Does this headline trouble you?

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Does this headline trouble you?

Postby allocator » Fri Jan 25, 2013 5:58 pm

From this afternoon's New York Times:


"Stocks Near New Heights as Small Investors Regain Faith"
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Re: Does this headline trouble you?

Postby mhc » Fri Jan 25, 2013 6:15 pm

No because my expectation is that stocks will go up.
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Re: Does this headline trouble you?

Postby bkslainte » Fri Jan 25, 2013 6:15 pm

As a Boglehead, not really.

As someone who tries to look out for others who may not be as sophisticated/interested in investing, yes it does.
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Re: Does this headline trouble you?

Postby Sidney » Fri Jan 25, 2013 6:17 pm

Most headlines about market activity attempt to connect two dots where no connection may exist. So I tend to ignore them. Half the time, the headline isn't even what the article is about. They would have been better off leaving small investors out of it.
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Re: Does this headline trouble you?

Postby 1530jesup » Fri Jan 25, 2013 6:22 pm

allocator wrote:From this afternoon's New York Times:


"Stocks Near New Heights as Small Investors Regain Faith"


I think the conventional wisdom is that by the time the small investors come back to the market, they are late to the game.
All the more reason I keep to the passive index allocation path. If I was not in the retirement stage of life (as in no more accumulation) I might take a different tack; but I do not know what that would have been - sell, buy, hide, worry?
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Re: Does this headline trouble you?

Postby allocator » Fri Jan 25, 2013 6:23 pm

As an "Emerging Boglehead", I would like to think I am above such headlines. Alas, as there is still that part of me which has not quite made the transition, I did take note. Where I came out was here: the only things over which I have control are my risk exposure (asset allocation) and my capacity to follow through on my plan (rebalancing when I am out of my band). To that end I turned on some music and started dinner for the kids.
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Re: Does this headline trouble you?

Postby nisiprius » Fri Jan 25, 2013 6:25 pm

It wouldn't have worried me before, and it worries me even less after reading Rick Ferri's article, Mr. Market doesn't care what you think, discussed here.

What the headline tells us is just that stocks have been rising recently... and that public memory is short... and that, best of all, the 2009 bottom is now still close enough to three years ago that every stock fund is showing great three-year return numbers.
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Re: Does this headline trouble you?

Postby Peter Foley » Fri Jan 25, 2013 6:43 pm

Not at all - I hoping that we will hit new highs since that is about the top of my rebalancing band. :happy
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Re: Does this headline trouble you?

Postby Toons » Fri Jan 25, 2013 6:51 pm

Not at all,,,It is pretty much normal after a severe decline in stock market cycles.The "average investor" usually starts to buy in long after the biggest gains have been made since the bottom of the bear market.The S&P is up 126% since the March 2009 bottom of 667.00.Just a guess,but I'm thinking we might be somewhere between the confidence and enthusiasm stage this time around :happy

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Re: Does this headline trouble you?

Postby reggiesimpson » Fri Jan 25, 2013 6:58 pm

Todays WSJ commented that equities are at a five year high and the "chart" is getting ominous. I plan on selling the few stocks i have left and i wont look back. Taking a profit is called winning.
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Re: Does this headline trouble you?

Postby Dale_G » Fri Jan 25, 2013 6:58 pm

I'll start getting concerned when there is a new reality show featuring day traders, and my local newspaper starts doing interviews of those with great (self reported) success stories.

There have been a lot of posts on Bogleheads lately about "getting back into the market", and a lot of hesitancy about actually pulling the trigger. It will be time to worry when we start seeing a lot of new posts saying, "I finally did it!"

Apparently human nature has not been repealed.

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Re: Does this headline trouble you?

Postby Boglenaut » Fri Jan 25, 2013 7:03 pm

Does this headline trouble you?


No, because a good contrarian always sees another headline (CNBC.com):

"Why S&P 1,500 May Signal Stock Rally Has Peaked"
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Re: Does this headline trouble you?

Postby Calm Man » Fri Jan 25, 2013 7:24 pm

reggiesimpson wrote:Todays WSJ commented that equities are at a five year high and the "chart" is getting ominous. I plan on selling the few stocks i have left and i wont look back. Taking a profit is called winning.


My brother, who is a day trader for a company, told me he sold all of his personal US and international stock funds today. He is usually pretty on track. Reggie, if you sell all of your stocks, does that mean you will be 100% bonds? Not wishing to argue at all, but won't that mean locking in an inflation losing situation forever or are you planning to reenter the stock market?
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Re: Does this headline trouble you?

Postby BBL » Fri Jan 25, 2013 7:31 pm

allocator wrote:From this afternoon's New York Times:


"Stocks Near New Heights as Small Investors Regain Faith"


Nahhhh. That faith will be fleeting as soon as things get interesting again. This never changes. :|
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Re: Does this headline trouble you?

Postby Fallible » Fri Jan 25, 2013 7:35 pm

allocator wrote:From this afternoon's New York Times:


"Stocks Near New Heights as Small Investors Regain Faith"


What's troubling - the headline itself or small investors buying high again? Whatever, I liked this last quote from the article: "But Russ Koesterich, the chief investment strategist at BlackRock, said that the current threats were “mundane” in comparison to what investors had faced over the last few years. “We’re not talking about big crises anymore,” Mr. Koesterich said.
"Common sense and a sense of humor are the same thing, moving at different speeds. A sense of humor is just common sense, dancing." -William James
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Re: Does this headline trouble you?

Postby Atilla » Fri Jan 25, 2013 7:40 pm

No - it gives me encouragement.

I launder my charitable giving through my taxable brokerage account when it makes sense - so gains are good. By donating you raise your cost basis for cap gains taxable purposes and give away unrealized gains rather than earnings while getting the full tax deduction as if it had been cash. Just initiated charitable transfer of a passle of stock today while the price was high. At the same time set up a transfer of cash back into the account to re-buy what I gave away.

And I started shorting the S&P 500 a week ago thinking it can't go much higher. Still waiting on that one, but I'm still hopeful for a Really Bad Day sometime in the next month or so. :happy I haven't been to Las Vegas since Labor Day, so this is all I got.
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Re: Does this headline trouble you?

Postby reggiesimpson » Fri Jan 25, 2013 8:36 pm

Calm Man wrote:
reggiesimpson wrote:Todays WSJ commented that equities are at a five year high and the "chart" is getting ominous. I plan on selling the few stocks i have left and i wont look back. Taking a profit is called winning.


My brother, who is a day trader for a company, told me he sold all of his personal US and international stock funds today. He is usually pretty on track. Reggie, if you sell all of your stocks, does that mean you will be 100% bonds? Not wishing to argue at all, but won't that mean locking in an inflation losing situation forever or are you planning to reenter the stock market.
No i dont plan on re entering into equities unless and when there is another large drop. I am up comfortably in my remaining stock holdings and will sell for a tidy profit
I have been largely in a bond ladder for decades with an eye to retirement living which is where i am presently at. I have no problem buying bonds as they provide a cash flow that i can use not only to live on but to reinvest the excess cash in whatever makes sense at the time. Typically more bonds. I realize this is not typical BH philosophy but i am in retirement and my earning years are over. I am far less concerned about inflation than i am about the distinct possibility of losing money at this stage of my life. If the market shoots up then so be it i dont care. I do not buy into the idea that one simply has to have equities in their portfolio. IMHO
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Re: Does this headline trouble you?

Postby pennstater2005 » Fri Jan 25, 2013 8:41 pm

Not at all.
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Re: Does this headline trouble you?

Postby Buckeye » Fri Jan 25, 2013 8:48 pm

I just read a headline yesterday that mentioned stocks are the cheapest they've been in a generation.

This statement bothers me a bit as I think stocks are fairly valued today....which is far from being very cheap.

I do expect a moderate bear market this year or next which will make stocks cheap.
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Re: Does this headline trouble you?

Postby stratton » Fri Jan 25, 2013 8:48 pm

reggiesimpson wrote:My brother, who is a day trader for a company, told me he sold all of his personal US and international stock funds today.

You sure he doesn't close out all his positions on week ends?

A lot of stuff can happen over two days.

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Re: Does this headline trouble you?

Postby lwfitzge » Fri Jan 25, 2013 9:03 pm

not at all - love stocks, pouring in new cash because I heard a smart person on CNBC said valuations are at historic lows and we are entering a new secular bull market :wink:

ok, nevermind,...stay the course :)
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Re: Does this headline trouble you?

Postby Dopey » Fri Jan 25, 2013 9:04 pm

reggiesimpson wrote:Todays WSJ commented that equities are at a five year high and the "chart" is getting ominous. I plan on selling the few stocks i have left and i wont look back. Taking a profit is called winning.


Did the same thing today. My last stock I owned went up 18% so I sold it all! No more stocks, all index funds. I'm officially a Boglehead. It feels great.
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Re: Does this headline trouble you?

Postby Calm Man » Fri Jan 25, 2013 9:07 pm

stratton wrote:
reggiesimpson wrote:My brother, who is a day trader for a company, told me he sold all of his personal US and international stock funds today.

You sure he doesn't close out all his positions on week ends?
He closes all his positions before each day ends, not only the week. He does very well at the day trading job -- again, it's not his money, it's the company's money. But in hi personal money he thinks the market is horribly set for a large multiyear fall. I hope he's wrong and I don't tell him I use a 2 fund portfolio.

A lot of stuff can happen over two days.

Paul
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Re: Does this headline trouble you?

Postby letsgobobby » Fri Jan 25, 2013 9:19 pm

Rammer wrote:
reggiesimpson wrote:Todays WSJ commented that equities are at a five year high and the "chart" is getting ominous. I plan on selling the few stocks i have left and i wont look back. Taking a profit is called winning.


Did the same thing today. My last stock I owned went up 18% so I sold it all! No more stocks, all index funds. I'm officially a Boglehead. It feels great.

congratulations!
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Re: Does this headline trouble you?

Postby hoppy08520 » Fri Jan 25, 2013 9:34 pm

Yes, it troubles me. As soon as I read the headline, I thought, "OK, this is where all the foolish sell-low, buy-high investors jump in, only to have the market crash again, just to punish those fickle investors--again. And of course they'll bring me down with them."

Not that I'm going to do anything about it other than staying the course.

After reading Bernsteins "Four Pillars of Investing," I know that long-term stock prices will be want they will be, regardless of short term fluctuations, so I'm not worried.
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Re: Does this headline trouble you?

Postby Fallible » Fri Jan 25, 2013 9:43 pm

Rammer wrote:
reggiesimpson wrote:Todays WSJ commented that equities are at a five year high and the "chart" is getting ominous. I plan on selling the few stocks i have left and i wont look back. Taking a profit is called winning.


Did the same thing today. My last stock I owned went up 18% so I sold it all! No more stocks, all index funds. I'm officially a Boglehead. It feels great.


And you will still feel the same great way when the stock you sold soars another 18% on Monday, right? And still the same when it soars another 18 on Tuesday? :)
"Common sense and a sense of humor are the same thing, moving at different speeds. A sense of humor is just common sense, dancing." -William James
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Re: Does this headline trouble you?

Postby Dopey » Fri Jan 25, 2013 10:28 pm

Fallible wrote:
Rammer wrote:
reggiesimpson wrote:Todays WSJ commented that equities are at a five year high and the "chart" is getting ominous. I plan on selling the few stocks i have left and i wont look back. Taking a profit is called winning.


Did the same thing today. My last stock I owned went up 18% so I sold it all! No more stocks, all index funds. I'm officially a Boglehead. It feels great.


And you will still feel the same great way when the stock you sold soars another 18% on Monday, right? And still the same when it soars another 18 on Tuesday? :)


Of course not. I'll probably kick myself and think what might have been.

But I still won't buy back in.
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Re: Does this headline trouble you?

Postby Naikansha » Fri Jan 25, 2013 10:34 pm

Toons: so many of the Times readers posting comments seem to be somewhere between the 'contempt' and 'doubt and suspicion' levels ( 'The market is rigged', 'I'm never going to put any money in the market', 'I keep my money under the mattress', 'I've taken everything out in 2008 and will never invest again' etc.) But there seem to be a few Bogelhead types at the 'confidence' level.
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Re: Does this headline trouble you?

Postby Toons » Fri Jan 25, 2013 11:14 pm

Naikansha wrote:Toons: so many of the Times readers posting comments seem to be somewhere between the 'contempt' and 'doubt and suspicion' levels ( 'The market is rigged', 'I'm never going to put any money in the market', 'I keep my money under the mattress', 'I've taken everything out in 2008 and will never invest again' etc.) But there seem to be a few Bogelhead types at the 'confidence' level.


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Re: Does this headline trouble you?

Postby lindisfarne » Fri Jan 25, 2013 11:33 pm

The headline implies that it is the small investors that are driving up stock prices.
But as I understand it, small investors make too small of a % of overall purchases of equities to have that kind of effect (perhaps a fraction of a %, but not the kind of growth in the last 2 months).

Please correct me if I'm wrong. (It could depend on what is meant by "small investor" & I'm interpreting that to mean individuals (not billionaires), not pension funds, etc.)
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Re: Does this headline trouble you?

Postby telemark » Sat Jan 26, 2013 12:24 am

No. I'm content with my current asset allocation -- not perfect, but good enough -- and I already expect that the market will fluctuate unpredictably, because that's what it does.
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Re: Does this headline trouble you?

Postby Nathan Drake » Sat Jan 26, 2013 1:16 am

They nature of the market is to grow with time.

There's a lot of bumps along the way, but I think the past 12 years has really skewed the perspective of markets to most investors, thinking that "all time highs" mean that the market is somehow overvalued, simply because the past decade has not seen those highs hit frequently...

but, historically, the market hits "highs" very frequently, which is expected. if it didn't, the market wouldn't return 8-10% annually over 30 years.
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Re: Does this headline trouble you?

Postby Nathan Drake » Sat Jan 26, 2013 1:18 am

lindisfarne wrote:The headline implies that it is the small investors that are driving up stock prices.
But as I understand it, small investors make too small of a % of overall purchases of equities to have that kind of effect (perhaps a fraction of a %, but not the kind of growth in the last 2 months).

Please correct me if I'm wrong. (It could depend on what is meant by "small investor" & I'm interpreting that to mean individuals (not billionaires), not pension funds, etc.)



This is largely true, and at last count retail investors were still fleeing stocks for "safer" assets.
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Re: Does this headline trouble you?

Postby og15F1 » Sat Jan 26, 2013 4:22 am

allocator wrote:From this afternoon's New York Times:


"Stocks Near New Heights as Small Investors Regain Faith"



Nope

If the headline was "you made money today" I would also not be troubled
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Re: Does this headline trouble you?

Postby Call_Me_Op » Sat Jan 26, 2013 9:34 am

allocator wrote:From this afternoon's New York Times:


"Stocks Near New Heights as Small Investors Regain Faith"


It's really amazing, though, that so-called "small investors" regain faith only when the market makes new highs. There is probably a correction in the not too distant future, but this should not trouble long-term investors.
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Re: Does this headline trouble you?

Postby MnD » Sat Jan 26, 2013 11:48 am

Having sold in a fairly significant way on three occasions since the bottom to adhere to my AA through re-balancing I am less troubled by this headline.
No-one personally has told me lately that they are "getting in".
When that inevitably happens I'll grimace, wish them good luck with that and check my AA again to make sure I'm not overweight equity.
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Re: Does this headline trouble you?

Postby Karl » Sat Jan 26, 2013 12:17 pm

Yes, it concerns me because the investing public tends to act stupidly. They were wildly enthusiastic about stocks in the late 1990s as well and we know how that turned out.
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Re: Does this headline trouble you?

Postby midareff » Sat Jan 26, 2013 4:39 pm

Line the sheep up, they are getting ready to open the slaughter house.
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Re: Does this headline trouble you?

Postby Karl » Sat Jan 26, 2013 4:45 pm

midareff wrote:Line the sheep up, they are getting ready to open the slaughter house.


Wouldn't they be greedy pigs chasing returns, rather than sheep?
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Re: Does this headline trouble you?

Postby mickeyd » Sat Jan 26, 2013 5:02 pm

As Tim Buckley (CIO @ Vanguard) recently noted on a webcast ~"Avoid the short-term noise."
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Re: Does this headline trouble you?

Postby awval999 » Sat Jan 26, 2013 5:28 pm

MnD wrote:Having sold in a fairly significant way on three occasions since the bottom to adhere to my AA through re-balancing I am less troubled by this headline.
No-one personally has told me lately that they are "getting in".
When that inevitably happens I'll grimace, wish them good luck with that and check my AA again to make sure I'm not overweight equity.


I will say this. I randomly, in passing, mentioned stocks are approaching an all time high and I didn't get any chitter-chatter in the office. I even got a--- "yeah I still don't trust them". So I will say that the lay population is still uneasy. I wasn't around during the whole late 90's stock market frenzy but there is definitely no frenzy at the workplace.
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Re: Does this headline trouble you?

Postby HardKnocker » Sun Jan 27, 2013 12:59 pm

Sometimes it's good to hang on and ride the wave.

Who knows? We might have another 5 years of "irrational exuberance". :sharebeer
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Re: Does this headline trouble you?

Postby MnD » Sun Jan 27, 2013 1:36 pm

awval999 wrote:I will say this. I randomly, in passing, mentioned stocks are approaching an all time high and I didn't get any chitter-chatter in the office. I even got a--- "yeah I still don't trust them". So I will say that the lay population is still uneasy. I wasn't around during the whole late 90's stock market frenzy but there is definitely no frenzy at the workplace.


I concur with this. The buy high sell low crowd aren't comfortable diving in quite yet.
I'll be curious when they do, what the equivalent will be to Janus Funds, Scudder Ultra and QQQ that will be touting. :mrgreen:
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Re: Does this headline trouble you?

Postby EyeYield » Sun Jan 27, 2013 3:36 pm

So, we're where we were five years ago. And...
The market goes up and down, just like it always has and always will; rallies and corrects - repeat.
One thing interesting, is that money just started leaving bond funds.
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