Markets back near all time highs - how are you feeling and path forward ?

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denovo
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by denovo »

Grt2bOutdoors wrote: Fri Jun 05, 2020 8:36 pm
gwe67 wrote: Fri Jun 05, 2020 7:50 pm I was asleep for a few months. What did I miss?
Toilet paper shortage...... :D
My local Costco was still out of toilet paper.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by dogagility »

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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by dcabler »

Staying the course. Still adding money every month and still rebalancing when triggers are met.

This is going to be one of those years where future backtesters who use only annual data will have no clue. :D
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by hoffse »

We are 100/0 in our investments. Rode it down, rode it back up. Kept buying the whole time. We don’t plan to change our AA anytime soon.

I watched it every day because it was fascinating, but it didn’t give me anxiety. I’m 33. I have decades.

We do have a decent emergency fund, and I was offered a 24-month unsecured loan for $30k at 1% with a balloon payment for “liquidity purposes during these uncertain times.” So I took that offer and stuck it in a no-penalty CD paying 1.5%, just as another buffer in case it really hit the fan. Thankfully, our work has really picked up in late May and June so it seems very unlikely that we will need it. A small part of me wishes we had invested it with the rally, but a much larger part knows that’s not a rational use of money we need in less than 2 years.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by LadyGeek »

A post discussing coronavirus has been removed (Page 1 of this thread). The main intent of the post must be on-topic, which is the market high.

See: Please read before posting on coronavirus/COVID-19
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Chicken Little »

Patzer wrote: Fri Jun 05, 2020 10:44 pm
Normchad wrote: Fri Jun 05, 2020 8:46 pm How are the “this time it is different!” crowd from early March feeling?

To add: my path hasn’t changed one iota. I still have twice monthly paycheck deductions going to VTSAX and automatic monthly withdrawals going into VSMGX. The *only* interesting thing for me this year, it was the first time I have tax loss harvested.
For me, I thought there would be a bad crash, and there was. It wasn't as bad as I thought it would be, so I have lagged the market on the way up, but I outperformed it a ton on the way down. Consequently, excluding inflows, my portfolio is up 9.3% this year and sitting at 7% below my target allocation to equity.
I think the market is overpriced right now and is going to correct again by 10% before the end of the month, and I will buy more on that correction. Whether I sell prior to it is still up in the air and depends on how high we go.
This is me save the last. Everybody knows Q2 will be bad, so I don’t necessarily see why market will go lower when it’s announced?

Legend Biotech just got $424 million, and had originally filed for $350. There is a ton of money out there looking for a home.

Ordinarily, I would always be prepared for at least a 50% decline. Right now, I’m starting to need to know where that money would go to continue to believe it’s possible.

Plenty is different this time. The fed bought junk bonds for one. Plenty of bad balance sheets out there, both private and public. If they pull the rug out from under this?
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midareff
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by midareff »

I don't feel anything and emotions have no place in successful investing. Obviously, we prefer to be up 1.99% than down 7% for the year but my portfolio AA matches my tolerance for risk and I sleep well at night at either side.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by jebmke »

denovo wrote: Sat Jun 06, 2020 5:04 am My local Costco was still out of toilet paper.
Weeks ago livesoft assured us that the market will not have hit bottom until TP was back on the shelves.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by remomnyc »

gwe67 wrote: Fri Jun 05, 2020 7:50 pm I was asleep for a few months. What did I miss?
I think it was Fidelity that said the customers that did best during the GFC were dead or forgot they had accounts.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by remomnyc »

TheTimeLord wrote: Fri Jun 05, 2020 8:20 pm Personally I appear to be entering into a relationship with TINA.
I think TINA and FOMO are driving the market, but I also accept that the market can be irrational longer than I can remain solvent, so I will continue to rebalance when my 5% bands get hit. I am considering adding another rebalance trigger when market drops or gains 20% from previous highs, but I hate to change my IPS during such a volatile period. I did change my cash holdings to 2x expenses (from 1x) so I can sleep better at night.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by nigel_ht »

remomnyc wrote: Sat Jun 06, 2020 8:57 am
TheTimeLord wrote: Fri Jun 05, 2020 8:20 pm Personally I appear to be entering into a relationship with TINA.
I think TINA and FOMO are driving the market, but I also accept that the market can be irrational longer than I can remain solvent, so I will continue to rebalance when my 5% bands get hit. I am considering adding another rebalance trigger when market drops or gains 20% from previous highs, but I hate to change my IPS during such a volatile period. I did change my cash holdings to 2x expenses (from 1x) so I can sleep better at night.
I removed my rebalance bands and added a -30% drop to switch from 50/50 to 70/30. Thought about adding a milder 60/40 change at -20%.

Now that we’ve reset you might as well make whatever changes you want to your IPs before anything new happens.

The thing about TINA is there IS an alternative...the market could go south enough to make bonds look really good...

If everything is priced in then the combination of the two implies that stocks are priced for perfection...
Last edited by nigel_ht on Sat Jun 06, 2020 9:10 am, edited 1 time in total.
nydoc
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by nydoc »

It’s nice free money everywhere. Take your share.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by RockyMountainSlim »

jebmke wrote: Sat Jun 06, 2020 7:20 am
denovo wrote: Sat Jun 06, 2020 5:04 am My local Costco was still out of toilet paper.
Weeks ago livesoft assured us that the market will not have hit bottom until TP was back on the shelves.
it was when the TP was *absent* from the shelves that the market was really hitting my bottom.

Path forward to me is to make a decision about whether my long term asset allocation is right, and then make the change to the IPS if needed, followed by a change to the portfolio reflecting this at the end of the year. The crash was stressful for me, but I seemed fairly equally torn between wanting to sell stocks and wanting to buy more, so it seems that I was in a pretty good place, as I did nothing. However, long term, 60/40 may be more appropriate than the current 70/30, as I feel little need to chase high returns.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by nisiprius »

I never feel good about the market when it seems irrational. That is always, so I never feel good about it. But I feel worse when it seems more irrational, which it does now. John C. Bogle said "Time is your friend. Impulse is your enemy" and I eventually decided he was right. I didn't do anything when the market fell, and I'm not doing anything now when it's rising.

The wonderful drop in the unemployment percentage was apparently spurious, the result of a "misclassification error." The rate didn't fall from 14.7% to 13.3%, it rose from 14.7% to 16.3%. I have to say I wish this news had emerged on a day other than Friday, as I am curious to see what the stock market is going to make of it. Not curious enough to actually check futures, though.

"Things are more like they are now than they have ever been before." (For those who care, here is (the Quote Investigator's research on attribution).
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
LeslieSmiley
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by LeslieSmiley »

KingRiggs wrote: Fri Jun 05, 2020 11:24 pm
LeslieSmiley wrote: Fri Jun 05, 2020 8:06 pm now is a good time to re-examine your AA in regards to risk tolerance and then rebalance to that AA.

remember how you felt in march before this recovery started. did you wish you had a lower stock AA? did you contemplate selling to avoid the "falling knife"? if so, now is the time to consider shifting to an AA with less equity exposure.
This is precisely what I have chosen to do. Was at 70/30 when the market dropped. Didn’t sell, actually rebalanced to equities to maintain AA, but did not particularly sleep well. Had decided to re-evaluate my risk tolerance and AA at end of 2020, but the current rally has allowed me to recoup my losses AND move to an AA I think I’ll find more palatable (60/40). :sharebeer
yes! i am supposed to be at 66/34 but i have been at around 72/28 for the past few years because i dragged my feet to rebalance every year (i follow 120 - age as stock AA model) which did me well. i then realized that i need to start preserving my gain as i am approaching retirement, so i re-balanced 3% the day after the initial drop, waited until may to re-balance another 3% to get to 66/34. a few days ago, i moved another 2% to 64/36 and i plan to gradually get to 60/40 in the next 2 years which i plan to retire.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by TheTimeLord »

nisiprius wrote: Sat Jun 06, 2020 9:51 am I never feel good about the market when it seems irrational. That is always, so I never feel good about it. But I feel worse when it seems more irrational, which it does now. John C. Bogle said "Time is your friend. Impulse is your enemy" and I eventually decided he was right. I didn't do anything when the market fell, and I'm not doing anything now when it's rising.

The wonderful drop in the unemployment percentage was apparently spurious, the result of a "misclassification error." The rate didn't fall from 14.7% to 13.3%, it rose from 14.7% to 16.3%. I have to say I wish this news had emerged on a day other than Friday, as I am curious to see what the stock market is going to make of it. Not curious enough to actually check futures, though.

"Things are more like they are now than they have ever been before." (For those who care, here is (the Quote Investigator's research on attribution).
The misclassification error was part of the April report also meaning the rates for those months were higher than reported but the trend, which is what matters imho, would be essentially as reported. So looks like it was a drop from nearly 20% to 16.3% when the error is backed out using the numbers from the reporting.

https://www.cnbc.com/2020/06/05/heres-w ... orted.html
The same misclassification phenomenon occurred in April, too — the official 14.7% unemployment rate would have been nearly 20% if furloughed workers had been identified correctly, the BLS said.
Last edited by TheTimeLord on Sat Jun 06, 2020 10:27 am, edited 1 time in total.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Lee_WSP »

Befuddled, shocked, apprehensive, etc etc. I am highly skeptical of the rally since it is not driven by any fundamentals and valuations are at ludicrous levels.

I seriously doubt these businesses would actually sell at the last quoted price for one share.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by LeslieSmiley »

HomerJ wrote: Fri Jun 05, 2020 11:06 pm
Sandtrap wrote: Fri Jun 05, 2020 9:18 pm
LeslieSmiley wrote: Fri Jun 05, 2020 8:06 pm now is a good time to re-examine your AA in regards to risk tolerance and then rebalance to that AA.

remember how you felt in march before this recovery started. did you wish you had a lower stock AA? did you contemplate selling to avoid the "falling knife"? if so, now is the time to consider shifting to an AA with less equity exposure.
+1
Good points!

j🌺
Indeed, this is a good time to make a permanent change...

I was 66/33 in 2008... Bogleheads helped me "stay the course" during that crash... I never sold...

Once we had recovered, I changed to 50/50 because I recognized that 66/33 had been tough for me to stick with.

Every crash/correction since then at 50/50 has been pretty smooth sailing. So I now know that works for me.

Getting close to retirement so I switched to 45/55 in January (pure luck on the timing), and I plan to be 40/60 when I actually retire.
the "being able to stay the course without panic selling or FOMO buying and not enduring anxiety/stress" is worth the lower return. emotional/psychological/mental cost is real and can be vast to many folks.
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TheTimeLord
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by TheTimeLord »

Lee_WSP wrote: Sat Jun 06, 2020 10:21 am Befuddled, shocked, apprehensive, etc etc. I am highly skeptical of the rally since it is not driven by any fundamentals and valuations are at ludicrous levels.

I seriously doubt these businesses would actually sell at the last quoted price for one share.
Just curious but when fundamentals drive rallies, serious question? When I think fundamentals I think of reported numbers which are rear view mirror and just confirm or disprove assumptions that have been made about the future. So the question is are rallies ever driven by fundamentals or do fundamentals just confirm rallies?
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Teague »

I'm feeling occhiolistic. But that's just me.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by H-Town »

skor99 wrote: Fri Jun 05, 2020 6:48 pm So the market is back up to all-time highs and I’m guessing pretty much everybody’s portfolio is as well. I am feeling relieved for sure, but not sure if there is a lot of happiness at this time with all the uncertainty still around. Covid is still spreading and millions are still without jobs .
What are folks feeling and what should be the path forward ?
Zero feeling. Not relieved, not regretful, not happy nor sad. Just nothing.

Pretty easy to manage portfolio without any emotional attachment to it.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by LeslieSmiley »

remomnyc wrote: Sat Jun 06, 2020 8:47 am
gwe67 wrote: Fri Jun 05, 2020 7:50 pm I was asleep for a few months. What did I miss?
I think it was Fidelity that said the customers that did best during the GFC were dead or forgot they had accounts.
*LOL*
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TheTimeLord
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by TheTimeLord »

H-Town wrote: Sat Jun 06, 2020 10:32 am
skor99 wrote: Fri Jun 05, 2020 6:48 pm So the market is back up to all-time highs and I’m guessing pretty much everybody’s portfolio is as well. I am feeling relieved for sure, but not sure if there is a lot of happiness at this time with all the uncertainty still around. Covid is still spreading and millions are still without jobs .
What are folks feeling and what should be the path forward ?
Zero feeling. Not relieved, not regretful, not happy nor sad. Just nothing.

Pretty easy to manage portfolio without any emotional attachment to it.
I feel like Thor in the movie Ragnarok when he realizes his power was not from his hammer but from the fact he is the god of Thunder. <Immigrant Song now playing in the background>.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by tibbitts »

skor99 wrote: Fri Jun 05, 2020 7:12 pm
rascott wrote: Fri Jun 05, 2020 7:04 pm Thr constant bear sentiment makes me feel SPX 3600 by year end is the most likely outcome.
Wouldn’t 3600 cross all bounds of irrational-ity ? The fall after would be even more severe than March

I always like my portfolio going up in value, but sorta hoping it doesn’t come to 3600 unless conditions really improve just to preserve everyone’s sanity.
Lots of things that have already happened this year have crossed all bounds of irrationality.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Live »

I felt my age. Path forward is still a random walk, so forward, backwards or sideways, up or down is the true question, as always, in my humble opinion.

But for me personally, this time was different. The whole process led me to begin to use Vanguard's Advisor services to preserve what we've earned but also prepare us for retirement. The young man who created our portfolio (me) is now a pre-retiree (although maybe a few years off if I stay healthy). That's what's different for me and my family.

I helped my parents at this financial stage of their lives (although they were a bit older, maybe) by suggesting that they do what I just did, and it worked out for them. I am not saying this time is different. Just sharing my personal experience and revelation during the recent V shaped market.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by rkhusky »

nisiprius wrote: Sat Jun 06, 2020 9:51 am The wonderful drop in the unemployment percentage was apparently spurious, the result of a "misclassification error." The rate didn't fall from 14.7% to 13.3%, it rose from 14.7% to 16.3%. I have to say I wish this news had emerged on a day other than Friday, as I am curious to see what the stock market is going to make of it. Not curious enough to actually check futures, though.
Isn't the 16.3% number valid only if all the "Other" responses were reclassified as "Laid Off", which may not be true. Sounds like the Post is trying to cover up after stating that the number would be close to 20%. And I wonder how many people are "voluntarily" laid off because they are making more on unemployment than working.
Last edited by rkhusky on Sat Jun 06, 2020 10:59 am, edited 1 time in total.
minimalistmarc
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by minimalistmarc »

I’m feeling very bullish, but nowhere near as bullish as I was in March when many new (and some existing) forum members were capitulating or pretending to be calmly awaiting for the markets to drop to their perception of fair value.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by jebmke »

Going into retirement at the end of 2007, we designed our portfolio to immunize us as much as possible from the woes of downturns and the exuberance of recoveries.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by rkhusky »

I'm feeling good about the recovery. My portfolio is back to 1/1/20 levels and almost to mid-February levels. Stores are opening up. I may be able to get a haircut in a week or so. The weather is nice. I've gotten some projects done.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Lee_WSP »

TheTimeLord wrote: Sat Jun 06, 2020 10:32 am
Lee_WSP wrote: Sat Jun 06, 2020 10:21 am Befuddled, shocked, apprehensive, etc etc. I am highly skeptical of the rally since it is not driven by any fundamentals and valuations are at ludicrous levels.

I seriously doubt these businesses would actually sell at the last quoted price for one share.
Just curious but when fundamentals drive rallies, serious question? When I think fundamentals I think of reported numbers which are rear view mirror and just confirm or disprove assumptions that have been made about the future. So the question is are rallies ever driven by fundamentals or do fundamentals just confirm rallies?
Pretty sure nearly all rallies are based on speculation. But this one just doesn’t feel right.
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TheTimeLord
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by TheTimeLord »

Lee_WSP wrote: Sat Jun 06, 2020 11:18 am
TheTimeLord wrote: Sat Jun 06, 2020 10:32 am
Lee_WSP wrote: Sat Jun 06, 2020 10:21 am Befuddled, shocked, apprehensive, etc etc. I am highly skeptical of the rally since it is not driven by any fundamentals and valuations are at ludicrous levels.

I seriously doubt these businesses would actually sell at the last quoted price for one share.
Just curious but when fundamentals drive rallies, serious question? When I think fundamentals I think of reported numbers which are rear view mirror and just confirm or disprove assumptions that have been made about the future. So the question is are rallies ever driven by fundamentals or do fundamentals just confirm rallies?
Pretty sure nearly all rallies are based on speculation. But this one just doesn’t feel right.
That was my only point.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by firebirdparts »

So I'm feeling like I would not get in any hurry to make changes to my accounts. I mentioned that in one of the other threads. I'm not tempted to "buy extra".
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by phatpodo »

I'm still in accumulation, so if the market drops again I'm okay with it. No doubt we'd be much lower today without the Fed's injection of $$ the last few months.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Krischi »

Our portfolio broke even yesterday in terms of returns, compared to the all-time highs. We hit our rebalancing bands twice on the way down, and now hit them just yesterday on the way up.

I don't have strong feelings about the market either way, but feel good that stay-the-course has seen yet another validation.

The only change I've made is to front-load my wife's and my tax-deferred retirement contributions through the end of summer. We had lower expenses during the stay-at-home order and a sizable emergency fund, so there was no reason not to do it.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Small Savanna »

Comparing our portfolio now to December, it looks like nothing happened in the last six months. We are within 1% of where we were. We were about 60/40 then, and we're about 60/40 now. But being down several hundred $K in the middle of March was emotionally challenging, and I'm a lot more wary about the future than I was.

How do we make that actionable? Shifting more money into bonds has risk too, including inflation risk, so I don't see that as a good solution. Here is a strategy that I think will work:

1. Delay retirement. I'm 59, wife is 54. On paper we're able to retire now, but based on what happened I'm inclined to keep working for a few more years. That keeps our investments growing and reduces the number of years between retirement and social security.

2. Pay off the mortgage. Paying down the mortgage is like buying bonds, but with a better return, and once it's paid off our monthly burn rate will go down significantly, where pension plus social security should about cover it.

The combination of 1 and 2 makes us almost impervious to anything the market does. Maybe that's an overreaction, but it's what I'm feeling today.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by JimmyJammy »

I manage my wife's portfolio in the standard Vanguard-approved Boglehead manner. So I didn't change much during March except for adding some near bottom (re-balancing).

Meanwhile, in my own portfolio, I decided to be much more hands-on. I've been shorting, I've been selling and buying, I've been dealing with some individual stocks.
But I made some bad "day trader" moves and lost a lot of my initial gains.

The result:

My wife's portfolio is up 5% YTD and I'm only up 2%. (Thanking my stars I'm not red and we're both still beating our Target Retirement fund benchmarks).

Friday was the most stressed I've been about the market since March. I was feeling both FOMO (since I'm 9% cash) but also tempted to dump since the market seems irrationally high (and I'm only 13% bond).
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by almostretired1965 »

So let me play Nostradamus for a bit. My thoughts are that the current situation in the US represents the following market consensus:

1. We have learned enough about how this virus spreads so that most of the economy (except parts that rely on events where large crowds shouting at each other indoors, and possibly outdoors, is pretty much a pre-requesite for a good time: conventions, bars, rock concerts, professional sports, etc.) can *probably* reopen without causing surges in infections and deaths that overwhelm the medical system. We have also learned a lot about how to protect the vulnerable populations (though admittedly things were handled rather poorly in many of the states that experience the earliest clusters) in nursing homes and should be able to avoid the worst of the practices that inadvertently led to the most serious problems.

2. The key uncertainty is exactly how bad the second wave will be in the Fall. Even if an effective vaccine and/or therapeutics do not emerge by then, if it can be managed successfully by isolated quarrantines and/or effective contact tracing without wide spread lockdowns, then I don't think the odds of a market down turn should not be any higher than what you would expect normally given the current valuations. South Korea, Japan, and Singapore show that an effective public health service can get things done even when breakouts happen, and my view is that despite our poor performance in Feb/Mar/Apr, our public health authorities will handle it better if and when it returns.

3. Another risk that is being discounted by the market at the moment is that monetary and fiscal policy will continue to be accomodative while COVID-19 remains a significant risk. The key problem, in my opinion, is whether Congress will be able to cut a deal to continue fiscal stimulus beyond the end of July. If no deal is cut, I think there is significant risk that we will have a double dip as aggregate demand collapse due to both drastic cuts in state/local spending and a large reduction in consumer spending as the enhanced unemployment benefits expire. I am not confident that the Fed can fully offset this in the short run if we remain in a state of high unemployment (say 9% or higher) when it hits.

My 2 cents. Personally, I am not likely to do anything, regardless, if history is a guide. But if anyone here thinks they have better insight into what will happen on COVID-19 4-6 months from now than what appears to be the status quo, this is your chance to time the market!
johnegonpdx
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by johnegonpdx »

Feeling a bit disoriented. The general uncertainty for the real economy seems disconnected from market sentiment.

My current position
60% Stock (30% lrg, 18% mid, 12% sml cap)
20% Bonds
20% Cash (I'm usually 10% cash, but I've been accumulating without selling securities since the end of the year for a variety of reasons beyond COVID).

My path forward
Keep feeding my 401k to get the full match from my company.
Keep my spending down and continue to grow my cash reserves (I was surprised how much I could improve my savings rate without feeling any real difference in my quality of life. Consumerism really is overrated, but maybe I should keep that to myself . . .).
Keep rebalancing.
Maybe refinance.
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Toons
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Toons »

Moving forward?
Same as always.
Markets gyrate.
Part of the equation.
It is about the Economy.
Progress,Innovation will continue
The bias is up.
Put the dollars to work
Like little soldiers that don't need sleep.
The Army starts growing exponentially
As Compounding starts working it's magic
:wink:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
Fallible
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Fallible »

skor99 wrote: Fri Jun 05, 2020 6:48 pm So the market is back up to all-time highs and I’m guessing pretty much everybody’s portfolio is as well. I am feeling relieved for sure, but not sure if there is a lot of happiness at this time with all the uncertainty still around. Covid is still spreading and millions are still without jobs .
What are folks feeling and what should be the path forward ?
Been in the market 30-plus years, so it's just more of the same there. As for "uncertainty still around," it's not going anywhere. The only certainty is uncertainty, in the market and in life.
Last edited by Fallible on Sat Jun 06, 2020 1:49 pm, edited 1 time in total.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
KlangFool
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Joined: Sat Oct 11, 2008 12:35 pm

Re: Markets back near all time highs - how are you feeling and path forward ?

Post by KlangFool »

Folks,

The "Know nothing" approach is one of the best "market timing" tools. It beats 100% stock.

Vanguard Balanced Index Fund Admiral Shares (VBIAX) 60/40
https://finance.yahoo.com/quote/VBIAX?p ... c=fin-srch

YTD Return = -0.7%

https://finance.yahoo.com/quote/VTSAX?p=VTSAX

YTD Return = -5.56%

KlangFool
Topic Author
skor99
Posts: 282
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by skor99 »

johnegonpdx wrote: Sat Jun 06, 2020 12:44 pm Feeling a bit disoriented. The general uncertainty for the real economy seems disconnected from market sentiment.

My current position
60% Stock (30% lrg, 18% mid, 12% sml cap)
20% Bonds
20% Cash (I'm usually 10% cash, but I've been accumulating without selling securities since the end of the year for a variety of reasons beyond COVID).

My path forward
Keep feeding my 401k to get the full match from my company.
Keep my spending down and continue to grow my cash reserves (I was surprised how much I could improve my savings rate without feeling any real difference in my quality of life. Consumerism really is overrated, but maybe I should keep that to myself . . .).
Keep rebalancing.
Maybe refinance.
Consumerism is what keeps the economy going. If everybody starts thinking like you, then it would be a disaster for the economy and the markets, even if the virus disappears completely.
Lee_WSP
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Lee_WSP »

TheTimeLord wrote: Sat Jun 06, 2020 11:29 am
Lee_WSP wrote: Sat Jun 06, 2020 11:18 am
TheTimeLord wrote: Sat Jun 06, 2020 10:32 am
Lee_WSP wrote: Sat Jun 06, 2020 10:21 am Befuddled, shocked, apprehensive, etc etc. I am highly skeptical of the rally since it is not driven by any fundamentals and valuations are at ludicrous levels.

I seriously doubt these businesses would actually sell at the last quoted price for one share.
Just curious but when fundamentals drive rallies, serious question? When I think fundamentals I think of reported numbers which are rear view mirror and just confirm or disprove assumptions that have been made about the future. So the question is are rallies ever driven by fundamentals or do fundamentals just confirm rallies?
Pretty sure nearly all rallies are based on speculation. But this one just doesn’t feel right.
That was my only point.
I thought about it some more and this feels like a corner, not a bull market.
Hoosier CPA
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Hoosier CPA »

LeslieSmiley wrote: Fri Jun 05, 2020 8:06 pm now is a good time to re-examine your AA in regards to risk tolerance and then rebalance to that AA.

remember how you felt in march before this recovery started. did you wish you had a lower stock AA? did you contemplate selling to avoid the "falling knife"? if so, now is the time to consider shifting to an AA with less equity exposure.
This is where I'm at right now. 42 years old, 90/10 target portfolio. I rebalanced around new year's and didn't touch anything during 2020, other than continuing the bi-weekly 403b contributions. Those go 100% to stocks (don't like the bond choices available through work) so I guess I rebalanced a bit by doing that. Currently I'm very close to 90/10 again although I doubt I was a couple months ago.

I've thought about reducing stock exposure after the the recovery. I realize the difference between 90/10 and 80/20 isn't significant.

I have a small cap tilt also that I've thought about abandoning for the sake of simplicity too. The fact that it's underperformed recently makes me want to stick with it. In my view there has been evidence that small cap outperformed in the past, but the way governments seem to prop up the larger companies during crises makes me wonder if those days are gone.
reln
Posts: 446
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by reln »

windaar wrote: Fri Jun 05, 2020 6:51 pm At least following the philosophy of this particular financial board, the path is to stay the course. Not being a smart alek; that's what J.B. taught.
+1
Staying the course as JB preached.
remomnyc
Posts: 845
Joined: Mon Jan 04, 2016 4:27 pm

Re: Markets back near all time highs - how are you feeling and path forward ?

Post by remomnyc »

KlangFool wrote: Sat Jun 06, 2020 1:14 pm Folks,

The "Know nothing" approach is one of the best "market timing" tools. It beats 100% stock.

Vanguard Balanced Index Fund Admiral Shares (VBIAX) 60/40
https://finance.yahoo.com/quote/VBIAX?p ... c=fin-srch

YTD Return = -0.7%

https://finance.yahoo.com/quote/VTSAX?p=VTSAX

YTD Return = -5.56%

KlangFool
Although I manage a 3-fund portfolio (with a few stragglers that I sell or donate when appropriate) for my family, my recommendation to my spouse and heirs is VBIAX when I can no longer manage it. I also recommend it to most of my friends when asked for advice.
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fredflinstone
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by fredflinstone »

I feel pessimistic about the stock market. I've felt this way for most of the last 10 years and mostly I've been wrong.
Stocks 28 / Gold 23 / Long-term US treasuries 19 / Cash (mainly CDs) 22 / TIPS 8
KlangFool
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Joined: Sat Oct 11, 2008 12:35 pm

Re: Markets back near all time highs - how are you feeling and path forward ?

Post by KlangFool »

Hoosier CPA wrote: Sat Jun 06, 2020 1:37 pm
I've thought about reducing stock exposure after the the recovery. I realize the difference between 90/10 and 80/20 isn't significant.
Hoosier CPA,

Then, your choice should be 80/20. In fact, your AA should be 70/30. Since 70/30 is better than 80/20 too.

Why would you take the additional risk for little to no extra return?

YTD, 60/40 is beating 100/0 by at least a 4% additional return.

KlangFool
rockstar
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by rockstar »

KlangFool wrote: Sat Jun 06, 2020 1:45 pm
Hoosier CPA wrote: Sat Jun 06, 2020 1:37 pm
I've thought about reducing stock exposure after the the recovery. I realize the difference between 90/10 and 80/20 isn't significant.
Hoosier CPA,

Then, your choice should be 80/20. In fact, your AA should be 70/30. Since 70/30 is better than 80/20 too.

Why would you take the additional risk for little to no extra return?

YTD, 60/40 is beating 100/0 by at least a 4% additional return.

KlangFool
Are you trying to time your AA?
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Sandi_k
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Sandi_k »

RockyMountainSlim wrote: Sat Jun 06, 2020 9:38 am
Path forward to me is to make a decision about whether my long term asset allocation is right, and then make the change to the IPS if needed, followed by a change to the portfolio reflecting this at the end of the year. The crash was stressful for me, but I seemed fairly equally torn between wanting to sell stocks and wanting to buy more, so it seems that I was in a pretty good place, as I did nothing. However, long term, 60/40 may be more appropriate than the current 70/30, as I feel little need to chase high returns.
Yes. I decided at 5.5 years out from retirement, our 82/18 AA was a shade more aggressive than warranted. So I've decided to simplify and rebalance. (My IPS says 60/40 in retirement). So a move to 65/35 seems prudent. As a result, I've decided that slice-and-dice isn't helping in any significant way, and simplicity has a value. Goodbye international, goodbye SCV, and goodbye REITs.

This feels like the right choice: I weathered the thought of losing 30% of the portfolio just fine, but decided 40% was now too much for us (which is entirely possible at 80/20, especially now that we're entering negative real interest rates). Also of note: the Senate's disinclination to add more stimulus funds to the economy at this time. If there is a substantial second wave of CV-19, I could see the economy plummeting again - with very few levers used or employed.

As of today, down 1.1% for the YTD.
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