Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

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AndroidAZ
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Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by AndroidAZ » Tue Jan 12, 2016 1:31 pm

http://money.cnn.com/2016/01/12/investi ... -year-rbs/

What do Bogleheads make of this dire warning?

Is it time to cash out, or hold steady and stay the course??

:confused :confused

J295
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by J295 » Tue Jan 12, 2016 1:35 pm

Noise. Misleading headline. I read the article to state there could be, in their opinion, a 10-20% decline. In my world, that is nowhere near "cataclysmic." Regardless, it's not relevant to me.

What does your IPS provide?

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by RustyShackleford » Tue Jan 12, 2016 1:42 pm

Sure, it's noise.

But, this is the second year in a row (at least) where I would have been better off replacing my 40% equity, 40% bonds, 10% real estate, 5% commodity, 5% cash portfolio with 100% TIAA Real Estate (or even 100% TIAA Traditional). (And yes, I believe Bogleheads would approve of all the investment choices in the above-described AA, except, of course, that many would disapprove of even the inclusion of the commodity allotment).

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by quantAndHold » Tue Jan 12, 2016 1:46 pm

"He said the bank's red flags for 2016 -- falling oil, volatility in China, shrinking world trade, rising debt, weak corporate loans and deflation -- had all been seen in just the first week of trading."

Aren't those things already priced into the market?

AndroidAZ
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by AndroidAZ » Tue Jan 12, 2016 1:46 pm

J295 wrote:Noise. Misleading headline. I read the article to state there could be, in their opinion, a 10-20% decline. In my world, that is nowhere near "cataclysmic." Regardless, it's not relevant to me.

What does your IPS provide?

Where do you see 10-20% decline? I see in the article "potential 20% decline in valuation of China currency".

And what do you mean what does "IPS" provide?

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by Steadfast » Tue Jan 12, 2016 1:56 pm

With a 25+ year investing horizon and cash on hand, I would welcome a global equity market cataclysm this year.
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hornet96
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by hornet96 » Tue Jan 12, 2016 1:59 pm

AndroidAZ wrote:And what do you mean what does "IPS" provide?


Your own "Investment Policy Statement." See the wiki: https://www.bogleheads.org/wiki/Investm ... _statement

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by jwillis77373 » Tue Jan 12, 2016 2:00 pm

A very 'short' article and lean on 'specifics'.

Premise is oil and china will drive the whole world into depression... and 'hold on to bonds'.

A Bond to me is a 'short-term' stock.. so if conditions don't improve in short order.. it makes no difference.

As for whether this should influence Bogelheads strategy.. seriously? your asking this question.. seriously?

You don't know Bogleheads.

Instead of back testing last year.. look at 10 years ago.. or 20 years ago.. an instance in time... is an instance in time.. its trying to pick a single day out of all the days in a very huge routlet wheel. You shouldn't trade [all] your investments on a Single Day that's simply ludricous.

AndroidAZ
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by AndroidAZ » Tue Jan 12, 2016 2:05 pm

hornet96 wrote:
AndroidAZ wrote:And what do you mean what does "IPS" provide?


Your own "Investment Policy Statement." See the wiki: https://www.bogleheads.org/wiki/Investm ... _statement

Thanks for the link.

I follow the 3 fund portfolio strategy and do not actively trade, as my horizon for retirement is 5-10 or maybe 15 years away. I am quite young and could retire today if I wished, but I enjoy my work and make good money doing it.

I'm a little bit unnerved by the article, as I have built a nice nest egg and don't want to see that in jeopardy for an extended period of time. I could tolerate year to year volatility, but not if we're diving into a 3 - 5 year recession.

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by dkturner » Tue Jan 12, 2016 2:06 pm

quantAndHold wrote:"He said the bank's red flags for 2016 -- falling oil, volatility in China, shrinking world trade, rising debt, weak corporate loans and deflation -- had all been seen in just the first week of trading."

Aren't those things already priced into the market?


Since all of them were well known throughout much of 2015, and the S&P 500 just completed its worst first week of the year ever, I would hazard a guess that those things weren't already priced in to the market. In short, it was priced in until, suddenly, it wasn't priced in enough. Sort of a stock market version of amplitude modulation.
Last edited by dkturner on Tue Jan 12, 2016 2:11 pm, edited 1 time in total.

AndroidAZ
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by AndroidAZ » Tue Jan 12, 2016 2:07 pm

jwillis77373 wrote:A very 'short' article and lean on 'specifics'.

Premise is oil and china will drive the whole world into depression... and 'hold on to bonds'.

A Bond to me is a 'short-term' stock.. so if conditions don't improve in short order.. it makes no difference.

As for whether this should influence Bogelheads strategy.. seriously? your asking this question.. seriously?

You don't know Bogleheads.

Instead of back testing last year.. look at 10 years ago.. or 20 years ago.. an instance in time... is an instance in time.. its trying to pick a single day out of all the days in a very huge routlet wheel. You shouldn't trade [all] your investments on a Single Day that's simply ludricous.

I fully agree, except the last time RBS made a dire warning and it was posted here was in 2008, right before the 3-4 year recession.

I didn't flinch back then, lost half my nest egg, gained it all back and then some.

Now I'm questioning if I want to stomach another potential 5 years (or who knows... more?) of recession or economic depression... I have a tidy sum I can put into more conservative allocation and sit back and see how the global economy looks in a few years...

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by Epsilon Delta » Tue Jan 12, 2016 2:17 pm

AndroidAZ wrote:I fully agree, except the last time RBS made a dire warning and it was posted here was in 2008, right before the 3-4 year recession.

Of course history also makes it clear that nobody who mattered at RBS believed that dire warning.

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by packet » Tue Jan 12, 2016 2:19 pm

AndroidAZ wrote:...could retire today if I wished...

If you've won the game, why are you still playing?

:beerCheers,
packet
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by Garco » Tue Jan 12, 2016 2:24 pm

Consider the source: RBS has a lot of experience with bankruptcy. Its own. A shady reputation.

http://www.theguardian.com/business/201 ... -of-losses

http://www.theguardian.com/business/201 ... regulators
Last edited by Garco on Wed Jan 13, 2016 12:15 am, edited 2 times in total.

AndroidAZ
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by AndroidAZ » Tue Jan 12, 2016 2:24 pm

packet wrote:
AndroidAZ wrote:...could retire today if I wished...

If you've won the game, why are you still playing?

:beerCheers,
packet

LOL, honestly I'd be bored out of my mind retired. I also work because I really enjoy my work, and I get paid great money doing it, so instead of spending money, I'm making more money so I can have a more enjoyable retirement in the future.

I have too much knowledge / experience/ skills to let it go to waste not doing anything. I love my employers, I have total freedom, and I get to work with great people. Until things change for the worse, I don't mind working. :happy :beer

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by packet » Tue Jan 12, 2016 2:31 pm

I was not commenting on your working... I think it's great that you have a career that you like and want to continue with. Congrats on that!

I was referring to your investments.

If you have enough to retire today, perhaps a review of your risk profile is in order?
If you know how much it would take to retire today, maybe that amount should be in less risky assets... then the rest in equities and you wouldn't fear losing them...

just a thought, or two.

:beerCheers,
packet

(edit)
PS,
Also, no matter what you decide... don't base any decisions on noise like this article!
First round’s on me.

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by visualguy » Tue Jan 12, 2016 2:41 pm

jwillis77373 wrote:Instead of back testing last year.. look at 10 years ago.. or 20 years ago.. an instance in time... is an instance in time.. its trying to pick a single day out of all the days in a very huge routlet wheel. You shouldn't trade [all] your investments on a Single Day that's simply ludricous.


Looking at long periods of time can cause a lot of worry as well... For example, if you look at VGTSX (total international stock index), it's the same now as it was 17 years ago! You just see a lot of volatility without an acceptable return. Similarly, there were very long periods of time in the past when the US stock market went nowhere.

I'm definitely not saying that market timing works better. Just saying that the Boglehead strategy doesn't necessarily work either. It's a bet, and far from a sure thing. I personally think that it's ok for up to a half of investable assets, and would invest the rest in real estate such as owning rental properties.

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by randomguy » Tue Jan 12, 2016 3:01 pm

quantAndHold wrote:"He said the bank's red flags for 2016 -- falling oil, volatility in China, shrinking world trade, rising debt, weak corporate loans and deflation -- had all been seen in just the first week of trading."

Aren't those things already priced into the market?



No. A chance of them happening is priced into the market. When they go from a probability to a certainty, the market will adjust to reflect that new info.

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by hornet96 » Tue Jan 12, 2016 3:12 pm

AndroidAZ wrote:I'm a little bit unnerved by the article, as I have built a nice nest egg and don't want to see that in jeopardy for an extended period of time.


This statement suggests to me that you are approaching the point of discovering what your true risk tolerance is (it sounds like it isn't as high as you previously thought it was). A review of your current risk tolerance and asset allocation are probably in order.

Further, this statement is internally inconsistent:

AndroidAZ wrote:I could tolerate year to year volatility, but not if we're diving into a 3 - 5 year recession.


Either you can truly tolerate the volatility or you can't - your tolerance shouldn't depend on your gut feeling of whether a recession is imminent or not.

  • If you truly have the ability and willingness to tolerate the volatility, any downturn should provide you with ample buying opportunities.
  • If you don't have the ability or willingness to tolerate the volatility, then your asset allocation is too aggressive.
  • If you have the ability to tolerate the volatility, but your willingness changes based on the "noise of the day" like from these kinds of articles, then you are susceptible to falling into many of the behavioral bias traps that will typically only harm your long-term investment results. As Jack Bogle is often quoted in saying: "Don't just do something, stand there!"

I'm sure others will chime in with a more in depth analysis, but in my mind it all boils down to the paragraph above.

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by Jack FFR1846 » Tue Jan 12, 2016 3:18 pm

You've won the game. Unless you're following the band "Cake" and their song "He's going the distance", I don't understand why you're out there still driving and striving as fast as you can.

Sell everything. Buy TIPS. Ignore the entire market. The end.
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by wvmtnbkr » Tue Jan 12, 2016 3:39 pm

AndroidAZ wrote:http://money.cnn.com/2016/01/12/investing/markets-sell-everything-cataclysmic-year-rbs/

What do Bogleheads make of this dire warning?

Is it time to cash out, or hold steady and stay the course??

:confused :confused


When I saw that this morning, my first thought was RBS was trying to drum up business from uninformed/fearful folks. As previously mentioned, their reputation is far from stellar...

Stephen

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by gilgamesh » Tue Jan 12, 2016 3:47 pm

AndroidAZ wrote:
hornet96 wrote:
AndroidAZ wrote:And what do you mean what does "IPS" provide?


Your own "Investment Policy Statement." See the wiki: https://www.bogleheads.org/wiki/Investm ... _statement

Thanks for the link.

I follow the 3 fund portfolio strategy and do not actively trade, as my horizon for retirement is 5-10 or maybe 15 years away. I am quite young and could retire today if I wished, but I enjoy my work and make good money doing it.

I'm a little bit unnerved by the article, as I have built a nice nest egg and don't want to see that in jeopardy for an extended period of time. I could tolerate year to year volatility, but not if we're diving into a 3 - 5 year recession.


I know interest rates are horrible, but if I were you I'll use some of the nest egg and lay some floors for retirement. Utility of wealth....you are there, no need to put it all at risk.

For the rest of us, yeah! it's just noise to tune out.

Disclaimer: I am an utter newbie

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by NYCwriter » Tue Jan 12, 2016 3:57 pm

JPM is essentially saying the same. The downside is that it just adds fuel to the sell-off fire.

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An Illustration of Inability To Predict Future

Post by White Coat Investor » Tue Jan 12, 2016 4:48 pm

[merged to existing thread]

I saw a particularly extreme article today:

http://www.ksl.com/?sid=38103067&nid=15 ... d=toppick2


Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

"Sell everything."

That harrowing advice is from The Royal Bank of Scotland, which has warned of a "cataclysmic year" ahead for markets and advised clients to head for the exit. Do not wait. Do not pass go.

"Sell everything except high quality bonds," warned Andrew Roberts in a note this week.

He said the bank's red flags for 2016 — falling oil, volatility in China, shrinking world trade, rising debt, weak corporate loans and deflation — had all been seen in just the first week of trading.

"We think investors should be afraid," he said.


What is illustrative here, however, is that Mr. Roberts made this announcement this week AFTER global stock markets had fallen, and not two weeks ago BEFORE they fell. What has changed? Oil was falling two weeks ago. China was volatile two weeks ago. Global trade was shrinking two weeks ago. Debt was rising two weeks ago. Corporate loans were weak two weeks ago. Deflation was occurring two weeks ago. The only thing that has changed in the last two weeks is stock markets have gone down.

So apparently, Mr. Roberts thinks you should sell because stock markets have gone down. That seems much more like a reason to buy than to sell. I'm confident his crystal ball is just as cloudy as the rest of ours.

I'm still bullish on the performance of stocks over my investment horizon (50-60 years) so I will continue to buy.
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by ERMD » Tue Jan 12, 2016 5:08 pm

i agree with RBS and JPM, and think that everyone should dump their equities immediately. i'll give you fifty cents on the dollar!

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by Toons » Tue Jan 12, 2016 5:11 pm

I thought you were supposed to buy shares in declining markets instead of selling,,like
2000-2002
2007-2009
Cataclysmic Buying Opportunity,,,
:happy
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by swl » Tue Jan 12, 2016 5:32 pm

visualguy wrote:
jwillis77373 wrote:Instead of back testing last year.. look at 10 years ago.. or 20 years ago.. an instance in time... is an instance in time.. its trying to pick a single day out of all the days in a very huge routlet wheel. You shouldn't trade [all] your investments on a Single Day that's simply ludricous.


Looking at long periods of time can cause a lot of worry as well... For example, if you look at VGTSX (total international stock index), it's the same now as it was 17 years ago! You just see a lot of volatility without an acceptable return. Similarly, there were very long periods of time in the past when the US stock market went nowhere.

I'm definitely not saying that market timing works better. Just saying that the Boglehead strategy doesn't necessarily work either. It's a bet, and far from a sure thing. I personally think that it's ok for up to a half of investable assets, and would invest the rest in real estate such as owning rental properties.


VGTSX had an adjusted close of 7.18 on Jan 13, 1999. That's an 88% increase. Not great, but not exactly the same either.

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by rbaldini » Tue Jan 12, 2016 5:37 pm

Toons wrote:I thought you were supposed to buy shares in declining markets instead of selling,,like
2000-2002
2007-2009
Cataclysmic Buying Opportunity,,,
:happy


I tried to start a discussion about this before. I never got a very clear answer. If you believe the market is a (independent) random walk, then a recent drop does not mean that you should expect greater returns from the market in the future. If it's a self-correcting walk, then possibly so. I don't see any evidence of negative autocorrelation in the quarterly or annual returns in VTMSX in the last few decades, but maybe there is on shorter timescales.

More to the point of this thread: Someone needs to do us the service to see if these kinds of forecasts have any predictive value. Whenever some professionals of this type make a prediction, record it. Then see if it actually comes true. Surely someone has tried to do this, if only retroactively?
Last edited by rbaldini on Tue Jan 12, 2016 5:50 pm, edited 1 time in total.

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Re: An Illustration of Inability To Predict Future

Post by cfs » Tue Jan 12, 2016 5:39 pm

Fun reading.

Thanks to our shipmate ER for the link. Predicting the Market Future is becoming harder and harder, and for predictions aficionados is becoming harder and harder to hide their [failed] previous predictions thanks to Mister Google. Regardless of the false prophets I continue to invest slowly and for the long run.

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by surfstar » Tue Jan 12, 2016 5:40 pm

I'm selling it all and buying gold. Or was that powerball tickets? :oops:

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by Geologist » Tue Jan 12, 2016 6:12 pm

surfstar wrote:I'm selling it all and buying gold. Or was that powerball tickets? :oops:


Since the warning is via the Royal Bank of Scotland, shouldn't that be haggis? :)

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by slick_dealer_05 » Tue Jan 12, 2016 6:22 pm

Reminds me of Meredith Whitney (whose predictions were very infamous around 2008-2010 and a favorite of the news media). In 2010, she predicted all of the municipal bonds are about to crash, we are still waiting for it...

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by tyler_cracker » Tue Jan 12, 2016 6:29 pm

surfstar wrote:I'm selling it all and buying gold. Or was that powerball tickets? :oops:


why not both? then your portfolio is diversified!

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by Fallible » Tue Jan 12, 2016 6:34 pm

AndroidAZ wrote:http://money.cnn.com/2016/01/12/investing/markets-sell-everything-cataclysmic-year-rbs/

What do Bogleheads make of this dire warning?

Is it time to cash out, or hold steady and stay the course??

:confused :confused


If you are seriously considering cashing out because of this and other similar recent predictions, then review your asset allocation (and IPS if you have one) to see if you have not taken on too much risk for your tolerance level. When creating an AA, a question to always ask is how much you afford to lose in market downturns, and whether you'll lose sleep to anxiety over predictions like these or panic and sell low. A legitimate reason to lower equity allocation is misjudging risk.
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by Adam78 » Tue Jan 12, 2016 6:48 pm

If your horizon is 5-15 years, and the risk is causing you to loose sleep, probably best to re-visit your asset allocation and make sure that it still aligns with your (newly revealed) risk tolerance. My strategy is to simply avoid financial websites (with the exception of this one) as much as I can, and for gosh sakes, don't fall prey to any click-bait articles making predictions about the near term.

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by Indyxc » Tue Jan 12, 2016 6:54 pm

For my 401k, steady as she goes. I won't time it properly, and have 30-40 years to go before I retire.

For my personal savings, I converted to bonds last summer. That article is funny. My goal is preserve capital at the cost of return. A cataclysmic market with a 10-20% corrections? I think that would actually be healthy. It can't go up every year forever. It's click bait, but I think the general consensus is correct.

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by DonCamillo » Tue Jan 12, 2016 6:56 pm

It is obvious that the sky is falling. I am now wearing my wife's stew pot on my head for protection! :D

If it is a bad year for the stock market, I might work through 2017 so that I can buy stocks cheap for my 401a, 403b, 457b, and make a Roth and spousal Roth contribution. Otherwise, I will probably retire on January 1, 2017.

A big dip is also a chance to convert from an IRA to a Roth.
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by Clearly_Irrational » Tue Jan 12, 2016 6:59 pm

So far my crash indicator doesn't agree with them.

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by snowshoes » Tue Jan 12, 2016 7:05 pm

Golds been a international currency since before the rise of Rome, a PP type allocation might be prudent for those not sleeping well. / :? JMO
Last edited by snowshoes on Tue Jan 12, 2016 7:09 pm, edited 1 time in total.

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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by David Jay » Tue Jan 12, 2016 7:07 pm

quantAndHold wrote:"He said the bank's red flags for 2016 -- falling oil, volatility in China, shrinking world trade, rising debt, weak corporate loans and deflation -- had all been seen in just the first week of trading."

Aren't those things already priced into the market?


Reading Bernstein (Four Pillars) on the plane yesterday. A near quote: "If someone tells you that they know what will happen in the future take two steps back, turn around and RUN."

[edit] agreeing with Quant, in case that wasn't clear...
Last edited by David Jay on Tue Jan 12, 2016 7:25 pm, edited 1 time in total.
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by itstoomuch » Tue Jan 12, 2016 7:22 pm

Thinking about selling most everything in trading accounts. About 15% of assets. Much to lose, little to gain. :greedy
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by David Jay » Tue Jan 12, 2016 7:26 pm

itstoomuch wrote:Thinking about selling most everything in trading accounts. About 15% of assets. Much to lose, little to gain. :greedy


What's a trading account? :wink:
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packet
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by packet » Tue Jan 12, 2016 7:46 pm

rbaldini wrote:...Someone needs to do us the service to see if these kinds of forecasts have any predictive value. Whenever some professionals of this type make a prediction, record it. Then see if it actually comes true. Surely someone has tried to do this, if only retroactively?

Here you go!

:beerCheers,
packet
First round’s on me.

TorturedRegret
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Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by TorturedRegret » Tue Jan 12, 2016 7:58 pm

LOL, do these people actually think anyone takes them seriously? How silly.
http://money.cnn.com/2016/01/12/investi ... -year-rbs/

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Maynard F. Speer
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by Maynard F. Speer » Tue Jan 12, 2016 8:02 pm

I think British investors have a lot more to worry about this year ..

At some point (hopefully in 2016) we're going to have a referendum on leaving the EU .. Up until now, the odds of leaving seemed quite remote - but due to various political events going on in Europe, things are swinging dangerously the other way, and an exit has become a lot more likely (and this is almost certainly not priced in)

If we left the EU, it would take years to renegotiate trade terms with Europe; Scotland would likely exit the UK in order to stay in Europe; Europe would likely make trade very difficult for the UK, in order to dissuade others from leaving; and our relationship with the US and Asia may even be damaged ... This would not only lead huge capital flight from the UK, but it may make the UK economy rather less investable ... And having considered my options, I don't think this is a case for buying-and-holding ... Great upside if we stay in; perpetual downside if we leave ... Look at Brazil or Russia's economies if you want examples of bad markets for buy-and-hold investors ... So for the next year or so, I'm probably going to dumb UK equities if we drop below the trendline (based on my active funds)
"Economics is a method rather than a doctrine, an apparatus of the mind, a technique of thinking, which helps its possessor to draw correct conclusions." - John Maynard Keynes

lack_ey
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by lack_ey » Tue Jan 12, 2016 8:28 pm

packet wrote:
rbaldini wrote:...Someone needs to do us the service to see if these kinds of forecasts have any predictive value. Whenever some professionals of this type make a prediction, record it. Then see if it actually comes true. Surely someone has tried to do this, if only retroactively?

Here you go!

:beerCheers,
packet

For the stock market as a whole, the CXO Advisory Group's data is often cited:
http://www.cxoadvisory.com/gurus/

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loves2read
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by loves2read » Tue Jan 12, 2016 8:38 pm

Last paragraph of the article the link goes to--re the RBS's Cassandra-like warning (if proven true)---

.RBS believes China suffered a massive outflow of capital in December — perhaps as much as $170 billion — with much of that money going straight into the dollar. A chart showing Chinese outflows in 2015 is "surely now the most important chart in the world," concluded Roberts.
Surely the most important chart in the world----and here be monsters...

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rustymutt
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by rustymutt » Tue Jan 12, 2016 8:46 pm

Someone wants you to panic and sell out. That's the whole thing about these kinds of doom day articles. The author is shorting the markets, thinks this will help it move the right (money making) way. It's noise, investment porn.
Knowledge is knowing that the Tomato is a fruit. Wisdom is knowing better than to put the tomato in a fruit salad.

sambb
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by sambb » Tue Jan 12, 2016 8:55 pm

Teh skepticism is interesting, and no, one cant predict or time the market. However, we have had a good bull run for several years, a bear market is inevitable at some point, and there is nothign wrong with taking some money off the table and changing allocations since the run up. You may be older, you may have different goals. Nothing wrong at all. Maybe you CAN be more conservative in allocation if your goals and projections are reasonable. Reassessing is good, and this is a good time to do it if you are uncomfortable.

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arcticpineapplecorp.
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Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

Post by arcticpineapplecorp. » Tue Jan 12, 2016 9:03 pm

swl wrote:
visualguy wrote:
jwillis77373 wrote:Instead of back testing last year.. look at 10 years ago.. or 20 years ago.. an instance in time... is an instance in time.. its trying to pick a single day out of all the days in a very huge routlet wheel. You shouldn't trade [all] your investments on a Single Day that's simply ludricous.


Looking at long periods of time can cause a lot of worry as well... For example, if you look at VGTSX (total international stock index), it's the same now as it was 17 years ago! You just see a lot of volatility without an acceptable return. Similarly, there were very long periods of time in the past when the US stock market went nowhere.

I'm definitely not saying that market timing works better. Just saying that the Boglehead strategy doesn't necessarily work either. It's a bet, and far from a sure thing. I personally think that it's ok for up to a half of investable assets, and would invest the rest in real estate such as owning rental properties.


VGTSX had an adjusted close of 7.18 on Jan 13, 1999. That's an 88% increase. Not great, but not exactly the same either.


Yes...for those of us that like visuals, as well as a source where we get our information from, here's morningstar's pretty picture on how VGTSX did over those 17 years:

Image

Visualguy, where did you get your data that VGTSX is "the same now as it was 17 years ago!"?? A $10,000 investment in 1/12/99 is worth $17,538.77. Are you talking after inflation returns?
Last edited by arcticpineapplecorp. on Tue Jan 12, 2016 9:06 pm, edited 1 time in total.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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