Still Buying As planned Regardless Of The World Situation

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selftalk
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Still Buying As planned Regardless Of The World Situation

Post by selftalk » Tue Aug 08, 2017 3:38 pm

Today I purchased more VTI as the money became available. It seems that everyone in my group of friends keep on talking about how high the market is and how bad the world situation is but of course won`t buy any more shares. It`s a real wall of worry as they say. Call me crazy but I do try to ignore the friendly chatter and well meaning people and continue with my purchasing plan to preserve my long term purchasing power of the dollar as per Warren Buffett so indicates in his annual reports of Berkshire Hathaway and what John Bogle and Taylor Larimore suggests.

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mhc
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Re: Still Buying As planned Regardless Of The World Situation

Post by mhc » Tue Aug 08, 2017 3:50 pm

If the world situation is so bad then why are the markets so high? I'm no economist or historian, but the two don't seem like they would go together.

During the great recession when things were bad, the market was down.

Güero
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Re: Still Buying As planned Regardless Of The World Situation

Post by Güero » Tue Aug 08, 2017 3:56 pm

Good. Me, too.

Why would you consider changing?

Are your friends better off than you are and if so do they know something about the markets that you don't?

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Kenkat
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Re: Still Buying As planned Regardless Of The World Situation

Post by Kenkat » Tue Aug 08, 2017 3:58 pm

The world situation is always bad it seems.

delamer
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Re: Still Buying As planned Regardless Of The World Situation

Post by delamer » Tue Aug 08, 2017 4:03 pm

The recently-retired Scott Burns -- my favorate personal finance writer -- advocated two things in times of uncertainty (which seems to be a lot of the time): 1) pay down debt and 2) diversify your assets.

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Re: Still Buying As planned Regardless Of The World Situation

Post by DanMahowny » Tue Aug 08, 2017 4:04 pm

Yep. Problems and reasons NOT to invest are easy to find if that's what people are looking for.

I'm always buying. I'll stop when I die.

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Re: Still Buying As planned Regardless Of The World Situation

Post by Dottie57 » Tue Aug 08, 2017 4:09 pm

delamer wrote:The recently-retired Scott Burns -- my favorate personal finance writer -- advocated two things in times of uncertainty (which seems to be a lot of the time): 1) pay down debt and 2) diversify your assets.

Ok. U.S. total stock and Bond fund owner here. Also own international stock fund. So what else can I diversify into. That is passive. Reits I suppose. Beyond that I am not sure.

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Re: Still Buying As planned Regardless Of The World Situation

Post by rmelvey » Tue Aug 08, 2017 4:11 pm

Stock prices follow earnings and earnings have been good. If you just followed earnings the stock market's strength wouldn't be that surprising. Low interest rates don't hurt either :D

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Re: Still Buying As planned Regardless Of The World Situation

Post by cherijoh » Tue Aug 08, 2017 4:12 pm

DanMahowny wrote:Yep. Problems and reasons NOT to invest are easy to find if that's what people are looking for.

I'm always buying. I'll stop when I die.
You might change your tune when you are retired and you start drawing down your portfolio.

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Re: Still Buying As planned Regardless Of The World Situation

Post by delamer » Tue Aug 08, 2017 4:14 pm

Dottie57 wrote:
delamer wrote:The recently-retired Scott Burns -- my favorate personal finance writer -- advocated two things in times of uncertainty (which seems to be a lot of the time): 1) pay down debt and 2) diversify your assets.

Ok. U.S. total stock and Bond fund owner here. Also own international stock fund. So what else can I diversify into. That is passive. Reits I suppose. Beyond that I am not sure.
Channeling Scott (I am sure he'd be thrilled :happy), you already are doing what he'd advocate. He'd get people writing in, like post-9/11, asking "Should I sell all my stocks and buy gold bars?" His response was that the best way to handle the unknown is by diversifying.

I'd have some cash too, though, if you don't already.

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Re: Still Buying As planned Regardless Of The World Situation

Post by Snowjob » Tue Aug 08, 2017 4:15 pm

cherijoh wrote:
DanMahowny wrote:Yep. Problems and reasons NOT to invest are easy to find if that's what people are looking for.

I'm always buying. I'll stop when I die.
You might change your tune when you are retired and you start drawing down your portfolio.
maybe dividends and interest more than cover his expenses and he really does keep buying =O

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Re: Still Buying As planned Regardless Of The World Situation

Post by RRAAYY3 » Tue Aug 08, 2017 4:27 pm

this world's always been a mess ... now we just have instant access to too much information so it seems oh so scary ... i will be buying continuously for the next 20 years ... and i'll buy even more when the markets go "bad" ... why? because either the market bounces back to doing what it's always done or WW3 kills us all - in which case, your precious asset allocation is irrelevant.

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Re: Still Buying As planned Regardless Of The World Situation

Post by Dottie57 » Tue Aug 08, 2017 4:43 pm

delamer wrote:
Dottie57 wrote:
delamer wrote:The recently-retired Scott Burns -- my favorate personal finance writer -- advocated two things in times of uncertainty (which seems to be a lot of the time): 1) pay down debt and 2) diversify your assets.

Ok. U.S. total stock and Bond fund owner here. Also own international stock fund. So what else can I diversify into. That is passive. Reits I suppose. Beyond that I am not sure.
Channeling Scott (I am sure he'd be thrilled :happy), you already are doing what he'd advocate. He'd get people writing in, like post-9/11, asking "Should I sell all my stocks and buy gold bars?" His response was that the best way to handle the unknown is by diversifying.

I'd have some cash too, though, if you don't already.

Being pre-retirement by 1day to 3.5 years I have cash saved. Not a problem there.

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Re: Still Buying As planned Regardless Of The World Situation

Post by Fallible » Tue Aug 08, 2017 4:54 pm

Nothing the market does should be a great surprise to experienced investors or those who have carefully established an investment philosophy and long-term plan based on goals, time horizon, personal risk tolerance, and financial capacity. If the plan is included in an IPS, it can be reviewed to help stay the course or make course corrections if needed. OP, sounds as if your friends lack a plan.
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Re: Still Buying As planned Regardless Of The World Situation

Post by thangngo » Tue Aug 08, 2017 4:59 pm

selftalk wrote:Today I purchased more VTI as the money became available. It seems that everyone in my group of friends keep on talking about how high the market is and how bad the world situation is but of course won`t buy any more shares. It`s a real wall of worry as they say. Call me crazy but I do try to ignore the friendly chatter and well meaning people and continue with my purchasing plan to preserve my long term purchasing power of the dollar as per Warren Buffett so indicates in his annual reports of Berkshire Hathaway and what John Bogle and Taylor Larimore suggests.
I just bought some today in taxable account.

If the market crashes? It's even better! I'll buy some more, a lot more. :sharebeer

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Re: Still Buying As planned Regardless Of The World Situation

Post by arcticpineapplecorp. » Tue Aug 08, 2017 5:08 pm

heard a funny tale from Alan Shaw (a retired technical "chartist") on Barry Ritholtz's podcast (masters in business). Paraphrasing, he said a shareholder was at a meeting and the company had been doing well and the shareholder asked the CEO what he thought of the company's prospects, to which the CEO said, "It couldn't be better". The shareholder immediately left the room and sold all his shares. When his broker asked him why he's selling all his shares he stated, "The CEO said the company can't be any better". :?
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Re: Still Buying As planned Regardless Of The World Situation

Post by Chrono Triggered » Tue Aug 08, 2017 5:38 pm

When the market is high or stagnant, buy shares. When the market is down, buy even more shares.

The market will always reach a new high as time marches on but it sounds like you know this already.

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Re: Still Buying As planned Regardless Of The World Situation

Post by Angelus359 » Tue Aug 08, 2017 5:48 pm

Auto investing every week on Mondays is what I like to do
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Re: Still Buying As planned Regardless Of The World Situation

Post by iamlucky13 » Tue Aug 08, 2017 6:34 pm

I buy every other week, and in my 401k the option is VTSAX, not VTI, but I'm buying, too.
mhc wrote:If the world situation is so bad then why are the markets so high? I'm no economist or historian, but the two don't seem like they would go together.

During the great recession when things were bad, the market was down.
Unfortunately, that's not a great indicator of much. The markets were high in 2006 and 1999, as well, and many folks are arguing that the high markets are exactly why we should be worried.

But you're right that the wold situation also isn't a very useful indicator, especially the rest of the market knows the world situation, as well. Even if we had good evidence that the world situation had specific implications for stocks, what's the threshold for action? If you bail out now, you miss any gains between now and the actual crash. If there is no crash, you miss all the gains until you get back in. If there is a crash, when is the right time to get back in? If you get back in when the decline reverses, what if was just a dead cat bounce?

As is the constant theme of this site, there are numerous ways our attempts to beat the market can backfire on us.
Angelus359 wrote:Auto investing every week on Mondays is what I like to do
But automobiles are a depreciating asset! :wink:

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Re: Still Buying As planned Regardless Of The World Situation

Post by Johnnie » Tue Aug 08, 2017 6:51 pm

$1,000 going into my 401k every two weeks (VGSIX at the moment - REITs).

My first reaction at this news was glad to be 40% international. That's odd - the usual reaction would be just the opposite, expecting a "flight to quality" (US assets) if anything pops.

I've also got Billy Joel "We didn't start the fire" going through my head, thinking about all the world events since I came of age in the early 1970s, when the Dow was a around 700. :o

♫ ♪ ...Birth control, Ho Chi Minh, Richard Nixon back again
Moonshot, Woodstock, Watergate, punk rock
Begin, Reagan, Palestine, Terror on the airline
Ayatollah's in Iran, Russians in Afghanistan
Wheel of Fortune, Sally Ride, heavy metal suicide
Foreign debts, homeless Vets, AIDS, crack, Bernie Goetz
Hypodermics on the shores, China's under martial law
Rock and Roller cola wars, I can't take it anymore

We didn't start the fire
It was always burning since the world's been turning
We didn't start the fire
But when we are gone
It will still burn on, and on, and on, and on...
♪ ♫

And yet - what my sig says.
Last edited by Johnnie on Tue Aug 08, 2017 6:53 pm, edited 1 time in total.
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Re: Still Buying As planned Regardless Of The World Situation

Post by Tycoon » Tue Aug 08, 2017 6:53 pm

A student of history might ask what "world situation"?
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Re: Still Buying As planned Regardless Of The World Situation

Post by pkcrafter » Tue Aug 08, 2017 7:03 pm

Fallible wrote:Nothing the market does should be a great surprise to experienced investors or those who have carefully established an investment philosophy and long-term plan based on goals, time horizon, personal risk tolerance, and financial capacity.
This is an excellent response. Ignore the noise and continue plugging away. You will hit market upturns and downturns throughout your investing time frame and you need to just stay in the saddle. Don't even discuss with friends.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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Re: Still Buying As planned Regardless Of The World Situation

Post by frugalecon » Tue Aug 08, 2017 7:40 pm

Because my asset allocation has drifted several percentage points outside of my target range, I am doing a soft rebalance by temporarily changing my allocation of new money to be 100% bonds. I will re-evaluate monthly.

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Re: Still Buying As planned Regardless Of The World Situation

Post by John Laurens » Tue Aug 08, 2017 8:03 pm

In general, there has never been a better time to be a human.

Regards,
John

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Re: Still Buying As planned Regardless Of The World Situation

Post by hightower » Tue Aug 08, 2017 8:20 pm

I'm still buying too, but not as much. I decided to focus more on getting rid of debt for awhile. And yes it's because I don't believe the market is going to do as well the rest of the year. I figured it was a good time to get out of debt.

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Re: Still Buying As planned Regardless Of The World Situation

Post by Grt2bOutdoors » Tue Aug 08, 2017 8:21 pm

It was bad in 1953, what makes this any different? Should it come to pass that it all goes poof, what difference whether you hold stock, bond, cash, gold, oil, commodities, food will mean? It means zero, so holding cash isn't going to provide you with any protection and if things ease off, you will miss a big rally. Btw, i bought today as well. If the markets thought an outbreak was imminent, you would have a selloff and oil would be skyrocketing, did not see that yet.
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Re: Still Buying As planned Regardless Of The World Situation

Post by snarlyjack » Tue Aug 08, 2017 8:33 pm

I ignore the noise & keep plugging away.
I keep dollar cost averaging into everything,
so far it has worked out pretty good.

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Re: Still Buying As planned Regardless Of The World Situation

Post by flyingaway » Tue Aug 08, 2017 8:37 pm

arcticpineapplecorp. wrote:heard a funny tale from Alan Shaw (a retired technical "chartist") on Barry Ritholtz's podcast (masters in business). Paraphrasing, he said a shareholder was at a meeting and the company had been doing well and the shareholder asked the CEO what he thought of the company's prospects, to which the CEO said, "It couldn't be better". The shareholder immediately left the room and sold all his shares. When his broker asked him why he's selling all his shares he stated, "The CEO said the company can't be any better". :?
Was that an insider trading?

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Re: Still Buying As planned Regardless Of The World Situation

Post by flyingaway » Tue Aug 08, 2017 8:44 pm

I now know three of my friends have been out of market since last year. Their money are in money market or stable value funds. They are waiting for a market down turn. I don't know if they can jump in when the down turn comes.

For me, I am buying automatically each month with my paychecks (close to 50%). But I have been buying more bonds than stocks, because I reached financial independence late last year. I am also shifting some stock funds to bond funds when market hits new highs. Moving from 80/10/10 to about 70/15/15 gradually, preparing for a possible retirement in two years.

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Re: Still Buying As planned Regardless Of The World Situation

Post by prettybogle » Tue Aug 08, 2017 9:01 pm

I dont mean any disrespect to the OP, but I really do not understand the point of threads like this. We all very well know the responses - some rehash of 1. market timing does not work; 2. Dont do something just stand there; 3. Keep investing etc

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Re: Still Buying As planned Regardless Of The World Situation

Post by Johnnie » Tue Aug 08, 2017 9:14 pm

prettybogle wrote:I dont mean any disrespect to the OP, but I really do not understand the point of threads like this. We all very well know the responses - some rehash of 1. market timing does not work; 2. Dont do something just stand there; 3. Keep investing etc
It's a human thing. We're human. Also, it's fun, and that's worth something too. Man does not live by quantification alone.<shrug>
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Re: Still Buying As planned Regardless Of The World Situation

Post by unclescrooge » Tue Aug 08, 2017 9:48 pm

selftalk wrote:Today I purchased more VTI as the money became available. It seems that everyone in my group of friends keep on talking about how high the market is and how bad the world situation is but of course won`t buy any more shares. It`s a real wall of worry as they say. Call me crazy but I do try to ignore the friendly chatter and well meaning people and continue with my purchasing plan to preserve my long term purchasing power of the dollar as per Warren Buffett so indicates in his annual reports of Berkshire Hathaway and what John Bogle and Taylor Larimore suggests.
If my friends told me the world was ending tomorrow I would still buy stocks and bonds today.

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Re: Still Buying As planned Regardless Of The World Situation

Post by BolderBoy » Tue Aug 08, 2017 10:59 pm

selftalk wrote:It seems that everyone in my group of friends keep on talking about ... how bad the world situation is...
"There's always an Arquillian Battle Cruiser, or a Corillian Death Ray, or an intergalactic plague that is about to wipe out all life on this miserable little planet, and the only way these people can get on with their happy lives is that they DO NOT KNOW ABOUT IT!" - Agent Kay, "The Men In Black"

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Re: Still Buying As planned Regardless Of The World Situation

Post by raven15 » Tue Aug 08, 2017 11:45 pm

BolderBoy wrote:
selftalk wrote:It seems that everyone in my group of friends keep on talking about ... how bad the world situation is...
"There's always an Arquillian Battle Cruiser, or a Corillian Death Ray, or an intergalactic plague that is about to wipe out all life on this miserable little planet, and the only way these people can get on with their happy lives is that they DO NOT KNOW ABOUT IT!" - Agent Kay, "The Men In Black"
That is an amazingly relevant quote.
It's Time. Adding Interest.

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Re: Still Buying As planned Regardless Of The World Situation

Post by Ari » Wed Aug 09, 2017 12:06 am

Whenever the market is high, people tell you "You can't buy now; it's overvalued and about to crash!". Whenever the market is low, people tell you "You can't buy now; we're in a bear market and tanking!". If you listened to what people are saying, you'd stay out of investing altogether.
All in, all the time.

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Re: Still Buying As planned Regardless Of The World Situation

Post by FIREchief » Wed Aug 09, 2017 12:11 am

delamer wrote:The recently-retired Scott Burns -- my favorate personal finance writer -- advocated two things in times of uncertainty (which seems to be a lot of the time): 1) pay down debt and 2) diversify your assets.
Aren't those two good things to do ALL of the time?
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Re: Still Buying As planned Regardless Of The World Situation

Post by Darwin » Wed Aug 09, 2017 12:34 am

RRAAYY3 wrote:this world's always been a mess ... now we just have instant access to too much information so it seems oh so scary ... i will be buying continuously for the next 20 years ... and i'll buy even more when the markets go "bad" ... why? because either the market bounces back to doing what it's always done or WW3 kills us all - in which case, your precious asset allocation is irrelevant.
That's funny... I started investing seriously 25 years ago (maxing out my Roth) while living in a 15-foot rustic roundhouse with a dirt floor, fire pit in the middle, and smoke hole in the roof. I loved it. I also loved my career My theory was, since I didn't particularly care about money (and expected everything to collapse imminently), why not invest it in case my assumptions were wrong? Still not completely sure they were wrong, but I'm glad I'll be able to get bye either way.
Still living simply, but have a few more amenities. Never forget the wonder of piped water, heat and refrigeration!!! Perspective goes a long way toward finding happiness.

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Re: Still Buying As planned Regardless Of The World Situation

Post by CurlyDave » Wed Aug 09, 2017 1:05 am

FIREchief wrote:
delamer wrote:The recently-retired Scott Burns -- my favorate personal finance writer -- advocated two things in times of uncertainty (which seems to be a lot of the time): 1) pay down debt and 2) diversify your assets.
Aren't those two good things to do ALL of the time?
I have personally increased my net worth substantially by taking on lots of mortgage debt, both before and after retirement.

I do not understand why paying down debt is advantageous if the interest on that debt is 1/4 to 1/3 of the long term CAGR of equities.

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Re: Still Buying As planned Regardless Of The World Situation

Post by mmcmonster » Wed Aug 09, 2017 5:20 am

FIREchief wrote:
delamer wrote:The recently-retired Scott Burns -- my favorate personal finance writer -- advocated two things in times of uncertainty (which seems to be a lot of the time): 1) pay down debt and 2) diversify your assets.
Aren't those two good things to do ALL of the time?
I've got an outstanding (in both senses of the word) $23k car loan at 1.24% that I occasionally think about paying off. Then I remember that I can do better than that with Total Stock Market. :-)

Hopefully I can keep my resolve and finish the loan at it's alloted time in 3/2019.

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Re: Still Buying As planned Regardless Of The World Situation

Post by fundseeker » Wed Aug 09, 2017 6:01 am

prettybogle wrote:I dont mean any disrespect to the OP, but I really do not understand the point of threads like this. We all very well know the responses - some rehash of 1. market timing does not work; 2. Dont do something just stand there; 3. Keep investing etc
Maybe the point is to have others with similar attitudes chime in to raise the OP's comfort level, maybe like having a support group. :happy

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Re: Still Buying As planned Regardless Of The World Situation

Post by awval999 » Wed Aug 09, 2017 6:44 am

CurlyDave wrote: I have personally increased my net worth substantially by taking on lots of mortgage debt, both before and after retirement.

I do not understand why paying down debt is advantageous if the interest on that debt is 1/4 to 1/3 of the long term CAGR of equities.
You are the right that it is mathematically incorrect; however, the reason people pay off low interest debt is because it reduces risk and increases cash flow.

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Re: Still Buying As planned Regardless Of The World Situation

Post by CurlyDave » Wed Aug 09, 2017 9:02 am

awval999 wrote: You are the right that it is mathematically incorrect; however, the reason people pay off low interest debt is because it reduces risk and increases cash flow.
I don't think it really does either of those things. I strongly suspect the real reason is that it is psychologically comforting to not have debt. This psychological comfort has a high price.

A second reason is that we have allowed the financial community to confound "risk" with "short-term price fluctuation". As a long-term investor I welcome short-term fluctuations because they lead to better long-term returns.

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Re: Still Buying As planned Regardless Of The World Situation

Post by drk » Wed Aug 09, 2017 9:52 am

iamlucky13 wrote:Unfortunately, that's not a great indicator of much. The markets were high in 2006 and 1999, as well, and many folks are arguing that the high markets are exactly why we should be worried.
That looks like an example of the Availability bias/heuristic. Those two situations do not appear to describe the current situation and are themselves dissimilar, yet they're the most tangible market-related events for most people.

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Re: Still Buying As planned Regardless Of The World Situation

Post by flamesabers » Wed Aug 09, 2017 10:12 am

OP,

I think the best thing to do is to disregard what your friends are saying about the market. Nobody knows whether the situation of the world will improve or worsen, so why not continue to invest in the market today? If they don't want to be invested in the market, that's their decision.

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Re: Still Buying As planned Regardless Of The World Situation

Post by lazydavid » Wed Aug 09, 2017 10:30 am

My only "fear" is that the market will rebound from today's kerfuffle between now and my next 401k contribution, and I will have missed the sale. :mrgreen:

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Re: Still Buying As planned Regardless Of The World Situation

Post by MMMsentMe » Wed Aug 09, 2017 10:56 am

RRAAYY3 wrote:this world's always been a mess ... now we just have instant access to too much information so it seems oh so scary ... i will be buying continuously for the next 20 years ... and i'll buy even more when the markets go "bad" ... why? because either the market bounces back to doing what it's always done or WW3 kills us all - in which case, your precious asset allocation is irrelevant.
I have several co-workers who have this mind set. Why invest or save most of your income? You know you should really live for today because you can't take your money with you! We are one catastrophe from the end of the world or the United States! You should buy gold and silver instead because the stock market will be worthless when that happens.

Sure, I could die long before I get to use any of the money or we could have WW3 which wipes out most of the world. But like you said, if any of that happens the last thing on any of our minds will be the stock market. Instead, I will continue to invest and if things don't pan out the way they used to, at least I tried.

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Re: Still Buying As planned Regardless Of The World Situation

Post by RRAAYY3 » Wed Aug 09, 2017 11:22 am

so ... with this in mind ... does anyone know when, based on eastern standard time - vanguard's total international stock index "closes". i know i can buy total us before 4pm closing ... just curious as to what for total int'l

put another 1K in this morning for int'l (literally first thing i did today) ... just may do so again

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Re: Still Buying As planned Regardless Of The World Situation

Post by Ice-9 » Wed Aug 09, 2017 11:26 am

For the past several months, my asset allocation spreadsheet has listed that I'm under my target allocation in REIT index, Total Bond Market Index, and TIPS Index, so that's where all my new money has been going. Total Stock Market is starting to get close to my target allocation, though, so who knows, maybe I'll be buying some of that soon?

Regardless, the world situation doesn't play a factor in my purchases; only my asset allocation spreadsheet does.

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Re: Still Buying As planned Regardless Of The World Situation

Post by triceratop » Wed Aug 09, 2017 11:29 am

RRAAYY3 wrote:so ... with this in mind ... does anyone know when, based on eastern standard time - vanguard's total international stock index "closes". i know i can buy total us before 4pm closing ... just curious as to what for total int'l

put another 1K in this morning for int'l (literally first thing i did today) ... just may do so again
Any orders received before 4pm ET today receive the closing NAV of today.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

selters
Posts: 424
Joined: Thu Feb 27, 2014 9:26 am

Re: Still Buying As planned Regardless Of The World Situation

Post by selters » Wed Aug 09, 2017 11:47 am

Chrono Triggered wrote:When the market is high or stagnant, buy shares. When the market is down, buy even more shares.
So increase your allocation to stocks as the market falls?

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