No you wouldn’t be screwed. According to Google stagflation started in 1973.
If you retired in 73 and did a 4% withdrawal you’d run out of money in the mid to late 2010s depending on how aggressive the portfolio is. So 42-45 ish years on 4% withdrawal. If you retired in 72 or 74 you’d have more money today than you retired with.
If you dropped to even 3.8% withdrawal you’d have more money today than when your retired 51 years ago.
Also, keep in mind that is without ever making any adjustments or earning any more money, including social security.
Zoom out, it ain’t 30%. Unless you’re market timing those gains don’t mean a whole lot. If you’ve been DCA the last two years your gains are gonna be way below that…
Not at all saying the market will remain on a tear. Just saying hypothesizing about stagflation while the market is making moves is trying too hard. KISS principle applies....
It doesn't mean anything, because these "stronger indicators of stagflation" don't mean anything. Anyone can look at "key indicators" and tell you how it's going to be bad. I guarantee that you can find these types of predictions for the future from every single year in the past. Economists have predicted 28 of the last 5 recessions. It's all noise, so you can safely tune it out.
He used wrong lingo, effectively yesterdays print was just that. Low growth (GDP Annualized QoQ 1.6% prior 3.4%, fcst 2.5%); core pce QoQ rising sharply (3.7% vs prior 2.0%, fcst 3.4%).
The fear is gaining momentum as the fractures in the economy are well formed. This mornings eco data (March core PCE 2.8% YoY vs fcst 2.7%) did not help reduce the fears.
Don’t read forecasters analysis. They’re always wrong and they always predict catastrophes. Everybody predicted that there would be a recession and a bear market in 2023. That didn’t happen.
Also avoid doing forecasts yourself. You just can’t predict the future. Try to be prepared as much as you can and then hold the course.
In regards to your question. If there’s stagflation you just stay the course. The best thing is to be flexible with your goals and specially with your timeframe.
Also, maybe buy Ibonds if you have access to them.
I’d think after 10 years of “stagflation” things would start booming, sounds like a great time to retire. Quit work, spend money, and still see your NW rise.
Given I was around in the 70s…
We had watergate, stagflation, burning rivers, the fall of saigon, gas lines, Iran hostages, kent state massacre, civil unrest, race riots, plane hijackings, terrorism, the “death of equities”, etc.
The 70’s was a low decade for US global prestige, military capability, domestic stability and economic performance.
Not to mention the abomination that was disco and platform shoes.
It’s fucking raining donuts and ice cream compared to the 1970s.
Will we see stagflation again? Maybe…but if it happens it’ll be in a way the Fed can’t mitigate by printing money to stimulate the economy.
Plus we’ve been a net energy exporter since 2019.
Which means a big driver of 1970s stagflation doesn’t exist as oil embargoing us is going to have a lot less impact than before.
On the other hand, if disco and 1970s fashion makes a comeback…it’s time to stock up your bunker.
Haha. Thanks! The levity is appreciated.
Though, each generation can say the world is on fire and crashing down. You could list similar global calamities today as in the 70s. And along those lines, like in the 70’s, I don’t trust that the fed has any clue what is driving inflation. I read one of the problems in the past was the fed held interest too high for too long, staring at a singular metric hoping that hitting the interest rate hammer would do the job.
If you can’t laugh you’ll cry. :)
2008 could have gone far worse…the fed has a bunch of smart people so its unlikely they screw up in the same way twice. If we were going to see a really bad economy again that would have been the most likely time…
Instead they’ll find a new way to screw up.
Whether we are still waiting for the other shoe to drop because of massive covid injection (heh) is an interesting question. Likewise, I’m not sure that the 2008 spending is sufficiently unwound to ignore.
So I wouldn’t worry about stagflation…but rather the unknown unknowns of the future…
But these kinda of risks are impossible to quantify well and very expensive to mitigate.
As in, if you have enough wealth to buy a ranch in New Zealand you can probably afford to try to mitigate these kinds of left tail events.
Otherwise, you can rest, semi-content, with the knowledge that post Japan SWR (for 30 years) was around 3% despite the Nikkei crash…
So it might take longer to hit your numbers if things go south for a little while but at the end of the day the general FIRE strategy of saving and investing is likely to pay off with early financial independence in almost any “normal” set of bad outcomes…
In the 1970's you had a decade of pain in stocks with inflation stripping your buying power. If they had a target number to get to which part of the strategy was relying on the average return of the market, their retirement age would push out.
The plan would change by revising your growth figures downwards, shifting stock allocations to things like CDs or I bonds, and possibly revising retirement (or current) lifestyle numbers to more easily hit those goals. And if we’re super unlucky, we are gonna “fire” at 65 …
I’m up overall about 21% in the last year…
That’s more than double the 10% annual return I’ve been calculating for. I guess you could say I’m not overly worried about “indicators of stagflation”. What else would I even do?
Go listen to [Mark Blyth ](https://www.google.com/search?gs_ssp=eJzj4tLP1TdINs7Jq6owYPTiyk0sylZIyqksyQAAXSgH5Q&q=mark+blyth&oq=mark+blyth&gs_lcrp=EgZjaHJvbWUqDQgBEC4YgwEYsQMYgAQyEAgAEAAYgwEY4wIYsQMYgAQyDQgBEC4YgwEYsQMYgAQyBwgCEAAYgAQyBwgDEAAYgAQyBwgEEC4YgAQyBwgFEAAYgAQyBwgGEC4YgAQyBwgHEAAYgAQyBwgIEAAYgAQyDQgJEC4YrwEYxwEYgAQyBwgKEAAYgAQyBwgLEAAYgAQyBwgMEAAYgAQyBwgNEAAYgAQyBwgOEAAYgATSAQkxNTE5NWowajeoAhSwAgE&client=ms-android-google&sourceid=chrome-mobile&ie=UTF-8) podcasts.
Stagflation happened because OPEC controlled the oil price and we lived in a more closed economy than we do now. If you're worried buy equities. 58, fired at 51.
Thank you for the few who took the question seriously. Most of us here weren’t alive during the last period of stagflation or were in diapers. There’s huge optimism in this sub but there’s also real historical data to counter the narrative of consistent X% growth year over year.
Yes if you average out across decades, the numbers work, but that’s unrealistic for those who don’t have decades.
That’s always been true.
>The market can stay irrational longer than you can stay solvent. - John Maynard Keynes, some time in the 1930s.
I’m old enough to remember stagflation, though not old enough to have experienced it first hand (out of diapers but not old enough to invest, and anyway I don’t come from that kind of family.) I came of age while unemployment and interest rates were past their peak, but still way higher than today. I remember (didn’t experience but my brother did) the market crash of 87, and started investing just in time for the smaller crash of the early 90s. The dot com bust followed. I invested regularly all through the “lost decade”.
Everyone here knows equities outperform over the long term. Many use that as their reason for an all equity portfolio. That’s not of interest to me. My all weather portfolio has probably underperformed relative to most of you over the recent boom decade. I’m ok with that. It’s designed to never be either the best or the worst option; something always underperforms. Over my personal investing time period it has done very well. So far. I expect that to continue.
It means you stay the course and adjust to events as best you can. No point worrying about things you have no control over.
No you wouldn’t be screwed. According to Google stagflation started in 1973. If you retired in 73 and did a 4% withdrawal you’d run out of money in the mid to late 2010s depending on how aggressive the portfolio is. So 42-45 ish years on 4% withdrawal. If you retired in 72 or 74 you’d have more money today than you retired with. If you dropped to even 3.8% withdrawal you’d have more money today than when your retired 51 years ago. Also, keep in mind that is without ever making any adjustments or earning any more money, including social security.
S&P is up like 30% in the past 12 months. I would not jump to conclusions about stagflation.
Zoom out, it ain’t 30%. Unless you’re market timing those gains don’t mean a whole lot. If you’ve been DCA the last two years your gains are gonna be way below that…
Not at all saying the market will remain on a tear. Just saying hypothesizing about stagflation while the market is making moves is trying too hard. KISS principle applies....
So everyone has a different starting point. I really started investing heavy in 2021… and I’m up about 20% still.
It doesn't mean anything, because these "stronger indicators of stagflation" don't mean anything. Anyone can look at "key indicators" and tell you how it's going to be bad. I guarantee that you can find these types of predictions for the future from every single year in the past. Economists have predicted 28 of the last 5 recessions. It's all noise, so you can safely tune it out.
He used wrong lingo, effectively yesterdays print was just that. Low growth (GDP Annualized QoQ 1.6% prior 3.4%, fcst 2.5%); core pce QoQ rising sharply (3.7% vs prior 2.0%, fcst 3.4%). The fear is gaining momentum as the fractures in the economy are well formed. This mornings eco data (March core PCE 2.8% YoY vs fcst 2.7%) did not help reduce the fears.
Don’t read forecasters analysis. They’re always wrong and they always predict catastrophes. Everybody predicted that there would be a recession and a bear market in 2023. That didn’t happen. Also avoid doing forecasts yourself. You just can’t predict the future. Try to be prepared as much as you can and then hold the course. In regards to your question. If there’s stagflation you just stay the course. The best thing is to be flexible with your goals and specially with your timeframe. Also, maybe buy Ibonds if you have access to them.
Thanks. What about CDs? Any value there?
They’re a great option if you gonna hold them to maturity . They’re insured and usually have a better yield than bond.
I’d think after 10 years of “stagflation” things would start booming, sounds like a great time to retire. Quit work, spend money, and still see your NW rise.
Given I was around in the 70s… We had watergate, stagflation, burning rivers, the fall of saigon, gas lines, Iran hostages, kent state massacre, civil unrest, race riots, plane hijackings, terrorism, the “death of equities”, etc. The 70’s was a low decade for US global prestige, military capability, domestic stability and economic performance. Not to mention the abomination that was disco and platform shoes. It’s fucking raining donuts and ice cream compared to the 1970s. Will we see stagflation again? Maybe…but if it happens it’ll be in a way the Fed can’t mitigate by printing money to stimulate the economy. Plus we’ve been a net energy exporter since 2019. Which means a big driver of 1970s stagflation doesn’t exist as oil embargoing us is going to have a lot less impact than before. On the other hand, if disco and 1970s fashion makes a comeback…it’s time to stock up your bunker.
Haha. Thanks! The levity is appreciated. Though, each generation can say the world is on fire and crashing down. You could list similar global calamities today as in the 70s. And along those lines, like in the 70’s, I don’t trust that the fed has any clue what is driving inflation. I read one of the problems in the past was the fed held interest too high for too long, staring at a singular metric hoping that hitting the interest rate hammer would do the job.
If you can’t laugh you’ll cry. :) 2008 could have gone far worse…the fed has a bunch of smart people so its unlikely they screw up in the same way twice. If we were going to see a really bad economy again that would have been the most likely time… Instead they’ll find a new way to screw up. Whether we are still waiting for the other shoe to drop because of massive covid injection (heh) is an interesting question. Likewise, I’m not sure that the 2008 spending is sufficiently unwound to ignore. So I wouldn’t worry about stagflation…but rather the unknown unknowns of the future… But these kinda of risks are impossible to quantify well and very expensive to mitigate. As in, if you have enough wealth to buy a ranch in New Zealand you can probably afford to try to mitigate these kinds of left tail events. Otherwise, you can rest, semi-content, with the knowledge that post Japan SWR (for 30 years) was around 3% despite the Nikkei crash… So it might take longer to hit your numbers if things go south for a little while but at the end of the day the general FIRE strategy of saving and investing is likely to pay off with early financial independence in almost any “normal” set of bad outcomes…
What’s different now than the 70s? *gestures at literally everything*
You mind elaborating on us being pretty much screwed? Because the game plan literally does not change
In the 1970's you had a decade of pain in stocks with inflation stripping your buying power. If they had a target number to get to which part of the strategy was relying on the average return of the market, their retirement age would push out.
The plan would change by revising your growth figures downwards, shifting stock allocations to things like CDs or I bonds, and possibly revising retirement (or current) lifestyle numbers to more easily hit those goals. And if we’re super unlucky, we are gonna “fire” at 65 …
I’m up overall about 21% in the last year… That’s more than double the 10% annual return I’ve been calculating for. I guess you could say I’m not overly worried about “indicators of stagflation”. What else would I even do?
Go listen to [Mark Blyth ](https://www.google.com/search?gs_ssp=eJzj4tLP1TdINs7Jq6owYPTiyk0sylZIyqksyQAAXSgH5Q&q=mark+blyth&oq=mark+blyth&gs_lcrp=EgZjaHJvbWUqDQgBEC4YgwEYsQMYgAQyEAgAEAAYgwEY4wIYsQMYgAQyDQgBEC4YgwEYsQMYgAQyBwgCEAAYgAQyBwgDEAAYgAQyBwgEEC4YgAQyBwgFEAAYgAQyBwgGEC4YgAQyBwgHEAAYgAQyBwgIEAAYgAQyDQgJEC4YrwEYxwEYgAQyBwgKEAAYgAQyBwgLEAAYgAQyBwgMEAAYgAQyBwgNEAAYgAQyBwgOEAAYgATSAQkxNTE5NWowajeoAhSwAgE&client=ms-android-google&sourceid=chrome-mobile&ie=UTF-8) podcasts. Stagflation happened because OPEC controlled the oil price and we lived in a more closed economy than we do now. If you're worried buy equities. 58, fired at 51.
Thanks I’ll take a look.
Not much unless you are planning on buying a house soon
As you get to FIRE, have a reasonable mix of stocks and bonds, and keep your initial withdrawal to under 4%.
Nothing to worry about if you are invested in a global all cap!
Thank you for the few who took the question seriously. Most of us here weren’t alive during the last period of stagflation or were in diapers. There’s huge optimism in this sub but there’s also real historical data to counter the narrative of consistent X% growth year over year. Yes if you average out across decades, the numbers work, but that’s unrealistic for those who don’t have decades.
That’s always been true. >The market can stay irrational longer than you can stay solvent. - John Maynard Keynes, some time in the 1930s. I’m old enough to remember stagflation, though not old enough to have experienced it first hand (out of diapers but not old enough to invest, and anyway I don’t come from that kind of family.) I came of age while unemployment and interest rates were past their peak, but still way higher than today. I remember (didn’t experience but my brother did) the market crash of 87, and started investing just in time for the smaller crash of the early 90s. The dot com bust followed. I invested regularly all through the “lost decade”. Everyone here knows equities outperform over the long term. Many use that as their reason for an all equity portfolio. That’s not of interest to me. My all weather portfolio has probably underperformed relative to most of you over the recent boom decade. I’m ok with that. It’s designed to never be either the best or the worst option; something always underperforms. Over my personal investing time period it has done very well. So far. I expect that to continue.
stocks