A 4% move in the Dow and S&P in 12 days? Seems odd

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Wakefield1
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by Wakefield1 » Tue Jan 16, 2018 12:34 pm

The saddest thing about this probably is that the most fragile investors,scared of the memories of the last bear or crash,are the last getting lured in by the excitement near the top,they are liable to be the first to bail and get burned when the "correction" comes. They probably help fuel the correction.

Delta1
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by Delta1 » Tue Jan 16, 2018 3:28 pm

I'm stuck in a holding pattern here,haven't invested sep ira contributions for 17 and 18, waiting for that correction, stressing me out honestly, I should really just throw it in and not look until 19, but I would not be happy if the crash happened tomorrow...
Trying to remind myself that even if it did crash tomorrow, I am not looking to withdraw anytime soon, so regardless it would be considered a cheap buy, but yep it's definitely tough, market is still open, maybe I'll get the courage to throw in a couple k,

laputan86
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by laputan86 » Tue Jan 16, 2018 3:31 pm

Welcome to 2018, the year of euphoria.

Image

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AtlasShrugged?
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by AtlasShrugged? » Tue Jan 16, 2018 3:49 pm

I'm stuck in a holding pattern here,haven't invested sep ira contributions for 17 and 18, waiting for that correction, stressing me out honestly, I should really just throw it in and not look until 19, but I would not be happy if the crash happened tomorrow...
Delta1....Invest that money today. Or tomorrow. But invest the money now [low cost index funds recommended]. Make that money work for you. You work hard for your money, so make your money work for you. And don't beat yourself up about it, Ok? It is an inexpensive lesson learned - the best kind.
“If you don't know, the thing to do is not to get scared, but to learn.”

flyingaway
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by flyingaway » Tue Jan 16, 2018 4:10 pm

Surprisingly, today did not help.

tarmangani
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by tarmangani » Tue Jan 16, 2018 4:11 pm

Delta1 wrote:
Tue Jan 16, 2018 3:28 pm
I'm stuck in a holding pattern here,haven't invested sep ira contributions for 17 and 18, waiting for that correction, stressing me out honestly, I should really just throw it in and not look until 19, but I would not be happy if the crash happened tomorrow...
Trying to remind myself that even if it did crash tomorrow, I am not looking to withdraw anytime soon, so regardless it would be considered a cheap buy, but yep it's definitely tough, market is still open, maybe I'll get the courage to throw in a couple k,
Come on man/woman, you're essentially a case study in why someone shouldn't market time. Stressing out, sitting on the sidelines, missing gains...you're in it for the long haul and should be apathetic toward what happens tomorrow. Put the money in and move on.

Delta1
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by Delta1 » Tue Jan 16, 2018 4:33 pm

Thanx guys yep I know it's a issue, it's a against the advice I give others, but since the 1/1/18 when was planning to make my 2017 contributions, (and throw any leftover money in 2018 sep,) just looking at that almost straight line up has been a red flag holding me back...

*Good news is finally after 2 weeks of holding put in a few k to start right before closing today. Perhaps I should have put it all in...
Last edited by Delta1 on Tue Jan 16, 2018 4:41 pm, edited 1 time in total.

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White Coat Investor
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by White Coat Investor » Tue Jan 16, 2018 4:39 pm

It is just as hard to stay the course when markets are going up as when they are going down.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

UpperNwGuy
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by UpperNwGuy » Tue Jan 16, 2018 4:40 pm

There seems to be a lot of fear on this forum, and that surprises me. When I joined three months ago, I was hoping to find a group of investors who followed the investment philosophies of John Bogle. I was looking for encouragement, yet every day one or more people post that a crash is coming and that we have to do something. Of course a crash is coming! That's why we're supposed to have an IPS that takes that inevitability into account so we can stay the course without fear.

Delta1
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by Delta1 » Tue Jan 16, 2018 4:43 pm

White Coat Investor wrote:
Tue Jan 16, 2018 4:39 pm
It is just as hard to stay the course when markets are going up as when they are going down.
+1000%

RudyS
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by RudyS » Tue Jan 16, 2018 4:45 pm

This would be a good time to confirm that your asset allocation is suitable. Especially be sure that you CAN (and will) stay the course if a big drop happens. And be sure you have sufficient (relatively) safe holdings that you will not HAVE to sell stocks in case of a huge drop. Then, just enjoy the ride!

cusetownusa
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by cusetownusa » Tue Jan 16, 2018 4:50 pm

bgf wrote:
Tue Jan 16, 2018 10:48 am
drg02b wrote:
Tue Jan 16, 2018 10:44 am
Every time I think the market is overvalued during the current run, I look at this graph:

https://www.ftportfolios.com/Common/Con ... 8ff9bfe12d

Then I realize we COULD only be halfway there and I keep reminding myself to keep investing.
exactly. and imagine what that would look like if they'd counted that like 19.8% or whatever it was drop in the past few years...
I was just wondering this exact thing...20% is just some arbitrary number. If the market dropped 0.2% more during that drop it would make that chart look even more rosy.

At the end of the day you can make any chart/graph look however you want depending on the point you are trying to make...doesn't mean anything about what the future holds, imo.

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jimmd
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by jimmd » Tue Jan 16, 2018 4:54 pm

WpgGuy wrote:
Tue Jan 16, 2018 12:27 pm
JCE66 wrote:
Tue Jan 16, 2018 9:47 am
Bogleheads....I am struggling to recall a time where 'Mr. Market' moved like this in 12 days
Let me help, this (>=4% in 7 trading days) has happened 110 times since March 2009 [1]. There is nothing even remotely unique about this.

Stay the course.

[1] https://www.Washingtonpost.com/news/get ... ading-days
+1.
OP: my behavior has been to rebalance (5% band) on MLK day for the past 5 years. Otherwise...on course.

delamer
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by delamer » Tue Jan 16, 2018 5:11 pm

UpperNwGuy wrote:
Tue Jan 16, 2018 4:40 pm
There seems to be a lot of fear on this forum, and that surprises me. When I joined three months ago, I was hoping to find a group of investors who followed the investment philosophies of John Bogle. I was looking for encouragement, yet every day one or more people post that a crash is coming and that we have to do something. Of course a crash is coming! That's why we're supposed to have an IPS that takes that inevitability into account so we can stay the course without fear.
Look at the number of individual posts and “joined date” for the people writing in about sitting on the sidelines. A lot of them are new to the forum and are either unfamiliar with or still learning the Boglehead philosophy.

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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by White Coat Investor » Tue Jan 16, 2018 5:26 pm

UpperNwGuy wrote:
Tue Jan 16, 2018 4:40 pm
There seems to be a lot of fear on this forum, and that surprises me. When I joined three months ago, I was hoping to find a group of investors who followed the investment philosophies of John Bogle. I was looking for encouragement, yet every day one or more people post that a crash is coming and that we have to do something. Of course a crash is coming! That's why we're supposed to have an IPS that takes that inevitability into account so we can stay the course without fear.
It surprised me too in 2008 to see many people who I thought were avowed Bogleheads selling low. The phrase being used then was "Plan B." An intellectual understanding doesn't always correlate with the ability to actually do it.

Search "Plan B 2008" on this forum and you'll find some very interesting reading.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

flyingaway
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by flyingaway » Tue Jan 16, 2018 5:29 pm

delamer wrote:
Tue Jan 16, 2018 5:11 pm
UpperNwGuy wrote:
Tue Jan 16, 2018 4:40 pm
There seems to be a lot of fear on this forum, and that surprises me. When I joined three months ago, I was hoping to find a group of investors who followed the investment philosophies of John Bogle. I was looking for encouragement, yet every day one or more people post that a crash is coming and that we have to do something. Of course a crash is coming! That's why we're supposed to have an IPS that takes that inevitability into account so we can stay the course without fear.
Look at the number of individual posts and “joined date” for the people writing in about sitting on the sidelines. A lot of them are new to the forum and are either unfamiliar with or still learning the Boglehead philosophy.
I guess many bogleheads have retired and are no longer active here.

tarmangani
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by tarmangani » Tue Jan 16, 2018 5:31 pm

UpperNwGuy wrote:
Tue Jan 16, 2018 4:40 pm
There seems to be a lot of fear on this forum, and that surprises me. When I joined three months ago, I was hoping to find a group of investors who followed the investment philosophies of John Bogle. I was looking for encouragement, yet every day one or more people post that a crash is coming and that we have to do something. Of course a crash is coming! That's why we're supposed to have an IPS that takes that inevitability into account so we can stay the course without fear.
You're on a public forum. Lots of different people register here to post, ask questions, explore Bogleheadism, toss opinions around. No one has to pass a test to register. It's a testament to the forum's popularity that it brings in many people who are not yet, or never intend to be, Bogleheads. You have indeed found a group of investors who follow the investment philosophies of John Bogle. They're just not the only people here. This would be a very different forum if the only people who posted were True Believers. I'd imagine it would have to be heavily moderated/censored or unpopular so that no one knew about it.

Obviously this is to say nothing as well of selective memory, and how many posts made could be attributed to being "anti-Boglehead" and how many are "pro-Boglehead."

delamer
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by delamer » Tue Jan 16, 2018 5:33 pm

flyingaway wrote:
Tue Jan 16, 2018 5:29 pm
delamer wrote:
Tue Jan 16, 2018 5:11 pm
UpperNwGuy wrote:
Tue Jan 16, 2018 4:40 pm
There seems to be a lot of fear on this forum, and that surprises me. When I joined three months ago, I was hoping to find a group of investors who followed the investment philosophies of John Bogle. I was looking for encouragement, yet every day one or more people post that a crash is coming and that we have to do something. Of course a crash is coming! That's why we're supposed to have an IPS that takes that inevitability into account so we can stay the course without fear.
Look at the number of individual posts and “joined date” for the people writing in about sitting on the sidelines. A lot of them are new to the forum and are either unfamiliar with or still learning the Boglehead philosophy.
I guess many bogleheads have retired and are no longer active here.

Funny, I tend to think the opposite — that we retirees have more time to read and post.

flyingaway
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by flyingaway » Tue Jan 16, 2018 5:48 pm

delamer wrote:
Tue Jan 16, 2018 5:33 pm
flyingaway wrote:
Tue Jan 16, 2018 5:29 pm
delamer wrote:
Tue Jan 16, 2018 5:11 pm
UpperNwGuy wrote:
Tue Jan 16, 2018 4:40 pm
There seems to be a lot of fear on this forum, and that surprises me. When I joined three months ago, I was hoping to find a group of investors who followed the investment philosophies of John Bogle. I was looking for encouragement, yet every day one or more people post that a crash is coming and that we have to do something. Of course a crash is coming! That's why we're supposed to have an IPS that takes that inevitability into account so we can stay the course without fear.
Look at the number of individual posts and “joined date” for the people writing in about sitting on the sidelines. A lot of them are new to the forum and are either unfamiliar with or still learning the Boglehead philosophy.
I guess many bogleheads have retired and are no longer active here.

Funny, I tend to think the opposite — that we retirees have more time to read and post.
If you retired (with enough hopefully), don't you have something more fun to do?

cherijoh
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by cherijoh » Tue Jan 16, 2018 5:50 pm

JCE66 wrote:
Tue Jan 16, 2018 11:24 am
After a pattern continues long enough that the masses think it is the "New Norm".
Record ,Massive Inflows to an asset class.
Chasing Performance.
Greed.
This is more along the lines of what I was looking for, in a behavioral sense. For now, I am not seeing very many 'but this time, it is just so different' articles that would lead me to conclude people are buying into the idea of a 'New Norm'.

Would love to see other behavioral examples that Bogleheads look for.
Prior to the dot com bust, one was working class folks (with no prior investment experience) quitting their day jobs to do day trading. Just like people with no real estate experience quitting their day jobs to flip houses before the real estate bust.

delamer
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by delamer » Tue Jan 16, 2018 6:03 pm

flyingaway wrote:
Tue Jan 16, 2018 5:48 pm
delamer wrote:
Tue Jan 16, 2018 5:33 pm
flyingaway wrote:
Tue Jan 16, 2018 5:29 pm
delamer wrote:
Tue Jan 16, 2018 5:11 pm
UpperNwGuy wrote:
Tue Jan 16, 2018 4:40 pm
There seems to be a lot of fear on this forum, and that surprises me. When I joined three months ago, I was hoping to find a group of investors who followed the investment philosophies of John Bogle. I was looking for encouragement, yet every day one or more people post that a crash is coming and that we have to do something. Of course a crash is coming! That's why we're supposed to have an IPS that takes that inevitability into account so we can stay the course without fear.
Look at the number of individual posts and “joined date” for the people writing in about sitting on the sidelines. A lot of them are new to the forum and are either unfamiliar with or still learning the Boglehead philosophy.
I guess many bogleheads have retired and are no longer active here.

Funny, I tend to think the opposite — that we retirees have more time to read and post.
If you retired (with enough hopefully), don't you have something more fun to do?
What a strange thing to say.

I spend time on Bogleheads because it is interesting and I continue to learn things.

It isn’t as if once you retire, even with adequate savings and income, that you are somehow home free.

And because I hope I can provide information/suggestions to others who post questions.

flyingaway
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by flyingaway » Tue Jan 16, 2018 6:05 pm

delamer wrote:
Tue Jan 16, 2018 6:03 pm
flyingaway wrote:
Tue Jan 16, 2018 5:48 pm
delamer wrote:
Tue Jan 16, 2018 5:33 pm
flyingaway wrote:
Tue Jan 16, 2018 5:29 pm
delamer wrote:
Tue Jan 16, 2018 5:11 pm


Look at the number of individual posts and “joined date” for the people writing in about sitting on the sidelines. A lot of them are new to the forum and are either unfamiliar with or still learning the Boglehead philosophy.
I guess many bogleheads have retired and are no longer active here.

Funny, I tend to think the opposite — that we retirees have more time to read and post.
If you retired (with enough hopefully), don't you have something more fun to do?
What a strange thing to say.

I spend time on Bogleheads because it is interesting and I continue to learn things.

It isn’t as if once you retire, even with adequate savings and income, that you are somehow home free.

And because I hope I can provide information/suggestions to others who post questions.
:sharebeer

SimplicityNow
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by SimplicityNow » Tue Jan 16, 2018 6:13 pm

delamer wrote:
Tue Jan 16, 2018 6:03 pm
flyingaway wrote:
Tue Jan 16, 2018 5:48 pm
delamer wrote:
Tue Jan 16, 2018 5:33 pm
flyingaway wrote:
Tue Jan 16, 2018 5:29 pm
delamer wrote:
Tue Jan 16, 2018 5:11 pm


Look at the number of individual posts and “joined date” for the people writing in about sitting on the sidelines. A lot of them are new to the forum and are either unfamiliar with or still learning the Boglehead philosophy.
I guess many bogleheads have retired and are no longer active here.

Funny, I tend to think the opposite — that we retirees have more time to read and post.
If you retired (with enough hopefully), don't you have something more fun to do?
What a strange thing to say.

I spend time on Bogleheads because it is interesting and I continue to learn things.

It isn’t as if once you retire, even with adequate savings and income, that you are somehow home free.

And because I hope I can provide information/suggestions to others who post questions.
+1

Sine I retired successfully (in part to the wisdom of all the Bogleheads before me)I feel a greater responsibility to post here and help others achieve that

same success.Not to mention I learn something almost every single time I visit this forum.

Bastiat
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by Bastiat » Tue Jan 16, 2018 6:25 pm

Geologist wrote:
Tue Jan 16, 2018 10:59 am
The problem with facile explanations of changes is that they often don't fit the data. International Stocks are up more than US stocks. How does US corporate tax law changes explain that?
We'll ignore that the US economy is the largest in the world, conducts a great deal of international business and trade, and what's good for the US economy is good for the world.

Change in US corporate tax law does not need to explain a rise in international stocks. You're affirming a disjunct.

Geologist
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by Geologist » Tue Jan 16, 2018 8:29 pm

Bastiat wrote:
Tue Jan 16, 2018 6:25 pm
Geologist wrote:
Tue Jan 16, 2018 10:59 am
The problem with facile explanations of changes is that they often don't fit the data. International Stocks are up more than US stocks. How does US corporate tax law changes explain that?
We'll ignore that the US economy is the largest in the world, conducts a great deal of international business and trade, and what's good for the US economy is good for the world.

Change in US corporate tax law does not need to explain a rise in international stocks. You're affirming a disjunct.
I'm just saying that I see no demonstration of the connection of the change in US corporate taxes and 12 days of US stock changes, just an assertion. Cause and effect is very difficult to demonstrate. You may disagree, but we will then have to disagree.

As to the OP's original query that the increase seemed odd or unusual. It isn't odd at all as various posters have pointed out.

TheHouse7
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by TheHouse7 » Tue Jan 16, 2018 8:46 pm

delamer wrote:
Tue Jan 16, 2018 6:03 pm
flyingaway wrote:
Tue Jan 16, 2018 5:48 pm
delamer wrote:
Tue Jan 16, 2018 5:33 pm
flyingaway wrote:
Tue Jan 16, 2018 5:29 pm
delamer wrote:
Tue Jan 16, 2018 5:11 pm


Look at the number of individual posts and “joined date” for the people writing in about sitting on the sidelines. A lot of them are new to the forum and are either unfamiliar with or still learning the Boglehead philosophy.
I guess many bogleheads have retired and are no longer active here.

Funny, I tend to think the opposite — that we retirees have more time to read and post.
If you retired (with enough hopefully), don't you have something more fun to do?
What a strange thing to say.

I spend time on Bogleheads because it is interesting and I continue to learn things.

It isn’t as if once you retire, even with adequate savings and income, that you are somehow home free.

And because I hope I can provide information/suggestions to others who post questions.
Thank you.
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.

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BrandonBogle
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by BrandonBogle » Wed Jan 17, 2018 12:59 am

I wouldn't have even noticed that the Dow and S&P moved 4% in 12 days. That said, I did notice the uptick -- in absolute dollars. While I am only up 3.3% since the beginning of the year, my growth dollars are nearly 2/3 of my planned contributions of 2018. 2017 was the first year that my balance, in dollars, grew more than what I contributed (significantly so -- the growth dollars alone nearly surprised my gross income for the year), I'm surprised to see such a large dollar swing so soon in the year. I guess I need to get used to it as my retirement assets have grown large enough that they so such wide variations in dollar terms.

That said, I'm a Boglehead. So the result of this "epiphany" is to have another :beer and "Stay the course"

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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by RadAudit » Wed Jan 17, 2018 11:46 am

Behaviors?

Just before one crash ago, there was a lot of talk about and news articles on getting rich on day trading. Also news articles on people going off the deep end and shooting anything that moved in a day trading parlor. I don't expect a recurrence of that, this time.

Before that, people were chatting about valuing dot com IPOs on the number of eyeballs on a web site.

However, chat about permanently high plateaus of equity valuations from unusually high P\E levels might be something to be concerned about.

It's always different but the common thread seems to me to have more than a little bit of craziness attached to it.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The Calvary isn't coming, kids. You are on your own.

Engineer250
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by Engineer250 » Wed Jan 17, 2018 12:09 pm

flyingaway wrote:
Tue Jan 16, 2018 12:29 pm
Engineer250 wrote:
Tue Jan 16, 2018 12:14 pm
JCE66 wrote:
Tue Jan 16, 2018 9:47 am
What I am looking for are behavioral signs. What specific behaviors do you observe that make that light bulb go off in your head?
2018 will be a big increase for me in retirement contributions. Therefore, I know it won’t be a down year because then I could be buying at a discount. I think other than flash crashes (which will happen the day after my buy orders go in each week) I don’t think we’ll have another downturn until 2020 when I have quite a bit more invested and it hurts from several years of good contributions.

Yes I cynically base my predictions on what would be less optimal for me. Or maybe there won’t be a crash, just stagnation starting now.
With a 40% positive return by 2020, I am going to retire then, no more ONE MORE YEAR.
I didn’t say it would keep going up by 20% a year, just that it won’t go down before 2020. 8-)
Where the tides of fortune take us, no man can know.

mffl
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by mffl » Wed Jan 17, 2018 12:11 pm

bgf wrote:
Tue Jan 16, 2018 11:51 am
this is not to say that i agree with market headlines that state nonsense like 'Dow down 0.3% on news that so and so shot whoever.'
Heh, yeah, those daily finance writers are so lazy. I've more than once seen an article on Yahoo Finance switch from "Dow down 200 points *ON* Fed comments" to "Dow up 150 points *DESPITE* Fed comments". Just change one word and run with the same story. They take the market change, the biggest perceived news of the day, and then use either "on" or "despite" depending on whether the two seem to make sense together or not. They'll even change the preposition after the fact if the market changes even though the seemingly relevant news doesn't.

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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by Engineer250 » Wed Jan 17, 2018 12:13 pm

delamer wrote:
Tue Jan 16, 2018 6:03 pm
What a strange thing to say.

I spend time on Bogleheads because it is interesting and I continue to learn things.

It isn’t as if once you retire, even with adequate savings and income, that you are somehow home free.

And because I hope I can provide information/suggestions to others who post questions.
As a youngin’ early in accumulation I am happy there are retirees posting on here to pass down their insights and experiences. :sharebeer

I also think for me this forum fills some of my need to “do something”. So rather than mess with my AA or buy or sell something I come here. This forum is like a warm calming blanket and I always come away worrying less about whatever the news of the day is.
Where the tides of fortune take us, no man can know.

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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by nisiprius » Wed Jan 17, 2018 12:18 pm

Wakefield1 wrote:
Tue Jan 16, 2018 10:33 am
I believe I heard some market guru say that upside moves or toppings end when the bulk of the investing public (including new investors drawn to the excitement of the rising market?) runs out of new money to throw in
Exactly what does that mean, and what data could you look at to find out whether it has even been true in the past? Offhand I think it is just hándwaving.
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.

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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by Phineas J. Whoopee » Wed Jan 17, 2018 9:22 pm

nisiprius wrote:
Wed Jan 17, 2018 12:18 pm
Wakefield1 wrote:
Tue Jan 16, 2018 10:33 am
I believe I heard some market guru say that upside moves or toppings end when the bulk of the investing public (including new investors drawn to the excitement of the rising market?) runs out of new money to throw in
Exactly what does that mean, and what data could you look at to find out whether it has even been true in the past? Offhand I think it is just hándwaving.
What we take as the market price is simply the most recent price at which the most eager buyer and most eager seller transacted. New money to throw in isn't really it, because the money changes hands between the previous shareholder and the new one. The market itself is composed of shares of stock, not units of currency (although the shares are valued in the unit of account sense of money).

PJW

Agggm
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by Agggm » Wed Jan 17, 2018 10:45 pm

BuckyBadger wrote:
Tue Jan 16, 2018 9:50 am
JCE66 wrote:
Tue Jan 16, 2018 9:47 am
Bogleheads....I am struggling to recall a time where 'Mr. Market' moved like this in 12 days [the wild gyrations of 2008-09 do not count, totally different circumstance]. That 4% move is pretty amazing. I am sitting here shaking my head and saying: Go!. :mrgreen:

At what point do you stop and say to yourself, "This party cannot go on".

What I am looking for are behavioral signs. What specific behaviors do you observe that make that light bulb go off in your head?
Does it matter, though? Would you do something other than stay the course no matter what happened in the last 12 days? Let's say you think "the party can't go on." What are you going to do with this knowledge?

I'm going to keep doing what I've been doing regardless of the party, so the last 12 days and the next 12 days are irrelevant to me.
+1

Candor
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by Candor » Fri Jan 19, 2018 11:18 pm

White Coat Investor wrote:
Tue Jan 16, 2018 4:39 pm
It is just as hard to stay the course when markets are going up as when they are going down.
I wouldn't say it's just as hard but I'm sure many find it surprisingly and somewhat counterintuitively difficult. I have weathered a few market gyrations over the decades and I will gladly take the angst over a rising market vs. the opposite.

BlackStrat
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by BlackStrat » Sat Jan 20, 2018 9:16 am

Delta1 wrote:
Tue Jan 16, 2018 4:33 pm
Thanx guys yep I know it's a issue, it's a against the advice I give others, but since the 1/1/18 when was planning to make my 2017 contributions, (and throw any leftover money in 2018 sep,) just looking at that almost straight line up has been a red flag holding me back...

*Good news is finally after 2 weeks of holding put in a few k to start right before closing today. Perhaps I should have put it all in...
Hopefully you're in a position to invest for the long term. Another way of looking at it is:

- the money you invest in your 20's is for perhaps an early retirement in your 50's (or 60's)
- the money you invest in your 30's is for supporting you in your 60's (or 70's)
- the money you invest in your 40's is for supporting you in your 70's (or 80's)
- the money you invest in your 50's is for supporting you in your 80's (or 90's)

I hope most of us can agree that, short of a historic crisis of epic proportions, this amount of time between investing and withdrawing would result in positive earnings.

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F150HD
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by F150HD » Sat Jan 20, 2018 9:57 am

OkieIndexer wrote:
Tue Jan 16, 2018 10:58 am
Just 2 years ago Jan. 2016 was the worst January for the market since January 2009. They both ended up being good years for equities.
we always hear how long this 'bull' has been but some seem to forget that correction. Didn't that somewhat reset the beginning of the current bull?

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F150HD
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by F150HD » Sat Jan 20, 2018 9:59 am

drg02b wrote:
Tue Jan 16, 2018 10:44 am
Every time I think the market is overvalued during the current run, I look at this graph:

https://www.ftportfolios.com/Common/Con ... 8ff9bfe12d

Then I realize we COULD only be halfway there and I keep reminding myself to keep investing.
nice pdf.

tibbitts
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by tibbitts » Sat Jan 20, 2018 10:23 am

JCE66 wrote:
Tue Jan 16, 2018 3:49 pm
I'm stuck in a holding pattern here,haven't invested sep ira contributions for 17 and 18, waiting for that correction, stressing me out honestly, I should really just throw it in and not look until 19, but I would not be happy if the crash happened tomorrow...
Delta1....Invest that money today. Or tomorrow. But invest the money now [low cost index funds recommended]. Make that money work for you. You work hard for your money, so make your money work for you. And don't beat yourself up about it, Ok? It is an inexpensive lesson learned - the best kind.
I think it's not a bad idea to wait until the last month or two to make contributions for the previous year. It's less hassle than making corrections, and I've done it both ways. So I'll make 2017 contributions in a couple of months or so. Depending on your tax situation (% capital gains for example) it might or might not matter much, but like I said for me I just want to make taxes and reporting as simple as possible.

staythecourse
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by staythecourse » Sat Jan 20, 2018 3:08 pm

You are kidding right? Off the top of my had I believe the U.S. markets were moving up and down 4-8% per DAY when U.S. debt was downgraded. There were a few other times as well.

In the end, you have to ask would you be asking this question if the market went up 4%? Probably not. Return (positive return) and loss (negative return) are the two sides of the coin of volatility. The same volatility that gives high returns is the same that gives huge losses.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

DrGoogle2017
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by DrGoogle2017 » Sat Jan 20, 2018 4:20 pm

delamer wrote:
Tue Jan 16, 2018 6:03 pm
flyingaway wrote:
Tue Jan 16, 2018 5:48 pm
delamer wrote:
Tue Jan 16, 2018 5:33 pm
flyingaway wrote:
Tue Jan 16, 2018 5:29 pm
delamer wrote:
Tue Jan 16, 2018 5:11 pm


Look at the number of individual posts and “joined date” for the people writing in about sitting on the sidelines. A lot of them are new to the forum and are either unfamiliar with or still learning the Boglehead philosophy.
I guess many bogleheads have retired and are no longer active here.

Funny, I tend to think the opposite — that we retirees have more time to read and post.
If you retired (with enough hopefully), don't you have something more fun to do?
What a strange thing to say.

I spend time on Bogleheads because it is interesting and I continue to learn things.

It isn’t as if once you retire, even with adequate savings and income, that you are somehow home free.

And because I hope I can provide information/suggestions to others who post questions.
I’m retired too. Before my retirement, I didn’t follow bogglehead forum at all. Sometimes the financial information are just over my head. But I’m slowly learning. Maybe pass along some information I’ve learned here to my kids. Future boggleheads.

sambb
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by sambb » Sat Jan 20, 2018 4:23 pm

Something has happened in the US that has caused stock markets to skyrocket in the last year, i am not referring to politics or anything else, but the facts are the facts - something has caused buyers to buy.
I dont think the 4% move is odd. I am staying the course, and investing per my allocation, though sometimes i think i shoudl rebalance out by 5-10%.

Shallowpockets
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by Shallowpockets » Sat Jan 20, 2018 4:37 pm

Odd. Maybe, but it is.
I just did an asset tally today and I am up 47k since the beginning of the year. That dollar amount is more than our annual total expenses. If I take out that amount then I am covered for another year going forward and I am holding the same assets I had end of 2017.
For anyone relying on the 4% rule, there you have it.
Almost a free ride year.

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whodidntante
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by whodidntante » Sat Jan 20, 2018 4:42 pm

This is the 4% real return that Bogle told us we'd get. You either need 4%+inflation or you just make it all in 12 days so inflation is irrelevant.

blinx77
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Re: A 4% move in the Dow and S&P in 12 days? Seems odd

Post by blinx77 » Sat Jan 20, 2018 6:55 pm

flyingaway wrote:
Tue Jan 16, 2018 11:29 am
OkieIndexer wrote:
Tue Jan 16, 2018 11:15 am
flyingaway wrote:
Tue Jan 16, 2018 11:11 am
Admiral wrote:
Tue Jan 16, 2018 10:54 am
Here's all you need to know (from the chart that was posted):

The average Bull Market period lasted 9.0 years with an average cumulative total return of 480%.

The average Bear Market period lasted 1.4 years with an average cumulative loss of -41%

Why would you assume that a big corporate tax cut would NOT send the markets flying higher? Seems pretty elemental to me. These co's are/have been sitting on a LOT of cash.
Experts claimed that has been "priced in" in last year's run-up .
Yeah, my thinking was the tax cut was already priced in last year even before it passed. My theory is the rise so far this month is mostly due to retail money (i.e. regular folks) flowing into equities (2018 IRA contributions, etc.).
It seems to me that the smart money was in last year, and the dumb money is rushing in now, which is the sign of topping.
The smart money is investing in accordance with its predetermined asset allocation. :sharebeer :sharebeer

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