How are folks handling the unprecedented rise in the market ?

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ThrustVectoring
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Re: How are folks handling the unprecedented rise in the market ?

Postby ThrustVectoring » Sat Jul 15, 2017 11:12 pm

inbox788 wrote:
ThrustVectoring wrote:I am following my investment plan. Where do you think you are, anyhow?

But seriously, I'm young and have few assets relative to my salary (thanks, student loans), so I'm staying 1.5 levered long VTI until my portfolio borrows $10k, then buying more VTI without re-levering until my porfolio is 1.2x levered, and sticking to that AA for the next five years.

How are you achieving this leveraging? Margin account? What is your cost to leverage?

VTI is up nearly 10% YTD, so does this mean you're up around 15%? And doesn't that mean your leverage increases?


Margin account. Cost to borrow is pretty bad at the moment, but less than my student loans so it's fine for the moment. Once I get a bit more in savings I'm switching over to Interactive Brokers since they have much better margin rates (though they do have a monthly minimum fee, which is annoying but shouldn't matter too much).

And when VTI goes up, it means my leverage goes down, since the $10 of VTI my margin loan bought is now worth $11, which means a lower leverage ratio (unless I buy more to rebalance). And yeah, a 1.5x levered VTI portfolio would be up 15% (less borrowing costs).

MoonOrb
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Re: How are folks handling the unprecedented rise in the market ?

Postby MoonOrb » Sun Jul 16, 2017 1:33 am

I'm handling by just expecting that the market is supposed to sometimes be down and sometimes be up. I'm not worrying about trying to predict when it is that it will do either one of those things. I expect it to be worth more in 20 years than it is now, so I stay in it.

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imbogled
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Re: How are folks handling the unprecedented rise in the market ?

Postby imbogled » Sun Jul 16, 2017 4:50 am

SimplicityNow wrote:Mr. Bogle has said:

..Half the time I worry why I have so much in stocks and the other half of the time I worry why I have so little in stocks...

I think many of us can relate.

But worrying won't change anything, and changing your asset allocation to be more conservative or more aggressive will only be proven correct in the rear view mirror.

If whatever you have invested in stocks is what allows you to sleep well at night then that is the correct asset allocation "for you". If not then that is a reason to reconsider your AA.

What anyone else is doing makes interesting reading but it shouldn't influence what you decide is right for you.


Cliff Notes for " How are folks handling the unprecedented rise in the market ? " Nice job SimplicityNow!
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foo.c
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Re: How are folks handling the unprecedented rise in the market ?

Postby foo.c » Sun Jul 16, 2017 7:46 am

Backtesting, simulating, and researching.

Johnnie
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Re: How are folks handling the unprecedented rise in the market ?

Postby Johnnie » Sun Jul 16, 2017 9:04 am

How I'm handling it:

- I peek every day the market is up and mentally approximate how much richer I am. On some days I neglect to run the other approximation, which is how much would have to be plundered from my bond fund to rebalance after a 50 percent stock decline.

- I take more pleasure in being 40 percent international. That pleasure is momentarily enhanced by international kicking tail so far this year.

I also paid off a mortgage ahead of time but that was more coincidence.

~~~~~~~~~~~~
ThrustVectoring wrote:I am following my investment plan. Where do you think you are, anyhow?

LOL - touche'. :happy


~~~~~~~~~~~
gmc4h232 wrote: Agreed, political environment has been volatile since 1776.

1776? It's been volatile since Ugh the Caveman challenged Big-Scar-On-Cheek for headman, about 10 minutes after the band first climbed down from the trees, stood up and started talking. :twisted:

~~~~~~~~~
WildBill wrote:Napping is useful, as is beer. Whiskey helps also, but only in moderation. All above are even more useful when the market is down.

Ah, they're all-season multi-taskers! Excellent.

~~~~~~~~~

investingdad wrote:Back on topic, part of the reason it feels like a big up market, for us, is because we've been in the market for some time now and even smaller gains translate into bigger dollar moves.

I love that part. Even the loss numbers on (modest) down days are exciting. :oops:
Last edited by Johnnie on Sun Jul 16, 2017 9:40 am, edited 2 times in total.
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Bastiat
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Re: How are folks handling the unprecedented rise in the market ?

Postby Bastiat » Sun Jul 16, 2017 9:35 am

skor99 wrote:
mptfan wrote:What do you mean by "unprecedented?" The market has risen before, so what is different about this time?


Unprecedented in the sense that market seems to be ignoring the political volatility and uncertainty, highest inequality since the 1920s by some measures and the general unease amongst people regarding the direction of the country. Maybe I am overthinking all this, but I do feel if there is a crash like we had in 2008/09 again or even something less bad, it will not be a fast hockey stick recovery like we had the last time.


There have been much more politically volatile times in the past, and there will continue to be volatility heading forward. In the words of Billy Joel, We Didn't Start the Fire.

Thanks to capitalism, the poor today are much better off than even the richest in the 1920's.

Nothing about this is unprecedented. There were a number of threads here about people "retreating to cash" after the election; the market is up 20% since then. Rather than staying the course, they let their political beliefs override their IPS and investing beliefs. It is unlikely that when the inevitable decline comes they will be able to time things such that they come out ahead; if they do, it will have been by luck.

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Re: How are folks handling the unprecedented rise in the market ?

Postby aegis965 » Sun Jul 16, 2017 9:57 am

I'm buying more books to offset the gain. :P Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism is a fascinating read.
I came, I saw, I purchased at a low multiple.

LRDave
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Re: How are folks handling the unprecedented rise in the market ?

Postby LRDave » Sun Jul 16, 2017 10:23 am

Bastiat wrote:
skor99 wrote:
mptfan wrote:What do you mean by "unprecedented?" The market has risen before, so what is different about this time?


Thanks to capitalism, the poor today are much better off than even the richest in the 1920's.



hmmmm...... The Jekyll Island Club says hello. This must not be exactly what was meant. Unless you mean the poor today are still in the game and the 1920's richest have cashed in their chips. :D

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willthrill81
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Re: How are folks handling the unprecedented rise in the market ?

Postby willthrill81 » Sun Jul 16, 2017 10:34 am

mortfree wrote:I paid off my mortgage in 2016 (I had 94k remaining in 2013). House value 230k

I maxed my 401k in 2016 and will again in 2017.

Maxed my Roth in 2015, 2016, and 2017.

I contributed to my wife's Roth in 2016. 2017 is TBD.

I've also been investing in my taxable - VTI and Berkshire Hathaway.

Freedom of not having a mortgage gives me comfort to throw $$ in the market. Age 40 btw.


That's precisely my plan well. Once our mortgage is paid off in three years, we'll double up on our monthly investments. That will enable us to max out my 401k, both my spouses and my IRA, my HSA (already maxed), and still have some left for taxable accounts.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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willthrill81
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Re: How are folks handling the unprecedented rise in the market ?

Postby willthrill81 » Sun Jul 16, 2017 10:37 am

LRDave wrote:
Bastiat wrote:
skor99 wrote:
mptfan wrote:What do you mean by "unprecedented?" The market has risen before, so what is different about this time?


Thanks to capitalism, the poor today are much better off than even the richest in the 1920's.



hmmmm...... The Jekyll Island Club says hello. This must not be exactly what was meant. Unless you mean the poor today are still in the game and the 1920's richest have cashed in their chips. :D


I think he might have been referring to the fact that most of those below the poverty line in the U.S. have televisions (with cable or satellite), air conditioning, washers and dryers, cellphones, and the like. We lived below the poverty line for four years during grad school and had a great time.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

snowman
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Re: How are folks handling the unprecedented rise in the market ?

Postby snowman » Sun Jul 16, 2017 10:54 am

I am 40% international, have been for many years, so it's nice to see it doing well again. Just checked - it's up only 28% over the last 6 years, vs. 108% for total US. So I don't feel the jitters, quite the opposite - I feel like my portfolio has been under performing all these years.

But these are just my feelings, and they don't affect my actions. Why? I learned many years ago that future truly is unpredictable, and any time I tried to predict it (and act on it), I was wrong. I think that line of thinking is true for most older investors - we made stupid mistakes when we were younger, so we learned the lesson, set the AA, and left it at that. It's amazing how well it works.

There is ALWAYS something to be afraid of. Just recently - remember the inevitable bond crash coming, so you should avoid bonds? It's still coming, 8 years later... Remember the stocks being overpriced by any measure in 2013 so it's time to take chips off the table? How did that work out for you the last 4 years? Remember dire predictions for stock market collapse if Trump wins election? How did that work out for you the last 8 months?

Just stay the course is probably the best piece of advice I can give to OP, whatever course you are on. I wish you good luck!

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Tycoon
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Re: How are folks handling the unprecedented rise in the market ?

Postby Tycoon » Sun Jul 16, 2017 11:56 am

snowman wrote:But these are just my feelings, and they don't affect my actions. Why? I learned many years ago that future truly is unpredictable, and any time I tried to predict it (and act on it), I was wrong. I think that line of thinking is true for most older investors - we made stupid mistakes when we were younger, so we learned the lesson, set the AA, and left it at that. It's amazing how well it works.


With age comes wisdom.

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...I might be just beginning | I might be near the end. Enya | | C'est la vie

Bastiat
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Re: How are folks handling the unprecedented rise in the market ?

Postby Bastiat » Sun Jul 16, 2017 12:31 pm

LRDave wrote:
Bastiat wrote:
skor99 wrote:
mptfan wrote:What do you mean by "unprecedented?" The market has risen before, so what is different about this time?


Thanks to capitalism, the poor today are much better off than even the richest in the 1920's.



hmmmm...... The Jekyll Island Club says hello. This must not be exactly what was meant. Unless you mean the poor today are still in the game and the 1920's richest have cashed in their chips. :D


No, that is exactly what was meant. This article explains why.

In 1924 the son the President of the United States died because of a blister on his toe. There was no television, almost no air conditioning, little refrigeration, inconvenient travel, etc. Even without all that, the computers that we all carry around in our pockets every day and the connectivity they provide would alone make us the richest person in 1920.

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Re: How are folks handling the unprecedented rise in the market ?

Postby vitaflo » Sun Jul 16, 2017 1:51 pm

willthrill81 wrote:
mortfree wrote:I paid off my mortgage in 2016 (I had 94k remaining in 2013). House value 230k

I maxed my 401k in 2016 and will again in 2017.

Maxed my Roth in 2015, 2016, and 2017.

I contributed to my wife's Roth in 2016. 2017 is TBD.

I've also been investing in my taxable - VTI and Berkshire Hathaway.

Freedom of not having a mortgage gives me comfort to throw $$ in the market. Age 40 btw.


That's precisely my plan well. Once our mortgage is paid off in three years, we'll double up on our monthly investments. That will enable us to max out my 401k, both my spouses and my IRA, my HSA (already maxed), and still have some left for taxable accounts.


This implies you're not currently maxing out your tax-advantaged accounts when you could be? I'm curious why you're not maxing them out before you pay down your mortgage? It feels like you're giving a lot of extra money to Uncle Sam every year.

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Re: How are folks handling the unprecedented rise in the market ?

Postby runner540 » Sun Jul 16, 2017 2:01 pm

willthrill81 wrote:
mortfree wrote:I paid off my mortgage in 2016 (I had 94k remaining in 2013). House value 230k

I maxed my 401k in 2016 and will again in 2017.

Maxed my Roth in 2015, 2016, and 2017.

I contributed to my wife's Roth in 2016. 2017 is TBD.

I've also been investing in my taxable - VTI and Berkshire Hathaway.

Freedom of not having a mortgage gives me comfort to throw $$ in the market. Age 40 btw.


That's precisely my plan well. Once our mortgage is paid off in three years, we'll double up on our monthly investments. That will enable us to max out my 401k, both my spouses and my IRA, my HSA (already maxed), and still have some left for taxable accounts.


I always find it interesting how different BH's balance buying a home with retirement saving in tax advantaged accounts. For folks with enough income to max, why not max out retirement accounts and build the rest of the budget, including mortgage around it? Hard to beat the tax benefits. It's all different flavors of LBYM and building wealth.

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willthrill81
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Re: How are folks handling the unprecedented rise in the market ?

Postby willthrill81 » Sun Jul 16, 2017 2:21 pm

vitaflo wrote:
willthrill81 wrote:
mortfree wrote:I paid off my mortgage in 2016 (I had 94k remaining in 2013). House value 230k

I maxed my 401k in 2016 and will again in 2017.

Maxed my Roth in 2015, 2016, and 2017.

I contributed to my wife's Roth in 2016. 2017 is TBD.

I've also been investing in my taxable - VTI and Berkshire Hathaway.

Freedom of not having a mortgage gives me comfort to throw $$ in the market. Age 40 btw.


That's precisely my plan well. Once our mortgage is paid off in three years, we'll double up on our monthly investments. That will enable us to max out my 401k, both my spouses and my IRA, my HSA (already maxed), and still have some left for taxable accounts.


This implies you're not currently maxing out your tax-advantaged accounts when you could be? I'm curious why you're not maxing them out before you pay down your mortgage? It feels like you're giving a lot of extra money to Uncle Sam every year.


There are several factors at work here. First and foremost, while my job (and career) is very secure in the short-term, I have some serious concerns about its long-term security. I don't want to lose my job (and my career) and still have a mortgage, even if my 401k would look great for my age but be inadequate to allow a very early retirement.

Second, I am already taking on quite a lot of risk by being virtually 100% in stocks with my portfolio, which is significant for my age already. By paying down/off my mortgage early, I'm reducing my total risk.

Third, once our mortgage is paid off, around 90% of my monthly investments will be going into tax advantaged accounts anyway, so I'm not losing much tax-advantaged 'space' by paying off the mortgage early.

I know that mathematically, if everything goes fine, this is a sub-optimal strategy, but the expected cost is minimal. Plus, my DW really wants to do it this way, and I've been married long enough to believe in the maxim "Happy wife, happy life."

runner540 wrote:For folks with enough income to max, why not max out retirement accounts and build the rest of the budget, including mortgage around it? Hard to beat the tax benefits. It's all different flavors of LBYM and building wealth.


As noted above, I'm not losing much tax-advantaged space by doing it this way. Plus, I want to go into retirement (hopefully age 55) with some assets in taxable accounts for various reasons.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: How are folks handling the unprecedented rise in the market ?

Postby Ron » Sun Jul 16, 2017 2:42 pm

The same way I handled the unprecedented fall of the value of my investments in 1987, early 2000's, and 2008-09. I did (and am doing) nothing.

35 years in the market (thus far) has taught me that there will always be periods of joy along with periods of sorrow, just like anything else in life...

- Ron

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Re: How are folks handling the unprecedented rise in the market ?

Postby tom white » Sun Jul 16, 2017 4:09 pm

tibbitts wrote:
Unprecedented in the sense that the political environment is so volatile

As opposed to oh, say, during the civil war ?


I can't wait until you produce documents showing the what the market returns were during the civil war.
I would think the OP deserves a bit less sarcasm than that.

Anyway, for the OP -
If you are really, really nervous about current conditions, maybe taking a partial break from the market might actually be good for you. Not so much a case of timing the market, more like timing your nervous system. Financial health is merely one type of health we all have to worry about. If the market is giving you mental or emotional stress - take a recess, and take a couple breaths.

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tooluser
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Re: How are folks handling the unprecedented rise in the market ?

Postby tooluser » Sun Jul 16, 2017 9:55 pm

Don't forget the block party! Really, you won't regret it. Get out there and have a good time.

Then, this fall, roll up your sleeves and do something very meaningful and which may not be as fun, but you know needs doing.

Put all your resources to good use.
Live! This is what good times are for!
I had crossed the line. I was free; but there was no one to welcome me to the land of freedom. I was a stranger in a strange land. - Harriet Tubman

Dandy
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Re: How are folks handling the unprecedented rise in the market ?

Postby Dandy » Mon Jul 17, 2017 2:52 pm

I don't know whether to be happy or worried when the market goes up. I am retired with a conservative allocation. Hard to believe grid lock and polarization is good in the long run. You would think the market would be tanking. That is why you really can't rely much on predictions or "feelings".

I try to keep my equity allocation between 40 and 43%. So, I guess I tightened by rebalancing bands a few years ago to keep equities from getting too far either way. I'm more in the asset preservation mode so it is less of a concern then those who are trying to get to their number who need growth.

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willthrill81
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Re: How are folks handling the unprecedented rise in the market ?

Postby willthrill81 » Mon Jul 17, 2017 4:35 pm

tom white wrote:
tibbitts wrote:
Unprecedented in the sense that the political environment is so volatile

As opposed to oh, say, during the civil war ?


I can't wait until you produce documents showing the what the market returns were during the civil war.


The data are out there. 1860 to 1872 was one of the greatest bull runs in stock market history.

http://www.businessinsider.com/bofa-gre ... 800-2012-6
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: How are folks handling the unprecedented rise in the market ?

Postby tetractys » Mon Jul 17, 2017 4:55 pm

Hi all,

Nice OP question, which doesn't cause me much concern. I don't see any precedent being set. Just a few decades ago we saw something like 20% gains for an entire decade--nothing like that now. It was followed by much panic over a weeny bear market. And the last big bear market, one of the biggest I've heard, bounced back in just a few years.

So from what I gather, the market today is just ho-hum, and nothing to get excited about or lend any special action one way or the other. Can't find any excuse not to follow the standard wisdom of staying the course. -- Tet

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Re: How are folks handling the unprecedented rise in the market ?

Postby Small Law Survivor » Mon Jul 17, 2017 4:59 pm

I'm retired, and I'm trying to target a 50-50 allocation.

It has drifted up to 53% stocks. I sold 1% today (all U.S.).

Will this make a difference? Likely not, but it makes me feel a little better.

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HomerJ
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Re: How are folks handling the unprecedented rise in the market ?

Postby HomerJ » Mon Jul 17, 2017 5:29 pm

skor99 wrote:Maybe I am overthinking all this, but I do feel if there is a crash like we had in 2008/09 again or even something less bad, it will not be a fast hockey stick recovery like we had the last time.


You should ALWAYS plan for a crash happening tomorrow that takes 2-10 years to recover.

Because it could.

If you set an AA always assuming this could happen, then it's easy to stay the course. And you don't have to predict anything.

Note that this assumption doesn't mean you have to be super conservative. If you are 30, you can be 90/10 stocks/bonds even assuming a crash might happen tomorrow that takes 5 years to recover. If you are 55, that assumption may lead you to be 50/50 stocks/bonds instead.

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Re: How are folks handling the unprecedented rise in the market ?

Postby The Wizard » Mon Jul 17, 2017 6:49 pm

Small Law Survivor wrote:I'm retired, and I'm trying to target a 50-50 allocation.

It has drifted up to 53% stocks. I sold 1% today (all U.S.).

Will this make a difference? Likely not, but it makes me feel a little better.

That's exactly how I used to handle it in retirement, an increment back towards the target but not all the way.
But lately I'm wondering whether to follow Wade Pfau's thinking and let my stock percentage rise, especially since most of my income doesn't derive from my portfolio...
Attempted new signature...

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Top99%
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Re: How are folks handling the unprecedented rise in the market ?

Postby Top99% » Tue Jul 18, 2017 7:32 am

I am following my favorite piece of investment advice: Don't just do something, sit there!
Other than being a little more cautious about expected future returns and rebalancing if we hit the bands in our IPS we are sitting there.
Adapt or perish

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Re: How are folks handling the unprecedented rise in the market ?

Postby Tamalak » Tue Jul 18, 2017 8:34 am

I feel fine about it in large part because half my money is in international.. and international hasn't had a huge bull run these last 5 years, in fact it's gone freaking nowhere. So I don't feel 'due for a crash'.

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Re: How are folks handling the unprecedented rise in the market ?

Postby Sandi_k » Tue Jul 18, 2017 10:43 am

I am looking at the balances on a monthly basis, per my IPS.

I am calculating the 5% band for rebalancing among funds, per my IPS.

I am doing the math on which funds need some sales, and which funds I should be buying, per my IPS.

At the end of the month, when I do my analysis for next month's investment, I will be selling appreciated funds, and buying where my AA is under-allocated - per my IPS.

I just keep repeating to myself "You're *supposed* to buy low, and sell high!" So I consider selling some of the appreciated stock funds a fundamental action. If I hold onto them until things turn more bearish, I've just sold low. :D

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Re: How are folks handling the unprecedented rise in the market ?

Postby IlliniDave » Tue Jul 18, 2017 11:01 am

I'm slowly ratcheting down my stock exposure, something I've been doing for some time due to proximity of my early retirement date. The "unprecedented rise" is something I'm only aware of because throwing all my new contributions into bonds is not moving my AA as much as I would have thought. It's possible I may have to get in there and do a manual rebalance.
Don't do something. Just stand there!

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Re: How are folks handling the unprecedented rise in the market ?

Postby Engineer250 » Tue Jul 18, 2017 12:31 pm

Anyone worried now should go look at all the threads from around 2013 when a lot of people were posting and saying the same things. A lot of people were going all cash in 2013. Then again around the election. There's always someone who is sure a crash is around the corner and now is the time to sell. Some of those people will be right at least some of the time.

Stormbringer wrote:3) I've stopped using extra cash to buy stocks in my taxable account, and I'm putting it towards the mortgage.


Debt vs. savings is one of my bigger financial stressors. Right now I'm just throwing a little money at both retirement and cash savings (student loan debt is still deferred) but everything feels insufficient. I suppose paying debt at a high stock price moment makes a lot of sense, but it feels tough to put money in a 1% savings account instead of the stock market. So I just end up doing a little bit of everything, and nothing is properly done it seems.

ThrustVectoring wrote:I am following my investment plan. Where do you think you are, anyhow?

But seriously, I'm young and have few assets relative to my salary (thanks, student loans), so I'm staying 1.5 levered long VTI until my portfolio borrows $10k, then buying more VTI without re-levering until my porfolio is 1.2x levered, and sticking to that AA for the next five years.


Margin and student loans? I am stressed out just reading your post. I hope you are living with Mom & Dad.

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Re: How are folks handling the unprecedented rise in the market ?

Postby MJW » Tue Jul 18, 2017 11:32 pm

Perhaps tangentially related to the topic at hand, I have lately noticed a ton of threads on the forum related to bonds and bond allocation. Dare I say the number of which may currently exceed those related to international investing?

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Re: How are folks handling the unprecedented rise in the market ?

Postby expat » Wed Jul 19, 2017 12:34 am

Just buying bonds ....

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Re: How are folks handling the unprecedented rise in the market ?

Postby pascalwager » Wed Jul 19, 2017 2:55 am

I've been 80/5/15 for awhile, but at age 75 I decided I might like to have a more stable portfolio, and the high market seemed like a good time to make a change. But I really don't like to sell stocks to buy bonds, and changing to a world market portfolio recently made it easier. I liked the idea of the world bond/stock market determining the asset proportions rather than me.

So I assembled my own four-fund (Vanguard) world market portfolio using William F. Sharpe's instructions in his RISMAT paper at a time when the market stock/bond ratio is 57/43. Now I'm at 50/37/13. The percentages are not fixed or even intentional. They'll vary with the world market.

That's one way of backing into a more conservative portfolio for someone who is bond aversive.

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Re: How are folks handling the unprecedented rise in the market ?

Postby oldzey » Wed Jul 19, 2017 10:22 pm

I'm handling the unprecedented rise in the market by doing nothing, while my automatic contributions maintain my desired AA.
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

CurlyDave
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Re: How are folks handling the unprecedented rise in the market ?

Postby CurlyDave » Thu Jul 20, 2017 12:56 am

Dandy wrote:... Hard to believe grid lock and polarization is good in the long run. You would think the market would be tanking...


I have always been fond of the quote: "That government is best which governs least."

It seems to me that gridlock leads to do-nothing government which is very good...

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Re: How are folks handling the unprecedented rise in the market ?

Postby carstars » Thu Jul 20, 2017 1:18 am

20% corrections ala bear markets have happened many times and I conclude they will happen again in the future. Nearing 60 years of age I take pause as this bull markets nears 9 years. Waiting for the big correction (will it be a 50% discount? :D ) and then the joy of re-balancing into discounted stocks. Past few years been buying shorter duration low risk bonds as the re-balance is triggered every once in a while as the market ascends. Sell high to the momentum folks and later will be buying low from those panic sellers.

Always remember on October 19,1987 the S&P index fell over 20% in a single day. 1/5 of all stock value in the United States was gone. You have not lived until you experience such a thing.

ThrustVectoring
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Re: How are folks handling the unprecedented rise in the market ?

Postby ThrustVectoring » Thu Jul 20, 2017 1:30 am

Engineer250 wrote:Margin and student loans? I am stressed out just reading your post. I hope you are living with Mom & Dad.


Student loans are past tense. Also I'm saving somewhere between $2000 and $3000 a month, after tax.

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willthrill81
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Re: How are folks handling the unprecedented rise in the market ?

Postby willthrill81 » Fri Jul 21, 2017 10:34 am

carstars wrote:20% corrections ala bear markets have happened many times and I conclude they will happen again in the future. Nearing 60 years of age I take pause as this bull markets nears 9 years. Waiting for the big correction (will it be a 50% discount? :D ) and then the joy of re-balancing into discounted stocks. Past few years been buying shorter duration low risk bonds as the re-balance is triggered every once in a while as the market ascends. Sell high to the momentum folks and later will be buying low from those panic sellers.

Always remember on October 19,1987 the S&P index fell over 20% in a single day. 1/5 of all stock value in the United States was gone. You have not lived until you experience such a thing.


Historically, 50% declines in stocks have been fairly rare, only occurring from 1929-1932 (-90% from high), 1937-1938 (-52%), and 2007-2009 (-54%), plus the 46% drop from 1973-1974; all other declines were less than 40% from peak to trough. To the extent that the future resembles the past, it's conceivable that many here will never again see a 50% decline in their lifetime.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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TSquare
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Re: How are folks handling the unprecedented rise in the market ?

Postby TSquare » Fri Jul 21, 2017 10:37 am

Steady as she goes. 401(k) contributions bi-weekly, and Roth contribution on the 15th of every month. Not sure what else I should be doing?
-tsquare

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David Jay
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Re: How are folks handling the unprecedented rise in the market ?

Postby David Jay » Fri Jul 21, 2017 11:17 am

whodidntante wrote:I'm amazed that there is still so much skepticism following an 8+ year bull market. Aren't we supposed to be blinded by greed by now?

Exactly. I will believe that the market is in for a crash when people on the street start talking about "burn rate" (ala 2001).
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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Re: How are folks handling the unprecedented rise in the market ?

Postby Portfolio7 » Fri Jul 21, 2017 11:37 am

David Jay wrote:
whodidntante wrote:I'm amazed that there is still so much skepticism following an 8+ year bull market. Aren't we supposed to be blinded by greed by now?

Exactly. I will believe that the market is in for a crash when people on the street start talking about "burn rate" (ala 2001).


+1.

As long as we have a wall of worry, and we definitely have for 8 years (and still do), I'm not concerned - and 10-20% drops common and shouldn't even be discussed in this context. If you have a static AA and a long term buy and hold philosophy, what does it matter? If you are concerned now, I'd suggest you maybe aren't really comfortable with your portfolio and why it's built the way it is. You may want to review why you structured it as you did, that always helps me when I want to change mine.

inbox788
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Re: How are folks handling the unprecedented rise in the market ?

Postby inbox788 » Fri Jul 21, 2017 5:38 pm

It's making me a little scared. I might have mentioned above that in my speculative fund, I'm short the market. As the market goes higher, I went a little more short. Overall, my AA has been overweight equities, and I've been lax to rebalance, but if you consider my total position, the short position partly offsets the overweight equities. I would do better taking off the speculative short and actually rebalancing by selling off some equities and buying some bonds. But I'm scared of bonds too. Short term bonds return too little and long term bonds carry too much risk.

FWIW, one of my accounts hit a rebalance band/trigger for action, so I sold off some equities. I'm getting close to the bottom range of my equities AA, so I might just sit around that point, or decide if I want to up my equities position a little. My IPS is somewhat flexible over that allowing me some market timing withing limits.

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Re: How are folks handling the unprecedented rise in the market ?

Postby CurlyDave » Sun Jul 23, 2017 12:07 am

skor99 wrote:I like many others am a skeptic of this market, given the volatile political situation and lack of any real improvements such as tax reform or infrastructure bills. But the fact is that the market still keeps going up. I am still in the market but What is everybody else doing ? Keeping the faith or thinking of bailing ?


I think there are real improvements. They are not in the areas you mention, but come in the form of reduction in regulation.

IMHO this can be a major driver of industrial activity and stocks follow.

Clever lawyers and accountants will always come up with ways to snooker the tax man...

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Re: How are folks handling the unprecedented rise in the market ?

Postby littlebird » Sun Jul 23, 2017 1:10 am

To someone who started investing in 1982 -- me -- this is hardly an unprecedented rise. And, nothing to do with the moderate rise, but I'm reacting by being more conservative, more risk averse and less optimistic than I've been since 1982. And I'm someone who always bought on RBDs, even well into retirement.


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