So...do I keep buying more equities?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Topic Author
justsomeguy2018
Posts: 1120
Joined: Wed Oct 03, 2018 8:11 pm

So...do I keep buying more equities?

Post by justsomeguy2018 » Mon Dec 17, 2018 10:51 pm

Should I keep buying into the market as its dropping? Feel like at this point that any day it drops 1% to 2% or more, I should just keep buying a small portion of it and reduce my overall cost basis.

Soon2BXProgrammer
Posts: 785
Joined: Mon Nov 24, 2014 11:30 pm

Re: So...do I keep buying more equities?

Post by Soon2BXProgrammer » Mon Dec 17, 2018 11:00 pm

i buy whatever my portfolio is short on every two weeks like clockwork.

User avatar
Taylor Larimore
Advisory Board
Posts: 29526
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Develop a plan. Then stay the course.

Post by Taylor Larimore » Mon Dec 17, 2018 11:14 pm

justsomeguy2018 wrote:
Mon Dec 17, 2018 10:51 pm
Should I keep buying into the market as its dropping? Feel like at this point that any day it drops 1% to 2% or more, I should just keep buying a small portion of it and reduce my overall cost basis.
justsomeguy2018:

Your most important investment decision is your asset-allocation plan between stocks and safe fixed-income (bonds CDs, cash, etc.). Once you have made this determination and invested according to your plan, Stay-the-course by rebalancing when your asset-allocation deviates more than 5% - 10% from your plan.

Vanguard has model portfolios with different stock/bond allocations which shows what has happened in the past:

https://personal.vanguard.com/us/insigh ... ns?lang=en

Best wishes
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

User avatar
Jerry55
Posts: 755
Joined: Tue Jan 27, 2015 1:56 am
Location: That Toddlin' Town

Re: So...do I keep buying more equities?

Post by Jerry55 » Mon Dec 17, 2018 11:19 pm

Not certain if you're buying any particular equity, or a mutual fund, but here goes...

My children are saving for retirement, and they freak out like you may be, but I tell them this...It's dollar cost averaging.
Simply put, they're looking to retire in 25-35 years and let's keep it simple.

If you like Mutual Fund A (or B, C, D, etc) and you buy 4 shares for $100, if the price goes down and your $100 buys 8 shares, do you like it less ?
Obviously, if you like each share at $25, you should like it more at $12.50

Dollar cost averaging. I doubled down on my purchases in late 2008 forward, and am a happy camper because of it. I rode the wave.
Know when you should get out if you need the money, or are close to your objective.
Retired CSRS on 12/19/2012 @ age 57 w/39 years | Good Bye Tension, Hello Pension !!!

garlandwhizzer
Posts: 2853
Joined: Fri Aug 06, 2010 3:42 pm

Re: So...do I keep buying more equities?

Post by garlandwhizzer » Tue Dec 18, 2018 10:47 am

So...do I keep buying more equities?
Yes, if you're a long term investor and plan to buy on a regular basis for a long period of time, which is IMO the way you should be. It is not a mistake to buy things when they go on sale. Stocks are the only thing I am aware of that buyers are afraid to buy when they go on sale but are enthusiastic to buy when they're expensive and getting more so. Emotions are the main enemy of investing success.

Garland Whizzer

Cycle
Posts: 1650
Joined: Sun May 28, 2017 7:57 pm
Location: Minneapolis

Re: So...do I keep buying more equities?

Post by Cycle » Tue Dec 18, 2018 10:51 am

Depends. If it's Wednesday, then yes. That is the day I buy vtiax and vtsax, 52 weeks a year.

I adjust the amount I buy once or twice a year to keep my checking account in homeostasis.
Never look back unless you are planning to go that way

User avatar
greg24
Posts: 3892
Joined: Tue Feb 20, 2007 10:34 am

Re: So...do I keep buying more equities?

Post by greg24 » Tue Dec 18, 2018 10:55 am

My automatic investments continue to purchase at my chosen asset allocation.

NYCPete
Posts: 781
Joined: Thu Apr 12, 2007 1:24 pm
Location: New York, NY

Re: So...do I keep buying more equities?

Post by NYCPete » Tue Dec 18, 2018 10:58 am

The key to investing is to buy low and sell high, right? It's pretty hard to make money doing the reverse! :P

If you have an asset allocation that you stick with and rebalance when necessary, dollar cost averaging means you'll sometimes buy something low with the hope and expectation that you're buying it low and it will go up. If your equities portion of your allocation is down, then yes you should be buying equities. The idea is that you're buying something when it's low, because at some point it won't be.

Best,
Peter
To the extent that a fool knows his foolishness, | He may be deemed wise | A fool who considers himself wise | Is indeed a fool. | | Buddha

randomguy
Posts: 9032
Joined: Wed Sep 17, 2014 9:00 am

Re: So...do I keep buying more equities?

Post by randomguy » Tue Dec 18, 2018 10:59 am

garlandwhizzer wrote:
Tue Dec 18, 2018 10:47 am
So...do I keep buying more equities?
Yes, if you're a long term investor and plan to buy on a regular basis for a long period of time, which is IMO the way you should be. It is not a mistake to buy things when they go on sale. Stocks are the only thing I am aware of that buyers are afraid to buy when they go on sale but are enthusiastic to buy when they're expensive and getting more so. Emotions are the main enemy of investing success.

Garland Whizzer
So are you loading up on Japanese stocks because they are on a megasale given how far they are below their historical highs set almost 30 years ago? The problem with value investing is always figuring out if the product is on sale or if they are distressed merchandise. Buying now before the 20% dip is a poor idea. Buying now before the 20% rebound is a great one.

Stocks aren't on sale. They are priced to reflect the best estimates of future value. Those estimates are lower (but probably just as accurate) as the guess from 12 months ago. When we start getting extremes (50%+ drops) we can talk about market irrationalities and things being on sale.

LiterallyIronic
Posts: 1449
Joined: Sat Dec 05, 2015 10:36 am

Re: So...do I keep buying more equities?

Post by LiterallyIronic » Tue Dec 18, 2018 11:03 am

justsomeguy2018 wrote:
Mon Dec 17, 2018 10:51 pm
Should I keep buying into the market as its dropping? Feel like at this point that any day it drops 1% to 2% or more, I should just keep buying a small portion of it and reduce my overall cost basis.
Yes, keep buying. I buy four times per month (twice on payday's 401k contributions, and two monthly Roth IRA contributions). As long as you've got a sufficient time horizon, you should just keep consistently buying regardless of what the market is doing.

WanderingDoc
Posts: 1341
Joined: Sat Aug 05, 2017 8:21 pm

Re: So...do I keep buying more equities?

Post by WanderingDoc » Tue Dec 18, 2018 12:07 pm

randomguy wrote:
Tue Dec 18, 2018 10:59 am
garlandwhizzer wrote:
Tue Dec 18, 2018 10:47 am
So...do I keep buying more equities?
Yes, if you're a long term investor and plan to buy on a regular basis for a long period of time, which is IMO the way you should be. It is not a mistake to buy things when they go on sale. Stocks are the only thing I am aware of that buyers are afraid to buy when they go on sale but are enthusiastic to buy when they're expensive and getting more so. Emotions are the main enemy of investing success.

Garland Whizzer
So are you loading up on Japanese stocks because they are on a megasale given how far they are below their historical highs set almost 30 years ago? The problem with value investing is always figuring out if the product is on sale or if they are distressed merchandise. Buying now before the 20% dip is a poor idea. Buying now before the 20% rebound is a great one.

Stocks aren't on sale. They are priced to reflect the best estimates of future value. Those estimates are lower (but probably just as accurate) as the guess from 12 months ago. When we start getting extremes (50%+ drops) we can talk about market irrationalities and things being on sale.
Totally agree. Also to point out what someone said above "safe" fixed income.. fixed income that returns -3% to 3% isn't safe. It's a bad investment. Period. First rule of investing - don't lose money. I don't play to 'lose only a little', I play to win.

I did not become financially independent at an early age buying "stocks on sale". Something is on sale because it's not desirable. Kind of like the 5 day old chicken on clearance at the grocery store.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

cdu7
Posts: 351
Joined: Thu Feb 02, 2017 2:34 pm

Re: So...do I keep buying more equities?

Post by cdu7 » Tue Dec 18, 2018 12:15 pm

You should continue your set investment schedule on schedule all the time reguardless of market conditions.

cpan00b
Posts: 126
Joined: Wed May 10, 2017 9:39 pm

Re: So...do I keep buying more equities?

Post by cpan00b » Tue Dec 18, 2018 1:23 pm

What if you're 100% equities currently -- just keep buying as normal and bringing cost basis down? For these investors, would now be a bad time to think about becoming more conservative and building up a cash reserve or buying bonds? I feel like I'd want to do this once the market finally starts going back up.

User avatar
Ged
Posts: 3888
Joined: Mon May 13, 2013 1:48 pm
Location: Roke

Re: So...do I keep buying more equities?

Post by Ged » Tue Dec 18, 2018 1:27 pm

justsomeguy2018 wrote:
Mon Dec 17, 2018 10:51 pm
Should I keep buying into the market as its dropping? Feel like at this point that any day it drops 1% to 2% or more, I should just keep buying a small portion of it and reduce my overall cost basis.
If something drops in price at the grocery store what do you do?

WhiteMaxima
Posts: 2143
Joined: Thu May 19, 2016 5:04 pm

Re: So...do I keep buying more equities?

Post by WhiteMaxima » Tue Dec 18, 2018 1:34 pm

If you DCA and not 100 into the equity, you will win. Now it's not the time to be all in. institute and folks with 100% equity during last couple of years bull want to out to harvest the gain. You should wait at least until the market back to norm.

User avatar
willthrill81
Posts: 19117
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: So...do I keep buying more equities?

Post by willthrill81 » Tue Dec 18, 2018 1:45 pm

justsomeguy2018 wrote:
Mon Dec 17, 2018 10:51 pm
Should I keep buying into the market as its dropping? Feel like at this point that any day it drops 1% to 2% or more, I should just keep buying a small portion of it and reduce my overall cost basis.
Stick with your strategy. Now is probably not the best time to start changing your plans, unless you know that you will panic if the market drops 20-30% from here, which it could.
“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

cpan00b
Posts: 126
Joined: Wed May 10, 2017 9:39 pm

Re: So...do I keep buying more equities?

Post by cpan00b » Tue Dec 18, 2018 1:48 pm

WhiteMaxima wrote:
Tue Dec 18, 2018 1:34 pm
If you DCA and not 100 into the equity, you will win. Now it's not the time to be all in. institute and folks with 100% equity during last couple of years bull want to out to harvest the gain. You should wait at least until the market back to norm.
What if you're 100% equities and have no gains to TLH? I'm currently down 5% or 10k from the total amount I've contributed since April 2017.Nothing's really changed in my investment strategy... just buying more equities every week regardless of price. Should I stop contributing new money and save up cash until I'm at a 90-10 equities to cash ratio? Isn't that market timing? What's to say stocks wont begin to go up after christmas or new years?

WhiteMaxima
Posts: 2143
Joined: Thu May 19, 2016 5:04 pm

Re: So...do I keep buying more equities?

Post by WhiteMaxima » Tue Dec 18, 2018 1:55 pm

cpan00b wrote:
Tue Dec 18, 2018 1:48 pm
WhiteMaxima wrote:
Tue Dec 18, 2018 1:34 pm
If you DCA and not 100 into the equity, you will win. Now it's not the time to be all in. institute and folks with 100% equity during last couple of years bull want to out to harvest the gain. You should wait at least until the market back to norm.
What if you're 100% equities and have no gains to TLH? I'm currently down 5% or 10k from the total amount I've contributed since April 2017.Nothing's really changed in my investment strategy... just buying more equities every week regardless of price. Should I stop contributing new money and save up cash until I'm at a 90-10 equities to cash ratio? Isn't that market timing? What's to say stocks wont begin to go up after christmas or new years?
I would direct 100% into stable values. the market act very volatile recently. +-2% daily is becoming norm. You can easily capture the 2% daily now in your tax advantage account. I am not telling you should timing the market. We had the longest bull (10 years). So the odd to bear market is much higher. I am following to auto sales and housing sells number. Be safe.

NYCPete
Posts: 781
Joined: Thu Apr 12, 2007 1:24 pm
Location: New York, NY

Re: So...do I keep buying more equities?

Post by NYCPete » Tue Dec 18, 2018 2:01 pm

WhiteMaxima wrote:
Tue Dec 18, 2018 1:55 pm
cpan00b wrote:
Tue Dec 18, 2018 1:48 pm
WhiteMaxima wrote:
Tue Dec 18, 2018 1:34 pm
If you DCA and not 100 into the equity, you will win. Now it's not the time to be all in. institute and folks with 100% equity during last couple of years bull want to out to harvest the gain. You should wait at least until the market back to norm.
What if you're 100% equities and have no gains to TLH? I'm currently down 5% or 10k from the total amount I've contributed since April 2017.Nothing's really changed in my investment strategy... just buying more equities every week regardless of price. Should I stop contributing new money and save up cash until I'm at a 90-10 equities to cash ratio? Isn't that market timing? What's to say stocks wont begin to go up after christmas or new years?
I would direct 100% into stable values. the market act very volatile recently. +-2% daily is become norm. You can easily capture the 2% daily now. I am not telling you should timing the market. We had the longest bull (10 years). So the odd to bear market is much higher. Be safe.
Uhhh...you absolutely are saying to try to time the market. And you're not even being consistent. You said this only 5 days ago, on Thursday, December 13th:
WhiteMaxima wrote:
Thu Dec 13, 2018 6:45 pm
Just use three fund approach. No need to wait. 100% equity is too risk and 100% Bond is too conservative. Something in between is better.
To the extent that a fool knows his foolishness, | He may be deemed wise | A fool who considers himself wise | Is indeed a fool. | | Buddha

WhiteMaxima
Posts: 2143
Joined: Thu May 19, 2016 5:04 pm

Re: So...do I keep buying more equities?

Post by WhiteMaxima » Tue Dec 18, 2018 2:09 pm

NYCPete wrote:
Tue Dec 18, 2018 2:01 pm
WhiteMaxima wrote:
Tue Dec 18, 2018 1:55 pm
cpan00b wrote:
Tue Dec 18, 2018 1:48 pm
WhiteMaxima wrote:
Tue Dec 18, 2018 1:34 pm
If you DCA and not 100 into the equity, you will win. Now it's not the time to be all in. institute and folks with 100% equity during last couple of years bull want to out to harvest the gain. You should wait at least until the market back to norm.
What if you're 100% equities and have no gains to TLH? I'm currently down 5% or 10k from the total amount I've contributed since April 2017.Nothing's really changed in my investment strategy... just buying more equities every week regardless of price. Should I stop contributing new money and save up cash until I'm at a 90-10 equities to cash ratio? Isn't that market timing? What's to say stocks wont begin to go up after christmas or new years?
I would direct 100% into stable values. the market act very volatile recently. +-2% daily is become norm. You can easily capture the 2% daily now. I am not telling you should timing the market. We had the longest bull (10 years). So the odd to bear market is much higher. Be safe.
Uhhh...you absolutely are saying to try to time the market. And you're not even being consistent. You said this only 5 days ago, on Thursday, December 13th:
WhiteMaxima wrote:
Thu Dec 13, 2018 6:45 pm
Just use three fund approach. No need to wait. 100% equity is too risk and 100% Bond is too conservative. Something in between is better.
Yes, I am sort of timing the economical cycle but not the market. The market is hard to predict but economical cycle is very easy to predict. Now we are in late cycle and equity valuation is still very rich even after -14% from the top. Three fund folio is a tool to play with safety and risk. Actual AA depend on each person. If you are young, you could have more on the left. if you are close to retirement and in retirement, i would lean toward to the right. good luck.

randomguy
Posts: 9032
Joined: Wed Sep 17, 2014 9:00 am

Re: So...do I keep buying more equities?

Post by randomguy » Tue Dec 18, 2018 2:51 pm

Ged wrote:
Tue Dec 18, 2018 1:27 pm
justsomeguy2018 wrote:
Mon Dec 17, 2018 10:51 pm
Should I keep buying into the market as its dropping? Feel like at this point that any day it drops 1% to 2% or more, I should just keep buying a small portion of it and reduce my overall cost basis.
If something drops in price at the grocery store what do you do?
What do you do when some crashes their car and is willkng to sell it to you for 10% less than an uncrashed model?

User avatar
Ged
Posts: 3888
Joined: Mon May 13, 2013 1:48 pm
Location: Roke

Re: So...do I keep buying more equities?

Post by Ged » Tue Dec 18, 2018 3:48 pm

randomguy wrote:
Tue Dec 18, 2018 2:51 pm
Ged wrote:
Tue Dec 18, 2018 1:27 pm
justsomeguy2018 wrote:
Mon Dec 17, 2018 10:51 pm
Should I keep buying into the market as its dropping? Feel like at this point that any day it drops 1% to 2% or more, I should just keep buying a small portion of it and reduce my overall cost basis.
If something drops in price at the grocery store what do you do?
What do you do when some crashes their car and is willkng to sell it to you for 10% less than an uncrashed model?
Obviously if the item at the grocery store is broken you don't buy it.

WanderingDoc
Posts: 1341
Joined: Sat Aug 05, 2017 8:21 pm

Re: So...do I keep buying more equities?

Post by WanderingDoc » Tue Dec 18, 2018 5:55 pm

NYCPete wrote:
Tue Dec 18, 2018 2:01 pm
WhiteMaxima wrote:
Tue Dec 18, 2018 1:55 pm
cpan00b wrote:
Tue Dec 18, 2018 1:48 pm
WhiteMaxima wrote:
Tue Dec 18, 2018 1:34 pm
If you DCA and not 100 into the equity, you will win. Now it's not the time to be all in. institute and folks with 100% equity during last couple of years bull want to out to harvest the gain. You should wait at least until the market back to norm.
What if you're 100% equities and have no gains to TLH? I'm currently down 5% or 10k from the total amount I've contributed since April 2017.Nothing's really changed in my investment strategy... just buying more equities every week regardless of price. Should I stop contributing new money and save up cash until I'm at a 90-10 equities to cash ratio? Isn't that market timing? What's to say stocks wont begin to go up after christmas or new years?
I would direct 100% into stable values. the market act very volatile recently. +-2% daily is become norm. You can easily capture the 2% daily now. I am not telling you should timing the market. We had the longest bull (10 years). So the odd to bear market is much higher. Be safe.
Uhhh...you absolutely are saying to try to time the market. And you're not even being consistent. You said this only 5 days ago, on Thursday, December 13th:
WhiteMaxima wrote:
Thu Dec 13, 2018 6:45 pm
Just use three fund approach. No need to wait. 100% equity is too risk and 100% Bond is too conservative. Something in between is better.
No growth can occur if we don't change our mind :sharebeer
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

randomguy
Posts: 9032
Joined: Wed Sep 17, 2014 9:00 am

Re: So...do I keep buying more equities?

Post by randomguy » Tue Dec 18, 2018 6:21 pm

Ged wrote:
Tue Dec 18, 2018 3:48 pm
randomguy wrote:
Tue Dec 18, 2018 2:51 pm
Ged wrote:
Tue Dec 18, 2018 1:27 pm
justsomeguy2018 wrote:
Mon Dec 17, 2018 10:51 pm
Should I keep buying into the market as its dropping? Feel like at this point that any day it drops 1% to 2% or more, I should just keep buying a small portion of it and reduce my overall cost basis.
If something drops in price at the grocery store what do you do?
What do you do when some crashes their car and is willkng to sell it to you for 10% less than an uncrashed model?
Obviously if the item at the grocery store is broken you don't buy it.
So is the stock recent stock drop a sale (good is still valuable and you are getting it cheaply) or a broken item (the price is correct for the current estimates of future return)? Nobody really knows. When Japanese stocks dropped from 40k to 20k it wasn't a sale. It was distressed merchandise. When the s&p 500 dropped from 1500 to 700 it was a sale. How good do you think you are at picking sales from distressed merchandise?

I keep buying equities cause I have no clue. Maybe I am overpaying. Maybe I am not. I stay the course and hope that in 20 years everything works out.

WanderingDoc
Posts: 1341
Joined: Sat Aug 05, 2017 8:21 pm

Re: So...do I keep buying more equities?

Post by WanderingDoc » Tue Dec 18, 2018 7:23 pm

randomguy wrote:
Tue Dec 18, 2018 6:21 pm
Ged wrote:
Tue Dec 18, 2018 3:48 pm
randomguy wrote:
Tue Dec 18, 2018 2:51 pm
Ged wrote:
Tue Dec 18, 2018 1:27 pm
justsomeguy2018 wrote:
Mon Dec 17, 2018 10:51 pm
Should I keep buying into the market as its dropping? Feel like at this point that any day it drops 1% to 2% or more, I should just keep buying a small portion of it and reduce my overall cost basis.
If something drops in price at the grocery store what do you do?
What do you do when some crashes their car and is willkng to sell it to you for 10% less than an uncrashed model?
Obviously if the item at the grocery store is broken you don't buy it.
So is the stock recent stock drop a sale (good is still valuable and you are getting it cheaply) or a broken item (the price is correct for the current estimates of future return)? Nobody really knows. When Japanese stocks dropped from 40k to 20k it wasn't a sale. It was distressed merchandise. When the s&p 500 dropped from 1500 to 700 it was a sale. How good do you think you are at picking sales from distressed merchandise?

I keep buying equities cause I have no clue. Maybe I am overpaying. Maybe I am not. I stay the course and hope that in 20 years everything works out.
Some strategy you got there, friend. "Hope" 8-)
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

randomguy
Posts: 9032
Joined: Wed Sep 17, 2014 9:00 am

Re: So...do I keep buying more equities?

Post by randomguy » Tue Dec 18, 2018 7:57 pm

WanderingDoc wrote:
Tue Dec 18, 2018 7:23 pm
randomguy wrote:
Tue Dec 18, 2018 6:21 pm
Ged wrote:
Tue Dec 18, 2018 3:48 pm
randomguy wrote:
Tue Dec 18, 2018 2:51 pm
Ged wrote:
Tue Dec 18, 2018 1:27 pm


If something drops in price at the grocery store what do you do?
What do you do when some crashes their car and is willkng to sell it to you for 10% less than an uncrashed model?
Obviously if the item at the grocery store is broken you don't buy it.
So is the stock recent stock drop a sale (good is still valuable and you are getting it cheaply) or a broken item (the price is correct for the current estimates of future return)? Nobody really knows. When Japanese stocks dropped from 40k to 20k it wasn't a sale. It was distressed merchandise. When the s&p 500 dropped from 1500 to 700 it was a sale. How good do you think you are at picking sales from distressed merchandise?

I keep buying equities cause I have no clue. Maybe I am overpaying. Maybe I am not. I stay the course and hope that in 20 years everything works out.
Some strategy you got there, friend. "Hope" 8-)
Unfortunately I have seen little evidence of a better strategy:) I do like to think the deck is really stack in my favor.....

WanderingDoc
Posts: 1341
Joined: Sat Aug 05, 2017 8:21 pm

Re: So...do I keep buying more equities?

Post by WanderingDoc » Tue Dec 18, 2018 8:47 pm

randomguy wrote:
Tue Dec 18, 2018 7:57 pm
WanderingDoc wrote:
Tue Dec 18, 2018 7:23 pm
randomguy wrote:
Tue Dec 18, 2018 6:21 pm
Ged wrote:
Tue Dec 18, 2018 3:48 pm
randomguy wrote:
Tue Dec 18, 2018 2:51 pm


What do you do when some crashes their car and is willkng to sell it to you for 10% less than an uncrashed model?
Obviously if the item at the grocery store is broken you don't buy it.
So is the stock recent stock drop a sale (good is still valuable and you are getting it cheaply) or a broken item (the price is correct for the current estimates of future return)? Nobody really knows. When Japanese stocks dropped from 40k to 20k it wasn't a sale. It was distressed merchandise. When the s&p 500 dropped from 1500 to 700 it was a sale. How good do you think you are at picking sales from distressed merchandise?

I keep buying equities cause I have no clue. Maybe I am overpaying. Maybe I am not. I stay the course and hope that in 20 years everything works out.
Some strategy you got there, friend. "Hope" 8-)
Unfortunately I have seen little evidence of a better strategy:) I do like to think the deck is really stack in my favor.....
I've experienced and seen some serious evidence in my own life. Investing in real assets that produce income, for starters.

I have just renewed 3 leases, bumped rents 3-4% in each, tenants payed down ~$18K of my principal on several mortgages (directly adding to my net worth), and I legally won't pay any taxes on my rental income in 2018. I will claim a paper loss despite a five figure net profit on cash flow alone. There are assets allow you to modify and control them (even in bad times). I don't want to be at the whim of "Mr. Market".

I am currently ~83% in passive and active real estate equity, and frankly I wish it was higher :P
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

tmcc
Posts: 329
Joined: Tue Feb 06, 2018 6:38 pm

Re: So...do I keep buying more equities?

Post by tmcc » Tue Dec 18, 2018 9:44 pm

WanderingDoc wrote:
Tue Dec 18, 2018 8:47 pm
randomguy wrote:
Tue Dec 18, 2018 7:57 pm
WanderingDoc wrote:
Tue Dec 18, 2018 7:23 pm
randomguy wrote:
Tue Dec 18, 2018 6:21 pm
Ged wrote:
Tue Dec 18, 2018 3:48 pm


Obviously if the item at the grocery store is broken you don't buy it.
So is the stock recent stock drop a sale (good is still valuable and you are getting it cheaply) or a broken item (the price is correct for the current estimates of future return)? Nobody really knows. When Japanese stocks dropped from 40k to 20k it wasn't a sale. It was distressed merchandise. When the s&p 500 dropped from 1500 to 700 it was a sale. How good do you think you are at picking sales from distressed merchandise?

I keep buying equities cause I have no clue. Maybe I am overpaying. Maybe I am not. I stay the course and hope that in 20 years everything works out.
Some strategy you got there, friend. "Hope" 8-)
Unfortunately I have seen little evidence of a better strategy:) I do like to think the deck is really stack in my favor.....
I've experienced and seen some serious evidence in my own life. Investing in real assets that produce income, for starters.

I have just renewed 3 leases, bumped rents 3-4% in each, tenants payed down ~$18K of my principal on several mortgages (directly adding to my net worth), and I legally won't pay any taxes on my rental income in 2018. I will claim a paper loss despite a five figure net profit on cash flow alone. There are assets allow you to modify and control them (even in bad times). I don't want to be at the whim of "Mr. Market".

I am currently ~83% in passive and active real estate equity, and frankly I wish it was higher :P
Too bad multifamily props are so overpriced here. $500k for a frame shack built in 1940. no thanks!

When did you get into your rentals?

randomguy
Posts: 9032
Joined: Wed Sep 17, 2014 9:00 am

Re: So...do I keep buying more equities?

Post by randomguy » Tue Dec 18, 2018 10:19 pm

WanderingDoc wrote:
Tue Dec 18, 2018 8:47 pm


I've experienced and seen some serious evidence in my own life. Investing in real assets that produce income, for starters.

I have just renewed 3 leases, bumped rents 3-4% in each, tenants payed down ~$18K of my principal on several mortgages (directly adding to my net worth), and I legally won't pay any taxes on my rental income in 2018. I will claim a paper loss despite a five figure net profit on cash flow alone. There are assets allow you to modify and control them (even in bad times). I don't want to be at the whim of "Mr. Market".

I am currently ~83% in passive and active real estate equity, and frankly I wish it was higher :P
And the person who bought real estate in 2006 that was cash flow positive and then saw rents drop 20% so they weren't and the house price drop 40% wasn't at the whim of Mr Market?:) If I could invest passively in real estate I would but everything I looked at suggests that the overhead is too high to make it pay off. Maybe some day there will be someone I can write a check to and pay my .1% management fee and be able to passively invest. But as far as I know that day isn't today. And I no I don't want a second job:)

PinotGris
Posts: 715
Joined: Tue Feb 14, 2012 9:38 pm

Re: So...do I keep buying more equities?

Post by PinotGris » Tue Dec 18, 2018 10:34 pm

justsomeguy2018 wrote:
Mon Dec 17, 2018 10:51 pm
Should I keep buying into the market as its dropping? Feel like at this point that any day it drops 1% to 2% or more, I should just keep buying a small portion of it and reduce my overall cost basis.
This is a great time to buy equities. The problem I am facing is when I do a TLH. It is also a great time to do that and for the same reason that the market is low(er). But then I cannot buy into that fund for 30 days. So I have to find an alternate for the duration to keep investing.

User avatar
Toons
Posts: 13630
Joined: Fri Nov 21, 2008 10:20 am
Location: Hills of Tennessee

Re: So...do I keep buying more equities?

Post by Toons » Tue Dec 18, 2018 10:42 pm

Jerry55 wrote:
Mon Dec 17, 2018 11:19 pm
Not certain if you're buying any particular equity, or a mutual fund, but here goes...

My children are saving for retirement, and they freak out like you may be, but I tell them this...It's dollar cost averaging.
Simply put, they're looking to retire in 25-35 years and let's keep it simple.

If you like Mutual Fund A (or B, C, D, etc) and you buy 4 shares for $100, if the price goes down and your $100 buys 8 shares, do you like it less ?
Obviously, if you like each share at $25, you should like it more at $12.50

Dollar cost averaging. I doubled down on my purchases in late 2008 forward, and am a happy camper because of it. I rode the wave.
Know when you should get out if you need the money, or are close to your objective.
Excellent logical explanation,
Great Advice
:sharebeer
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

smectym
Posts: 845
Joined: Thu May 26, 2011 5:07 pm

Re: So...do I keep buying more equities?

Post by smectym » Tue Dec 18, 2018 11:11 pm

"You should continue your set investment schedule on schedule all the time reguardless [sic] of market conditions."

When the propagator of an absolute dogma also has spelling challenges, look out.

Boglehead investing principles are golden and they work wonders for investors. Great. That doesn't mean becoming "Dogma Dog."

We must always keep our wits about us and look at what's happening in the markets today. Boglehead principles are historically conditioned, and have worked during an arguably idiosyncratic span of market history characterized by U.S. hegemony since 1945, a hegemony which seemed to become a permanent monopoly after 1991...but now is showing signs of strain.

What does that mean for investing strategy going forward? Not sure.

"Not sure" can sometimes be the right answer. I wouldn't get too locked into an investing strategy that also features cult-like shaming of "market-timers," dogged repetition of slogans such as "Stay The Course!," and an aversion to fresh analysis of discrepant data that might challenge core precepts of the faith.

Smectym

WanderingDoc
Posts: 1341
Joined: Sat Aug 05, 2017 8:21 pm

Re: So...do I keep buying more equities?

Post by WanderingDoc » Wed Dec 19, 2018 12:08 am

tmcc wrote:
Tue Dec 18, 2018 9:44 pm
WanderingDoc wrote:
Tue Dec 18, 2018 8:47 pm
randomguy wrote:
Tue Dec 18, 2018 7:57 pm
WanderingDoc wrote:
Tue Dec 18, 2018 7:23 pm
randomguy wrote:
Tue Dec 18, 2018 6:21 pm


So is the stock recent stock drop a sale (good is still valuable and you are getting it cheaply) or a broken item (the price is correct for the current estimates of future return)? Nobody really knows. When Japanese stocks dropped from 40k to 20k it wasn't a sale. It was distressed merchandise. When the s&p 500 dropped from 1500 to 700 it was a sale. How good do you think you are at picking sales from distressed merchandise?

I keep buying equities cause I have no clue. Maybe I am overpaying. Maybe I am not. I stay the course and hope that in 20 years everything works out.
Some strategy you got there, friend. "Hope" 8-)
Unfortunately I have seen little evidence of a better strategy:) I do like to think the deck is really stack in my favor.....
I've experienced and seen some serious evidence in my own life. Investing in real assets that produce income, for starters.

I have just renewed 3 leases, bumped rents 3-4% in each, tenants payed down ~$18K of my principal on several mortgages (directly adding to my net worth), and I legally won't pay any taxes on my rental income in 2018. I will claim a paper loss despite a five figure net profit on cash flow alone. There are assets allow you to modify and control them (even in bad times). I don't want to be at the whim of "Mr. Market".

I am currently ~83% in passive and active real estate equity, and frankly I wish it was higher :P
Too bad multifamily props are so overpriced here. $500k for a frame shack built in 1940. no thanks!

When did you get into your rentals?
I've bought real estate in 2011, 2013, 2014, 2016, 2017, and 2018. Continue to profit from all the investments (5 profit centers). Even if values drop, I am still payed 4 other ways.

I do hope there is a bit of a correction and prices drop, but doesn't look to be happening in the markets I like.

I'm going to do a 75% LTV refinance on two properties in January. I will have $0 in them at that point. The return will be infinity/undefinable. Also, risk is zero since I have no money tied up in them.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

WanderingDoc
Posts: 1341
Joined: Sat Aug 05, 2017 8:21 pm

Re: So...do I keep buying more equities?

Post by WanderingDoc » Wed Dec 19, 2018 12:17 am

randomguy wrote:
Tue Dec 18, 2018 10:19 pm
WanderingDoc wrote:
Tue Dec 18, 2018 8:47 pm


I've experienced and seen some serious evidence in my own life. Investing in real assets that produce income, for starters.

I have just renewed 3 leases, bumped rents 3-4% in each, tenants payed down ~$18K of my principal on several mortgages (directly adding to my net worth), and I legally won't pay any taxes on my rental income in 2018. I will claim a paper loss despite a five figure net profit on cash flow alone. There are assets allow you to modify and control them (even in bad times). I don't want to be at the whim of "Mr. Market".

I am currently ~83% in passive and active real estate equity, and frankly I wish it was higher :P
And the person who bought real estate in 2006 that was cash flow positive and then saw rents drop 20% so they weren't and the house price drop 40% wasn't at the whim of Mr Market?:) If I could invest passively in real estate I would but everything I looked at suggests that the overhead is too high to make it pay off. Maybe some day there will be someone I can write a check to and pay my .1% management fee and be able to passively invest. But as far as I know that day isn't today. And I no I don't want a second job:)
Rents drop 20%? Please don't quote random numbers if you don't know exacts. Class B and C market rents in apartments stayed the same or went UP during the Great recession in many markets. The mortgage default rate on residential multifamily was less than 1.5% during the worst real estate housing crash in the last 100 years. Rents move very slowly and in the markets I invest, they plateaued, went up, or dropped 1-2%. Vacancies went down. That 20% figure perhaps happened only in Detroit but its an off-the-cuff made up random number. There are thousands of submarkets in the US that aren't Detroit. that is why you need to diverse geographically, size, number of units, and investing strategy.

As mortgage rates lately have been going up, and less people are able to afford a home, guess what I am seeing? Something very similar as 10 years ago - vacancy rates actually going down. I was at about 95% occupancy over the last several years, now it is closer to 98% occupancy. The percentage of renters in the United States is at a 60-year high as well. The best time to be a real estate investor is when the average person cannot afford to buy a home.

I've spent a lot more time browsing this form than managing the entirety of my real estate business in 2018. And the hours aren't even close.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

User avatar
willthrill81
Posts: 19117
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: So...do I keep buying more equities?

Post by willthrill81 » Wed Dec 19, 2018 12:21 am

smectym wrote:
Tue Dec 18, 2018 11:11 pm
"You should continue your set investment schedule on schedule all the time reguardless [sic] of market conditions."

When the propagator of an absolute dogma also has spelling challenges, look out.

Boglehead investing principles are golden and they work wonders for investors. Great. That doesn't mean becoming "Dogma Dog."

We must always keep our wits about us and look at what's happening in the markets today. Boglehead principles are historically conditioned, and have worked during an arguably idiosyncratic span of market history characterized by U.S. hegemony since 1945, a hegemony which seemed to become a permanent monopoly after 1991...but now is showing signs of strain.

What does that mean for investing strategy going forward? Not sure.

"Not sure" can sometimes be the right answer. I wouldn't get too locked into an investing strategy that also features cult-like shaming of "market-timers," dogged repetition of slogans such as "Stay The Course!," and an aversion to fresh analysis of discrepant data that might challenge core precepts of the faith.

Smectym
I've been called the resident trend follower (i.e. market timer) around here, but I don't feel at all like I've been 'cult-like shamed' about it, despite posting about it often. In fact, when I've explained what I do and why, some prominent people have said that they understand why and think that I'll do fine but probably not as well as I would if I was a buy-and-holder. You cannot ask for more intellectual honesty and decency than that. No one has called my strategy names (or implied that a spelling error on my part was indicative anything). Also, I publicly acknowledge that they may be right, but I'm going to stay with my chosen course because I believe it will work better overall (i.e. not just in financial terms) for me. I also have no problem wholeheartedly recommending buy-and-hold to others.
“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

User avatar
willthrill81
Posts: 19117
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: So...do I keep buying more equities?

Post by willthrill81 » Wed Dec 19, 2018 12:24 am

WanderingDoc wrote:
Wed Dec 19, 2018 12:17 am
randomguy wrote:
Tue Dec 18, 2018 10:19 pm
WanderingDoc wrote:
Tue Dec 18, 2018 8:47 pm


I've experienced and seen some serious evidence in my own life. Investing in real assets that produce income, for starters.

I have just renewed 3 leases, bumped rents 3-4% in each, tenants payed down ~$18K of my principal on several mortgages (directly adding to my net worth), and I legally won't pay any taxes on my rental income in 2018. I will claim a paper loss despite a five figure net profit on cash flow alone. There are assets allow you to modify and control them (even in bad times). I don't want to be at the whim of "Mr. Market".

I am currently ~83% in passive and active real estate equity, and frankly I wish it was higher :P
And the person who bought real estate in 2006 that was cash flow positive and then saw rents drop 20% so they weren't and the house price drop 40% wasn't at the whim of Mr Market?:) If I could invest passively in real estate I would but everything I looked at suggests that the overhead is too high to make it pay off. Maybe some day there will be someone I can write a check to and pay my .1% management fee and be able to passively invest. But as far as I know that day isn't today. And I no I don't want a second job:)
Rents drop 20%? Please don't quote random numbers if you don't know exacts. Class B and C market rents in apartments stayed the same or went UP during the Great recession in many markets. The mortgage default rate on residential multifamily was less than 1.5% during the worst real estate housing crash in the last 100 years. Rents move very slowly and in the markets I invest, they plateaued, went up, or dropped 1-2%. Vacancies went down. That 20% figure perhaps happened only in Detroit but its an off-the-cuff made up random number. There are thousands of submarkets in the US that aren't Detroit. that is why you need to diverse geographically, size, number of units, and investing strategy.

As mortgage rates lately have been going up, and less people are able to afford a home, guess what I am seeing? Something very similar as 10 years ago - vacancy rates actually going down. I was at about 95% occupancy over the last several years, now it is closer to 98% occupancy. The percentage of renters in the United States is at a 60-year high as well. The best time to be a real estate investor is when the average person cannot afford to buy a home.

I've spent a lot more time browsing this form than managing the entirety of my real estate business in 2018. And the hours aren't even close.
Yes, I thought that rents were very stable overall throughout the financial crisis and thereafter. However, I know that quite a few heavily leveraged real estate folks declared bankruptcy too. My guess is that such folks didn't have adequate cash flow from their properties, though it could be due to something else entirely.
“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

randomguy
Posts: 9032
Joined: Wed Sep 17, 2014 9:00 am

Re: So...do I keep buying more equities?

Post by randomguy » Wed Dec 19, 2018 1:13 am

WanderingDoc wrote:
Wed Dec 19, 2018 12:17 am


Rents drop 20%? Please don't quote random numbers if you don't know exacts. Class B and C market rents in apartments stayed the same or went UP during the Great recession in many markets. The mortgage default rate on residential multifamily was less than 1.5% during the worst real estate housing crash in the last 100 years. Rents move very slowly and in the markets I invest, they plateaued, went up, or dropped 1-2%. Vacancies went down. That 20% figure perhaps happened only in Detroit but its an off-the-cuff made up random number. There are thousands of submarkets in the US that aren't Detroit. that is why you need to diverse geographically, size, number of units, and investing strategy.

As mortgage rates lately have been going up, and less people are able to afford a home, guess what I am seeing? Something very similar as 10 years ago - vacancy rates actually going down. I was at about 95% occupancy over the last several years, now it is closer to 98% occupancy. The percentage of renters in the United States is at a 60-year high as well. The best time to be a real estate investor is when the average person cannot afford to buy a home.

I've spent a lot more time browsing this form than managing the entirety of my real estate business in 2018. And the hours aren't even close.
It happens to be what my rent dropped during the 2000-2002 dot.com bust. And I there was probably another 10% drop if I wanted to stay :) I am willing to bet that when Vegas vacancy rates went over 15%, that their were landlords willing to make deals:) The overall default rate was 1.5% which is slightly lower than the 2% default of SFH. But you have to remember where those defaults are concentrated. The people that bought in 1995 weren't defaulting. It was the ones that bought in 2005. And yes it was definitely market specific. The odds of your market being the one that crashes might be low but that doesn't help you if you happen to get the short straw:)

I am not saying real estate isn't a good investment. There are plenty of people that have make good money in it. But it is far from risk free.

WanderingDoc
Posts: 1341
Joined: Sat Aug 05, 2017 8:21 pm

Re: So...do I keep buying more equities?

Post by WanderingDoc » Wed Dec 19, 2018 1:52 am

randomguy wrote:
Wed Dec 19, 2018 1:13 am
WanderingDoc wrote:
Wed Dec 19, 2018 12:17 am


Rents drop 20%? Please don't quote random numbers if you don't know exacts. Class B and C market rents in apartments stayed the same or went UP during the Great recession in many markets. The mortgage default rate on residential multifamily was less than 1.5% during the worst real estate housing crash in the last 100 years. Rents move very slowly and in the markets I invest, they plateaued, went up, or dropped 1-2%. Vacancies went down. That 20% figure perhaps happened only in Detroit but its an off-the-cuff made up random number. There are thousands of submarkets in the US that aren't Detroit. that is why you need to diverse geographically, size, number of units, and investing strategy.

As mortgage rates lately have been going up, and less people are able to afford a home, guess what I am seeing? Something very similar as 10 years ago - vacancy rates actually going down. I was at about 95% occupancy over the last several years, now it is closer to 98% occupancy. The percentage of renters in the United States is at a 60-year high as well. The best time to be a real estate investor is when the average person cannot afford to buy a home.

I've spent a lot more time browsing this form than managing the entirety of my real estate business in 2018. And the hours aren't even close.
It happens to be what my rent dropped during the 2000-2002 dot.com bust. And I there was probably another 10% drop if I wanted to stay :) I am willing to bet that when Vegas vacancy rates went over 15%, that their were landlords willing to make deals:) The overall default rate was 1.5% which is slightly lower than the 2% default of SFH. But you have to remember where those defaults are concentrated. The people that bought in 1995 weren't defaulting. It was the ones that bought in 2005. And yes it was definitely market specific. The odds of your market being the one that crashes might be low but that doesn't help you if you happen to get the short straw:)

I am not saying real estate isn't a good investment. There are plenty of people that have make good money in it. But it is far from risk free.
Having zero money in a cash flowing, good location asset is risk free. What's the risk, if I have $0 in the deal? The bank can take the property.. I've made plenty of money from it over the years 8-) An investment is risky due to lack of education on the part of the investor. Real estate is so forgiving as an investment its almost comical. My parents, don't speak English well, not personable, zero business sense, etc. did very well even though worse real estate market crash in 100 years. They literally just bought real estate with no planning or math done. Actually having a plan produces even better returns.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

FireProof
Posts: 752
Joined: Thu May 05, 2011 12:15 pm

Re: So...do I keep buying more equities?

Post by FireProof » Wed Dec 19, 2018 5:08 am

That would be my dream. I almost wish I weren't retired now so I'd have more money to put in this market.

tmcc
Posts: 329
Joined: Tue Feb 06, 2018 6:38 pm

Re: So...do I keep buying more equities?

Post by tmcc » Wed Dec 19, 2018 5:18 am

willthrill81 wrote:
Wed Dec 19, 2018 12:24 am
WanderingDoc wrote:
Wed Dec 19, 2018 12:17 am
randomguy wrote:
Tue Dec 18, 2018 10:19 pm
WanderingDoc wrote:
Tue Dec 18, 2018 8:47 pm


I've experienced and seen some serious evidence in my own life. Investing in real assets that produce income, for starters.

I have just renewed 3 leases, bumped rents 3-4% in each, tenants payed down ~$18K of my principal on several mortgages (directly adding to my net worth), and I legally won't pay any taxes on my rental income in 2018. I will claim a paper loss despite a five figure net profit on cash flow alone. There are assets allow you to modify and control them (even in bad times). I don't want to be at the whim of "Mr. Market".

I am currently ~83% in passive and active real estate equity, and frankly I wish it was higher :P
And the person who bought real estate in 2006 that was cash flow positive and then saw rents drop 20% so they weren't and the house price drop 40% wasn't at the whim of Mr Market?:) If I could invest passively in real estate I would but everything I looked at suggests that the overhead is too high to make it pay off. Maybe some day there will be someone I can write a check to and pay my .1% management fee and be able to passively invest. But as far as I know that day isn't today. And I no I don't want a second job:)
Rents drop 20%? Please don't quote random numbers if you don't know exacts. Class B and C market rents in apartments stayed the same or went UP during the Great recession in many markets. The mortgage default rate on residential multifamily was less than 1.5% during the worst real estate housing crash in the last 100 years. Rents move very slowly and in the markets I invest, they plateaued, went up, or dropped 1-2%. Vacancies went down. That 20% figure perhaps happened only in Detroit but its an off-the-cuff made up random number. There are thousands of submarkets in the US that aren't Detroit. that is why you need to diverse geographically, size, number of units, and investing strategy.

As mortgage rates lately have been going up, and less people are able to afford a home, guess what I am seeing? Something very similar as 10 years ago - vacancy rates actually going down. I was at about 95% occupancy over the last several years, now it is closer to 98% occupancy. The percentage of renters in the United States is at a 60-year high as well. The best time to be a real estate investor is when the average person cannot afford to buy a home.

I've spent a lot more time browsing this form than managing the entirety of my real estate business in 2018. And the hours aren't even close.
Yes, I thought that rents were very stable overall throughout the financial crisis and thereafter. However, I know that quite a few heavily leveraged real estate folks declared bankruptcy too. My guess is that such folks didn't have adequate cash flow from their properties, though it could be due to something else entirely.
Yes... I have several acquaintances that were so levered that they ultimately were foreclosed because their occupancy ticked under what their modeled rate was. Then property taxes were due and the rest is history.

User avatar
oldzey
Posts: 1548
Joined: Sun Apr 13, 2014 8:38 pm
Location: Land of Lincoln

Re: So...do I keep buying more equities?

Post by oldzey » Wed Dec 19, 2018 5:58 am

greg24 wrote:
Tue Dec 18, 2018 10:55 am
My automatic investments continue to purchase at my chosen asset allocation.
+1

Stay the Course! :beer
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

kksmom
Posts: 191
Joined: Sun Oct 09, 2011 11:07 am

Re: So...do I keep buying more equities?

Post by kksmom » Wed Dec 19, 2018 7:23 am

WanderingDoc wrote:
Wed Dec 19, 2018 1:52 am



Having zero money in a cash flowing, good location asset is risk free. What's the risk, if I have $0 in the deal? The bank can take the property.. I've made plenty of money from it over the years 8-) An investment is risky due to lack of education on the part of the investor. Real estate is so forgiving as an investment its almost comical. My parents, don't speak English well, not personable, zero business sense, etc. did very well even though worse real estate market crash in 100 years. They literally just bought real estate with no planning or math done. Actually having a plan produces even better returns.
Are your loans recourse or non recourse? Are they conventional or commercial? any balloons?

Not asking you personally... but saying that it depends..

User avatar
CyclingDuo
Posts: 3257
Joined: Fri Jan 06, 2017 9:07 am

Re: So...do I keep buying more equities?

Post by CyclingDuo » Wed Dec 19, 2018 10:03 am

justsomeguy2018 wrote:
Mon Dec 17, 2018 10:51 pm
Should I keep buying into the market as its dropping? Feel like at this point that any day it drops 1% to 2% or more, I should just keep buying a small portion of it and reduce my overall cost basis.
Short answer: yes.

Stick to your automatic, regularly scheduled contributions. Through thick and thin (and there will be plenty of both over the next few decades).

Those of us who invested and lived through 1987, 1990, 1998, 1999, 2000-02, 2007-09, 2011, 2015-16 can attest to buying in the face of doom and gloom as we watched our portfolios dwindle and then recover. Good bang for our buck on all of those purchases when prices were distressed - no matter how it felt to do so at the time. Think ahead to 2025, 2030, 2045, etc... . How will the purchases you made this year and next year have contributed to your asset accumulation?

It's always a gut check due to the genetic power of loss aversion during market swoons - be they short, intermediate, or longer, but if anything, we should question more about buying on days of 1% to 2% gains during the ascents. You simply stick to plan and purchase during both scenarios during your accumulation years. You will have purchased at lows, highs, and everything between.

Our household continues to also receive the employer match to our tax-deferred retirement plans. We would like to take advantage of that for at least another 5-10 years as we wrap up our full time working careers in spite of what the markets do over that time frame.

Throw in the employer match (free money), and it would behoove y

As you approach retirement, your allocation has adjusted and the amount percentage wise going into equities - compared to bonds and alternatives - will be less on a bi-weekly or monthly basis than it was in your 20's, 30's, 40's and early 50's.

Today's required reading and good reminders are here:

https://www.etf.com/sections/index-inve ... nopaging=1

https://www.etf.com/docs/IfYouCan.pdf

Between 1980 and 2018, the U.S. markets experienced 36 corrections. During this time, the S&P 500 had fallen by an average of 15.6 percent. Ten of these corrections resulted in bear markets...
https://www.investopedia.com/terms/c/correction.asp

Between 1900 and 2015, there were 32 bear markets, averaging one every 3.5 years...
https://www.investopedia.com/terms/b/bearmarket.asp
Last edited by CyclingDuo on Wed Dec 19, 2018 10:33 am, edited 2 times in total.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

bearcub
Posts: 1053
Joined: Sat Mar 08, 2008 7:54 am
Location: Twilight Zone

Re: So...do I keep buying more equities?

Post by bearcub » Wed Dec 19, 2018 10:06 am

I am in two Balanced Funds So I sit on my hands + they rebalance for me.

garlandwhizzer
Posts: 2853
Joined: Fri Aug 06, 2010 3:42 pm

Re: So...do I keep buying more equities?

Post by garlandwhizzer » Wed Dec 19, 2018 12:04 pm

randomguy wrote:

The problem with value investing is always figuring out if the product is on sale or if they are distressed merchandise. Buying now before the 20% dip is a poor idea. Buying now before the 20% rebound is a great one.
The question posed was:
So...do I keep buying more equities?
"Keep buying" does not IMO imply market timing, picking the bottom value investing, but rather continuing to buy at regular intervals like monthly purchases taken from your paycheck which is as sound an investment strategy as it gets IMO. Regular steady equal purchases taken every month from your income stream and put into low cost broadly based equity funds is a fool-proof method for gaining wealth long term. I know this because I did it for decades. The opposite of "keep buying" is "stop buying" which in my opinion is a serious mistake in a declining market if you have a periodic regular stock investment plan.

The Japan collapse since 1990 -2018 is the exception that proves the rule. No similar event has ever occurred in US market history, nor has it ever occurred to this degree and length of time on a global basis. Equity diversification is critical, especially if you're investing in Japan in 1989 when the PE was about 70, something that I would never have done. Basing an entire investing strategy on the Japan collapse, something that happened once in the last 2 centuries in one foreign country, seems to be a foolish investment strategy to me. My advice is that if you have a investment plan of regular stock purchases you should not abandon it because the market drops if you can make financial ends meet. I do not believe that I or anyone else can accurately and reliable pick the market bottom in a serious bear market but "keep buying" is a different matter.

Garland Whizzer

randomguy
Posts: 9032
Joined: Wed Sep 17, 2014 9:00 am

Re: So...do I keep buying more equities?

Post by randomguy » Wed Dec 19, 2018 2:01 pm

garlandwhizzer wrote:
Wed Dec 19, 2018 12:04 pm
randomguy wrote:

The problem with value investing is always figuring out if the product is on sale or if they are distressed merchandise. Buying now before the 20% dip is a poor idea. Buying now before the 20% rebound is a great one.
The question posed was:
So...do I keep buying more equities?
"Keep buying" does not IMO imply market timing, picking the bottom value investing, but rather continuing to buy at regular intervals like monthly purchases taken from your paycheck which is as sound an investment strategy as it gets IMO. Regular steady equal purchases taken every month from your income stream and put into low cost broadly based equity funds is a fool-proof method for gaining wealth long term. I know this because I did it for decades. The opposite of "keep buying" is "stop buying" which in my opinion is a serious mistake in a declining market if you have a periodic regular stock investment plan.

The Japan collapse since 1990 -2018 is the exception that proves the rule. No similar event has ever occurred in US market history, nor has it ever occurred to this degree and length of time on a global basis. Equity diversification is critical, especially if you're investing in Japan in 1989 when the PE was about 70, something that I would never have done. Basing an entire investing strategy on the Japan collapse, something that happened once in the last 2 centuries in one foreign country, seems to be a foolish investment strategy to me. My advice is that if you have a investment plan of regular stock purchases you should not abandon it because the market drops if you can make financial ends meet. I do not believe that I or anyone else can accurately and reliable pick the market bottom in a serious bear market but "keep buying" is a different matter.

Garland Whizzer
Keep buying is a fine answer. Pretending that they are on sale is delusional. Sometimes the new market valuation is too optomistic. Sometimes too pessimistic. But unless your a stock picking guru, you are just playing a guessi g game.

Topic Author
justsomeguy2018
Posts: 1120
Joined: Wed Oct 03, 2018 8:11 pm

Re: So...do I keep buying more equities?

Post by justsomeguy2018 » Wed Dec 19, 2018 4:47 pm

Seems like it all boils down to value - how do we know at what price the market is a good value? For all we know it may never go back up in value as it may be overvalued.

KlangFool
Posts: 16603
Joined: Sat Oct 11, 2008 12:35 pm

Re: So...do I keep buying more equities?

Post by KlangFool » Wed Dec 19, 2018 4:50 pm

justsomeguy2018 wrote:
Wed Dec 19, 2018 4:47 pm
Seems like it all boils down to value - how do we know at what price the market is a good value? For all we know it may never go back up in value as it may be overvalued.
justsomeguy2018,

1) You don't. That is why your asset allocation should never be 100% stock. If you are not 100% stock, this is never a problem.

2) And, this is the reason why the 3 funds portfolio is the wrong answer for some folks. If you invest in a target date fund and/or life strategy fund, you do not have to ask this question.

KlangFool

3-20Characters
Posts: 714
Joined: Tue Jun 19, 2018 2:20 pm

Re: So...do I keep buying more equities?

Post by 3-20Characters » Wed Dec 19, 2018 4:52 pm

Good time to read W. Buffett’s letters to shareholders.

http://www.berkshirehathaway.com/letters/letters.html

GuyLafleur
Posts: 6
Joined: Mon Nov 28, 2016 5:51 pm

Re: So...do I keep buying more equities?

Post by GuyLafleur » Wed Dec 19, 2018 6:56 pm

Not to derail the thread, but the assertion that real estate can be risk-free or is not a very risky asset is absolutely ludicrous. I work in the real estate industry, and most of my professional network is in the real estate industry, and it is definitely an extremely risky asset. Most of being a real investor or developer is about managing the countless risks you'll encounter during acquisition, asset management, and divestment. Hell, even after ignoring all the deal-specific financial and legal risks, your downside risk with a real estate investment is theoretically unlimited because of the risk of environmental contamination of the site and the liability that attaches to all the people in the chain of ownership.

Post Reply