One minor goal I had this year was to start consolidating a few investment accounts I had scattered around with different providers. I finished with the big pieces, and it feels good to have it better organized. Still have 2 small pieces to take care of.
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A couple years ago 60,000 American Airlines frequent flyer miles was enough to get me round trip to Paris - around April/early May or September - not peak season or worst season. Now it’s 60,000 + $200 or $400. My frequent flyer miles are losing out to inflation I think. If only I could invest them…
Heading to Europe one month from today. Round trip to Spain from the midwest (not Chicago) only $700 not too bad.
Oh wow, I hadn’t seen those price hikes on rewards travel. Haven’t paid much attention. That really sucks.
And $700 to Europe from the Midwest is solid! I’ve been kind of looking at summer travel but haven’t settled on anything yet.
Yes, I pulled the trigger around Thanksgiving. Madrid isn’t very far into Europe, I wonder if that is part of the reason. From there I have:
a $15 train to Barcelona
a $61 flight to Naples
a $22 train to Rome
a $51 train to Venice
a $52 flight to Madrid
I didn’t use miles because my dad was footing the bill and there were three of us.
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In other news I’m considering Scotland next year and taking one of my regular bridge partners (who is 20 years older than me). He’s never been to the UK so we might need two days in London to address that issue. That trip would have a fair amount of driving, which would suit him. He can get around on foot ok but he isn’t going to want to walk five miles a day either and that won’t be necessary.
London → Edinburgh
Loch Lomond
isle of Iona
Inverness
Cairgorms National Park
looking for other towns and excellent scenic drives.
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Flights and trains in the EU are so affordable. Part of me wants to just fly into wherever, spend a day or two, and then go from there. Does add a bit of time, maybe I’ll save this idea for when I have time to slow travel.
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For Cairngorms, I would look at Aviemore.
Inverness is an industrial town and just good for a stopover. I assume you are going there to see loch ness and Uruqhuart Castle.
The most beautiful landscapes in the highlands are around Applecross, Torridon, Skye, Glencoe. Thats the west highland route.
It will depend on how much time you have but its difficult to do Central Belt (Cairngorms) and West Highlands (Skye, Torridon), and Loch Lomond in one trip. You would need like a month as its a lot of driving and sightseeing.
A better bet is to:
Fly London to Inverness.
Do the west coast drive (via Torridon, Applecross, Glencoe)
Skye you need at least 3 days so I would not visit unless you can give it that much time.
Once you get past Glencoe you will have Oban. You can get to Iona from there but only via Mull (so its Oban ferry to Mull, drive a bit, then ferry to Iona).
Once you return back to Oban from Mull you can drive to Loch Lomond. Its not far.
Then you can fly back to London from Glasgow (Loch Lomond is about 1hr from Glasgow).
$1k more sent off to the Roth IRA, bloop.
Likely will be the first year I max out both a 401k and an IRA (plus partner’s matching 401k amount).
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Over the Easter break have been looking at my 1-year, 5- year, 10-year, and 20-year plans (most of the long-term stuff is educational expenses for our little one)
Came across some interesting modelling for the S&P 500 (about 30% of my PF flows through here).
Looks like we are heading for a recession in the US (2023-4), and the time to buy the dip will be around 2025 (S&P around 1500).
So you are saying that the Best Case Scenario is that the stock market in 2025 reaches down below a 66.6% loss off the high’s observed in early 2022?
Yep. Thats Base Case scenario. Not best case.
The low rates and large increases in the money supply inflated the S&P 500 far above normal.
The impact across 2023 - 25 is actually the lagged effect of the historically fast increases in rates (from close to 0% to 5%)
After the last of those economic ripples hits the US the S&P 500 should revert back to the long-term average.
Here is the longer time series graph. Kind of puts it in historical perspective.
Also here is unemployment in the US (mild, moderate, severe)
You should be heavily active in the options market if you have faith in the accuracy of this type of prediction.
Not very big into options.
I am more into long-term macro investing. I think its possible to give a time frame for the peaks and troughs (I am not talking about pin-point accuracy but more from a year to year basis). 5 years into the future is as far as one can go with this (after 5Y the modelling is just too uncertain to be of any real value).
I will revisit this thread in 5Y to see how the predictions have fared. 
Did I miss sources or methodology on this? Feels like we need the return of “I can’t time the market, but…”
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It’s based on CAPM, S&P dividends, and historical share price information. The macro assumptions are definitely debeateable.
The reasoning for the downward trend is:
- We are at the beginnings of a large banking crisis
- Dividend yields from shares are well below T-bills
This points to investors pulling their money out of the stock market and putting it into safer investments (t-bills).
Some data from Oxford Economics and Equity Research folks.
Stocks still seem expensive to me.
- Anything going up (like MCD or KO) has a sky-high P/E (of 34.1, 28.6). The S&P is at 22.
- Europe is a lot cheaper but I can’t find anything stable (as if that were easy).
- The latest 13-week T-bill hit 5.128%
What I want to do is park everything in Treasuries and watch Polymath’s scenario play out. And I typed this up before seeing the post immediately before mine. But I would also like to find some dull stocks that will do better. The only thing in my mind lately is that I’m going to pay 12% federal tax on my 5% T-bill bringing the net yield down to 4.4% vs dividends and stock appreciation that would be tax-free if I could invest it and leave it alone.
If you are a long-term investor (not touching your shares for 5 years) you should be fine.
Just ride out the coming correction in 2023.
I am mostly trying to prepare some extra liquidity to buy more shares around dip time.
But yes, this is another variation of “I can’t time the market, but…”
Aren’t market bottoms usually out ahead of peak unemployment?
Not necessarily.
Market participants are just publicly traded companies.
The smaller businesses (which are not publicly traded) often get hit with economic problems after the larger companies start cutting people and costs (when they start doing this the market will then correct upwards).
The impact on smaller businesses then has a knock on effect in terms of unemployment (which would then tick up a bit).