Do Any Bogleheads Consider Themselves Bears?

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whereskyle
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Do Any Bogleheads Consider Themselves Bears?

Post by whereskyle »

After reading Jack Bogle's writings and subscribing to many of his views, I feel that I must identify as a stock-market "bull." The market goes up more than it goes down, et cetera. I wonder, though, if any Bogleheads consider themselves stock-market bears. Buying and holding index funds while feeling perpetually or frequently bearish seems (excuse the pun) unbearable. But I wonder if anyone sees themselves or the market that way. Sometimes, fear perpetuates the threads on this cite, so I wonder if there are any self-identifying Bogleheads who also self-identify as stock-market bears. If so, what enables you to stick to a Bogleheaded strategy?

Thanks, all!
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
Tamalak
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by Tamalak »

I feel bearish, in the sense that I think a lot of the confidence in stocks to "always recover" and otherwise be a sure thing in the long run, is misplaced. Stocks have always recovered so far for us but that's survivorship bias.. if they hadn't recovered, we wouldn't be talking about them or considering investing in them.

I also think stocks are very expensive right now and not likely to turn much of a profit. I think the downside risk is pretty high compared to the upside potential.

That said I'm 100% stocks and strangely comfortable with it. I have been since I invested. I guess it's the sense that there's nowhere else for my money to go and that I don't really know anything, so I might as well hitch my wagon to the world and see where it goes.

Plus, half my investments are international, and while returns on that have been miserable since I invested, it comforts me to know that a bunch of my portfolio is low P/E, so all it has to do to succeed is not trip and fall on more knives.. which it has been doing year after year.. but all it has to do is stop, please.
Last edited by Tamalak on Wed Jun 10, 2020 2:01 pm, edited 1 time in total.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by TomatoTomahto »

I guess I might be considered a bear; for sure right now I’m not a bull.

As to how I stick to a BH strategy; there’s really not much alternative, is there? That said, when I encounter “irrational exuberance” as I do now, I don’t sell but I don’t rush to put more and more money into equities. Call me a market timer; sticks and stones ...
Okay, I get it; I won't be political or controversial. The Earth is flat.
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whereskyle
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by whereskyle »

TomatoTomahto wrote: Wed Jun 10, 2020 2:00 pm I guess I might be considered a bear; for sure right now I’m not a bull.

As to how I stick to a BH strategy; there’s really not much alternative, is there? That said, when I encounter “irrational exuberance” as I do now, I don’t sell but I don’t rush to put more and more money into equities. Call me a market timer; sticks and stones ...
Wonderful insight. There is no alternative.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
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whereskyle
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by whereskyle »

Tamalak wrote: Wed Jun 10, 2020 1:59 pm I feel bearish, in the sense that I think a lot of the confidence in stocks to "always recover" and otherwise be a sure thing in the long run, is misplaced. Stocks have always recovered so far for us but that's survivorship bias.. if they hadn't recovered, we wouldn't be talking about them or considering investing in them.

I also think stocks are very expensive right now and not likely to turn much of a profit. I think the downside risk is pretty high compared to the upside potential.

That said I'm 100% stocks and strangely comfortable with it. I have been since I invested. I guess it's the sense that there's nowhere else for my money to go and that I don't really know anything, so I might as well hitch my wagon to the world and see where it goes.

Plus, half my investments are international, and while returns on that have been miserable since I invested, it comforts me to know that a bunch of my portfolio is low P/E, so all it has to do to succeed is not trip and fall on more knives.. which it has been doing year after year.. but all it has to do is stop, please.
Hahahaha at the very least you (and I) hold the expensive stuff that keeps getting pricier and the cheap stuff that can't get much cheaper. As always, the market portfolio is an effective portfolio.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
Tamalak
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by Tamalak »

whereskyle wrote: Wed Jun 10, 2020 2:07 pm Hahahaha at the very least you (and I) hold the expensive stuff that keeps getting pricier and the cheap stuff that can't get much cheaper.
:D That's a perfect way to express how domestic and international has behaved in the last decade.. I tell myself that if you squish them together, they somehow average out to a balanced portfolio with good upside potential.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by KlangFool »

OP,

I am 60/40. I make money in the bull market and I make money in the bear market. And, if the market oscillates sideways, I make money too. In summary, I do not care.

With diversification, there is always something to do well and something to do not as well or badly, I am always "Buy Low and Sell HIgh". I always make money.

KlangFool
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whereskyle
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by whereskyle »

Tamalak wrote: Wed Jun 10, 2020 2:10 pm
whereskyle wrote: Wed Jun 10, 2020 2:07 pm Hahahaha at the very least you (and I) hold the expensive stuff that keeps getting pricier and the cheap stuff that can't get much cheaper.
:D That's a perfect way to express how domestic and international has behaved in the last decade.. I tell myself that if you squish them together, they somehow average out to a balanced portfolio with good upside potential.
Hey, I tell myself that too, and since I started the thread to discuss how Jack's ideas have convinced me that I'm a bull, I'll say that I think we're both telling ourselves the truth!
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
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whereskyle
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by whereskyle »

KlangFool wrote: Wed Jun 10, 2020 2:12 pm OP,

I am 60/40. I make money in the bull market and I make money in the bear market. And, if the market oscillates sideways, I make money too. In summary, I do not care.

With diversification, there is always something to do well and something to do not as well or badly, I am always "Buy Low and Sell HIgh". I always make money.

KlangFool
Beautiful place to be! 60/40 is my default recommendation for everyone new to investing.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
Chicken Little
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by Chicken Little »

I’m bearish because I know what it would look like if it wasn’t supported.
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whereskyle
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by whereskyle »

Chicken Little wrote: Wed Jun 10, 2020 2:14 pm I’m bearish because I know what it would look like if it wasn’t supported.
I'm bullish because I doubt the 100-year-old institution in charge of the money supply is going to stop supporting the markets.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by TheTimeLord »

BH are interesting, they are for the by and large conservative to very conservative, which would be a bear trait, but the philosophy is based on a belief in the long term success of stocks, which is a bull trait. I think in general they are Bully-bears.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by Chicken Little »

whereskyle wrote: Wed Jun 10, 2020 2:35 pm
Chicken Little wrote: Wed Jun 10, 2020 2:14 pm I’m bearish because I know what it would look like if it wasn’t supported.
I'm bullish because I doubt the 100-year-old institution in charge of the money supply is going to stop supporting the markets.
Fair enough.

What did the support in ‘08/‘09 cost? How much was paid back? How much did this cost? What is the plan to pay that back? What will the next crisis cost?

To save you time, it’s not simply Fed, they work in conjunction with Treasury with approval from Congress and executive.

If it’s no problem, then why not more?
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by HawkeyePierce »

I'd call myself a "cowardly bull". I believe stocks will go up over a long enough time horizon, so I invest like a bull, even tilting towards higher-risk investments like small-cap value, emerging markets and the Excellent Adventure.

*But* though stocks tend to up over a long enough time horizon, that might not be true for *my* time horizon, so I cowardly hold some bonds and cash to avoid sequence of returns risk.

I then rely on my high savings rate to make up for the lower returns I get from not being 100% stocks.
Last edited by HawkeyePierce on Wed Jun 10, 2020 2:45 pm, edited 1 time in total.
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TheTimeLord
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by TheTimeLord »

Chicken Little wrote: Wed Jun 10, 2020 2:14 pm I’m bearish because I know what it would look like if it wasn’t supported.
Interesting because this doesn't look like Bear behavior. Bought the market when it was down and you new AA has a larger allocation to stocks than you beginning of the year AA. How long will it take you to get down to 45/55 anyway?
Chicken Little wrote: Wed Jun 10, 2020 1:49 pm I was 40/60 in January, buying every two weeks. Rebalanced to 60/40 in Feb/Mar because government officials on TV told me they were going to arrest the market decline.

Yesterday, I started to move back toward 45/55. I don’t know what happens next. I specifically do not know how large the next “round” will be.

I am of the school that believes that many of these enormous companies require a lot of the population to have money in their pocket to do well. There are different ways to make that happen.

Good luck.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by Ferdinand2014 »

I am always optimistic. I am a bull. I wouldn’t own stocks otherwise.

“I am an optimist. It does not seem too much use being anything else.“

Winston Churchill
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by hammond »

I am bearish in the sense that I believe stock returns over the next decade will only be 1-2%. I am not even counting growth when I am preparing our financial plan and savings.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by Fallible »

whereskyle wrote: Wed Jun 10, 2020 1:56 pm After reading Jack Bogle's writings and subscribing to many of his views, I feel that I must identify as a stock-market "bull." The market goes up more than it goes down, et cetera. I wonder, though, if any Bogleheads consider themselves stock-market bears. Buying and holding index funds while feeling perpetually or frequently bearish seems (excuse the pun) unbearable. But I wonder if anyone sees themselves or the market that way. Sometimes, fear perpetuates the threads on this cite, so I wonder if there are any self-identifying Bogleheads who also self-identify as stock-market bears. If so, what enables you to stick to a Bogleheaded strategy?
Do you mean a permabear, where one tends to always be pessimistic about the market? Or those feeling bearish during crashes, pandemics, a recession, etc., but are optimistic (me) about the market overall? I think the fear we see on the forum now often reflects less a true bearish trait than having taken on too much risk.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by Chicken Little »

TheTimeLord wrote: Wed Jun 10, 2020 2:45 pmInteresting because this doesn't look like Bear behavior. Bought the market when it was down and you new AA has a larger allocation to stocks than you beginning of the year AA. How long will it take you to get down to 45/55 anyway?
I’m probably under 50/50 right now. Still have to address third account.

My allocation would definitely poll bearish around here, what with all the 100%ers and leverage players.

Buying major declines is easy, especially when they let you know the bottom is being put in. Bear has to eat too.

To recap: I knew virus was coming, I knew schools would close here (posted it in Feb), I knew bottom was likely set in March because they told me they were emptying the tool kit (imagine if that wasn’t enough?).

I don’t know what happens from here. I don’t know how big the next round of stimulus will be. There’s no yield anywhere. I’m bearish, but there’s risk with not having enough equity exposure now as well, especially if a new buyer emerges (who would object?).

Trying to find middle ground to wait it out.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by Blue456 »

whereskyle wrote: Wed Jun 10, 2020 1:56 pm After reading Jack Bogle's writings and subscribing to many of his views, I feel that I must identify as a stock-market "bull." The market goes up more than it goes down, et cetera. I wonder, though, if any Bogleheads consider themselves stock-market bears. Buying and holding index funds while feeling perpetually or frequently bearish seems (excuse the pun) unbearable. But I wonder if anyone sees themselves or the market that way. Sometimes, fear perpetuates the threads on this cite, so I wonder if there are any self-identifying Bogleheads who also self-identify as stock-market bears. If so, what enables you to stick to a Bogleheaded strategy?

Thanks, all!
I am a bear. I think that markets will eventually collapse and stay down for extended period of time. I do think that US economy will underperform international for a decade or more. I think that during my life time dollar will loose its status.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by bogledogle »

Can I be a bear riding a bull?

ie: I am a bear when I investable cash ready to go to buy at a discount, rest of the time I am pretty bullish and want my money to compound and grow :sharebeer
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by calqueuelater »

My wife says she frequently finds me unbearabull . . . :wink:
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by Normchad »

I’m an unabashed long term bull. I am absolutely convinced that human edge unity will continue to increase the size of the world wide global economic pie. And I’m getting a piece of all of that......

What happens in the short term? Things bounce up and down. Long term, it’s going to be up. The only long term DOWN scenarios I can imagine, are so horrendous, that it will not have mattered what I did. Ie is total economic collapse happens, I’m doomed anyway....
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by Trader Joe »

whereskyle wrote: Wed Jun 10, 2020 1:56 pm After reading Jack Bogle's writings and subscribing to many of his views, I feel that I must identify as a stock-market "bull." The market goes up more than it goes down, et cetera. I wonder, though, if any Bogleheads consider themselves stock-market bears. Buying and holding index funds while feeling perpetually or frequently bearish seems (excuse the pun) unbearable. But I wonder if anyone sees themselves or the market that way. Sometimes, fear perpetuates the threads on this cite, so I wonder if there are any self-identifying Bogleheads who also self-identify as stock-market bears. If so, what enables you to stick to a Bogleheaded strategy?

Thanks, all!
No, not at all. I always invest in United States equities (VFIAX/VTSAX) without fail and I am very happy with my investment returns.

And I stay the course.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by Horton »

Bull or bear doesn’t matter - I’m risk averse and my portfolio reflects that.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by tenkuky »

calqueuelater wrote: Wed Jun 10, 2020 4:57 pm My wife says she frequently finds me unbearabull . . . :wink:
:sharebeer
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by rascott »

KlangFool wrote: Wed Jun 10, 2020 2:12 pm OP,

I am 60/40. I make money in the bull market and I make money in the bear market. And, if the market oscillates sideways, I make money too. In summary, I do not care.

With diversification, there is always something to do well and something to do not as well or badly, I am always "Buy Low and Sell HIgh". I always make money.

KlangFool
In the last true bear market (2008)....a 60/40 portfolio lost 21% for the year, took nearly 3 years to get back above water... even with rebalancing bands. So no, you don't always make money.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by Independent George »

I'm definitely bearish in outlook, but behave like a bull (90/10 for the forseeable fugture).

Funny enough, back in Feb/March, that was the most bullish I've felt in ages - once we went past -20%, I actually felt relief because I'd been anticipating that for years, and it finally happened. I won't say it made me happy (because losing money never makes me happy), but I was mentally ready for it.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by goodenyou »

“For reasons I have never understood, people like to hear that the world is going to hell.”
-Deirdre McCloskey

“I have observed that not the man who hopes when others despair, but the man who despairs when others hope, is admired by a large class of persons as a sage.”
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#7 in the The Psychology of Money by Morgan Housel: The seduction of pessimism in a world where optimism is the most reasonable stance.
https://www.collaborativefund.com/blog/ ... -of-money/

The less I need to take risk, the more of a bear and a "market timer" I become. It's easy to hoard cash and pay a penalty for it when the consequences for doing so matter less.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by KlangFool »

rascott wrote: Wed Jun 10, 2020 6:21 pm
KlangFool wrote: Wed Jun 10, 2020 2:12 pm OP,

I am 60/40. I make money in the bull market and I make money in the bear market. And, if the market oscillates sideways, I make money too. In summary, I do not care.

With diversification, there is always something to do well and something to do not as well or badly, I am always "Buy Low and Sell HIgh". I always make money.

KlangFool
In the last true bear market (2008)....a 60/40 portfolio lost 21% for the year, took nearly 3 years to get back above water... even with rebalancing bands. So no, you don't always make money.
rascott,

Please complete the whole story. How long did it take for the 100/0 to recover? It is much longer than 60/40. So, 60/40 win that round too.

KlangFool
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by DesertDiva »

I propose another alternative: a tortoise.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by rascott »

KlangFool wrote: Wed Jun 10, 2020 6:36 pm
rascott wrote: Wed Jun 10, 2020 6:21 pm
KlangFool wrote: Wed Jun 10, 2020 2:12 pm OP,

I am 60/40. I make money in the bull market and I make money in the bear market. And, if the market oscillates sideways, I make money too. In summary, I do not care.

With diversification, there is always something to do well and something to do not as well or badly, I am always "Buy Low and Sell HIgh". I always make money.

KlangFool
In the last true bear market (2008)....a 60/40 portfolio lost 21% for the year, took nearly 3 years to get back above water... even with rebalancing bands. So no, you don't always make money.
rascott,

Please complete the whole story. How long did it take for the 100/0 to recover? It is much longer than 60/40. So, 60/40 win that round too.

KlangFool
Took 4 months longer than 60/40 to recover
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by KlangFool »

rascott wrote: Wed Jun 10, 2020 6:47 pm
KlangFool wrote: Wed Jun 10, 2020 6:36 pm
rascott wrote: Wed Jun 10, 2020 6:21 pm
KlangFool wrote: Wed Jun 10, 2020 2:12 pm OP,

I am 60/40. I make money in the bull market and I make money in the bear market. And, if the market oscillates sideways, I make money too. In summary, I do not care.

With diversification, there is always something to do well and something to do not as well or badly, I am always "Buy Low and Sell HIgh". I always make money.

KlangFool
In the last true bear market (2008)....a 60/40 portfolio lost 21% for the year, took nearly 3 years to get back above water... even with rebalancing bands. So no, you don't always make money.
rascott,

Please complete the whole story. How long did it take for the 100/0 to recover? It is much longer than 60/40. So, 60/40 win that round too.

KlangFool
Took 4 months longer than 60/40 to recover
So, 60/40 wins that round too.

KlangFool
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by whodidntante »

Not a bear. I have incredibly strong and enduring confidence in the ability of equity markets to assist in wealth building. I'll be right there buying with the rest of you because I think it's a good bet. However, I do not believe I am owed or have received any guarantees. It's not all cupcakes and puppies. It never has been. I can make a bear case with the best of them.

- Capital markets are a relatively recent invention, as is fiat currency. We should consider the possibility that these inventions will not endure.
- Growth is slow around the world, let's face it, likely negative right now or has been negative.
- There are unfavorable demographic trends, aging, less productive workforce.
- The middle class has been hollowed out, a few people with a lot and a lot of people with much less. At the same time, the extreme end of poverty seems to be getting better.
- Interest is something your daddy earned, but you may not.
- Central banks coming to the rescue and they've been at it for over a decade now. This probably leads to inefficient use of capital.
- Pockets of concern around the world. Does anyone want to guess how and when the Chinese real estate bubble will end and what the side effects will be? Place bets now.
- Lots of things can go spectacularly wrong in the world.

I'll take what I think are good risks. If the risks work out and I enjoy an abundance, I'll consider myself fortunate.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by Robot Monster »

whereskyle wrote: Wed Jun 10, 2020 2:35 pm
Chicken Little wrote: Wed Jun 10, 2020 2:14 pm I’m bearish because I know what it would look like if it wasn’t supported.
I'm bullish because I doubt the 100-year-old institution in charge of the money supply is going to stop supporting the markets.
They could very well stop supporting the markets if inflation starts heating up and it significantly breaches their 2% target, in which case they'd tighten, cutting off the easy money Wall Street is addicted to in a possibly very, very painful and brutal way.

Yes, inflation picking up in such a way perhaps has a very low chance of happening, and perhaps we should be worried about deflation more. Still...a high inflation scenario isn't impossible.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by JoMoney »

whereskyle wrote: Wed Jun 10, 2020 1:56 pm... what enables you to stick to a Bogleheaded strategy? ...
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by Call_Me_Op »

Agnostic here. No idea what will happen in the future and not particularly concerned as long as the very long-term trend is up.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by jhsu802701 »

I'm bearish on large cap US stocks but bullish on international stocks, especially Japan and emerging markets. Does that disqualify me from being a Boglehead?

I agree with parts of the Boglehead philosophy. What I disagree with is the idea that the risk and potential reward of any asset class is constant over time. International stocks are MUCH cheaper than US stocks.

An example of what I'm talking about is WisdomTree Emerging Markets Quality Dividend Growth Fund (DGRE) vs. WisdomTree U.S. Quality Dividend Growth Fund (DGRW). Both funds are from WisdomTree, and both specialize in dividend growth stocks, so I consider this to be an apples-to-apples comparison. The difference is that DGRE invests in emerging markets while DGRW invests in the US.

DGRE is selling for 1.7 times book value. DGRW is selling for 5 times book value. Thus, the emerging markets fund is 3 times cheaper than the comparable US fund. I regard DGRE as having lower risk AND a higher potential return than DGRW. But most people on this forum insist that DGRW has lower risk and a higher potential return.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by rich126 »

I don't really consider myself a BH so that is one thing. I think right now things are a mess although a bunch of people think things are back to normal (not sure what they are looking at) but there is no way the economy is in better shape now than it was before the virus. I'd expect a rocky and rough 6-12 months. Obviously if you are investing for decades that may not matter but if retirement is nearby I would be careful.

As someone else said, long term will be interesting due to the huge deficit, slowing population growth in many countries and many other issues I won't mention. Many cities are in a tough place financially because the pensions they offer are not realistic (i.e., work 20 years, retire and collect pension for 30-60 years) w/o significant population growth (basically a pyramid type scheme).

Of course since most people's retirement future is based on the stock market rising (other than social security or the minority with nice pensions) the options are limited.

Personally I'd expect 0 or negative interest rates for quite some time and I suppose that is helping the market a bit (a lot?) since people expect to make more in the market.
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mmmodem
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by mmmodem »

I am neither. I have absolutely no idea what the stock market will do. I have speculations on what the economy will look like. I am absolutely sure we are not done with the recession and the worst is yet to come. But the economy is not the market. The market makes no sense and will do whatever it pleases. It doesn't matter if interests rates go negative or unemployment rates go down. The market will do its own thing.

The strategy for me is not to be a bull and expect the market to go up vice versa. The strategy is to diversify my investments so that I make money no matter what the market does.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by tibbitts »

I don't know about the stock market direction so in that sense not, and have medium-conservative investments, but I'm pessimistic about life in general. If I had to guess I would say returns on every asset class will be low-to-non-existent for the rest of my lifetime. But zero returns wouldn't be my biggest disappointment; I think lots of other things will go wrong that will be worse.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by nigel_ht »

KlangFool wrote: Wed Jun 10, 2020 6:48 pm
rascott wrote: Wed Jun 10, 2020 6:47 pm
KlangFool wrote: Wed Jun 10, 2020 6:36 pm
rascott wrote: Wed Jun 10, 2020 6:21 pm
KlangFool wrote: Wed Jun 10, 2020 2:12 pm OP,

I am 60/40. I make money in the bull market and I make money in the bear market. And, if the market oscillates sideways, I make money too. In summary, I do not care.

With diversification, there is always something to do well and something to do not as well or badly, I am always "Buy Low and Sell HIgh". I always make money.

KlangFool
In the last true bear market (2008)....a 60/40 portfolio lost 21% for the year, took nearly 3 years to get back above water... even with rebalancing bands. So no, you don't always make money.
rascott,

Please complete the whole story. How long did it take for the 100/0 to recover? It is much longer than 60/40. So, 60/40 win that round too.

KlangFool
Took 4 months longer than 60/40 to recover
So, 60/40 wins that round too.

KlangFool
Not really. 100/0 made more money than you did overall. That it only took 4 months more to recover supports that AA doesn't matter as much in terms of recovery from bear markets. They do down further and faster but recover just as quick.

As long as you aren't withdrawing and you have enough time left before retirement the only real advantage 60/40 has over 100/0 is the ability to go to 100/0 when stock prices crash...
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by KlangFool »

nigel_ht wrote: Thu Jun 11, 2020 12:17 pm
KlangFool wrote: Wed Jun 10, 2020 6:48 pm
rascott wrote: Wed Jun 10, 2020 6:47 pm
KlangFool wrote: Wed Jun 10, 2020 6:36 pm
rascott wrote: Wed Jun 10, 2020 6:21 pm

In the last true bear market (2008)....a 60/40 portfolio lost 21% for the year, took nearly 3 years to get back above water... even with rebalancing bands. So no, you don't always make money.
rascott,

Please complete the whole story. How long did it take for the 100/0 to recover? It is much longer than 60/40. So, 60/40 win that round too.

KlangFool
Took 4 months longer than 60/40 to recover
So, 60/40 wins that round too.

KlangFool
Not really. 100/0 made more money than you did overall. That it only took 4 months more to recover supports that AA doesn't matter as much in terms of recovery from bear markets. They do down further and faster but recover just as quick.

As long as you aren't withdrawing and you have enough time left before retirement the only real advantage 60/40 has over 100/0 is the ability to go to 100/0 when stock prices crash...
nigel_ht,

<<Not really. 100/0 made more money than you did overall. >>

If you want to make that claim, please tell us the difference. It is not as significant as you think.

<<As long as you aren't withdrawing>>

Which is not guaranteed since we have no job security. By the way, I was unemployed for more than 1 year in that stretch of time.

<<you have enough time left before retirement>>

And, nobody knows that too. Many of my peers are forced into permanent unemployment and under-employment in their 40s and 50s.

KlangFool
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by nigel_ht »

KlangFool wrote: Thu Jun 11, 2020 12:42 pm
nigel_ht wrote: Thu Jun 11, 2020 12:17 pm
KlangFool wrote: Wed Jun 10, 2020 6:48 pm
rascott wrote: Wed Jun 10, 2020 6:47 pm
KlangFool wrote: Wed Jun 10, 2020 6:36 pm

rascott,

Please complete the whole story. How long did it take for the 100/0 to recover? It is much longer than 60/40. So, 60/40 win that round too.

KlangFool
Took 4 months longer than 60/40 to recover
So, 60/40 wins that round too.

KlangFool
Not really. 100/0 made more money than you did overall. That it only took 4 months more to recover supports that AA doesn't matter as much in terms of recovery from bear markets. They do down further and faster but recover just as quick.

As long as you aren't withdrawing and you have enough time left before retirement the only real advantage 60/40 has over 100/0 is the ability to go to 100/0 when stock prices crash...
nigel_ht,

<<Not really. 100/0 made more money than you did overall. >>

If you want to make that claim, please tell us the difference. It is not as significant as you think.

<<As long as you aren't withdrawing>>

Which is not guaranteed since we have no job security. By the way, I was unemployed for more than 1 year in that stretch of time.

<<you have enough time left before retirement>>

And, nobody knows that too. Many of my peers are forced into permanent unemployment and under-employment in their 40s and 50s.

KlangFool
Jan 2010- Dec 2019

https://www.portfoliovisualizer.com/bac ... tion2_2=40

Jan 2008- May 2020

https://www.portfoliovisualizer.com/bac ... tion2_2=40

Is 100/0 more risky than 60/40? After both 2008/2009 and March 2020 drops I'd say if you have the time horizon probably not very.

Can you lose your job, burn through your EF and need to withdraw money from your portfolio during the accumulation phase? Yes.

But this is 100/0 starting with 900K in the market in 2008:

https://www.portfoliovisualizer.com/bac ... ation2_1=0

$1M 60/40 ended with $3.5M
$900K 100/0 ended with $3.8M

Of course, we had two V shaped recoveries after these larger drops and the jury is still out for 2020.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by abuss368 »

Ferdinand2014 wrote: Wed Jun 10, 2020 2:49 pm I am always optimistic. I am a bull. I wouldn’t own stocks otherwise.

“I am an optimist. It does not seem too much use being anything else.“

Winston Churchill
Well said. That is why I am always buying stocks too!
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by abuss368 »

I remember in our stock picking days thinking I was a bear by buying SDS. A two oe three times inverse stock!
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by wolf359 »

whereskyle wrote: Wed Jun 10, 2020 1:56 pm After reading Jack Bogle's writings and subscribing to many of his views, I feel that I must identify as a stock-market "bull." The market goes up more than it goes down, et cetera. I wonder, though, if any Bogleheads consider themselves stock-market bears. Buying and holding index funds while feeling perpetually or frequently bearish seems (excuse the pun) unbearable. But I wonder if anyone sees themselves or the market that way. Sometimes, fear perpetuates the threads on this cite, so I wonder if there are any self-identifying Bogleheads who also self-identify as stock-market bears. If so, what enables you to stick to a Bogleheaded strategy?

Thanks, all!
That's funny. After reading Jack Bogle's writings, I also believe that markets will eventually recover and go up. I also know that the market can potentially and unexpectedly collapse at any time. I therefore find it easy to buy when the markets are down, and keep myself mentally prepared for a bear market. However, most of the time, the markets are hitting all time highs. I find it much harder to keep throwing in dollar after dollar into a climbing market. During the recent market recovery, I found it very difficult to stick to my plan and regularly buy when I knew that underlying market conditions were so terrible.

I'm always fearful that I've put too much money in at the top, and not enough when it's dropped.

I overcome this fear by automating my purchases. If I don't, I second-guess my contributions and end up market timing. But I still feel better when I'm buying low than when I'm buying high. Because I'm more comfortable in bear markets than in bulls, I may be a bear.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by TheDDC »

This topic is nonsensical. If one were a bear (in the perpetual sense), why would one invest?

We realists/bulls invest because long term we know that the top 500 growth/growth+income companies are generally going to be profitable over 10+ year periods.

If I were a bear then I would be crying in my beer while I watch my savings get eroded by steady inflation over longer periods of time.

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Rules to wealth building: 90-100% VTSAX piled high and deep, 0-10% VIGAX tilt, 0% given away to banks, minimize amount given to medical-industrial complex
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by Ged »

Not either. I don't consider these categories useful.

The question for me is does the Boglehead methodology work. Can I predict when something else is a better approach?

Answers so far are yes and don't know.
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Re: Do Any Bogleheads Consider Themselves Bears?

Post by YRT70 »

rascott wrote: Wed Jun 10, 2020 6:21 pm
KlangFool wrote: Wed Jun 10, 2020 2:12 pm OP,

I am 60/40. I make money in the bull market and I make money in the bear market. And, if the market oscillates sideways, I make money too. In summary, I do not care.

With diversification, there is always something to do well and something to do not as well or badly, I am always "Buy Low and Sell HIgh". I always make money.

KlangFool
In the last true bear market (2008)....a 60/40 portfolio lost 21% for the year, took nearly 3 years to get back above water... even with rebalancing bands. So no, you don't always make money.
If I remember correctly Early Retirement Now did an article about this. He said the recovery took much longer than 3 years if you take inflation into account. I don't have the link at hand.
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