How Bad Could It Get?

Never mind about who wins the Virginia governor's race today, or CRT in schools. What I want to know, as an old geezer that has to make his RMDs every year, is this.

How much money should I take our of my ETFs to make sure I don't have to sell in a downturn to make my RMD?

Because for an old geezer the worst thing in the world is having to sell equities at the bottom of a bear market.

Here's my point. The result of the disastrous COVID shutdowns and Biden administration money machine is that we are going to have a nasty reckoning, at some point. But how nasty, and when, and for how long?

So I took a look at the Dow Jones history for the last century. Do you know what the worst bear market was? OK, We all know it has to be the great crash from 1929-32. But, as I look at it, the worst period seems to be the bear market from 1966 to 1982. In January 1966 the Dow was at about 8,500. In July 1982 the Dow bottomed out at about 2,275. Take a look.

Let's see, that's a decline of about 73 percent in 17 years. And that doesn't include the effect of inflation, which, you may not remember, reached 10 percent a year in the late 1970s. However, the S&P 500 index was basically flat during that period, from about 100 in March 1966 to 105 in March 1982.

Now, of course, the period from 1965 to 1980 was a period of multiple stupidities, from the Great Society social programs that cranked up gubmint spending to the Vietnam war that cranked up gubmint spending to the wage and price controls of 1971 when President Nixon, the Republican took the US dollar off the gold standard and instituted a wage-price freeze. Then we had the OPEC oil embargo of 1973 that quadrupled the price of Middle East oil and encouraged the government to impose price controls on oil. Then we had the recession of 1974. Then we had the Carter stagflation of 1977-80. President Reagan finally abolished price controls on oil and gasoline in 1981.

Do you see what the period of 1965 to 82 was all about? It was all about politicians being politicians and doing stupid things in response to the effects of their stupid policies. And this went on from the glorious dawn of Lyndon Johnson's Great Society in 1965 to Richard Nixon's 1971 ploy to fix the economy in neutral until after the 1972 election to Carter's Keynesian apocalypse in 1977-80.

It took a really dumb B-movie actor to put a stop to it all, and that took a nasty recession that resulted in a 26 member GOP loss in the 1982 midterms.

We are doing the same thing now with Biden's absurd continuation of free money in the COVID crisis to the ridiculous super-expansion of the welfare state with the Build Back Better or "social infrastructure" bill.

You know what? There is bound to be a really nasty market crash / inflation / recession / who-knows-what in the next few years. And the glorious crusade to end global warming as we know it won't help.

(That's why I think that the Dems were fools to jink the 2020 election. Much better to have let Trump deal with the aftermath of Money Printer Go Brrrr. And take the blame.)

But what's a geezer to do to avoid getting demolished in the undertow?

I wonder if all the nice suburban moms that really didn't like Trump's mean tweets will soon be calling for a "strong leader" to protect them from the Biden disaster.