[Solved] Starting investing in a long-run bull market: advices ?

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wichtounet
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Joined: Tue Nov 14, 2017 7:56 am

[Solved] Starting investing in a long-run bull market: advices ?

Post by wichtounet » Tue Nov 14, 2017 8:42 am

Hello bogleheads,

I plan to start investing at the beginning of 2018, I'm currently researching my options (allocations, which ETFs, brokers, ...). My current goal is to save for a house in around 10-15 years and for retirement in around 20-25 years. I plan to use the buy-and-hold strategy with various ETF (four fund probably) from Vanguard with some Domestic value. I live and will likely retire in Switzerland.

I know I should not try to time the market, but I cannot help but be afraid by the current state of the bull stock market. I'm afraid that by investing now, it will go down soon and then recover to mainly the same value in 10 years.

Is there anything I should do differently considering the current status of the market ? More international rather than US ? More bonds (and maybe sell some of them for stocks in the bear market ?) ?

Thanks a lot

Baptiste
Last edited by wichtounet on Wed Nov 15, 2017 8:11 am, edited 1 time in total.

dbr
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Re: Starting investing in a long-run bull market: advices ?

Post by dbr » Tue Nov 14, 2017 10:34 am

Mathematically you are far better off if the market goes down soon that if it goes down fifteen or twenty years from now.

The only real mistake a young investor can make is to not invest.

Oh, and the other mistake is to try to mess around with your investments because you think you know what the market might do.

cal91
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Re: Starting investing in a long-run bull market: advices ?

Post by cal91 » Tue Nov 14, 2017 11:16 am

I know I should not try to time the market, but I cannot help but be afraid by the current state of the bull stock market. I'm afraid that by investing now, it will go down soon and then recover to mainly the same value in 10 years.
What is funny is that is just about the best thing that could possibly happen... a market crash right when you start investing. Just keep investing, where the market is should not make an impact on your investing. Just make sure your savings rate is high enough for your financial goals and that your asset allocation is representative of your risk capacity.

3funder
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Re: Starting investing in a long-run bull market: advices ?

Post by 3funder » Tue Nov 14, 2017 11:52 am

Pray that the market crashes! You'll make more money!

Slothmeister
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Re: Starting investing in a long-run bull market: advices ?

Post by Slothmeister » Tue Nov 14, 2017 12:21 pm

If you're planning to invest bits at a time, no need to wait. The market is starting to herk and jerk, so who knows what it will do. The harder decision would be if you had a big lump sum. Monthly, or whatever periodic savings is always good.

mega317
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Re: Starting investing in a long-run bull market: advices ?

Post by mega317 » Tue Nov 14, 2017 1:23 pm

Welcome!
wichtounet wrote:
Tue Nov 14, 2017 8:42 am
I know I should not try to time the market, but
Most common phrase on this forum.

My opinions on what you said are:
1. If you feel like you should have "more bonds" now, then you should probably always have more.
2. How will you know when to increase your stock allocation in a "bear market"? 10% drop? 30%? Whatever arbitrary number you choose, the drop might take us to a point higher than today.

Tracker968
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Re: Starting investing in a long-run bull market: advices ?

Post by Tracker968 » Tue Nov 14, 2017 1:46 pm

Recently I heard a pundit say that bull markets don't end due to old age. The end due to Federal Reserve policy. That has helped me feel better about staying in the market.

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Artsdoctor
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Re: Starting investing in a long-run bull market: advices ?

Post by Artsdoctor » Tue Nov 14, 2017 1:55 pm

wichtounet wrote:
Tue Nov 14, 2017 8:42 am
Hello bogleheads,

I plan to start investing at the beginning of 2018, I'm currently researching my options (allocations, which ETFs, brokers, ...). My current goal is to save for a house in around 10-15 years and for retirement in around 20-25 years. I plan to use the buy-and-hold strategy with various ETF (four fund probably) from Vanguard with some Domestic value. I live and will likely retire in Switzerland.

I know I should not try to time the market, but I cannot help but be afraid by the current state of the bull stock market. I'm afraid that by investing now, it will go down soon and then recover to mainly the same value in 10 years.

Is there anything I should do differently considering the current status of the market ? More international rather than US ? More bonds (and maybe sell some of them for stocks in the bear market ?) ?

Thanks a lot

Baptiste
Baptiste,

Welcome to the Bogleheads!

You're asking two questions: should you invest "all at once" and what should your domestic:international ratio be.

If you have a lifetime of investing in front of you, statistics would suggest that investing all at once will be to your benefit most of the time. You didn't really specify if you have a large amount to invest all at once or if you're simply starting from scratch and building paycheck-by-paycheck.

While statistics would suggest investing a lump sum all at once is likely to benefit you, investor psychology should also be considered. If you're new to investing, you've not invested through a significant bear benefit and you may not be fully aware of your risk tolerance. Novice investors may be more likely to make emotional, or rash, decisions when corrections occur. To help ameliorate this risk, some would invest chunks over time. This is a personal decision.

If you're living in Switzerland and plan to stay there, you might want to consider investing in a world stock fund or ETF (for example, look at Vanguard's VT ETF). There are many opinions regarding percentages of international investments both from a US viewpoint and an ex-US viewpoint.

Grt2bOutdoors
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Re: Starting investing in a long-run bull market: advices ?

Post by Grt2bOutdoors » Tue Nov 14, 2017 1:57 pm

OP - I got news for you; the long running bull market has been going on since October 1931. That's right, it's been in a steady but slow upward trend since 1931. In that time period, we've had a Great Depression, followed by a World War that lasted nearly 6 years, followed by an economic boom, then countless recessions, two Asian theater conflicts - Korean War and Vietnam War, the assassination of a sitting U.S. President, the Watergate crisis, an impeachment of a sitting U.S. President, the Oil Embargo, a severe bout of inflation, followed by severe monetary tightening, followed by a severe recession, the Iranian hostage crisis, an attempted assassination attempt of a sitting U.S. president, an economic boom, then an economic bust, the internet bust, the attack on the World Trade Center and Washington D.C. that led to the nation's stock exchanges being closed for a week, a recession, then a boom, followed by a stock market collapse, housing crisis, worst depression since the Great Depression and STILL:

the trend over the booms and busts has been UP!!! You can not time the markets........if you think today's environment is scary, what do you think it was like for those who lived in the periods noted above??
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Sandtrap
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Re: Starting investing in a long-run bull market: advices ?

Post by Sandtrap » Tue Nov 14, 2017 2:00 pm


WhiteMaxima
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Re: Starting investing in a long-run bull market: advices ?

Post by WhiteMaxima » Tue Nov 14, 2017 2:10 pm

It's hard to time the market. But it is a losing game if you out of the market. I am not saying you have to be 100% in the market. Let do 50/50, 50% in stock, 50% into cash or short term bond. This way you have benefit of both. If you have debt, it's good to pay them off before invest. Safety is always No.1.

mega317
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Re: Starting investing in a long-run bull market: advices ?

Post by mega317 » Tue Nov 14, 2017 2:28 pm

Grt2bOutdoors wrote:
Tue Nov 14, 2017 1:57 pm
OP - I got news for you; the long running bull market has been going on since October 1931. That's right, it's been in a steady but slow upward trend since 1931. In that time period, we've had a Great Depression, followed by a World War that lasted nearly 6 years, followed by an economic boom, then countless recessions, two Asian theater conflicts - Korean War and Vietnam War, the assassination of a sitting U.S. President, the Watergate crisis, an impeachment of a sitting U.S. President, the Oil Embargo, a severe bout of inflation, followed by severe monetary tightening, followed by a severe recession, the Iranian hostage crisis, an attempted assassination attempt of a sitting U.S. president, an economic boom, then an economic bust, the internet bust, the attack on the World Trade Center and Washington D.C. that led to the nation's stock exchanges being closed for a week, a recession, then a boom, followed by a stock market collapse, housing crisis, worst depression since the Great Depression and STILL:

the trend over the booms and busts has been UP!!! You can not time the markets........if you think today's environment is scary, what do you think it was like for those who lived in the periods noted above??
Can someone write a script that will post this in any thread about market timing?

randomguy
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Re: Starting investing in a long-run bull market: advices ?

Post by randomguy » Tue Nov 14, 2017 3:09 pm

cal91 wrote:
Tue Nov 14, 2017 11:16 am
I know I should not try to time the market, but I cannot help but be afraid by the current state of the bull stock market. I'm afraid that by investing now, it will go down soon and then recover to mainly the same value in 10 years.
What is funny is that is just about the best thing that could possibly happen... a market crash right when you start investing. Just keep investing, where the market is should not make an impact on your investing. Just make sure your savings rate is high enough for your financial goals and that your asset allocation is representative of your risk capacity.
So the 1989 Japanese investor had the best possible timing?:) For the crash to work out you need it to happen early on (i.e. so you don't lose much money) and the it has to stay down a while (i.e. some 24 month crash doesn't give you much time to buy low) while at the same time you remain employed (long crashes tend to be major economic turmoil times).

The reason a crash early on is nice is so you get used to losing money. Over a 50+ year investment career, it will happen a dozen times that you have down years. Might as well get used to them.

cal91
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Re: Starting investing in a long-run bull market: advices ?

Post by cal91 » Tue Nov 14, 2017 3:25 pm

randomguy wrote:
Tue Nov 14, 2017 3:09 pm
cal91 wrote:
Tue Nov 14, 2017 11:16 am
I know I should not try to time the market, but I cannot help but be afraid by the current state of the bull stock market. I'm afraid that by investing now, it will go down soon and then recover to mainly the same value in 10 years.
What is funny is that is just about the best thing that could possibly happen... a market crash right when you start investing. Just keep investing, where the market is should not make an impact on your investing. Just make sure your savings rate is high enough for your financial goals and that your asset allocation is representative of your risk capacity.
So the 1989 Japanese investor had the best possible timing?:) For the crash to work out you need it to happen early on (i.e. so you don't lose much money) and the it has to stay down a while (i.e. some 24 month crash doesn't give you much time to buy low) while at the same time you remain employed (long crashes tend to be major economic turmoil times).

The reason a crash early on is nice is so you get used to losing money. Over a 50+ year investment career, it will happen a dozen times that you have down years. Might as well get used to them.
Better than if he decided to not invest because there was a crash about to happen!

Olemiss540
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Re: Starting investing in a long-run bull market: advices ?

Post by Olemiss540 » Tue Nov 14, 2017 3:25 pm

Grt2bOutdoors wrote:
Tue Nov 14, 2017 1:57 pm
OP - I got news for you; the long running bull market has been going on since October 1931. That's right, it's been in a steady but slow upward trend since 1931. In that time period, we've had a Great Depression, followed by a World War that lasted nearly 6 years, followed by an economic boom, then countless recessions, two Asian theater conflicts - Korean War and Vietnam War, the assassination of a sitting U.S. President, the Watergate crisis, an impeachment of a sitting U.S. President, the Oil Embargo, a severe bout of inflation, followed by severe monetary tightening, followed by a severe recession, the Iranian hostage crisis, an attempted assassination attempt of a sitting U.S. president, an economic boom, then an economic bust, the internet bust, the attack on the World Trade Center and Washington D.C. that led to the nation's stock exchanges being closed for a week, a recession, then a boom, followed by a stock market collapse, housing crisis, worst depression since the Great Depression and STILL:

the trend over the booms and busts has been UP!!! You can not time the markets........if you think today's environment is scary, what do you think it was like for those who lived in the periods noted above??
But this one's different!!!!!

Bravo. Bravo.

wichtounet
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Joined: Tue Nov 14, 2017 7:56 am

Re: Starting investing in a long-run bull market: advices ?

Post by wichtounet » Wed Nov 15, 2017 8:07 am

Hi every body,

Thanks a lot all of you for all your answers!!!

I didn't realize about the opportunities that that could do. Since I have a long time for investing before I need your money, I'll follow the multiple advice in this thread and start investing as I was planning to and forget about timing the market!

Thanks

Excellent forum!

Baptiste

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