Exit from Stocks WSJ

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TT
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Exit from Stocks WSJ

Post by TT »

Viewing and researching past performance of stocks is not of value IMO as changes in how Wall Street operates
I have been a part of this departure steadily over time.


http://finance.yahoo.com/news/despite-g ... 25z;_ylv=3
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RooseveltG
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Re: Exit from Stocks WSJ

Post by RooseveltG »

If so much money has been leaving the market, why have stocks gone up in price? Less supply?

Also, this would seem bullish for long term investors.

Roosevelt.
dickenjb
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Re: Exit from Stocks WSJ

Post by dickenjb »

Interesting but I am staying the course.

If you read the article you will see that the last few times the public gave up on stocks were all good times to do the opposite. IOW they all sold after big crashes or long steady declines - called shutting the barn door after the horse has left.
dickenjb
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Re: Exit from Stocks WSJ

Post by dickenjb »

RooseveltG wrote:If so much money has been leaving the market, why have stocks gone up in price? Less supply?

Also, this would seem bullish for long term investors.

Roosevelt.
Because the smart money is buying.

I agree, bullish for long term investors. Sell when your shoe shine boy gives you stock tips. Buy when Ma & Pa Kettle head for the exits. Or just pick an appropriate AA and ignore the noise. HFT and Greece is noise. It is not different this time.
Sidney
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Re: Exit from Stocks WSJ

Post by Sidney »

dickenjb wrote: agree, bullish for long term investors. Sell when your shoe shine boy gives you stock tips. Buy when Ma & Pa Kettle head for the exits.
Yes, fleeing is good.
I always wanted to be a procrastinator.
john94549
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Re: Exit from Stocks WSJ

Post by john94549 »

Pick a month, any month will do. February works for me. Re-balance then. With your "real money".

As for your "play money" (aka "trading account"), buy/sell at leisure. It's all about keeping score, is it not?

And yes, swimming against the tide, I sold yesterday (in my trading account). Harvesting some gains, think October-Fest.

Swimming even harder against the tide, not only did I sell some long, I bought more short.

Oh, well.
Leesbro63
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Re: Exit from Stocks WSJ

Post by Leesbro63 »

I agree with the people in the article that nothing is safe. But the older guys who are market timing will be lucky not to underperform at best and get burned at worst
Call_Me_Op
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Re: Exit from Stocks WSJ

Post by Call_Me_Op »

TT wrote:Viewing and researching past performance of stocks is not of value IMO as changes in how Wall Street operates
I have been a part of this departure steadily over time.


http://finance.yahoo.com/news/despite-g ... 25z;_ylv=3
This encourages me to buy more stock.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein
RenoJay
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Re: Exit from Stocks WSJ

Post by RenoJay »

I read this article on Yahoo news. I reviewed the comments underneath the article, and the vast majority seemed to believe "Wall St. is rigged" and other conspiracy theories. It's not wonder so many people are broke.
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Tim_in_GA
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Re: Exit from Stocks WSJ

Post by Tim_in_GA »

RenoJay wrote:I read this article on Yahoo news. I reviewed the comments underneath the article, and the vast majority seemed to believe "Wall St. is rigged" and other conspiracy theories. It's not wonder so many people are broke.
Yeah, the comments on Yahoo Finance articles are a major source of entertainment for me each day.
RenoJay
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Re: Exit from Stocks WSJ

Post by RenoJay »

Tim_in_GA wrote:
RenoJay wrote:I read this article on Yahoo news. I reviewed the comments underneath the article, and the vast majority seemed to believe "Wall St. is rigged" and other conspiracy theories. It's not wonder so many people are broke.
Yeah, the comments on Yahoo Finance articles are a major source of entertainment for me each day.
Personally, when I get in a mood to rant without a point in a way that would be inappropriate for Facebook or Bogleheads, I go to Yahoo and leave comments.
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zaboomafoozarg
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Re: Exit from Stocks WSJ

Post by zaboomafoozarg »

"Only a quarter of households with retirement plans were willing to take above-average investment risk in 2011, down from 33% in 1998, an ICI survey found."

I wonder how they even quantified "above-average risk".
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yukonjack
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Re: Exit from Stocks WSJ

Post by yukonjack »

I wonder how much of this "concern" has to do with the S & P being at a 5 year high and people believing it's time for a correction. I have to agree with most on this forum that it is probably more of a sign to buy or at least stay the course. Reading articles like that mark me appreciate the Bogleheads even more.
jes58
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Re: Exit from Stocks WSJ

Post by jes58 »

This surely demonstrates the importance of creating a plan that provides the emotional and technical framework in which to treat all this as noise and stay the course. Scary how many people have not done so.
Rodc
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Re: Exit from Stocks WSJ

Post by Rodc »

zaboomafoozarg wrote:"Only a quarter of households with retirement plans were willing to take above-average investment risk in 2011, down from 33% in 1998, an ICI survey found."

I wonder how they even quantified "above-average risk".
At least they did not say only a quarter of households with retirement plans were willing to take above median risk...
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.
trico
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Re: Exit from Stocks WSJ

Post by trico »

The stock market has been up and down ever sense it inception, and knowing when that happens has been impossible to time. I used to subscribe to the market timing theory, in that the professionals with computer programs could figure out when the market was going to go down and then sell your stocks. This was thru Merriman Financial Services, and I can tell you it did not work. Its kind of like picking who is going to win an NFL game, if you could pick all the winners and never lost a game, you would be a instant millionaire. But this is called gambling, so you may as well go to the casino, and at least have free drinks so you can see you hard earned money evaporate. so good luck my friends, trying to predict where the market is going is a losers game won by the house.
letsgobobby
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Re: Exit from Stocks WSJ

Post by letsgobobby »

jes58 wrote:This surely demonstrates the importance of creating a plan that provides the emotional and technical framework in which to treat all this as noise and stay the course. Scary how many people have not done so.
The great majority of people are not capable of this kind of emotionless, long term planning. Those of us who can will always far outperform the masses.
rustymutt
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Re: Exit from Stocks WSJ

Post by rustymutt »

Reminds me of a greased pig contest at a county fair.
Even educators need education. And some can be hard headed to the point of needing time out.
VennData
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Re: Exit from Stocks WSJ

Post by VennData »

RooseveltG wrote:If so much money has been leaving the market, why have stocks gone up in price? Less supply?
Good point. But because it's simply a faulty assumption. If someone sells a stock to someone else, no money has "left" the market. The same amount of real, cash money that "left" also "came in."

It's part of this fear and paranoia for American nonsense of certain media types.
john94549
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Re: Exit from Stocks WSJ

Post by john94549 »

Folks buy, folks sell. It's the market.
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gnosis
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Re: Exit from Stocks WSJ

Post by gnosis »

I just hit my 5/25 rebalancing band today, so I moved 5% stocks into bonds. It was a true test of my discipline to "ignore the noise, follow your IPS". I passed the test! I must admit though I did spend about 30 minutes hesitating, stewing in my emotions, trying to imagine where stocks will go next, and looking at S&P 500 graph YTD before I pulled the trigger. I had remorse for about 2 hours afterward.
Easy Rhino
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Re: Exit from Stocks WSJ

Post by Easy Rhino »

gnosis wrote:I had remorse for about 2 hours afterward.
I usually just eat ice cream before rebalancing, that way I trade on a sugar high and don't feel any remorse.

The article mentioned inflows into international stocks, has that passed the $168 billion withdrawn from (domestic) stock funds?
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dmcmahon
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Re: Exit from Stocks WSJ

Post by dmcmahon »

I am suspicious that those MF outflow stats don't include ETF inflows. Moreover, funds have (per an article I can't find right now) been flowing into target-date funds which invest partially in stocks. I would also want to know about pension funds and other ways in which the "average Joe" is investing indirectly in stocks.
thebogledude
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Re: Exit from Stocks WSJ

Post by thebogledude »

in the past, like ten years ago, if stocks were up, then bonds were down and vice versa, but then interest rates weren't as low as they are now. Nowadays, both bonds and stocks are overpriced. If interest rates go up and bond prices go down, you can have a negative return in bonds.
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jidina80
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Re: Exit from Stocks WSJ

Post by jidina80 »

The economy is clearing recovering in terms of unemployment and the purchasing/input end of the supply chain. The 'smart money' is investing in stocks. Good times ahead, the money says.

That said, I maintain a relatively static allocation between equity and debt and suggest almost everyone do the same. The future of equity values is really, really, hard to predict :-).
livesoft
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Re: Exit from Stocks WSJ

Post by livesoft »

Not enough gloom and doom in this thread. What's up with that?
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BC_Doc
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Re: Exit from Stocks WSJ

Post by BC_Doc »

"The Death of Equities" article crossed my mind as I was reading this story last night. It makes me think this secular bear market is getting long in the tooth.

Edit: cyclical replaced with secular.
Last edited by BC_Doc on Sat Oct 06, 2012 12:33 pm, edited 2 times in total.
dickenjb
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Re: Exit from Stocks WSJ

Post by dickenjb »

BC_Doc wrote:"The Death of Equities" article crossed my mind as I was reading this story last night. It makes me think this cyclical bear market is getting long in the tooth.
You mean secular bear, right? Because we are in a cyclical bull market now.
PacNorWest
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Re: Exit from Stocks WSJ

Post by PacNorWest »

If stocks hit a high water mark, why would you not take 5-percent off the table?
You know the tide will go out again, don't you?

Is patience an emotion?
Sidney
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Re: Exit from Stocks WSJ

Post by Sidney »

PacNorWest wrote:If stocks hit a high water mark, why would you not take 5-percent off the table?
You know the tide will go out again, don't you?

Is patience an emotion?
how do you know what the high water mark is?
I always wanted to be a procrastinator.
livesoft
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Re: Exit from Stocks WSJ

Post by livesoft »

PacNorWest wrote:If stocks hit a high water mark, why would you not take 5-percent off the table?
Uh, because stocks always have gone higher than all previous high water marks? That's something one can write with certainty.
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YDNAL
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Re: Exit from Stocks WSJ

Post by YDNAL »

Sidney wrote:
PacNorWest wrote:If stocks hit a high water mark, why would you not take 5-percent off the table?
You know the tide will go out again, don't you?

Is patience an emotion?
how do you know what the high water mark is?
livesoft wrote:Uh, because stocks always have gone higher than all previous high water marks? That's something one can write with certainty.
No specific knowledge here of a high water mark, but do have historical indications where "a flood line" might be - that is, when the water spills over the wall [street]. :)
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PacNorWest
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Re: Exit from Stocks WSJ

Post by PacNorWest »

YDNAL wrote: No specific knowledge here of a high water mark, but do have historical indications where "a flood line" might be - that is, when the water spills over the wall [street]. :)
Image
Very nice, thank you.
It helped me find this parallel explanation: http://www.advisorperspectives.com/dsho ... uation.php
Yours is a very helpful answer.
rec7
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Re: Exit from Stocks WSJ

Post by rec7 »

RooseveltG wrote:If so much money has been leaving the market, why have stocks gone up in price? Less supply?

Also, this would seem bullish for long term investors.

Roosevelt.
I think like you but I don't understand how stocks are going up with 90% of new money going into bonds. The only thing I can think of is government money going into the market is not printed.
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ofcmetz
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Re: Exit from Stocks WSJ

Post by ofcmetz »

rec7 wrote:
RooseveltG wrote:If so much money has been leaving the market, why have stocks gone up in price? Less supply?

Also, this would seem bullish for long term investors.

Roosevelt.
I think like you but I don't understand how stocks are going up with 90% of new money going into bonds. The only thing I can think of is government money going into the market is not printed.

90% of small investors maybe, but not the real money like pensions and what not. Aren't prices set on the edges, as not all stocks are sold every day. There have been buyers willing to pay more and more day by day. These buyers include me.

Trading on hunches and feelings is like thinking you can guess the next roulette color.
Never underestimate the power of the force of low cost index funds.
BC_Doc
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Re: Exit from Stocks WSJ

Post by BC_Doc »

dickenjb wrote:
BC_Doc wrote:"The Death of Equities" article crossed my mind as I was reading this story last night. It makes me think this cyclical bear market is getting long in the tooth.
You mean secular bear, right? Because we are in a cyclical bull market now.
Whoops! Yes, thanks-- I definitely meant secular bear. Thanks for catching my error.

BC Doc
rec7
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Re: Exit from Stocks WSJ

Post by rec7 »

ofcmetz wrote:
rec7 wrote:
RooseveltG wrote:If so much money has been leaving the market, why have stocks gone up in price? Less supply?

Also, this would seem bullish for long term investors.

Roosevelt.
I think like you but I don't understand how stocks are going up with 90% of new money going into bonds. The only thing I can think of is government money going into the market is not printed.

90% of small investors maybe, but not the real money like pensions and what not. Aren't prices set on the edges, as not all stocks are sold every day. There have been buyers willing to pay more and more day by day. These buyers include me.

Trading on hunches and feelings is like thinking you can guess the next roulette color.
Take a look at this http://www.lipperusfundflows.com/#creat ... _trial.php
do you call that small investors?
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ofcmetz
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Re: Exit from Stocks WSJ

Post by ofcmetz »

rec7 wrote:
ofcmetz wrote:
rec7 wrote:
RooseveltG wrote:If so much money has been leaving the market, why have stocks gone up in price? Less supply?

Also, this would seem bullish for long term investors.

Roosevelt.
I think like you but I don't understand how stocks are going up with 90% of new money going into bonds. The only thing I can think of is government money going into the market is not printed.

90% of small investors maybe, but not the real money like pensions and what not. Aren't prices set on the edges, as not all stocks are sold every day. There have been buyers willing to pay more and more day by day. These buyers include me.

Trading on hunches and feelings is like thinking you can guess the next roulette color.
Take a look at this http://www.lipperusfundflows.com/#creat ... _trial.php
do you call that small investors?
It didn't show the amount per investor. The WSJ, article only references mutual fund and ETF fund flows. Couldn't these massive numbers be an aggregate of the minions of individual investors and not the giant pension funds and endowments? I freely admit that I'm no expert and was just speculating. It's possible that they have stuck to their asset allocations and are not timing like the investors mentioned in the article.
Never underestimate the power of the force of low cost index funds.
rec7
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Re: Exit from Stocks WSJ

Post by rec7 »

I am no expert but that is a lot of money running away from the market.
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Phineas J. Whoopee
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Re: Exit from Stocks WSJ

Post by Phineas J. Whoopee »

ofcmetz wrote:
rec7 wrote:
ofcmetz wrote:
rec7 wrote:
RooseveltG wrote:If so much money has been leaving the market, why have stocks gone up in price? Less supply?

Also, this would seem bullish for long term investors.

Roosevelt.
I think like you but I don't understand how stocks are going up with 90% of new money going into bonds. The only thing I can think of is government money going into the market is not printed.

90% of small investors maybe, but not the real money like pensions and what not. Aren't prices set on the edges, as not all stocks are sold every day. There have been buyers willing to pay more and more day by day. These buyers include me.

Trading on hunches and feelings is like thinking you can guess the next roulette color.
Take a look at this http://www.lipperusfundflows.com/#creat ... _trial.php
do you call that small investors?
It didn't show the amount per investor. The WSJ, article only references mutual fund and ETF fund flows. Couldn't these massive numbers be an aggregate of the minions of individual investors and not the giant pension funds and endowments? I freely admit that I'm no expert and was just speculating. It's possible that they have stuck to their asset allocations and are not timing like the investors mentioned in the article.
Hi ofcmetz,

You are exactly correct. If I may quote from the article:
... Even as stock indexes have doubled in value since the market low in March 2009, investors have yanked a net $138 billion from mutual funds and exchange-traded funds that invest in U.S. stocks, according to the Investment Company Institute, a mutual-fund trade group. ...
(Emphasis added)

Mutual Funds + ETFs are not equal to the entire universe of US stock market investors. There are others, including institutions and individuals, some domiciled domestically, some foreign. I tried a quick Google search but was not able to find the size of the slice of US stock markets held by mutual funds and ETFs.

As others have noted, how could money leave or enter the secondary market? Nobody can sell without a buyer. Nobody can buy without a seller.

To its credit, the article is talking about cash flows (money in its medium of exchange and store of value functions), not changes in the overall value of the market (money in its unit of account function). It gives no indication that there is a problem with stocks, just that mutual fund and ETF investors have been pulling out more than they have put in from March 2009 to last Thursday.

Also to its credit is the non-misleading headline: "Despite Gains, Many Flee Stock Market."

To me the article appears to be about sociology rather than investing.

PJW
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