Carry on or Take your toys and go home ?

[skor99]

Nasdaq at all time highs by far, S&P within 2% of all time highs, but COVID also at all time highs and growing... something has to give is the feeling that I get and I am sure a lot of people are feeling that.
If you have come close or crossed your previous portfolio high and/or reached or are close to your ‘number’, do you take your toys and go home ? Or atleast get super conservative 80-20 in cash/bonds vs stocks ?

[sailaway]

Carry on.

[anon_investor]

Carry on.

+1.

[livesoft]

I learned that I could lose a million dollars and get it all back, so no need to stop playing. Carry on.

[7eight9]

If you have won the game why not pick your ball and go home?

I remember one night years ago when Bobby was running the dice pit. It was a slow weekday and only one table was still open. Around 1:00am the table was ahead six figures. So what did Bobby do? He closed the game and sent the crew home. There was no way that he was going to risk giving back a six figure win.

It is good to quit a winner.

[ChiKid24]

The long-term annual growth rate of the S&P 500 is positive. That means it is not uncommon to be at or near "all time highs". Looking back at the last 7 years, here is the number of times the S&P hit an all time high in each of those years:

2013: 45 times
2014: 52
2015: 10
2016: 18
2017: 62
2018: 19
2019: 34

If you sold when we hit an all-time high in 2013, you would have missed out on 123% growth.
If you sold when we hit an all-time high in 2014, you would have missed out on 80% growth.
Even if you sold when it broke 3,000 in July 2019 or again this past May, you would have missed out on 12% growth.

Are you telling me "this time it's different"?

[Sandtrap]

Ignore financial news, media frenzy, aura of chaos, and public anxiety.
Stick to your IPS.

j

[Silverado]

Nasdaq at all time highs by far, S&P within 2% of all time highs, but COVID also at all time highs and growing... something has to give is the feeling that I get and I am sure a lot of people are feeling that.
If you have come close or crossed your previous portfolio high and/or reached or are close to your ‘number’, do you take your toys and go home ? Or atleast get super conservative 80-20 in cash/bonds vs stocks ?

Same as I did in February, carry on. Same as I’ll do next disaster.

[7eight9]

Imagine the Japanese investor in December 1989.

Those who took their toys home are still patting themselves on the back three decades later.

Markets don't always go up.

Sometimes they go down and stay down for decades.

[fatcoffeedrinker]

Imagine the Japanese investor in December 1989.

Those who took their toys home are still patting themselves on the back three decades later.

Markets don't always go up.

Sometimes they go down and stay down for decades.

[Yawn] When will people realize we aren't Japan? And certainly nowhere near where Japan was in 1989.

[skor99]

Ignore financial news, media frenzy, aura of chaos, and public anxiety.
Stick to your IPS.

j

I try very hard and feel that I am pretty successful at ignoring all the talking heads on TV, but how do you ignore the facts of rising dysfunction in Washington , rising Covid, ever rising debt and now even the aura of the almighty US dollar starting to dim as a reserve currency ( which is probably the main reason for US superpower status ) ? Couldn’t all this be a reason of a long term decline like Japan after the 1980s ?

[skor99]

Imagine the Japanese investor in December 1989.

Those who took their toys home are still patting themselves on the back three decades later.

Markets don't always go up.

Sometimes they go down and stay down for decades.

[Yawn] When will people realize we aren't Japan? And certainly nowhere near where Japan was in 1989.

Can you please provide your reasoning for that ?

[fatcoffeedrinker]

Ignore financial news, media frenzy, aura of chaos, and public anxiety.
Stick to your IPS.

j

I try very hard and feel that I am pretty successful at ignoring all the talking heads on TV, but how do you ignore the facts of rising dysfunction in Washington , rising Covid, ever rising debt and now even the aura of the almighty US dollar starting to dim as a reserve currency ( which is probably the main reason for US superpower status ) ? Couldn’t all this be a reason of a long term decline like Japan after the 1980s ?

I think you have cause and effect between reserve currency and superpower status backward.

[000]

Consider limiting a "tactical trim" to 10-20%.

Also consider that USD may not be a great store of value either.

[Silverado]

Ignore financial news, media frenzy, aura of chaos, and public anxiety.
Stick to your IPS.

j

I try very hard and feel that I am pretty successful at ignoring all the talking heads on TV, but how do you ignore the facts of rising dysfunction in Washington , rising Covid, ever rising debt and now even the aura of the almighty US dollar starting to dim as a reserve currency ( which is probably the main reason for US superpower status ) ? Couldn’t all this be a reason of a long term decline like Japan after the 1980s ?

Could be. Could also not be. There’s a lot of rich people in Japan, and there will be a lot of rich people here. I could buy stocks for twenty more years as they decline. Bought at the top before, bought at the bottom before. All feels the same to me.

[jebmke]

I’m home already.

[Silverado]

I’m home already.

I could tell because you weren’t wearing a mask.

[fatcoffeedrinker]

Imagine the Japanese investor in December 1989.

Those who took their toys home are still patting themselves on the back three decades later.

Markets don't always go up.

Sometimes they go down and stay down for decades.

[Yawn] When will people realize we aren't Japan? And certainly nowhere near where Japan was in 1989.

Can you please provide your reasoning for that ?

Demographics and valuation. Our population is still growing due to continued net immigration. Japan's fall in population is accelerating. And the CAPE10 for Japan in 1989 was around 90. The US CAPE10 right now is around 30.

[flyingcows]

Nasdaq at all time highs by far, S&P within 2% of all time highs, but COVID also at all time highs and growing... something has to give is the feeling that I get and I am sure a lot of people are feeling that.
If you have come close or crossed your previous portfolio high and/or reached or are close to your ‘number’, do you take your toys and go home ? Or atleast get super conservative 80-20 in cash/bonds vs stocks ?

All assets are going up, not just stocks, silver is up 50% in the past 3 weeks.

[jarjarM]

With all the liquidity injection by the Fed and ballon M2 supply, maybe one should be more worry about inflation, which means CASH/BOND is not good holdings.

[skor99]

With all the liquidity injection by the Fed and ballon M2 supply, maybe one should be more worry about inflation, which means CASH/BOND is not good holdings.

This is one reason for my hesitation in taking the toys home. Bonds/cash don’t look to be particularly good alternatives.

[TheTimeLord]

With all the liquidity injection by the Fed and ballon M2 supply, maybe one should be more worry about inflation, which means CASH/BOND is not good holdings.

This is one reason for my hesitation in taking the toys home. Bonds/cash don’t look to be particularly good alternatives.

So what do you think the odds are of this nightmare scenario of yours occurring in the next 2, 5 or 10 years?

[jarjarM]

With all the liquidity injection by the Fed and ballon M2 supply, maybe one should be more worry about inflation, which means CASH/BOND is not good holdings.

This is one reason for my hesitation in taking the toys home. Bonds/cash don’t look to be particularly good alternatives.

So what do you think the odds are of this nightmare scenario of yours occurring in the next 2, 5 or 10 years?

As usual, no one knows, but looking at gold/silver/bitcoin run up, I bet not a small minority of investors are concern about this and putting money into things that they believe are inflation resistant. I personally aren't betting on high inflation within the next year or two, at least not til money velocity goes up significantly. So I will do the KlangFool method, hold some amount of gold for getting out of the country dooms day scenario and invest the rest according to my IPS

[skor99]

With all the liquidity injection by the Fed and ballon M2 supply, maybe one should be more worry about inflation, which means CASH/BOND is not good holdings.

This is one reason for my hesitation in taking the toys home. Bonds/cash don’t look to be particularly good alternatives.

So what do you think the odds are of this nightmare scenario of yours occurring in the next 2, 5 or 10 years?

Wouldn’t I be the richest boglehead if I knew that ?

[CyclingDuo]

Nasdaq at all time highs by far, S&P within 2% of all time highs, but COVID also at all time highs and growing... something has to give is the feeling that I get and I am sure a lot of people are feeling that.
If you have come close or crossed your previous portfolio high and/or reached or are close to your ‘number’, do you take your toys and go home ? Or atleast get super conservative 80-20 in cash/bonds vs stocks ?

Good things coming to the stock market over the next few years.

Follow along every week here...

https://www.youtube.com/watch?v=QTs4HxUb_Zc

[TheTimeLord]

With all the liquidity injection by the Fed and ballon M2 supply, maybe one should be more worry about inflation, which means CASH/BOND is not good holdings.

This is one reason for my hesitation in taking the toys home. Bonds/cash don’t look to be particularly good alternatives.

So what do you think the odds are of this nightmare scenario of yours occurring in the next 2, 5 or 10 years?

Wouldn’t I be the richest boglehead if I knew that ?
No, the odds of something occurring and what actually occurs are different.

So you are going to make a major change in your AA without any belief in how likely it is that the scenario you are protecting against might occur.

[skor99]

With all the liquidity injection by the Fed and ballon M2 supply, maybe one should be more worry about inflation, which means CASH/BOND is not good holdings.

This is one reason for my hesitation in taking the toys home. Bonds/cash don’t look to be particularly good alternatives.

So what do you think the odds are of this nightmare scenario of yours occurring in the next 2, 5 or 10 years?

Wouldn’t I be the richest boglehead if I knew that ?
No, the odds of something occurring and what actually occurs are different.

So you are going to make a major change in your AA without any belief in how likely it is that the scenario you are protecting against might occur.

I never said I am going to. The whole point of this thread is try to understand what to make of the seemingly contradictory stockMarket and the big problems with the real economy.

[Sandtrap]

Ignore financial news, media frenzy, aura of chaos, and public anxiety.
Stick to your IPS.

j

I try very hard and feel that I am pretty successful at ignoring all the talking heads on TV, but how do you ignore the facts of rising dysfunction in Washington , rising Covid, ever rising debt and now even the aura of the almighty US dollar starting to dim as a reserve currency ( which is probably the main reason for US superpower status ) ? Couldn’t all this be a reason of a long term decline like Japan after the 1980s ?

My mom was a classic poverty to wealth, on her own labors and efforts, life story. She passed away at 97.
She worked for many years as a bank auditor and befriended all the "rich people", and heard all the back and front room banker and finance conversations and gossip. She was poor and struggled to dress nice and be of best service and learn. Her mentors were glad to teach her.

She once said, "invest in Gerber Baby Food and diapers because the world will always be having more babies." It was a sort of metaphor told to her by a retired banker and wealthy financier, also a rags to riches story.

The idea of this is to separate domestic and various local events, conditions, fluctuations, and look at the larger growth of the world population as it's own "global all inclusive economy". And, look at it in the overall trend of growth.
This is far larger than the "market", "the economy per se", and so forth.

So, it doesn't matter if the chickens are arguing or not getting along, the overall trend in a large chicken egg farm is that there are always eggs being laid and more chickens (from fertile eggs) as well, thus more and more eggs.

As for taking one's toys and going home. That's not possible. Nobody's leaving the pool.

j

[000]

OP, where is "home"? Cash and bonds have inflation risk. Gold has had a lot of price appreciation recently. Commodities are "gross".

I guess value stocks (including international) are an option. But is there any reason to believe they are anything but fairly valued?

[RiotAct]

I guess I’ll carry on...... but I have 30 years until retirement still

[GoldenFinch]

If you have won the game why not pick your ball and go home?

I remember one night years ago when Bobby was running the dice pit. It was a slow weekday and only one table was still open. Around 1:00am the table was ahead six figures. So what did Bobby do? He closed the game and sent the crew home. There was no way that he was going to risk giving back a six figure win.

It is good to quit a winner.

But Bobby was gambling. People here are investing. So it’s not the same. At least, that’s what I like to think.

[grettman]

Ignore financial news, media frenzy, aura of chaos, and public anxiety.
Stick to your IPS.

j

I try very hard and feel that I am pretty successful at ignoring all the talking heads on TV, but how do you ignore the facts of rising dysfunction in Washington , rising Covid, ever rising debt and now even the aura of the almighty US dollar starting to dim as a reserve currency ( which is probably the main reason for US superpower status ) ? Couldn’t all this be a reason of a long term decline like Japan after the 1980s ?

My mom was a classic poverty to wealth, on her own labors and efforts, life story. She passed away at 97.
She worked for many years as a bank auditor and befriended all the "rich people", and heard all the back and front room banker and finance conversations and gossip. She was poor and struggled to dress nice and be of best service and learn. Her mentors were glad to teach her.

She once said, "invest in Gerber Baby Food and diapers because the world will always be having more babies." It was a sort of metaphor told to her by a retired banker and wealthy financier, also a rags to riches story.

The idea of this is to separate domestic and various local events, conditions, fluctuations, and look at the larger growth of the world population as it's own "global all inclusive economy". And, look at it in the overall trend of growth.
This is far larger than the "market", "the economy per se", and so forth.

So, it doesn't matter if the chickens are arguing or not getting along, the overall trend in a large chicken egg farm is that there are always eggs being laid and more chickens (from fertile eggs) as well, thus more and more eggs.

As for taking one's toys and going home. That's not possible. Nobody's leaving the pool.

j

Agreed. Besides, the pool has been nice for me over the last couple of decades or so. Yeah... sometimes someone leaves a Baby Ruth in the water but it turns out okay..

[skor99]

OP, where is "home"? Cash and bonds have inflation risk. Gold has had a lot of price appreciation recently. Commodities are "gross".

I guess value stocks (including international) are an option. But is there any reason to believe they are anything but fairly valued?

I have never invested in TIPS, but think that provides inflation protection with a small fixed rate of return ? Does that make sense in these times ?

[arcticpineapplecorp.]

This is one reason for my hesitation in taking the toys home. Bonds/cash don’t look to be particularly good alternatives.

So what do you think the odds are of this nightmare scenario of yours occurring in the next 2, 5 or 10 years?

Wouldn’t I be the richest boglehead if I knew that ?
No, the odds of something occurring and what actually occurs are different.

So you are going to make a major change in your AA without any belief in how likely it is that the scenario you are protecting against might occur.

I never said I am going to. The whole point of this thread is try to understand what to make of the seemingly contradictory stockMarket and the big problems with the real economy.

oh, well why didn't you just ask a question like, "How come the stock market is so disconnected from the economy?"

that's been asked so many times since February I can't count them all. But you can read all of them here:

https://www.google.com/search?client=fi ... bogleheads

in the meantime, there's always fear in the markets. look at all the times the "experts" were warning about markets falling...and then what happened after that:

[000]

OP, where is "home"? Cash and bonds have inflation risk. Gold has had a lot of price appreciation recently. Commodities are "gross".

I guess value stocks (including international) are an option. But is there any reason to believe they are anything but fairly valued?

I have never invested in TIPS, but think that provides inflation protection with a small fixed rate of return ? Does that make sense in these times ?

TIPS real yields are currently negative. So you get a guaranteed (by the government) return, but it is not a positive return. Maybe guaranteeing a slight loss is better than risking a bigger one? Depends on your situation/perspective.

Series I bonds are an option, but you can only buy a limited amount per year.

[UpperNwGuy]

Carry on. And stop consuming whatever news media has prompted you to want to take your toys and go home.

[skor99]

OP, where is "home"? Cash and bonds have inflation risk. Gold has had a lot of price appreciation recently. Commodities are "gross".

I guess value stocks (including international) are an option. But is there any reason to believe they are anything but fairly valued?

I have never invested in TIPS, but think that provides inflation protection with a small fixed rate of return ? Does that make sense in these times ?

TIPS real yields are currently negative. So you get a guaranteed (by the government) return, but it is not a positive return. Maybe guaranteeing a slight loss is better than risking a bigger one? Depends on your situation/perspective.

Series I bonds are an option, but you can only buy a limited amount per year.

Maybe I don’t understand, but why is the div yield showing as 1.58% on yahoo finance or cnbc for VTIP ( vanguard short term inflation protected securities )

[000]

OP, where is "home"? Cash and bonds have inflation risk. Gold has had a lot of price appreciation recently. Commodities are "gross".

I guess value stocks (including international) are an option. But is there any reason to believe they are anything but fairly valued?

I have never invested in TIPS, but think that provides inflation protection with a small fixed rate of return ? Does that make sense in these times ?

TIPS real yields are currently negative. So you get a guaranteed (by the government) return, but it is not a positive return. Maybe guaranteeing a slight loss is better than risking a bigger one? Depends on your situation/perspective.

Series I bonds are an option, but you can only buy a limited amount per year.

Maybe I don’t understand, but why is the div yield showing as 1.58% on yahoo finance or cnbc for VTIP ( vanguard short term inflation protected securities )

That is a nominal yield.

[skor99]

Carry on. And stop consuming whatever news media has prompted you to want to take your toys and go home.

As I already said, prompted not by media but by facts all around us.

[000]

OP, where is "home"? Cash and bonds have inflation risk. Gold has had a lot of price appreciation recently. Commodities are "gross".

I guess value stocks (including international) are an option. But is there any reason to believe they are anything but fairly valued?

I have never invested in TIPS, but think that provides inflation protection with a small fixed rate of return ? Does that make sense in these times ?

TIPS real yields are currently negative. So you get a guaranteed (by the government) return, but it is not a positive return. Maybe guaranteeing a slight loss is better than risking a bigger one? Depends on your situation/perspective.

Series I bonds are an option, but you can only buy a limited amount per year.

Maybe I don’t understand, but why is the div yield showing as 1.58% on yahoo finance or cnbc for VTIP ( vanguard short term inflation protected securities )

That is a nominal yield.

See: tipswatch article about negative real yield

[7eight9]

If you have won the game why not pick your ball and go home?

I remember one night years ago when Bobby was running the dice pit. It was a slow weekday and only one table was still open. Around 1:00am the table was ahead six figures. So what did Bobby do? He closed the game and sent the crew home. There was no way that he was going to risk giving back a six figure win.

It is good to quit a winner.

But Bobby was gambling. People here are investing. So it’s not the same. At least, that’s what I like to think.

Bobby wasn't gambling. Bobby was the casino. He had the edge. And he still opted to quit winners.

[LittleGreenSoldiers]

"Carry on"= Stay the course. I personally rebalanced this week per my IPS. My IPS always keeps me on course when I think I need to ask a question..
So I say "Carry on"!

[retire2022]

Op

On Monday I sold about 11% of my portfolio from VSEQX, this was in my Roth IRA since 1995, a little sad. I went from 93/7 to 79.5/6.6/13

I'm 60 years old, my portfolio was 1.833 million on Feb 21, now my portfolio is 1.875 million, and expect to retire Dec 2020.

[skor99]

I admire your guts to be 93/7 at age 60. How did you handle the fall from 1.8 MM to 1.2 MM in March ?

[Dottie57]

I find it hard to look at the news and believe all will be well in the next in the next 10 years. I have changed my allocation to a conservative amount of stocks. But I’ve learned the lesson well - my parents had all bonds and mom worried about running out of money. She saw her totals going down a lot - saving grace was thatthey were purchased in 1990’s.

Playing a smaller game fits me best.

[software]

If you have won the game why not pick your ball and go home?

I remember one night years ago when Bobby was running the dice pit. It was a slow weekday and only one table was still open. Around 1:00am the table was ahead six figures. So what did Bobby do? He closed the game and sent the crew home. There was no way that he was going to risk giving back a six figure win.

It is good to quit a winner.

But Bobby was gambling. People here are investing. So it’s not the same. At least, that’s what I like to think.

Bobby wasn't gambling. Bobby was the casino. He had the edge. And he still opted to quit winners.

So does Bobby no longer fundamentally believe in the profitability of dice pits? Does Bobby not plan on re-opening his dice pit the next day or the next week? Why is his six figure loss any more likely to happen the night he closed rather than the next time he reopens.

Hopefully you see where these questions are going, market timing is a fool’s errand.

[Jack FFR1846]

Market all time highs only happen once every 2 lifetimes (of a mosquito). If you run around with your hair on fire every time the market hits a new high, people are going to be annoyed enough to call security on you.

[TechGuy365]

Imagine the Japanese investor in December 1989.

Those who took their toys home are still patting themselves on the back three decades later.

Markets don't always go up.

Sometimes they go down and stay down for decades.

This is only academic and statistic, with no real-life impact. IF this were to happen in the US (BIG IF, I would say impossible) people would be investing elsewhere and not stay in a down market for 30 years like a sitting duck. You will need to find a 30-year period where the US AND global stocks AND bonds AND real estate AND every other asset being down - all at the same time.

Most of us aren't doomsday preppers in real life with underground bunkers, thus we don't invest like one.

[onourway]

If your intention is to spend it all today or this week, then yes, cash out now.

Since I hope to rely on my investments for the next 50 years, I'm not changing anything based on today's news.

[260chrisb]

My plan is to carry on and not take any more of my toys home than planned previously. I sold and protected my first two years of retirement in December of last year and planned to do the same for my third year at the end of this year and the end of next for year four provided the markets are up. Selling now to protect my third year would be the same as having done it for three years at the end of 2019 since the markets are about even for the year or getting close. I'm going to likely consider it at the end of the month but will likely hold off until the end of the year.