June Inflation Highest Since February, CPI +2.7%

[bjl584]

I wasn't sure where to put this but $1 for tap water could be considered inflation. Momofuku is in the Cosmo in Las Vegas.

Momofuku $ Tap water : r/vegas

it could be related to Lake Mead drying up.
or it could be gouging.....

[disneysteve]

Now we have the July producer price index up 0.9%. The expected rise was 0.2% so it came in 4-1/2 times higher than predicted. That would be an annualized rate of 10.8%.

[ua_guy]

Those numbers are from before the latest round of new/increased tariffs. I'm not looking forward to the turn things are likely about to take.

Despite bringing in new tax revenue of $21 Billion, the deficit somehow exploded 20% over the same time frame. What the heck is going on?

[ua_guy]

Core CPI was up to 3.1% for July, and that does not include volatile food/energy prices.

[disneysteve]

September inflation was the highest since January. Less than expected but still higher.

[QuarterMillionMan]

One would think the stock markets would be tanking but quite the opposite.

[Jluke]

Random article justifying market.

September inflation was lower than expected.

So they expected it to be worse.Like DS said too

when fed is lowering rates (expected) and earnings are good, markets don’t go down very much.

[ua_guy]

The economic data indicates the top 20% of earners are cooking along and are insulated from inflation and job market contractions, and continue to have money to spend on goods, including luxury goods. These are also the people who buy the market through tax-advantaged employer savings plans and personal brokerage accounts.

IMO to have broken 47k on the Dow this week is completely irrational, but it does look good on paper.

[disneysteve]

when fed is lowering rates (expected) and earnings are good, markets don’t go down very much.

Yep. As is often said, Wall St is not Main St. The economy sucks and is getting worse by the minute, but that's not what drives the stock market. The rich get richer and the rest not so much.

[disneysteve]

IMO to have broken 47k on the Dow this week is completely irrational, but it does look good on paper.

It looks great on paper and it's also why I have recently trimmed our stock allocation quite a bit. We're at a point where we simply don't need to keep taking so much risk. Our portfolio is up nearly $1 million since I retired. Year to date right now we're up nearly 500K despite me being fully retired and us having our highest spending year ever. I decided it was time to take some chips off the table. We have enough to last us the rest of our lives even with the more modest returns that will come from a lower stock allocation but we'll be better cushioned from any downturns.

[QuarterMillionMan]

Good move taking some chips off the table disneysteve.

[disneysteve]

Good move taking some chips off the table disneysteve.

I'm not a market timer by any means but at some point if you truly have "enough" whatever that means for you, why keep putting it all at risk. I've shifted our AA to 55/45. Statistically, that's not dramatically different than 60/40 but I feel more comfortable at that level. With 55% stocks, we'll still reap a lot of the benefit of ongoing market gains and won't give back quite as much with the next correction.

[ua_guy]

I'm not a market timer by any means but at some point if you truly have "enough" whatever that means for you, why keep putting it all at risk. I've shifted our AA to 55/45. Statistically, that's not dramatically different than 60/40 but I feel more comfortable at that level. With 55% stocks, we'll still reap a lot of the benefit of ongoing market gains and won't give back quite as much with the next correction.

Our planner has lined up a new allocation for us which will start at 70/30. The 30% is in CD's which are near vesting and then we will rebaseline that into an allocation even heavier in stocks. I'm still cautious, but he's helped provide me with informed data/reasons to continue to hang ourselves out there. The underlying economic data suggests rather than sabotage, the model is being reimagined to support a select few, where 80-90% of earners are basically set to get their teeth kicked in, and those with the stones to weather the market will emerge victorious - or, at least, still better than the bond market. I could really do without all the increased uncertainty on top of usual market uncertainty.

[LivingAlmostLarge]

Our planner has lined up a new allocation for us which will start at 70/30. The 30% is in CD's which are near vesting and then we will rebaseline that into an allocation even heavier in stocks. I'm still cautious, but he's helped provide me with informed data/reasons to continue to hang ourselves out there. The underlying economic data suggests rather than sabotage, the model is being reimagined to support a select few, where 80-90% of earners are basically set to get their teeth kicked in, and those with the stones to weather the market will emerge victorious - or, at least, still better than the bond market. I could really do without all the increased uncertainty on top of usual market uncertainty.

I've weather 2000/2007/2008/2011/2012/2018/2022. And now in 2025 i'm finally blinking. We've been invested heavily the entire way. I remember thinking in 2006-2010, and I have the excel spreadsheet to prove it, our 401k/roth iras were going down as we kept on pouring money in. It seemed like we were going nowhere and treading water. Even in 2015-2018 we were at a standstill. but can I stomach the drop still?

And we're still very aggressively invested like 95% stocks ETFs/Stocks. and more like 66% ETFs and 29% individual stocks. i'm trying to decide if i'm done. If it's time to add cds or invidual bonds to our portfolio to give it some certainty. About 5 years ago an investment advisor we considered told us to go 100% in stock because we had the income to weather anything and would come out ahead so we did have like 10%-15% bonds. We dropped it and went all in.

I'm with uaguy where i think if you can weather the storm you'll come out way ahead, but i'm not sure I can stomach it still. But if we do I am certain where we end up on the other side will be ridiculous over our number by many, many times over.

oh inflation is rampant. I can't believe they are saying it's not. Just looking at my electric bills.

[disneysteve]

I'm with uaguy where i think if you can weather the storm you'll come out way ahead, but i'm not sure I can stomach it still.

This is where you have to throw out the math. You need to be able to sleep at night. I have zero doubt that if we maintain a higher stock allocation at 61 years old, we could be far wealthier by the time we're 80+ but to what end? We have enough now. More than enough. The traditional 4% SWR is a good deal more than we are actually spending, and that doesn't even include future SS benefits. If we factor in SS, we could safely spend 60-70K/yr more than we are spending, and that's with a 60/40 portfolio. I'm okay with that. I'd be too worried if I went 80/20 or 90/10.