I am very concerned that this will also cause major problems in the crypto sector and that the bull run could suffer massively.....

What is decisive?

Soft-landing or recession... That is the crucial question in the whole affair!!!!

What is your opinion?

88 Comments

Stefan21@stefan_21

2Mon

The thing is... the massive correction after the rate cuts was not because of the rate cuts, but because rates had to be cut because the economy fell into recession.
I think it could be similar this time. Unless the FED actually manages a soft landing.

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Hitchkock@Hitchkock89

2Mon

I don't really care. I have savings plans in place, a 30-year investment horizon and, in the event of a massive correction, I still have some money lying around in the call money for a better entry.

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GHFx@GHF

2Mon

My dear Testo,
You are still a little too hectic and erratic. Every three weeks you read something new and completely realign your investment strategy.

There are countless statistics and studies on correlations in the stock market... in any direction you want. A. m. S. you can be relaxed with a diversified portfolio and simply sit out the lows ... time in market beats timing the market

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Soprano@Soprano

2Mon

Here I think correlation is being confused with causality in the classic way. For example, in 2008 or 2020, bankers and politicians drove the economy against the wall, to put it simply, and the Fed then tried to stimulate the economy again by cutting interest rates. It was by no means the case that the Fed cut interest rates and the market collapsed as a result, but it had already collapsed beforehand and the low after around six months was the turning point.

Your statistics do not show that there is a crash on average 195 days after the interest rate decision, but that it takes an average of 195 days for the market to be supported and slowly start to rise again.

Due to the corona policy, we had the problem that states needed cheap money and at the same time crippled productivity and therefore triggered huge inflation. NOW we have the problem that the average citizen has less and less free cash flow or is broke and therefore consumes less. That is why we are now lowering interest rates to relieve the burden on citizens and encourage them to consume.

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FamilyFinance@FamilyFinance

2Mon

Remember that you can happily pay taxes again when you sell. This effect of around -20% alone will not be recouped with the best market timing. I pull through "no matter what".

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Iwas M.@SSIT

2Mon

I follow the wisdom of the all-wise preacher T. Estoboss: Keep on shooting, no matter what.

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Robert@Iwant_money_423

2Mon

Have no exit strategy. We will simply continue to reinvest massively.

For me, bad market phases are buying phases.
To be honest, I am always happy about setbacks in the portfolio, they are healthy and necessary.

Hopefully I'll be able to quickly adjust my 3 micro positions.

The worse the market phase, the more aggressively I proceed 😂

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Erzwo@FYBSTRD

2Mon

I rely on 1980

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CashDividendGamer@CashDividendGamer

2Mon

Just let it run.

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Joris@Joris

2Mon

I'm not worried about selling at all, I have 4 positions in my portfolio and a savings plan is running on all of them. DCA takes care of that for me.
I've tried market timing before and it went very badly, this time I'm breathing easy.
I want to hold all 4 positions for the long term.

I can't say much about soft-landing or recession, I have no experience of prices after interest rate cuts. Only the older ones among us, the others have the experience afterwards.

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