Reaction to Market

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yousha
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Reaction to Market

Post by yousha »

Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
ThePrince
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Re: Reaction to Market

Post by ThePrince »

What is your alternative?
Dottie57
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Re: Reaction to Market

Post by Dottie57 »

Be glad it is only a paper loss.

I’ve lost about 50k..... it was worse during Great Recession.
DoctorPhysics
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Re: Reaction to Market

Post by DoctorPhysics »

Discount shopping now. I am in it for the long run.

Automatic investment plan on 401k and taxable. Today I bought more.

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Our favorite holding period is forever.
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MotoTrojan
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Re: Reaction to Market

Post by MotoTrojan »

yousha wrote: Wed Oct 24, 2018 6:36 pm Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
Didn’t you make much more than that in 2017?
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LadyGeek
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Re: Reaction to Market

Post by LadyGeek »

This thread is now in the Investing - Help with Personal Investments forum (investment planning).

Consider changing your asset allocation. See the wiki: Risk tolerance
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baconavocado
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Re: Reaction to Market

Post by baconavocado »

Looks like bonds held their value.
letsgobobby
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Re: Reaction to Market

Post by letsgobobby »

yousha wrote: Wed Oct 24, 2018 6:36 pm Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
Market isn't even down ten percent. Are you sure your risk reward ratio is appropriate?
TRC
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Re: Reaction to Market

Post by TRC »

I didn't realize the market dropped till I saw this post. I've guess I've really tuned out the noise lately.
cdu7
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Re: Reaction to Market

Post by cdu7 »

When you say 100k paper loss today, I’m assuming that means that today specifically you lost that much. Assuming you were 100% equities you should have only lost about 3% today, meaning you have a 3 million + portfolio? Are you invested heavily in individual stocks or do you just have a large equity heavy portfolio?
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MP123
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Re: Reaction to Market

Post by MP123 »

letsgobobby wrote: Wed Oct 24, 2018 7:56 pm
yousha wrote: Wed Oct 24, 2018 6:36 pm Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
Market isn't even down ten percent. Are you sure your risk reward ratio is appropriate?
Not to mention most indexes are still up for the year...
TheDDC
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Re: Reaction to Market

Post by TheDDC »

Still enough time to go to cash with Ally for your fixed income portion. :) I just did this with my taxable account for the required two months and would still be keeping it all in equities if the Ally offer were not tempting. I don't consider this market timing, just luck!

-TheDDC
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arcticpineapplecorp.
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Re: Reaction to Market

Post by arcticpineapplecorp. »

cdu7 wrote: Wed Oct 24, 2018 8:03 pm When you say 100k paper loss today, I’m assuming that means that today specifically you lost that much. Assuming you were 100% equities you should have only lost about 3% today, meaning you have a 3 million + portfolio? Are you invested heavily in individual stocks or do you just have a large equity heavy portfolio?
my thoughts exactly. if you are worried when the market falls 3% then you obviously are taking too much risk. But what is the appropriate amount then? Because even if you are a conservative investor with say 30% in stocks you can see a 6%+ drop during a bear market (i.e. a 20% drop X 30% equities = a 6% loss).
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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nisiprius
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Re: Reaction to Market

Post by nisiprius »

baconavocado wrote: Wed Oct 24, 2018 7:55 pm Looks like bonds held their value.
Indeed.

Image

US stocks (S&P 500, brown), -3%.
International stocks (VXUS, black), -2.3%
Bonds (BND, blue), 0%. Flat as a pancake.

One day means absolutely nothing, but do notice that international stocks dropped almost as much as US stocks, while bonds did nothing at all.
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.
sunny5885
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Re: Reaction to Market

Post by sunny5885 »

It honestly depends on your spacific timeframe. I am a relatively young 33 only been in the investing game 10 years. With that said for me I keep my perspective and focus on the long-game. Downturns and dollar cost averaging is my frend. I say let's keep this going the more down days the better.

In all seriousness markets go up and down, it takes time to adjust to that but you must, to really make good investmens and money. We've been in a bull market for 9-10 years a little volitilty is expected and in my opinion welcome :happy

Others may have different views.
iamthewalrus
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Re: Reaction to Market

Post by iamthewalrus »

MP123 wrote: Wed Oct 24, 2018 8:07 pm
letsgobobby wrote: Wed Oct 24, 2018 7:56 pm
yousha wrote: Wed Oct 24, 2018 6:36 pm Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
Market isn't even down ten percent. Are you sure your risk reward ratio is appropriate?
Not to mention most indexes are still up for the year...
The major US indexes just crossed into negative for year to date, both S&P500 and Dow Jones are below where they were on January 1st.
carguyny
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Re: Reaction to Market

Post by carguyny »

Best thing you could do is look at your asset allocation and adjust as necessary based on your reaction to the last few weeks. Hard to tell if this is the start of a 50%+ drop or a minor correction. Make sure you're positioned for either.
am
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Re: Reaction to Market

Post by am »

carguyny wrote: Wed Oct 24, 2018 9:04 pm Best thing you could do is look at your asset allocation and adjust as necessary based on your reaction to the last few weeks. Hard to tell if this is the start of a 50%+ drop or a minor correction. Make sure you're positioned for either.
I will stay the course and tune out the noise. But I admit, that I have less enthusiasm for investing into my taxable account. Don’t care about my tax deferred inves,nets as much, Maybe better to spend more than taxable? Seems like when the market is going down, it’s like throwing your money into the garbage disposal. But in the back of my mind I know that this is a better time to buy than earlier in the year. I’m hoping in the next 10 years it will work out.
HEDGEFUNDIE
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Re: Reaction to Market

Post by HEDGEFUNDIE »

Should have held some EDV.

Only thing in my portfolio that is up today.
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vineviz
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Re: Reaction to Market

Post by vineviz »

HEDGEFUNDIE wrote: Wed Oct 24, 2018 9:22 pm Should have held some EDV.

Only thing in my portfolio that is up today.
VGLT was up today as well.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
TonyDAntonio
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Re: Reaction to Market

Post by TonyDAntonio »

VZ did well yesterday and today. I got that one.
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MossySF
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Re: Reaction to Market

Post by MossySF »

$100K paper loss on 3% drop means $700K gain last year .. probably $1M-$1.5M over the last 5+ years.

You take the bad with the good.
WanderingDoc
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Re: Reaction to Market

Post by WanderingDoc »

yousha wrote: Wed Oct 24, 2018 6:36 pm Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
This is nothing. Just the tip of the iceberg. Strap on your helmet and hold on tight! :o
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.
WanderingDoc
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Re: Reaction to Market

Post by WanderingDoc »

ThePrince wrote: Wed Oct 24, 2018 6:39 pm What is your alternative?
There are alternatives. Here's one: all of my real estate rental and partnership checks came in for Oct '18. 10-15% return on cash, regardless of the value of the asset.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.
KlangFool
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Re: Reaction to Market

Post by KlangFool »

yousha wrote: Wed Oct 24, 2018 6:36 pm Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
yousha,

If you lose 100K with 3% market drop, you have 3+ million in stock.

A) You are a very lucky person to have that much money.

B) Why are you keeping 3 million in stock?

<<the appropriate risk reward ratio.>>

C) It is a time like this that you find out what is an appropriate AA for you.

KlangFool
letsgobobby
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Re: Reaction to Market

Post by letsgobobby »

am wrote: Wed Oct 24, 2018 9:18 pm
carguyny wrote: Wed Oct 24, 2018 9:04 pm Best thing you could do is look at your asset allocation and adjust as necessary based on your reaction to the last few weeks. Hard to tell if this is the start of a 50%+ drop or a minor correction. Make sure you're positioned for either.
I will stay the course and tune out the noise. But I admit, that I have less enthusiasm for investing into my taxable account.
I truly don't understand this. Wouldn't you be more excited to invest with prices down 8-13%?
cali
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Re: Reaction to Market

Post by cali »

what is the "risk reward ratio" ? i see mentioned here?

Just on my Fidelity account I lost about $35K today. Since early Oct I lost $109K. I had just over $1mill.
That does not include my Vanguard acct that I use for work.


I was aggressive this year and planned to reallocate end of summer to be more diversified. Wanted to meet with an advisor since retirement is 5-10 yrs. Unfortunatly Life got in the way with a very ill family member and didn't pay attention to my portfolio for months…. Now this.. not sure what to do at this point.
UniversityEmployee9
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Re: Reaction to Market

Post by UniversityEmployee9 »

cali wrote: Wed Oct 24, 2018 10:08 pm what is the "risk reward ratio" ? i see mentioned here?

Just on my Fidelity account I lost about $35K today. Since early Oct I lost $109K. I had just over $1mill.
That does not include my Vanguard acct that I use for work.


I was aggressive this year and planned to reallocate end of summer to be more diversified. Wanted to meet with an advisor since retirement is 5-10 yrs. Unfortunatly Life got in the way with a very ill family member and didn't pay attention to my portfolio for months…. Now this.. not sure what to do at this point.
Don't fret over it. Markets fluctuate. I'd go ahead and make the AA adjustments you were planning already if I were you.
UpperNwGuy
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Re: Reaction to Market

Post by UpperNwGuy »

yousha wrote: Wed Oct 24, 2018 6:36 pm Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
Wow! Congratulations! I wish my portfolio were large enough to have experienced a $100,000 paper loss today.
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MP123
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Re: Reaction to Market

Post by MP123 »

iamthewalrus wrote: Wed Oct 24, 2018 8:59 pm
MP123 wrote: Wed Oct 24, 2018 8:07 pm
letsgobobby wrote: Wed Oct 24, 2018 7:56 pm
yousha wrote: Wed Oct 24, 2018 6:36 pm Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
Market isn't even down ten percent. Are you sure your risk reward ratio is appropriate?
Not to mention most indexes are still up for the year...
The major US indexes just crossed into negative for year to date, both S&P500 and Dow Jones are below where they were on January 1st.
Indeed. I was checking trailing 12 months.

Thanks for catching that.
Beehave
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Re: Reaction to Market

Post by Beehave »

I'm not sure I'm credentialed to be the defender of "the Philosophy" for "the Organization," but here's my take:

The "Philosophy" of the "Organization" is:

(1) Set an allocation ratio of riskier to less risky assets that meets your risk-tolerance level.
(2) Rebalance when the ratio gets out of whack.

There have been significant recent gains. Rebalancing during the course of those gains would have served to take some off the table.
Rebalancing now (if called for) would take some of those gains and redeploy them into the market.
This is known as selling high and buying low.

Anyone not following this method probably should not be lamenting it. Anyone following this policy and lamenting it because of the last few days probably needs to reassess their allocation ratios. Moreover, they should be thankful that it was only a 3% daily loss that provided them with this very special form of knowledge, namely self-knowledge, that such notables as Socrates and Buddha valued most of all.
am
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Re: Reaction to Market

Post by am »

letsgobobby wrote: Wed Oct 24, 2018 10:03 pm
am wrote: Wed Oct 24, 2018 9:18 pm
carguyny wrote: Wed Oct 24, 2018 9:04 pm Best thing you could do is look at your asset allocation and adjust as necessary based on your reaction to the last few weeks. Hard to tell if this is the start of a 50%+ drop or a minor correction. Make sure you're positioned for either.
I will stay the course and tune out the noise. But I admit, that I have less enthusiasm for investing into my taxable account.
I truly don't understand this. Wouldn't you be more excited to invest with prices down 8-13%?
I think it is a typical investor reaction but is overridden by my years of boglehead experience and knowledge.
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stemikger
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Re: Reaction to Market

Post by stemikger »

It was a non-event. I didn't even look at my portfolio yet.

I'm all in the balanced index fund, so I let Vanguard do all the heavy lifting and rebalance to 60/40. Didn't even have to get off the couch.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!
SoAnyway
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Re: Reaction to Market

Post by SoAnyway »

yousha wrote: Wed Oct 24, 2018 6:36 pm Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
If you care about a $100k paper loss in the equity markets on a single day, OP, I highly recommend that you continue to educate yourself and revisit some of the excellent resources on this website re. the (lower-case) philosophy of the BH (no capital-O, "Organization") community. Personally, I'm sure I probably had a healthy 6-figure "paper loss" over the last week. I couldn't care less, due to my circumstance-appropriate AA and strategy. I had similar days in '87/'00/'07. Yawn. Stay the course.

I recognize it's not always easy to follow when the market tanks. For that reason, please review this post from nisiprius.
Nothing in this post constitutes legal or medical advice. | Consult your attorney or physician to verify if/how anything stated might or might not be applicable to your specific situation.
2015
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Re: Reaction to Market

Post by 2015 »

letsgobobby wrote: Wed Oct 24, 2018 10:03 pm
am wrote: Wed Oct 24, 2018 9:18 pm
carguyny wrote: Wed Oct 24, 2018 9:04 pm Best thing you could do is look at your asset allocation and adjust as necessary based on your reaction to the last few weeks. Hard to tell if this is the start of a 50%+ drop or a minor correction. Make sure you're positioned for either.
I will stay the course and tune out the noise. But I admit, that I have less enthusiasm for investing into my taxable account.
I truly don't understand this. Wouldn't you be more excited to invest with prices down 8-13%?
Indeed. Stocks are finally on sale. No sense (to keep on) paying department store prices.
Flyer24
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Re: Reaction to Market

Post by Flyer24 »

Interested to see your portfolio if a 2.4% drop means $100K. Percentage wise it wasn’t that big of a drop today.
heyyou
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Re: Reaction to Market

Post by heyyou »

Max SS starts in 18 months. Ten plus years of additional WDs is in bond funds. I suppose that my equities lost in today's market fluctuation, but since the portfolio is not cap weighted, just each fund in the slice and dice portfolio, I may have lost less than someone with more growth exposure, while they would have done much better recently. Risk and reward take turns leading the market.

I just mistyped into "portfoolio." I like that as a new word implying an unsuitable allocation.
Dottie57
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Re: Reaction to Market

Post by Dottie57 »

letsgobobby wrote: Wed Oct 24, 2018 10:03 pm
am wrote: Wed Oct 24, 2018 9:18 pm
carguyny wrote: Wed Oct 24, 2018 9:04 pm Best thing you could do is look at your asset allocation and adjust as necessary based on your reaction to the last few weeks. Hard to tell if this is the start of a 50%+ drop or a minor correction. Make sure you're positioned for either.
I will stay the course and tune out the noise. But I admit, that I have less enthusiasm for investing into my taxable account.
I truly don't understand this. Wouldn't you be more excited to invest with prices down 8-13%?
I think it depends on where you are regarding retirement. 10 yearsago I was 51 and had two opposing reactions. Sold 30k of stocks, but then turned around and upped my 401k contributions to stock funds. Rather bizarre. The stories on the main page of the newspaper really scared me.


Right now I am closely following weekly results, but currently do not have fears for the system. Also at a 50/50 allocation in retirement. No earning new mney to put in. However if the market are still down in january, I’ll be doing roth conversions right away.
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Dale_G
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Re: Reaction to Market

Post by Dale_G »

If "paper losses" make people feel better, so be it. I mark to market and my losses were real losses.

There is the story of the guy at the track who watched his horse come in dead last. Asked how much he lost, he looked at his betting slip and said, "It's only a paper loss".

Dale
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Hawaiishrimp
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Re: Reaction to Market

Post by Hawaiishrimp »

I am 60% cash as of end of Sept. Waiting for buying opportunity. I expect 40% drop this time. I could be wrong, but I placed my AA accordingly because of the high PE.
I save and invest my money, so money can make money for me, so I don't have to make money eventually.
tesuzuki2002
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Re: Reaction to Market

Post by tesuzuki2002 »

The Sky is falling!!!
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yousha
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Re: Reaction to Market

Post by yousha »

Dale_G wrote: Thu Oct 25, 2018 12:51 am If "paper losses" make people feel better, so be it. I mark to market and my losses were real losses.

There is the story of the guy at the track who watched his horse come in dead last. Asked how much he lost, he looked at his betting slip and said, "It's only a paper loss".

Dale SO TRUE!
BanquetBeer
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Re: Reaction to Market

Post by BanquetBeer »

I logged in 3 times over the last couple days.. bought $3000 in 529 for the new baby. Unfortunately I always front load the purchases.

Would be nice to know the future but don’t beat yourself up over what you could/should have done. Just plan your path forward.

I have sold stocks once to change allocation back when it was free (no income). In the many years since then I change allocation by dividends and new investment.
Valuethinker
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Re: Reaction to Market

Post by Valuethinker »

yousha wrote: Wed Oct 24, 2018 6:36 pm Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
If it is difficult, then you have the wrong asset allocation. Markets dropped what, 3%? That's not a real loss.

It's when one has lost 20% (definition of when a correction becomes a bear market), 35% (2000 -03, probably), 50% (2008-09). Then, it really will feel like a loss. I've never had to survive a general market crash of 70%+ but those who were investing in the UK in the mid 1970s had precisely that.

That's true whether you lose 10k of a 30k portfolio, or 100k of a 300k, or 1m of 3m. In my case, it was more or less to lose 90% of say $1m portfolio (employer's stock in the dot com crash).
MikeG62
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Re: Reaction to Market

Post by MikeG62 »

carguyny wrote: Wed Oct 24, 2018 9:04 pm Hard to tell if this is the start of a 50%+ drop or a minor correction. Make sure you're positioned for either.
There have been only two bear markets with US stock market declines (as measured by the S&P500) in excess of 50% ('29-'32 down 86% and '07-'09 down 56%). One would have to have an incredibly pessimist outlook to think we could be on the precipice of another 50%+ decline.

BTW, not suggesting you are saying that is likely or possible, just that declines of that magnitude are more like black swan events.

Could this turn into a bear market, with a decline in excess of 20%, absolutely possible and would not discount it (especially given the approach of the current US administration to trade negotiations).
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Bacchus01
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Re: Reaction to Market

Post by Bacchus01 »

Meh. I’m down about $150k in Oct

Just got a big raise at work
Record sales and profit year means record bonus in April
Did a little Tax Loss Harvesting
Helping my son sort through the college process
Everyone is healthy

Meh
remomnyc
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Re: Reaction to Market

Post by remomnyc »

I check the market for TLH opportunities. Until last week, I hadn't had any since 2016. I TLH'd last week and again yesterday. No need to rebalance because I am still within my bands. I was excited to TLH since I am living off my assets now and happy to bank some tax loss carry forwards to use against future capital gains I will be cashing in.

P.S. I noticed that my portfolio value decreased more in absolute dollars this month than during the entire last 50% decline because my portfolio is that much larger. That made me smile.
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Re: Reaction to Market

Post by z3r0c00l »

3% is not an especially bad day in stocks. It does rank as one of top 20 worst point declines, but that is only because the market is so much higher today than it was years ago. -7% is required to break the top 20 bad day list, and we have not had one of those in 10 years.

https://en.wikipedia.org/wiki/List_of_l ... al_Average
lostdog
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Re: Reaction to Market

Post by lostdog »

Debt free, house paid off. Honestly not phased one bit. For accumulation stage it's a win-win up or down. Now if I was close to FULL retirement I better have bonds or cash available for a few years of a bear market but I am not at this stage yet.
carguyny
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Re: Reaction to Market

Post by carguyny »

MikeG62 wrote: Thu Oct 25, 2018 7:20 am
carguyny wrote: Wed Oct 24, 2018 9:04 pm Hard to tell if this is the start of a 50%+ drop or a minor correction. Make sure you're positioned for either.
There have been only two bear markets with US stock market declines (as measured by the S&P500) in excess of 50% ('29-'32 down 86% and '07-'09 down 56%). One would have to have an incredibly pessimist outlook to think we could be on the precipice of another 50%+ decline.

BTW, not suggesting you are saying that is likely or possible, just that declines of that magnitude are more like black swan events.

Could this turn into a bear market, with a decline in excess of 20%, absolutely possible and would not discount it (especially given the approach of the current US administration to trade negotiations).
It's always 100% possible that one could be underway - is it probable? Probably not, but I've been a fund manager for about 20 years - I never met anyone at the time who thought that 10/9/2007 was going to be the high that we gave back over 50% and retraced back to the 11/6/1996 close.
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