Okay, now when you do buy back in?

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HomerJ
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Okay, now when you do buy back in?

Post by HomerJ » Mon Mar 02, 2020 12:39 pm

So you sold everything last Wednesday with S&P 500 at 3116, freaked out by the Monday and Tuesday drops and you were sure it would keep dropping.

You patted yourself on the back on Thursday and Friday, as the market dropped all the way to 2956 on Friday.

Hmm... but now it's heading back up today... It's already at 3020.

In order for your market timing move to work, you have to buy in below where you sold.

Should you buy today? You will have saved 3% of your stock-market money with your market-timing moves.

But what if starts dropping again? You were worried about a 20%-30% drop just 3 days ago. Getting back in now puts all your money back at risk.

Maybe you should wait a few days and see if this is just a dead-cat bounce.

But what if it keeps going up? What if tomorrow it hits 3060? At what point will you pull the trigger? Should you wait until it is close to where you sold? Do you have a plan? I mean, how do you know when the crisis is over?

What if it gets close to where you sold, so you buy, but then a new huge outbreak occurs and the next day the market drops 2% and the day after another 2%? Will you sell it all again?

Once you start down this road of buying and selling on short-term moves and the news cycle, where does it end? I mean, now you're committed to paying attention every day to all the different forecasts and predictions. It matters now, because each day you have to make a decision.

Do you have a plan?
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”

theorist
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Re: Okay, now when you do buy back in?

Post by theorist » Mon Mar 02, 2020 12:45 pm

HomerJ wrote:
Mon Mar 02, 2020 12:39 pm
So you sold everything last Wednesday with S&P 500 at 3116, freaked out by the Monday and Tuesday drops and you were sure it would keep dropping.

You patted yourself on the back on Thursday and Friday, as the market dropped all the way to 2956 on Friday.

Hmm... but now it's heading back up today... It's already at 3020.

In order for your market timing move to work, you have to buy in below where you sold.

Should you buy today? You will have saved 3% of your stock-market money with your market-timing moves.

But what if starts dropping again? You were worried about a 20%-30% drop just 3 days ago. Getting back in now puts all your money back at risk.

Maybe you should wait a few days and see if this is just a dead-cat bounce.

But what if it keeps going up? What if tomorrow it hits 3060? At what point will you pull the trigger? Should you wait until it is close to where you sold? Do you have a plan? I mean, how do you know when the crisis is over?

What if it gets close to where you sold, so you buy, but then a new huge outbreak occurs and the next day the market drops 2% and the day after another 2%? Will you sell it all again?

Once you start down this road of buying and selling on short-term moves and the news cycle, where does it end? I mean, now you're committed to paying attention every day to all the different forecasts and predictions. It matters now, because each day you have to make a decision.

Do you have a plan?
+1 😈

mroe800
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Re: Okay, now when you do buy back in?

Post by mroe800 » Mon Mar 02, 2020 12:49 pm

Let’s not talk about how my target volatility strategy signaled a large move out of equities on Friday, you know at the bottom of the dip is this upwards movement keeps on.

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Re: Okay, now when you do buy back in?

Post by DesertDiva » Mon Mar 02, 2020 12:51 pm

HomerJ wrote:
Mon Mar 02, 2020 12:39 pm
So you sold everything last Wednesday with S&P 500 at 3116, freaked out by the Monday and Tuesday drops and you were sure it would keep dropping.

You patted yourself on the back on Thursday and Friday, as the market dropped all the way to 2956 on Friday.

Hmm... but now it's heading back up today... It's already at 3020.

In order for your market timing move to work, you have to buy in below where you sold.

Should you buy today? You will have saved 3% of your stock-market money with your market-timing moves.

But what if starts dropping again? You were worried about a 20%-30% drop just 3 days ago. Getting back in now puts all your money back at risk.

Maybe you should wait a few days and see if this is just a dead-cat bounce.

But what if it keeps going up? What if tomorrow it hits 3060? At what point will you pull the trigger? Should you wait until it is close to where you sold? Do you have a plan? I mean, how do you know when the crisis is over?

What if it gets close to where you sold, so you buy, but then a new huge outbreak occurs and the next day the market drops 2% and the day after another 2%? Will you sell it all again?

Once you start down this road of buying and selling on short-term moves and the news cycle, where does it end? I mean, now you're committed to paying attention every day to all the different forecasts and predictions. It matters now, because each day you have to make a decision.

Do you have a plan?
I don't have a crystal ball, but I don't need one. I've stuck to my IPS. That has been my plan all along.
#StayingTheCourse

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Rowan Oak
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Re: Okay, now when you do buy back in?

Post by Rowan Oak » Mon Mar 02, 2020 1:01 pm

it's a quagmire. Good luck to those who roll the dice.
“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger

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Re: Okay, now when you do buy back in?

Post by Jack FFR1846 » Mon Mar 02, 2020 1:01 pm

I didn't sell. I did rebalance twice, selling bond to buy equity. When my AA gets lopsided in the other direction, I'll sell equity to buy bond.
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palanzo
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Re: Okay, now when you do buy back in?

Post by palanzo » Mon Mar 02, 2020 1:02 pm

HomerJ wrote:
Mon Mar 02, 2020 12:39 pm
So you sold everything last Wednesday with S&P 500 at 3116, freaked out by the Monday and Tuesday drops and you were sure it would keep dropping.

You patted yourself on the back on Thursday and Friday, as the market dropped all the way to 2956 on Friday.

Hmm... but now it's heading back up today... It's already at 3020.

In order for your market timing move to work, you have to buy in below where you sold.

Should you buy today? You will have saved 3% of your stock-market money with your market-timing moves.

But what if starts dropping again? You were worried about a 20%-30% drop just 3 days ago. Getting back in now puts all your money back at risk.

Maybe you should wait a few days and see if this is just a dead-cat bounce.

But what if it keeps going up? What if tomorrow it hits 3060? At what point will you pull the trigger? Should you wait until it is close to where you sold? Do you have a plan? I mean, how do you know when the crisis is over?

What if it gets close to where you sold, so you buy, but then a new huge outbreak occurs and the next day the market drops 2% and the day after another 2%? Will you sell it all again?

Once you start down this road of buying and selling on short-term moves and the news cycle, where does it end? I mean, now you're committed to paying attention every day to all the different forecasts and predictions. It matters now, because each day you have to make a decision.

Do you have a plan?
Did you sell everything last Wednesday?

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HomerJ
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Re: Okay, now when you do buy back in?

Post by HomerJ » Mon Mar 02, 2020 1:07 pm

palanzo wrote:
Mon Mar 02, 2020 1:02 pm
Did you sell everything last Wednesday?
Nope. Never hit my rebalancing bands.

VBTLX (Vanguard Total Bond) - YTD return - 3.87%
VTSAX (Vanguard Total Stock) - YTD return - -8.23%

A 50/50 portfolio is down 2.2% YTD so far. Not a disaster. Makes it pretty easy to "stay the course".

(Not even counting today's uptick).
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”

Triple digit golfer
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Re: Okay, now when you do buy back in?

Post by Triple digit golfer » Mon Mar 02, 2020 1:15 pm

I made one little tiny move:

Future $750 bi-weekly 401k contributions will now all go to the S&P 500 Index instead of $400 to S&P 500 and $350 to Intermediate Term Bond Index. And I'm even starting to think why did I bother? If the market goes right back up shortly, I'll have to change it right back. Still, seemed silly for me to be contributing to bonds when I was underweight in bonds. At the end of the day, it just doesn't matter much. As long as I stay within my 5% bands, I really don't care about splitting hairs with changing new contributions often.

I had $350 going to bonds because my AA is 80/20 and I assume loosely that I'll invest $45k annually. $350 x 26 pay periods = approximately 20% of $45k.

I did not rebalance because at the low point so far, my AA was only off from its target by 2.1%, not 5%.

H-Town
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Re: Okay, now when you do buy back in?

Post by H-Town » Mon Mar 02, 2020 1:24 pm

HomerJ wrote:
Mon Mar 02, 2020 12:39 pm
So you sold everything last Wednesday with S&P 500 at 3116, freaked out by the Monday and Tuesday drops and you were sure it would keep dropping.

You patted yourself on the back on Thursday and Friday, as the market dropped all the way to 2956 on Friday.

Hmm... but now it's heading back up today... It's already at 3020.

In order for your market timing move to work, you have to buy in below where you sold.

Should you buy today? You will have saved 3% of your stock-market money with your market-timing moves.

But what if starts dropping again? You were worried about a 20%-30% drop just 3 days ago. Getting back in now puts all your money back at risk.

Maybe you should wait a few days and see if this is just a dead-cat bounce.

But what if it keeps going up? What if tomorrow it hits 3060? At what point will you pull the trigger? Should you wait until it is close to where you sold? Do you have a plan? I mean, how do you know when the crisis is over?

What if it gets close to where you sold, so you buy, but then a new huge outbreak occurs and the next day the market drops 2% and the day after another 2%? Will you sell it all again?

Once you start down this road of buying and selling on short-term moves and the news cycle, where does it end? I mean, now you're committed to paying attention every day to all the different forecasts and predictions. It matters now, because each day you have to make a decision.

Do you have a plan?
This is where most market timers do not have answer for.

This is why Bogleheads preach "stay the course" as it is the tried and true investing method from the more experienced investors.

Barsoom
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Re: Okay, now when you do buy back in?

Post by Barsoom » Mon Mar 02, 2020 1:31 pm

H-Town wrote:
Mon Mar 02, 2020 1:24 pm
This is where most market timers do not have answer for.

This is why Bogleheads preach "stay the course" as it is the tried and true investing method from the more experienced investors.
I think that "market timers" don't think of themselves as people who follow hunches about what the market will do based on extreme news reports.

Market timers are people who follow a set of economic indicators that have historically been known to signal structural changes in the economic condition of the country and the world, and take action when these indicators signal impending weakness.

Currently, these indicators are signaling a healthy jobs environment and positive retail sales. Weakness is creeping into industrial production, corporate earnings per share, personal income growth, and the bond market yield curve is inverted again.

The current drop in the market is likely not structural and was not signaled by timing indicators, but a panic response to the Covid-19 that will shortly correct itself. In the end, it might be like the YE2018 whipsaw, although a bit deeper.

-B

drg02b
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Re: Okay, now when you do buy back in?

Post by drg02b » Mon Mar 02, 2020 1:35 pm

HomerJ wrote:
Mon Mar 02, 2020 12:39 pm
So you sold everything last Wednesday with S&P 500 at 3116, freaked out by the Monday and Tuesday drops and you were sure it would keep dropping.

You patted yourself on the back on Thursday and Friday, as the market dropped all the way to 2956 on Friday.

Hmm... but now it's heading back up today... It's already at 3020.

In order for your market timing move to work, you have to buy in below where you sold.

Should you buy today? You will have saved 3% of your stock-market money with your market-timing moves.

But what if starts dropping again? You were worried about a 20%-30% drop just 3 days ago. Getting back in now puts all your money back at risk.

Maybe you should wait a few days and see if this is just a dead-cat bounce.

But what if it keeps going up? What if tomorrow it hits 3060? At what point will you pull the trigger? Should you wait until it is close to where you sold? Do you have a plan? I mean, how do you know when the crisis is over?

What if it gets close to where you sold, so you buy, but then a new huge outbreak occurs and the next day the market drops 2% and the day after another 2%? Will you sell it all again?

Once you start down this road of buying and selling on short-term moves and the news cycle, where does it end? I mean, now you're committed to paying attention every day to all the different forecasts and predictions. It matters now, because each day you have to make a decision.

Do you have a plan?

Stop reading my mind! Nah, just kidding. The only investment thing that happened for me was my payroll 403b contribution on Friday, for which it was nice to get a discounted purchase price.

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Re: Okay, now when you do buy back in?

Post by AnalogKid22 » Mon Mar 02, 2020 1:41 pm

last week I exchanged all index funds for bitcoin.

InvestingGeek
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Re: Okay, now when you do buy back in?

Post by InvestingGeek » Mon Mar 02, 2020 1:49 pm

HomerJ wrote:
Mon Mar 02, 2020 12:39 pm
Do you have a plan?
Plan? Ha, amateurs! Expert market timers go by 'feel' buddy.

Jokes aside, I think the virus hasn't yet played itself out and there are still a lot of unknowns. A momemtary spike in the market due to Fed moves to lower interest rates might not stem the decline for long.

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Re: Okay, now when you do buy back in?

Post by Third Son » Mon Mar 02, 2020 1:55 pm

I did nothing 'cuz I'm retired and don't bother about such things 🐃or🐻
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Re: Okay, now when you do buy back in?

Post by expat » Mon Mar 02, 2020 1:58 pm

I bought a lot of stock Friday because my stock allocation was in the negative.

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Re: Okay, now when you do buy back in?

Post by Caduceus » Mon Mar 02, 2020 2:07 pm

HomerJ wrote:
Mon Mar 02, 2020 1:07 pm
palanzo wrote:
Mon Mar 02, 2020 1:02 pm
Did you sell everything last Wednesday?
Nope. Never hit my rebalancing bands.

VBTLX (Vanguard Total Bond) - YTD return - 3.87%
VTSAX (Vanguard Total Stock) - YTD return - -8.23%

A 50/50 portfolio is down 2.2% YTD so far. Not a disaster. Makes it pretty easy to "stay the course".

(Not even counting today's uptick).
I agree with your original post insofar as it's about the difficulty of market timing. But I think the bigger choice is how much equities to own in the first place. I don't think people actually write posts encouraging others to calculate all the missed gains from those heavy allocation to bonds in this historic bull market, when the relative out-performance from something like a 100-0 vs a 50-50 portfolio is going to dwarf most market timing mistakes even the most naive investors make (or are going to make) with their recent coronavirus bets. Unless you genuinely think bonds are going to out-perform equities over long periods of time, what bonds seem to do for most investors is psychologically cushion the blow of severe losses in their portfolio. That does not seem - emotionally - that much different from what market timers are trying to do, which is that they are also afraid of severe losses in their portfolio.

People with significant bonds are trading away higher expected returns for reduced volatility and emotional comfort.

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HomerJ
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Re: Okay, now when you do buy back in?

Post by HomerJ » Mon Mar 02, 2020 2:13 pm

Caduceus wrote:
Mon Mar 02, 2020 2:07 pm
]People with significant bonds are trading away higher expected returns for reduced volatility and emotional comfort.
This is absolutely correct.

If you can save enough though, it's the best way to do it.

I don't need high expected returns to meet my retirement goals, and I enjoy the emotional comfort.

And if you market-time because of your reduced emotional comfort, you may miss out on the higher expected returns as well.
Last edited by HomerJ on Mon Mar 02, 2020 2:19 pm, edited 1 time in total.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”

Rosencrantz1
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Re: Okay, now when you do buy back in?

Post by Rosencrantz1 » Mon Mar 02, 2020 2:14 pm

Well, one thing for sure, at least in my mind - I have the distinct impression there are more "market timers" on Bogleheads than I initially thought.

Of course, some that dumped equities were probably simply adjusting their AA? Seriously, though, market action like this allows one to REALLY examine their appetite for risk.

I rebalanced into equities on the way down in my 70/30 retirement portfolio - and, before this is over, I suspect I will probably have the chance to do that again. :beer

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Re: Okay, now when you do buy back in?

Post by Jimbo9911 » Mon Mar 02, 2020 2:19 pm

Great post HomerJ
Makes every body think!

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StevieG72
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Re: Okay, now when you do buy back in?

Post by StevieG72 » Mon Mar 02, 2020 2:23 pm

After the dead cat bounce.
Fools think their own way is right, but the wise listen to others.

Carol88888
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Re: Okay, now when you do buy back in?

Post by Carol88888 » Mon Mar 02, 2020 2:32 pm

I have a plan: buy whenever I have some cash to spend.

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RootSki
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Re: Okay, now when you do buy back in?

Post by RootSki » Mon Mar 02, 2020 2:34 pm

InvestingGeek wrote:
Mon Mar 02, 2020 1:49 pm
HomerJ wrote:
Mon Mar 02, 2020 12:39 pm
Do you have a plan?
Plan? Ha, amateurs! Expert market timers go by 'feel' buddy.
Funny but true! :D

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dm200
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Re: Okay, now when you do buy back in?

Post by dm200 » Mon Mar 02, 2020 2:37 pm

HomerJ wrote:
Mon Mar 02, 2020 12:39 pm
So you sold everything last Wednesday with S&P 500 at 3116, freaked out by the Monday and Tuesday drops and you were sure it would keep dropping.

You patted yourself on the back on Thursday and Friday, as the market dropped all the way to 2956 on Friday.

Hmm... but now it's heading back up today... It's already at 3020.

In order for your market timing move to work, you have to buy in below where you sold.

Should you buy today? You will have saved 3% of your stock-market money with your market-timing moves.

But what if starts dropping again? You were worried about a 20%-30% drop just 3 days ago. Getting back in now puts all your money back at risk.

Maybe you should wait a few days and see if this is just a dead-cat bounce.

But what if it keeps going up? What if tomorrow it hits 3060? At what point will you pull the trigger? Should you wait until it is close to where you sold? Do you have a plan? I mean, how do you know when the crisis is over?

What if it gets close to where you sold, so you buy, but then a new huge outbreak occurs and the next day the market drops 2% and the day after another 2%? Will you sell it all again?

Once you start down this road of buying and selling on short-term moves and the news cycle, where does it end? I mean, now you're committed to paying attention every day to all the different forecasts and predictions. It matters now, because each day you have to make a decision.

Do you have a plan?
Maybe just not buy back in! Sounds like you are not willing/able to look "long term" and stay the course. You might do better, in the long run, by sticking with much lower volatility choices - such as bonds, bond funds or CDs.

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Re: Okay, now when you do buy back in?

Post by rossington » Mon Mar 02, 2020 2:42 pm

HomerJ wrote:
Mon Mar 02, 2020 2:13 pm
Caduceus wrote:
Mon Mar 02, 2020 2:07 pm
]People with significant bonds are trading away higher expected returns for reduced volatility and emotional comfort.
This is absolutely correct.

If you can save enough though, it's the best way to do it.

I don't need high expected returns to meet my retirement goals, and I enjoy the emotional comfort.

And if you market-time because of your reduced emotional comfort, you may miss out on the higher expected returns as well.
It looked to me that much of the selling last week was due to panic for those who had high exposure to equities. I don't think you can even be remotely successful selling into the downward avalanche of institutional electronic sell algorithms... it does not go well. Sitting on the sidelines is the best you can do no matter how painful.
It sure does make the case for at least some exposure to bonds if you're not a spring chicken anymore.
I would suspect the market timers are back at it again today though.
"Success is going from failure to failure without loss of enthusiasm." Winston Churchill.

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Re: Okay, now when you do buy back in?

Post by Peculiar_Investor » Mon Mar 02, 2020 2:54 pm

StevieG72 wrote:
Mon Mar 02, 2020 2:23 pm
After the dead cat bounce.
Too funny because the Is this the start of the dead cat bounce? topic was started 2 minutes before this topic.
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LawProf
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Re: Okay, now when you do buy back in?

Post by LawProf » Mon Mar 02, 2020 3:01 pm

I converted to cash last week not because of the market drops, which were barely worth noting, but because of the reaction of governments around the world to the virus, including the taking of actions I don't remember ever seeing in my lifetime (Saudi Arabia forbidding travel to Mecca, Japan closing schools, a President giving a prime time news conference about a virus that had barely affect any US citizens at all, talk of canceling the Olympics, the drastic measures of the South Korea government, whatever is happening in Iran, suggestions that US cities may be quarantined, etc.). It seems to me that the virus will necessarily spread worldwide and has the unique potential to create economic dislocations, political instability, and insurance risk. Do I think all of this will happen? Not really, although I will be shocked if stocks are done falling. But the potential of chaotic uncertainty of this unique situation is higher than I was comfortable with. Mine was an insurance play.

So I have no plan, except to sit back and watch to see how things play out. I hope my fears are unwarranted and if I get back in higher than I got out, no problem. That's the cost of insurance.

Last week was the first time I sold in 20 years.

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Re: Okay, now when you do buy back in?

Post by vipertom1970 » Mon Mar 02, 2020 3:05 pm

DesertDiva wrote:
Mon Mar 02, 2020 12:51 pm
I don't have a crystal ball, but I don't need one. I've stuck to my IPS. That has been my plan all along.
#StayingTheCourse
I got a crystal ball, it shows me my portfolio will be way ahead in 2030.

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Vulcan
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Re: Okay, now when you do buy back in?

Post by Vulcan » Mon Mar 02, 2020 3:11 pm

LawProf wrote:
Mon Mar 02, 2020 3:01 pm
I converted to cash last week not because of the market drops, which were barely worth noting, but because of the reaction of governments around the world to the virus, including the taking of actions I don't remember ever seeing in my lifetime (Saudi Arabia forbidding travel to Mecca, Japan closing schools, a President giving a prime time news conference about a virus that had barely affect any US citizens at all, talk of canceling the Olympics, the drastic measures of the South Korea government, whatever is happening in Iran, suggestions that US cities may be quarantined, etc.). It seems to me that the virus will necessarily spread worldwide and has the unique potential to create economic dislocations, political instability, and insurance risk. Do I think all of this will happen? Not really, although I will be shocked if stocks are done falling. But the potential of chaotic uncertainty of this unique situation is higher than I was comfortable with. Mine was an insurance play.

So I have no plan, except to sit back and watch to see how things play out. I hope my fears are unwarranted and if I get back in higher than I got out, no problem. That's the cost of insurance.

Last week was the first time I sold in 20 years.
This time it's different
If you torture the data long enough, it will confess to anything. ~Ronald Coase

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Vulcan
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Re: Okay, now when you do buy back in?

Post by Vulcan » Mon Mar 02, 2020 3:18 pm

I bought back the same day I sold: used the drawdown to move some stocks into a tax-deferred account that previously held bonds without triggering capital gains taxes (readying the cash position for the upcoming college bills, but do not want to touch stocks) :beer
If you torture the data long enough, it will confess to anything. ~Ronald Coase

GoldenFinch
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Re: Okay, now when you do buy back in?

Post by GoldenFinch » Mon Mar 02, 2020 3:22 pm

LawProf wrote:
Mon Mar 02, 2020 3:01 pm
I converted to cash last week not because of the market drops, which were barely worth noting, but because of the reaction of governments around the world to the virus, including the taking of actions I don't remember ever seeing in my lifetime (Saudi Arabia forbidding travel to Mecca, Japan closing schools, a President giving a prime time news conference about a virus that had barely affect any US citizens at all, talk of canceling the Olympics, the drastic measures of the South Korea government, whatever is happening in Iran, suggestions that US cities may be quarantined, etc.). It seems to me that the virus will necessarily spread worldwide and has the unique potential to create economic dislocations, political instability, and insurance risk. Do I think all of this will happen? Not really, although I will be shocked if stocks are done falling. But the potential of chaotic uncertainty of this unique situation is higher than I was comfortable with. Mine was an insurance play.

So I have no plan, except to sit back and watch to see how things play out. I hope my fears are unwarranted and if I get back in higher than I got out, no problem. That's the cost of insurance.

Last week was the first time I sold in 20 years.
A potential problem I see with your bet, or rationale, is that you are not counting the 100+ other reasons that the market can turn on a dime and shoot up (or down) that have nothing to do with your concerns. Some weird economic data or unforeseen other happening can change everything. Markets are fickle. Good luck though.

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Re: Okay, now when you do buy back in?

Post by mindboggling » Mon Mar 02, 2020 3:23 pm

Every day--corona or no corona--I ask myself if it is necessary to do something (anything) with my investments. So far the answer has been no.
In broken mathematics, We estimate our prize, --Emily Dickinson

LawProf
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Re: Okay, now when you do buy back in?

Post by LawProf » Mon Mar 02, 2020 3:50 pm

Vulcan wrote:
Mon Mar 02, 2020 3:11 pm
LawProf wrote:
Mon Mar 02, 2020 3:01 pm
I converted to cash last week not because of the market drops, which were barely worth noting, but because of the reaction of governments around the world to the virus, including the taking of actions I don't remember ever seeing in my lifetime (Saudi Arabia forbidding travel to Mecca, Japan closing schools, a President giving a prime time news conference about a virus that had barely affect any US citizens at all, talk of canceling the Olympics, the drastic measures of the South Korea government, whatever is happening in Iran, suggestions that US cities may be quarantined, etc.). It seems to me that the virus will necessarily spread worldwide and has the unique potential to create economic dislocations, political instability, and insurance risk. Do I think all of this will happen? Not really, although I will be shocked if stocks are done falling. But the potential of chaotic uncertainty of this unique situation is higher than I was comfortable with. Mine was an insurance play.

So I have no plan, except to sit back and watch to see how things play out. I hope my fears are unwarranted and if I get back in higher than I got out, no problem. That's the cost of insurance.

Last week was the first time I sold in 20 years.
This time it's different
One day it will be different.

GoldenFinch
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Re: Okay, now when you do buy back in?

Post by GoldenFinch » Mon Mar 02, 2020 3:50 pm

If you sold last Wednesday, you needed to buy back in last Friday.

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hagridshut
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Re: Okay, now when you do buy back in?

Post by hagridshut » Mon Mar 02, 2020 3:53 pm

HomerJ wrote:
Mon Mar 02, 2020 12:39 pm
So you sold everything last Wednesday with S&P 500 at 3116, freaked out by the Monday and Tuesday drops and you were sure it would keep dropping.
Should you buy today? You will have saved 3% of your stock-market money with your market-timing moves.

But what if starts dropping again? You were worried about a 20%-30% drop just 3 days ago. Getting back in now puts all your money back at risk.

Do you have a plan?
I am partially in this situation, but not in reaction to the virus outbreak.

I recently changed jobs, and began the process of rolling over my 401k to a Vanguard IRA in the 1st week of February. The 401k was liquidated 2 Wednesdays ago, when the S&P500 closed at 3386. Since then, the funds have been in limbo. The 401k custodian says that the check is "in the mail" to Vanguard, and that I should see the $ arrive in my settlement account sometime this week.

Since I am left to twiddle my thumbs during this maddeningly slow/archaic process (seriously, this is the freaking 21st Century, and I see no reason why this rollover process has dragged on for nearly a month now), I have time to think. Do I lump sum buy? DCA? I have no idea :confused :mrgreen: The last 2 times I consolidated a 401k into my rollover IRA, there was nothing of note going on in the markets, and I bought lump sum as soon as the funds arrived.
Last edited by hagridshut on Mon Mar 02, 2020 3:57 pm, edited 1 time in total.
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GAAP
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Re: Okay, now when you do buy back in?

Post by GAAP » Mon Mar 02, 2020 3:57 pm

HomerJ wrote:
Mon Mar 02, 2020 12:39 pm
So you sold everything last Wednesday with S&P 500 at 3116, freaked out by the Monday and Tuesday drops and you were sure it would keep dropping.
Oops, I forgot to do this part! Now I'm already in that climbing market -- what do I do now? :twisted:
“Adapt what is useful, reject what is useless, and add what is specifically your own.” ― Bruce Lee

an_asker
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Re: Okay, now when you do buy back in?

Post by an_asker » Mon Mar 02, 2020 3:58 pm

HomerJ wrote:
Mon Mar 02, 2020 12:39 pm
[...]
Do you have a plan?
I don't but the Commander in Chief (isn't that the full form of CnC?) does!

rockstar
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Re: Okay, now when you do buy back in?

Post by rockstar » Mon Mar 02, 2020 4:00 pm

Mine was always tied to the 300 day moving average. When I logged in to sell, it had already broke through it again. I didn’t end up selling anything but my one international position last week.
Last edited by rockstar on Mon Mar 02, 2020 4:15 pm, edited 1 time in total.

LawProf
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Re: Okay, now when you do buy back in?

Post by LawProf » Mon Mar 02, 2020 4:01 pm

GoldenFinch wrote:
Mon Mar 02, 2020 3:22 pm
LawProf wrote:
Mon Mar 02, 2020 3:01 pm
I converted to cash last week not because of the market drops, which were barely worth noting, but because of the reaction of governments around the world to the virus, including the taking of actions I don't remember ever seeing in my lifetime (Saudi Arabia forbidding travel to Mecca, Japan closing schools, a President giving a prime time news conference about a virus that had barely affect any US citizens at all, talk of canceling the Olympics, the drastic measures of the South Korea government, whatever is happening in Iran, suggestions that US cities may be quarantined, etc.). It seems to me that the virus will necessarily spread worldwide and has the unique potential to create economic dislocations, political instability, and insurance risk. Do I think all of this will happen? Not really, although I will be shocked if stocks are done falling. But the potential of chaotic uncertainty of this unique situation is higher than I was comfortable with. Mine was an insurance play.

So I have no plan, except to sit back and watch to see how things play out. I hope my fears are unwarranted and if I get back in higher than I got out, no problem. That's the cost of insurance.

Last week was the first time I sold in 20 years.
A potential problem I see with your bet, or rationale, is that you are not counting the 100+ other reasons that the market can turn on a dime and shoot up (or down) that have nothing to do with your concerns. Some weird economic data or unforeseen other happening can change everything. Markets are fickle. Good luck though.
That's fair and something I've thought a lot about. The unknowns of this situation suggest to me a greater risk that the normal 100+ other reasons that populate everyday life. A lot of people say that it is too early to panic because there's so much we don't know; I see that fact as the reason to panic. But you're right, the time it will be different will be probably be something that punches us in the face unawares.

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Vulcan
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Re: Okay, now when you do buy back in?

Post by Vulcan » Mon Mar 02, 2020 4:02 pm

LawProf wrote:
Mon Mar 02, 2020 3:50 pm
Vulcan wrote:
Mon Mar 02, 2020 3:11 pm
This time it's different
One day it will be different.
No two days are the same.
If you torture the data long enough, it will confess to anything. ~Ronald Coase

Grt2bOutdoors
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Re: Okay, now when you do buy back in?

Post by Grt2bOutdoors » Mon Mar 02, 2020 4:10 pm

Peculiar_Investor wrote:
Mon Mar 02, 2020 2:54 pm
StevieG72 wrote:
Mon Mar 02, 2020 2:23 pm
After the dead cat bounce.
Too funny because the Is this the start of the dead cat bounce? topic was started 2 minutes before this topic.
No, it's because it was an article in the back of the Markets section of the Wall Street Journal this morning. :P
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Sandtrap
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Re: Okay, now when you do buy back in?

Post by Sandtrap » Mon Mar 02, 2020 4:17 pm

These are good times to evaluate how "correction proof" and "recession proof" one's overall long term financial strategy is.
Look at:
Diversification of income streams.
Diversification of assets.
Review Allocation and the underlying funds in "fixed" and "equities".

j :happy
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Scooter57
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Re: Okay, now when you do buy back in?

Post by Scooter57 » Mon Mar 02, 2020 4:18 pm

I didn't sell last week, didn't buy last week, ditto today.

I expect we will be seeing a lot of whipsawing and continue to be glad I have an allocation that lets me sleep even if we see a 2008 style downturn that lasts. The pain of loss is so much worse than the joy of gain when you live modestly and have enough for your needs.

MoneyMarathon
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Re: Okay, now when you do buy back in?

Post by MoneyMarathon » Mon Mar 02, 2020 4:22 pm

HomerJ wrote:
Mon Mar 02, 2020 12:39 pm
Hmm... but now it's heading back up today... It's already at 3020.
3090 now. Lots of main street market timers are about to sell low, buy high.

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LiveSimple
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Re: Okay, now when you do buy back in?

Post by LiveSimple » Mon Mar 02, 2020 4:23 pm

I did nothing

For someone who sold last week and looking for a plan this week or next, use the same plan that you used last week.
Did the plan had anything on when to buy back, if not and you are scrambling then next time, "stay the course" no impulse sell / buy.

DaftInvestor
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Re: Okay, now when you do buy back in?

Post by DaftInvestor » Mon Mar 02, 2020 4:29 pm

I get my paychecks on the last day of the month so I bought on Friday last week :) Got lucky.
Maybe at the end of this week we will be below where we were last week - who knows - since I buy every month and hold for many years - I know the odds are with me that I will win.

Iridium
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Re: Okay, now when you do buy back in?

Post by Iridium » Mon Mar 02, 2020 4:36 pm

hagridshut wrote:
Mon Mar 02, 2020 3:53 pm
HomerJ wrote:
Mon Mar 02, 2020 12:39 pm
So you sold everything last Wednesday with S&P 500 at 3116, freaked out by the Monday and Tuesday drops and you were sure it would keep dropping.
Should you buy today? You will have saved 3% of your stock-market money with your market-timing moves.

But what if starts dropping again? You were worried about a 20%-30% drop just 3 days ago. Getting back in now puts all your money back at risk.

Do you have a plan?
I am partially in this situation, but not in reaction to the virus outbreak.

I recently changed jobs, and began the process of rolling over my 401k to a Vanguard IRA in the 1st week of February. The 401k was liquidated 2 Wednesdays ago, when the S&P500 closed at 3386. Since then, the funds have been in limbo. The 401k custodian says that the check is "in the mail" to Vanguard, and that I should see the $ arrive in my settlement account sometime this week.

Since I am left to twiddle my thumbs during this maddeningly slow/archaic process (seriously, this is the freaking 21st Century, and I see no reason why this rollover process has dragged on for nearly a month now), I have time to think. Do I lump sum buy? DCA? I have no idea :confused :mrgreen: The last 2 times I consolidated a 401k into my rollover IRA, there was nothing of note going on in the markets, and I bought lump sum as soon as the funds arrived.
Lump sum ASAP. Presumably, you were comfortable with your equity allocation in the 401k. You should remain comfortable with it in your IRA. That you were forced out of the market is unfortunate (well, it worked out for you this time), but intentionally keeping money out is no different from others who did not switch accounts but decided to go all cash because of the news. It would be different if this was a windfall because the psychology is different. However, this is not 'new money'. It is money that, thanks to bureaucracy, couldn't be invested for a couple of weeks. It didn't suddenly transform into anything other than 'formerly invested money.'

Cwise
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Re: Okay, now when you do buy back in?

Post by Cwise » Mon Mar 02, 2020 4:46 pm

DaftInvestor wrote:
Mon Mar 02, 2020 4:29 pm
I get my paychecks on the last day of the month so I bought on Friday last week :) Got lucky.
Maybe at the end of this week we will be below where we were last week - who knows - since I buy every month and hold for many years - I know the odds are with me that I will win.
You sir have figured it out... Good on you. :sharebeer

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TheTimeLord
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Re: Okay, now when you do buy back in?

Post by TheTimeLord » Mon Mar 02, 2020 4:48 pm

It will be interesting to see where we are in a month. But selling on Wednesday seems awfully late for a market timer.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

dru808
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Re: Okay, now when you do buy back in?

Post by dru808 » Mon Mar 02, 2020 4:48 pm

I’m so glad I’m on weekly auto invest. I chuckle everytime I hear “I held strong in past corrections, but this time it’s different”
60% US equity | 25% International equity | 15% US Treasury bonds

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