Was today's rally temporary?

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Kelli28
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Was today's rally temporary?

Post by Kelli28 » Sat Feb 13, 2016 1:08 am

think S&P will hit 1800 by March?


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mephistophles
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Re: Was todays rally temporary?

Post by mephistophles » Sat Feb 13, 2016 1:20 am

Today's rally was today's rally. Tomorrow's performance will be tomorrow's performance. It will be different than today's performance.

kiddoc
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Re: Was todays rally temporary?

Post by kiddoc » Sat Feb 13, 2016 1:32 am

Kelli28 wrote:think S&P will hit 1800 by March?

[OT comments removed by admin LadyGeek] please take a look at the Bogleheads contest threads and posts by Taylor Larimore.
"The four most dangerous words in investing are: 'this time it's different.'" - Sir John Templeton

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patriciamgr2
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Re: Was todays rally temporary?

Post by patriciamgr2 » Sat Feb 13, 2016 6:02 am

Kelli28: this forum doesn't have many people who believe in timing the markets. The Wiki has information about how to develop an investing policy for yourself. Once you've completed that analysis, many here would encourage you to invest your cash in a lump sum. I'm more inclined to dollar cost average money into the market in, for example, three installments. Other than rebalancing (also explained in the Wiki), we'd suggest not focusing too much on market movements until about 10 years before you retire.

I have noticed that many posts recently don't seem to fit the Boglehead framework. I'm not sure where these posters learned of this site, but--trust me--Bogleheads.org is not the place to get advice on market movements over the next three weeks. You'd probably get agreement that the markets will be higher by the time you retire at age 70, but that's about as much forecasting as this group generally does. :happy

I hope you'll take the time to read the Wiki--it's an incredible source of information that IMO is really valuable for long-term investors.

Good Luck & Best Wishes

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Toons
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Re: Was todays rally temporary?

Post by Toons » Sat Feb 13, 2016 6:41 am

No. :happy
But whatever its all good
The American Economy keeps chugging along. :happy
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DaftInvestor
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Re: Was todays rally temporary?

Post by DaftInvestor » Sat Feb 13, 2016 7:03 am

Kelli28 wrote:think S&P will hit 1800 by March?


I'm hoping it will be far higher than 1800 by March 2046. As far as next month who knows and who cares. If you read the wiki as recommended after your other posts you'd realize that folks on this forum believe investing in equities is for the long haul not 30 days so no need to speculate what will happen next month.

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Re: Was todays rally temporary?

Post by nisiprius » Sat Feb 13, 2016 7:22 am

Kelli28, the annoyance you detect is because at some point we hope that forum visitors will learn what we mean by "Investing advice inspired by Jack Bogle." If you're not sure what kind of investing we do here, read the article on the Bogleheads investment philosophy. It wasn't written by Bogle, we're not doctrinaire about it and many of us depart from it, but it's a good summary of the central ideas.

Somehow, one needs to develop a plan and an investing style that does not depend on predicting what the market will do Monday. And since we can't predict what will happen Monday, and definitely are not going to act on what will happen Monday, we try not to care what will happen Monday.

The financial news media make money by making you want to read the news. They have a vested interest in making you think that the daily movements of the stock market are hugely important and that you need to read their stuff daily. John C. Bogle, quoting Shakespeare, frequently says that the daily movements of the market are "a tale told by an idiot, full of sound and fury, signifying nothing."

Reporter Jason Zweig attended an early Bogleheads meeting and reported on it in Here Come the Bogleheads! The article ends:
On Friday afternoon, when the group first gathers outside the hotel, a Boglehead wants to capture a group photo. “Cheese,” she calls out from behind her lens, but not everyone smiles. “The market was down today!” she chirps, and grins spread across a few more faces. “The market was down today, and we don’t care!” she yells, and now all the Diehards are smiling. Finally the mood is just right. She snaps her picture.
Last edited by nisiprius on Sat Feb 13, 2016 7:38 am, edited 2 times in total.
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dixonge
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Re: Was todays rally temporary?

Post by dixonge » Sat Feb 13, 2016 7:27 am

Kelli28 wrote:think S&P will hit 1800 by March?


Kelli,

This forum is based on the philosophies of its namesake, Jack Bogle. You would do well to read and/or watch some introductory material. In there, you will see that trying to determine what the market will do in the near future is a fool's errand. It is the opposite of what Bogle would do.

https://www.bogleheads.org/wiki/Video:Bogleheads%C2%AE_investment_philosophy

ks289
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Re: Was todays rally temporary?

Post by ks289 » Sat Feb 13, 2016 7:40 am

I realize that you are trying to use analysis and reasoning to make predictions to optimize your investment returns, but it is the belief of most on this forum that this approach (most would call this market timing) is unreliable and inferior to staying the course with an asset allocation. Refer to the wiki for all the details. Anybody's predictions about the short term future of the markets is likely to be incorrect (or correct by chance) similar to predicting the teams and final score for next year's Super Bowl.
The few experts who can make reliable predictions about the future are unlikely to share them on anonymous free Internet forums.

longinvest
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Re: Was todays rally temporary?

Post by longinvest » Sat Feb 13, 2016 7:46 am

Kelli28,

Members of this forum do not believe in predicting future returns. Instead, they adopt the following principle:

Never try to time the market (Watch the video)

Bogleheads® investment philosophy wrote:[...] Bogleheads create a good plan and then stick with it, which consistently produces good outcomes over the long term.


Actually, if you have not already done so, you should learn about our investment philosophy:

Bogleheads® investment philosophy wrote:1 Develop a workable plan
2 Invest early and often
3 Never bear too much or too little risk
4 Diversify
5 Never try to time the market
6 Use index funds when possible
7 Keep costs low
8 Minimize taxes
9 Invest with simplicity
10 Stay the course


If you do not like reading, you can learn about them by watching the video series.

The stock market goes up and goes down. If this makes you uncomfortable, just add more bonds to your portfolio. Do not ever try to time the market. Instead, select an asset allocation of stocks and bonds with at least 25%, but no more than 75% in bonds, and then rebalance your portfolio once a year. Many of us keep things simple using the Three-Fund Portfolio.

Anytime you get an urge to watch the market, take the time to look, first, at your calendar and ask yourself:
  • Is it my birthday?
If the answer is "no", forget about the market and go do something else with your life.

If the answer is "yes", rebalance your portfolio, and go back doing something else with your life.
Last edited by longinvest on Sat Feb 13, 2016 8:20 am, edited 2 times in total.
Bogleheads investment philosophy | Lifelong Portfolio: 25% each of (domestic/international)stocks/(nominal/inflation-indexed)bonds | VCN/VXC/VAB/ZRR

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nisiprius
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Re: Was todays rally temporary?

Post by nisiprius » Sat Feb 13, 2016 7:46 am

Above, I wrote:
Somehow, one needs to develop a plan and an investing style that does not depend on predicting what the market will do Monday. And since we can't predict what will happen Monday, and definitely are not going to act on what will happen Monday, we try not to care what will happen Monday.
And I suddenly had a nagging doubt and I checked. I actually do know what the stock market will do Monday! I got this secret tip from Vanguard! Psst!
Vanguard wrote:Holiday closing
The financial markets will be closed on Monday, February 15, 2016, for Presidents' Day.

Image
I was thinking about using the facepalm emoticon :oops: but I don't believe I will, because my mistake proves that I really am not paying attention to the daily movements of the market.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

joebh
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Re: Was todays rally temporary?

Post by joebh » Sat Feb 13, 2016 7:50 am

"Was todays rally temporary?"

All rallies are temporary.

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jfn111
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Re: Was todays rally temporary?

Post by jfn111 » Sat Feb 13, 2016 8:04 am


Hi Kelli,
Don't let the grumpy members of the forum get to you. Most of us have the majority of our funds in simple index funds but a lot of members also have some side money invested differently. I have been doing some buying as the market declined with the expectation that it will turn around eventually. None of us knows when that turn around will happen. :sharebeer

Impromptu
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Re: Was todays rally temporary?

Post by Impromptu » Sat Feb 13, 2016 8:09 am

If you have cash to invest it feels nice to invest on the nadir. But who knew that investing on March 6-9 2009 would have been the perfect time to do so. No one knew it. Fortunately, investing during any of those Bear Market/Recession low months would have led to substantial growth subsequently, even if you didn't pick the perfect day.

The same is possibly true today. If you are worried that investing all of your money now might lead to losses and regret, you can invest some now and some in a few months from now according to your predetermined asset allocation. Picking the perfect days is impossible to know. Accept that and you may be happier, even when seeing a short term decline in your portfolio.

My prediction: The stock market will continue to decline more days than it goes up until it goes up more days than it declines. I think it will happen later this year. I will continue to invest from my monthly paycheck according to my asset allocation of 40/40/20 (US/Intl/Bonds). As I have a long time horizon, I wouldn't mind a year's worth of Bear market, even though it feels awful to see losses and imagine what else I could have done with that money. I try to defer to the experts that buying in corrections and bear markets is where a good portion of my future wealth will come from.
I'll gladly pay you Tuesday for a hamburger today.

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Re: Was today's rally temporary?

Post by LadyGeek » Sat Feb 13, 2016 9:24 am

I removed some off-topic comments. As a reminder, see: General Etiquette
We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones. Discussions are about issues, not people. If you disagree with an idea, go ahead and marshal all your forces against it. But do not confuse ideas with the person posting them.

At all times we must conduct ourselves in a respectful manner to other posters. Attacks on individuals, insults, name calling, trolling, baiting or other attempts to sow dissension are not acceptable.

I also fixed a typo in the thread title.

Administrative note: General investing discussions are permitted in this forum.
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Re: Was today's rally temporary?

Post by climber2020 » Sat Feb 13, 2016 9:30 am

Kelli28 wrote:think S&P will hit 1800 by March?


No one knows, but I certainly hope not. For people in our age group, we should be hoping for a huge stock market crash while we're young.

skepticalobserver
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Re: Was today's rally temporary?

Post by skepticalobserver » Sat Feb 13, 2016 9:35 am

Look at the overnight Euro and Asian markets late Sunday, early Monday. Chinese stocks start trading after a week off for New Years. Look at the treasury market--how close to zero yield is the ten year note (ha, ha). All this might give you on idea for Tuesday's opening.

Ask: what's the trend? Buying on dips or selling into strength? I have an opinion, but I'm usually wrong but always certain.

supersharpie
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Re: Was today's rally temporary?

Post by supersharpie » Sat Feb 13, 2016 9:35 am

Kelli28 wrote:think S&P will hit 1800 by March?


It's already at 1865.

tibbitts
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Re: Was today's rally temporary?

Post by tibbitts » Sat Feb 13, 2016 10:24 am

climber2020 wrote:
Kelli28 wrote:think S&P will hit 1800 by March?


No one knows, but I certainly hope not. For people in our age group, we should be hoping for a huge stock market crash while we're young.

How many equities will you be able to buy with your unemployment check? What will you do when the unemployment benefits run out?

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Re: Was today's rally temporary?

Post by climber2020 » Sat Feb 13, 2016 11:13 am

tibbitts wrote:
climber2020 wrote:
Kelli28 wrote:think S&P will hit 1800 by March?


No one knows, but I certainly hope not. For people in our age group, we should be hoping for a huge stock market crash while we're young.

How many equities will you be able to buy with your unemployment check? What will you do when the unemployment benefits run out?


I have a recession-proof job (I don't know a single person in my profession who is unemployed not-by-choice), so that likely won't happen. And if it does, I can live for 2 years off of the cash in my savings account and sell some of my bonds to buy more stocks. Thanks to advice from other bogleheads, I've planned for a situation like that if it does come up.

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Re: Was today's rally temporary?

Post by bertilak » Sat Feb 13, 2016 3:12 pm

climber2020 wrote:
tibbitts wrote:
climber2020 wrote:
Kelli28 wrote:think S&P will hit 1800 by March?


No one knows, but I certainly hope not. For people in our age group, we should be hoping for a huge stock market crash while we're young.

How many equities will you be able to buy with your unemployment check? What will you do when the unemployment benefits run out?


I have a recession-proof job (I don't know a single person in my profession who is unemployed not-by-choice), so that likely won't happen. And if it does, I can live for 2 years off of the cash in my savings account and sell some of my bonds to buy more stocks. Thanks to advice from other bogleheads, I've planned for a situation like that if it does come up.

Did you bring enough for everybody?
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Re: Was today's rally temporary?

Post by TomCat96 » Sat Feb 13, 2016 4:15 pm

At first I was wondering why everyone's response was so snarky, until I saw this is the 5th or 6th time you asked this question.

Nonetheless, I will respond with my opinion. Yes I think today's rally was temporary. The tenor of the market has not changed, and the global sentiment is bad.

That being said, at 34, and have an extremely large risk appetite relative to most people here, even I think that market timing is a bad idea.
I time the market occasionally and I do so going forward with my own spreadsheets and models. As an engineer, as a thinker, I pride myself on being able to perform deeper more comprehensive analysis than others. It's a life intellectual journey for me. So when I time, it's a bit of an irrational thing--I want to see my comprehension of things vindicated.

But overall if you engage in market timing, you have to be more than 50% right. If I gave you a fair coin, and said, if the coin lands heads you win 10 dollars, and if its tail you lose 10 dollars, then over an infinite number of trials your expected money in hand should be 0.

But if I gave you that same coin and said to you, if it lands heads you win 9 dollars, and if its tails you lose 10 dollars, you would expect to be in the hole over an infinite number of trials.

I think that's what market timing is like.

If i had 100 dollars, and it went up 10 percent only to lose 10 percent, then I now have $99. 100 * 1.1* .9
Similarly, if those 100 dollars went down 10 percent only to go up 10 percent, the same result occurs.

In fact if you play the same game again with the 99 dollars, this is the result you will have.
99 * 1.1 * .9 == 99 * .9 * 1.1 = $98.01 Playing the same game again and we have $97.0299

Of course, this doesn't account for transaction costs either. But the point is clear, the more you play the more you lose.

If you choose to time the market, you must do better than random chance. Random chance = an inevitable loss to you.


So then the question is do you know something or understand something the market does not?

I dont fully agree with boglehead philosophy, because I believe there are times when the evidence is so clear that the market will drop, one should take action in light of that evidence. 9/11 would be a good example. A nuclear weapons drop would be another. These are extremely complex scenarios that I believe even the market cannot fully price in as human comprehension of the implications is inherently limited.

Nevertheless, I don't kid myself. The times when I think I have a leg up on the entire market are going to be few and far between if ever. On average about 2 times a year, the stars align and I'm willing to take on the risk of market timing.


As per listening to pundits, I don't want to insult anyone, but I find it to be utter trash. It's complete white noise, and you are often worse off for having read it. It disrupts the internal harmony of my deeper thoughts. I can assume it does the same for others. I don't think you will benefit from reading a variety of differing opinions, and that includes cnn money, seeking alpha, zero hedge, and god knows every "heads and shoulders" pattern call from technical analysts. This may be "youthful" pride here, but if your analysis (your information on which you trade so to speak) is on the level that the pundits can contribute substantively to your information, you will not beat the market.

Kelli28
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Re: Was today's rally temporary?

Post by Kelli28 » Sun Feb 14, 2016 1:46 am

Thanks well again im not trying to time the market but buy a little at each dip. i dont see how that is a recipe for loss especially if your $ is in good investments. im sure some day the bull market will resume.



TomCat96 wrote:At first I was wondering why everyone's response was so snarky, until I saw this is the 5th or 6th time you asked this question.

Nonetheless, I will respond with my opinion. Yes I think today's rally was temporary. The tenor of the market has not changed, and the global sentiment is bad.

That being said, at 34, and have an extremely large risk appetite relative to most people here, even I think that market timing is a bad idea.
I time the market occasionally and I do so going forward with my own spreadsheets and models. As an engineer, as a thinker, I pride myself on being able to perform deeper more comprehensive analysis than others. It's a life intellectual journey for me. So when I time, it's a bit of an irrational thing--I want to see my comprehension of things vindicated.

But overall if you engage in market timing, you have to be more than 50% right. If I gave you a fair coin, and said, if the coin lands heads you win 10 dollars, and if its tail you lose 10 dollars, then over an infinite number of trials your expected money in hand should be 0.

But if I gave you that same coin and said to you, if it lands heads you win 9 dollars, and if its tails you lose 10 dollars, you would expect to be in the hole over an infinite number of trials.

I think that's what market timing is like.

If i had 100 dollars, and it went up 10 percent only to lose 10 percent, then I now have $99. 100 * 1.1* .9
Similarly, if those 100 dollars went down 10 percent only to go up 10 percent, the same result occurs.

In fact if you play the same game again with the 99 dollars, this is the result you will have.
99 * 1.1 * .9 == 99 * .9 * 1.1 = $98.01 Playing the same game again and we have $97.0299

Of course, this doesn't account for transaction costs either. But the point is clear, the more you play the more you lose.

If you choose to time the market, you must do better than random chance. Random chance = an inevitable loss to you.


So then the question is do you know something or understand something the market does not?

I dont fully agree with boglehead philosophy, because I believe there are times when the evidence is so clear that the market will drop, one should take action in light of that evidence. 9/11 would be a good example. A nuclear weapons drop would be another. These are extremely complex scenarios that I believe even the market cannot fully price in as human comprehension of the implications is inherently limited.

Nevertheless, I don't kid myself. The times when I think I have a leg up on the entire market are going to be few and far between if ever. On average about 2 times a year, the stars align and I'm willing to take on the risk of market timing.


As per listening to pundits, I don't want to insult anyone, but I find it to be utter trash. It's complete white noise, and you are often worse off for having read it. It disrupts the internal harmony of my deeper thoughts. I can assume it does the same for others. I don't think you will benefit from reading a variety of differing opinions, and that includes cnn money, seeking alpha, zero hedge, and god knows every "heads and shoulders" pattern call from technical analysts. This may be "youthful" pride here, but if your analysis (your information on which you trade so to speak) is on the level that the pundits can contribute substantively to your information, you will not beat the market.

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Re: Was today's rally temporary?

Post by SeeMoe » Sun Feb 14, 2016 12:29 pm

Several CNBC guest technical analysts ,Friday,suggest choppy markets for some months to come. Say it is a worldwide shake-out as China slows down and regroups after years of dramatic expansion. Personally I take it a day at a time, staying the (folio) course!
SeeMoe.. :confused
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Re: Was today's rally temporary?

Post by tibbitts » Sun Feb 14, 2016 12:57 pm

Kelli28 wrote:Thanks well again im not trying to time the market but buy a little at each dip. i dont see how that is a recipe for loss especially if your $ is in good investments. im sure some day the bull market will resume.




I'm not sure if the bull will return, even in your lifetime, but more importantly, you have to wonder about "buy on the dip." Many people who seem anxious to invest now, were cautious about the markets being too high the last time they were at exactly these levels. Somehow because the market has gone higher since, they feel it's safer to invest now than it was at identical levels back then, even though there haven't been sufficient changes in earnings or other factors to substantiate a higher valuation now. So, for example, S&P1800 seemed to some people to justify selling when it was an all time high, but 1800 then becomes a desirable entry point when it occurs on the way down from 1900, even if earnings aren't that much different between those periods.

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Re: Was today's rally temporary?

Post by tyler_cracker » Tue Feb 16, 2016 1:23 pm

bump for stunning conclusion to this cliffhanger from friday.

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Re: Was todays rally temporary?

Post by JupiterJones » Tue Feb 16, 2016 2:10 pm

joebh wrote:"Was todays rally temporary?"

All rallies are temporary.


For that matter, everything is temporary.
Stay on target...

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Re: Was today's rally temporary?

Post by randomguy » Tue Feb 16, 2016 3:40 pm

Kelli28 wrote:think S&P will hit 1800 by March?


Maybe. Or maybe it will hit 2k. It just doesn't matter in the long run. The question is will it be at 4k,8k or 12k in 20 years.

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Re: Was today's rally temporary?

Post by joebh » Tue Feb 16, 2016 3:47 pm

tyler_cracker wrote:bump for stunning conclusion to this cliffhanger from friday.


There will be no conclusion.

Every day when there is a rally someone will wonder "Was today's rally temporary?" Others will assume that "Every day will be like today."

And others will realize that nothing is forever, everything is temporary, and it only makes sense to look at the long term.

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