U.S. stocks in free fall

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
User avatar
ddb
Posts: 5511
Joined: Mon Feb 26, 2007 11:37 am
Location: American Gardens Building, West 81st St.

Post by ddb »

Lbill wrote:But, even more important, I want to see stocks get killed so I can buy. The last time I bought was the very day the S&P hit bottom at 666 back in March 2009. Going for a 2-fer.
Lbill wrote:No, I honestly think that investing in stocks stinks. It's a legitimate viewpoint even though it's a voice in wilderness in the Cult of Equities. You can make pretty good returns without undergoing the torture of the stock market - I always have.
In quote 1 above, you say that you've owned stocks before, and want to own them again. In quote 2, you say you have always earned good returns without being invested in stocks. Which is it?

In any event, you are obviously skilled, as you managed to not only buy stocks near the bottom in 2009, but on the actual lowest day which occurred. Well done!

- DDB
"We have to encourage a return to traditional moral values. Most importantly, we have to promote general social concern, and less materialism in young people." - PB
User avatar
Topic Author
Lbill
Posts: 4997
Joined: Thu Mar 13, 2008 11:25 pm
Location: Somewhere between Up and Down

Post by Lbill »

HE's BAAAACK!!!

Image
"Life can only be understood backward; but it must be lived forward." ~ Søren Kierkegaard | | "You can't connect the dots looking forward; but only by looking backwards." ~ Steve Jobs
exoilman
Posts: 881
Joined: Wed Oct 15, 2008 1:38 pm
Location: New Jersey

Post by exoilman »

:yawn
neverknow
Posts: 2392
Joined: Fri Jun 05, 2009 4:45 am

Post by neverknow »

exoilman wrote::yawn
:yawn :yawn :yawn
neverknow
User avatar
BigD53
Posts: 1042
Joined: Sat Jul 21, 2007 7:47 pm

Post by BigD53 »

We Don't Know, and We Don't Care???

:shock: :roll: :undecided :oops: :confused :(

Some of these Bogleheads must have Cast Iron stomachs! :lol

:thumbsdown
:thumbsdown
:moneybag
:moneybag
Last edited by BigD53 on Thu Aug 18, 2011 10:41 am, edited 1 time in total.
Sidney
Posts: 6784
Joined: Thu Mar 08, 2007 5:06 pm

Post by Sidney »

I love the pictures that appear in the news web pages of traders with their hands over their eyes.

Image
I always wanted to be a procrastinator.
Calum
Posts: 153
Joined: Wed Sep 22, 2010 9:32 am
Location: Lubbock TX

Post by Calum »

Old news, the twitter fund is way ahead of this.

http://www.theatlanticwire.com/business ... ket/41389/

:P
DaveS
Posts: 1308
Joined: Fri Jun 15, 2007 9:42 am
Location: Reno, NV

Post by DaveS »

How's that 100% equity allocation working out for ya. Dave
User avatar
VictoriaF
Posts: 20122
Joined: Tue Feb 27, 2007 6:27 am
Location: Black Swan Lake

Post by VictoriaF »

I have never been a fan of a bumper-sticker logic whether it is "Sell!" or "Yawn." For me, a day like today is quite unnerving. I successfully avoided last week's gyration by the virtue of being disconnected from the media. I prefer spending my money on vacations to having them disappear into the abyss of falling markets.

Victoria
Inventor of the Bogleheads Secret Handshake | Winner of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
User avatar
nisiprius
Advisory Board
Posts: 52105
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Post by nisiprius »

Isn't it annoying when you can just see exactly how the market is going to go, and then it doesn't?

Image

Darn!

Image

Darn!
Last edited by nisiprius on Thu Aug 18, 2011 10:26 am, edited 1 time in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
User avatar
Topic Author
Lbill
Posts: 4997
Joined: Thu Mar 13, 2008 11:25 pm
Location: Somewhere between Up and Down

Post by Lbill »

Dare I say it? As of the price today, the S&P 500 has a cumulative return of 5% for the last 12 years, including dividends. That's not counting inflation. Puts me in mind of the Count of Monte Cristo's last words:

"But, as Until the day when God will deign to reveal the future to man, all human wisdom is contained in these two words, Wait and hope."
"Life can only be understood backward; but it must be lived forward." ~ Søren Kierkegaard | | "You can't connect the dots looking forward; but only by looking backwards." ~ Steve Jobs
Elysium
Posts: 4119
Joined: Mon Apr 02, 2007 6:22 pm

Post by Elysium »

I am buying. Bought last week, this week, and buying again today.

At some point I figure I will reach levels beyond which I don't want to deplete my cash position. If the market keeps falling after that point then I would have bought too early.

Oh, well, the perils of not having crystal balls.
User avatar
Trader007
Posts: 147
Joined: Wed Jul 13, 2011 1:43 am
Location: Europe

Post by Trader007 »

Bad numbers today. High inflation as well so Fed can´t do much if they ever could.
Focus on the butterfly..
Last edited by Trader007 on Thu Aug 18, 2011 10:20 am, edited 1 time in total.
Michael Baker
Posts: 195
Joined: Tue Jul 05, 2011 10:54 pm

Post by Michael Baker »

Dieharder wrote:I am buying. Bought last week, this week, and buying again today.

At some point I figure I will reach levels beyond which I don't want to deplete my cash position. If the market keeps falling after that point then I would have bought too early.

Oh, well, the perils of not having crystal balls.
I am doing the same thing.
neverknow
Posts: 2392
Joined: Fri Jun 05, 2009 4:45 am

Post by neverknow »

VictoriaF wrote:I have never been a fan of a bumper-sticker logic whether it is "Sell!" or "Yawn." For me, a day like today is quite unnerving. I successfully avoided last week's gyration by the virtue of being disconnected from the media. I prefer spending my money on vacations to having them disappear into the abyss of falling markets.

Victoria
Good point, Victoria.

I am yawning, because I didn't believe in the first place. There is most definitely something unnerving going in the world -- don't know that I am smart enough to know what it is, but as for stock markets -- I have very little exposure.

I'm postal mailing in my CD renewal forms this morning, and turning in my saved up change, all neatly rolled for the bank ($36 worth ... coins by themselves don't buy anything anymore).

I don't know what else to do other then return to my roots. Spend less then you earn.

When I was 7 years old (1962) I could get into a Saturday matinee for 35 cents and for 15 cents more, buy a box of milk duds that would last the whole movie (or I made them last). 50 cents. Nothing costs 50 cents anymore, other then a roll of pennies.
neverknow
btenny
Posts: 5694
Joined: Sun Oct 07, 2007 6:47 pm

Post by btenny »

Boy do I know nothing is like it used to be. Back when I was in high school we used to go to a small Mexican town across the border from our home for a fun day. We would get a haircut for 50 cents, fill up the car with gas for 10 cents per gallon and then walk over to the pool hall and play a game for 5 cents and have a beer for 10 cents.Then we would go swimming at the water hole on the way home. Life was good. The whole day would cost maybe $2.

Bill
neverknow
Posts: 2392
Joined: Fri Jun 05, 2009 4:45 am

Post by neverknow »

btenny wrote:Then we would go swimming at the water hole on the way home. Life was good.
Bill
I've thought a poll on who has swam in wild water. Not a swimming beach, but wild water. You know, you climb up the tree roots and jump off the limb. And don't even anyone think the water was cleaner back then, because prior to 1970 and the first "Earth Day" -- it sure wasn't.
neverknow
User avatar
HomerJ
Posts: 21246
Joined: Fri Jun 06, 2008 12:50 pm

Post by HomerJ »

Lbill wrote:Dare I say it? As of the price today, the S&P 500 has a cumulative return of 5% for the last 12 years, including dividends. That's not counting inflation.
Rats, it's too bad I put all my money in the market 12 years ago, and haven't added to it, or rebalanced since.

"Lies, damn lies, and statistics"

One could just as easily post a postive thread pointing out that "as of the price today, the S&P 500 has a cumulative return of 75% for the last 2.5 years, including dividends"...

Interestingly enough, one could also post that "as of the price today, the S&P 500 has a cumulative return of 75% for the last 8 years, including dividends"

Both are as true as your post.

Also one could say this.... "as of the price today, the S&P 500 has returned 10.55% a year for the last 35 years"

That's right, those historical returns of 9%-10% INCLUDE decades of poor performance and bear markets.... Weird, huh? A bear market does not "prove" that investing in stocks is a bad idea... We've had multi-decade bear markets before, and STILL stocks returned 9%-10% over the long run.

It MAY be different this time... I doubt it though... But I find it very disconcerting that you take JOY in the downturn and HOPE that it IS different this time and we all get permanently financially devastated.

That would make you happy?

Very sad.
bigDanShan
Posts: 55
Joined: Thu Jan 06, 2011 2:34 pm
Location: Cork, Ireland

Post by bigDanShan »

Lbill wrote:Dare I say it? As of the price today, the S&P 500 has a cumulative return of 5% for the last 12 years, including dividends. That's not counting inflation. Puts me in mind of the Count of Monte Cristo's last words:

"But, as Until the day when God will deign to reveal the future to man, all human wisdom is contained in these two words, Wait and hope."
The S&P , excluding dividends, is down 40% in real terms since it's all time high back in tech bubble days. The awesome power of the secular bear.
"Be kind, for everyone you meet is fighting a hard battle." – Plato
User avatar
HomerJ
Posts: 21246
Joined: Fri Jun 06, 2008 12:50 pm

Post by HomerJ »

bigDanShan wrote:
The S&P , excluding dividends, is down 40% in real terms since it's all time high back in tech bubble days. The awesome power of the secular bear.
Behold the awesome power of calculating from the last peak! (also, the awesome power of excluding dividends!)

Kind of like those guys who always compare gold's return from the absolute peak in 1980, assuming that anyone who has ever bought gold, bought it all during that one week in 1980.
User avatar
woof755
Posts: 3263
Joined: Sun Aug 05, 2007 2:03 pm
Location: Honolulu

Post by woof755 »

rrosenkoetter wrote:
bigDanShan wrote:
The S&P , excluding dividends, is down 40% in real terms since it's all time high back in tech bubble days. The awesome power of the secular bear.
Behold the awesome power of calculating from the last peak! (also, the awesome power of excluding dividends!)

Kind of like those guys who always compare gold's return from the absolute peak in 1980, assuming that anyone who has ever bought gold, bought it all during that one week in 1980.
For the record, I'm with you. But, a twinge in my brain says that a behavioral economist might say that many, many people do buy more during the peaks. Investor returns lag fund returns by significant margins. That is what makes me sad.
"By singing in harmony from the same page of the same investing hymnal, the Diehards drown out market noise." | | --Jason Zweig, quoted in The Bogleheads' Guide to Investing
User avatar
SVariance1
Posts: 1376
Joined: Mon Jun 20, 2011 11:27 am
Location: Philadelphia Area

Post by SVariance1 »

I suspect that the majority of people on this board are heavily invested in bonds so this downturn may be somewhat muted for them. Until this year I was 100% equities but the risks, IMO were too high to justify that type of allocation. At this point, anything I would sell would have a cost associated with the sale. Not sure that I want to go down that path. At the same time, I am not a buyer of equities on any of these dips. Lastly, I don't think it is wise to dismiss these large declines and high volatility as routine.
Mike
User avatar
Topic Author
Lbill
Posts: 4997
Joined: Thu Mar 13, 2008 11:25 pm
Location: Somewhere between Up and Down

Post by Lbill »

Behold the awesome power of calculating from the last peak! (also, the awesome power of excluding dividends!)

Kind of like those guys who always compare gold's return from the absolute peak in 1980, assuming that anyone who has ever bought gold, bought it all during that one week in 1980.
Yeh, you've got a good point there. It's good to remind stockbugs that they can be cut with the same sword they often wield against goldbugs. Each has their day in the sun, and now it's the goldbugs' turn. :mrgreen:
"Life can only be understood backward; but it must be lived forward." ~ Søren Kierkegaard | | "You can't connect the dots looking forward; but only by looking backwards." ~ Steve Jobs
User avatar
GregLee
Posts: 1748
Joined: Wed Oct 27, 2010 3:54 pm
Location: Waimanalo, HI

Post by GregLee »

Dieharder wrote:I am buying. Bought last week, this week, and buying again today.

At some point I figure I will reach levels beyond which I don't want to deplete my cash position. If the market keeps falling after that point then I would have bought too early.
Same here, and trying to be patient and keep some cash back in case prices get still better.
Greg, retired 8/10.
Beagler
Posts: 3442
Joined: Sun Dec 21, 2008 6:39 pm

Post by Beagler »

Days like this are why dry powder can be useful: some high quality stocks are (again) on sale. However, this is tempered by the real pain of investors who must liquidate equities to make ends mee; for them I certainly hope things change, but I'm not betting on it. Low FI rates don't help.
“The only place where success come before work is in the dictionary.” Abraham Lincoln. This post does not provide advice for specific individual situations and should not be construed as doing so.
User avatar
Topic Author
Lbill
Posts: 4997
Joined: Thu Mar 13, 2008 11:25 pm
Location: Somewhere between Up and Down

Post by Lbill »

I feel sympathy for those especially depending on their equity-tilted investment portfolios to fund their retirement. It would be heartless to feel otherwise. I feel real animosity toward the financial investment establishment and financial media that probably put them in the position they're in. The last decade has been a sad lesson for us all, and class isn't over yet, apparently. There is sounder guidance available to those who are nearing retirement if they have the opportunity to avail themselves and I hope they can.
"Life can only be understood backward; but it must be lived forward." ~ Søren Kierkegaard | | "You can't connect the dots looking forward; but only by looking backwards." ~ Steve Jobs
User avatar
Daffy
Posts: 152
Joined: Tue Nov 06, 2007 3:05 pm

Post by Daffy »

neverknow wrote:When I was 7 years old (1962) I could get into a Saturday matinee for 35 cents and for 15 cents more, buy a box of milk duds that would last the whole movie (or I made them last). 50 cents. Nothing costs 50 cents anymore, other then a roll of pennies.
neverknow
50-years later you can now get a movie from a Redbox or Blockbuster Express vending machine on any street corner for $1, or in some case free with a coupon code. Throw in a box of milk duds for 0.50 cents and there's your entertainment for the night, just as cheap as it was 50 years ago.
User avatar
SVariance1
Posts: 1376
Joined: Mon Jun 20, 2011 11:27 am
Location: Philadelphia Area

Post by SVariance1 »

Beagler wrote:Days like this are why dry powder can be useful: some high quality stocks are (again) on sale.
I hope it is not a final sale, where you can't return the item
Mike
UnderTheMatress
Posts: 27
Joined: Thu May 19, 2011 10:36 am

Post by UnderTheMatress »

I rebalanced part of my 401k to purely large cap Stock funds earlier this week (figured sell bonds high, buy stocks low). So much for that idea. Good thing I only rebalanced a small amount as I was afraid there was more red to go.

Wonder what tomorrow will bring. I want to rebalance more bond into my Spartan 500 fund, but not when it's still freefalling...
zeugmite
Posts: 1176
Joined: Tue Jul 22, 2008 11:48 pm

Post by zeugmite »

Lbill wrote:I feel sympathy for those especially depending on their equity-tilted investment portfolios to fund their retirement. It would be heartless to feel otherwise. I feel real animosity toward the financial investment establishment and financial media that probably put them in the position they're in. The last decade has been a sad lesson for us all, and class isn't over yet, apparently. There is sounder guidance available to those who are nearing retirement if they have the opportunity to avail themselves and I hope they can.
I think there is a lesson here, but in a more subtle way than whether stocks or bonds should fund one's retirement. At the end of the day, stocks and bonds are sold at certain prices such that either could fund a retirement. All stocks could do for you is give you a bit more risk premium over the long run. It's something but not that much really. In good times, people do tend to forget that (1) the 20% returns of stocks going up is only on the upswing, not a long-term trend, and (2) the long-term risk premium is only gotten when there is panic in the streets. I think you're absolutely right that the financial media overhypes stocks, when compared to their objective pluses over boring bonds, so much so that when you hear the word "market" you think stocks, even though the bond market is larger.
MWCA
Posts: 2820
Joined: Fri Nov 30, 2007 3:21 pm
Location: A wonderful place

Post by MWCA »

Beagler wrote:Days like this are why dry powder can be useful: some high quality stocks are (again) on sale. However, this is tempered by the real pain of investors who must liquidate equities to make ends mee; for them I certainly hope things change, but I'm not betting on it. Low FI rates don't help.
What happens when you run out of powder.
We are all worms. But I believe that I am a glow-worm.
User avatar
TrustNoOne
Posts: 787
Joined: Thu Oct 30, 2008 7:09 am

Post by TrustNoOne »

VictoriaF wrote:I have never been a fan of a bumper-sticker logic whether it is "Sell!" or "Yawn." For me, a day like today is quite unnerving. I successfully avoided last week's gyration by the virtue of being disconnected from the media. I prefer spending my money on vacations to having them disappear into the abyss of falling markets.Victoria
No reason you can't do both at once.....
User avatar
Sheepdog
Posts: 5783
Joined: Tue Feb 27, 2007 2:05 pm
Location: Indiana, retired 1998 at age 65

Post by Sheepdog »

Those in the accumulation stage can feel panic, but they can also feel "buying opportunity." But, I feel for those retirees who need income from their nesteggs, but maintain higher stock levels. Some can't learn from the past. "Everyone" says they should have more in order to grow, beat inflation, etc. Now their panic is deeply felt.
Thankfully, I learned so there is no panic......at least, I think so.
Jim
Last edited by Sheepdog on Thu Aug 18, 2011 1:16 pm, edited 2 times in total.
Unless you try to do something beyond what you have already mastered you will never grow. (Ralph Waldo Emerson)
User avatar
VictoriaF
Posts: 20122
Joined: Tue Feb 27, 2007 6:27 am
Location: Black Swan Lake

Post by VictoriaF »

TrustNoOne wrote:
VictoriaF wrote:I have never been a fan of a bumper-sticker logic whether it is "Sell!" or "Yawn." For me, a day like today is quite unnerving. I successfully avoided last week's gyration by the virtue of being disconnected from the media. I prefer spending my money on vacations to having them disappear into the abyss of falling markets.Victoria
No reason you can't do both at once.....
I do my part, the market does her part. And yes, she and I can do it simultaneously.

Victoria
Inventor of the Bogleheads Secret Handshake | Winner of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
maxinout
Posts: 426
Joined: Fri Mar 12, 2010 2:03 pm

Post by maxinout »

MWCA wrote:
Beagler wrote:Days like this are why dry powder can be useful: some high quality stocks are (again) on sale. However, this is tempered by the real pain of investors who must liquidate equities to make ends mee; for them I certainly hope things change, but I'm not betting on it. Low FI rates don't help.
What happens when you run out of powder.
You hope the market goes on a rally!
oragne lovre
Posts: 536
Joined: Tue Nov 25, 2008 2:34 pm

Post by oragne lovre »

btenny wrote:Boy do I know nothing is like it used to be. Back when I was in high school we used to go to a small Mexican town across the border from our home for a fun day. We would get a haircut for 50 cents, fill up the car with gas for 10 cents per gallon and then walk over to the pool hall and play a game for 5 cents and have a beer for 10 cents.Then we would go swimming at the water hole on the way home. Life was good. The whole day would cost maybe $2.

Bill
Boys, you really had a good time then.
Let see if I can do something that is that cheap today: Probably an evening tennis match and 30-lap swimming that are free at free home association court and pool. Oh, and getting a bit of TSM shares when they're cheaper anyway.
Just trying to make life good when "the sky is falling down." :)
User avatar
Random Musings
Posts: 6756
Joined: Thu Feb 22, 2007 3:24 pm
Location: Pennsylvania

Post by Random Musings »

I'm sure when we are in a secular bull - Lbill will remind us why equities are so great.

As long as he calls the bottom within 2 S&P handles or on the day of the low, it'll be okay.

RM
Calum
Posts: 153
Joined: Wed Sep 22, 2010 9:32 am
Location: Lubbock TX

Post by Calum »

MWCA wrote:What happens when you run out of powder.
I think that means you didn't catch the knife.
User avatar
jh
Posts: 1998
Joined: Mon May 14, 2007 11:36 am
Location: USA

Post by jh »

.....
Last edited by jh on Fri May 04, 2012 10:29 pm, edited 1 time in total.
User avatar
SVariance1
Posts: 1376
Joined: Mon Jun 20, 2011 11:27 am
Location: Philadelphia Area

Post by SVariance1 »

Lbill wrote:HE's BAAAACK!!!

Image
As a fellow bear on this market, I have to say that you might be a little too enthusiastic about the downside. My guess is that posts like this might irritate some people.
Mike
User avatar
SVariance1
Posts: 1376
Joined: Mon Jun 20, 2011 11:27 am
Location: Philadelphia Area

Post by SVariance1 »

jh wrote:Plenty of blood on the streets today. This bear is mauling equity owners, chomping on them like salmon.
I don't think there is any blood yet. We have had strong rallies within the declines that gives people some hope.
Mike
HiAlphaLowBeta
Posts: 83
Joined: Mon May 09, 2011 2:55 pm

Post by HiAlphaLowBeta »

Dieharder wrote:I am buying. Bought last week, this week, and buying again today.

At some point I figure I will reach levels beyond which I don't want to deplete my cash position. If the market keeps falling after that point then I would have bought too early.

Oh, well, the perils of not having crystal balls.
I'm somewhat of a novice so please don't slam me but isn't the "Boglehead" way to (for the most part) only buy/sell during rebalancing periods and trying to buy/sell when you think the market is too low/high is merely timing the market which is a loser's game? Not trying to offend, just asking since I haven't bought/sold a thing during these past few weeks. I'm also 30 and I feel as though I can ride this out like 2008, but just want some input in case I'm way off base.
User avatar
Mel Lindauer
Moderator
Posts: 35757
Joined: Mon Feb 19, 2007 7:49 pm
Location: Daytona Beach Shores, Florida
Contact:

Post by Mel Lindauer »

HiAlphaLowBeta wrote:
Dieharder wrote:I am buying. Bought last week, this week, and buying again today.

At some point I figure I will reach levels beyond which I don't want to deplete my cash position. If the market keeps falling after that point then I would have bought too early.

Oh, well, the perils of not having crystal balls.
I'm somewhat of a novice so please don't slam me but isn't the "Boglehead" way to (for the most part) only buy/sell during rebalancing periods and trying to buy/sell when you think the market is too low/high is merely timing the market which is a loser's game? Not trying to offend, just asking since I haven't bought/sold a thing during these past few weeks. I'm also 30 and I feel as though I can ride this out like 2008, but just want some input in case I'm way off base.
Many younger investors (like you) are buying in these down markets because they're investing via their 401k, 403b or other retirement plan on a regular basis. They like it when the market is down, since they're getting more shares for their invested dollars, and so should you.
Best Regards - Mel | | Semper Fi
User avatar
SVariance1
Posts: 1376
Joined: Mon Jun 20, 2011 11:27 am
Location: Philadelphia Area

Post by SVariance1 »

HiAlphaLowBeta wrote:
Dieharder wrote:I am buying. Bought last week, this week, and buying again today.

At some point I figure I will reach levels beyond which I don't want to deplete my cash position. If the market keeps falling after that point then I would have bought too early.

Oh, well, the perils of not having crystal balls.
I'm somewhat of a novice so please don't slam me but isn't the "Boglehead" way to (for the most part) only buy/sell during rebalancing periods and trying to buy/sell when you think the market is too low/high is merely timing the market which is a loser's game? Not trying to offend, just asking since I haven't bought/sold a thing during these past few weeks. I'm also 30 and I feel as though I can ride this out like 2008, but just want some input in case I'm way off base.
I think for the most part you are right. Most people here would tell you to ignore the daily gyrations and buy/sell based on your investment plan. Rebalancing is a big part of it. This approach has lots of research to support it. My approach is a little different.
Mike
User avatar
HomerJ
Posts: 21246
Joined: Fri Jun 06, 2008 12:50 pm

Post by HomerJ »

HiAlphaLowBeta wrote:
Dieharder wrote:I am buying. Bought last week, this week, and buying again today.

At some point I figure I will reach levels beyond which I don't want to deplete my cash position. If the market keeps falling after that point then I would have bought too early.

Oh, well, the perils of not having crystal balls.
I'm somewhat of a novice so please don't slam me but isn't the "Boglehead" way to (for the most part) only buy/sell during rebalancing periods and trying to buy/sell when you think the market is too low/high is merely timing the market which is a loser's game? Not trying to offend, just asking since I haven't bought/sold a thing during these past few weeks. I'm also 30 and I feel as though I can ride this out like 2008, but just want some input in case I'm way off base.
You're right that one shouldn't "rebalance" (i.e. sell bonds and buy stocks) inside your bands based on a gut feeling.

But an easier way to "rebalance" is to change all new 401k purchases, taxable contributions, etc to be 100% stocks...

So yeah I'm buying stocks during this downturn... 100% of all new contributions are stocks for me right now.
UnderTheMatress
Posts: 27
Joined: Thu May 19, 2011 10:36 am

Post by UnderTheMatress »

Mel Lindauer wrote: Many younger investors (like you) are buying in these down markets because they're investing via their 401k, 403b or other retirement plan on a regular basis. They like it when the market is down, since they're getting more shares for their invested dollars, and so should you.
Which is what I'm doing. I reallocated some of my bond funds in my 401k over to Large Cap Spartan 500 fund. Figured I might as well sell my bonds high and get a low price on the stock fund. I usually don't rebalance (as said in the post above me) on a whim but I figured this is a good time.

Then again, I probably did it a bit too conservatively as I only rebalanced about 5%-8% of my total bonds into the stock fund today.

Probably tomorrow (depending on if we continue the freefall), I'll fund my RIRA too with stock heavy funds.
Manbaerpig
Posts: 1368
Joined: Wed Mar 09, 2011 1:32 am
Location: San Jose

Post by Manbaerpig »

I've got all new contributions into 401ks/etc to be 50/50 stocks/bonds for now

who knows how far this rabbit hole goes..
xerty24
Posts: 4827
Joined: Tue May 15, 2007 3:43 pm

Post by xerty24 »

SVariance1 wrote:I don't think there is any blood yet.
I agree.
Beagler
Posts: 3442
Joined: Sun Dec 21, 2008 6:39 pm

Post by Beagler »

MWCA wrote:
Beagler wrote:Days like this are why dry powder can be useful: some high quality stocks are (again) on sale. However, this is tempered by the real pain of investors who must liquidate equities to make ends mee; for them I certainly hope things change, but I'm not betting on it. Low FI rates don't help.
What happens when you run out of powder.
Work provides more dry powder, I don't anticipate running out.
“The only place where success come before work is in the dictionary.” Abraham Lincoln. This post does not provide advice for specific individual situations and should not be construed as doing so.
HiAlphaLowBeta
Posts: 83
Joined: Mon May 09, 2011 2:55 pm

Post by HiAlphaLowBeta »

Thanks for the feedback. I'm still working on my AA plan, and I do contribute to my 401k (My balance is very small (1%) compared to my taxable so it hardly impacts my AA). Still kinda seems like market timing because by buying 100% stocks you are changing your AA based off market conditions rather than the three risk factors (ability, willingness and need). However, if you keep your AA in your 401k, then naturally by regularly investing at pay periods, you will be buying more stocks when low and less when high.
Locked