U.S. stocks in freefall

[ray.james]

My 401k automatic contribution goes in

[Bacchus01]

Today was definitely a TLH day. If you haven't looked and done it, you probably should.

Interesting to note that I transfered (swapped) all of my VTIAX purchases going back to 12/28/2012. Ouch. I moved all of my VTSAX going back to 12/27/2013. I will likely still swap my VMVAX that were bought in Jan 2015.

Not much growth happening.

Wait. What? Surely you have considerable gains on VTIAX purchased in 2012 and VTSAX purchased in 2013. What's the TLH opportunity there?

I don't think I was clear. I did have gains in VTIAX. I did not sell my 12/28/2012 position (which is only up 2% and may be underwater by the end of today), i sold everything after that. The same for VTSAX. the 12/27/2013 and prior positions are in the money, but everything after was not. I sold everything after 12/27/2013. That particular lot, bought 12/27/2013, is up 10% (before close today).

[broadstone]

These upcoming turbulent times are a good reminder why diversification is so important and why your retirement shouldn't be entirely in stocks and bonds or in the market in general.

Index funds + Real Estate rentals + Peer 2 Peer Lending + CD's = a good nights sleep.

[bertilak]

I went to Cash a week or so ago in my Roth IRA because I'm moving from Schwab to Vanguard and I figured cash would be easier to move. Not a market timer but feels good to have dodged a few percentage points of losses by accident. I will jump back in once the transfer is complete.

I did half of that. On the 19th I sold off enough to pay down my mortgage from 24 years to 4 years.

The intent was to get rid of that mortgage so if I get hit by a bus in 4 years and a day the reduced mortgage expense (principle + interest) almost exactly matches the loss in Soc Sec and pension (50% joint survivor).

I am guilty of deliberate, but minor, market timing. I knew I wanted to do this but thought to myself the market is up pretty good and now is a good time to do it. I wasn't expecting a sell off but decided I was at least not selling after a significant loss.

[dbCooperAir]

Down almost 300 on the DOW today on top of the 300+ loss yesterday. Is this getting anybody's attention yet? This guy nailed it to the day:

http://www.marketwatch.com/story/market-timer-tom-mcclellan-sees-stocks-set-up-for-ugly-decline-as-early-as-thursday-2015-08-17?dist=lcountdown

Even broken clocks are right twice a day.

I set my broken clocks to 5:00

[JonnyDVM]

Is it time for plan B yet? After digesting a variety of threads from the past week I've decided to sell off all my equity holdings and use the proceeds to purchase silver bars and a handgun. I'm planning to stuff the silver and gun along with 20k in cash that I've been keeping around my house "just in case" next to the 16 cans of Costco brand tuna I keep in my new "bug-out bag". I'm ready to bug out to Europe at a moments notice due to the new awesome exchange rate.

[Crow Hunter]

Is it time for plan B yet? After digesting a variety of threads from the past week I've decided to sell off all my equity holdings and use the proceeds to purchase silver bars and a handgun. I'm planning to stuff the silver and gun along with 20k in cash that I've been keeping around my house "just in case" next to the 16 cans of Costco brand tuna I keep in my new "bug-out bag". I'm ready to bug out to Europe at a moments notice due to the new awesome exchange rate.

You can't take the handgun to Europe.

[JonnyDVM]

Is it time for plan B yet? After digesting a variety of threads from the past week I've decided to sell off all my equity holdings and use the proceeds to purchase silver bars and a handgun. I'm planning to stuff the silver and gun along with 20k in cash that I've been keeping around my house "just in case" next to the 16 cans of Costco brand tuna I keep in my new "bug-out bag". I'm ready to bug out to Europe at a moments notice due to the new awesome exchange rate.

You can't take the handgun to Europe.

You're right! I completely forgot about that. Darn Euros and their sensible political policies. I guess this is strong evidence in favor of staying the course. Now what am I going to do with all this silver and Kirkland brand tuna

[parsi1]

I was going to look at my 401k this morning and stopped myself. That's just what they want me to do...

I stopped looking sometimes ago, to look often adds to the temptation for tinkering

[parsi1]

My 401k automatic contribution goes in

+1

[Hunky-dory]

Here comes the typical afternoon sell-off. Will we get the standard pre-close mini-rally?!?

[scone]

^ PPT FTW!

[HomerJ]

So I have a lazy 3 fund.... 80/20. Would I be advised to sell my 20% bonds and buy stocks at this level?

No. But you may want to rebalance if you are out of your rebalancing bands.

I am 26. I thought 20% bonds was a bit heavy. This just gives me a buying opportunity to move it to even heavier stocks for a while.

That's market timing. You shouldn't go heavier or lighter on stocks for a while just because the market is up or down.

Pick an AA, and stay the course... Change it as your need and willingness to take risk change (for instance, getting closer to retirement). Do not change it every time the stock market drops or goes up 5%.

[easye418]

So I have a lazy 3 fund.... 80/20. Would I be advised to sell my 20% bonds and buy stocks at this level?

No. But you may want to rebalance if you are out of your rebalancing bands.

I am 26. I thought 20% bonds was a bit heavy. This just gives me a buying opportunity to move it to even heavier stocks for a while.

That's market timing. You shouldn't go heavier or lighter on stocks for a while just because the market is up or down.

Pick an AA, and stay the course... Change it as your need and willingness to take risk change (for instance, getting closer to retirement). Do not change it every time the stock market drops or goes up 5%.

Yeah, I want my AA to be 90/10 stocks to bonds. However, I needed to put so much in Bonds to get admiral shares so my account was 80/20. I am going to let 100 stocks go for a while then eventually readjust towards 90/10 when I get enough capital.

[TomatoTomahto]

Livesoft frequently says not to purchase a car that costs more than the amount you gain or lose on a day. It's early, but it appears that we will be suffering a six digit loss today, so I can purchase my Tesla with Livesoft's stamp of approval.

[scone]

^ Counting the digits to the right if the decimal?

[TomatoTomahto]

^ Counting the digits to the right if the decimal?

Not unless you'll sell me a Tesla for $1,000.00.

[oldzey]

But was it truly a livesoft-defined RBD™?

[livesoft]

Livesoft frequently says not to purchase a car that costs more than the amount you gain or lose on a day. It's early, but it appears that we will be suffering a six digit loss today, so I can purchase my Tesla with Livesoft's stamp of approval.

I'm giving you my stamp of approval because the market did drop even more in the last couple of minutes.

@oldzey, yes, many ETFs had livesoft-defined RBD™'s today. But since it is Friday, I am not forced to buy on a Friday-RBD. I did buy today though … and more than TT's Tesla will cost him.

[3wood]

Interesting timing. My wife and I talked and she is more conservative than I am. Anyway, WR decided to chane the aa from 80/20 to 65/35.
Wouldn't do so now lock in losses?

[TomatoTomahto]

Interesting timing. My wife and I talked and she is more conservative than I am. Anyway, WR decided to chane the aa from 80/20 to 65/35.
Wouldn't do so now lock in losses?

Yes, and deciding to change asset allocation on a day like today really means that it was far too aggressive for you in the first place.

[ruralavalon]

Did something important happen today?

[Youngblood]

Ouch!

[scone]

I'm kinda excited. It's like the Fedex "doom" commercial where people get themselves worked up into a frenzy. Not yet at the panic button stage though. Next week should be fun-- if the weekend punditocracy goes for the "end times" narrative, things could keep right on dropping.

[Leeraar]

I plan to check and perhaps rebalance tomorrow, when I know the closing prices from today. If it involve moving more than about 2% of our assets, I will rebalance.

It's a 5-minute thing: 80% VSMGX, 10% VFSUX, 10% VBILX. It's so simple, I just make a new spreadsheet every time to do the arithmetic, then throw it away.

If this is the bottom of the dip, I'll look like a genius. It the market drops further, I'll have more opportunities to look like a genius.

L.

[Browser]

Mr. Market to Earth -- have I got your attention?

[jebmke]

I plan to check and perhaps rebalance tomorrow, when I know the closing prices from today. If it involve moving more than about 2% of our assets, I will rebalance.


L.

Prices will be much steadier tomorrow - that's my prediction.

[livesoft]

Prices will be much steadier tomorrow - that's my prediction.

I'll go along with that, too.

[3wood]

Interesting timing. My wife and I talked and she is more conservative than I am. Anyway, WR decided to chane the aa from 80/20 to 65/35.
Wouldn't do so now lock in losses?

Yes, and deciding to change asset allocation on a day like today really means that it was far too aggressive for you in the first place.

I will stay with the current asset allocation. My wife has never shown much interest so I have been taking the lead. We recently started talking about it and this happens. I will take it as a sign from above that we should hold our ground for now. Let's see how long this lasts. I'll bet not long.

[iskey]

I plan to check and perhaps rebalance tomorrow, when I know the closing prices from today.

L.

I've been wondering about this. At what time are mutual fund prices updated? And why is there a delay instead of being updated immediately upon market close? And finally, is there a way to calculate this on my own before it's updated?

[lack_ey]

VIX (volatility index) actually hit 28 today, the highest since 2011.

S&P 500 is down 7.51% from the last peak. This is still not very much, though; there have been five worse drawdowns since the bottom in 2009, and double-digit losses are common even in years with positive stock returns.

[Browser]

You see how it happens, don't you? Big market drop right out of the blue catches everyone who was standing by the exits with their pants down. They'll never learn. Now the pundits are all digging up explanations and pointing out that they "knew" it was coming. Now they get to twist in the wind waiting for Black Monday....

[cfs]

The Pillow Test

This is perfect time for The Pillow Test. If you can't sleep well tonight, tomorrow, or the day after tomorrow, thinking about Miss Market, then you have failed The Pillow Test. If this is the case, you need to work on your asset allocation, and make changes as needed. However, you will do so "after" things get back to normal and not in the middle of a so called Miss Market Correction.

Already then, now let me get back to doing something productive.

[JoMoney]

On the plus side, I'm still accumulating and at least it will make my average cost head the direction I like (down).
And I'm getting a bit closer to my bearish estimate for the year:
viewtopic.php?t=154407

[Browser]

For those following such things, the S&P has just crashed through it's 200-day moving average this week like a hot knife through butter. That's probably not good.

[Doom&Gloom]

Grey Friday?

[nisiprius]

At the risk of pointing out the obvious... I have no idea what people expect when they talk about international in general and emerging markets in particular as having "low correlation" with stocks, but, certainly, in the very short term, the phrase "U.S. stocks in freefall" is not capturing all the nuances of the situation.

This doesn't mean not to invest in international stocks, it just means don't expect them necessarily to protect you against weeks like this.

Blue, Vanguard Total Stock, VTSMX (U.S. only)
Red, Vanguard Total International, VGTSX (whole world ex-US)
Green, Vanguard Emerging Markets, VEIEX (emerging markets).

[backpacker]

Mr. Market to Earth -- have I got your attention?

Earth: "Eh? We couldn't hear you. Too much noise."

[Browser]

Mr. Market to Earth -- have I got your attention?

Earth: "Eh? We couldn't hear you. Too much noise."

Guess I'll have to amp it up then.

[ofcmetz]

VIX (volatility index) actually hit 28 today, the highest since 2011.

S&P 500 is down 7.51% from the last peak. This is still not very much, though; there have been five worse drawdowns since the bottom in 2009, and double-digit losses are common even in years with positive stock returns.

And 2011 was the start of this thread. Things were quite exciting then. If this drop is making someone start to rethink their allocation then they may be a bit to equity heavy. Keep in mind that equities could go down quite a bit more and stay down for a long time or they could recover by next week to their highs. No one knows what will happen and that's where that risk premium comes to play. I will say that it's never fun to lose money.

[ofcmetz]

At the risk of pointing out the obvious... I have no idea what people expect when they talk about international in general and emerging markets in particular as having "low correlation" with stocks, but, certainly, in the very short term, the phrase "U.S. stocks in freefall" is not capturing all the nuances of the situation.

This doesn't mean not to invest in international stocks, it just means don't expect them necessarily to protect you against weeks like this.

Blue, Vanguard Total Stock, VTSMX (U.S. only)
Red, Vanguard Total International, VGTSX (whole world ex-US)
Green, Vanguard Emerging Markets, VEIEX (emerging markets).

Well said nisi! Equities ( international, small cap, large cap US, etc.) are equities and carry the risks they carry. Bonds, CD's, and stable value funds at least look fine right now.

[chipmonk]

Livesoft frequently says not to purchase a car that costs more than the amount you gain or lose on a day. It's early, but it appears that we will be suffering a six digit loss today, so I can purchase my Tesla with Livesoft's stamp of approval.

I just had my biggest 1-day loss ever. $14k today.

Phew!! Looks like my 5-year-old Mazda3 is approved

[avenger]

At the risk of pointing out the obvious... I have no idea what people expect when they talk about international in general and emerging markets in particular as having "low correlation" with stocks, but, certainly, in the very short term, the phrase "U.S. stocks in freefall" is not capturing all the nuances of the situation.

This doesn't mean not to invest in international stocks, it just means don't expect them necessarily to protect you against weeks like this.

Blue, Vanguard Total Stock, VTSMX (U.S. only)
Red, Vanguard Total International, VGTSX (whole world ex-US)
Green, Vanguard Emerging Markets, VEIEX (emerging markets).

Well said nisi! Equities ( international, small cap, large cap US, etc.) are equities and carry the risks they carry. Bonds, CD's, and stable value funds at least look fine right now.

Having only invested since 2011, I am feeling quite comfortable with my 75/25 AA right now. Glad I finally settled on that.

[walletless]

Last two days were awesome.. I did TLH on Total International & Emerging Markets; bought some Domestic TSM.
Hope to see this continue for another month or so, so I can come back to my original position while doing yet another TLH

[TorturedRegret]

It will be hard for markets to ever crash again like in '87 b/c of all the controls put in.
The short uptick rule, and simply closing the markets down intra-day.
It will never be as bad as in the past.

[Carpentermaass84]

Long time lurker..

No debt, 30-years-old, 30k in cash and 75k in bonds. I moved all of my funds from my workplace Charles Schwab RGAEX fund once the market stagnated at 18,250 a few months ago into bonds on a hunch (fortunately the hunch was a good one... so far.) As I am in a position to take more risk given my age, I will probably allocate all of my cash assets into oil ETFs (IF) crude prices reach the low-to-mid 30's. I have all the time in the world to wait for a recovery in the oil market. As far as moving back into the stock market is concerned... I may average down with my future 401k and ROTH contributions but I am not moving the bulk of my assets until commodity prices pick up and economic indicators start to point in the opposite direction. I only stand to gain from a market collapse and I feel that we are long overdue for a sizable correction; Tesla, Shake Shack, Netflix - you'd swear these companies were in the same league as GM or Boeing given their valuations....

[Bacchus01]

Livesoft frequently says not to purchase a car that costs more than the amount you gain or lose on a day. It's early, but it appears that we will be suffering a six digit loss today, so I can purchase my Tesla with Livesoft's stamp of approval.

I just had my biggest 1-day loss ever. $14k today.

Phew!! Looks like my 5-year-old Mazda3 is approved

I'm pretty sure I'm down close to 6 figures this week. Down about $29K today.

But you know what? That means I had that much to start with! Can't be worried much about that.

It was an awesome day to TLH. I'm glad I pulled the trigger.

[chipmonk]

Livesoft frequently says not to purchase a car that costs more than the amount you gain or lose on a day. It's early, but it appears that we will be suffering a six digit loss today, so I can purchase my Tesla with Livesoft's stamp of approval.

I just had my biggest 1-day loss ever. $14k today.

Phew!! Looks like my 5-year-old Mazda3 is approved

I'm pretty sure I'm down close to 6 figures this week. Down about $29K today.

But you know what? That means I had that much to start with! Can't be worried much about that.

It was an awesome day to TLH. I'm glad I pulled the trigger.

I was thinking of pulling the trigger on a TLH, but I still only have about $6k of harvestable losses after today's carnage. Maybe Monday?

[Boglenaut]

Now I remember why I have those almost no interest bond funds. At least that took away a little bit of the sting and allowed some minor rebalancing.

[protagonist]

If it makes you feel any better, the S+P is still up 11.4% since a year ago today.

It will take a large correction to make up for the gains of the past few years.