Are we better off now than Dec 2018?

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SandysDad
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Are we better off now than Dec 2018?

Post by SandysDad » Sat Mar 21, 2020 5:37 am

I think people need to ask themselves why they are freaked out about a US stock market that is just about where it was in Dec 2018. Why not just take what you had back then “off the table”.

THINK about this!

We are looking to be in far worse shape over the next year than anything that was remotely contemplated in Dec 2018. Yet somehow people feel it is too late to sell.

Stop anchoring you’re feelings around gains that you are not getting back anytime soon. That 3000 S&P is NOT Coming back anytime soon.

Get over your emotional reluctance to lock in losses and just understand that you are protecting what you had in DECEMBER 2018.

[General comment on religion removed by admin LadyGeek]

Why am I posting this? Because many of the very smart people on this board have helped me and I am trying to shock a few people into protecting themselves.

We can discuss when to get back in later. Now is the time to get out if you haven’t already.

fortyofforty
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Re: Are we better off now than Dec 2018?

Post by fortyofforty » Sat Mar 21, 2020 5:52 am

No need to flame you. I will simply point out the obvious: if you have a set asset allocation, it should be the same allocation in December 2018, December 2019 and December 2020. Rebalance. Just rebalance. No need to overreact, or react with emotion to what should be a logical plan.

Also, trying to time the market is a loser's game. If you believe, emotionally, that this is just the beginning of an ever greater downturn, then react accordingly. I don't know. I know I don't know. So I follow the course I set, and don't try to change course in the middle of a hurricane. Staying the course, with steady dollar-cost-averaging, worked in 1987, 2000, and 2008. Only fear and emotion can derail a sound investment plan.

Good luck moving forward.

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watchnerd
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Re: Are we better off now than Dec 2018?

Post by watchnerd » Sat Mar 21, 2020 6:02 am

SandysDad wrote:
Sat Mar 21, 2020 5:37 am

We can discuss when to get back in later. Now is the time to get out if you haven’t already.
If I was happy to be in 2018, 2017, 2016, etc, why do I need to get out?

I have more shares now than I did in the past. And I can collect even more now buying at these prices.

The only time that price matters is when I buy and when I sell, and I don't need to touch my stocks for 10+ years.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

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SandysDad
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Re: Are we better off now than Dec 2018?

Post by SandysDad » Sat Mar 21, 2020 6:21 am

watchnerd wrote:
Sat Mar 21, 2020 6:02 am
SandysDad wrote:
Sat Mar 21, 2020 5:37 am

We can discuss when to get back in later. Now is the time to get out if you haven’t already.
If I was happy to be in 2018, 2017, 2016, etc, why do I need to get out?

I have more shares now than I did in the past. And I can collect even more now buying at these prices.

The only time that price matters is when I buy and when I sell, and I don't need to touch my stocks for 10+ years.
Because you can (with a high degree of confidence) sell a bunch now, and buy it back for LESS in a month or two.

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watchnerd
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Re: Are we better off now than Dec 2018?

Post by watchnerd » Sat Mar 21, 2020 6:27 am

SandysDad wrote:
Sat Mar 21, 2020 6:21 am
Because you can (with a high degree of confidence) sell a bunch now, and buy it back for LESS in a month or two.
Even if you're correct on your timing:

Why would I bother?

I don't care what the price is now versus 2 months later.

Plus, I'll be buying more over the next several months and get more shares at those cheaper prices, anyway.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

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SandysDad
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Re: Are we better off now than Dec 2018?

Post by SandysDad » Sat Mar 21, 2020 6:29 am

fortyofforty wrote:
Sat Mar 21, 2020 5:52 am
No need to flame you. I will simply point out the obvious: if you have a set asset allocation, it should be the same allocation in December 2018, December 2019 and December 2020. Rebalance. Just rebalance. No need to overreact, or react with emotion to what should be a logical plan.

Also, trying to time the market is a loser's game. If you believe, emotionally, that this is just the beginning of an ever greater downturn, then react accordingly. I don't know. I know I don't know. So I follow the course I set, and don't try to change course in the middle of a hurricane. Staying the course, with steady dollar-cost-averaging, worked in 1987, 2000, and 2008. Only fear and emotion can derail a sound investment plan.

Good luck moving forward.
Well, I was in the market (though with less capital of course) in the 1990's run up, the 2000-2002 .com bust, 9/11, the 2008/2009 GFC. Did not change course in terms of existing equities during any of those, BUT I did take advantage of investment opportunities each crises presented.

What is the opportunity today? A market that still has not come to grips and priced in the coming economic calamity. So the opportunity is to sell high, and buy it back later. Same reason I purchased "insurance" in the form of SPY puts (medium duration later this year) to buffer my equities I did not sell against the coming losses. I'll put all the money I make from the puts back into the market when the time is right. I won't know exactly what is the 'right' time, but I know it will be a better time than now in terms of cost per share.

Chip
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Re: Are we better off now than Dec 2018?

Post by Chip » Sat Mar 21, 2020 6:32 am

SandysDad wrote:
Sat Mar 21, 2020 6:21 am
Because you can (with a high degree of confidence) sell a bunch now, and buy it back for LESS in a month or two.
It appears you don't understand how markets work. They are forward-looking. If there was a "high-degree of confidence" the markets would already be at that lower level.

Yes, the economy is going to get very bad. That doesn't tell you what the markets will do from here forward. You don't know and I don't know. Stick with the plan.

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SandysDad
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Re: Are we better off now than Dec 2018?

Post by SandysDad » Sat Mar 21, 2020 6:32 am

watchnerd wrote:
Sat Mar 21, 2020 6:27 am
SandysDad wrote:
Sat Mar 21, 2020 6:21 am
Because you can (with a high degree of confidence) sell a bunch now, and buy it back for LESS in a month or two.
Even if you're correct on your timing:

Why would I bother?

I don't care what the price is now versus 2 months later.

Plus, I'll be buying more over the next several months and get more shares at those cheaper prices, anyway.
Would you rather own SPY @ 230, 210, 190, or 170.... ?

Agree one can't time the bottom, but knowing that there is the opportunity today to own stuff for less a bit later in the year seems like a no brainer to me. I also don't see a run back up to pre Corona levels quickly, so the potential loss of upside is much less than the downside risk right now.

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SandysDad
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Re: Are we better off now than Dec 2018?

Post by SandysDad » Sat Mar 21, 2020 6:41 am

Chip wrote:
Sat Mar 21, 2020 6:32 am
SandysDad wrote:
Sat Mar 21, 2020 6:21 am
Because you can (with a high degree of confidence) sell a bunch now, and buy it back for LESS in a month or two.
It appears you don't understand how markets work. They are forward-looking. If there was a "high-degree of confidence" the markets would already be at that lower level.

Yes, the economy is going to get very bad. That doesn't tell you what the markets will do from here forward. You don't know and I don't know. Stick with the plan.
I agree markets are forward looking. What was completely obvious in February was the forward looking markets were blind to the economic issues that were already happening w/ the Corona virus shut down in China that was clearly visible. Thats when I started my DCA approach (and buying PUTs) to reducing my exposure of a decline that I thought then was very likely and feel even more strongly about it now.

Friday we were priced at about the December 2018 lows. Those lows were based on the "horrors" of 2.5% interest rates. Now we have a large scale economic shutdown and associated recession / depression / bankruptcies on the horizon that may last for a very long time (or a shorter time), and we are pricing it about the same. If the markets were truly forward looking, they would be selling off far more than they have to date.

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watchnerd
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Re: Are we better off now than Dec 2018?

Post by watchnerd » Sat Mar 21, 2020 6:46 am

SandysDad wrote:
Sat Mar 21, 2020 6:32 am


Would you rather own SPY @ 230, 210, 190, or 170.... ?

Agree one can't time the bottom, but knowing that there is the opportunity today to own stuff for less a bit later in the year seems like a no brainer to me. I also don't see a run back up to pre Corona levels quickly, so the potential loss of upside is much less than the downside risk right now.

I don't try to squeeze alpha out of public markets because they're too efficient.

I use public markets for their high liquidity and ability to capture beta cheaply.

Public markets are where we put our dumb liquid money to score singles and doubles on auto pilot.

We get alpha from inefficient, illiquid private investments where we can earn home runs.

Plus, via my ESPP, I'm already buying stocks at 10% discount to the market price every quarter, anyway.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

Chip
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Re: Are we better off now than Dec 2018?

Post by Chip » Sat Mar 21, 2020 6:56 am

It's very tempting to believe that you know more than the market. I know that I don't. And I'm about 99% sure that you don't, either. But it's your money.

We've been comfortably retired for nearly 20 years, living off our portfolio. We've seen a version of this movie before. We'll stick with the plan. Though I am getting ready to put our kitchen remodeling plans into high gear.

fortyofforty
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Re: Are we better off now than Dec 2018?

Post by fortyofforty » Sat Mar 21, 2020 6:58 am

OP, what you're saying is illogical. Is there anything you know that other investors do not? Is there any risk you appreciate that other investors are failing to appreciate? What makes your level of knowledge of the "true" value of stocks more correct than the overall judgment of the other tens of millions of investors, and how can you be sure but in hindsight? Everyone who makes the right guess is viewed as smart. The right guess twice, a genius. Get it right three times and you'll get your own investment newsletter. The whole point of "nobody knows nothin'" is that nobody knows nothin'.

Ari
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Re: Are we better off now than Dec 2018?

Post by Ari » Sat Mar 21, 2020 7:00 am

Let's look back at this thread come summer or so and see how this prediction went. @OP, do you want to put some numbers on it? Time frame, how much it will fall? After all, "At some point the market will be lower than today" is often true, but we rarely succeed in profiting from that information. "Within two months, the S&P 500 will be at least 10% below today's levels" is information that we can profit from, if accurate.

Good luck with your investments! I'm also timing the market, though in the other direction. I've been leveraging up (slightly). Not so much that it is likely to hurt me too much if I'm wrong. I've gone from 100% to 105% stocks, so I'm thinking we're better off now than in December 2018. :beer
All in, all the time.

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watchnerd
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Re: Are we better off now than Dec 2018?

Post by watchnerd » Sat Mar 21, 2020 7:01 am

fortyofforty wrote:
Sat Mar 21, 2020 6:58 am
OP, what you're saying is illogical. Is there anything you know that other investors do not? Is there any risk you appreciate that other investors are failing to appreciate? What makes your level of knowledge of the "true" value of stocks more correct than the overall judgment of the other tens of millions of investors, and how can you be sure but in hindsight? Everyone who makes the right guess is viewed as smart. The right guess twice, a genius. Get it right three times and you'll get your own investment newsletter. The whole point of "nobody knows nothin'" is that nobody knows nothin'.
+1

There is one highly proven way to win at market timing:

Insider trading.

And it's a crime.

And doesn't really apply in this situation, unless OP has access to information others do not.
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watchnerd
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Re: Are we better off now than Dec 2018?

Post by watchnerd » Sat Mar 21, 2020 7:07 am

SandysDad wrote:
Sat Mar 21, 2020 6:41 am

Friday we were priced at about the December 2018 lows. Those lows were based on the "horrors" of 2.5% interest rates. Now we have a large scale economic shutdown and associated recession / depression / bankruptcies on the horizon that may last for a very long time (or a shorter time), and we are pricing it about the same. If the markets were truly forward looking, they would be selling off far more than they have to date.
If the markets are making you nervous, sure, get out, if you're worried.

It's your money and your mental health to protect.

But we've seen how this usually plays out when people do so and can't figure out when to get back in....and then miss all the action because they're sitting on the sides.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

MotoTrojan
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Re: Are we better off now than Dec 2018?

Post by MotoTrojan » Sat Mar 21, 2020 7:14 am

Yes we are. We have similar prices, yet have received a years worth of dividends.

AlwaysaQ
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Re: Are we better off now than Dec 2018?

Post by AlwaysaQ » Sat Mar 21, 2020 8:15 am

Prices are not similar. I have lots of Vanguard Total Stock and Fidelity Total Stock from 2017 showing losses.

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hagridshut
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Re: Are we better off now than Dec 2018?

Post by hagridshut » Sat Mar 21, 2020 8:25 am

SandysDad wrote:
Sat Mar 21, 2020 5:37 am
Stop anchoring you’re feelings around gains that you are not getting back anytime soon. That 3000 S&P is NOT Coming back anytime soon.
Perhaps, and perhaps not. I couldn't tell for certain what will happen, and neither can you.

When Donald Trump was elected to the White House in 2016, I thought it was probable that he would accidentally stumble into a war with North Korea, which would result in use of nuclear weapons, devastation of Asian economies, and ultimately worldwide depression. That didn't happen. What people "feel" will happen, is often times not what will actually happen.

I know that my powers of prediction are not anything close to certain. Why should I believe that your powers of prediction are any better?

[General comment on religion removed by admin LadyGeek]

We can discuss when to get back in later. Now is the time to get out if you haven’t already.
I had co-workers who bailed out of the markets in late 2008 through early 2009. Most of them failed to get back in, and that permanently wrecked their finances. They took every downturn in 2010 and 2011 as evidence that whatever they had left, would be destroyed, and never got back in. A lot of these folks were 50-60 years old during the '08 Financial Crisis. They missed the 2009-2019 run up completely, and simultaneously were at the end of their careers. Game Over.

I know from observation, that "getting back in" is very difficult for most people. Some will only get back in when it is too late, only to be slammed again by another downturn.
First Principles: (1) Diversify (2) Low Cost (3) Stay the Course | 3-Fund Index Portfolio

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SandysDad
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Re: Are we better off now than Dec 2018?

Post by SandysDad » Sat Mar 21, 2020 8:33 am

I started this thread more as a public service for those who have helped me in the past.

I have nothing to gain or lose by people agreeing or disagreeing with me (as I am now done with all my financial moves related to the front end of this).

I hate to be blunt, but yes, frequently individual people DO see things the market doesn't see. Like all the ridiculous mortgages and houses to people who could not afford them and the fact that it would inevitably end badly. Like companies being valued for billions when they have minimal real assets and an easily replicable idea and no real profits (WeWork).

Getting back in (for me) is not a concern, I will just look at former profitability levels (pre crises) and recognize value after the decline and DCA my way back up to my former AA. I am not worried about finding the bottom, just lowering my basis for the recovery.

I do believe that we will come out of this health crises OK, but somewhat damaged. How much long term damage is anyones guess.

What is clear is there is money to be made by making the right moves now at the front end of this.

hamhocs
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Re: Are we better off now than Dec 2018?

Post by hamhocs » Sat Mar 21, 2020 8:44 am

[/quote]

I had co-workers who bailed out of the markets in late 2008 through early 2009. Most of them failed to get back in, and that permanently wrecked their finances. They took every downturn in 2010 and 2011 as evidence that whatever they had left, would be destroyed, and never got back in. A lot of these folks were 50-60 years old during the '08 Financial Crisis. They missed the 2009-2019 run up completely, and simultaneously were at the end of their careers. Game Over.

I know from observation, that "getting back in" is very difficult for most people. Some will only get back in when it is too late, only to be slammed again by another downturn.
[/quote]

OTOH, Since nobody knows what the end result will be, there is also the possibility of a future post saying "I know a lot of people who failed to get out in late February 2020 and that permanently wrecked their finances...."

7eight9
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Re: Are we better off now than Dec 2018?

Post by 7eight9 » Sat Mar 21, 2020 8:48 am

SandysDad wrote:
Sat Mar 21, 2020 5:37 am
[General comment on religion removed by admin LadyGeek]
As the saying goes --- check yo self before you wreck yo self.

Rats jump off burning ships. The best time to sell was a month ago. Tomorrow might be the next best time.
I guess it all could be much worse. | They could be warming up my hearse.

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hagridshut
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Re: Are we better off now than Dec 2018?

Post by hagridshut » Sat Mar 21, 2020 8:52 am

hamhocs wrote:
Sat Mar 21, 2020 8:44 am
OTOH, Since nobody knows what the end result will be, there is also the possibility of a future post saying "I know a lot of people who failed to get out in late February 2020 and that permanently wrecked their finances...."
It is a game of chance.

However, I won't need to start cashing out for a couple decades or more.

If the global economy is so damaged by Coronavirus that the markets collapse and don't recover by the time I need to start my mandatory withdrawals, I think I may have much bigger things to worry about than the market value of securities in my IRAs.
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Chip
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Re: Are we better off now than Dec 2018?

Post by Chip » Sat Mar 21, 2020 8:53 am

SandysDad wrote:
Sat Mar 21, 2020 8:33 am
I started this thread more as a public service for those who have helped me in the past.
I view it as more of a public disservice to all those novice investors reading here who are tempted to time the market with funds they won't need for 30+ years.
What is clear is there is money to be made by making the right moves now at the front end of this.
Agreed. But the "right" move will have to be a lucky guess.

If it's not too personal, may I ask you how old you are and did you have significant assets in the market in 2000-2002 and 2008-9? FWIW, I'm in my 60s and my wife and I fully retired just before 9/11 and have been living off our portfolio since then.

rgs92
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Re: Are we better off now than Dec 2018?

Post by rgs92 » Sat Mar 21, 2020 8:53 am

Chip wrote:
Sat Mar 21, 2020 6:56 am
It's very tempting to believe that you know more than the market. I know that I don't. And I'm about 99% sure that you don't, either. But it's your money.

We've been comfortably retired for nearly 20 years, living off our portfolio. We've seen a version of this movie before. We'll stick with the plan. Though I am getting ready to put our kitchen remodeling plans into high gear.
Quick (tangential) question if you don't mind. Are you just withdrawing from fixed income sources or just making draws in line with your overall portfolio's asset allocation? (Or something in between?) Thanks.

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SandysDad
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Re: Are we better off now than Dec 2018?

Post by SandysDad » Sat Mar 21, 2020 8:59 am

Chip wrote:
Sat Mar 21, 2020 8:53 am
SandysDad wrote:
Sat Mar 21, 2020 8:33 am
I started this thread more as a public service for those who have helped me in the past.
I view it as more of a public disservice to all those novice investors reading here who are tempted to time the market with funds they won't need for 30+ years.
What is clear is there is money to be made by making the right moves now at the front end of this.
Agreed. But the "right" move will have to be a lucky guess.

If it's not too personal, may I ask you how old you are and did you have significant assets in the market in 2000-2002 and 2008-9? FWIW, I'm in my 60s and my wife and I fully retired just before 9/11 and have been living off our portfolio since then.

50’s early retired. Yes on significant assets in 2000-2002 and 2008-2009.

Your point about novice investors or people who dont need money for 20 years is valid. My perspective is one of someone who is experienced yet is also trying to avoid poor sequence of returns issues.

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firebirdparts
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Re: Are we better off now than Dec 2018?

Post by firebirdparts » Sat Mar 21, 2020 9:01 am

Well, there's some evidence that equities are forming a base here....
A fool and your money are soon partners

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Kenkat
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Re: Are we better off now than Dec 2018?

Post by Kenkat » Sat Mar 21, 2020 9:17 am

You may be right
I may be crazy
But it just may be a lunatic you're looking for
Turn out the light
Don't try to save me
You may be wrong for all I know
But you may be right

50/50 kid, put your money down and spin the big wheel. Step up, don’t be shy. Red or black, what’s it gonna be?

I chose not to play that game because I realize I am not that smart and don’t know which it will be.

Triple digit golfer
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Re: Are we better off now than Dec 2018?

Post by Triple digit golfer » Sat Mar 21, 2020 9:19 am

firebirdparts wrote:
Sat Mar 21, 2020 9:01 am
Well, there's some evidence that equities are forming a base here....
Can you explain what that means?

Chip
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Re: Are we better off now than Dec 2018?

Post by Chip » Sat Mar 21, 2020 9:21 am

rgs92 wrote:
Sat Mar 21, 2020 8:53 am
Quick (tangential) question if you don't mind. Are you just withdrawing from fixed income sources or just making draws in line with your overall portfolio's asset allocation? (Or something in between?) Thanks.
We have several months spending in a money market fund, so that's what we draw from. When that gets low we sell whatever is above target to replenish it. It gets a little more complex than it sounds because we have all equities (but only certain asset classes) in taxable except for the MMF, so there can be multiple trades involved depending on where the particular asset we want to sell is located.

Not that you asked but we use the same 5/25 bands (with a 60/40 portfolio) that many here do. They've been triggered once since this all started and we rebalanced to 60/40. Looking this morning I see that they were just barely breached at the close on Friday. So I will rebalance again to 60/40 on Monday if the open is flat or down.

Xrayman69
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Re: Are we better off now than Dec 2018?

Post by Xrayman69 » Sat Mar 21, 2020 9:24 am

SandysDad wrote:
Sat Mar 21, 2020 6:32 am
watchnerd wrote:
Sat Mar 21, 2020 6:27 am
SandysDad wrote:
Sat Mar 21, 2020 6:21 am
Because you can (with a high degree of confidence) sell a bunch now, and buy it back for LESS in a month or two.
Even if you're correct on your timing:

Why would I bother?

I don't care what the price is now versus 2 months later.

Plus, I'll be buying more over the next several months and get more shares at those cheaper prices, anyway.
Would you rather own SPY @ 230, 210, 190, or 170.... ?

Agree one can't time the bottom, but knowing that there is the opportunity today to own stuff for less a bit later in the year seems like a no brainer to me. I also don't see a run back up to pre Corona levels quickly, so the potential loss of upside is much less than the downside risk right now.


The lowest Stocks can go is zero. The highest they can go is infinite.

If the s&p goes to zero I’ll probably have much worse things the worry about then my portfolio as the financial and social institutions and life as I know it would be obliterated. I’m gonna gamble on the side that some companies will survive then thrive in an ever changing environment for business and societal needs. I just don’t know which companies will do better than others. I don’t know which will turn into Sears Roebuck after 75 years or which new companies products I will use everyday such as Google.

I don’t know how low it will go, and you ask would I rather own SPY at 230, 210, 190, 170... my answer in this stage of my investment life of accumulation is yes, all the above. I will buy each and every week and DCA. If and when it goes up to 300, 320, 340, 360, .... I will still buy each and every week until my phase in life changes (10-15 year outlook).

I totally understand you base principle, but I would say I don’t have the ability to identify when a bottom will have occurred. I’m betting the end of capitalism and the way Americans live life will survive.

Xrayman69
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Re: Are we better off now than Dec 2018?

Post by Xrayman69 » Sat Mar 21, 2020 9:24 am

Kenkat wrote:
Sat Mar 21, 2020 9:17 am
You may be right
I may be crazy
But it just may be a lunatic you're looking for
Turn out the light
Don't try to save me
You may be wrong for all I know
But you may be right

50/50 kid, put your money down and spin the big wheel. Step up, don’t be shy. Red or black, what’s it gonna be?

I chose not to play that game because I realize I am not that smart and don’t know which it will be.
My luck it would be green.

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hagridshut
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Re: Are we better off now than Dec 2018?

Post by hagridshut » Sat Mar 21, 2020 9:29 am

SandysDad wrote:
Sat Mar 21, 2020 8:59 am
50’s early retired. Yes on significant assets in 2000-2002 and 2008-2009.

Your point about novice investors or people who dont need money for 20 years is valid. My perspective is one of someone who is experienced yet is also trying to avoid poor sequence of returns issues.
Heh, you probably should have stated this upfront, because the risk profile of a retired person is vastly different than the risk profile of person who still has many decades of working years ahead of them.

You've "won the game" so to speak, if you're able to Early Retire.

If I am fortunate enough to reach Early Retirement levels of wealth, I'll go 30/70 or even 20/80 on my portfolio, with at least 5 years expenses as a buffer in cash. Being able to wait out rough patches is key, IMO.
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Xrayman69
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Re: Are we better off now than Dec 2018?

Post by Xrayman69 » Sat Mar 21, 2020 9:31 am

watchnerd wrote:
Sat Mar 21, 2020 7:01 am
fortyofforty wrote:
Sat Mar 21, 2020 6:58 am
OP, what you're saying is illogical. Is there anything you know that other investors do not? Is there any risk you appreciate that other investors are failing to appreciate? What makes your level of knowledge of the "true" value of stocks more correct than the overall judgment of the other tens of millions of investors, and how can you be sure but in hindsight? Everyone who makes the right guess is viewed as smart. The right guess twice, a genius. Get it right three times and you'll get your own investment newsletter. The whole point of "nobody knows nothin'" is that nobody knows nothin'.
+1

There is one highly proven way to win at market timing:

Insider trading.

And it's a crime.

And doesn't really apply in this situation, unless OP has access to information others do not.

He could be a Senator....

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Kenkat
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Re: Are we better off now than Dec 2018?

Post by Kenkat » Sat Mar 21, 2020 9:38 am

Xrayman69 wrote:
Sat Mar 21, 2020 9:24 am
Kenkat wrote:
Sat Mar 21, 2020 9:17 am
You may be right
I may be crazy
But it just may be a lunatic you're looking for
Turn out the light
Don't try to save me
You may be wrong for all I know
But you may be right

50/50 kid, put your money down and spin the big wheel. Step up, don’t be shy. Red or black, what’s it gonna be?

I chose not to play that game because I realize I am not that smart and don’t know which it will be.
My luck it would be green.
It’s funny you say that because green (0, 00) is why the house always comes out ahead. Staying invested all the time is your best chance of coming out ahead in the long run is my opinion.

7eight9
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Re: Are we better off now than Dec 2018?

Post by 7eight9 » Sat Mar 21, 2020 9:45 am

Kenkat wrote:
Sat Mar 21, 2020 9:38 am
Xrayman69 wrote:
Sat Mar 21, 2020 9:24 am
Kenkat wrote:
Sat Mar 21, 2020 9:17 am
You may be right
I may be crazy
But it just may be a lunatic you're looking for
Turn out the light
Don't try to save me
You may be wrong for all I know
But you may be right

50/50 kid, put your money down and spin the big wheel. Step up, don’t be shy. Red or black, what’s it gonna be?

I chose not to play that game because I realize I am not that smart and don’t know which it will be.
My luck it would be green.
It’s funny you say that because green (0, 00) is why the house always comes out ahead. Staying invested all the time is your best chance of coming out ahead in the long run is my opinion.
Green is not why the house comes out ahead. Players can bet on 0 or 00 too. The house wins when the player wins. Sounds crazy but it is true.

The reason the house wins when the player wins is because the house pays less then true odds. 35:1 on a straight bet. On a double zero wheel the payout should be 37:1. Those two units that aren't paid to the player are the house edge on a double zero wheel (2/38 = 5.26% house edge). On a single zero wheel the edge is 1/37 or 2.70%.
I guess it all could be much worse. | They could be warming up my hearse.

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Re: Are we better off now than Dec 2018?

Post by Chip » Sat Mar 21, 2020 9:47 am

SandysDad wrote:
Sat Mar 21, 2020 8:59 am
50’s early retired. Yes on significant assets in 2000-2002 and 2008-2009.

Your point about novice investors or people who dont need money for 20 years is valid. My perspective is one of someone who is experienced yet is also trying to avoid poor sequence of returns issues.
So you've been through something like this before, but I assume you were still working during the last two meltdowns? It definitely feels different once you're retired. It's no longer "buying stocks cheap" every paycheck, it's rebalancing by selling nice safe bonds to buy cratering stocks. It feels like shoveling cash onto a bonfire.

It became clear in 2008/9 that we had too high an equity allocation at 75/25. We got to a point where we couldn't bring ourselves to keep rebalancing. Didn't sell out, just froze. That experience caused us to move to 60/40 in 2015. We'll continue to rebalance according to plan until we hit the hard floor of 10 years of expenses in fixed income. I think that will be about another 35% down from here.

May I suggest that you might have too much allocated to equities?

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Kenkat
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Re: Are we better off now than Dec 2018?

Post by Kenkat » Sat Mar 21, 2020 9:50 am

7eight9 wrote:
Sat Mar 21, 2020 9:45 am
Kenkat wrote:
Sat Mar 21, 2020 9:38 am
Xrayman69 wrote:
Sat Mar 21, 2020 9:24 am
Kenkat wrote:
Sat Mar 21, 2020 9:17 am
You may be right
I may be crazy
But it just may be a lunatic you're looking for
Turn out the light
Don't try to save me
You may be wrong for all I know
But you may be right

50/50 kid, put your money down and spin the big wheel. Step up, don’t be shy. Red or black, what’s it gonna be?

I chose not to play that game because I realize I am not that smart and don’t know which it will be.
My luck it would be green.
It’s funny you say that because green (0, 00) is why the house always comes out ahead. Staying invested all the time is your best chance of coming out ahead in the long run is my opinion.
Green is not why the house comes out ahead. Players can bet on 0 or 00 too. The house wins when the player wins. Sounds crazy but it is true.

The reason the house wins when the player wins is because the house pays less then true odds. 35:1 on a straight bet. On a double zero wheel the payout should be 37:1. Those two units that aren't paid to the player are the house edge on a double zero wheel (2/38 = 5.26% house edge). On a single zero wheel the edge is 1/37 or 2.70%.
I was trying to say on a red/black bet, it is the two green squares that let the house come out ahead since it’s not really 50/50. But your explanation is far better than mine :beer

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Third Son
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Re: Are we better off now than Dec 2018?

Post by Third Son » Sat Mar 21, 2020 10:00 am

SandysDad wrote:
Sat Mar 21, 2020 5:37 am
I think people need to ask themselves why they are freaked out about a US stock market that is just about where it was in Dec 2018. Why not just take what you had back then “off the table”.

THINK about this!

We are looking to be in far worse shape over the next year than anything that was remotely contemplated in Dec 2018. Yet somehow people feel it is too late to sell.

Stop anchoring you’re feelings around gains that you are not getting back anytime soon. That 3000 S&P is NOT Coming back anytime soon.

Get over your emotional reluctance to lock in losses and just understand that you are protecting what you had in DECEMBER 2018.

[General comment on religion removed by admin LadyGeek]

Why am I posting this? Because many of the very smart people on this board have helped me and I am trying to shock a few people into protecting themselves.

We can discuss when to get back in later. Now is the time to get out if you haven’t already.

Please watch this recently published video by Ben Felix...he may help you with your bad decision making

https://www.youtube.com/watch?v=9PYsVkPtcXk
"A part of all you earn is yours to keep" | | -The Richest Man in Babylon

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Third Son
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Re: Are we better off now than Dec 2018?

Post by Third Son » Sat Mar 21, 2020 10:03 am

SandysDad wrote:
Sat Mar 21, 2020 8:59 am
Chip wrote:
Sat Mar 21, 2020 8:53 am
SandysDad wrote:
Sat Mar 21, 2020 8:33 am
I started this thread more as a public service for those who have helped me in the past.
I view it as more of a public disservice to all those novice investors reading here who are tempted to time the market with funds they won't need for 30+ years.
What is clear is there is money to be made by making the right moves now at the front end of this.
Agreed. But the "right" move will have to be a lucky guess.

If it's not too personal, may I ask you how old you are and did you have significant assets in the market in 2000-2002 and 2008-9? FWIW, I'm in my 60s and my wife and I fully retired just before 9/11 and have been living off our portfolio since then.

50’s early retired. Yes on significant assets in 2000-2002 and 2008-2009.

Your point about novice investors or people who dont need money for 20 years is valid. My perspective is one of someone who is experienced yet is also trying to avoid poor sequence of returns issues.
I retired last month at 60 years old. If you are a smart person, you can weather any SOR risk. You may need to adapt a little upfront based on your circumstances. This self-quarantine thing does help keep the spending down for a while anyway.
"A part of all you earn is yours to keep" | | -The Richest Man in Babylon

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SandysDad
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Re: Are we better off now than Dec 2018?

Post by SandysDad » Sat Mar 21, 2020 10:19 am

Chip wrote:
Sat Mar 21, 2020 9:47 am


So you've been through something like this before, but I assume you were still working during the last two meltdowns? It definitely feels different once you're retired. It's no longer "buying stocks cheap" every paycheck, it's rebalancing by selling nice safe bonds to buy cratering stocks. It feels like shoveling cash onto a bonfire.

It became clear in 2008/9 that we had too high an equity allocation at 75/25. We got to a point where we couldn't bring ourselves to keep rebalancing. Didn't sell out, just froze. That experience caused us to move to 60/40 in 2015. We'll continue to rebalance according to plan until we hit the hard floor of 10 years of expenses in fixed income. I think that will be about another 35% down from here.

May I suggest that you might have too much allocated to equities?
Correct on working in previous meltdowns. And correct that it is different.

My allocation is 55/45 (or was). I changed things up a bit in how I protected myself as I bought a lot of spy puts that are already worth much more and dont expire until May and July. That’s in addition to some sales of equities.

If this was just a recession or falling prices like December 2018 I would just rebalance. I just see this as something different and something were I can protect myself against losses I don’t have to take.

I did not sell everything. Just a lot and protected the rest with the puts.

My plan is to definitely be back in fully at my aa sometime in the May to July timeframe. May Dca it a bit over a month or three.
Basically doing that when it seems the bad news is peaking.

The exact time will depend on when it seems like it is the worst news of this tragedy.

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Re: Are we better off now than Dec 2018?

Post by watchnerd » Sat Mar 21, 2020 10:24 am

SandysDad wrote:
Sat Mar 21, 2020 10:19 am

My plan is to definitely be back in fully at my aa sometime in the May to July timeframe. May Dca it a bit over a month or three.
Basically doing that when it seems the bad news is peaking.

The exact time will depend on when it seems like it is the worst news of this tragedy.
How will you know when it seems like it is the worst news?

What are your criteria?
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MDfan
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Re: Are we better off now than Dec 2018?

Post by MDfan » Sat Mar 21, 2020 10:29 am

Sounds like you're trying to convince yourself this is the right move rather than trying to convince anyone else. You have to do what allows you to sleep at night. I'm less than 2 years from retirement, 60/40 allocation, and haven't changed a thing. It's extremely painful for sure. But I don't need every bit of my money the day I retire. Or even within 5 years. If things haven't gotten better in 5-7 years, then I'm pretty sure we'll have much more serious issues to deal with than how much money we have.

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SandysDad
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Re: Are we better off now than Dec 2018?

Post by SandysDad » Sat Mar 21, 2020 10:54 am

The only thing I am trying to convince people of, is that this is a black swan and is not priced into the market. I am already convinced.

No issues sleeping at night. The market will do what it does. My personal goal is to make some money on the down trend and pick equities back up at a lower price.

Seems pretty inevitable that there is much more bad news than good coming and when people see the jobs and economic numbers as well as friends family and neighbors suffering both personally from illness and economically from the economy the market will almost certainly drop more.

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Re: Are we better off now than Dec 2018?

Post by rbaldini » Sat Mar 21, 2020 10:59 am

SandysDad wrote:
Sat Mar 21, 2020 6:21 am
Because you can (with a high degree of confidence) sell a bunch now, and buy it back for LESS in a month or two.
A concrete prediction! Love it. Perhaps you will be right. Let's see: check back in 1 month and in 2 months. Is the price lower than it is now?

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Re: Are we better off now than Dec 2018?

Post by watchnerd » Sat Mar 21, 2020 11:01 am

SandysDad wrote:
Sat Mar 21, 2020 10:54 am
The only thing I am trying to convince people of, is that this is a black swan and is not priced into the market. I am already convinced.
Why do you want to convince others if you're already convinced?

Won't doing so increase the chance this information becomes priced in, and thus undermine your advantage?
Last edited by watchnerd on Sat Mar 21, 2020 11:02 am, edited 1 time in total.
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rbaldini
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Re: Are we better off now than Dec 2018?

Post by rbaldini » Sat Mar 21, 2020 11:01 am

watchnerd wrote:
Sat Mar 21, 2020 11:01 am
SandysDad wrote:
Sat Mar 21, 2020 10:54 am
The only thing I am trying to convince people of, is that this is a black swan and is not priced into the market. I am already convinced.
Why do you want to convince others if you're already convinced?

Won't doing so cause increase the chance this information becomes priced in, and thus undermine your advantage?
We bogleheads aren't that powerful...

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Re: Are we better off now than Dec 2018?

Post by TheTimeLord » Sat Mar 21, 2020 11:02 am

SandysDad wrote:
Sat Mar 21, 2020 10:54 am
The only thing I am trying to convince people of, is that this is a black swan and is not priced into the market. I am already convinced.

No issues sleeping at night. The market will do what it does. My personal goal is to make some money on the down trend and pick equities back up at a lower price.

Seems pretty inevitable that there is much more bad news than good coming and when people see the jobs and economic numbers as well as friends family and neighbors suffering both personally from illness and economically from the economy the market will almost certainly drop more.
And you believe this insight is unique to you, others haven't figured it out yet or acted on it. Not saying the market can't or won't go lower, maybe much lower, just saying your logic seems to rely on you realizing something few other people have.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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Re: Are we better off now than Dec 2018?

Post by watchnerd » Sat Mar 21, 2020 11:03 am

rbaldini wrote:
Sat Mar 21, 2020 11:01 am

We bogleheads aren't that powerful...
Social media force multipliers.

But it's a thought exercise, mostly.
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watchnerd
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Re: Are we better off now than Dec 2018?

Post by watchnerd » Sat Mar 21, 2020 11:05 am

TheTimeLord wrote:
Sat Mar 21, 2020 11:02 am


And you believe this insight is unique to you, others haven't figured it out yet or acted on it. Not saying the market can't or won't go lower, maybe much lower, just saying your logic seems to rely on you realizing something few other people have.
At Friday's virtual happy hour with my co-workers (yes, that's a thing now), they were all saying the thing as the OP:

That the market will go lower.


Anecdotal evidence seems to be this sentiment is, in fact, common.
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watchnerd
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Re: Are we better off now than Dec 2018?

Post by watchnerd » Sat Mar 21, 2020 11:09 am

SandysDad wrote:
Sat Mar 21, 2020 10:54 am

Seems pretty inevitable that there is much more bad news than good coming and when people see the jobs and economic numbers as well as friends family and neighbors suffering both personally from illness and economically from the economy the market will almost certainly drop more.
Oh, yes, I think this is pretty likely, too.

But I think there millions of other investors who think the same thing.

This isn't exactly some kind of unique, genius-level observation.....
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