overwhelming negativity

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muck53
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overwhelming negativity

Post by muck53 »

It is striking today - the overwhelming negativity.

This forum is openingly wondering the worst - 1974 market time to recovery in years, S&P 700 or below, even wondering at possible developed country bankruptcies.

CNBC appears to have given up all hope, along with their guests.

Fast money - all 4 gloomy.

I get it, the technicians think their market magic says it will break lower 15-20% ... Perhaps it will.

Perhaps, this is the max negative sentiment? I guess, I must be a contrarian. I think if it were to break lower, it would have already done it - it is striking to me that it hasn't yet. Perhaps it is only short term traders left to sell, and everyone else is in the camp - hold these things forever? The market can't keep going down, if it has run out of sellers. I am not selling, are you?

Did you see what happened when the DOW touched it's November Intraday low, mid day today? It bounced of. The orders set to trigger on that index point, were buy orders - not sell orders.

I think the DOW has lost it's relavence - too many companies in its small index of 30, heading to zero. Both the S&P and Nasdaq are holding up better.

My equity allocation is small, at 25% and I am topped off - there is nothing I would sell, even if I were to know for sure it's going down another 50% .... hmm, perhaps more evidence there are no more long term investors with anything to sell?

I stand ready to fill-er-up, should the market do some sort of spectacular crash ... otherwise

Hey, this is a future investment - minimum 20 year horizon.

The sun will come up tomorrow. In fact, a herd of 25 Elk came cruising though this afternoon.

I wish only good things for you and your own.
muck53
Derek Tinnin
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Re: overwhelming negativity

Post by Derek Tinnin »

muck53 wrote:I stand ready to fill-er-up, should the market do some sort of spectacular crash ...
Like this?

http://finance.yahoo.com/q/bc?s=%5EGSPC&t=5y
PatrickS
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Post by PatrickS »

Perhaps we're in a doom & gloom bubble?
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White Coat Investor
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Re: overwhelming negativity

Post by White Coat Investor »

muck53 wrote: there is nothing I would sell, even if I were to know for sure it's going down another 50% ....
Have you lost your sense of logic?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
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speedbump101
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Re: overwhelming negativity

Post by speedbump101 »

muck53 wrote:It is striking today - the overwhelming negativity.

This forum is openingly wondering the worst - 1974 market time to recovery in years, S&P 700 or below, even wondering at possible developed country bankruptcies.

CNBC appears to have given up all hope, along with their guests.

Fast money - all 4 gloomy.

I get it, the technicians think their market magic says it will break lower 15-20% ... Perhaps it will.

Perhaps, this is the max negative sentiment? I guess, I must be a contrarian. I think if it were to break lower, it would have already done it - it is striking to me that it hasn't yet. Perhaps it is only short term traders left to sell, and everyone else is in the camp - hold these things forever? The market can't keep going down, if it has run out of sellers. I am not selling, are you?

Did you see what happened when the DOW touched it's November Intraday low, mid day today? It bounced of. The orders set to trigger on that index point, were buy orders - not sell orders.

I think the DOW has lost it's relavence - too many companies in its small index of 30, heading to zero. Both the S&P and Nasdaq are holding up better.

My equity allocation is small, at 25% and I am topped off - there is nothing I would sell, even if I were to know for sure it's going down another 50% .... hmm, perhaps more evidence there are no more long term investors with anything to sell?

I stand ready to fill-er-up, should the market do some sort of spectacular crash ... otherwise

Hey, this is a future investment - minimum 20 year horizon.

The sun will come up tomorrow. In fact, a herd of 25 Elk came cruising though this afternoon.

I wish only good things for you and your own.
muck53
I'm with you here...

It really amazes me how worked up people get on this forum about day to day swings of the market... especially in light of the fact that we call ourselves 'Bogleheads'... and generally follow Mr. Bogle's approach to investing. Anyone here who doesn't know what that means needs to do some reading... get ye to the wiki

In a recent poll a substantial majority of folk suggested they had an IPS (investment policy statement)... so did the move today trigger an IPS event? I sincerely doubt it... If not, what’s with all the short term 'speculation' when we like to refer to ourselves as long term 'investors?' I seem to be missing something... caveat, this seems to be a fairly normal occurrence these days though.

Now back to being retired!!!

SB...
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Post by White Coat Investor »

It was about this negative back in November. Incidentally, the S&P 500 hasn't yet returned to its Nov 20th low. As far as I'm concerned, we're still in the bull market that started that day! This is just an intra-bullll correction. :)
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
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Kenster1
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Post by Kenster1 »

Well, for a growing number of people out there --- the market rebound won't help their retirement fund much if they've had to raid it to support themselves after a year out of work.
:roll:
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unclemick
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Re: overwhelming negativity

Post by unclemick »

speedbump101 wrote:
muck53 wrote:It is striking today - the overwhelming negativity.

This forum is openingly wondering the worst - 1974 market time to recovery in years, S&P 700 or below, even wondering at possible developed country bankruptcies.

CNBC appears to have given up all hope, along with their guests.

Fast money - all 4 gloomy.

I get it, the technicians think their market magic says it will break lower 15-20% ... Perhaps it will.

Perhaps, this is the max negative sentiment? I guess, I must be a contrarian. I think if it were to break lower, it would have already done it - it is striking to me that it hasn't yet. Perhaps it is only short term traders left to sell, and everyone else is in the camp - hold these things forever? The market can't keep going down, if it has run out of sellers. I am not selling, are you?

Did you see what happened when the DOW touched it's November Intraday low, mid day today? It bounced of. The orders set to trigger on that index point, were buy orders - not sell orders.

I think the DOW has lost it's relavence - too many companies in its small index of 30, heading to zero. Both the S&P and Nasdaq are holding up better.

My equity allocation is small, at 25% and I am topped off - there is nothing I would sell, even if I were to know for sure it's going down another 50% .... hmm, perhaps more evidence there are no more long term investors with anything to sell?

I stand ready to fill-er-up, should the market do some sort of spectacular crash ... otherwise

Hey, this is a future investment - minimum 20 year horizon.

The sun will come up tomorrow. In fact, a herd of 25 Elk came cruising though this afternoon.

I wish only good things for you and your own.
muck53
I'm with you here...

It really amazes me how worked up people get on this forum about day to day swings of the market... especially in light of the fact that we call ourselves 'Bogleheads'... and generally follow Mr. Bogle's approach to investing. Anyone here who doesn't know what that means needs to do some reading... get ye to the wiki

In a recent poll a substantial majority of folk suggested they had an IPS (investment policy statement)... so did the move today trigger an IPS event? I sincerely doubt it... If not, what’s with all the short term 'speculation' when we like to refer to ourselves as long term 'investors?' I seem to be missing something... caveat, this seems to be a fairly normal occurrence these days though.

Now back to being retired!!!

SB...
Hormones! It's not football season. March Madness isn't here yet.

Full auto Target Retirement with auto deduct to Prime MM each year. 16th year of retirement.

:wink: Pontification is fun. Ah er well given the current unpleasantness - maybe just semi-fun. :roll: :lol: :lol: :lol:

heh heh heh - 8)
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Post by grumel »

PatrickS wrote:Perhaps we're in a doom & gloom bubble?
Forum discussions and media reports definitly exagerate a lot in both directions. I wished that would also be true for the market, would be easy to get rich.
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Post by cloudeleven »

I think a lot of it has to do with the fact that in America we tie up a very large amount of our national pride in the stock market. Everyone watches the daily movements of the market, and when it goes down, our national pride takes a bit of a hit, and it hurts. When it goes up, everyone feels like we rule the world (well, we still rule the world even with the market way down, but anyway, the point still stands.)
Cheers, | cloudeleven
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Post by baw703916 »

Equities are Not Dead Yet! (Monty Python's interpretation)

Best wishes,
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Post by Fear and Loathing »

They are merely cooking the frog.

I am finding every one in the media overly optimistic. The American Dream is just that - a dream. Only idiots chase dreams - they need to face reality.
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muck53
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Re: overwhelming negativity

Post by muck53 »

EmergDoc wrote:
muck53 wrote: there is nothing I would sell, even if I were to know for sure it's going down another 50% ....
Have you lost your sense of logic?
No, I haven't. I spent most of 2008 getting out of the way of this train wreck. 25% in equities is pretty darn small, considering I am decades away from age 75. No reasonable investment plan would have me any smaller in equities. Anything that needed selling is already sold.

And that's my point - are there any long term investors left to panic? We have already panic'd. I speculate, the only remining sellers are the traders (though they might have vast holdings to sell). The remainder of us - long term investors, 401(k) holders, pension plans ...haven't we all ready sold? I guess not the folks that may have backed the truck up early (such as my 62 year old brother who is 80% in equities - but I'd bet you, he won't panic sell either, he will just back the truck up again).

If I knew it was going down 50% - but we never know, do we?

I am very small in equities. The last thing I could find to sell, I sold last Friday. I have made 4 purchases in the past 5 trading days - all 4 holding their own, if not up. I have nothing left to sell. If this is true for me, I imagine this is true for many. There are just some things that haven't fallen far enough to buy more of yet. Maybe I'll get my chance.
muck53
Ron
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Post by Ron »

kb0fhp wrote:...Only idiots chase dreams - they need to face reality.
And what is "reality"?

- Ron
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Adrian Nenu
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Post by Adrian Nenu »

It's a great time to buy stocks. The CNBC watchers will buy after the recovery has already started and miss most of the runup.

Adrian
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DocHolliday
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Post by DocHolliday »

I am a long term investor. I am not panicking and have not sold anything. Since my stock/bond ratio is heavy in bonds now after the market drop, I have been buying 100% equities in my 401K for the last month or so.

I am gainfully employed with no threat of losing my job. These days, I buy my stocks cheap every other Friday when I get my paycheck. The folks I feel sorry for are the ones that have lost their job. The market will come back and these cheap stock purchases will pay off. Not being able to keep your house or put food on the table is cause for panick.
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Post by MekongTrader »

cloudeleven wrote:I think a lot of it has to do with the fact that in America we tie up a very large amount of our national pride in the stock market. Everyone watches the daily movements of the market, and when it goes down, our national pride takes a bit of a hit, and it hurts. When it goes up, everyone feels like we rule the world (well, we still rule the world even with the market way down, but anyway, the point still stands.)
I'm not really sure about this one.

Does the average American or 'Joe Six-Pack' follow the DOW on a daily basis? Does the stock market have anything to do with national pride? Despite the US markets' dismal performance over the last decade, I don't think that this had an impact on national pride, no?

Does America still rule the world? Not sure about this one either.

My 2 cents
yobria
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Re: overwhelming negativity

Post by yobria »

muck53 wrote:It is striking today - the overwhelming negativity.

This forum is openingly wondering the worst - 1974 market time to recovery in years, S&P 700 or below, even wondering at possible developed country bankruptcies.
Human nature isn't particularly well suited to investing. One of many reasons is we graviate toward the tails of the bell curve. It feels good to predict extremes.

Nick
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Post by bozo »

OK, I'll be the contrarian.

Happy, happy. happy.

But, then, I have 10 plus years of retirement funds in IRA CDs yielding an average of 5.45%. Prudently managed, they will stretch out to 13 years.

Happy, happy, happy.

But, in order to be happy, I had to be a contrarian and take half off the table back in 2004 (seems like so long ago).

My wife was not not happy, happy, happy. Indeed, she was unhappy. She thought I was leaving so much on the table. Or so little. She wanted to increase to 100% equities . Well, for two years she was correct.

Now, she is happy, happy, happy.

Bozo
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Post by unclemick »

Ron wrote:
kb0fhp wrote:...Only idiots chase dreams - they need to face reality.
And what is "reality"?

- Ron
Now retired - a meditation on the sound of one hand clapping.

heh heh heh - 8) Or will the Americans beat the Swiss or others? in the quest to corral the Higgs Boson? Hmmm.
Last edited by unclemick on Thu Feb 19, 2009 10:31 pm, edited 1 time in total.
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iranutmeg
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Sorry

Post by iranutmeg »

Actually, I'm afraid it's all my fault, I started to rebalance our retirement portfolio today.

It's not easy selling bonds and buying stocks right now...

Let the bloodbath begin..... :cry:
Best Wishes to all, | | PJ
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Re: overwhelming negativity

Post by White Coat Investor »

muck53 wrote:
EmergDoc wrote:
muck53 wrote: there is nothing I would sell, even if I were to know for sure it's going down another 50% ....
Have you lost your sense of logic?
No, I haven't. I spent most of 2008 getting out of the way of this train wreck. 25% in equities is pretty darn small, considering I am decades away from age 75. No reasonable investment plan would have me any smaller in equities. Anything that needed selling is already sold.

If I knew it was going down 50% - but we never know, do we?
My comment was merely on the "for sure" bit. If anyone knew for sure a 50% drop was coming, of course they'd sell. But you're right, we don't know.

Seems like 2008 we were already in the train wreck. A little late to get out of the way, no?
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baw703916
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Post by baw703916 »

Most of the drop has already happened...I say that with mathematical certainty. It's already dropped by >50%. It can't go below zero.

(of course, that's on a linear, not a log scale)

Best wishes,
Brad
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MekongTrader
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Post by MekongTrader »

Overwhelming negativity:

I have to admit that I've become a news-junkie. Reading and hearing about the economic mess all day long and then watching Bloomberg before going to bed makes it all worse. It's like I'm crafing for more bad news. It's not good.

Living and working in a 'Frontier Market', we are starting to feel the massive impact only now. When the US, EU, Japan go down, it takes some time until the waves (well, Tsunami in this case) land on our shores - but now it's really setting in. When you guys in the US (and anybody else in the Western world) stop consuming, we don't feel it right away... we keep on packing and shipping sneakers, apparel, furniture, cheap electronics for a couple of more weeks or months....all the stuff had been ordered some time ago. But now there's no more orders...

As an investor, I stay the course and keep on shoveling more $ into the hole. 25yrs+ to go. If it doesn't recover the whole world will have gone to the dogs.

Good luck to everybody.

:wink:
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Adrian Nenu
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Post by Adrian Nenu »

If anyone knew for sure a 50% drop was coming, of course they'd sell. But you're right, we don't know.
- that's right, nobody knew a 50% market drop was coming but at the end of 2006, the inverted yield curve indicated an impending recession (rising equity risk). Then factor in the RE bubble, bad loans, defaulting MBS securities, excessive leverage, hedge funds blowing up, financial firms going under, etc. But investors ignored all this and "stayed the course". It works in flat or rising markets but they have to get the risk (stock/bond mix) right to be able to ride out bear markets. Most investors failed to get the stock/bond mix right and overestimated their personal risk tolerances. There will be capitulation and panic selling when they realize the markets will not recover any time soon.

Adrian
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Post by wilson08 »

There is going to be a lot of wailing by those who
capitulated just before the inevitable upward trend
in the market begins.

Wilson
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muck53
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Re: overwhelming negativity

Post by muck53 »

EmergDoc wrote:Seems like 2008 we were already in the train wreck. A little late to get out of the way, no?
Only late to catch the optimal exit - not too late to minimize my losses by half.

Bozo, I also have 10 years of expenses in CD's. Happy, happy, happy.
muck53
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Post by tim1999 »

I wish Business Week would just run a "Death of Equities" cover story and get this bear over with...
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Post by Asterix »

I'm certainly gloomy - my investments are around where they were a few months ago, which is fine, but now the government has created a ludicrously massive amount of debt that I'll be paying through taxes and inflation for the rest of my adult life. And now I get to pay other people's mortgages, to boot. I see that as a significant deterioration of my long-term financial condition.

:(
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muck53
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Time

Post by muck53 »

I was going to start a new thread, but here is as good as any.

I am old enough to have seen hard times before. I've seen hard times, but had a job. I've seen hard times, and been laid off with 1.2 million in my industry. I've owned a home with 25% down and a mortgage of 13.25% when the oil economy fell apart in the late 80's - yes, due to the foreclosure wave (including my next door neighbor), I had an underwater mortgage, my home went down 30%. I paid my mortgage - there was no way I was going to let those banker theives rob me of my downpayment, which at the time, was everything I had ever saved up. As soon as the foreclosure wave was over - whoosh, prices rebounded back in the double digits. There were negative amortization loans back then, also. I have seen my investment portfolio get crushed by 60% (3 years in a row of 20% each).

In all cases, that have occurred in my limited span of history, there has been no time when things were not better, in some kind of huge way, within a 5 year window. Never. Even if I think of 1930, yep, this still holds ture - things were better by 1935.

Please do not panic sell. My hope is that everyone who needed to do this, has already done so. Time is the cure.

In some of those 5 year windows, the resulting opportunities were massive, grander then I could ever imagine. One 5 year window was more running in place, only to be clobbered again - but even still, one of my best memories come from those 5 years.

Getting clobbered, and windows of opportunity is all I have ever known.

My big brother, at age 62 is 80% in equities. I could not talk him out of this. He is investing for his grandkids (via inherited IRA's). I worry for him, of course, but he has been fiscally prudent his entire life. He is healthy enough to work. He is self employed. I'd bet you my last dollar, he will not panic sell into this. I will not be doing so either. I am much smaller at 25% in equities, but that - like my brother - reflects my investing time horizon.

It has always been wise to look closely around me, and assume this is the majority. We are not selling. The time for panic has passed. Now is the time for hunkering down, and putting one foot in front of the other - the sun will come up tomorrow. It always has.

I hope what I've written about is true. I hope there are no more panic sellers on this Boglehead forum, designed especially for long term investers. I actually believe the only sellers remaining are the traders. Let them sell. That is what they do everyday, buy and sell - they are traders.
muck53
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Post by Bob_H »

Cash is nice.
Bamagoter.
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muck53
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Post by muck53 »

Bob_H wrote:Cash is nice.
Yes, it is. I am 55% in cash (or CDs). I stand ready to fill-er-up, but not yet. There is no hurry with this one.

I have a well thought out, well diversified plan that accounts for my need for risk, and my time horizon, on various pools of investments.
muck53
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Post by Gekko »

"The bull market on Wall Street which started, and I'll never forget this, it started on a Friday. I was at the Financial News Network - I was anchoring at the time. It was in August 1982 and we were coming out of a period of very high inflation, very high interest rates, concerns about growth in the economy, and almost on a dime – it all turned around. Fed Chairman Volcker had broken the back of inflation and Wall Street just took off." – Bill Griffeth, CNBC, October 2007
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Re: Time

Post by Ron »

muck53 wrote:I've owned a home with 25% down and a mortgage of 13.25%
That's the big difference between then and now. I may be a bit younger than you, but my first three note/mortgages were at 10%, with at least 20% down. My last (1994) was 6.875%.

The important thing in the mind set between then and now is that today, many folks have no "skin in the game" when they signed their note. Secondly, they used the current difference in value to "cash out".

Being older, I've always looked at my home as my "fortress of solitude", not a vehicle for investment (I have other investments, for that).

For a lot of folks on this forum, a home is nothing more than an investment vehicle. Something to hold on to when it rises in perceived value, something to walk away from when it is currently worth less than when they bought it (much like selling losses in the market).

I can understand some of their feelings. When I/wife were younger, our current home represented the bulk of our estate net worth. Today? Just a bit over 10%.

When I started in the workaday world, there were no 401k/IRA's - there were defined benefit (e.g. pension) plans and no requirement to necessarily plan for retirement. Today? You have to do it on your own (as I had to learn, mid-career as my pensions were eliminated) and you look at all "assets" (including your home) as possibly a vehicle for investing for the future.

We're not going back in time. While I look at today's younger home owners in disgust (those that look at their homes as banks, or those willing to walk away from a commitment), I'm also aware that the opportunity to invest for my own retirement (e.g. 401k/IRA) even late in my career has given me a better overall financial picture, than just a pension would have done.

As a "senior", one advantage I do have is the long term view of the market, and like you, I believe we (on a global basis) will come out of it OK. Also, like you I have a good cash/bond position that I need not worry about my equities for a long time, if ever. Additionally, I don't need to know what the market will do in the next 30 years, since that's about double my projected remaining lifespan :lol: ...

- Ron
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muck53
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Re: Time

Post by muck53 »

Ron wrote:Something to hold on to when it rises in perceived value, something to walk away from when it is currently worth less than when they bought it (much like selling losses in the market).
For some reason, a Orbitz like comparison came to mine - book your flight now, if a better price comes along, before your scheduled flight - we'll send you a check?

Are there any ETF/Mutual fund like investment vehicles to buy the upside on the housing market, for those wanting principle reduction? My experience was the moment my neighbors house was cleared through foreclosure (which took about 3 years, and iterations of scumbags - drug dealers, rent skippers, house gutters) -- whosh, up she went - 5 years, from when it went down 30% to par.

No sorry, I don't want to invest in South Florida condo's on an individual basis - I live in my home, I am not well suited to be a landlord.
muck53
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Post by nisiprius »

wilson08 wrote:There is going to be a lot of wailing by those who
capitulated just before the inevitable upward trend
in the market begins.
Inevitable? In a sense, I suppose. But
Over 20-year intervals, 22 percent of all real returns are below zero. Only when we look back at intervals of over 50 years can we say that the real return on Japanese stocks has been consistently positive. Fifty years is a long time.

--Elroy Dimson, Paul Marsh, and Mike Staunton (2003), "Irrational Optimism"
Their chart for Japan provides impressive evidence for the validity of "stocks for the long run" and impressive evidence that "the long run" can mean fifty years--not twenty.

The story of Japan is very meaningful to those who lived through the decade of bull about the economic superpower that was beating us and soon would dominate the world. (remember Michael Crichton's novel "Rising Sun?"). Of course, we're not Japan, but as they say "if it happens, then it's possible."

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Post by sailor234 »

Like some others here I felt the need to be more conservative in early 2007, a combination of getting older and seeing negative market indications. In mid-07 I re-directed all interest, dividends and distributions to MM. Also, for my first five years of retirement I did IRA to ROTH conversions and invested that conservatively. Last Fall I moved about half of my bond assets into TIPS, anticipating the inflation that will eventually arrive. (Thanks, Larry, for the heads up on TIPS)

Due to my changes and market losses, I'm now about 25% equities and 20% cash, which I will re-invest in equities if/when it seems appropriate... market timing perhaps but I sleep well at night.

I can survive for ten-fifteen years on my pension/SS and interest income; I hope to last at least that long.

Surprisingly to me, but having anticipated this one I'm not (yet) panicking. (When i was younger and working I would have panicked at the losses we are seeing right now)

Best wishes to all.

Ray
marianna
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Joined: Wed Sep 24, 2008 10:40 am

Post by marianna »

Reality is often unpleasant
hamishdad
Posts: 315
Joined: Mon Jan 21, 2008 2:16 pm

Post by hamishdad »

http://news.yahoo.com/s/ap/20090220/ap_ ... vestigator

"Aviation is hours and hours of boredom interrupted by seconds of sheer terror, and you gotta be ready for the seconds of sheer terror."
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