Still Buying As planned Regardless Of The World Situation

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iamlucky13
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Re: Still Buying As planned Regardless Of The World Situation

Post by iamlucky13 » Wed Aug 09, 2017 12:23 pm

drk wrote:
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.
Umm...no? I mean, those were two easy to recall examples, but I don't present them as necessarily saying anything about the current market situation.

The only message is that it is possible for the economic situation to be poor and the market high. Notable about those two examples, however, is that at the times I mentioned, we largely did not yet realize the economic situation was not very good, where as the prior poster referenced the Great Depression after the various economic troubles had become clear.

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

Post by harvestbook » Wed Aug 09, 2017 12:51 pm

I always recall Warren Buffet said he bought his first stocks while the US was losing the war against Japan (which it was, until the latter part of 1942.)
I'm not smart enough to know, and I can't afford to guess.

RRAAYY3
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Re: Still Buying As planned Regardless Of The World Situation

Post by RRAAYY3 » Wed Aug 09, 2017 1:10 pm

triceratop wrote:
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.
this applies to international as well? sweet.

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

Post by triceratop » Wed Aug 09, 2017 1:33 pm

RRAAYY3 wrote:
triceratop wrote:
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.
this applies to international as well? sweet.
Despite investing in foreign securities, the fund is still a U.S.-domiciled mutual fund, so yes. There are some "fair value" adjustments made to estimate what the true NAV is when foreign markets are closed. The details of how this is done is somewhat murky (and likely proprietary).
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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

Post by delamer » Wed Aug 09, 2017 3:23 pm

mmcmonster wrote:
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.
Burns was responding to readers who were writing him convinced that the world was going-to-hell-in-a-hand basket (like, maybe, war with North Korea) and planning to empty their investment and bank accounts and bury their money in the backyard. He was trying to dial back the panic, by suggesting the better course was to minimize their debt and diversfy their investments.

Not everyone follows the Boglehead philosophy, and even those who do can freak out when it appears that "this time it really may be different."

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

Post by FIREchief » Wed Aug 09, 2017 3:31 pm

delamer wrote:
mmcmonster wrote:
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.
Burns was responding to readers who were writing him convinced that the world was going-to-hell-in-a-hand basket (like, maybe, war with North Korea) and planning to empty their investment and bank accounts and bury their money in the backyard. He was trying to dial back the panic, by suggesting the better course was to minimize their debt and diversfy their investments.

Not everyone follows the Boglehead philosophy, and even those who do can freak out when it appears that "this time it really may be different."
Yeah, that makes sense. As a few other posters pointed out, I didn't really think through my original comment (one reminded me that I also have an outstanding car loan simply because I was offered 36 months at zero percent interest - I just left that money in the market the past two and a half years, so I guess I came out okay 8-) ).
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

Chrono Triggered
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Re: Still Buying As planned Regardless Of The World Situation

Post by Chrono Triggered » Wed Aug 09, 2017 5:17 pm

selters wrote:
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?
Sure. This can be accomplished by simply re-balancing during this time, or in my case, with 20+ years until retirement, if the market really tanks I'm going to put in as much money as I feasibly can.

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

Post by columbia » Wed Aug 09, 2017 5:19 pm

Amen on that last sentence.

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

Post by FIREchief » Wed Aug 09, 2017 7:38 pm

Chrono Triggered wrote:
selters wrote:
So increase your allocation to stocks as the market falls?
Sure. This can be accomplished by simply re-balancing during this time
These are two different things.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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

Post by drk » Wed Aug 09, 2017 10:19 pm

iamlucky13 wrote:
drk wrote:
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.
Umm...no? I mean, those were two easy to recall examples, but I don't present them as necessarily saying anything about the current market situation.

The only message is that it is possible for the economic situation to be poor and the market high. Notable about those two examples, however, is that at the times I mentioned, we largely did not yet realize the economic situation was not very good, where as the prior poster referenced the Great Depression after the various economic troubles had become clear.
I actually thought about prefacing that with a note that I knew you were not making the argument that the market is primed for a repeat of either of the last two crises. That's my bad. Someone (e.g., "many folks") who did make that argument would be committing the aforementioned fallacy, though.

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Lieutenant.Columbo
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Re: Still Buying As planned Regardless Of The World Situation

Post by Lieutenant.Columbo » Wed Aug 09, 2017 11:48 pm

Darwin wrote:...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.
somehow this reminded me of Garfunkel, on-stage, saying:
How nice poverty looks in retrospect.
Lt. Columbo: Well, what do you know. Here I am talking with some of the smartest people in the world, and I didn't even notice!

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

Post by stemikger » Thu Aug 10, 2017 8:23 am

Warren Buffett is on the record as saying, he never let a world crisis and/or political climate derail his investing. That never had anything to do with it.

The World has always been a dangerous place and will continue to be. Keep Investing!

P.S. Don't let negative people influence your plan. I'm around them all day and I just choose to ignore them.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

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

Post by protagonist » Thu Aug 10, 2017 8:32 am

I think paying off debt is always a good option, especially given its priceless psychological effect (and particularly if investing is causing you anxiety).

RRAAYY3
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Re: Still Buying As planned Regardless Of The World Situation

Post by RRAAYY3 » Thu Aug 10, 2017 11:24 am

Remind yourself that this world has always been crazy, there just wasn't twitter before ... buy the dips ...

If disaster does strike, your AA is irrelevant anyway

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

Post by telemark » Thu Aug 10, 2017 12:57 pm

I'm still buying normally, but normal currently means 100% into bonds, to help keep my portfolio near its target allocation. If the market ever drops I'll start buying stocks again, for the same reason.

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

Post by visualguy » Thu Aug 10, 2017 1:26 pm

Chrono Triggered wrote: The market will always reach a new high as time marches on but it sounds like you know this already.
It's important to realize that this is not some rule of economics. It may or may not happen, and it may or may not happen within a time frame that's relevant to you. For example, the Japanese Nikkei never even came close to reaching the highs of the late 80s again. The US is also now suffering from an aging population, and there's pressure to reduce immigration, which would make it worse. Stagnation isn't impossible even in the US. Not saying this will happen, but you can't really say that the market will always reach a new high with 100% certainty.

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

Post by Crisium » Thu Aug 10, 2017 2:57 pm

selters wrote:
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?
If you DCA (like with regular 401k contributions) then you do buy more when the market down. You get more shares for the same dollar.

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

Post by Darwin » Fri Aug 11, 2017 11:13 pm

Lieutenant.Columbo wrote:
Darwin wrote:...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.
somehow this reminded me of Garfunkel, on-stage, saying:
How nice poverty looks in retrospect.
Pretty cool! I love Garfunkle. He (and Simon) were among my heroes as a kid.
I suppose the difference I'd give is the context... I'm not worshiping "poverty". Our wealth for our age is 4X national average (we save more than we use), and my wife and I don't need anywhere near that much because we live in a neighborhood that fits our personality. We both grew up poor (yeah, really), and we still work outdoors doing physical labor day after day. We live with working-class plumbers and roofers and carpenters as neighbors. Not that we're in his range, but think Warren Buffet... I imagine he still lives in his earlier, humbler neighborhood because he likes the types of people he's surrounded by. So do we. I don't think of wealth as "climbing over the less intelligent" so much as taking advantage of my luck and wits to not have to worry about retirement so much. I'm happy glad to have this boglehead community to give good guidance, since pension plans have been mostly replaced by 401k since the Reagan years. The "freedom" of 401k assumes that every worker has to be an investment specialist too, and thankfully (in lieu of standard pensions) there's Vanguard/Jack Bogle/Bogleheads. Doing our best, and planning to pass it on to the less fortunate once we're gone! Not being nostalgic about poverty, just pointing out that expenses+1=happiness, expenses-1=misery.

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

Post by nedsaid » Sat Aug 12, 2017 10:20 am

selftalk wrote:
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.
I don't think people need to obsess over valuations. Pretty much what you want to do is cut back if you see a bubble forming. We are not in a bubble. I would explain a bubble as excessive valuations coupled with excessive optimism. Pretty much, bull markets end when markets run out of buyers. It seems that valuations are "stretched" but interest rates are still very low, still a lot of cash on corporate balance sheets, profit margins are still high, and inflation seems subdued. The higher the market goes, the more articles I see warning of market doom. There is optimism out there about the economy and the markets but no where near euphoria. Individual investors and institutions have optimism but I don't see huge optimism in the financial press. People are not quitting their jobs to day trade. Market valuation is nowhere near where it was before the 2000-2002 bear market.

Markets seem expensive but we have been in a bull market since about March of 2009. Stocks always look expensive in bull markets. Garden variety bear markets of 20% to 30% down can happen at any time, particularly if there is an unexpected world event that happens which shakes investors. I don't see euphoria setting us up for a 50% or more crash, it doesn't feel like the 1999 stock market euphoria or the 2007 real estate euphoria. In certain real estate markets, where new construction is constricted, we might be seeing whiffs of euphoria but mortgages are harder to get now than in 2007 and other parts of the US have more normal markets.

If you are relatively young, just keep investing right on schedule. If you are near retirement, you might want to pay more attention to market valuations, but no reason here for anyone to panic. That is if you have an age appropriate asset allocation and you have a long term outlook.
A fool and his money are good for business.

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

Post by selftalk » Sat Aug 12, 2017 4:16 pm

nedsaid, have you noticed that W. Buffett has the highest cash hoard ( most probably Berkshire Hathaway has it) he ever had. It seems to me that he`s having some difficulty buying stocks and companies at these prices. He has said that he wants a great company at a fair price. So as he`s said numerous times he`ll wait for the right pitch to swing at. For those market timers they should notice that Buffett doesn`t sell out. It may not be the top now but it`s certainly not the bottom that`s for sure. Us smaller less monetary investors should just keep on dollar cost averaging with blinders on. Buffett has his companies and let`s them try to grow more regardless of a high priced market.

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

Post by nedsaid » Sat Aug 12, 2017 4:29 pm

selftalk wrote:
Sat Aug 12, 2017 4:16 pm
nedsaid, have you noticed that W. Buffett has the highest cash hoard ( most probably Berkshire Hathaway has it) he ever had. It seems to me that he`s having some difficulty buying stocks and companies at these prices. He has said that he wants a great company at a fair price. So as he`s said numerous times he`ll wait for the right pitch to swing at. For those market timers they should notice that Buffett doesn`t sell out. It may not be the top now but it`s certainly not the bottom that`s for sure. Us smaller less monetary investors should just keep on dollar cost averaging with blinders on. Buffett has his companies and let`s them try to grow more regardless of a high priced market.
Yes, I am aware of Berkshire-Hathaway's $100 billion cash hoard. I believe that is a commentary on Berkshire-Hathaway's size as much as it is on market valuations. He could buy smaller businesses but they would have a miniscule effect the company as a whole. He wants to buy something that will add to the earnings power and intrinsic value of B-H in a meaningful way. I have also read that Buffett believes that stocks are relatively cheap particularly when considering the low level of interest rates.

The thing is, Warren Buffett has built a cash machine of businesses that pretty much run themselves. All Buffett and Munger have to do is allocate the capital. These guys are good operators. I would add that there should be organic growth within the businesses that B-H already owns. The company will grow even if Buffett never makes another investment.
A fool and his money are good for business.

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

Post by selftalk » Sat Aug 12, 2017 4:35 pm

how true nedsaid. I guess the fly in the ointment is the interest rate policy which basically no one knows. High rates could topple the market of course. Since we do not know which way and/or how high or low rates will go or become we have to do what Bogle suggests and that is "invest we must." The beat goes on as always.

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

Post by nedsaid » Sun Aug 13, 2017 9:52 pm

selftalk wrote:
Sat Aug 12, 2017 4:35 pm
how true nedsaid. I guess the fly in the ointment is the interest rate policy which basically no one knows. High rates could topple the market of course. Since we do not know which way and/or how high or low rates will go or become we have to do what Bogle suggests and that is "invest we must." The beat goes on as always.
Gosh, what would happen if Mr. Buffett took his own advice and bought 90% S&P 500 (or $90 Billion) and 10% Treasuries(or $10 Billion). If that is good enough for his wife, it ought to be good enough for his shareholders. :wink:
A fool and his money are good for business.

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