Selling 100% stocks on a bounce

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kareysue
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Re: Selling 100% stocks on a bounce

Post by kareysue »

Any risk in shorting the market tomorrow? Since everyone say it is a down day what is risk
Dregob
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Re: Selling 100% stocks on a bounce

Post by Dregob »

I just changed my monthly 403(b) contribution to 100% stocks.
InvestingGeek
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Re: Selling 100% stocks on a bounce

Post by InvestingGeek »

mathguy3021 wrote: Sun Mar 22, 2020 6:59 pm I cannot wait until stocks are near zero.
What does that even mean?

If you look at VTSAX, the major holdings are companies like Microsoft, Alphabet, Amazon, Apple, Johnson & Johnson. Do you think these companies wouldn't be making money even if the social distancing were to continue for a long time? Their sales would go down some but online businesses are great for the social distancing economy.

And in the worst case, if the virus can't be controlled, we'll see a new normal where daily life continues with masks, gloves and other gear in place once production catches up. The world is not going to end.

There's no question in your OP, so posting this is probably just cathartic for you in some way, maybe (hopefully?) as a parting kick to BH as you throw the entire concept of buy and hold index investing out the window?

You can lock in your 2016 gains and get back in later, sure. Good luck and hope you come out ahead after things recover.
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watchnerd
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Re: Selling 100% stocks on a bounce

Post by watchnerd »

mathguy3021 wrote: Sun Mar 22, 2020 9:41 pm I will be selling 100% in my retirement accounts, and tax loss harvesting the taxable account.
I can't wait to buy your losses. nomnomnom. Delicious!

:sharebeer
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dwickenh
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Re: Selling 100% stocks on a bounce

Post by dwickenh »

cost.basis wrote: Sun Mar 22, 2020 9:56 pm OP wants to lock in his 2016 gains. So, why is that a bad thing? He could lock in his gains and DCA back in the market as it stabilizes.
Hey, good idea, maybe we could all just take our gains and then DCA back in as the market stabilizes. Wait, who is going
to stabilize the market- we're all dumping stocks, not buying. I don't think he will buy in again until the market has already
shown the big gains. I guess it's ok to market time when you decide "this time is different". I think he may be making the best
choice for himself, but I wouldn't defend his methods for anyone else.
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett
dcw213
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Re: Selling 100% stocks on a bounce

Post by dcw213 »

Serious question for OP - why are you posting this? I have read many posts from you the last week saying the same thing and dismissing nearly all feedback. Just sell and move on.
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F150HD
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Re: Selling 100% stocks on a bounce

Post by F150HD »

watchnerd wrote: Sun Mar 22, 2020 8:59 pm
denovo wrote: Sun Mar 22, 2020 8:53 pm
ThePrince wrote: Sun Mar 22, 2020 7:56 pm
nps wrote: Sun Mar 22, 2020 7:39 pm
mathguy3021 wrote: Sun Mar 22, 2020 7:32 pm Investors who are short sighted will say that it's too late to sell because of the recent crash. The reality is that in my case, it's equivalent to moving to a much safer allocation after gains in 2016.
Investors who are short sighted also rationalize their panic selling in down markets.
+1
+10
+100!!
whats with all the binary math? did we miss something here?
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watchnerd
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Re: Selling 100% stocks on a bounce

Post by watchnerd »

F150HD wrote: Sun Mar 22, 2020 10:28 pm
watchnerd wrote: Sun Mar 22, 2020 8:59 pm
denovo wrote: Sun Mar 22, 2020 8:53 pm
ThePrince wrote: Sun Mar 22, 2020 7:56 pm
nps wrote: Sun Mar 22, 2020 7:39 pm

Investors who are short sighted also rationalize their panic selling in down markets.
+1
+10
+100!!
whats with all the binary math? did we miss something here?
+1000!
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MoneyMarathon
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Re: Selling 100% stocks on a bounce

Post by MoneyMarathon »

mathguy3021 wrote: Sun Mar 22, 2020 7:32 pm My net worth has grown from under six figures in 2009 to over 7 figures earlier this year.
I see.

Do you believe that you've found that you'd want to hold more in bonds going forward?
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jabberwockOG
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Re: Selling 100% stocks on a bounce

Post by jabberwockOG »

Go ahead and sell. The market is somewhat of a zero sum game. Buyers will be very happy to buy all your stocks at tomorrow's sale prices.

You might want to stick with a more conservative AA going forward.
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mathguy3021
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Re: Selling 100% stocks on a bounce

Post by mathguy3021 »

dcw213 wrote: Sun Mar 22, 2020 10:28 pm Serious question for OP - why are you posting this? I have read many posts from you the last week saying the same thing and dismissing nearly all feedback. Just sell and move on.
I didn't dismiss the feedback. I will only sell on a significant bounce. If there is no significant bounce, I will not sell. This market has been in free fall. I've never seen a 32% crash in one month. I need a bear market rally in order to sell. Please read the title of my post.
Last edited by mathguy3021 on Sun Mar 22, 2020 11:33 pm, edited 1 time in total.
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watchnerd
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Re: Selling 100% stocks on a bounce

Post by watchnerd »

jabberwockOG wrote: Sun Mar 22, 2020 10:37 pm Go ahead and sell. The market is somewhat of a zero sum game. Buyers will be very happy to buy all your stocks at tomorrow's sale prices.

You might want to stick with a more conservative AA going forward.
His shares are mine tomorrow!

MUAHAHA! :twisted: :twisted: :twisted:
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watchnerd
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Re: Selling 100% stocks on a bounce

Post by watchnerd »

mathguy3021 wrote: Sun Mar 22, 2020 10:38 pm
dcw213 wrote: Sun Mar 22, 2020 10:28 pm Serious question for OP - why are you posting this? I have read many posts from you the last week saying the same thing and dismissing nearly all feedback. Just sell and move on.
I didn't ask the same question last week. I will only sell on a significant bounce. If there is no significant bounce, I will not sell. This market has been in free fall. I've never seen a 32% crash in one month. I need a bear market rally in order to sell. Please read the title of my post.
Oh, you need a wee little bounce to save your dignity?

I thought you wanted to protect your gains?

Your gains may bleed away while you wait for that bear rally, death by a thousand cuts, day after day while you wait....
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mathguy3021
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Re: Selling 100% stocks on a bounce

Post by mathguy3021 »

MoneyMarathon wrote: Sun Mar 22, 2020 10:34 pm
mathguy3021 wrote: Sun Mar 22, 2020 7:32 pm My net worth has grown from under six figures in 2009 to over 7 figures earlier this year.
I see.

Do you believe that you've found that you'd want to hold more in bonds going forward?
No. I didn't miscalculate my risk tolerance. I simply didn't expect a free fall in stocks of this magnitude in such a short time frame. As I said before, I was prepared for a brutal bear market, not a collapse in stock prices in a short period of time. Bogleheads are saying this is normal for a bear market. We will see over the coming weeks if this is normal for a bear market. I prepared for this bear market by moving from a 90/10 stock to bond allocation to a 75/25 allocation in mid 2019 with the S&P 500 index well above 3000. That was one of the smartest decisions I've made in my life given the amount I have invested. But I cannot tolerate a 60% or greater free fall in stocks. I can tolerate even the most brutal bear markets as I held almost 100% stocks and kept dollar cost averaging through the Great Recession in 2008 and 2009. Even if I had the current net worth back then, I would be able to tolerate a 75/25 allocation. What I see today is very different from what I saw back in 2008. It's a different type of shock that can potentially be more devastating than 2008. I could be wrong, but I think this bear market will be the worst since the Great Depression in terms of total loss, and that is certainly not normal. So to summarize, I was prepared for a brutal bear market, not a depression.
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watchnerd
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Re: Selling 100% stocks on a bounce

Post by watchnerd »

mathguy3021 wrote: Sun Mar 22, 2020 10:48 pm Even if I had the current net worth back then, I would be able to tolerate a 75/25 allocation. What I see today is very different from what I saw back in 2008. It's a different type of shock that can potentially be more devastating than 2008. I could be wrong, but I think this bear market will be the worst since the Great Depression in terms of total loss, and that is certainly not normal. So to summarize, I was prepared for a brutal bear market, not a depression.
You're waffling....

If it's a depression and you want to protect your gains, why are you waiting for a bear market rally?

At least show some conviction.

Otherwise, all this drama is a big nothing burger.
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jfave33
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Re: Selling 100% stocks on a bounce

Post by jfave33 »

cost.basis wrote: Sun Mar 22, 2020 9:56 pm OP wants to lock in his 2016 gains. So, why is that a bad thing? He could lock in his gains and DCA back in the market as it stabilizes.
Because that is not really locking in gains. Doesn't work like that. At some point he would want to get back into the market and if he doesn't buy lower than he sold he locks in losses. He will unlock his gains and lock in losses.
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mathguy3021
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Re: Selling 100% stocks on a bounce

Post by mathguy3021 »

watchnerd wrote: Sun Mar 22, 2020 10:52 pm
mathguy3021 wrote: Sun Mar 22, 2020 10:48 pm Even if I had the current net worth back then, I would be able to tolerate a 75/25 allocation. What I see today is very different from what I saw back in 2008. It's a different type of shock that can potentially be more devastating than 2008. I could be wrong, but I think this bear market will be the worst since the Great Depression in terms of total loss, and that is certainly not normal. So to summarize, I was prepared for a brutal bear market, not a depression.
You're waffling....

If it's a depression and you want to protect your gains, why are you waiting for a bear market rally?

At least show some conviction.

Otherwise, all this drama is a big nothing burger.
In any brutal bear market, there are bear market rallies. Even during the Great Depression there was a significant bear market rally. I am waiting for this rally to sell. If it doesn't happen, then I will suffer the consequences.
ulrichw
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Re: Selling 100% stocks on a bounce

Post by ulrichw »

mathguy3021 wrote: Sun Mar 22, 2020 10:48 pm [...] What I see today is very different from what I saw back in 2008. [...]
You're right about that - I remember 2008.

A total collapse of financial markets. Major financial houses with household names going out of business. Insurance industry collapsed. Thousands and thousands of foreclosures - people forced out of their homes. Fannie Mae and Ginnie Mac insolvent.

And then, the cure possibly worse than the disease - trillions of dollars of money injected into the system. Hyperinflation looming on the horizon.

Yep, pretty scary times.

By comparison a temporary slowdown based on voluntary measures to slow the spread of the virus seems pretty tame.

Don't get me wrong, this crash is scary, like all of them have been. But it's not so different from the other ones and this time, the financial systems are relatively strong (2008 forced a reckoning of sorts). I think we have a long way to go before recovery, but I feel good about our long-term prospects.

I have to say, I agree with the other posters who assert that you simply weren't ready for a bear market.

(BTW: you should look up what depression really means - hint: it doesn't have anything to do with how much the market declines)
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mathguy3021
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Re: Selling 100% stocks on a bounce

Post by mathguy3021 »

ulrichw wrote: Sun Mar 22, 2020 11:06 pm
mathguy3021 wrote: Sun Mar 22, 2020 10:48 pm [...] What I see today is very different from what I saw back in 2008. [...]
You're right about that - I remember 2008.

A total collapse of financial markets. Major financial houses with household names going out of business. Insurance industry collapsed. Thousands and thousands of foreclosures - people forced out of their homes. Fannie Mae and Ginnie Mac insolvent.

And then, the cure possibly worse than the disease - trillions of dollars of money injected into the system. Hyperinflation looming on the horizon.

Yep, pretty scary times.

By comparison a temporary slowdown based on voluntary measures to slow the spread of the virus seems pretty tame.

Don't get me wrong, this crash is scary, like all of them have been. But it's not so different from the other ones and this time, the financial systems are relatively strong (2008 forced a reckoning of sorts). I think we have a long way to go before recovery, but I feel good about our long-term prospects.

I have to say, I agree with the other posters who assert that you simply weren't ready for a bear market.

(BTW: you should look up what depression really means - hint: it doesn't have anything to do with how much the market declines)
When I say that I was not prepared for a depression, I mean that I am not prepared for a free fall in stock prices of more than 60%. Risk tolerance is based on how much you can tolerate in losses. Being prepared for a bear market means that I can tolerate the loss in stocks from peak to trough. So it's all about how much loss I'm able to tolerate. That's what I mean when I say I was prepared for a brutal bear but not a depression. In other words, I can tolerate losses from a brutal bear market, but not the losses seen during the Great Depression. My portfolio was prepared for a 50% loss in stocks, not an 80% loss in stocks.
MoneyMarathon
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Re: Selling 100% stocks on a bounce

Post by MoneyMarathon »

mathguy3021 wrote: Sun Mar 22, 2020 11:13 pm My portfolio was prepared for a 50% loss in stocks, not an 80% loss in stocks.
If you were prepared for a loss of 50% * 75% = 37.5% of portfolio value, and if an 80% loss in stocks is the possibility you should have been prepared for, then you should consider investing .375 / .8 = about 45% in stocks, giving you an allocation of 45% stocks / 55% bonds. Then your portfolio would lose the amount of value that you were prepared for, in the event of an 80% loss in stocks.
jdgamble
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Re: Selling 100% stocks on a bounce

Post by jdgamble »

Love the Jack Bogle quote. For the OP... selling now is panic selling. It is abandoning a philosophy that is proven effective. There is no philosophy associated with selling after a 30% hair cut and then trying to figure out when to move back in. Just sayin.

I, too, am going down with the ship. And I’ll be rebalancing the whole way down. I’m sure in 10-15 years, we will have all forgotten about this one... just in time for the next crisis where everyone wants to jump ship because this time is different!

Best wishes all.
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watchnerd
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Re: Selling 100% stocks on a bounce

Post by watchnerd »

mathguy3021 wrote: Sun Mar 22, 2020 10:58 pm
In any brutal bear market, there are bear market rallies. Even during the Great Depression there was a significant bear market rally. I am waiting for this rally to sell. If it doesn't happen, then I will suffer the consequences.
Or you could just ride it all out, right?
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watchnerd
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Re: Selling 100% stocks on a bounce

Post by watchnerd »

MoneyMarathon wrote: Sun Mar 22, 2020 11:20 pm If you were prepared for a loss of 50% * 75% = 37.5% of portfolio value, and if an 80% loss in stocks is the possibility you should have been prepared for, then you should consider investing .375 / .8 = about 45% in stocks, giving you an allocation of 45% stocks / 55% bonds. Then your portfolio would lose the amount of value that you were prepared for, in the event of an 80% loss in stocks.
I was 70% stocks. I rebalanced on way down a bit, but now I'm about 60% stock, but with more shares.

I like having more shares!
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HomerJ
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Re: Selling 100% stocks on a bounce

Post by HomerJ »

mathguy3021 wrote: Sun Mar 22, 2020 9:12 pm Preventing a life changing loss is FAR more important than big unecessary gains in the market. If I can live comfortably on my current net worth, but cannot afford to lose, I'll give up gains to be financially independent.
Why is it life-changing? Is this money you need soon?

Then, yes you should sell. It never should have been in the market to begin with.

If it's long-term retirement money, then how is it going to hurt you going down 60%, then going back up to new highs in 5-10 years?

The 9%-10% long-term average return of the stock market INCLUDES the 50% crashes (and the 87% crash of the Great Depression). You didn't have to avoid the crashes in the past to become rich.

But, yes if this money that you need to buy food next month or next year, you better get it out of the stock market tomorrow.
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HomerJ
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Re: Selling 100% stocks on a bounce

Post by HomerJ »

kareysue wrote: Sun Mar 22, 2020 10:03 pm Any risk in shorting the market tomorrow? Since everyone say it is a down day what is risk
Everyone could be wrong.

That's the risk.

Everyone have been wrong before.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
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unclescrooge
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Re: Selling 100% stocks on a bounce

Post by unclescrooge »

watchnerd wrote:
Conan, what is best in life

Conan: To buy from weaker hands, take their shares, and to hear the lamentations of their statements!
👏
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anon_investor
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Re: Selling 100% stocks on a bounce

Post by anon_investor »

Enzo IX wrote: Sun Mar 22, 2020 9:16 pm Well at least the OP is telling everyone what he's doing even though he/she knows they are going to get trashed on.

CNBC reports even usually the rocksteady Vanguard Group is reporting billions of dollars of redemptions.

You people aren't doing the "Pump and Dump on me", are you? I will be pissed.
How much of those redemptions are tax loss harvesting or rebalancing?
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HomerJ
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Re: Selling 100% stocks on a bounce

Post by HomerJ »

mathguy3021 wrote: Sun Mar 22, 2020 10:38 pmThis market has been in free fall. I've never seen a 32% crash in one month.
You've seen a 22% crash in eight days before. You were alive in 2008, right?

Your parents saw a 22% crash in ONE day in 1987.

32% crash in one month is a big deal, but it's not THAT big of a deal.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
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unclescrooge
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Re: Selling 100% stocks on a bounce

Post by unclescrooge »

mathguy3021 wrote: Sun Mar 22, 2020 10:58 pm
watchnerd wrote: Sun Mar 22, 2020 10:52 pm
mathguy3021 wrote: Sun Mar 22, 2020 10:48 pm Even if I had the current net worth back then, I would be able to tolerate a 75/25 allocation. What I see today is very different from what I saw back in 2008. It's a different type of shock that can potentially be more devastating than 2008. I could be wrong, but I think this bear market will be the worst since the Great Depression in terms of total loss, and that is certainly not normal. So to summarize, I was prepared for a brutal bear market, not a depression.
You're waffling....

If it's a depression and you want to protect your gains, why are you waiting for a bear market rally?

At least show some conviction.

Otherwise, all this drama is a big nothing burger.
In any brutal bear market, there are bear market rallies. Even during the Great Depression there was a significant bear market rally. I am waiting for this rally to sell. If it doesn't happen, then I will suffer the consequences.
But you said this time was different. If it is the same, then eventually the market will rally and overcome these depression-type losses.

Unless you think this is the end of a global economy or even capitalism. In which case there won't be any best market rallies.
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monkey_business
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Re: Selling 100% stocks on a bounce

Post by monkey_business »

watchnerd wrote: Sun Mar 22, 2020 8:59 pm
denovo wrote: Sun Mar 22, 2020 8:53 pm
ThePrince wrote: Sun Mar 22, 2020 7:56 pm
nps wrote: Sun Mar 22, 2020 7:39 pm
mathguy3021 wrote: Sun Mar 22, 2020 7:32 pm Investors who are short sighted will say that it's too late to sell because of the recent crash. The reality is that in my case, it's equivalent to moving to a much safer allocation after gains in 2016.
Investors who are short sighted also rationalize their panic selling in down markets.
+1
+10
+100!!

Conan, what is best in life

Conan: To buy from weaker hands, take their shares, and to hear the lamentations of their statements!
:D
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unclescrooge
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Re: Selling 100% stocks on a bounce

Post by unclescrooge »

watchnerd wrote: Sun Mar 22, 2020 11:39 pm
MoneyMarathon wrote: Sun Mar 22, 2020 11:20 pm If you were prepared for a loss of 50% * 75% = 37.5% of portfolio value, and if an 80% loss in stocks is the possibility you should have been prepared for, then you should consider investing .375 / .8 = about 45% in stocks, giving you an allocation of 45% stocks / 55% bonds. Then your portfolio would lose the amount of value that you were prepared for, in the event of an 80% loss in stocks.
I was 70% stocks. I rebalanced on way down a bit, but now I'm about 60% stock, but with more shares.

I like having more shares!
When I was kid my mother would often remark how wealthy someone was by the number of shares they owned in a particular company.

Where I'm from, everyone invested in the stock market. And apparently everyone knew each other's business.
bampf
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Re: Selling 100% stocks on a bounce

Post by bampf »

Fear is a terrible thing. It changes the brain chemistry. It triggers all sorts of behaviors (flight-- dumping your position, fight-- arguing about why you should or should not dump your position).

From the Smithsonian Magazine:

"However, an evolutionarily unique and fascinating way of learning in humans is through instruction – we learn from the spoken words or written notes! If a sign says the dog is dangerous, proximity to the dog will trigger a fear response."

There is a lot of uncertainty right now and no one knows nothing. The way I look at things (@klangfool!) is that I have enough set aside to carry me for the reasonable future. The rest is really irrelevant. If the market tumbles to the point where it won't recover, then a bunch of money in devalued currency won't do me much good... (Hello little house on the prairie) shotguns and coffee are what I need. (booze, rice, whatever).

I have really two courses to consider if the next few years are pretty solidly funded (they are):
  • Bet that the market and the capital markets in particular will do what the have done since the dawn of capital markets (eventually go up).
  • Bet that they won't recover in the foreseeable future.

The first is palatable and reasonable. The second is a dystopian nightmare and I really won't be able to do much with that funny bits of paper of electronic balance sheets anyway.

Where are we in 2025? Thats all I really care about today. Best of luck all. Try hard not to let fear or anger get the best of you.

--Bampf
ulrichw
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Re: Selling 100% stocks on a bounce

Post by ulrichw »

mathguy3021 wrote: Sun Mar 22, 2020 11:13 pm [...]

When I say that I was not prepared for a depression, I mean that I am not prepared for a free fall in stock prices of more than 60%. Risk tolerance is based on how much you can tolerate in losses. Being prepared for a bear market means that I can tolerate the loss in stocks from peak to trough. So it's all about how much loss I'm able to tolerate. That's what I mean when I say I was prepared for a brutal bear but not a depression. In other words, I can tolerate losses from a brutal bear market, but not the losses seen during the Great Depression. My portfolio was prepared for a 50% loss in stocks, not an 80% loss in stocks.
Well, in my book, your lack of preparation for a bear market is illustrated is the fact that you let this initial drop convince you that the drop will inevitably exceed 60%. Every bear market has a point in it where many people start getting scared. Being "prepared" for a bear market means not joining them.

Look at the following chart (Nota bene: Log scale on Y axis to more accurately portray comparable percentage swings) - Look at '87, '01 and '08 - compare them to where we are now:
Image
Note the relative scale of the '01 and '08 crashes.
Note the comparable abruptness of '87 and '08 to what we're seeing now.

BTW: One other note - look at the volume in '08 relative to the base volume in '05, and compare to the volume now vs. the volume in '17 - To me that says relatively few people have bailed so far.
Indexer99
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Re: Selling 100% stocks on a bounce

Post by Indexer99 »

Is Warren Buffett selling now? No.

If you can ride this out, I would.
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mathguy3021
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Re: Selling 100% stocks on a bounce

Post by mathguy3021 »

I'm done wasting my time with useless advice and taking criticism for trying to preserve my hard earned savings. I don't care about achieving the highest future gains. It's not a guarantee that stocks will be higher 10 years from now. What I care about is surviving today and tomorrow as I have no one to depend on. Some people on this forum make sick with their comments. I've done extremely well as a self directed investor. I have the right to have a different investment strategy. Don't criticize me for not being a boglehead.
Doc7
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Re: Selling 100% stocks on a bounce

Post by Doc7 »

cost.basis wrote: Sun Mar 22, 2020 9:56 pm OP wants to lock in his 2016 gains. So, why is that a bad thing? He could lock in his gains and DCA back in the market as it stabilizes.

10 post poster. This is the antithesis of Boglehead investing.


https://www.thesimpledollar.com/investi ... r-returns/
Missing the five best days when you’re otherwise fully invested drops your overall return by 35%! And the results only get worse the more good market days you miss. Missing the best 10 days will more than halve your long-term returns. Once you miss out on the 50 best-performing days, you might as well have been investing in the Juicero instead of the stock market.

The above chart tracks a 38-year period, or roughly 10,000 days of stock trading. So, if you think you can time the market, you’re betting that you can get in and out without missing just five of those 10,000 days — which could happen at anytime. To an average Joe like me, it seems far simpler to just stay invested rather than take on those odds.

Another good reason to stay invested is that the majority of the best stock market days throughout history have come in the midst of significant market downturns. Of the top 10 biggest gaining days, six occurred during the chaos of the early 2000s tech bust or the 2008 Great Recession. Even though it can be hard, it’s crucial to avoid panic selling when the market struggles. As the saying goes, “It’s all about time in the markets, not timing the markets.”

We are talking about missing out of several million dollars for being a day late back into the market.
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Third Son
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Re: Selling 100% stocks on a bounce

Post by Third Son »

mathguy3021 wrote: Mon Mar 23, 2020 6:42 am I have the right to have a different investment strategy. Don't criticize me for not being a boglehead.
This is bogleheads.org. What did you expect? Just. Do. It.
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rmelvey
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Re: Selling 100% stocks on a bounce

Post by rmelvey »

There are many others who are attempting to do the exact same thing, which is why a bounce may not happen (at least not before more drops, and then a long road to recovery over many years).

Jack Bogle never recommended 100% stocks, and he even has talked about how during extreme crashes sometimes you have to sell if it maintains a floor of value that you cannot personally breach. This usually only happens if your allocation was too risky in the first place because if you had enough bonds you wouldn't be in this position to begin with.
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Stef
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Re: Selling 100% stocks on a bounce

Post by Stef »

mathguy3021 wrote: Mon Mar 23, 2020 6:42 am I'm done wasting my time with useless advice and taking criticism for trying to preserve my hard earned savings. I don't care about achieving the highest future gains. It's not a guarantee that stocks will be higher 10 years from now. What I care about is surviving today and tomorrow as I have no one to depend on. Some people on this forum make sick with their comments. I've done extremely well as a self directed investor. I have the right to have a different investment strategy. Don't criticize me for not being a boglehead.
Why did you make this thread? What's the purpose of this thread?

At least answer that.
Gufomel
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Re: Selling 100% stocks on a bounce

Post by Gufomel »

The number of capitulation threads on here give me hope that we are near the bottom.
fitterhappier
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Re: Selling 100% stocks on a bounce

Post by fitterhappier »

I'm 100% bought into the "invest in the world" / indexing idea, and thinking long term. But I see the same responses in this thread as I see in others..."ok if you're going to sell, why not short too?".

What has me thinking the same way as OP is that this *strategy* is, perhaps in one of the few times in history, being called into question. I don't have a model for how world economic activity is affected by a record upcoming quarterly GDP drop, record rate of increase in unemployment, and what will clearly be the end of lots and lots of businesses.

That's only the beginning of the combination of factors that fries my circuits. I don't want to go too deeply into politics other than to say that here we are at a rare intersection of the economic and the political (as in '29, '08, and maybe a couple other moments)...where what politicians do *right now* can and will have huge consequences for business activity and economic growth over the next 10 years. And again trying to avoid political specifics as much as possible...but everyone can agree that the current administration is highly unusual, and what the admin decides to do matters greatly for the outcome, and all of this playing out in the midst of a historically totally unusual election (??)

I find these responses to the OP to short the market as really flimsy attempts to use pure-logic to invalidate OP's inclinations, and I will just say that if buy-and-hold is a strategy and not a dogma, you should be able to imagine and articulate conditions under which it's a bad idea. I submit that there are few if any moments in history when the thesis that "betting on markets and world growth produces solid returns over 5/10/15 year periods" is getting fundamentally called into question. I want to understand what I'm investing in, and I find that I simply can't hold in my head what the world looks like on the other side of this or what happens along the way..after whatever economic vicious cycles or even political instability play out.

Everyone ask themselves: if you were sitting in cash right now, would you really get in? You wouldn't wait for the world to get back to a more recognizable state...and just hold off until, say, December? Would you really hit the buy button on VTI right now?
Last edited by fitterhappier on Mon Mar 23, 2020 7:16 am, edited 1 time in total.
grettman
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Re: Selling 100% stocks on a bounce

Post by grettman »

Why shouldn't the OP sell? There is no limit to the bottom of this dive. What does everyone else know that he doesn't?

When was the last time the US economy turned off the revenue switch for virtually every business in the country? With no end in sight?

Revenues have been dialed down to near zero. Meanwhile, expenses remain mostly the same for them (especially painful for small business).

OP: Go for it.
shm317
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Re: Selling 100% stocks on a bounce

Post by shm317 »

Gufomel wrote: Mon Mar 23, 2020 7:03 am The number of capitulation threads on here give me hope that we are near the bottom.
Totally agree. Tyson said it best “Everyone has a plan until they get punched in the mouth.”
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Re: Selling 100% stocks on a bounce

Post by Doc7 »

:greedy
grettman wrote: Mon Mar 23, 2020 7:15 am Why shouldn't the OP sell? There is no limit to the bottom of this dive. What does everyone else know that he doesn't?

When was the last time the US economy turned off the revenue switch for virtually every business in the country? With no end in sight?

Revenues have been dialed down to near zero. Meanwhile, expenses remain mostly the same for them (especially painful for small business).

OP: Go for it.


If everyone knew where the bottom is, the price would already be at it. So the real question is what does the OP know that the entire market doesn’t?
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Stef
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Re: Selling 100% stocks on a bounce

Post by Stef »

OP, we'll have a bump today, will you sell?
grettman
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Re: Selling 100% stocks on a bounce

Post by grettman »

Doc7 wrote: Mon Mar 23, 2020 7:22 am :greedy
grettman wrote: Mon Mar 23, 2020 7:15 am Why shouldn't the OP sell? There is no limit to the bottom of this dive. What does everyone else know that he doesn't?

When was the last time the US economy turned off the revenue switch for virtually every business in the country? With no end in sight?

Revenues have been dialed down to near zero. Meanwhile, expenses remain mostly the same for them (especially painful for small business).

OP: Go for it.


If everyone knew where the bottom is, the price would already be at it. So the real question is what does the OP know that the entire market doesn’t?

The OP said: I've decided to sell 100% of my stocks in all investment accounts to preserve 2016 gains"

So the OP knows what they want.
grettman
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Re: Selling 100% stocks on a bounce

Post by grettman »

grettman wrote: Mon Mar 23, 2020 7:29 am
Doc7 wrote: Mon Mar 23, 2020 7:22 am :greedy
grettman wrote: Mon Mar 23, 2020 7:15 am Why shouldn't the OP sell? There is no limit to the bottom of this dive. What does everyone else know that he doesn't?

When was the last time the US economy turned off the revenue switch for virtually every business in the country? With no end in sight?

Revenues have been dialed down to near zero. Meanwhile, expenses remain mostly the same for them (especially painful for small business).

OP: Go for it.


If everyone knew where the bottom is, the price would already be at it. So the real question is what does the OP know that the entire market doesn’t?

The OP said: "I've decided to sell 100% of my stocks in all investment accounts to preserve 2016 gains"

So the OP knows what they want.
Alex GR
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Re: Selling 100% stocks on a bounce

Post by Alex GR »

Mathguy,
For what it's worth, I also can't sleep at night. I wake up thinking: "was this whole coronavirus/market crash thing a dream or did I just lose $150k in 30 days???"
(Some people I know can't save that much in their lifetime)
Really, I am in the same boat. I wake up in the middle of the night and cannot fall asleep for hours. The typical forum response for this is "well then you didn't set the allocation appropriately". I've seen it hundreds of times in response to statements like this.

Having said that, I don't really follow you on the rest of it.
The time to sell (if any) was in late February. For example, when VTI was 170 and dropped to 150, you could sell all stock and hold cash temporarily until the smoke clears. You would have a pretty good chance of getting back in at least @150. Even if the market took off and soared back to 170, at some point it would likely drop and you could get back in.
But now it's simply too late. For all we know, today (or sometime this week) could be another March 9th, 2009.
One thing I could understand is if (following my VTI example) you sell it today @115 and immediately put in orders to buy @105, 100, 95 and 90 (or some variation of this) hoping they execute and (depending on portfolio size) make(save) yourself several thousand dollars. Tens of thousands for a decent portfolio. But then again, what do you do if that doesn't happen? Or, what if only 105 executes and others don't, and the market takes off from there?
I am probably feeling even worse than you are (read the first part of my post). But I realize that the only option at this point is to ignore it and wait for the market to come back.
Can't force myself to rebalance by selling bond and buying stock to return to desired allocation like I am suppose to according to this forum. But hope I have enough patience to ride this out.
Last edited by Alex GR on Tue Mar 24, 2020 1:33 am, edited 3 times in total.
lostdog
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Re: Selling 100% stocks on a bounce

Post by lostdog »

watchnerd wrote: Sun Mar 22, 2020 8:59 pm
denovo wrote: Sun Mar 22, 2020 8:53 pm
ThePrince wrote: Sun Mar 22, 2020 7:56 pm
nps wrote: Sun Mar 22, 2020 7:39 pm
mathguy3021 wrote: Sun Mar 22, 2020 7:32 pm Investors who are short sighted will say that it's too late to sell because of the recent crash. The reality is that in my case, it's equivalent to moving to a much safer allocation after gains in 2016.
Investors who are short sighted also rationalize their panic selling in down markets.
+1
+10
+100!!

Conan, what is best in life

Conan: To buy from weaker hands, take their shares, and to hear the lamentations of their statements!
Haha!!! :sharebeer

This is classic!!

I am saving this one.

I am seeing Arnold sitting in his Conan throne while reading this.

Conan: To buy from weaker hands, take their shares and watch them wring their hands and sweat when the market shoots up!
57% VTI | 43% VXUS
sd323232
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Re: Selling 100% stocks on a bounce

Post by sd323232 »

if you need to sell, today may be the bounce you were looking for
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