#I'm pretty sure the level cap is increased since then too

[vampirepuppygirl]

I wish I could actually have fun playing ffxiv again.

[arizonaconservativegal]

As you work in government, and think the government should be dramatically reduced, I was wondering where you think such cuts ought to start and how would you get enough people to agree with you? From where I stand, as someone who gained political consciousness in 2018(?) and has been leaning right libertarian ever since, it seems no one can agree even though we all see the same issue.

Well if I were dictator for a day, I'd eliminate the federal Department of Education because they pretty much do nothing of value.

But the real answer is that I wouldn't start by cutting any programs at all.

Sure I'm a libertarian who has a philosophical problem with pretty much every government program, and if I were building the system from the ground up, I wouldn't ever include most of what we ended up with, but since it's already there, that's not an option.

Besides, even as bloated as they are, most government offices/agencies/departments do have a handful of very necessary positions and good employees in them. They just also have an awful lot of jobs that no one would ever miss and a lot of employees who do nothing but take up space. You need to go through all of them with a fine tooth comb to figure out which ones should be kept, what can be consolidated, and what can be eliminated with no impact on services. And then you'd need to hang around long enough to figure out which individual people to keep (either in their existing roles or reassign them to more useful positions) and which ones are just dedicated to being useless.

The problem is that doing that properly takes a tremendous amount of time and you really can't leave it up to the bureaucrats within the departments. If you tell them to just cut staffing levels by a certain percentage, half of them will just go by last hired, first fired and the other half will deliberately cut critical and public facing positions to create political demand for their funding to be restored.

If I were really going to go through all that, I'd start by identifying the positions to cut and then let attrition do its thing. Useless positions do not need to be replaced when vacated. Not actually firing anyone gets you around civil service protections and if you do your targeting well, the only people who will really squawk will be union bosses upset about dwindling membership numbers. The two tricks here are a) you still have to replace the positions that are necessary and start consolidating responsibilities so you can't skip that first step of figuring out what those are and b) you cannot let politics determine which positions are cut. All services levels must be maintained, even in programs that we disagree with politically.

The next thing I would do - which would be much harder - is reform those civil service and union protections. We need to be able to fire people who do not do their jobs adequately or who are no longer needed. Right now that's pretty much impossible so instead of firing them, we shuffle them off to another position - and usually that comes with a promotion and raise so they can't claim they're being treated unfairly. Or we just hire a second person to do the job the first one won't or can't do but instead of replacing the first person with the second person, we just pay two people to do one job at the same time.

The trade I would make is to eliminate or drastically increase pay caps for high performing employees and for positions that we have trouble hiring/retaining qualified employees. Too often we lose highly effective employees because the only thing we can do to reward them is to promote them out of their area of skill. And we simply cannot hire a talented lawyer or tech worker for $75k when they could be making two or three or ten times that in the private sector. Sorry, I know no one wants to pay government employees more but when we have a team of ten shitty employees getting paid $50k each, that's a lot more expensive than getting one good one who will actually do the job for $200k.

(If I could, I'd also put new employees on a 401k style retirement plan - I'd even offer a very generous match - and never put them in the pension system. It would save us a ton of money and frankly, those employees would be better off in the long run for having control of their retirement funds. But that's a separate issue and possibly a bigger hurdle than cutting jobs.)

Only when all that was done, and after several years had gone by so the public would see that the reductions in workforce really didn't hamper the service they received, that's when I'd think about starting to cut actual programs.

And then I would start with the Department of Education.

[hananoami]

[ Directional Orbit ] Fire - Stage 120 Clear VOD

On June 26th I finally cleared Rafayel's Directional Orbit: Fire - Stage 120! This is the last fight currently available for hunters to challenge in the Deepspace Trials. With this clear I can now say I have successfully completed all 120 stages of Open and Directional Orbits that are out. It's a feels good moment knowing that I was able to achieve this goal before the big update in July. Hopefully we'll see more stages soon.

Anyway, some important information pertaining to Stage 120. Like all red orbits, x0 stages it requires two different teams. Team 01's Protofield Stellactrum is 6-Pearl memories. Team 02's Protofield Stellactrum is 6-Violet memories.

By having a 'perfect match' with the Protofield Stellactrum you will receive additional attribute bonuses (for every color you match increase DMG boost 5.0% and DMG reduction 5.0% up to 30.0%), as well as the ability to shatter two protofield shields in a single strike. For this stage I opted to match the colors for each team. The bonuses of having a perfect match was more optimal instead of me trying to brute force it.

A disclaimer of sorts -- a lot of time, energy, and resources went into this stage. Everything here is based on my own experience with this particular fight. There is no right or wrong way to go about it. What worked for me may not work for you, but I hope some of the things I learned along the way could help you with your own trials.

What a long and precarious journey this has been, especially with Rafayel. From me begging the rng god(s) to bless me with his AB myth pair to struggling to obtain crit rate violet delta protocores... his team builds always made me work for it in every sense of the word. Which is why I am beyond ecstatic to finally be done with this, hahaha. I started this stage on 05/22 and finally cleared on 06/26 -- 5 weeks of progging this fight whenever his orbit was available... ngl it was pretty rough.

With Team 01, it wasn't so bad if you have a perfect match and group up the three wanderers. I've done countless runs of this stage and noticed that my build was strong enough to auto battle it -- though it sometimes cut really close to the timer ending. However, if you're doing it off color and trying to brute force it I would highly suggest that you stand close to / focus on Nauticverge (it's ranged with a staff). The other two wanderers will come to you to make it easier to group together.

With Team 02, the sheer amount of resources I invested into Rafayel's violet team is kinda wild. This was the first time I awakened a 4-star memory [Ivory Nightfall] but that was done only after I exhausted all of my other upgrades (ie. getting 5-star memories to level 80, maxing out +15 protocores). I don't regret that though. That memory is beautiful and well worth it since it's an ATK talent. I called it my make or break upgrade and thankfully that was the last bit of damage I needed to clear.

Originally, I was progging the second half of the stage using his Phantasma Sands guns... but finally gave up and swapped to Hunter Claymore to do even more damage. Truthfully, I'm not that great when it comes to melee weapons. Getting those stacks was a hit or miss because I anxiously dodge back too fast before seeing the red ring.

I know my game play was messy... but at least I made sure to press my buttons on cooldown, tried not to cap on my energy charges, and made sure to grab the fishtail beacon every time I used Rafayel's support skill. There's also the case with the last shield break of the fight. I made sure to hold my resonance skill until ~0:13 left on the timer to utilize the most damage out of my ardent oath during the wanderers weakened state. As seen in my video that was the final blow before I got my clear!

ADDITIONAL SCREENSHOTS

Companion: Rafayel's God of the Tides Weapon: Tidal Embrace Attribute Bonus For each matched stellactrum, increases DMG Boost 5.0% (currently increased: 30.0%) and DMG Reduction 5.0% (currently increased 30.0%). ♡ Affinity Bonus: 102 (Rafayel’s Protective Skill) When you take a fatal blow, Rafayel teleports to you, blocks a hit, and counter attacks. Enemies will be knocked back. [ HP 4000 || DEF 100 || ATK 200 ] Pair Bonus [TP] - Starting Effect: increases team DMG by 8%, reduces DMG taken by 8%, and increases Crit DMG by 10% when fighting alongside Sea Spirits. - Duo Rank 1: boosts Ardent Oath Charge by 20%. The starting level of Sea Spirits rises to Lv. 2, and Sea Spirits will last for 5 more seconds. - Duo Rank 2: increases Energy Charge cap by 1. During Heavenly Rain, recovery rate of energy charge is increased by 30%.

5☆ Temple's Promise (pearl/solar) Lv 80/awakened rank 2 using +9 SSR protocores

5☆ Temple's Sunset (pearl/solar) Lv 80/awakened rank 2 using +9 and +12 SSR protocores

5☆ Private Trip (pearl/lunar) Lv 80 using +11 and +12 SSR protocores

5☆ Fireworks Vow (pearl/lunar) Lv 80 rank using +9 and +15 SSR protocores

5☆ Tipsy Invitation (pearl/lunar) Lv 80 using +15 SSR protocores

5☆ Before Sunrise (pearl/lunar) Lv 80 rank 3 using +12 and +15 SSR protocores

Companion: Rafayel's Abysswalker Weapon: Hunter Claymore Attribute Bonus For each matched stellactrum, increases DMG Boost 5.0% (currently increased: 30.0%) and DMG Reduction 5.0% (currently increased 30.0%). ♡ Affinity Bonus: 102 (Rafayel’s Protective Skill) When you take a fatal blow, Rafayel teleports to you, blocks a hit, and counter attacks. Enemies will be knocked back. [ HP 4000 || DEF 100 || ATK 200 ] Pair Bonus [AB] - Starting Effect: increases team DMG by 8%, reduces DMG taken by 8%, and increases Crit DMG of Deepsea Persuit by 30%.

5☆ Deep Sea Riches (violet/solar) Lv 80/awakened rank 2 using +15 SSR protocores

5☆ Deep Sea Promise (violet/solar) Lv 80/awakened using +15 SSR protocores

5☆ Floral Promise (violet/lunar) Lv 80 using +15 SSR protocores

5☆ Your Fragrance (violet/lunar) Lv 80 rank 2 using +15 SSR protocores

5☆ Whispers (violet/lunar) Lv 80 using +15 SSR protocores

4☆ Ivory Nightfall (violet/lunar) Lv 80/awakened rank 3 using +15 SSR protocores

[lavenderedhoney]

Day 77 on T! 11 weeks! Been using about a third of a pack of androgel a night. So far:

Skin: been weird but not too bad! Started reacting immediately and continues to be up and down. Before T, birth control had my skin really clear and my skincare routine was literally just moisturizing after a shower. Immediately after starting T I broke out for about a week (nothing cystic but quite a bit more irritation and texture than I've had in years). Not the most convenient for me bc I have skin picking problems lol 🤪 but it's been ok! Since then my face has stabilized somewhat. I've had a couple more breakout periods but they never seem to last longer than about a week and then things go back to being relatively for 2-3 weeks or so. Cleansing at least once a day with micellar water seems to help.

I've started getting folliculitis and acne from certain things touching my face which is new - stuff like a pillowcase that hasn't been changed in maybe 7 days tops, or a mask I've worn too many times. Both of these are kind of annoying!! I used to reuse a KN95 7-8 times (airing out in between uses, obv) but recently I've been capping it at 3 or maybe 4 wears and changing my pillowcase slightly more than once a week. The micellar water helps with all this too.

Also, for the first time ever I'm getting small blemishes on my shoulders and chest. This started like 2 weeks ago. ��� I used to get a zit on my chest like once a year but now I've got a few. Might just have to start regularly cleansing these areas too, who knows!

Also also, sometimes the alcohol in the gel dries out the skin on my leg and that's itchy and annoying, but it's easy to combat by lotioning in the morning after I wash the gel off.

Dick: I honestly haven't been keeping close track of the size but my gf says she can actually feel it when she touches it now lmfao. An improvement for sure! Tiny dick problems. 😔 She started noticing a significant size increase at about 2 and a half weeks, and she says it's continued to get a little bit bigger since then. For the first time ever I can grind on horizontal surfaces and receive stimulation from it, which is crazy (previously mentioned tiny dick problems!!). I'm definitely a little more sensitive than I used to be but I haven't had any problems with oversensitivity when getting off!

Libido: I was SUPER horny all the time for the first few weeks, but I'm just regular, pre-T levels of horny now most days lmao.

Facial hair: I've had a couple long-ish chin hairs for years but they were SUPER fine and almost impossible to see. Now the slightly darker one is course enough to feel with my fingers, and my peach fuzz is starting to get longer too (only in my chin area so far tho). I've started trimming the longer hairs bc I'm curious to see how they grow back!

Body hair: for the literal first time ever I have visible leg hair on my thigh lmao. Before it was very, very blonde and fine, and now it's light brown and feels just a little bit fuzzier under my hands. Only on the one thigh tho, bc I've only been applying T to one side just for experiment's sake. Gonna start applying to both sides when I can get more leggings (I've been wearing a pair that I cut one leg off of to sleep in to make sure I don't get any T on my girl).

Body shape: haven't really noticed yet! Might have experienced a little bit of weight gain since my pants have been getting a tiny bit snugger in the waist, but I don't own a scale on purpose so I can't check and my weight's been inconsistent the past half year anyway! So I don't know if it's the T or just my body doing body stuff, and I also don't know if it's weight gain or just body fat moving around.

I'm having a pretty good time overall!

[dragon-snoots-a-boopin]

Another game that I firmly and finally gave up on and I am going to talk about this. SW: Chronicles is not a good game in my opinion. I've played SW Sky Arena too and that game is so far different from Chronicles that it is impossible to even compare the two. To me, Chronicles is Com2uS's attempt at a more Genshin Impact or Tower Of Fantasy take on Summoners War but with staples of what makes an SW game an SW game.

What those staple are, to me, is the ability to let the game kind of just play itself with minimal input from the player. Now, that's nice but the problem is that your Summoner of choice has to interact with NPC and talk to them so as much as one can AFK the combat and walking from place to place, the player does have to be present and aware to go through dialogue with NPCs and, to me, that really takes away from the ability to do a lot of things AFK in this game. On top of that, when you are going through the main story quests, there are story dungeons you have to do that REQUIRE you to play manually which, again, takes away from the big AFK aspect of the game. The final thing that, to me, also takes away from the AFK aspect of the game is that AI of the monsters is pretty fucking stupid. Honestly, my various group of three monsters will often willingly stand in and get knocked out from enemy AOEs and it is just baffling how stupid they are.

Now, to me, the next biggest problem of this game is progression because this game will halt your progress a lot because it is essentially a mobile game. I found a lot of times, especially with quest dungeons, where you and your team have to be a certain power level to even enter and if you're under said level you get a penalty, which I think is really stupid. The big problem lies with increasing your power level because it is something that sounds easy in explanation but more complicated in execution.

The simple aspect to gaining power level is by leveling up your monsters, having high level runes with enchantments on your monsters, leveling account level more and spending skill points, crafting outfits and enhancing weapons and gear. A lot of these are easy and self explanatory but a few of them I will touch on. I had heard from watching YouTube videos to use enchantments on runes but the problem with that is you have to get to a certain part in the main story to even unlock the ability to do that so, for the most part, you can't really rely on that early in the game.

The other thing is the whole crafting outfits because, sure, that sounds easy but it is so much more complicated that it needs to be. I'm just going to say that gathering materials in this game is such a chore, even if you can do AFK gathering and mining, it is still such a chore. Here's the thing, a lot of what you can even make in terms of materials because it all depends on your processing level since that is what gathering/mining are tied to. To gain levels in processing you have to give a certain amount of various materials and then you can go up a level and as you do you can make more things. Now, you'd think it would be easy to do this but, it is not because they gatekeep your progress in this regard by letting the player only do a certain amount of mining/gathering per day and this is so stupid. What's worse is that when you hit the cap, it'll ask you to watch ads to be able to do more gathering/mining and, if you are playing the Steam version of the game, it'll tell you that you can only watch ads on the mobile version of the game, which then make the only way to get more crafting/mining per day is to use actual money and spend $10 on their Summoners Pass and that is the ultimate stupid thing this game does in my opinion.

On top of that, some materials can only be gotten by doing repeatable dungeons and something called the Tower Of Ascension. But, you can obviously only get so far in these before you're getting steamrolled because you are too weak which kind of defeats the purpose of doing these in the first place. You can reply floors in the ToA but you don't get the reward past the first time you've done it and also, ToA is essential to gaining power level as there are four skill trees associated with it that you can only use by getting a currency from clearing floors in the ToA which you only get the first time you clear a floor so what exactly is the point of being able to replay past floors???

I think that the best way to give an overall discerption of how I feel about this game is needlessly complicated...and also progression gatekeeping. Yes, I know it's a mobile game and these sorts of things are intended so the player will feel compelled to spend money but that doesn't mean I have to like it and that is why I stopped playing this game as well as Sky Arena.

[kingofthewilderwest]

Heyo, Haddock! I'm a linguistics student, fluent in French, and I'm studying German. I'm looking into freelance translating as a job, but so far it's pretty overwhelming - do you have any suggestions or tips on how to get a jump on that? How do you find work as a freelance linguist?

Hey there, linguist! That’s really cool, and I wish you the best as you start exploring freelance translation as possible work.

Admittedly I’ve never done translation as a job. I briefly considered it once, but never applied to any jobs there. I subsist 100% off linguistics commission work, but it’s all in theoretical linguistics, mainly along the semantics-pragmatics interface (just finished a fun project related to phonology-morphology shenanigans though). I implement theoretical linguistics knowledge by annotating large corpora of data (usually a database of many sentences) with pertinent linguistics information. At times I help modify an annotation system to be better, too. I then send my annotated data to another team, where they do computational work to develop language-related technology: for instance, using semantic information to improve a computer’s algorithm for returning relevant search results, or helping an AI interact better with humans in back-and-forth conversation. There’s limitations to how much I can explain because of nondisclosure contractual agreements. However, I can say I like to joke with my friends that, when the sentient robot revolution happens, you technically could pin part of the blame on me. I don’t do any computation stuff teaching computers to be smart, but I do feed theoretical information to a computational team.

So…. all that said! I’m happy to talk about things I’ve learned to make my freelance life sustainable. Hopefully that can help you find a groove for your own freelance journey! However, I’ve seen that translation jobs tend to run differently than what I do. You will certainly have different experiences than I do, because the translation world has is own quirks and system. But maybe some of this is applicable, and I wish you the absolute best with sorting out stuff that feels overwhelming now.

What makes my freelancing work work is that I’m re-employed by the same people and companies consistently. I’ve been doing annotation linguistics work on several projects for my alma mater university since 2012. In the public sector, there’s one company in particular I have consistent interactions with. For that one, hiring directors have my resume on file in the company’s database of possible contractors. Those hiring directors and project managers who’ve worked with me in the past tend to come back and email me with new opportunities later. What started as me tossing out a bunch of resumes and applications has turned around; now I’m at the point that I almost never look for a new contract, but get emails asking me if I’m available for a new gig. Free new job offer in the inbox! There have been times I’ve had to turn some down, too! Two to three contracts going on at the same time is more than enough volume to handle, and any more than that is ridiculous and unsustainable. I tend to prioritize the longest-running projects, while picking up a few smaller tasks from new project managers to build connections for future networking purposes.

Actually, one of the main companies I work contracts with, Appen, also hires translators for basically EVERY language internationally - so you could check them out if you’d like! You could be qualified to do some gigs with them! Once you submit an application for one job, your information is on store for the company to use for future gigs. However, an idle resume probably isn’t going to do much over time. I recommend re-submitting your application for new jobs - it shows volition, availability, and helps your name get pulled to their attention. I’ll admit that my first few applications didn’t catch any fish; it wasn’t until I name-dropped (one of the university professors I worked for) that I ended up receiving responses from the hiring managers and project leads.

If you do end up doing contract work in a system like Appen’s, I encourage you to be very careful. With freelance linguistics or translations, there’s many gigs that underpay workers or have paying practices that might not secure semi-stable income. You and I don’t live in the same country, so this isn’t going to be the same, but there’s healthcare and tax stuff I have to keep an eye on, too. Honestly, one of the reasons I decided not to pursue the possibility of remote work translating… was that many available translation jobs offered in my area… made me raise my eyebrows. Some sketchy stuff is out there. Sure. Some was GREAT work. Full-time salaried position working as a civilian in a military base? Those looked like solid gigs. Other common translation work is remote translating through a translation-oriented company, where you’d have consistent work and could be a freelancer, not in short-term projects like I get, but being an ongoing member translator. But some translation companies I saw lots of negative reviews for regarding payment practices and how they treated employees as replaceable; seems like you had to be a project manager overseeing translation quality to have a good gig (I did have one old linguistics classmate get that position). I also always was nervous about the idea that some translation companies seemed to pay you per word for what documents you translated (what if you only got short messages that month? maybe workflow is steady(?), but that sounded nerve-wracking to me on the outsider’s perspective - same type of scary as people in sales being paid based on how much they sell). The work I do is paid per hour - not salaried - but at least “per hour” can be more stable and flexible with what you do. 

So yeah. I don’t know if this makes your job searching more or less overwhelming, but be careful. Sometimes job-wise in life we have to start with “anything,” but “anything” won’t get good money or mental rest, and there’s times to say “no” to “anything”. There is fair work too, though.

Note that some of my comments on the translation field maaaay be inaccurate, given as it’s been a while since I’ve looked at that, and some of my observations will be based upon where I live versus you. I don’t want to feed unintentionally bad information, so everything I say on the field should be taken with a good grain of salt.

I haven’t had problems with my work, in part because I’ve figured out the payment bargain game. Every time a new gig asks what I’d like to be paid, I increase the price amount slightly. They usually agree. I feel like, as far as hourly contract work is concerned, I’m not being paid jack shit or being taken advantage of so much, and I am more than happy to spend my work week in my pajamas at home listening to metal music in the background, choosing my hours - even if it’s freaking 2 AM. Salaried positions pay more of course, and would be “fairer” considering my education level, but I’m still well over minimum wage. I’ll take it. Once I get mental health issues worked out (they’re capping my ability to work the number of hours a week I need), I’ll be making decent yearly income. There’s the constant terror of not getting new gigs, though, which comes with companies making me only a part-time contractor… but in your translation, that shouldn’t be any issue. There’s going to be freelance translation you can do within one translation company and chill there as long as you like. You won’t have to keep reapplying to new gigs if you settle in with some translation company.

One thing I suspect you might have to do, though, especially to get decent gigs, is get translation certification. I haven’t looked into it, though I remember seeing the word floated around. Maybe you know this already though. XD You would have looked more into the field than me!

I’m wishing you the very best with starting a freelance translation journey, and you rock for being a linguist. I wish I could have been more helpful! I’d be interested to hear any experiences you have or end up having, if you ever want to share! Languages for the win!

[skuds-blog]

2018 Investment Outlook For Stocks, Bonds, And Real Estate: The Last Easy Year

Before you read my investment outlook for 2018, you must first understand my financial situation and my biases. Our biases often warp our reality by anchoring us to past situations.

Permanently left work in 2012 at the age of 34

Net worth got crushed by ~35% in 2008-2009

Small business owner who will benefit from the new tax plan

New father with a spouse who is a full-time mom

Favorite asset class is real estate with three physical properties in CA, one in HI

Worked in equities for 13 years at a couple large investment banks

Have significant investment positions in stocks, bonds, and real estate

With this background information, I believe 2018 will be the last year of “easy money,” where assets remain relatively stable as they track historical returns. Let's discuss each asset class in a little more detail.

Stock Market Outlook: One Last Hurrah

According to the U.S. Small Business Administration, small businesses account for 48% of national employment. In number, they represent 99.7% of all businesses in the country. In other words, it is the guy with the plumbing store or the gal with the digital online marketing agency who make up a massive part of the American economy.

Based on my interactions with other small business owners, everyone I've talked to is extremely excited about lower taxes and potentially less red tape. It's really “less red tape” that most owners are looking forward to, and not so much the 20% deduction of qualified small business income.

As business owners, we hardly EVER feel the government is on our side because we've got to: 1) pay license fees, 2) pay special small business taxes, 3) pay both sides of the FICA tax, 4) pay an accountant to figure out our more complicated taxes, 5) wonder why we can't collect unemployment after our business goes under, and much more.

With the passage of the new tax plan, there is finally hope the government is now on our side. Having a tailwind feels so much nicer than facing a headwind while climbing a hill – which is often what running a business feels like. As a result, I believe there will be a natural inclination to reinvest in our respective businesses and ultimately grow revenue. Higher revenue growth equals higher profits and higher company valuations.

Publicly traded companies are just a larger reflection of privately owned small businesses. And I think the mood in the boardroom is as bullish as ever with a 21% permanent corporate tax rate.

When there is business euphoria, as there is now, valuations matter less. The chart below is the S&P 500 Case Shiller P/E ratio as of January 2018. Instead of investors now thinking 33.27X is too high, investors are now thinking there's another 10X multiple higher to go until we reach 2000 peak bubble levels.

Investors aren't really thinking we're going to get to 44X, but it's nice to know we still have this historical valuation buffer before everything blows up. After all, corporate cash balance sheets are massive compared to 2000, rates are accommodative, taxes are lower, and earnings are still growing.

Given we're now in the final stages of a blow off where it's liquidity, excitement, and FOMO driving the markets, I expect to see the S&P 500 breach 3,000 in 2018. If we get back to 2000 peak level valuations, we're talking ~3,600 on the S&P 500, which ain't going to happen. I expect downside risk of 10% for an even risk / reward ratio. I'm buying the dips.

Related: The Proper Asset Allocation of Stocks And Bonds By Age

Bond Outlook: Lower Interest Rates Forever

I've said this before, and I'll say it again: we are in a permanently low interest rate environment. The 10-year bond yield has been going down since the late 1980s due to information efficiency, globalization, and policy efficacy. I expect interest rates to remain accommodative for the rest of our investing lives.

For 2018, I'm looking for another sub-3% level for the 10-year bond yield, and more likely an average of 2.6%, despite a couple more Fed Funds rate hikes expected this year. In other words, I expect bonds of all types to at least provide a total return equal to their coupon return as principal values hold rock steady. 

With the Fed raising the short end, and longer term rates staying steady, the yield curve is flattening. Historically, a flat or inverted yield curve portents an imminent recession as higher rates on the short-end choke off credit growth, make existing credit more expensive and curb excess reserves, thereby slowing the economy.

But if the Fed is really going to cement itself as an inflation fighter, then this belief gives confidence for bond traders to invest in longer duration Treasuries at lower yields because no accelerated inflation is expected. Hence, I'm confident investing in 20-year municipal bonds that pay a 3.5% – 4% tax free yield for the low risk portion of my net worth.

We will know the end is near if the Fed raises the Fed funds by 1% and the long end remains flat. That's when inversion occurs and should have enough time to reduce our risk exposure by then. I expect downside risk of half the coupon bond yield. I'm buying muni bonds whenever the 10-year bond yield goes above 2.6%.

Related: The Case For Bonds

Real Estate: A Tale Of Two Cities

Remember how I said in June 2017 that the rental market was soft in San Francisco due to a large supply of new condominiums and nose-bleed level rents that far outpaced wage growth? From 2H2015 to May 2017, I rented out my house for $8,800 – $9,000/month.  When I tried to get prospective new tenants to pay the same rent in May 2017, I got zero takers, despite aggressively marketing the house for 45 days. The best two offers I got were for $7,500 from a divorcee with an unstable startup and from a family of six with a dog. So, instead of going through the pain of continuing to be a landlord, I sold the house for a little over 30X annual gross rent.

The numbers are finally showing up in the data. Check out the rent prices for one bedroom and two bedrooms in December 2017 according to Zumper. If there was a three bedroom segment, I'm sure the numbers would look even weaker. Like stocks, real estate prices should trade on earnings fundamentals. With a decline in rent in so many of the most expensive cities and new negative tax laws in effect, real estate prices should remain weak in the most expensive markets.

Take a look at NYC housing market data from Douglas Elliman. Sales volume and prices headed down in 4Q2017 as buyers took a wait-and-see approach regarding the tax plan. Now that the tax plan has passed, it is worse than most people expected due to the $10,000 SALT cap and the $750,000 mortgage cap for interest deduction.

Real estate investors should view NYC and SF as “leading indicators” of what should be expected for other expensive real estate markets. Now that prices are softening, you should be in no rush to buy. Be picky about what's likely going to be the largest purchase of your life. Focus on location and expandability, the #1 way to increase your chances of making money in real estate. If you can build for $200/sqft and sell for $400/sqft, you win. And most of all, run the numbers to see if valuations make sense.

With the slowing of coastal city real estate, it's only a matter of time before non-coastal real estate slows as well. But figuring out the timing of when the slowdown will occur and by how much is the biggest conundrum. Three to five years tends to be a good lag, so we can make an educated guess that between 2019 – 2021 is when the data will appear. Let's just say 2H2020 to be more precise.

I don't think there will be more than a 5% – 10% correction in coastal city or non-coastal city markets over the next couple of years because the economic engine is still quite strong. Further lending standards have tightened since the last financial crisis. Therefore, if you're buying a home to live in for the long term, you should be fine.

Some folks have questioned the wisdom of my $810,000 investment in real estate crowdfunding outside of San Francisco. Understandable, given the absolute dollar amount sounds large. But I had a $2,740,000 position in a single SF property with a $815,000 mortgage where rents are declining. Therefore, I've reduced risk exposure while diversifying into 12 different non-SF properties where rents are stronger. Further, I keep my alternative investments to no more than 10% of my overall net worth and still have three California-based properties to manage.

Enjoying One Last Year Of Great Times

As a business owner, I haven't been this bullish since 2007, when I got promoted to Vice President at my banking job. Of course a year later, shit hit the fan and I saw a 35% destruction to my net worth in a matter of months. If a downturn happens again, I'm better prepared because I've got far more passive income streams, a variety of defensive investments, and a much lower debt to equity ratio.

If one can get a 10% return in stocks, a 4% return in bonds, and an un-levered 5% return in real estate without much volatility, I say that's pretty easy money. If I can get these types of returns, perhaps I'll finally be satisfied with a blended 2% – 3% guaranteed rate of return in retirement.

If you haven't done so already, run your investment portfolio through an investment analyzer to see what your latest exposure is to the market. Then carefully analyze your net worth composition and make sure you are comfortable with its construction. I wasn't entirely comfortable about my net worth composition in 2017, but now I am for 2018.

Sample Investment Analyzer by Personal Capital

Readers, what are your thoughts about the stock market, bond market, and real estate market? How are you positioned for 2018? Please also share your background and biases. As always, do your own research and invest based on your own risk tolerance.

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