Are we missing recession /bear market beginning

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Jimsad
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Are we missing recession /bear market beginning

Post by Jimsad » Thu Mar 22, 2018 5:23 am

It seems to me that on most days recently , the stock market is down on some excuse or other . It used to be the other way round till recently .
Is this because a bear market / recession has already started ?
Any changes to my portfolio I should be making?

AlohaJoe
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Re: Are we missing recession /bear market beginning

Post by AlohaJoe » Thu Mar 22, 2018 5:35 am

Jimsad wrote:
Thu Mar 22, 2018 5:23 am
It seems to me that on most days recently , the stock market is down on some excuse or other
Over the past 90 days the market has closed up 60% of the time -- 36 times up, 24 times down.
For the month of March (so far), the market has closed up 8 times and down 7 times.
For February + March, the market has closed up 19 times and down 15 times.

There's no time period over which "most days the stock market is down" has been true this year.
Any changes to my portfolio I should be making?
I wouldn't make investing decisions based on feelings. Markets go up. Markets go down. If you really want to get into trend following then there are numerous articles out there on it, though.

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JoeRetire
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Re: Are we missing recession /bear market beginning

Post by JoeRetire » Thu Mar 22, 2018 6:13 am

Jimsad wrote:
Thu Mar 22, 2018 5:23 am
It seems to me that on most days recently , the stock market is down on some excuse or other .
It's not '"most days", it's "some days".
In other words - normal.
It used to be the other way round till recently .
Not normal.
Is this because a bear market / recession has already started?
Could be. time will tell.
Don't be a lemming.

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Jimsad
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Re: Are we missing recession /bear market beginning

Post by Jimsad » Thu Mar 22, 2018 6:29 am

I am close to 50yrs age and initially had 65:35 in stock:bond funds .
In early February , when the correction occurred , I thought it was a buying opportunity and put extra in stocks both by extra Contribution and by rebalancing.
Now , with recent more negative returns , I not sure whether to stay out at my Present allocation which has become 75:25 or try to tweak it again .

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Re: Are we missing recession /bear market beginning

Post by Grt2bOutdoors » Thu Mar 22, 2018 6:45 am

Jimsad wrote:
Thu Mar 22, 2018 6:29 am
I am close to 50yrs age and initially had 65:35 in stock:bond funds .
In early February , when the correction occurred , I thought it was a buying opportunity and put extra in stocks both by extra Contribution and by rebalancing.
Now , with recent more negative returns , I not sure whether to stay out at my Present allocation which has become 75:25 or try to tweak it again .
You don’t have an Investment Policy Statement and you need to pick an asset allocation you can be comfortable with in good and bad times. 65/35 is good, as you age you may want to consider at age 55 or age 60 to have it become 60/40 or 55/45. For example, from ages 50-55, remain at 65/35, from ages 56-65, each year decrease equity exposure by 1%, increase fixed income exposure by 1% until at age 65 you reach 55/45. If you feel you need to “time” because of outrageous bargains, don’t increase your equity exposure by more than 5%. In your case now, I would sell down your equity exposure to no more than holding a 70% position. Try not to “time” even though you still have a 25 to 30 year plus investment horizon, especially if you are prone to fear. Stop watching CNBC. You can not judge the direction of the markets in a few days, weeks, or months, sometimes even years.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

WhyNotUs
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Re: Are we missing recession /bear market beginning

Post by WhyNotUs » Thu Mar 22, 2018 6:49 am

It takes a good deal of luck to beat picking an asset allocation that you can live with and letting it ride. Statistical analysis suggest that the most profitable way to save for retirement is find your acceptable level of risk and set your AA accordingly and then focus on other parts of your life.

https://www.bogleheads.org/wiki/Boglehe ... art-up_kit
I own the next hot stock- VTSAX

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Re: Are we missing recession /bear market beginning

Post by cherijoh » Thu Mar 22, 2018 7:02 am

Jimsad wrote:
Thu Mar 22, 2018 6:29 am
I am close to 50yrs age and initially had 65:35 in stock:bond funds .
In early February , when the correction occurred , I thought it was a buying opportunity and put extra in stocks both by extra Contribution and by rebalancing.
Now , with recent more negative returns , I not sure whether to stay out at my Present allocation which has become 75:25 or try to tweak it again .
You are market timing, which rarely works out in favor of the market timer! The issue is that you have to figure out when to unwind the original move - which is your current dilemma. Why was your AA at 65/35 in February? Are you comfortable with a 75/25 allocation now? This decision should not be driven by the market but instead by your goals (e.g., want to retire in xx years) and as Larry Swedroe puts it "your need, ability, and willingness to take risk".

The only "market timing" I would consider doing is when you are rebalancing back to a pre-set target allocation, because in that case you aren't making an emotional decision about where you think the market is going. [Personally I don't consider this as true market timing, but I know some people do].

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Re: Are we missing recession /bear market beginning

Post by Call_Me_Op » Thu Mar 22, 2018 7:07 am

Jimsad wrote:
Thu Mar 22, 2018 5:23 am
It seems to me that on most days recently , the stock market is down on some excuse or other . It used to be the other way round till recently .
Is this because a bear market / recession has already started ?
Any changes to my portfolio I should be making?
There is no way of knowing when the next recession will start, but your portfolio should be designed for all possibilities.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

Agggm
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Re: Are we missing recession /bear market beginning

Post by Agggm » Thu Mar 22, 2018 7:17 am

Jimsad wrote:
Thu Mar 22, 2018 5:23 am
It seems to me that on most days recently , the stock market is down on some excuse or other . It used to be the other way round till recently .
Is this because a bear market / recession has already started ?
Any changes to my portfolio I should be making?
Stay on course.

Bacchus01
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Re: Are we missing recession /bear market beginning

Post by Bacchus01 » Thu Mar 22, 2018 7:24 am

Bear market <> Recession

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JoeRetire
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Re: Are we missing recession /bear market beginning

Post by JoeRetire » Thu Mar 22, 2018 7:26 am

Jimsad wrote:
Thu Mar 22, 2018 6:29 am
I am close to 50yrs age and initially had 65:35 in stock:bond funds .
In early February , when the correction occurred , I thought it was a buying opportunity and put extra in stocks both by extra Contribution and by rebalancing.
Now , with recent more negative returns , I not sure whether to stay out at my Present allocation which has become 75:25 or try to tweak it again .
Jumping around month to month based on a few up or down days isn't likely to win in the ling run.

Find an asset allocation that works for you for the long haul. Then stick to it. Rebalance periodically.
Don't be a lemming.

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Re: Are we missing recession /bear market beginning

Post by UpperNwGuy » Thu Mar 22, 2018 7:36 am

The market seems down for two reasons:
1. 2017 was an unusually good year, as was most of January 2018. That was an exceptional time for the market. What we're seeing now is more typical of the market.
2. If you follow the graphs, the downward turns seem steeper, and the recovery days seem more gradual. This too is fairly typical.

Look at the long term. Stay the course.

RetireBy55
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Re: Are we missing recession /bear market beginning

Post by RetireBy55 » Thu Mar 22, 2018 7:59 am

I agree with the OP. It does indeed seem that *almost* every day futures are down when I first look in the early AM, and the market opens down. Whether it stays down or not, the trend is indeed clear.

What's making me think this IS the beginning of a Bear is that there is (as OP stated) "a new excuse every day".

My favorite example was a month or so back when yields on the 10-year were increasing. This was said to be Armageddon for stocks, and there was heavy selling with lower prices. Fast forward a month, when the yields went in the OPPOSITE direction and started to fall. This was ALSO said to be Armageddon for stocks, and people sold.

Now we have Facebook. Big deal..that's one whole company. Yet, there was a big downdraft "because of Facebook".

Then, back to fear of trade war with relatively small tarrifs being talked about.

Like I said..nearly every single day, it's a new excuse / reason.

My own opinion FWIW is that we're in the early stages of a Bear. That's just great since I plan to retire this year and was just about to rebalance to a more conservative allocation. Oh well..hope I live long enough to get back to where I was beginning of 2018..

RetireBy55
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Re: Are we missing recession /bear market beginning

Post by RetireBy55 » Thu Mar 22, 2018 8:02 am

And...futures are down 292 points as I write this. "Today's excuse" seems to be the talk of potential new tariffs. BUT the Fed announcement yesterday was BETTER than everyone expected (3 increases this year instead of 4) which should offset that if not support a rally.

Yet, straight down we seem to be headed today.

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Re: Are we missing recession /bear market beginning

Post by livesoft » Thu Mar 22, 2018 8:05 am

RetireBy55 wrote:
Thu Mar 22, 2018 7:59 am
Oh well..hope I live long enough to get back to where I was beginning of 2018..
But as of yesterday evening, your portfolio should have been UP for 2018 since things like Target Retirement and LifeStrategy funds were UP for 2018.
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Re: Are we missing recession /bear market beginning

Post by raisinsaregrapes » Thu Mar 22, 2018 8:07 am

Maybe. Don't care. Wont change my plan.

scoreboard
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Re: Are we missing recession /bear market beginning

Post by scoreboard » Thu Mar 22, 2018 8:08 am

Hindsight vision is awesome!

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Re: Are we missing recession /bear market beginning

Post by livesoft » Thu Mar 22, 2018 8:11 am

Jimsad wrote:
Thu Mar 22, 2018 6:29 am
I am close to 50yrs age and initially had 65:35 in stock:bond funds .
In early February , when the correction occurred , I thought it was a buying opportunity and put extra in stocks both by extra Contribution and by rebalancing.
Now , with recent more negative returns , I not sure whether to stay out at my Present allocation which has become 75:25 or try to tweak it again .
When you went away from 65:35 because of the buying opportunity, did you have a plan on when to get back to 65:35? What was it?
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lostdog
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Re: Are we missing recession /bear market beginning

Post by lostdog » Thu Mar 22, 2018 8:16 am

Some of you watch too much cnbc. Ignore the noise.
Total World Stock and Total World Bond. The simple two fund diversified portfolio. "Simplicity is the master key to financial success."

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Re: Are we missing recession /bear market beginning

Post by lostdog » Thu Mar 22, 2018 8:16 am

Some of you watch too much cnbc. Ignore the noise.
Total World Stock and Total World Bond. The simple two fund diversified portfolio. "Simplicity is the master key to financial success."

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Re: Are we missing recession /bear market beginning

Post by JoeRetire » Thu Mar 22, 2018 8:20 am

RetireBy55 wrote:
Thu Mar 22, 2018 7:59 am
I agree with the OP. It does indeed seem that *almost* every day futures are down when I first look in the early AM, and the market opens down. Whether it stays down or not, the trend is indeed clear.
What is the trend that is so clear? Based on this trend, what will the Dow (or S&P 500 if you prefer) be at the end of 2018?
What's making me think this IS the beginning of a Bear is that there is (as OP stated) "a new excuse every day".
Who is this official excuse-maker that seems to have you so rattled?
Don't be a lemming.

RetireBy55
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Re: Are we missing recession /bear market beginning

Post by RetireBy55 » Thu Mar 22, 2018 8:22 am

lostdog wrote:
Thu Mar 22, 2018 8:16 am
Some of you watch too much cnbc. Ignore the noise.
I don't watch a single second of CNBC or any other financial coverage.

I do, however, watch the DJIA, NASDAQ and S&P and as we speak, the Dow futures are down 300+. That's not "typical" and is happening with some regularity. Hence, my impression we are indeed in the beginning stages of a bear.

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Re: Are we missing recession /bear market beginning

Post by 2b2 » Thu Mar 22, 2018 8:34 am

OP,

I think your view is being distorted by recency bias.
Take a longer view.
A much longer view.

2b2

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Jimsad
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Re: Are we missing recession /bear market beginning

Post by Jimsad » Thu Mar 22, 2018 8:44 am

I did not have a plan when to get back to 65:35 again .
Now , not sure when to do it .

Agree with Retire by 55. Every day the futures open lower and most of days market is ending up lower now .

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Jimsad
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Re: Are we missing recession /bear market beginning

Post by Jimsad » Thu Mar 22, 2018 8:44 am

I did not have a plan when to get back to 65:35 again .
Now , not sure when to do it .

Agree with Retire by 55. Every day the futures open lower and most of days market is ending up lower now .

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Re: Are we missing recession /bear market beginning

Post by cfs » Thu Mar 22, 2018 8:46 am

In the way I see it when Miss Market gives me an opportunity to buy, I buy. When she gives me an opportunity to sell, I sell. As you can see, I am not a member of the church of buy and hold. My signature applies, y gracias por leer / cfs
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Re: Are we missing recession /bear market beginning

Post by midareff » Thu Mar 22, 2018 8:50 am

Maybe you are looking too often?

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Carlos Danger
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Re: Are we missing recession /bear market beginning

Post by Carlos Danger » Thu Mar 22, 2018 8:51 am

lostdog wrote:
Thu Mar 22, 2018 8:16 am
Some of you watch too much cnbc. Ignore the noise.
But it's entertaining when the excitable man yells and hits the big red buttons.

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Re: Are we missing recession /bear market beginning

Post by willthrill81 » Thu Mar 22, 2018 9:33 am

Call_Me_Op wrote:
Thu Mar 22, 2018 7:07 am
Jimsad wrote:
Thu Mar 22, 2018 5:23 am
It seems to me that on most days recently , the stock market is down on some excuse or other . It used to be the other way round till recently .
Is this because a bear market / recession has already started ?
Any changes to my portfolio I should be making?
There is no way of knowing when the next recession will start...
If you mean 'know with certainty', then yes.

However, there are some historically reliable early-warning signals of recessions, with the unemployment rate being one of the best.
In contrast with the absolute level, the trend in the unemployment rate–the direction that the rate is moving in–is a coincident indicator of recession, and can sometimes even be a leading indicator. As the table below shows, in each of the eleven recessions that occurred since 1948, the trend in the unemployment rate turned higher months before the recession began. The average lead for the period was 3.45 months.

Admittedly, the phrase “turning higher” is ambiguous. We need to be more precise, and so we’re going to define the phrase in terms of trailing moving averages. That is, we’re going to say that the unemployment rate trend has turned higher whenever its current value crosses above the moving average of its trailing values over some period, and that the unemployment rate trend has turned lower whenever its current value falls below the average of its trailing values over some period.

In the following chart, we plot the unemployment rate alongside its trailing 12 month moving average from January 1948 to January 2016. The red and green circles delineate important crossover points, with red crossovers delineating upward (bearish) turns, and green crossovers delineating downward (bullish) turns:

As you can see, historically, whenever the unemployment rate has crossed above the moving average, a recession has almost always followed shortly thereafter. Similarly, for every recession that actually did occur in the period, the unemployment rate successfully foreshadowed the recession in advance by crossing above its moving average.
http://www.philosophicaleconomics.com/2016/02/uetrend/

Based on this indicator (UER [4.1%) being lower than the 12 month moving average [4.24%]), we are not currently in a recession.
Last edited by willthrill81 on Thu Mar 22, 2018 9:39 am, edited 1 time in total.
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Re: Are we missing recession /bear market beginning

Post by greg24 » Thu Mar 22, 2018 9:38 am

Jimsad wrote:
Thu Mar 22, 2018 8:44 am
most of days market is ending up lower now .
Someone posted data above showing that this is not true. Humans have selective memory.

Pick an appropriate asset allocation and stick with it. You're probably going to lose with market timing.

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Re: Are we missing recession /bear market beginning

Post by nisiprius » Thu Mar 22, 2018 9:55 am

This is important: the usual source for recession dates is the National Bureau of Economic Research (NBER). For example, if you look at the charts from the St. Louis Fed that give you the option of shading in recessions, those are the dates they use. Those are the dates Jeremy Siegel uses in a chapter of Stocks for the Long Run that discusses stock performance in relation to recessions.
  • The NBER will not predict recessions in advance.
  • The NBER will not say whether or not we are in a recession at any given time.
  • The NBER is only willing to commit to there having been a recession after it is over.
Not only is it difficult, IMHO "impossible" to predict recessions, it is difficult to know whether or not we are even in one.

My personal past experience has been that (even though like everyone else I edit my own memories to forget the times I was wrong) nevertheless, I can remember that I thought we were seeing the start of a recession many times when we were not... and I missed the real recessions when they actually began.

In 2011, an awful lot of people thought that 2011 was the end of the bull market and the start of a bear market. And it's amazing to me how many people have pretty much forgotten 2011 and falsely remember 2009-2018 as a period of uninterrupted nothing-but-up.

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Re: Are we missing recession /bear market beginning

Post by wolf359 » Thu Mar 22, 2018 9:56 am

RetireBy55 wrote:
Thu Mar 22, 2018 7:59 am
Now we have Facebook. Big deal..that's one whole company. Yet, there was a big downdraft "because of Facebook".
I think the analysis that the downdraft was "because of Facebook" is correct. Facebook is the "F" in the FAANG stocks. This handful of stocks are responsible for most of the returns of the S&P 500 for a while. If one of the FAANG stocks plummets, it WILL affect the whole index.

The politics buzz has been interesting. Last year, US politics has been ... let's call it unstable and avoid specifics. Many of the political events and proposals might have caused market reactions in the past, but were mostly shrugged off. The market usually has at least one 10% or so pullback during the year -- but not last year. This year, the market actually seems to be reacting to political and economic events that it shrugged off a few months ago.

You usually can't tell a recession has started until you're well into it. By definition, a recession is a fall in the GDP over two consecutive quarters. In other words, you find out that a recession started 6 months ago.

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Re: Are we missing recession /bear market beginning

Post by CantPassAgain » Thu Mar 22, 2018 9:59 am

I always find it odd when folks in their 50's or near retirement and supposedly have been at this for while post threads like this, acting like whatever is happening recently is unprecedented. I just don't get it. Is it really that hard to look at a chart of the S&P500 and look at the squiggly line and see that, yes, stocks do go up and down...and in unpredictable ways?

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Jimsad
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Re: Are we missing recession /bear market beginning

Post by Jimsad » Thu Mar 22, 2018 10:03 am

I think it gets harder to stay course as your assets accumulate and your portfolio gets larger . This causes large daily fluctuations in balances . I am trying to stay course but cannot stop watching Market movements and wondering .

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Re: Are we missing recession /bear market beginning

Post by RetireBy55 » Thu Mar 22, 2018 10:12 am

Jimsad wrote:
Thu Mar 22, 2018 10:03 am
I think it gets harder to stay course as your assets accumulate and your portfolio gets larger . This causes large daily fluctuations in balances . I am trying to stay course but cannot stop watching Market movements and wondering .
EXACTLY. It's one thing to "look at the squiggly lines" during the accumulation phase. Another thing entirely when you are months from retirement. By that point, a 1% drop when it repeats for multiple days in a row does get disconcerting - especially for those of us who have accumulated a fair retirement kitty but had also planned to dial back equity exposure somewhere around 26,250 and did not get to it..

My biggest fear in stepping away from the good paying Megacorp job is sequence of returns. I do not want to RE at the beginning of a tough bear market. I can survive it as I have adequate cash reserves, but the stress of watching a big number drop dramatically would not be something I want to go through. I had always planned to get the big number down and the cash number up and am actually sitting on way more cash than any of you would probably do, but I also don't want what's left in equities (still a big number) to get slaughtered right before ER.

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Re: Are we missing recession /bear market beginning

Post by Ethelred » Thu Mar 22, 2018 10:13 am

RetireBy55 wrote:
Thu Mar 22, 2018 7:59 am
Like I said..nearly every single day, it's a new excuse / reason.
RetireBy55 wrote:
Thu Mar 22, 2018 8:22 am
I don't watch a single second of CNBC or any other financial coverage.

I do, however, watch the DJIA, NASDAQ and S&P and as we speak, the Dow futures are down 300+. That's not "typical" and is happening with some regularity. Hence, my impression we are indeed in the beginning stages of a bear.
This doesn't make any sense. The financial media always need a story to report, because narrative sells, so there is always, every business day, "an excuse" for what's happening in the markets. If you do watch the financial media, you should have already recognized this, and if you never watch the financial media, how is it that you have managed to recognize this now?

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Re: Are we missing recession /bear market beginning

Post by CantPassAgain » Thu Mar 22, 2018 10:18 am

RetireBy55 wrote:
Thu Mar 22, 2018 10:12 am
Jimsad wrote:
Thu Mar 22, 2018 10:03 am
I think it gets harder to stay course as your assets accumulate and your portfolio gets larger . This causes large daily fluctuations in balances . I am trying to stay course but cannot stop watching Market movements and wondering .
EXACTLY. It's one thing to "look at the squiggly lines" during the accumulation phase. Another thing entirely when you are months from retirement. By that point, a 1% drop when it repeats for multiple days in a row does get disconcerting - especially for those of us who have accumulated a fair retirement kitty but had also planned to dial back equity exposure somewhere around 26,250 and did not get to it..

My biggest fear in stepping away from the good paying Megacorp job is sequence of returns. I do not want to RE at the beginning of a tough bear market. I can survive it as I have adequate cash reserves, but the stress of watching a big number drop dramatically would not be something I want to go through. I had always planned to get the big number down and the cash number up and am actually sitting on way more cash than any of you would probably do, but I also don't want what's left in equities (still a big number) to get slaughtered right before ER.
I am not near retirement but I am no spring chicken, either. Believe me, I get what you are saying. But you have no control over the market, and despite what you might think you cannot predict where it is going to go. So, worry about things you have control over and avoid trying to be cute like the OP. Set your asset allocation according what you are comfortable with considering your circumstances right now, and stick with it (stick with it includes "rebalance when necessary according to your ISP"). And forget about regret.
Last edited by CantPassAgain on Thu Mar 22, 2018 12:43 pm, edited 1 time in total.

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Re: Are we missing recession /bear market beginning

Post by Da5id » Thu Mar 22, 2018 10:27 am

Ethelred wrote:
Thu Mar 22, 2018 10:13 am
RetireBy55 wrote:
Thu Mar 22, 2018 7:59 am
Like I said..nearly every single day, it's a new excuse / reason.
RetireBy55 wrote:
Thu Mar 22, 2018 8:22 am
I don't watch a single second of CNBC or any other financial coverage.

I do, however, watch the DJIA, NASDAQ and S&P and as we speak, the Dow futures are down 300+. That's not "typical" and is happening with some regularity. Hence, my impression we are indeed in the beginning stages of a bear.
This doesn't make any sense. The financial media always need a story to report, because narrative sells, so there is always, every business day, "an excuse" for what's happening in the markets. If you do watch the financial media, you should have already recognized this, and if you never watch the financial media, how is it that you have managed to recognize this now?
Furthermore, when people talk about the number of points Dow is up/down I get suspicious that they aren't thinking about it clearly. The Dow is currently down 1.5% today as I write this. In terms of historic bad days, nothing much to speak of. To get in the top 20 percentage loss days, you need to be down > 7% (https://en.wikipedia.org/wiki/List_of_l ... al_Average). 300 points sounds big, but maybe mentally people don't adjust that for the fact that the Dow is over 24K.

The market has been more volatile this year than in recent times, I'll grant you that (VIX has blown up). But YTD Dow is down about 1.5%, not exactly a big deal. Is a recession or bear market coming? Surely, there always is a next one coming. But knowing when is not reasonable.

Those who are somehow sure the bear is starting now, go ahead and sell/go short if that that seems wise to you. You may be right, who knows. The rest of us will stay the course I hope :)

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Re: Are we missing recession /bear market beginning

Post by Sandtrap » Thu Mar 22, 2018 10:59 am

Read this;
Asset Allocation (what is right for you?)
https://www.bogleheads.org/wiki/Asset_allocation
And this;
Investing Behavior Pitfalls
https://www.bogleheads.org/wiki/Behavioral_pitfalls
And this:
Read About Bob, The Worst Market Timer
What happens if you only invested at market highs?
http://awealthofcommonsense.com/2014/0 ... ket-timer/
Then Do this:
Define General Investment Goals and Objectives (what is your plan?)
https://www.bogleheads.org/wiki/Invest ... statement

aloha
j :D
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wrongfunds
Posts: 2018
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Re: Are we missing recession /bear market beginning

Post by wrongfunds » Thu Mar 22, 2018 10:59 am

I do not want to RE at the beginning of a tough bear market.
As opposed to beginning of turn around? Or as opposed to top of the market?

One does not want to give up the good paying job during tough bear market. One does not want to retire when the market is at all time high. One does not want to retire when the market is going down. One does not want to retire when market is going up. Heck, you don't want to retire when the market is going sideways, that is for sure!

RetireBy55
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Re: Are we missing recession /bear market beginning

Post by RetireBy55 » Thu Mar 22, 2018 11:42 am

wrongfunds wrote:
Thu Mar 22, 2018 10:59 am
One does not want to give up the good paying job during tough bear market. One does not want to retire when the market is at all time high. One does not want to retire when the market is going down. One does not want to retire when market is going up. Heck, you don't want to retire when the market is going sideways, that is for sure!
Actually, the best time to retire is at the top of a good bull market - and significantly dial back your equity allocation if your funding model can support that.

In the words of Bernstein, quit playing the game when you've won. I never plan to FULLY quit playing the game, but I did plan to move a pretty significant chunk of $$s from equities to cash around 26,500 and never did. Thankfully, we "had" to move DW's 401K $$s due to a merger and the new plan being total garbage, and it's currently in cash. That was a bit of luck but still far more invested than I care to be this close to ER.

livesoft
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Re: Are we missing recession /bear market beginning

Post by livesoft » Thu Mar 22, 2018 11:52 am

RetireBy55 wrote:
Thu Mar 22, 2018 11:42 am
wrongfunds wrote:
Thu Mar 22, 2018 10:59 am
One does not want to give up the good paying job during tough bear market. One does not want to retire when the market is at all time high. One does not want to retire when the market is going down. One does not want to retire when market is going up. Heck, you don't want to retire when the market is going sideways, that is for sure!
Actually, the best time to retire is at the top of a good bull market - and significantly dial back your equity allocation if your funding model can support that.
The best time to retire is at the depths of a bear market. Such a time pretty much says that you have enough wherewithal to retire and, by definition, the market will only go up from there.

The worst time to retire is at the top of a good bull market because you are led to believe that you have enough money which you may not have after the top disappears.
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nativenewenglander
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Re: Are we missing recession /bear market beginning

Post by nativenewenglander » Thu Mar 22, 2018 12:27 pm

You can try this site for information and charts. It looks like a recession is coming probably next year some time. We're 9 years into a bull market, nothing lasts forever. Personally I raise cash for spending, so I don't sell into a down market. I have three years cash right now.
https://www.frbsf.org/economic-research ... eld-curve/

Da5id
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Re: Are we missing recession /bear market beginning

Post by Da5id » Thu Mar 22, 2018 12:38 pm

RetireBy55 wrote:
Thu Mar 22, 2018 11:42 am
Actually, the best time to retire is at the top of a good bull market - and significantly dial back your equity allocation if your funding model can support that.

In the words of Bernstein, quit playing the game when you've won. I never plan to FULLY quit playing the game, but I did plan to move a pretty significant chunk of $$s from equities to cash around 26,500 and never did. Thankfully, we "had" to move DW's 401K $$s due to a merger and the new plan being total garbage, and it's currently in cash. That was a bit of luck but still far more invested than I care to be this close to ER.
Read this for another perspective:
It argues (with data) that historically the worst time to retire is at the top of a bull market, assuming you are timing your retirement by hitting a number (4%, 3.25 %, whatever).

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willthrill81
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Re: Are we missing recession /bear market beginning

Post by willthrill81 » Thu Mar 22, 2018 3:14 pm

nativenewenglander wrote:
Thu Mar 22, 2018 12:27 pm
You can try this site for information and charts. It looks like a recession is coming probably next year some time. We're 9 years into a bull market, nothing lasts forever. Personally I raise cash for spending, so I don't sell into a down market. I have three years cash right now.
https://www.frbsf.org/economic-research ... eld-curve/
I'm more familiar with changes in the unemployment rate trend and PMI data as early warning signs of a recession, but both are still saying that we're not in one yet. The PMI for last month was 60.8, a very strong number. The unemployment rate (4.1%) is still below its 1 year trend (4.21%), but if it starts to go up at all, it will break the 1 year trend. It's very plausible that this could happen in a year or two.
“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: Are we missing recession /bear market beginning

Post by willthrill81 » Thu Mar 22, 2018 3:16 pm

wrongfunds wrote:
Thu Mar 22, 2018 10:59 am
I do not want to RE at the beginning of a tough bear market.
As opposed to beginning of turn around? Or as opposed to top of the market?

One does not want to give up the good paying job during tough bear market. One does not want to retire when the market is at all time high. One does not want to retire when the market is going down. One does not want to retire when market is going up. Heck, you don't want to retire when the market is going sideways, that is for sure!
Precisely! If you're looking for a reason not to retire (or invest in pretty much anything), you'll always find at least one, probably several.
“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: Are we missing recession /bear market beginning

Post by willthrill81 » Thu Mar 22, 2018 3:54 pm

RetireBy55 wrote:
Thu Mar 22, 2018 11:42 am
In the words of Bernstein, quit playing the game when you've won.
I've never agreed with this saying of Bernstein. For one, how do you know that you've 'won'? When you hit 25x annual expenses? 30x? 40x? And if you definitely 'know' that you've won, why stop playing since you now have a greater ability to take on risk?

Another is that for some of us, the 'game' will keep going on long after we're six feet under (i.e. some of us are 'playing' for heirs and/or charity).
“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

LiterallyIronic
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Re: Are we missing recession /bear market beginning

Post by LiterallyIronic » Thu Mar 22, 2018 4:02 pm

willthrill81 wrote:
Thu Mar 22, 2018 3:54 pm
RetireBy55 wrote:
Thu Mar 22, 2018 11:42 am
In the words of Bernstein, quit playing the game when you've won.
I've never agreed with this saying of Bernstein. For one, how do you know that you've 'won'? When you hit 25x annual expenses? 30x? 40x? And if you definitely 'know' that you've won, why stop playing since you now have a greater ability to take on risk?

Another is that for some of us, the 'game' will keep going on long after we're six feet under (i.e. some of us are 'playing' for heirs and/or charity).
For me, taking on risk isn't done just when you have the ability, but also when you have the need. Yeah, when you hit 25x or whatever, you have a greater ability to take on risk, but a weaker need to take on risk. As soon as the need is gone, that is you've "won the game" you can still "un-win" by taking on unnecessary risk.

No matter what, your game ends when you're dead. Nobody on their deathbed wishes they spent more time in the office.

JBTX
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Re: Are we missing recession /bear market beginning

Post by JBTX » Thu Mar 22, 2018 4:07 pm

RetireBy55 wrote:
Thu Mar 22, 2018 8:22 am
lostdog wrote:
Thu Mar 22, 2018 8:16 am
Some of you watch too much cnbc. Ignore the noise.
I don't watch a single second of CNBC or any other financial coverage.

I do, however, watch the DJIA, NASDAQ and S&P and as we speak, the Dow futures are down 300+. That's not "typical" and is happening with some regularity. Hence, my impression we are indeed in the beginning stages of a bear.


Why do you watch these indices throughout the day every day? Nothing good can come from that.

JBTX
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Re: Are we missing recession /bear market beginning

Post by JBTX » Thu Mar 22, 2018 4:14 pm

willthrill81 wrote:
Thu Mar 22, 2018 3:14 pm
nativenewenglander wrote:
Thu Mar 22, 2018 12:27 pm
You can try this site for information and charts. It looks like a recession is coming probably next year some time. We're 9 years into a bull market, nothing lasts forever. Personally I raise cash for spending, so I don't sell into a down market. I have three years cash right now.
https://www.frbsf.org/economic-research ... eld-curve/
I'm more familiar with changes in the unemployment rate trend and PMI data as early warning signs of a recession, but both are still saying that we're not in one yet. The PMI for last month was 60.8, a very strong number. The unemployment rate (4.1%) is still below its 1 year trend (4.21%), but if it starts to go up at all, it will break the 1 year trend. It's very plausible that this could happen in a year or two.
Unemployment is a lagging indicator.

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