Buying the dip: What will you (have you) pick(ed) up?

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Stanczyk
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Buying the dip: What will you (have you) pick(ed) up?

Post by Stanczyk »

The title is self-explanatory, but let me narrow down the question somewhat:
As of today, SP500 is down 16% YTD, mid-cap indexes (like IJH) are down 25%, whereas small caps (like IJR) are down 29%.
Should we have other days like last Thursday, which featured major declines, what type of equities do you plan to purchase? Small? Large? Mid? Specific sectors?
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willthrill81
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by willthrill81 »

Ever heard the phrase 'catching a falling knife'?

With what funds are you planning to 'buy the dip'? Why were they not invested before the downturn? Do you have an adequate EF?
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by MotoTrojan »

My AA hasn't changed but I have been buying a lot of US & ex-US small-value, and some US large. US SCV approached -40%.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by catmommeg »

There is some uninvested cash in my underperforming (I assume due to un-investing) Roth Ira. I am looking at Delta, ATT & Paychex. At this point I only want to buy dividend paying stocks. Trying to earn enough in dividends so that I won't have to touch the principal right off when I hopefully retire at beginning of 2022.
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Stanczyk
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by Stanczyk »

willthrill81 wrote: Sun Mar 15, 2020 4:24 pm Ever heard the phrase 'catching a falling knife'?

With what funds are you planning to 'buy the dip'? Why were they not invested before the downturn? Do you have an adequate EF?
Yes, I have adequate EF. In fact, I have been sitting on some cash for some time now waiting for an opportunity like this and I am at least 25 years away from retirement.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by lifeisinmirrors »

catmommeg wrote: Sun Mar 15, 2020 4:41 pm There is some uninvested cash in my underperforming (I assume due to un-investing) Roth Ira. I am looking at Delta, ATT & Paychex. At this point I only want to buy dividend paying stocks. Trying to earn enough in dividends so that I won't have to touch the principal right off when I hopefully retire at beginning of 2022.
I think there's a high chance the airlines cut or suspend their dividend payments.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by willthrill81 »

milosz19 wrote: Sun Mar 15, 2020 4:44 pm
willthrill81 wrote: Sun Mar 15, 2020 4:24 pm Ever heard the phrase 'catching a falling knife'?

With what funds are you planning to 'buy the dip'? Why were they not invested before the downturn? Do you have an adequate EF?
Yes, I have adequate EF. In fact, I have been sitting on some cash for some time now waiting for an opportunity like this and I am at least 25 years away from retirement.
As long as your EF is well funded, jump in when you want. Stocks are likely to go further into the red tomorrow. Just remember that it's hard to catch a falling knife without getting your hands bloodied.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by jdilla1107 »

You should do whatever your plan said to do 6 months ago. Successful investing is not emotional or spontaneous.
Last edited by jdilla1107 on Sun Mar 15, 2020 4:50 pm, edited 1 time in total.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by willthrill81 »

lifeisinmirrors wrote: Sun Mar 15, 2020 4:48 pm
catmommeg wrote: Sun Mar 15, 2020 4:41 pm There is some uninvested cash in my underperforming (I assume due to un-investing) Roth Ira. I am looking at Delta, ATT & Paychex. At this point I only want to buy dividend paying stocks. Trying to earn enough in dividends so that I won't have to touch the principal right off when I hopefully retire at beginning of 2022.
I think there's a high chance the airlines cut or suspend their dividend payments.
That seems like a foregone conclusion.

The way I see it, one of the major airlines will go bankrupt and/or get bailed out by the Feds.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by rustymutt »

willthrill81 wrote: Sun Mar 15, 2020 4:24 pm Ever heard the phrase 'catching a falling knife'?

With what funds are you planning to 'buy the dip'? Why were they not invested before the downturn? Do you have an adequate EF?

Way worst than catching a falling wild cat isn't it? I might add to current position with another -20%.
Last edited by rustymutt on Sun Mar 15, 2020 4:52 pm, edited 1 time in total.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by MarkBarb »

I'm just staying the course. If stocks get low enough, I'll rebalance.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by Stanczyk »

willthrill81 wrote: Sun Mar 15, 2020 4:49 pm
milosz19 wrote: Sun Mar 15, 2020 4:44 pm
willthrill81 wrote: Sun Mar 15, 2020 4:24 pm Ever heard the phrase 'catching a falling knife'?

With what funds are you planning to 'buy the dip'? Why were they not invested before the downturn? Do you have an adequate EF?
Yes, I have adequate EF. In fact, I have been sitting on some cash for some time now waiting for an opportunity like this and I am at least 25 years away from retirement.
As long as your EF is well funded, jump in when you want. Stocks are likely to go further into the red tomorrow. Just remember that it's hard to catch a falling knife without getting your hands bloodied.
Yes, but the big question is whether some asset classes are just too risky. For example, are small caps - say SP600 - more likely to go belly up than bigger companies? Oil has gone way down, buy few would consider it a great deal now as even major companies would be under extreme pressure if the Saudis further increase production.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by catmommeg »

willthrill81 wrote: Sun Mar 15, 2020 4:49 pm
lifeisinmirrors wrote: Sun Mar 15, 2020 4:48 pm
catmommeg wrote: Sun Mar 15, 2020 4:41 pm There is some uninvested cash in my underperforming (I assume due to un-investing) Roth Ira. I am looking at Delta, ATT & Paychex. At this point I only want to buy dividend paying stocks. Trying to earn enough in dividends so that I won't have to touch the principal right off when I hopefully retire at beginning of 2022.
I think there's a high chance the airlines cut or suspend their dividend payments.
That seems like a foregone conclusion.

The way I see it, one of the major airlines will go bankrupt and/or get bailed out by the Feds.
Just looking/stock shopping right now. Not ready to buy just yet, but soon. ATT and Paychex are most likely my sure purchases. And I might add to my JNJ holding. Taking a bath right now with Boeing though. Ouch!
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by vipertom1970 »

since we don't know where the bottom is and with new money, it's better to buy some on the way down or it's better to buy some on the way up ?
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by willthrill81 »

vipertom1970 wrote: Sun Mar 15, 2020 5:30 pm since we don't know where the bottom is and with new money, it's better to buy some on the way down or it's better to buy some on the way up ?
Given the choice, I'd favor the latter. Historically, buying a downward trending asset has not turned out very well.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by jvini »

willthrill81 wrote: Sun Mar 15, 2020 4:24 pm Ever heard the phrase 'catching a falling knife'?

With what funds are you planning to 'buy the dip'? Why were they not invested before the downturn? Do you have an adequate EF?
If I 'bought the dip' right now it would be because I'm rebalancing out of the bond portion of my allocation which is about 7% out of whack currently. I rebalance at 10% or will wait until my yearly date, but that's where I'm assuming how many people will be buying at this point.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by BoggledHead2 »

After 6 month emergency fund secure, I buy anything in taxable that lowers my average cost basis or my AA is out of wack (even slightly)

Basically, Cash emergency fund + buy any chance I get (in addition to 401K max)
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by MoneyMarathon »

vipertom1970 wrote: Sun Mar 15, 2020 5:30 pm since we don't know where the bottom is and with new money, it's better to buy some on the way down or it's better to buy some on the way up ?
You won't know which one you're actually doing, without hindsight. Every rally could be part of another leg down.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by David Jay »

Hi, my name is David and I am a recovering stock-picker. I fell off the wagon last week and picked up some Boeing.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by catmommeg »

David Jay wrote: Sun Mar 15, 2020 6:00 pm Hi, my name is David and I am a recovering stock-picker. I fell off the wagon last week and picked up some Boeing.
Hi David. I have had BA for a long time. Dividend is nice, I just hope they don't cut it. Either way, I'm going to just hold on until it is way up again. So that will be when I'm 80 but that's ok, hopefully I'll be 80 someday anyway.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by ochotona »

I'm rebalancing when the S&P500 crosses over it's own 200 day moving average, when the uptrend is well established. Not before. Buying on the way down is stupid, maybe ok if your rebalancing bands are really wide. YOU CAN NEVER PICK THE BOTTOM. If you do, it's just by chance.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by willthrill81 »

David Jay wrote: Sun Mar 15, 2020 6:00 pm Hi, my name is David and I am a recovering stock-picker. I fell off the wagon last week and picked up some Boeing.
Hi David! :D

You can join me in the ranks of the 'bad Bogleheads'!
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by TheTimeLord »

David Jay wrote: Sun Mar 15, 2020 6:00 pm Hi, my name is David and I am a recovering stock-picker. I fell off the wagon last week and picked up some Boeing.
Did you get it in the 150s?
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by David Jay »

TheTimeLord wrote: Sun Mar 15, 2020 6:44 pm
David Jay wrote: Sun Mar 15, 2020 6:00 pm Hi, my name is David and I am a recovering stock-picker. I fell off the wagon last week and picked up some Boeing.
Did you get it in the 150s?
No, earlier in the week. Low 200s..
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by Vilgan »

Every single time I hear people talking about X being like trying to catch a falling knife, it has turned out to be a great buying opportunity.

I had a bunch of $$ in cash due to a house sale, laziness, and then concerns about coronavirus for the past two months. I've been buying all the way down, with a huge chunk going in thursday when VTI was under 126. That seems like a much better buy than 172.

Could the market drop lower? Sure. I don't have any confidence in my ability to pick the exact bottom, but long term I know that stocks are a much better buy right now than a few weeks ago. If VTI gets below 100, I'll convert every single bond holding I own into stocks. If it doesn't, at least 125ish was a reasonable buy in point.

I don't have any great confidence about specific stocks. Boeing seems cheap, but its still trading at a fairly high ratio P/E ratio. If I was into buying stocks vs just getting indexes, I would definitely buy Netflix.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by Bama12 »

willthrill81 wrote: Sun Mar 15, 2020 6:38 pm
David Jay wrote: Sun Mar 15, 2020 6:00 pm Hi, my name is David and I am a recovering stock-picker. I fell off the wagon last week and picked up some Boeing.
Hi David! :D

You can join me in the ranks of the 'bad Bogleheads'!
I will join picked up Wal Mart,Exxon,Occidental Petroleum,Oracle and Norwegian. Will buy others if they keep going down.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by 3funder »

International stocks, as they were within the range of reasonable, even before the rout. Now, they are cheap, at least to some degree. At some point (I don't know when), the virus will peak and people will gradually go back to work. Supply chains will also be less of an issue. I don't plan to retire until 2050, so I'm happy to keep buying shares as they plummet.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by Starfish »

willthrill81 wrote: Sun Mar 15, 2020 4:24 pm Ever heard the phrase 'catching a falling knife'?

With what funds are you planning to 'buy the dip'? Why were they not invested before the downturn? Do you have an adequate EF?
In my case I have more than a year of weak investing (except 401k, HSA, backdoor Roth) and about 200-250k of cash or cash equivalent (some bonds in 401k, some GLD - you convinced me :sharebeer ) because at some point the growth seemed unreasonable and a recession "was due" (I know, I know...).

However I am still hesitant to start buying, this might be the begin of a much larger recession (PIIGS, Boeing, major industries very affected) and I have high monthly expenses (loans, mortgages) we have a business that might start burning cash instead of producing etc.
If I had less monthly expses I would have no issue with starting to put 2-3k a week in VTSAX or even some individual stocks.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by willthrill81 »

Starfish wrote: Sun Mar 15, 2020 9:51 pm
willthrill81 wrote: Sun Mar 15, 2020 4:24 pm Ever heard the phrase 'catching a falling knife'?

With what funds are you planning to 'buy the dip'? Why were they not invested before the downturn? Do you have an adequate EF?
In my case I have more than a year of weak investing (except 401k, HSA, backdoor Roth) and about 200-250k of cash or cash equivalent (some bonds in 401k, some GLD - you convinced me :sharebeer ) because at some point the growth seemed unreasonable and a recession "was due" (I know, I know...).

However I am still hesitant to start buying, this might be the begin of a much larger recession (PIIGS, Boeing, major industries very affected) and I have high monthly expenses (loans, mortgages) we have a business that might start burning cash instead of producing etc.
If I had less monthly expses I would have no issue with starting to put 2-3k a week in VTSAX or even some individual stocks.
You're probably in fine shape. We're planning to pay off a small auto loan in about two weeks, and then our essential spending will be about 30% of our gross income.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by Abk911 »

@ starfish : Unfortunately with each passing week your courage to buy the dip will reduce. Unless you are a large investor many factors play in: your own job retention, or your spouses, or your health or your loved ones, or your own greed, or your business cash flow etc .. many things play. Very few have been able to successfully time things even with plenty of cash.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by MotoTrojan »

catmommeg wrote: Sun Mar 15, 2020 4:41 pm There is some uninvested cash in my underperforming (I assume due to un-investing) Roth Ira. I am looking at Delta, ATT & Paychex. At this point I only want to buy dividend paying stocks. Trying to earn enough in dividends so that I won't have to touch the principal right off when I hopefully retire at beginning of 2022.
I don’t think you understand how dividends work. Spending only dividends is likely spending principal too.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by IanRichmond »

David Jay wrote: Sun Mar 15, 2020 6:00 pm Hi, my name is David and I am a recovering stock-picker. I fell off the wagon last week and picked up some Boeing.
Ha, if you're going to go against Bogleheads rule, that amazing liner was def a great way to do it :)
Wishing everyone success in their physical, emotional, and financial health.
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Re: Buying the dip: What will you (have you) pick(ed) up?

Post by ochotona »

I am going to start buying when SPX is poking it's head above the 6 month moving average on an end of month closing basis. NO GUESSWORK NO HUNCHES. Rules based.

What to buy? I measure 3 6 and 12 month "dual momentum" (absolute and cross-sectional) across a variety of large index ETFs... SPY, VWO, VEA, others. Going to go with what's hottest.

Could be months or years from now. I'm not going to risk my capital. I got out 2/28/2020. Admittedly not BH. Doesn't matter to me what others think.
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