I made a mistake by not selling when the market was high this year

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sheople2
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I made a mistake by not selling when the market was high this year

Post by sheople2 » Fri Dec 14, 2018 11:58 pm

I made another big mistake. I should have taken some gains earlier this year when I had the chance. It seems to me that 10 months of great growth for 2018 has been wiped out in the past few weeks.

I don’t have a good question. Just wondering if anyone else is in the same boat.

Is this the beginning of the next bear market that they’ve been warning us about?

MotoTrojan
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Re: I made a mistake by not selling when the market was high this year

Post by MotoTrojan » Sat Dec 15, 2018 12:00 am

sheople2 wrote:
Fri Dec 14, 2018 11:58 pm
I made another big mistake. I should have taken some gains earlier this year when I had the chance. It seems to me that 10 months of great growth for 2018 has been wiped out in the past few weeks.

I don’t have a good question. Just wondering if anyone else is in the same boat.

Is this the beginning of the next bear market that they’ve been warning us about?
Even if it is, Boglehead philosophy would be to stay invested, unless you need the income for retirement or other expenses.

Would you have needed to withdraw to survive if the market was down 50%? If not, keep investing.

This volatility is nothing. We are barely in a correction and still have had incredible growth over the last 10 years; you should never use the word "months" in any sentence that is evaluating equity performance.


Also, who is "they"? Made me chuckle. People have been calling for a recession/bear since 2011 (technically we had one in 2016) and those same people have lost billions.

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cheese_breath
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Re: I made a mistake by not selling when the market was high this year

Post by cheese_breath » Sat Dec 15, 2018 12:03 am

No, you're making a mistake right now in thinking you can time the market.

The mistake you made before is not understanding your risk tolerance and defining an asset allocation to accommodate it.
The surest way to know the future is when it becomes the past.

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Re: I made a mistake by not selling when the market was high this year

Post by mrspock » Sat Dec 15, 2018 12:16 am

sheople2 wrote:
Fri Dec 14, 2018 11:58 pm
I made another big mistake. I should have taken some gains earlier this year when I had the chance. It seems to me that 10 months of great growth for 2018 has been wiped out in the past few weeks.

I don’t have a good question. Just wondering if anyone else is in the same boat.

Is this the beginning of the next bear market that they’ve been warning us about?
Yes, about a few hundred million folks with retirement savings :D . Nobody is enjoying this, just don’t be dumb money and give in to your emotions and sell low. Set your AA and then ride it out like the rest of us.

It could be the beginning of a bear, it certainly feels like the rockin’ good times of the last ten years are coming to a close. Trade Wars and interest rate changes take quite a bit of time to “bake” into the economy, so it’s hard to say for sure. Beyond those factors (and maybe Brexit) it is difficult to point to any specific thing which will end the party. Part of me, wonders if we are all grossly under estimating the impacts of some of these factors, they are here in front of us... but we just do not fully appreciate the impact yet.

Good luck!
Last edited by mrspock on Sat Dec 15, 2018 12:23 am, edited 1 time in total.

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Toons
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Re: I made a mistake by not selling when the market was high this year

Post by Toons » Sat Dec 15, 2018 12:18 am

Just be patient and sell the next time the market reaches a new high.
It is just a matter of time.
:happy
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andrew99999
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Re: I made a mistake by not selling when the market was high this year

Post by andrew99999 » Sat Dec 15, 2018 1:15 am

sheople2 wrote:
Fri Dec 14, 2018 11:58 pm
I made another big mistake. I should have taken some gains earlier this year when I had the chance. It seems to me that 10 months of great growth for 2018 has been wiped out in the past few weeks.

I don’t have a good question. Just wondering if anyone else is in the same boat.

Is this the beginning of the next bear market that they’ve been warning us about?
You join this forum over a decade ago and still ask questions like this?
I would think this thread should be locked. If it was from a new member that would be a different story.

Rwsawbones
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Re: I made a mistake by not selling when the market was high this year

Post by Rwsawbones » Sat Dec 15, 2018 1:20 am

The market is still very high. If you doubt that look at the records of the DJIA and S&P. Both are about 50% higher than 2016 and about quadruple since 2009 if for some reason you need to sell stock to raise some money this is not such a bad time to do so. If market fluctuations bother you you need to rethink your AA and as JP Morgan is alledged to have said you need to sell down to your sleeping point. In most situations a significant stock holding will support long term needs

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Re: I made a mistake by not selling when the market was high this year

Post by Sandtrap » Sat Dec 15, 2018 1:26 am

sheople2 wrote:
Fri Dec 14, 2018 11:58 pm
I made another big mistake. I should have taken some gains earlier this year when I had the chance. It seems to me that 10 months of great growth for 2018 has been wiped out in the past few weeks.

I don’t have a good question. Just wondering if anyone else is in the same boat.

Is this the beginning of the next bear market that they’ve been warning us about?
Perhaps, regardless of level of experience and knowledge, and "time in" as a "Boglehead", many are thinking the same thoughts at one time or another.
Nobody is invulnerable to "coulda', shoulda', would'a".
Hang in there.
If you are uncomfortable with your existing allocation and volatility in the present market, perhaps post a "portfolio review" and request methods to change your allocation.
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nedsaid
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Re: I made a mistake by not selling when the market was high this year

Post by nedsaid » Sat Dec 15, 2018 1:56 am

sheople2 wrote:
Fri Dec 14, 2018 11:58 pm
I made another big mistake. I should have taken some gains earlier this year when I had the chance. It seems to me that 10 months of great growth for 2018 has been wiped out in the past few weeks.

I don’t have a good question. Just wondering if anyone else is in the same boat.

Is this the beginning of the next bear market that they’ve been warning us about?
That is precisely why I have followed a program of mild rebalancing from stocks to bonds since July 2013. Pretty much, when stocks reach new highs, I trim stocks and add to bonds. I remembered that I allowed my stocks to run before the 2008-2009 financial crisis and never bothered to rebalance when times were good. I told myself that I wouldn't let this happen again.

Don't think you have made a mistake. Markets will make new highs eventually. If you are under 50 years old, I wouldn't give this another thought. Just ride it out. Whatever you do, don't sell your stocks. Hang in there, this is normal market behavior.
A fool and his money are good for business.

Bimmer
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Re: I made a mistake by not selling when the market was high this year

Post by Bimmer » Sat Dec 15, 2018 2:08 am

nedsaid wrote:
Sat Dec 15, 2018 1:56 am
sheople2 wrote:
Fri Dec 14, 2018 11:58 pm
I made another big mistake. I should have taken some gains earlier this year when I had the chance. It seems to me that 10 months of great growth for 2018 has been wiped out in the past few weeks.

I don’t have a good question. Just wondering if anyone else is in the same boat.

Is this the beginning of the next bear market that they’ve been warning us about?
That is precisely why I have followed a program of mild rebalancing from stocks to bonds since July 2013. Pretty much, when stocks reach new highs, I trim stocks and add to bonds. I remembered that I allowed my stocks to run before the 2008-2009 financial crisis and never bothered to rebalance when times were good. I told myself that I wouldn't let this happen again.

Don't think you have made a mistake. Markets will make new highs eventually. If you are under 50 years old, I wouldn't give this another thought. Just ride it out. Whatever you do, don't sell your stocks. Hang in there, this is normal market behavior.
+1
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whodidntante
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Re: I made a mistake by not selling when the market was high this year

Post by whodidntante » Sat Dec 15, 2018 2:20 am

C'est la vie. Fun, isn't it?

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eye.surgeon
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Re: I made a mistake by not selling when the market was high this year

Post by eye.surgeon » Sat Dec 15, 2018 2:46 am

The mistake is selling when it's low, not holding when it's high. You haven't lost a dime.
"I would rather be certain of a good return than hopeful of a great one" | Warren Buffett

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JoMoney
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Re: I made a mistake by not selling when the market was high this year

Post by JoMoney » Sat Dec 15, 2018 3:07 am

I didn't sell, but I don't consider it a mistake, there wasn't something else I was going to spend the money on.
I believe it would have been a mistake to sell with the expectation that someone was going to sell it back to me cheaper later.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: I made a mistake by not selling when the market was high this year

Post by bargainhuntingking » Sat Dec 15, 2018 3:18 am

VTI, the Vanguard Total US Stock Market ETF was at $38 in March, 2009.

In October of 2018 it was $147. Today it closed at $133.

And you are complaining you didn't market time perfectly?

From 2009 to 2018, VTI experienced a 386% gain and you are worried about a recent measly little 9.5% drop? Gimmie a break!

Relax and keep saving as per your IPS.

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Re: I made a mistake by not selling when the market was high this year

Post by ivk5 » Sat Dec 15, 2018 3:36 am

andrew99999 wrote:
Sat Dec 15, 2018 1:15 am
sheople2 wrote:
Fri Dec 14, 2018 11:58 pm
I made another big mistake. I should have taken some gains earlier this year when I had the chance. It seems to me that 10 months of great growth for 2018 has been wiped out in the past few weeks.

I don’t have a good question. Just wondering if anyone else is in the same boat.

Is this the beginning of the next bear market that they’ve been warning us about?
You join this forum over a decade ago and still ask questions like this?
I would think this thread should be locked. If it was from a new member that would be a different story.
Username may be confession of sorts

Longdog
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Re: I made a mistake by not selling when the market was high this year

Post by Longdog » Sat Dec 15, 2018 8:20 am

cheese_breath wrote:
Sat Dec 15, 2018 12:03 am
No, you're making a mistake right now in thinking you can time the market.

The mistake you made before is not understanding your risk tolerance and defining an asset allocation to accommodate it.
+1

Well articulated.
Steve

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Re: I made a mistake by not selling when the market was high this year

Post by Bacchus01 » Sat Dec 15, 2018 8:22 am

sheople2 wrote:
Fri Dec 14, 2018 11:58 pm
I made another big mistake. I should have taken some gains earlier this year when I had the chance. It seems to me that 10 months of great growth for 2018 has been wiped out in the past few weeks.

I don’t have a good question. Just wondering if anyone else is in the same boat.

Is this the beginning of the next bear market that they’ve been warning us about?
All of the contributions I made in 2017 are still up somewhere between 4 and 15% on money I won’t use for a decade or more.

What’s the problem?

Why would I want to pay taxes on gains I have no intention of using or needing?

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Re: I made a mistake by not selling when the market was high this year

Post by jogren » Sat Dec 15, 2018 8:37 am

You didn’t make a mistake and it’s normal to feel things like this. The good thing is your Boglehead training stopped you from taking action. You should reflect on all the times you stayed the course and how it has benefited you to this point. The only way you should be mildly critical of yourself is if you had a rebalancing plan that you have not been following and should have rebalanced earlier this year according to that plan to stay in your risk tolerable asset allocation.

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Re: I made a mistake by not selling when the market was high this year

Post by Jack FFR1846 » Sat Dec 15, 2018 8:44 am

I must have missed the email from Vanguard saying "This is the market peak. Going forwards, all equities will fall. Sell equity to buy bonds". Maybe I'll check my spam folder for it.
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Cycle
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Re: I made a mistake by not selling when the market was high this year

Post by Cycle » Sat Dec 15, 2018 8:51 am

They haven't even appreciably raised interest rates yet. They won't, as that will lead us back to where we were headed in 2009 before the the fed disincentivized everything but the market.
Never look back unless you are planning to go that way

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Re: I made a mistake by not selling when the market was high this year

Post by dh » Sat Dec 15, 2018 8:56 am

Rwsawbones wrote:
Sat Dec 15, 2018 1:20 am
The market is still very high. If you doubt that look at the records of the DJIA and S&P. Both are about 50% higher than 2016 and about quadruple since 2009 if for some reason you need to sell stock to raise some money this is not such a bad time to do so. If market fluctuations bother you you need to rethink your AA and as JP Morgan is alledged to have said you need to sell down to your sleeping point. In most situations a significant stock holding will support long term needs
To the OP: If you need the money now (or within a few years), having the money in the stock market was the mistake. The "mistake" wasn't you not timing the market correctly and selling at a high. As Rwsawbones highlights - take a look at S&P 500 Index returns over the last 10 years. We have done well, extraordinarily well! I believe it is Taylor's quote: Only have money in the market that you can afford to lose. What you need today should not be invested in the market. Hang in there! Big declines should be expected in a normal market. :sharebeer

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Re: I made a mistake by not selling when the market was high this year

Post by gorow » Sat Dec 15, 2018 9:07 am

And suppose the market suddenly has a strong recovery and move to new highs? Then your mistake no longer was a mistake? It is possible that at the high, your allocation may have been such that called for a re-balance according to your IPS, but if you are thinking that you missed a chance to protect value gained and intended to get back in later, you would be, of course, trying to time the market.
Retired 1/1/2019. Not concerned about sequence of returns because two years here taught me what I need to know.

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Re: I made a mistake by not selling when the market was high this year

Post by nisiprius » Sat Dec 15, 2018 9:09 am

You didn't make a mistake by "not selling when the market was high."

You made a mistake by believing that the stock market is risky for everybody else, but not for you, because you always know the right time to sell.

"Take your share of trouble, face it and don't complain:
If you want the rainbow, you must have the rain."
--1930s song
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.

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Re: I made a mistake by not selling when the market was high this year

Post by Olemiss540 » Sat Dec 15, 2018 9:23 am

OP,

Read a boglehead investment book. Enjoy a hobby. These thoughts you are having are normal, but unhealthy both financially and emotionally. You should NOT be holding any stocks you are planning to sell within 7 years. Asset allocations help to ensure your success with this plan while maintaining emotional stability.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

Chaconne
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Re: I made a mistake by not selling when the market was high this year

Post by Chaconne » Sat Dec 15, 2018 9:29 am

A recent email from Vanguard led me to their article on their outlook for 2019:

"Our near-term outlook for global equity markets remains guarded, but a bear market would not appear imminent given that we do not anticipate a global recession in 2019."

Of course, neither Vanguard nor anyone else can predict the future, as we all know.

Here's a link: https://investornews.vanguard/global-ou ... 13:201:MEC

spectec
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Re: I made a mistake by not selling when the market was high this year

Post by spectec » Sat Dec 15, 2018 9:37 am

sheople2 wrote:
Fri Dec 14, 2018 11:58 pm
I made another big mistake. I should have taken some gains earlier this year when I had the chance. It seems to me that 10 months of great growth for 2018 has been wiped out in the past few weeks.

I don’t have a good question. Just wondering if anyone else is in the same boat.

Is this the beginning of the next bear market that they’ve been warning us about?
You mistake is in thinking you made a mistake. Don't make another mistake by doing something (unless it's a legitimate rebalancing).
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

lostdog
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Re: I made a mistake by not selling when the market was high this year

Post by lostdog » Sat Dec 15, 2018 9:38 am

Just make sure your asset allocation is ok and then stay the course through thick and thin.

The top balance for us this year was 529k. We are now at 478k. It doesn't bother me. That is a spread of 51k. We have a healthy amount of cash and the rest is Total Stock and Total International at world market cap weight.
Last edited by lostdog on Sat Dec 15, 2018 9:43 am, edited 1 time in total.
I don't invest looking in the rear view mirror and I know absolutely nothing about the future.

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Re: I made a mistake by not selling when the market was high this year

Post by Olemiss540 » Sat Dec 15, 2018 9:39 am

But this popped up on my newsfeed today:

https://www.marketwatch.com/story/stock ... 2018-12-14

Being warned for the LAST TIME! this brings up two questions.

1.) How much money would you have lost had you listened the first time marketwatch warned us?
2.) Does this mean they will be done writing articles warning us of the impending stock implosion?
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

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Re: I made a mistake by not selling when the market was high this year

Post by Grt2bOutdoors » Sat Dec 15, 2018 9:44 am

If you sell now, the buyer on the other side of the trade will be me. Those who sold yesterday, sold to me and countless others. If you don’t need this money in the next 10 years, don’t sell it. If earnings stay flat for next ten years at 5% per year, the value of equities will be up even after inflation.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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PaddyMac
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Re: I made a mistake by not selling when the market was high this year

Post by PaddyMac » Sat Dec 15, 2018 11:50 am

I am in the same boat, fwiw. We are self-employed with royalty income that is declining (we stopped making new stuff), and are now at the point where we need to withdraw around $3K a month to live on from our portfolio next year. (We covered it this year with inheritance.) I wish I hadn't been so busy earlier to realize the market was high and sold a bit then, but I'm always wary of cap gains until I've had a chance to mockup our year's taxes. So my brain is set to think of only selling in December. Now that I've estimated our 2018 taxes, we have plenty of head room in the 12%/15% "free cap gains" bracket to sell stocks that have gains. The plan is to have 6-12 months in cash in Ally Bank savings, but I may only do half now.

We also haven't contributed to our Roth IRAs yet, so I was planning on selling some taxable and moving it sideways.

So yeah, I'm bummed that I feel pressure to sell stocks before the end of the year. And yes, I realize I should be grateful for the run up over the past decade, but it's a lesson to keep a better eye on the financial news and sell stuff during the year when the market is healthy.

On the other hand, our HSA feels like "money laundering"! I maxed it out (tax free), then took out $6K the next day, tax free.

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Re: I made a mistake by not selling when the market was high this year

Post by livesoft » Sat Dec 15, 2018 11:53 am

Something like VFSVX is down about 17.5% for 2018 so far. So if I buy an equal amount of VFSVX that I already have, then I will instantly outperform VFSVX for the year because my average loss will only be about 9%. That is, I can outperform VFSVX for the year by about 9%.

Outperforming is so easy, so why doesn't everyone do it?

Basically, don't compound the mistake of not selling when the market was high with another mistake of not buying when the market was low.
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Re: I made a mistake by not selling when the market was high this year

Post by Kenkat » Sat Dec 15, 2018 12:28 pm

If the market had gone up another 10% this year, would you be thinking “boy sure glad I let it ride this year”? I’d say probably so.

There is nothing to be gained by looking back into the past and saying what if. The past is dead - there is nothing there for us to act on.

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Flymore
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Re: I made a mistake by not selling when the market was high this year

Post by Flymore » Sat Dec 15, 2018 12:42 pm

My mistake was waiting till the end of the year to take some distribution. :oops:
The good side I've collected dividends along the way, but it's not enough to cover expenses :D
I'm one of those who doesn't have a pension, so this is a big deal.

I'm thinking now to defray risk, it may be better to take quarterly withdraws or something?
I know the topic of withdrawals has been covered many times here, read on this board people take distribution all kinds of ways some only as needed to once a year. I could skip withdraw this year. :?
I'm still feeling this out. :)
I'm still learning retirement. :D

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Re: I made a mistake by not selling when the market was high this year

Post by JediMisty » Sat Dec 15, 2018 12:59 pm

jogren wrote:
Sat Dec 15, 2018 8:37 am
You didn’t make a mistake and it’s normal to feel things like this. The good thing is your Boglehead training stopped you from taking action. You should reflect on all the times you stayed the course and how it has benefited you to this point. The only way you should be mildly critical of yourself is if you had a rebalancing plan that you have not been following and should have rebalanced earlier this year according to that plan to stay in your risk tolerable asset allocation.
+1

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Re: I made a mistake by not selling when the market was high this year

Post by goblue100 » Sat Dec 15, 2018 1:00 pm

Many people would say have 3 years of expenses in cash, and if the market has a down year don't withdraw. If it is flat or up, replenish.
Financial planners are savers. They want us to be 95 percent confident we can finance a 30-year retirement even though there is an 82 percent probability of being dead by then. - Scott Burns

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Re: I made a mistake by not selling when the market was high this year

Post by tadamsmar » Sat Dec 15, 2018 1:05 pm

sheople2 wrote:
Fri Dec 14, 2018 11:58 pm
I made another big mistake. I should have taken some gains earlier this year when I had the chance. It seems to me that 10 months of great growth for 2018 has been wiped out in the past few weeks.

I don’t have a good question. Just wondering if anyone else is in the same boat.

Is this the beginning of the next bear market that they’ve been warning us about?
Yes, in a sense, all good Bogleheads are in the same boat.

You and all of us are in the same boat just about every year. There is always a point where you could have taken some gains earlier in the year if only you had a crystal ball.

But we are not in the boat with the people who mistakenly think this is a mistake.

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Re: I made a mistake by not selling when the market was high this year

Post by arcticpineapplecorp. » Sat Dec 15, 2018 1:17 pm

andrew99999 wrote:
Sat Dec 15, 2018 1:15 am
sheople2 wrote:
Fri Dec 14, 2018 11:58 pm
I made another big mistake. I should have taken some gains earlier this year when I had the chance. It seems to me that 10 months of great growth for 2018 has been wiped out in the past few weeks.

I don’t have a good question. Just wondering if anyone else is in the same boat.

Is this the beginning of the next bear market that they’ve been warning us about?
You join this forum over a decade ago and still ask questions like this?
I would think this thread should be locked. If it was from a new member that would be a different story.
no way should this be locked. This exemplifies the notion that even investors who have been investing for awhile can make mistakes (admittedly) or unwittingly (continuing to buy individual stocks, etc.). The fact that the OP is still second guessing him/herself means s/he hasn't quite learned all there is to know about investing (market timing, rebalancing, risk tolerance and so on). Therefore this post is a very good lesson for novice and/or experienced investors.

Now to the OP's post. I just looked briefly though some of your recent posts. I found this one from Jan 2018 titled "Need to move "safe" money to another place":
viewtopic.php?f=1&t=237925&p=3727112#p3727112

You identified in that post you have safe money elsewhere. Therefore the money in the stock market is to take risk with it. It is not your safe money. What you're saying now is you should have sold some of your risky assets (stock) earlier this year to increase your safe money (non-stock). Did you just realize this now? Do you really need more safe money or were you just not willing to see losses (or non gains) in your risky (stock) money? See the difference? If you don't need more safe money, then why would you sell your risky assets now?
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

flah
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Re: I made a mistake by not selling when the market was high this year

Post by flah » Sat Dec 15, 2018 1:22 pm

This is why you DCA and not go all-in like so many people on this board say to do.

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Re: I made a mistake by not selling when the market was high this year

Post by KlangFool » Sat Dec 15, 2018 1:26 pm

sheople2 wrote:
Fri Dec 14, 2018 11:58 pm
I made another big mistake. I should have taken some gains earlier this year when I had the chance. It seems to me that 10 months of great growth for 2018 has been wiped out in the past few weeks.

I don’t have a good question. Just wondering if anyone else is in the same boat.

Is this the beginning of the next bear market that they’ve been warning us about?
sheople2,

1) What is your asset allocation (AA)?

2) If you have a fixed AA and you follow the AA, you would have "buy low and sell high". So, why do you need to time the market?

3) If you have a life strategy fund and/or Wellington fund, it would take profit and rebalance daily. Why do you need to do anything?

KlangFool
Last edited by KlangFool on Sat Dec 15, 2018 1:29 pm, edited 1 time in total.

TheHouse7
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Re: I made a mistake by not selling when the market was high this year

Post by TheHouse7 » Sat Dec 15, 2018 1:29 pm

flah wrote:
Sat Dec 15, 2018 1:22 pm
This is why you DCA and not go all-in like so many people on this board say to do.
GO ALL-IN! (I'm one of "those people on this board.) :D
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.

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Doom&Gloom
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Re: I made a mistake by not selling when the market was high this year

Post by Doom&Gloom » Sat Dec 15, 2018 1:37 pm

nisiprius wrote:
Sat Dec 15, 2018 9:09 am
You didn't make a mistake by "not selling when the market was high."

You made a mistake by believing that the stock market is risky for everybody else, but not for you, because you always know the right time to sell.

"Take your share of trouble, face it and don't complain:
If you want the rainbow, you must have the rain."
--1930s song
Words of wisdom right here.

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Re: I made a mistake by not selling when the market was high this year

Post by MotoTrojan » Sat Dec 15, 2018 1:44 pm

TheHouse7 wrote:
Sat Dec 15, 2018 1:29 pm
flah wrote:
Sat Dec 15, 2018 1:22 pm
This is why you DCA and not go all-in like so many people on this board say to do.
GO ALL-IN! (I'm one of "those people on this board.) :D
Me too! Makes it easy to avoid behavioral mistakes/actions.

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Re: I made a mistake by not selling when the market was high this year

Post by tibbitts » Sat Dec 15, 2018 1:52 pm

sheople2 wrote:
Fri Dec 14, 2018 11:58 pm
I made another big mistake. I should have taken some gains earlier this year when I had the chance. It seems to me that 10 months of great growth for 2018 has been wiped out in the past few weeks.

I don’t have a good question. Just wondering if anyone else is in the same boat.

Is this the beginning of the next bear market that they’ve been warning us about?
If you're thinking this way after eleven years on Bogleheads, you need to sell all your equity positions now and stay out of equities permanently. That's the correct allocation for you.

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Re: I made a mistake by not selling when the market was high this year

Post by arcticpineapplecorp. » Sat Dec 15, 2018 1:53 pm

flah wrote:
Sat Dec 15, 2018 1:22 pm
This is why you DCA and not go all-in like so many people on this board say to do.
I think we have to define "go all-in" here. When someone makes the dichotmoy of DCA vs. "go all-in" that appears to mean what is commonly referred to as DCA vs. lump sum investing. source: https://www.bogleheads.org/wiki/Dollar_ ... s_lump_sum

but that's not what's happening here at all. The OP may not have invested a lump sum. S/he may have DCA'd over the past 10 years and now has a large balance in risky assets. S/he didn't put them there all at once. So whether to DCA vs. lump sum is irrelevant in this case.

This case is really about asset allocation and risk tolerance and market timing. The OP has more allocated to stocks than s/he want(s)(ed), didn't realize his/her risk tolerance was lower than it appears to be and is now kicking him/herself for not market timing and selling before the market went down. Those are the lessons to be learned here.

The OP is not talking about going from 100% stock to 0% stock (which would be a lump sum type of thing). S/he's referring to not having taken some gains off the table, which could be argued is a DCA type strategy (DCAing out of the market instead of into the market, or DCAing into safer assets from riskier ones).
Last edited by arcticpineapplecorp. on Sat Dec 15, 2018 1:58 pm, edited 1 time in total.
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Re: I made a mistake by not selling when the market was high this year

Post by tibbitts » Sat Dec 15, 2018 1:54 pm

flah wrote:
Sat Dec 15, 2018 1:22 pm
This is why you DCA and not go all-in like so many people on this board say to do.
Although I personally have used DCA in the past it does nothing to help with the current situation. Eventually even if you employ a multi-decade DCA strategy, which nobody recommends doing consciously (vs. investing as you earn for example), you'll be all-in - most likely at the worst possible time.
Last edited by tibbitts on Sat Dec 15, 2018 1:55 pm, edited 1 time in total.

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arcticpineapplecorp.
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Re: I made a mistake by not selling when the market was high this year

Post by arcticpineapplecorp. » Sat Dec 15, 2018 1:55 pm

tibbitts wrote:
Sat Dec 15, 2018 1:52 pm
sheople2 wrote:
Fri Dec 14, 2018 11:58 pm
I made another big mistake. I should have taken some gains earlier this year when I had the chance. It seems to me that 10 months of great growth for 2018 has been wiped out in the past few weeks.

I don’t have a good question. Just wondering if anyone else is in the same boat.

Is this the beginning of the next bear market that they’ve been warning us about?
If you're thinking this way after eleven years on Bogleheads, you need to sell all your equity positions now and stay out of equities permanently. That's the correct allocation for you.
Until the market recovers and goes way up and s/he's saying "I made a mistake by getting out of the market completely because tibbitts told me to. Now what do I do?"

The lesson isn't to go to 0% anything but to realize what one's portfolio/asset allocation should look like and why. One doesn't learn that by going to 0% equities.
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

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Re: I made a mistake by not selling when the market was high this year

Post by MotoTrojan » Sat Dec 15, 2018 1:55 pm

tibbitts wrote:
Sat Dec 15, 2018 1:54 pm
flah wrote:
Sat Dec 15, 2018 1:22 pm
This is why you DCA and not go all-in like so many people on this board say to do.
Although I personally have used DCA in the past it does nothing to help with the current situation. Eventually even if you employ a multi-decade DCA strategy, you'll be all-in - most likely at the worst possible time.
Indeed. Every day you remain invested you are going all-in, especially in tax-advantaged accounts.

If a $1M windfall should be DCA’d then someone accumulating $1M in a 401K over three decades should move it all to cash and DCA it over again as well. There is no logical difference in situations (emotional differences do exist).

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Re: I made a mistake by not selling when the market was high this year

Post by tibbitts » Sat Dec 15, 2018 1:58 pm

arcticpineapplecorp. wrote:
Sat Dec 15, 2018 1:55 pm
tibbitts wrote:
Sat Dec 15, 2018 1:52 pm
sheople2 wrote:
Fri Dec 14, 2018 11:58 pm
I made another big mistake. I should have taken some gains earlier this year when I had the chance. It seems to me that 10 months of great growth for 2018 has been wiped out in the past few weeks.

I don’t have a good question. Just wondering if anyone else is in the same boat.

Is this the beginning of the next bear market that they’ve been warning us about?
If you're thinking this way after eleven years on Bogleheads, you need to sell all your equity positions now and stay out of equities permanently. That's the correct allocation for you.
Until the market recovers and goes way up and s/he's saying "I made a mistake by getting out of the market completely because tibbitts told me to. Now what do I do?"

The lesson isn't to go to 0% anything but to realize what one's portfolio/asset allocation should look like and why. One doesn't learn that by going to 0% equities.
Sometimes you learn your equity risk tolerance, and it's zero. And yes by acknowledging that you expose yourself to other risks, like inflation, but even in the '70s you didn't see 50+% drops in real terms a single year.

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Re: I made a mistake by not selling when the market was high this year

Post by SevenBridgesRoad » Sat Dec 15, 2018 2:01 pm

I wonder about these threads where the OP completely disappears.
Retired 2018 | Every day I choose how I spend my energy | One Vanguard TDF except for bunch of individual stocks...still recovering from my Fidelity AUM days years ago | Now sleeping well at night

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arcticpineapplecorp.
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Re: I made a mistake by not selling when the market was high this year

Post by arcticpineapplecorp. » Sat Dec 15, 2018 2:06 pm

tibbitts wrote:
Sat Dec 15, 2018 1:58 pm
Sometimes you learn your equity risk tolerance, and it's zero. And yes by acknowledging that you expose yourself to other risks, like inflation, but even in the '70s you didn't see 50+% drops in real terms a single year.
sure, but then you may have to adjust your savings rate dramatically to account for low returns (or returns that are less than inflation). As long as the OP is aware of the trade-offs in such a decision, I see no problem. But I don't see that explained anywhere when someone is just blithely suggesting the OP to get out of stocks entirely.
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

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