11Mon·

*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?

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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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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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11Mon
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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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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I follow the wisdom of the all-wise preacher T. Estoboss: Keep on shooting, no matter what.
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@SSIT AWESOME AWESOME AWESOME!
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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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@FamilyFinance yes, I'll definitely have to remember that, thanks for the point!!!
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@FamilyFinance Pro tip: You don't have to pay taxes if you only ever make a loss
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@Soprano I'll put it into practice! Sounds like a solid basis for wealth! :)
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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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@Iwant_money_423 That is also a very healthy thought! and the final stage of the mindset
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I rely on 1980
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@FYBSTRD the optimist! I like it ! 1 out of 10 times :D
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Just let it run.
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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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@Joris Good thought, but I probably want to shift to 100% crypto in the long term. Background: no desire to pay any more taxes :)
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@Testo-Investor so from shares and ETFs to crypto?
Where does that idea come from? The world AG then gone?
I've always had it in my head to bet everything on Bitcoin, but the balls aren't there 😅
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@Joris You keep evolving... maybe not 100% away, but largely crypto... I'll tell you why. I just don't want to keep blowing 30% tax up the government's ass on future sales, that's my main aspect and secondly I just believe in the crypto world... Especially the way it's currently picking up speed.... It's just brutal! Welt AG is already gone ... I only have the semiconductor etf and the SP500... I've sold everything else for crypto in the last few months.
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@Testo-Investor Yes, I'm also more than convinced by crypto, so for me specifically only Bitcoin. I'm thinking about pumping most of my savings into bitcoin over the next few months.
Currently 700€ nasdaq and 400€ bitcoin per month, but I'm definitely considering exchanging the amount. Then there's gold €150 a month and palantir €50.
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@Joris Sounds really solid at first! 1300 € is a solid savings rate. nice! yes exchange it .... if you do dca, then you can even post daily on Binance etc.... then you get a very accurate average price.... whether it makes sense I don't know ^^
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@Testo-Investor yes i think i dip it 😅 daily is blatant 😂 tracking it at getquin 😜
Currently buy monthly from BSDEX, low fees and always send it straight to my bitbox which is free from BSDEX
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@Joris free of charge? That is of course an announcement, .... Bitcoin network easily €4 per transaction.... ETH 6 € currently..... but often use BEP 20 from BInance.... everything works perfectly and only 20 cents or something like that
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@Testo-Investor yes free of charge on the wallet, that was the reason why I went there. 20 cents is also great
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@Joris I am highly satisfied with binance.... 0.1% fees except sending eth and btc is not worth it for small amounts... I have now uploaded all my purchases to cointracker.... so that I know exactly what I can sell tax-free and when..... I would also recommend you ...
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@Testo-Investor cointracker? Is that free of charge?
I had to close my Bitvavo account, so I can no longer see the purchases. I can only see when they were made on BSDEX.
But I downloaded the purchase history with transaction code beforehand. I can then use this to track them.
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Softlanding bei Zinssenkungen ist relativ selten. Diesmal aber nicht ganz unrealistisch.

"America’s economy is about to stick what’s called a “soft landing,” which is when inflation returns to the Fed’s target without a recession — a feat that’s only happened once, during the 1990s, according to some economists."

https://edition.cnn.com/2024/07/25/economy/us-economy-gdp-second-quarter/index.html
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@NoBobble HI bob, thanks for the info, so you can rely almost 100% on the statistics, right? I could just imagine that things will get really good again in 2024 and the big bang will come in 2025... do you think a TRUMP can't change that?
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@Testo-Investor Nobody knows that now. I'll keep a low profile in the summer - anyway - and then we'll see.
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@NoBobble ditto I just stand on the sidelines and watch the game :)
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As I've already said, I'll be exiting the crypto sector at the end of the year 😄👌 it will already be tax-free. And I'll stay invested, build up more cash & then get back into the market. Like 02/22 with this Ukrainian war there 😄
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-23.5 % would be sooooo nice, then I would shift a large part of my ftse all world into leveraged products such as $3USL or similar. 😍
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My opinion is that the Testoking is obviously smarter than it often pretends to be...I saw a recent clip from Steve Eisman today, who says that he sees no signs of a recession...
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History says that one year after a reduction, it is usually lower.
But it's logical, first investors are happy and then after a few months companies raise fresh capital, which lowers EBIT.
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Boy oh boy, it's scary how little knowledge you have of economics and how you act like a big investor here.

Everybody is a champion in a bull market.
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Rezession!
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I agree that a lot of air could be let out of the stock market, especially in hot sectors. But why are you so worried about crypto? Isn't the expected correlation there completely different?
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I'm a shy person and I'm already going out completely in November except for my etf and seeing what happens.
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Why such a huge effort? Just let it run throughout and when the correction comes have enough cash on the side to buy the selected positions. 🤷‍♂️
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