dry powder increasing

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Topic Author
k1982
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dry powder increasing

Post by k1982 » Tue Apr 07, 2020 9:15 pm

will we ever go back to March 23 lows?
since then, the market has moved up about 20%

the market is recovering too quickly while i had some dry powder ready for deployment

now i'm regretting cause i might have gotten too greedy waiting for a deeper hit to the market

i only put in 1/3 of the dry powder few weeks back
still have 2/3 left (while still making my small regular contributions every 2 weeks)

Triple digit golfer
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Re: dry powder increasing

Post by Triple digit golfer » Tue Apr 07, 2020 9:18 pm

Lesson learned, hopefully. Invest money that is to be invested.

jello_nailer
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Re: dry powder increasing

Post by jello_nailer » Tue Apr 07, 2020 9:26 pm

My thoughts are you will have time to deploy.
Not timing, just hoping to make you feel better.
Honestly though, I'm struggling to think the door closed already, things don't look any rosier tonight than 10 days ago. Earnings season is coming and it's going to stink to high heaven, not to mention unemployment numbers. Market is probably more expensive today than it was with SPY at 338. Yikes.
At least the VIX is down... to high level from crazy. Schizophrenia in the market is probably not over but who cares - you will DCA into some good value buys.

mega317
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Re: dry powder increasing

Post by mega317 » Tue Apr 07, 2020 10:16 pm

k1982 wrote:
Tue Apr 07, 2020 9:15 pm
the market is recovering too quickly while i had some dry powder ready for deployment
Oops. Time to rewrite your IPS.
jello_nailer wrote:
Tue Apr 07, 2020 9:26 pm
Earnings season is coming and it's going to stink to high heaven, not to mention unemployment numbers.
Eh, everyone already knows that. It's not like some low earnings and more unemployment numbers are guaranteed to tank the market again.
https://www.bogleheads.org/forum/viewtopic.php?t=6212

jello_nailer
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Re: dry powder increasing

Post by jello_nailer » Tue Apr 07, 2020 10:47 pm

mega - I agree with you that its priced in but this recent rally is what seems to have initiated the OP comments that they missed the open door. My hunch is if you are DCA'ing over the next few months you will probably get a few more bites at the apple. I'm more worried about the unknowns that are going to show up, not the employment and earnings. I'm thinking auto finance, credit card,consumer loans, mortgage train wrecks. Collateral damage.

I also don't think the stickiness of rehiring the labor force is priced in - Trump won't see a 3 handle on unemployment the rest of his presidency, even if he has a second term.

mega317
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Re: dry powder increasing

Post by mega317 » Tue Apr 07, 2020 11:10 pm

Oh absolutely it's possible. But it's also possible those don't happen. So I think it's a mistake to bet either way with your investments.
https://www.bogleheads.org/forum/viewtopic.php?t=6212

invest4
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Re: dry powder increasing

Post by invest4 » Tue Apr 07, 2020 11:57 pm

Similar to OP, I also have some juice still to be squeezed back into equities and feel a tinge of woulda, coulda, shoulda. Next tranche was at 40%...didn't quite hit it. Nonetheless, I'm keeping it liquid and we shall see how things play out in the coming weeks / months. In fact, given the recent rate of ascent, my mind starts to wander back toward valuations...which was my main concern before the most recent market happenings.

mega317
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Re: dry powder increasing

Post by mega317 » Wed Apr 08, 2020 12:04 am

How long had you been holding on to dry powder with concerns about valuations before this year?
https://www.bogleheads.org/forum/viewtopic.php?t=6212

Topic Author
k1982
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Re: dry powder increasing

Post by k1982 » Wed Apr 08, 2020 12:42 am

i call my "dry powder" my emergency fund too...
but since i still have a job now i have been tempted to deploy more of that in these hectic times

i put 1/3 of it during the 20% down spiral and was ready to deploy again at 30% and 40% phases
(however didn't get around to it since the next day once it hit 30% it went up again like crazy)
so yeah still about 66-70% of dry powder left for deep recession to hit

but i guess whatever i planned to do...others have planned to do as well...so already "priced in"

it's my first recession experience...if this is even a recession
all these gov't bailouts are keeping the house of cards still up

i guess we shall see in next few weeks/months how this plays out

P.S. if i had another chance i would of put 100% of my dry powder (not just 1/3 of it) at the 20% down spiral

lesson learned :P

FlyingMoose
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Re: dry powder increasing

Post by FlyingMoose » Wed Apr 08, 2020 12:56 am

k1982 wrote:
Wed Apr 08, 2020 12:42 am
P.S. if i had another chance i would of put 100% of my dry powder (not just 1/3 of it) at the 20% down spiral

lesson learned :P
If I had another chance, I’d buy a lottery ticket with the winning numbers, but we can’t predict the future. We can only do what we think is the best at the time.

boogiehead
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Re: dry powder increasing

Post by boogiehead » Wed Apr 08, 2020 12:59 am

FlyingMoose wrote:
Wed Apr 08, 2020 12:56 am
k1982 wrote:
Wed Apr 08, 2020 12:42 am
P.S. if i had another chance i would of put 100% of my dry powder (not just 1/3 of it) at the 20% down spiral

lesson learned :P
If I had another chance, I’d buy a lottery ticket with the winning numbers, but we can’t predict the future. We can only do what we think is the best at the time.
You'll get plenty of opportunities..... its funny how people get so emotional just because the market has gone up a few days. Overall there is still plenty of uncertainty so we'll be in for a ride :beer

iamlucky13
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Re: dry powder increasing

Post by iamlucky13 » Wed Apr 08, 2020 1:09 am

Time for Bogleheads to switch gears from debating how far it will fall to debating whether the market is over-valued. 8-)

I agree with this:
Triple digit golfer wrote:
Tue Apr 07, 2020 9:18 pm
Invest money that is to be invested.
But if in doubt, make a plan to dollar cost average it into the market. Now is still a very reasonable time to start.

jjface
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Re: dry powder increasing

Post by jjface » Wed Apr 08, 2020 1:13 am

k1982 wrote:
Tue Apr 07, 2020 9:15 pm
will we ever go back to March 23 lows?
since then, the market has moved up about 20%

the market is recovering too quickly while i had some dry powder ready for deployment

now i'm regretting cause i might have gotten too greedy waiting for a deeper hit to the market

i only put in 1/3 of the dry powder few weeks back
still have 2/3 left (while still making my small regular contributions every 2 weeks)
That is why people say you have to be right twice with market timing. Getting out and getting back in.

My advice is not to get too greedy and consider that when the markets return to the levels we saw before March you would have made a nice gain even if you invest tomorrow.

Or you can wait and wait and hope for the best.

annu
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Re: dry powder increasing

Post by annu » Wed Apr 08, 2020 2:43 am

I took all money with 10% or less loss and took it out and used towards mortgage, extra payments, reduced from 4 years to 2. As I still feel worst us yet to come, I might be wrong, but mortgage is going to be there regardless...even if it gets low, you may not know if it's the lowest, normally better to buy when it is trending up...consistently

Valuethinker
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Re: dry powder increasing

Post by Valuethinker » Wed Apr 08, 2020 3:00 am

k1982 wrote:
Tue Apr 07, 2020 9:15 pm
will we ever go back to March 23 lows?
since then, the market has moved up about 20%

the market is recovering too quickly while i had some dry powder ready for deployment

now i'm regretting cause i might have gotten too greedy waiting for a deeper hit to the market

i only put in 1/3 of the dry powder few weeks back
still have 2/3 left (while still making my small regular contributions every 2 weeks)
We haven't seen the damage in the real economy yet.

Whilst some countries are looking at exiting lockdown, the USA has not yet (I understand) gone fully into lockdown. I can tell you in the UK the police are still having to break up BBQs in public places, attended by 20+ people. Despite our death rate, people don't believe it will happen to them or to their families.

So since there is no sense that this thing is being tamed, and we know the impact on the macroeconomy will be brutal, perhaps the market is getting over ambitious? Markets anticipate events so maybe the market is anticipating effective treatment/ vaccine/ mass immunity. I hope so.

It's a hard call because the normal recovery from these sort of events is V-shaped. Steep fall, very sharp return to normalcy. But so far there are enough unusual factors as to mean that it is still very unclear.

averagedude
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Re: dry powder increasing

Post by averagedude » Wed Apr 08, 2020 4:10 am

Just to rub salt in the wound, to get a 20% increase in cash that has a 2% yield, it will take 9 years to get it. In stocks, it only took 2 weeks. We just witnessed a 33% decrease in the SP 500 from its peak, and the SP 500 will need a 50% increase to get back to even. It will take 20 years for a 2% yielding investment to reach a 50% increase, and I'm pretty sure it won't take stocks that long to get there. It isn't very often that the markets give you a 30% discount, and when it has in the past, it has been a screaming buying opportunity.

Silverado
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Re: dry powder increasing

Post by Silverado » Wed Apr 08, 2020 5:03 am

k1982 wrote:
Wed Apr 08, 2020 12:42 am

P.S. if i had another chance i would of put 100% of my dry powder (not just 1/3 of it) at the 20% down spiral
Based on your comments, I am afraid this is not a true statement. I am not even sure what a ‘20% down spiral is’, but what is the baseline?

I feel you were not prepared for the market to go up and down. That’s OK, it’s called experience, but you have to learn from it to make it useful. What are putting in place to ensure you aren’t posting this again next week, next month, next year, whenever the next downturn happens?

There’s no amount of decrease in the market that would cause me to consider my emergency fund dry powder. It does not exist in any calculation or view when investing is the topic.

sd323232
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Re: dry powder increasing

Post by sd323232 » Wed Apr 08, 2020 5:16 am

jello_nailer wrote:
Tue Apr 07, 2020 9:26 pm
My thoughts are you will have time to deploy.
Not timing, just hoping to make you feel better.
Honestly though, I'm struggling to think the door closed already, things don't look any rosier tonight than 10 days ago. Earnings season is coming and it's going to stink to high heaven, not to mention unemployment numbers. Market is probably more expensive today than it was with SPY at 338. Yikes.
At least the VIX is down... to high level from crazy. Schizophrenia in the market is probably not over but who cares - you will DCA into some good value buys.
everyone knows earning season is gonna be bad, it will not be a surprise. i would say it is def priced in right now, unemployment is also priced in. There was so much bad news out yet market is where it is right now. If all bad news is priced in, then this may be bottom. I highly doubt we will see dow jones 18k-19k lows again.

wilked
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Re: dry powder increasing

Post by wilked » Wed Apr 08, 2020 7:00 am


goblue100
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Re: dry powder increasing

Post by goblue100 » Wed Apr 08, 2020 7:46 am

Valuethinker wrote:
Wed Apr 08, 2020 3:00 am
k1982 wrote:
Tue Apr 07, 2020 9:15 pm
will we ever go back to March 23 lows?
since then, the market has moved up about 20%

the market is recovering too quickly while i had some dry powder ready for deployment

now i'm regretting cause i might have gotten too greedy waiting for a deeper hit to the market

i only put in 1/3 of the dry powder few weeks back
still have 2/3 left (while still making my small regular contributions every 2 weeks)
We haven't seen the damage in the real economy yet.

Whilst some countries are looking at exiting lockdown, the USA has not yet (I understand) gone fully into lockdown. I can tell you in the UK the police are still having to break up BBQs in public places, attended by 20+ people. Despite our death rate, people don't believe it will happen to them or to their families.
Sounds like you are in the UK. The majority of the United States is locked down far more than I ever thought possible. I would say the majority of the population is complying, though there are also a few that think it can't happen to them. The sense I have is that the next 7 days should be the worst, then we should be on the downside of the curve.
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

aristotelian
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Re: dry powder increasing

Post by aristotelian » Wed Apr 08, 2020 7:52 am

The market was down over 30%, biggest drop since 2008. If you weren't going to use your "dry powder" then, when will you ever use it? It is possible we don't see a drop like that again in our lifetime. If the sky does fall and we get to 50%, will you use it then or "wait for the bottom"?

deltaneutral83
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Re: dry powder increasing

Post by deltaneutral83 » Wed Apr 08, 2020 8:05 am

The S&P from 2011 until Mid Feb 2020 didn't see a 22% downturn, which is where we are as of close yesterday. The opportunity OP had at close yesterday is still a buying point that most people dream about. Buying the market after 35% dip (as of 3/23/2020) has yielded incredible results the last 90 years and might be true in the future, they've only happened a handful or two times. 22% dips aren't bad either. The market doesn't text you to tell you when it is going to bottom. Should always deploy cash as option A. Option B is to define spots on the S&P and execute buys then so you don't rely on your gut which is wrong almost all the time. I don't care about short term market movements but the news about the current situation seems to be getting better and the market is usually a leading indicator. People tend to think the market isn't random and that they know more than the market, and that is a mistake 99 out of 100 times.

mega317
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Re: dry powder increasing

Post by mega317 » Wed Apr 08, 2020 8:10 am

deltaneutral83 wrote:
Wed Apr 08, 2020 8:05 am
The opportunity OP had at close yesterday is still a buying point that most people dream about.
Not the people who didn't buy 2 weeks ago.
https://www.bogleheads.org/forum/viewtopic.php?t=6212

deltaneutral83
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Re: dry powder increasing

Post by deltaneutral83 » Wed Apr 08, 2020 8:11 am

mega317 wrote:
Wed Apr 08, 2020 8:10 am
deltaneutral83 wrote:
Wed Apr 08, 2020 8:05 am
The opportunity OP had at close yesterday is still a buying point that most people dream about.
Not the people who didn't buy 2 weeks ago.
Ok I'll play, same for me with March 9, 2009 at 2:35:57.

The next best time to buy based off info we have real time is...now.

whereskyle
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Re: dry powder increasing

Post by whereskyle » Wed Apr 08, 2020 8:28 am

My advice: Buy a set amount everyday from now until earnings. Or, if you really think that earnings will give you a new reason to buy, put half in now (as in right now), and hold onto half until the day after the earnings you're concerned about. My advice as well: pick an exact date and buy on that date no matter what. Letting yourself rationalize/emotionalize this process will do you no favors. If you're wrong, you'll feel bad. If you're right, you'll undeservedly feel like a genius and just increase the chance you'll engage in behaviorally risky behavior in the future. Take yourself out of it. You are not in control. IMO it is always a good decision to buy equities if you reinvest your dividends and have a time horizon longer than 5 years. Let that be enough comfort to you. No matter what, you are not investing at the absolute peak of this thing. Let that comfort you. And guess what. I invested a nice chunk of $ at what so far has been the bottom. Did I do that due to spectacular insight? No. I received some money on a Sunday and I put it in the market the next day. It happened to be the bottom (so far). Some people get lucky. Does this mean I don't have to worry whether I put my $ in at the bottom? Of course not! I have as much reason to worry as everyone else. I don't know if that was actually the bottom. No one does. So any good feeling I might have about timing this is totally undeserved and may turn out to be plain wrong, which will just make it hurt more in the end. Don't try to time the market because of FOMO. FOMO is not your friend. Time in the market and reinvested dividends are your friends.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle

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watchnerd
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Re: dry powder increasing

Post by watchnerd » Wed Apr 08, 2020 8:44 am

k1982 wrote:
Tue Apr 07, 2020 9:15 pm

now i'm regretting cause i might have gotten too greedy waiting for a deeper hit to the market
Market timing is hard.

:wink:
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watchnerd
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Re: dry powder increasing

Post by watchnerd » Wed Apr 08, 2020 8:46 am

k1982 wrote:
Wed Apr 08, 2020 12:42 am
i call my "dry powder" my emergency fund too...
but since i still have a job now i have been tempted to deploy more of that in these hectic times
:oops:
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

FishTaco
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Re: dry powder increasing

Post by FishTaco » Wed Apr 08, 2020 8:47 am

k1982 wrote:
Wed Apr 08, 2020 12:42 am
i put 1/3 of it during the 20% down spiral and was ready to deploy again at 30% and 40% phases
(however didn't get around to it since the next day once it hit 30% it went up again like crazy)
so yeah still about 66-70% of dry powder left for deep recession to hit
OP, you had a reasonable plan to move your dry powder to investments but 1/2 of your quandary is you weren't able to effectively put your plan into effect. Your 30% buy-in price has been well surpassed, but you weren't ready to move.

I'm not saying to rub your nose in it, but simply to try to get you to see that some of your dilemma is related to how you planned to actualize your plan. If this "dry powder" is just sitting in a brokerage account, maybe you should think about having limit orders on your account that will automatically execute when your levels are hit. This would also eliminate the hesitation you may feel about buying into a quickly falling market.

Or, stop trying to time the market, lump sum in and move on with your life.

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watchnerd
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Re: dry powder increasing

Post by watchnerd » Wed Apr 08, 2020 8:56 am

FishTaco wrote:
Wed Apr 08, 2020 8:47 am


Or, stop trying to time the market, lump sum in and move on with your life.
+1
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Wiggums
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Re: dry powder increasing

Post by Wiggums » Wed Apr 08, 2020 9:01 am

I continue to buy weekly, but earnings are not clear snd they fo matter.

Hard to know what has been priced into the markets. People and businesses are still waiting for the stimulus. Medical supplies are still being made.

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Current customers can expect to see the credit when they renew. Customers do not need to take any action to receive this credit.

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Sandtrap
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Re: dry powder increasing

Post by Sandtrap » Wed Apr 08, 2020 9:03 am

When things are down we wish they were up and up quickly.
When things are up we wish for more and longer lasting.

Recent stimulus package and other intervention makes things even more unpredictable.

If it’s a “WVwV” shaped recovery, there will be more chances ahead. Market timing is a fickle thing with its own mood.

j🌺
Last edited by Sandtrap on Wed Apr 08, 2020 9:06 am, edited 1 time in total.
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rkhusky
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Re: dry powder increasing

Post by rkhusky » Wed Apr 08, 2020 9:05 am

Rather than trying to time the market, just rebalance when it is called for. Market drops sufficiently - sell bonds and buy stocks. Market rises sufficiently - sell stocks and buy bonds. Easy-Peasy. No guessing involved.

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Re: dry powder increasing

Post by midareff » Wed Apr 08, 2020 9:17 am

Sandtrap wrote:
Wed Apr 08, 2020 9:03 am
When things are down we wish they were up and up quickly.
When things are up we wish for more and longer lasting.

Recent stimulus package and other intervention makes things even more unpredictable.

If it’s a “WVwV” shaped recovery, there will be more chances ahead. Market timing is a fickle thing with its own mood.

j🌺
and we have yet to experience the market gyrations when the profit pictures for the first and second quarter are seen....... this pullback was just a knee jerk reaction IMHO. Pick a number that moves you.. is it -20%, -30% .. -40% .... here is an interesting piece on the drop and recovery cycles. https://www.guggenheiminvestments.com/m ... erspective For me, and I suspect for many retiree's with appropriate AA's for their risk tolerance, I might be willing to look at a huge drop as an opportunity but have not seen one yet. If you are well situated in retirement avoiding loss is far more important than any thought of additional gains. Don't risk money you do have and do need for the prospect of making more money you most likely don't need.

Look around... as of last night the Vanguard S&P 500 is down 17.26% for the year (per M*).... look at how many businesses are closed, employees home hoping to get a check in the e or regular mail for food, groceries, rent, mortgage, car payments, gas, electric and so forth... malls closed, airlines not flying, cruise ships parked, tour destinations shut, restaurants with some hoping to stay alive selling food to go in a stay at home world. You think -17% is a reasonable expression of what you see on the streets?

The next thing we have gotten used to is 2% inflation. Drop a bunch or trillions of stimulus into the economy and what happens to that? .. to interest rates which seemingly have to be used to curb inflation. Seems like a good time to lock in cheap long term debt and keep your FI duration short.
Last edited by midareff on Wed Apr 08, 2020 9:38 am, edited 2 times in total.

sschullo
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Re: dry powder increasing

Post by sschullo » Wed Apr 08, 2020 9:30 am

k1982 wrote:
Tue Apr 07, 2020 9:15 pm
will we ever go back to March 23 lows?
since then, the market has moved up about 20%

the market is recovering too quickly while i had some dry powder ready for deployment

now i'm regretting cause i might have gotten too greedy waiting for a deeper hit to the market

i only put in 1/3 of the dry powder few weeks back
still have 2/3 left (while still making my small regular contributions every 2 weeks)
My dry powder is $1000 in each two UTMA accounts for my niece 8 and nephew 11. For 1.5 years since I put their money in a Vanguard MM, I have been waiting for a decline, and low and behold, we have one now! So what am I waiting for?!
From the beginning, I would have invested in a target retirement fund or Wellington but there isn't enough at the moment. I can purchase the VTI.
Now my usual steady mind turned to mush with this!
However, I thought the market was going down more as if three years of losses isn't enough. Did I feel "greedy" in the opposite direction!

I can feel comfortable managing my own money, largely because my portfolio was designed to work on autopilot (I have only rebalanced a couple of times in 15 years) but making a decision for somebody else's money is an entirely different process--even though it's their mother's and my money donated to their fund so they can learn how investments work.

Because of what is happening, I have not talked to the children and their mom about my idea to purchase VTI. But I better soon before the markets return to their February 12 high! LOLs

The point is not to get into this destructive and negative mental framework. I despise the very idea of trying to time the market, yet, that's what I am doing at the moment. Its no surprise. Don't we all want to purchase an investment at $115 (VTI LOW last week) rather than the $133 now? Of course, but that's not how this system works. And the sooner my niece and nephew learn this, the more successful investor they will be. Sa la vie!
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

rerod
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Re: dry powder increasing

Post by rerod » Wed Apr 08, 2020 9:36 am

aristotelian wrote:
Wed Apr 08, 2020 7:52 am
The market was down over 30%, biggest drop since 2008. If you weren't going to use your "dry powder" then, when will you ever use it? It is possible we don't see a drop like that again in our lifetime. If the sky does fall and we get to 50%, will you use it then or "wait for the bottom"?
The OP asked a question. Did you read it aristotelian?

"will we ever go back to March 23 lows?"

If you cant/wont give your opinion about the question, don't post more questions..

Nobody can answer the question, but my guess is there will be plenty of opportunities to buy lower than march 23.

I considered buying on the 23rd with the s&p 34% down, but it's way to early to know how the market will react to stopping productivity for who knows how long, and millions dying over the entire world IMO.
Last edited by rerod on Wed Apr 08, 2020 9:52 am, edited 1 time in total.

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Re: dry powder increasing

Post by MotoTrojan » Wed Apr 08, 2020 9:37 am

This is why I invest as much as I can, as soon as I can. It’s mechanical. No regrets.

mega317
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Re: dry powder increasing

Post by mega317 » Wed Apr 08, 2020 9:52 am

rerod wrote:
Wed Apr 08, 2020 9:36 am
If you wont answer the question, don't post more..

Nobody can answer the question,
OK end of thread I guess.

Or we can keep having a conversation.
https://www.bogleheads.org/forum/viewtopic.php?t=6212

DaftInvestor
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Re: dry powder increasing

Post by DaftInvestor » Wed Apr 08, 2020 9:54 am

This thread is yet Another good lesson on why NOT to try to time the market.
"Dry Powder" is market timing - goes against Boglehead philosophy (for good reason).

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ThunderTurtle
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Re: dry powder increasing

Post by ThunderTurtle » Wed Apr 08, 2020 10:30 am

I think market timing is just irresistible (thinking about it, at least). I feel like asking with indignation why there is so much discussion about market timing on these Bogleheads forums before realizing my own thoughts are not so pure. I used to wonder why the books had chapters on emotion. :oops:

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Re: dry powder increasing

Post by aristotelian » Wed Apr 08, 2020 10:31 am

rerod wrote:
Wed Apr 08, 2020 9:36 am
aristotelian wrote:
Wed Apr 08, 2020 7:52 am
The market was down over 30%, biggest drop since 2008. If you weren't going to use your "dry powder" then, when will you ever use it? It is possible we don't see a drop like that again in our lifetime. If the sky does fall and we get to 50%, will you use it then or "wait for the bottom"?
The OP asked a question. Did you read it aristotelian?

"will we ever go back to March 23 lows?"

If you cant/wont give your opinion about the question, don't post more questions..

Nobody can answer the question, but my guess is there will be plenty of opportunities to buy lower than march 23.

I considered buying on the 23rd with the s&p 34% down, but it's way to early to know how the market will react to stopping productivity for who knows how long, and millions dying over the entire world IMO.
Lol, you did not answer the question either. We are both saying he is asking the wrong question.

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watchnerd
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Re: dry powder increasing

Post by watchnerd » Wed Apr 08, 2020 10:57 am

ThunderTurtle wrote:
Wed Apr 08, 2020 10:30 am
I think market timing is just irresistible (thinking about it, at least). I feel like asking with indignation why there is so much discussion about market timing on these Bogleheads forums before realizing my own thoughts are not so pure. I used to wonder why the books had chapters on emotion. :oops:
I'm not sure this site is about what it used to be about.
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ThunderTurtle
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Re: dry powder increasing

Post by ThunderTurtle » Wed Apr 08, 2020 11:05 am

watchnerd wrote:
Wed Apr 08, 2020 10:57 am
I'm not sure this site is about what it used to be about.
Maybe registration should ask about books read or present a quiz?

jpmorganfunds
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Re: dry powder increasing

Post by jpmorganfunds » Wed Apr 08, 2020 11:09 am

Wait until the Q2 GDP report comes out in July. But the real surprise will be the Q3 GDP report in October. :sharebeer

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k1982
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Re: dry powder increasing

Post by k1982 » Wed Apr 08, 2020 11:48 am

thanks for all the feedback...
i'm not market timing, per say. i still contribute small amounts every 2 weeks.

i just have dry powder/emergency fund money that i want to put into good use since we are in turmoil times

so from what i got from some articles and feedback ...there is still a chance we could hit a recession later down the year.. once the free handouts evaporate...

people might start defaulting on their mortgages ...

P.S. my dad is a long haul truck driver and i help him out. there is very little freight out there.
there are NO loads on the west coast at all.
it just drives me crazy how you hear on every news network...how badly they need drivers. for what??
most warehouses are closed off

maybe local runs in chicago area or other bigger cities but that is not going to keep you in business pulling short runs and waiting 3 days to get
unloaded. my dad took a run from kansas city MO to st peters MO and they had his trailer for 5 days. after expenses he lost money on that run.
truckers are the ones that get beat up by regulations more than anyone else. they get treated like prisoners in their own vehicle and no one to turn to

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watchnerd
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Re: dry powder increasing

Post by watchnerd » Wed Apr 08, 2020 12:02 pm

k1982 wrote:
Wed Apr 08, 2020 11:48 am
thanks for all the feedback...
i'm not market timing, per say. i still contribute small amounts every 2 weeks.

i just have dry powder/emergency fund money that i want to put into good use since we are in turmoil times
Why would you put your emergency fund in the market?

That's supposed to be your "do not risk it" money.

Especially in times of turmoil.
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k1982
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Re: dry powder increasing

Post by k1982 » Wed Apr 08, 2020 12:21 pm

i don't mind suffering a little now for bigger gains in the long haul

i will always find a job out there. no matter how horrible it is. i'm just lucky to be working and providing a service.

i just don't believe or ever will believe the gov't is out there to help you out....these stimulus packages are bad bad sign for america
i'm against them

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watchnerd
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Re: dry powder increasing

Post by watchnerd » Wed Apr 08, 2020 12:28 pm

k1982 wrote:
Wed Apr 08, 2020 12:21 pm
i don't mind suffering a little now for bigger gains in the long haul

i will always find a job out there. no matter how horrible it is. i'm just lucky to be working and providing a service.

i just don't believe or ever will believe the gov't is out there to help you out....these stimulus packages are bad bad sign for america
i'm against them
How many years of living expenses do you have in your emergency fund?

Would you put all of it in the market?

I'm not sure what the stimulus package has to do with the emergency fund decision on a personal level.
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k1982
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Re: dry powder increasing

Post by k1982 » Wed Apr 08, 2020 12:34 pm

emergence fund money for 3-4 months

i still don't believe that is enough. most people should have 6-12 months EF

i hope this crisis has thought us to always save for a rainy day
i always look at worst case scenario and hope for the best

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Re: dry powder increasing

Post by whereskyle » Wed Apr 08, 2020 12:36 pm

Valuethinker wrote:
Wed Apr 08, 2020 3:00 am
k1982 wrote:
Tue Apr 07, 2020 9:15 pm
will we ever go back to March 23 lows?
since then, the market has moved up about 20%

the market is recovering too quickly while i had some dry powder ready for deployment

now i'm regretting cause i might have gotten too greedy waiting for a deeper hit to the market

i only put in 1/3 of the dry powder few weeks back
still have 2/3 left (while still making my small regular contributions every 2 weeks)
We haven't seen the damage in the real economy yet.

Whilst some countries are looking at exiting lockdown, the USA has not yet (I understand) gone fully into lockdown. I can tell you in the UK the police are still having to break up BBQs in public places, attended by 20+ people. Despite our death rate, people don't believe it will happen to them or to their families.

So since there is no sense that this thing is being tamed, and we know the impact on the macroeconomy will be brutal, perhaps the market is getting over ambitious? Markets anticipate events so maybe the market is anticipating effective treatment/ vaccine/ mass immunity. I hope so.

It's a hard call because the normal recovery from these sort of events is V-shaped. Steep fall, very sharp return to normalcy. But so far there are enough unusual factors as to mean that it is still very unclear.
In my humble opinion, these thoughts are worthless. We just don't know what earnings will tell us. It seems likely that consumers-staples stocks will not be very adversely affected. Their numbers reflect that. Disney (by virtue of park closures) has been seriously affected. Its numbers reflect that. I could go on, but the point is that OP seriously risks missing out by keeping powder dry based on speculation that is pretty well reflected in the market. On the flipside, in my opinion, the worst thing that could happen is that the market drops after OP buys and that means only one thing if OP is buying a well-diversified index fund: that OP might have to wait longer for the market to go up. I personally believe (and I believe Jack would agree) that there is always more risk in being out of the market than in it for the long-term investor regardless of short-term volatility. Keeping powder dry and planning to throw it in is just another way of saying that one's AA is significantly cash when the investor is nervous and it is significantly equities when the investor is optimistic. This is a classic, dangerous mistake (buying stocks consistently when they are getting expensive and not buying them consistently when they are becoming more inexpensive). I know for me I overextended as the market was going down, throwing money at it that I had not planned to invest. While now I'm happy that my cost basis is down, the negative about that is that it makes me think that maybe I should have kept powder dry. Meanwhile, my cost-basis would have come down all the same if I had just followed my plan to make weekly contributions. "Keeping powder dry" is a seriously risky thought that will do harm to a logical investment strategy over time.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle

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watchnerd
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Re: dry powder increasing

Post by watchnerd » Wed Apr 08, 2020 12:44 pm

k1982 wrote:
Wed Apr 08, 2020 12:34 pm
emergence fund money for 3-4 months

i still don't believe that is enough. most people should have 6-12 months EF

i hope this crisis has thought us to always save for a rainy day
i always look at worst case scenario and hope for the best
If you think your EF is not enough, and you should have 6-12 months, why are you thinking of risking the bit you do have in the market?
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