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

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

Post by KlangFool »

rockstar wrote: Sat Jun 06, 2020 1:50 pm
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?
rockstar,

1) My AA is 60/40. My 5/25 rebalancing rule to maintain my fixed AA of 60/40 is better than any other "market timing" move. I just wonder why others try so hard to do worse than maintaining a fixed AA.

2) There is no valid reason to have an AA of 100/0, 90/10, 80/20. This poster should have an AA of 70/30.

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

Post by nisiprius »

Teague wrote: Sat Jun 06, 2020 10:32 am I'm feeling occhiolistic. But that's just me.
What does it mean? I can't find it in ahdictionary.com, merriam-webster.com, or lexico.com (Oxford). I don't think it's a word yet.
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.
Elysium
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Elysium »

nisiprius wrote: Sat Jun 06, 2020 2:20 pm
Teague wrote: Sat Jun 06, 2020 10:32 am I'm feeling occhiolistic. But that's just me.
What does it mean? I can't find it in ahdictionary.com, merriam-webster.com, or lexico.com (Oxford). I don't think it's a word yet.
It has to be one of those social media coined words. Here is a reference

occhiolism
n. the awareness of the smallness of your perspective, by which you couldn’t possibly draw any meaningful conclusions at all, about the world or the past or the complexities of culture, because although your life is an epic and unrepeatable anecdote, it still only has a sample size of one, and may end up being the control for a much wilder experiment happening in the next room.
Hoosier CPA
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Hoosier CPA »

rockstar wrote: Sat Jun 06, 2020 1:50 pm
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?
I don't know...honestly. I just took Vanguard's "test" for AA, and it came back 80/20.
Hoosier CPA
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Hoosier CPA »

KlangFool wrote: Sat Jun 06, 2020 2:07 pm
rockstar wrote: Sat Jun 06, 2020 1:50 pm
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?
rockstar,

1) My AA is 60/40. My 5/25 rebalancing rule to maintain my fixed AA of 60/40 is better than any other "market timing" move. I just wonder why others try so hard to do worse than maintaining a fixed AA.

2) There is no valid reason to have an AA of 100/0, 90/10, 80/20. This poster should have an AA of 70/30.

KlangFool
KF - I like reading your posts. Why do you say my AA should be 70/30? Trying to learn here.
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Marmot
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Marmot »

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 ?
I feel very optimistic. I am standard investment percentages, didn't react and won't react to anything that happens. I will stay fully invested and I am marginally up for the year. Life is good, doomsayers can stick it.
Marty....don't go to the year 2020....Dr. Emmett Brown
KlangFool
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by KlangFool »

Hoosier CPA wrote: Sat Jun 06, 2020 2:56 pm
KlangFool wrote: Sat Jun 06, 2020 2:07 pm
rockstar wrote: Sat Jun 06, 2020 1:50 pm
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?
rockstar,

1) My AA is 60/40. My 5/25 rebalancing rule to maintain my fixed AA of 60/40 is better than any other "market timing" move. I just wonder why others try so hard to do worse than maintaining a fixed AA.

2) There is no valid reason to have an AA of 100/0, 90/10, 80/20. This poster should have an AA of 70/30.

KlangFool
KF - I like reading your posts. Why do you say my AA should be 70/30? Trying to learn here.
Hoosier CPA,

Check out this URL and compared the average return versus the worst year and year with a loss. Over the long run, the average return of (100/0, 90/10, 80/20) is not significantly higher than 70/30. But, the risk is a lot higher. It is a lousy bet. The efficient frontier for AA in terms of risk-adjusted return is between 70/30 and 30/70.

https://personal.vanguard.com/us/insigh ... llocations

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

Post by Hoosier CPA »

KlangFool wrote: Sat Jun 06, 2020 3:01 pm
Hoosier CPA wrote: Sat Jun 06, 2020 2:56 pm
KlangFool wrote: Sat Jun 06, 2020 2:07 pm
rockstar wrote: Sat Jun 06, 2020 1:50 pm
KlangFool wrote: Sat Jun 06, 2020 1:45 pm

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?
rockstar,

1) My AA is 60/40. My 5/25 rebalancing rule to maintain my fixed AA of 60/40 is better than any other "market timing" move. I just wonder why others try so hard to do worse than maintaining a fixed AA.

2) There is no valid reason to have an AA of 100/0, 90/10, 80/20. This poster should have an AA of 70/30.

KlangFool
KF - I like reading your posts. Why do you say my AA should be 70/30? Trying to learn here.
Hoosier CPA,

Check out this URL and compared the average return versus the worst year and year with a loss. Over the long run, the average return of (100/0, 90/10, 80/20) is not significantly higher than 70/30. But, the risk is a lot higher. It is a lousy bet. The efficient frontier for AA in terms of risk-adjusted return is between 70/30 and 30/70.

https://personal.vanguard.com/us/insigh ... llocations

KlangFool
Thanks. I'll review that.
Xrayman69
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Xrayman69 »

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 ?
Generally Feeling optimistic. Hospitals don’t appear to be overwhelmed, people are increasingly able to return to work. Some restaurants in Seattle are now beginning to permit seating and service.

However have some cautious whispers in my head that the “rally” has been very rapid. Nevertheless will continue to buy every Friday from taxable accounts and every months from taxed advantaged accounts.

Rebalanced again on June 1 after having rebalanced in mid March (not at the lows of March 23). I had increased my equities AA by 5% in the March rebalance when we added some free cash. Returned to the original AA in June rebalance.
billy269
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by billy269 »

I am feeling very irritated. I'm in the accumulation phase and my 401k contributions go in every month, which means with bear markets that last for a couple weeks, I never get stocks at cheaper valuations. These V recoveries are terrible for those of us that don't have the cash on hand to put a huge lump sum down towards the bottom of the V and have to wait for our contributions to hit from a paycheck. Second V recovery in a row this happened. I'd love to have the market remain in bear territory for even six months!
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Adonis »

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).
+1

I don’t know if all the people saying they feel nothing or feel fine are telling the truth or exhibiting bravado. If they really do not pay any attention and have no opinions as to what is happening I tip my hat to them, though I don’t comprehend it. For my part I think the markets are extremely irrational right now, but acknowledge I don’t really know anything, so it isn’t like I will act upon my thoughts. I will stick it my plans. Nevertheless I just can’t comprehend how the market can be as the same level it was last December. When I look outside I don’t see a booming economy like last Christmas, I don’t see a fast and easy recovery out of the pandemic since even in a best case scenario of a quick vaccine, it will stick take time to be rolled out to everyone. But then I remember someone once said in the short run the market is a voting machine, only in the long run is it a weighting machine tied to fundamentals.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by KyleAAA »

I think the market is more or less fairly valued given interest rates and future growth prospects. Actually, the last few months the market has behaved exactly the way I would have expected an efficient market to behave. I expect returns around the long term average going forward. I am very glad I aggressively rebalanced my long term treasuries into stocks twice on the way down.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Noobvestor »

I wish people would say 'US markets' when they mean 'US markets' - there are many others. International markets overall are below their peak (which was over two years ago) and barely above 2014 levels. I remain globally diversified, but the US worries me more than ex-US, personally. US large cap growth seems highly valued, but thankfully I also have small, value, developed, emerging, bonds, etc... 8-)
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by KlangFool »

billy269 wrote: Sat Jun 06, 2020 7:15 pm I am feeling very irritated. I'm in the accumulation phase and my 401k contributions go in every month, which means with bear markets that last for a couple weeks, I never get stocks at cheaper valuations. These V recoveries are terrible for those of us that don't have the cash on hand to put a huge lump sum down towards the bottom of the V and have to wait for our contributions to hit from a paycheck. Second V recovery in a row this happened. I'd love to have the market remain in bear territory for even six months!
billy269,

A) If your AA is not 100/0, this is not a problem.

B) If you are investing in a target-date retirement fund or balanced fund, it is not a problem too.

The problem is with your AA. With the right AA (70/30 to 30/70), you make money in any market.

My AA of 60/40 is doing very well.

<<Second V recovery in a row this happened.>>

More oscillation is better for me.

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

Post by mouses »

gwe67 wrote: Fri Jun 05, 2020 7:50 pm I was asleep for a few months. What did I miss?
Nothing, as far as the stock market goes. I have my three funds in my Roths, and yesterday the balance was within dollars of what it was at the beginning of the year. I suppose I could be greedy and complain that it had not gone up.

Where I will get hit is my 3% CDs coming up for renewal this year.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Teague »

Elysium wrote: Sat Jun 06, 2020 2:25 pm
nisiprius wrote: Sat Jun 06, 2020 2:20 pm
Teague wrote: Sat Jun 06, 2020 10:32 am I'm feeling occhiolistic. But that's just me.
What does it mean? I can't find it in ahdictionary.com, merriam-webster.com, or lexico.com (Oxford). I don't think it's a word yet.
It has to be one of those social media coined words. Here is a reference

occhiolism
n. the awareness of the smallness of your perspective, by which you couldn’t possibly draw any meaningful conclusions at all, about the world or the past or the complexities of culture, because although your life is an epic and unrepeatable anecdote, it still only has a sample size of one, and may end up being the control for a much wilder experiment happening in the next room.
Yeah, it's pretty sketchy as words go, but I'm rooting for it. And the definition needs to be tightened up. I propose the following edit to the above:
n. the awareness of the smallness of your perspective and the limitations thus imposed.
Last edited by Teague on Sat Jun 06, 2020 9:09 pm, 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 retire2022 »

denovo wrote: Sat Jun 06, 2020 5:04 am
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.
Not mine in Long Island City Vernon Blvd location, they have stacks of the Kirkland brand (today) for 16.99 plus tax, albeit one per customer.
retire2022
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by retire2022 »

billy269 wrote: Sat Jun 06, 2020 7:15 pm I am feeling very irritated. I'm in the accumulation phase and my 401k contributions go in every month, which means with bear markets that last for a couple weeks, I never get stocks at cheaper valuations. These V recoveries are terrible for those of us that don't have the cash on hand to put a huge lump sum down towards the bottom of the V and have to wait for our contributions to hit from a paycheck. Second V recovery in a row this happened. I'd love to have the market remain in bear territory for even six months!
That is why one should have emergency fund and then some "dry powder", but for some people on this forum it is heresy to time the market. For the record I am not one of them, I do time, it is my money and I decide what to do with it.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by SB1234 »

retire2022 wrote: Sat Jun 06, 2020 9:13 pm
billy269 wrote: Sat Jun 06, 2020 7:15 pm I am feeling very irritated. I'm in the accumulation phase and my 401k contributions go in every month, which means with bear markets that last for a couple weeks, I never get stocks at cheaper valuations. These V recoveries are terrible for those of us that don't have the cash on hand to put a huge lump sum down towards the bottom of the V and have to wait for our contributions to hit from a paycheck. Second V recovery in a row this happened. I'd love to have the market remain in bear territory for even six months!
That is why one should have emergency fund and then some "dry powder", but for some people on this forum it is heresy to time the market. For the record I am not one of them, I do time, it is my money and I decide what to do with it.
The notion of dry powder is ridiculous. I wonder how many holders of dry powder actually bought at or near lows. And also using emergency funds to invest in the market would be beyond reckless and foolish in fact.
anecdotes are not data
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by firebirdparts »

SB1234 wrote: Sat Jun 06, 2020 9:46 pm
retire2022 wrote: Sat Jun 06, 2020 9:13 pm
billy269 wrote: Sat Jun 06, 2020 7:15 pm I am feeling very irritated. I'm in the accumulation phase and my 401k contributions go in every month, which means with bear markets that last for a couple weeks, I never get stocks at cheaper valuations. These V recoveries are terrible for those of us that don't have the cash on hand to put a huge lump sum down towards the bottom of the V and have to wait for our contributions to hit from a paycheck. Second V recovery in a row this happened. I'd love to have the market remain in bear territory for even six months!
That is why one should have emergency fund and then some "dry powder", but for some people on this forum it is heresy to time the market. For the record I am not one of them, I do time, it is my money and I decide what to do with it.
The notion of dry powder is ridiculous. I wonder how many holders of dry powder actually bought at or near lows. And also using emergency funds to invest in the market would be beyond reckless and foolish in fact.
You sound like you could use some occhiolism.
A fool and your money are soon partners
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SB1234
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by SB1234 »

firebirdparts wrote: Sat Jun 06, 2020 9:52 pm
SB1234 wrote: Sat Jun 06, 2020 9:46 pm
retire2022 wrote: Sat Jun 06, 2020 9:13 pm
billy269 wrote: Sat Jun 06, 2020 7:15 pm I am feeling very irritated. I'm in the accumulation phase and my 401k contributions go in every month, which means with bear markets that last for a couple weeks, I never get stocks at cheaper valuations. These V recoveries are terrible for those of us that don't have the cash on hand to put a huge lump sum down towards the bottom of the V and have to wait for our contributions to hit from a paycheck. Second V recovery in a row this happened. I'd love to have the market remain in bear territory for even six months!
That is why one should have emergency fund and then some "dry powder", but for some people on this forum it is heresy to time the market. For the record I am not one of them, I do time, it is my money and I decide what to do with it.
The notion of dry powder is ridiculous. I wonder how many holders of dry powder actually bought at or near lows. And also using emergency funds to invest in the market would be beyond reckless and foolish in fact.
You sound like you could use some occhiolism.
On the contrary, it's the the market timers and dry powder proponents that need some.
anecdotes are not data
Kookaburra
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Kookaburra »

almostretired1965 wrote: Sat Jun 06, 2020 12:22 pm 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!
And there’s that whole election thing too.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Picasso »

gwe67 wrote: Fri Jun 05, 2020 7:50 pm I was asleep for a few months. What did I miss?
Did you see that guy who was on a long meditation retreat until recently and emerged to Covid and the current social unrest? Crazy.
michoco911
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by michoco911 »

Was my first major downward for me with a sizable portfolio. My 60/40 portfolio gave me confidence and i rebalanced using new savings.
Did an IPS at the beginning of the year and was able to stick to it with confidence.
30% VWRD 30% VUSD 40% AGGG until further notice
barberakb
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by barberakb »

As far as my account balance goes it feels great, I personally am surprised the market is doing so well though.
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UncleLeo
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by UncleLeo »

rockstar wrote: Fri Jun 05, 2020 7:00 pm Valuation are ridiculous right now. Q2 is going to be horrible. I'll follow my plan again: sell if it breaks below the 300 day moving average, and buy either at 20x ttm PE or when it breaks above the 300 day moving average again.

I'm more worried about where to deploy new money than my existing investments. My current plan is to accelerate paying down my home.
sorry for the dumb questions:
- Why look at ttm PE and not current/absolute PE?
- Where can I find/track current PE stats for TSM or S&P500?
manatee2005
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by manatee2005 »

gwe67 wrote: Fri Jun 05, 2020 7:50 pm I was asleep for a few months. What did I miss?
Nothing much
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Stef
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Stef »

billy269 wrote: Sat Jun 06, 2020 7:15 pm I am feeling very irritated. I'm in the accumulation phase and my 401k contributions go in every month, which means with bear markets that last for a couple weeks, I never get stocks at cheaper valuations. These V recoveries are terrible for those of us that don't have the cash on hand to put a huge lump sum down towards the bottom of the V and have to wait for our contributions to hit from a paycheck. Second V recovery in a row this happened. I'd love to have the market remain in bear territory for even six months!
Yeah sucks for me too. There was literally no time to profit from this crash as it recovered so fast! Monthly savings rate from March and Aprily, but that's it. My avg. price of the last 6 months (money weighted) was 3280 lol.
Teague
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Teague »

billy269 wrote: Sat Jun 06, 2020 7:15 pm I am feeling very irritated. I'm in the accumulation phase and my 401k contributions go in every month, which means with bear markets that last for a couple weeks, I never get stocks at cheaper valuations. These V recoveries are terrible for those of us that don't have the cash on hand to put a huge lump sum down towards the bottom of the V and have to wait for our contributions to hit from a paycheck. Second V recovery in a row this happened. I'd love to have the market remain in bear territory for even six months!
Be careful what you wish for. When prolonged substantial market drops happen, there are often other unpleasant things happening at the same time. Nevertheless, I predict your wish will be granted at some point in the future.
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Alchemist »

UncleLeo wrote: Sat Jun 06, 2020 11:55 pm sorry for the dumb questions:
- Why look at ttm PE and not current/absolute PE?
- Where can I find/track current PE stats for TSM or S&P500?
That is actually a great question. Robert Shiller maintains a website that tracks current P/E of the S&P 500 as well as a few other metrics include CAPE10:

https://www.multpl.com/s-p-500-pe-ratio
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Noobvestor
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Noobvestor »

Stef wrote: Sun Jun 07, 2020 1:43 am
billy269 wrote: Sat Jun 06, 2020 7:15 pm I am feeling very irritated. I'm in the accumulation phase and my 401k contributions go in every month, which means with bear markets that last for a couple weeks, I never get stocks at cheaper valuations. These V recoveries are terrible for those of us that don't have the cash on hand to put a huge lump sum down towards the bottom of the V and have to wait for our contributions to hit from a paycheck. Second V recovery in a row this happened. I'd love to have the market remain in bear territory for even six months!
Yeah sucks for me too. There was literally no time to profit from this crash as it recovered so fast! Monthly savings rate from March and Aprily, but that's it. My avg. price of the last 6 months (money weighted) was 3280 lol.
Only a few ways I can see this being a problem, and each has a silver lining, but perhaps also a lesson:

1) You are young, have little invested, in which case, congrats! You have decades to go and these small amounts don't matter long-term.
2) You are mostly or entirely in US large stocks, in which case, congrats! Might be worth diversifying international to better values ...
3) You don't rebalance regularly, in which case, congrats! You missed the ups and downs and tuned out the noise, did OK.

For this to have gone better, you may have needed to follow a pretty typical Boglehead strategy and allocation, like:

3) Have a balanced portfolio of global stocks and bonds, rebalanced at bands along the way, which would have netted you a tidy profit. Having a combination of stocks and bonds (and other sub-asset-classes) automatically helps you buy low and sell high, and the reverse.

I really didn't know what to expect heading into this. I didn't game out the scenarios, just followed my plan, used bands, bought and sold to rebalance. Yet somehow this year I'm up overall despite a number of holdings being down significantly. I mean, I'm holding things like small cap value, that got decimated, with mixed recoveries, and somehow it all adds up to a pretty smooth ride and solid returns. I was utterly shocked when I realized I was doing way better than the majority of my asset classes taken individually or in combination. Rebalancing helped. And that was only made possible by having a diversified portfolio. It won't always provide a tailwind, but in this case, it offered a significant one.
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe
stocknoob4111
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by stocknoob4111 »

Not confident at all.. I would've preferred a slower recovery with the market taking time to digest everything after seeing earnings in Q2 etc. This rally reeks of speculative madness and not quite sure we're going to be able to hold this level.
neverpanic
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by neverpanic »

stocknoob4111 wrote: Sun Jun 07, 2020 3:52 am Not confident at all.. I would've preferred a slower recovery with the market taking time to digest everything after seeing earnings in Q2 etc. This rally reeks of speculative madness and not quite sure we're going to be able to hold this level.
Even if we do hold these levels for a while, it's still a good time for me to take partial profits. YMMV

I'm keeping Boeing, but there is an airline on my sheet that will not make it to July. I'll never be upset about 2x, but if ever there was a time to take the money and run, this is most definitely it.
I am not a financial professional or guru. I'm a schmuck who got lucky 10 times. Such is the life of the trader.
Carguy85
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Carguy85 »

One can always put their money into a money market account or short term CD (currently for 1.5% or so) til the market cools down and jump back in when you deem the publicly available information indicates such a move and likewise get out when such information indicates...It seems to many, whoever said “nobody knows nothin” knows nothin with regard to the market...even though there is overwhelming evidence backing the wisdom shared by such giants. The saying don’t outsmart your common sense kinda gets turned on it’s head by Charlie Munger doesn’t it?
Elysium
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Elysium »

Kookaburra wrote: Sat Jun 06, 2020 10:04 pm And there’s that whole election thing too.
More likely to be a non-event for stock markets, either way, priced in. Likely pull back will come next year with re-adjusting no matter what.
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dogagility
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by dogagility »

KlangFool wrote: Sat Jun 06, 2020 1:45 pm YTD, 60/40 is beating 100/0 by at least a 4% additional return.
Ah, the joys of cherry-picking data to try and make a point.
All children spill milk. Learn to smile and wipe it up. -- A Farmer's Wife
Chuck107
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Chuck107 »

.....
Last edited by Chuck107 on Mon Oct 05, 2020 7:21 am, edited 1 time in total.
Alas, I find moderation of this forum too restrictive for my tastes, farewell.
nigel_ht
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by nigel_ht »

neverpanic wrote: Sun Jun 07, 2020 5:38 am
stocknoob4111 wrote: Sun Jun 07, 2020 3:52 am Not confident at all.. I would've preferred a slower recovery with the market taking time to digest everything after seeing earnings in Q2 etc. This rally reeks of speculative madness and not quite sure we're going to be able to hold this level.
Even if we do hold these levels for a while, it's still a good time for me to take partial profits. YMMV

I'm keeping Boeing, but there is an airline on my sheet that will not make it to July. I'll never be upset about 2x, but if ever there was a time to take the money and run, this is most definitely it.
Yah, it’s a good time for me to get rid of DAL. I think perhaps CCL and RCN as well. I have to see how much TLH reserve I have.
Dottie57
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Dottie57 »

sailaway wrote: Fri Jun 05, 2020 6:49 pm I am bewildered, and still sticking to my IPS.
+1
Dottie57
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Dottie57 »

Teague wrote: Sat Jun 06, 2020 10:32 am I'm feeling occhiolistic. But that's just me.
Show off :happy :happy

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

Post by VINNY »

Nothing. 100% VTSAX forever. We have pensions.
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9-5 Suited
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by 9-5 Suited »

While I wish the V shape had been more U shaped to allow for more purchasing of equities at lower prices, I’m happy about the underlying assumption of the improving market that better times may be on the horizon for all of us societally, and especially those most negatively impacted by the virus. Lots of businesses on the brink that need customers quickly.
jebmke
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by jebmke »

9-5 Suited wrote: Sun Jun 07, 2020 9:29 am While I wish the V shape had been more U shaped to allow for more purchasing of equities at lower prices, I’m happy about the underlying assumption of the improving market that better times may be on the horizon for all of us societally, and especially those most negatively impacted by the virus. Lots of businesses on the brink that need customers quickly.
I guess one question in my mind is how much is due to improving expectations and how much is due to $3 trillion of new money?

It doesn't influence my game plan but it I am curious.
When you discover that you are riding a dead horse, the best strategy is to dismount.
rockstar
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by rockstar »

UncleLeo wrote: Sat Jun 06, 2020 11:55 pm
rockstar wrote: Fri Jun 05, 2020 7:00 pm Valuation are ridiculous right now. Q2 is going to be horrible. I'll follow my plan again: sell if it breaks below the 300 day moving average, and buy either at 20x ttm PE or when it breaks above the 300 day moving average again.

I'm more worried about where to deploy new money than my existing investments. My current plan is to accelerate paying down my home.
sorry for the dumb questions:
- Why look at ttm PE and not current/absolute PE?
- Where can I find/track current PE stats for TSM or S&P500?
I look at the trailing twelve months of earnings and compare it to the current price, which is available here every Friday:

https://www.wsj.com/market-data/stocks/peyields

For the most part, I buy and hold. These events don't happen that often.
Last edited by rockstar on Sun Jun 07, 2020 11:27 am, edited 1 time in total.
rockstar
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by rockstar »

Alchemist wrote: Sun Jun 07, 2020 2:44 am
UncleLeo wrote: Sat Jun 06, 2020 11:55 pm sorry for the dumb questions:
- Why look at ttm PE and not current/absolute PE?
- Where can I find/track current PE stats for TSM or S&P500?
That is actually a great question. Robert Shiller maintains a website that tracks current P/E of the S&P 500 as well as a few other metrics include CAPE10:

https://www.multpl.com/s-p-500-pe-ratio
Here's Robert Shiller's data:

http://www.econ.yale.edu/~shiller/data.htm
JD2775
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by JD2775 »

Feeling good. Just rebalanced, was at 77/23, moved back to 70/30 on Friday. No other moves the last few months aside from regular scheduled contributions
Big Dog
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Big Dog »

Stayed the course thru the drop and return. (Took the opportunity for more Roth conversions at a discount.) Did not rebalance, as my bond fund took a hit. After reading the other thread on bonds, I've decided to use the rebound to swap out my VICSX (Inter Corp Bond) to a more conservative bond(s) fund (more Treasuries and higher quality corporates), while keeping my AA.
Xrayman69
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by Xrayman69 »

neverpanic wrote: Sun Jun 07, 2020 5:38 am
stocknoob4111 wrote: Sun Jun 07, 2020 3:52 am Not confident at all.. I would've preferred a slower recovery with the market taking time to digest everything after seeing earnings in Q2 etc. This rally reeks of speculative madness and not quite sure we're going to be able to hold this level.
Even if we do hold these levels for a while, it's still a good time for me to take partial profits. YMMV

I'm keeping Boeing, but there is an airline on my sheet that will not make it to July. I'll never be upset about 2x, but if ever there was a time to take the money and run, this is most definitely it.
Yeah, took my basis out of BA after it hit 200 (in at about 125 several months ago). It will be short term gains, but will be used against some TLH. Will let the remainder ride for the next 20 years as I feel the secular trend of air travel will likely eventually recover. I’m estimating the travel industry including air will be permitted (slowly and incrementally without public fanfare) to return to pre pandemic business (routinely selling middle seats). This being said travel and leisure over the past decade was in an era of plenty of excess income and economic growth. If the Wall Street markets eventually catch up with Main Street small business risks then travel and leisure may be on the blocks for families trying to manage budgets.
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dziuniek
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by dziuniek »

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
Covid
Killer Bees
Protests/Riots

Not even halfway there yet!

Remaining options for 2020:

- covid 2
- meteor?
- ww3?
garlandwhizzer
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Re: Markets back near all time highs - how are you feeling and path forward ?

Post by garlandwhizzer »

A lot of what is driving the US and recently even INTL too is not based at all on current economic fundamentals but rather three things.

First central banks around the world are fully on board with preventing acute meltdown. In the US the FED is buying corporate bonds, acting as the buyer of last resort to prevent a rolling series of corporate bond failures. Corporate debt was at record levels before this started. Powell has said that he will do anything necessary to prevent an economic collapse and that is reassuring. It might even include, if the future turns bad, stepping in to buy stocks as the buyer of last resort. Japan has already taken that step. There is massive fiscal stimulus all over the world on top of this central bank monetary stimulus. Even Germany is making massive investment in corporations like Lufthansa to keep them afloat and prevent bankruptcies. So the market downside is limited by governmental action in both stocks and bonds regardless of what's actually happening at present in the economy. Investors fully believe the wisdom of what the late Marty Zweig said decades ago: don't fight the FED.

Second, it is expected by all that a vaccine/effective treatment will arrive on the scene within a year or so and that social distancing and quarantining will disappear at some point. A recovery from this recession is going to happen without question. The only questions: When? And how strong will it be?
With the FED and Congress's fiscal stimulus--more of which is coming likely soon in an election year--investors are choosing the optimistic view. It will likely be a short V shaped recession and strong recovery due to pent up demand. That may or may not turn out to be true but that's the narrative the market has chosen.

Third, where else are you going to put trillions of investment dollars in aggregate? Bonds in a zero expected return world? Commodities with expected zero long term return and with supply far exceeding demand at present? Real estate which like equity is richly priced and whose future prospects are no better than stocks. Equity is the least bad house in an absolutely horrible neighborhood and this acts to support stock prices.

Due to all three of these things there is at present a complete dissociation between the dire current underlying economy and the exuberant US stock market. Short term traders betting on which side of this dissociation will dominate over the next 6 months or so, have about a 50/50 chance of betting on the right side of the optimism/pessimism split going forward. IMO long term investors with a well thought out balanced portfolio should pay little or no attention to it, consider it noise, and stay the course. Don't feel bad if you don't understand what's going on with market action and how it will all unfold going forward. Very few understand it even in retrospect and no one can accurately predict how it will will unfold going forward except to say that in the very long term equity is overwhelmingly likely to reward those who hold it through its ups and downs.

Garland Whizzer
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