U.S. stocks in freefall

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Toons
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Re: U.S. stocks in freefall

Postby Toons » Thu Mar 31, 2016 4:54 am

The "Market" went down?
You mean I missed a more shares opportunity? :sharebeer
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Re: U.S. stocks in freefall

Postby Valuethinker » Thu Mar 31, 2016 5:28 am

prettybogle wrote:I am 70% bonds (fixed 5% return) and 30% s & p in my 401k. After all the big moves in market, i am now 1.09% ytd. S & p is 0.8% ytd. Amazing how fast market can recover - from -15% ytd to +0.8% ytd in just a month !! :shock:
i "rebalanced" on friday and now i am 85% bonds and 15% s & p :sharebeer


What bonds would give you a 5% return? That implies a 5% Yield to Maturity. That implies either: sub investment grade bonds (junk) or Emerging Market government bonds? There's considerable risk in both.

If you held bonds with those kinds of coupons and yields, then you've already had much of the return from rising prices (falling interest rate environment) that you are going to get-- the existing yields on safe government bonds tend to run from c. 2% down to negative (about 30% of developed world government bonds have negative YTM apparently).

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Re: U.S. stocks in freefall

Postby HomerJ » Thu Mar 31, 2016 8:25 am

prettybogle wrote:I am 70% bonds (fixed 5% return) and 30% s & p in my 401k.
i "rebalanced" on friday and now i am 85% bonds and 15% s & p :sharebeer


That's not really "rebalancing". Rebalancing is buying and selling to get back to your Asset Allocation, not changing your AA.

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Re: U.S. stocks in freefall

Postby Carpentermaass84 » Thu Mar 31, 2016 11:09 am

I'm taking an opposite approach here... I moved everything to stable value funds ("sold" when you look at my attached image) when the marked peaked above 18k last august before the first correction and shifted back to VIMAX 100% ("bought") at just under 16000. While I went 100% stable value after the market recovered last year I was too nervous to buy once it went below 16000 as I fall victim to the doom and gloom scenarios from time to time and was all but certain that the second correction would turn into a recession. I like to weigh positives and negatives and I'm no longer seeing a long spreadsheet of negatives that made originally made me lose confidence in the Dow.

Image

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Re: U.S. stocks in freefall

Postby feh » Thu Mar 31, 2016 1:04 pm

prettybogle wrote:These huge gyrations in market this year are good reminders to always stay invested.
........... Getting tempted to sell this rally and wait for corrction ?


I don't understand how you can make those two statements in the same paragraph.

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Re: U.S. stocks in freefall

Postby letsgobobby » Thu Mar 31, 2016 2:21 pm

Carpentermaass84 wrote:I'm taking an opposite approach here... I moved everything to stable value funds ("sold" when you look at my attached image) when the marked peaked above 18k last august before the first correction and shifted back to VIMAX 100% ("bought") at just under 16000. While I went 100% stable value after the market recovered last year I was too nervous to buy once it went below 16000 as I fall victim to the doom and gloom scenarios from time to time and was all but certain that the second correction would turn into a recession. I like to weigh positives and negatives and I'm no longer seeing a long spreadsheet of negatives that made originally made me lose confidence in the Dow.

Image

[OT comment removed by admin LadyGeek]

Let us know how this 100% market-timing model works out for you in the long run.

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Re: U.S. stocks in freefall

Postby Carpentermaass84 » Thu Mar 31, 2016 4:30 pm

Hmmm.. looks like a moderator deleted my reply.. Fair enough. The point I made in my original post is that I am going to stop worrying about ups and downs and whether I'm leaving or jumping in at the right time. Rather, I'm simply putting my money in a solid index fund and leave it be. I originally timed the market with a little bit of success but I completely lost out on this most recent rally.

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Re: U.S. stocks in freefall

Postby prettybogle » Thu Mar 31, 2016 8:03 pm

feh wrote:
prettybogle wrote:These huge gyrations in market this year are good reminders to always stay invested.
........... Getting tempted to sell this rally and wait for corrction ?


I don't understand how you can make those two statements in the same paragraph.


The first statement is theory/ideal choice. Second statement is practice/human nature :moneybag

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Re: U.S. stocks in freefall

Postby feh » Fri Apr 01, 2016 7:39 am

prettybogle wrote:
feh wrote:
prettybogle wrote:These huge gyrations in market this year are good reminders to always stay invested.
........... Getting tempted to sell this rally and wait for corrction ?


I don't understand how you can make those two statements in the same paragraph.


The first statement is theory/ideal choice. Second statement is practice/human nature :moneybag


Yes. Of course, on this forum, we do our best to not be driven by emotions/hunches.

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Re: U.S. stocks in freefall

Postby roymeo » Fri Apr 01, 2016 11:48 am

Carpentermaass84 wrote:Hmmm.. looks like a moderator deleted my reply.. Fair enough. The point I made in my original post is that I am going to stop worrying about ups and downs and whether I'm leaving or jumping in at the right time. Rather, I'm simply putting my money in a solid index fund and leave it be. I originally timed the market with a little bit of success but I completely lost out on this most recent rally.


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Re: U.S. stocks in freefall

Postby sharpjm » Mon Apr 18, 2016 2:05 pm

broadstone wrote:S&P on its way to 1600. I'm still 100% cash.

S&P on its way to 2100. Are you still 100% cash? If not, may I ask at what point and why you chose to buy back in?

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Re: U.S. stocks in freefall

Postby InvestorNewb » Mon Apr 18, 2016 2:40 pm

The importance of not selling = this thread
My Portfolio: VTI [US], VXUS [Int'l], VNQ [REIT], VCN [Canada] (largest to smallest)

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Re: U.S. stocks in freefall

Postby triceratop » Mon Apr 18, 2016 3:08 pm

sharpjm wrote:
broadstone wrote:S&P on its way to 1600. I'm still 100% cash.

S&P on its way to 2100. Are you still 100% cash? If not, may I ask at what point and why you chose to buy back in?


My guess: at the very bottom.
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Re: U.S. stocks in freefall

Postby FullYellowJacket » Mon Apr 18, 2016 3:40 pm

This thread popping up got me to look at the S&P500, and it looks like with dividends reinvested we are within a percentage or so of the peak from 2015. US economy seems alright, with more people joining the labor market that were discouraged workers or otherwise not looking for work.

I'll reserve celebration when international funds (in my case VXUS) or my target retirement fund (VFIFX) get back near their peaks. There are still to hills to climb.

As always, I'm bullish on the USA and the World when looking out 30+ years.

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Re: U.S. stocks in freefall

Postby CoAndy » Mon Apr 18, 2016 4:06 pm

InvestorNewb wrote:The importance of not selling = this thread
Agree 100%. I actually perused this thread periodically while the markets were sputtering. It helped. :sharebeer

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Re: U.S. stocks in freefall

Postby Yesterdaysnews » Mon Apr 18, 2016 5:36 pm

I am thinking there are still a lot of people nervous about investing cause of 2007-2008. There is still substantial money on the sidelines imo which eventually will filter into the market slowly as the memories of those days slowly pass.

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Re: U.S. stocks in freefall

Postby broadstone » Mon Apr 18, 2016 6:32 pm

sharpjm wrote:
broadstone wrote:S&P on its way to 1600. I'm still 100% cash.

S&P on its way to 2100. Are you still 100% cash? If not, may I ask at what point and why you chose to buy back in?


Yes, still 100% cash. I'm happy to sit on the sidelines for this one.

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Re: U.S. stocks in freefall

Postby ParkersPaPa » Mon Apr 18, 2016 6:38 pm

Toons wrote:The "Market" went down?
You mean I missed a more shares opportunity? :sharebeer


My market-timing side tells me the markets are heading down<g>. So I changed my 401k contribution to all equity (including international). 'course this is just fun money at this point in my life. :D My over-all distribution is ready for an equity down-turn. Think 55/45, equities/bonds. 58 yr old.
Last edited by ParkersPaPa on Mon Apr 18, 2016 6:42 pm, edited 1 time in total.

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Re: U.S. stocks in freefall

Postby broadstone » Mon Apr 18, 2016 6:41 pm

FullYellowJacket wrote: US economy seems alright .


If the economy was alright, the interest rates wouldn't be low and the GDP wouldn't be almost flat (soon to be negative). The bright-side is for those who have the financial ability, a once in a lifetime buying opportunity is coming. For everyone else who's fully invested, it might be a long road to recovery, similar to the one UK index investors are experiencing with the FTSE which has taken 20 years to recover.

I really hope I'm wrong about this.

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Re: U.S. stocks in freefall

Postby fanmail » Mon Apr 18, 2016 8:20 pm

If you think stocks are going down 70% or more, you should be massively short right now.

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Re: U.S. stocks in freefall

Postby Toons » Mon Apr 18, 2016 8:23 pm

ParkersPaPa wrote:
Toons wrote:The "Market" went down?
You mean I missed a more shares opportunity? :sharebeer


My market-timing side tells me the markets are heading down<g>. So I changed my 401k contribution to all equity (including international). 'course this is just fun money at this point in my life. :D My over-all distribution is ready for an equity down-turn. Think 55/45, equities/bonds. 58 yr old.



+1 :mrgreen:
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Re: U.S. stocks in freefall

Postby AZAttorney11 » Mon Apr 18, 2016 8:39 pm

broadstone wrote:If the economy was alright, the interest rates wouldn't be low and the GDP wouldn't be almost flat (soon to be negative).


I'll bet you a substantial sum of money that the Gross Domestic Product of the United States doesn't go negative within the next four quarters.

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Re: U.S. stocks in freefall

Postby HomerJ » Mon Apr 18, 2016 8:41 pm

broadstone wrote:a once in a lifetime buying opportunity is coming.


You may be 100% right about this... But what you should have learned is that "timing" the market is near impossible.

I'm 50/50 stocks/bonds because I also fully expect a crash someday. But I don't know when, so I'm still holding on to my stocks, and rebalancing as they go up. I have made a ton of money that you have missed out on, because I know that I don't know enough to predict anything accurately.

For everyone else who's fully invested, it might be a long road to recovery, similar to the one UK index investors are experiencing with the FTSE which has taken 20 years to recover.


For everyone who has been 0% invested, you've already missed out on a long road to recovery. The market has doubled since August 2011 when this thread was started. The market could crash 40% tomorrow, and one would still be in better shape than the person who has been 100% in cash this whole time.

The real trick is to NOT be fully invested in either direction. Both 100% stocks and 100% cash are extreme positions. Nobody knows enough to predict the future accurately. If one is 100% stocks for the long-term, that's not terrible, and will probably pay off in the long run (but not for certain!). If someone is 100% stocks because they expect the market to go up strongly SOON, that is dangerous. 100% cash for the long-term is mostly just a bad idea (unless your savings rate is massive), and 100% cash because you think the market will crash SOON, is also risky.

Remember, in 1996, the market was considered highly overvalued, and had just finished a 9 year bull-run from the 1987 crash, yet it DOUBLED again before the next crash happened. Someone waiting on the sidelines in 1996 never got to buy back in cheaper. Even after the crash, the market was more expensive at the bottom in 2002 than it was in 1996.

"Waiting for the crash" is not a very good investment plan for retirement.
Last edited by HomerJ on Mon Apr 18, 2016 9:41 pm, edited 2 times in total.

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Re: U.S. stocks in freefall

Postby HomerJ » Mon Apr 18, 2016 8:47 pm

AZAttorney11 wrote:
broadstone wrote:If the economy was alright, the interest rates wouldn't be low and the GDP wouldn't be almost flat (soon to be negative).


I'll bet you a substantial sum of money that the Gross Domestic Product of the United States doesn't go negative within the next four quarters.


Heh, I think he meant GDP growth, not GDP.

Anyway, I was at Home Depot this weekend, and it was PACKED. I mean, more people than I've ever seen there before. Yes, it's spring, and people are working on their yards, but I don't think a new grill, or patio furniture would be necessities for people who have lost their jobs.

Restaurants in my area are totally full too.

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Re: U.S. stocks in freefall

Postby Yesterdaysnews » Mon Apr 18, 2016 9:18 pm

I think we (meaning the US) got away with one in 2007-08 with massive money printing and exporting the inflation. Was bad for many developing nations but good for us.

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Re: U.S. stocks in freefall

Postby lack_ey » Mon Apr 18, 2016 9:57 pm

broadstone wrote:
FullYellowJacket wrote: US economy seems alright .


If the economy was alright, the interest rates wouldn't be low and the GDP wouldn't be almost flat (soon to be negative). The bright-side is for those who have the financial ability, a once in a lifetime buying opportunity is coming. For everyone else who's fully invested, it might be a long road to recovery, similar to the one UK index investors are experiencing with the FTSE which has taken 20 years to recover.

I really hope I'm wrong about this.

The economy can be fine now and in the future without there being high interest rates, for a number of reasons. GDP could pick back up or not. If your expectation of "alright" means booming like in parts of the 20th century (which largely didn't happen anytime else in history), that may be an unrealistic in the future. Or maybe it happens. Can you really say for sure that interest rates and GDP mean for future stock returns? What is this based off of?


HomerJ wrote:[...]
Remember, in 1996, the market was considered highly overvalued, and had just finished a 9 year bull-run from the 1987 crash, yet it DOUBLED again before the next crash happened. Someone waiting on the sidelines in 1996 never got to buy back in cheaper. Even after the crash, the market was more expensive at the bottom in 2002 than it was in 1996.
[...]

I largely agree with the broader point you make in the rest of the post, but this example is maybe a bit misleading. The market didn't get cheaper, but if you market timed your way out in the start of 1996 and bought back in at the bottom in 2002, it was basically a wash if you were sitting in cash (say, a money market fund) because of the return on cash in those days. If you were sitting in bonds, you beat cash and got a better return than in stocks.

Of course, almost nobody would get the timing right to buy back in at the bottom in 2002.


The bigger the bet you want to make against the market, the better (more reliable) your signal or analysis should be to justify it, particularly when it comes to timing moves. If you believe you don't have any value-relevant information, you stay put no matter the conditions. I think there's some information that's unreliable you can look at and occasionally act on in the form of minor adjustments for a modest edge (winning more than you lose, hopefully). On the other hand, going all in or all out represents a high level of overconfidence, poor risk management, or rare possession of unique insights about the markets that many experts don't believe anybody has. This point is debatable but I think it's a tough sell.

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Re: U.S. stocks in freefall

Postby sharpjm » Mon Apr 18, 2016 10:15 pm

lack_ey wrote:...going all in or all out represents a high level of overconfidence, poor risk management, or rare possession of unique insights about the markets that many experts don't believe anybody has. This point is debatable but I think it's a tough sell.

I think your assessment is spot on. And I believe that 95%+ of folks that try to time the market fall into category 1: overconfidence.

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Re: U.S. stocks in freefall

Postby HomerJ » Tue Apr 19, 2016 8:45 am

lack_ey wrote:
HomerJ wrote:[...]
Remember, in 1996, the market was considered highly overvalued, and had just finished a 9 year bull-run from the 1987 crash, yet it DOUBLED again before the next crash happened. Someone waiting on the sidelines in 1996 never got to buy back in cheaper. Even after the crash, the market was more expensive at the bottom in 2002 than it was in 1996.
[...]

I largely agree with the broader point you make in the rest of the post, but this example is maybe a bit misleading. The market didn't get cheaper, but if you market timed your way out in the start of 1996 and bought back in at the bottom in 2002, it was basically a wash if you were sitting in cash (say, a money market fund) because of the return on cash in those days. If you were sitting in bonds, you beat cash and got a better return than in stocks.

Of course, almost nobody would get the timing right to buy back in at the bottom in 2002.


You make a fair point. But I also agree with your last sentence, because anyone going by valuations would not have bought back in at the bottom in 2002. The market was still considered overvalued in 2002.

The main point is, buying and holding, so far, has worked better, in practice, than jumping in and out of the market.

100% cash is a huge bet that says you think you can predict the future accurately. And very few people should be that confident.

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Re: U.S. stocks in freefall

Postby bertilak » Tue Apr 19, 2016 9:58 am

HomerJ wrote:
broadstone wrote:a once in a lifetime buying opportunity is coming.


You may be 100% right about this... But what you should have learned is that "timing" the market is near impossible.

I'm 50/50 stocks/bonds because I also fully expect a crash someday. But I don't know when, so I'm still holding on to my stocks, and rebalancing as they go up. I have made a ton of money that you have missed out on, because I know that I don't know enough to predict anything accurately.

The way I look at it, with a 50/50 you have TWO portfolios. Someday ONE of them will make you rich! (and the other probably won't do too bad either.)

Disclaimer: When I paid off my mortgage I felt I could take more risk so bumped from 50/50 to 60/40. Market has been going UP sine then! (Boy am I a genius! :wink: )
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Re: U.S. stocks in freefall

Postby Erwin » Tue Apr 19, 2016 10:01 am

Yesterdaysnews wrote:I think we (meaning the US) got away with one in 2007-08 with massive money printing and exporting the inflation. Was bad for many developing nations but good for us.


what about those that lost jobs and have never being able to get it back? If I recall wsell, there are now plenty of low paying jobs available, but it is much harder to get one that can support a family.
Erwin

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Re: U.S. stocks in freefall

Postby FullYellowJacket » Tue Apr 19, 2016 10:45 am

Erwin wrote:
Yesterdaysnews wrote:I think we (meaning the US) got away with one in 2007-08 with massive money printing and exporting the inflation. Was bad for many developing nations but good for us.


what about those that lost jobs and have never being able to get it back? If I recall wsell, there are now plenty of low paying jobs available, but it is much harder to get one that can support a family.


This was going to happen with or without the 07-08 crisis. No, it is not the fault of free trade agreements, wall street greed, immigrants, or whatever scapegoat is popular today. Technology and automation will replace any high paying job that it can. The question remaining is: What do we do about this as a society?

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Re: U.S. stocks in freefall

Postby Independent George » Tue Apr 19, 2016 11:03 am

FullYellowJacket wrote:This was going to happen with or without the 07-08 crisis. No, it is not the fault of free trade agreements, wall street greed, immigrants, or whatever scapegoat is popular today. Technology and automation will replace any high paying job that it can. The question remaining is: What do we do about this as a society?


Duh. Stock up on food & ammo in preparation for the robot uprising.

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Re: U.S. stocks in freefall

Postby broadstone » Tue Apr 19, 2016 1:18 pm

Sometimes there are so many warning flags waving that you have to pay attention, other times not so much. Now is a time where technical analysis, and economic logic are screaming, hey, it's June, the ice is melting but you're still standing in the middle of the lake like it's mid winter. I never wanted to be a market timer as I don't have the stomach for it and in my heart, I'm a true Boglehead. But there are so many warning sayings, proceed with extreme caution, that I can't ignore them anymore. The warning signs were there in 2007 and they're back now. History will repeat itself.

But hopefully I will be wrong, the naysayers will be right, I'll look foolish, you can say "we told you so", and I'll have lost out on some growth years. :oops:

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Re: U.S. stocks in freefall

Postby roymeo » Tue Apr 19, 2016 4:21 pm

We're a good 6 months past the deadline from the 6 month dire warnings some big movers-n-shakers were giving a friend. But have no fear, they couldn't have been wrong.
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Re: U.S. stocks in freefall

Postby GoldenFinch » Tue Apr 19, 2016 5:08 pm

broadstone wrote:Sometimes there are so many warning flags waving that you have to pay attention, other times not so much. Now is a time where technical analysis, and economic logic are screaming, hey, it's June, the ice is melting but you're still standing in the middle of the lake like it's mid winter. I never wanted to be a market timer as I don't have the stomach for it and in my heart, I'm a true Boglehead. But there are so many warning sayings, proceed with extreme caution, that I can't ignore them anymore. The warning signs were there in 2007 and they're back now. History will repeat itself.

But hopefully I will be wrong, the naysayers will be right, I'll look foolish, you can say "we told you so", and I'll have lost out on some growth years. :oops:


Broadstone, you say you are a "true Boglehead," but you are really getting lost in the noise. You say "technical analysis , and economic logic are screaming." That's noise. You are getting tangled up in too much information and not looking long term because you are waiting for the SUPER SALE. The problem is you are losing out if you have a long term time horizon and you are in cash. Getting back in later is not as good of a strategy as putting the money in the market and letting it do its thing over time. If the market makes you nervous, invest automatically and don't pay attention.
Last edited by GoldenFinch on Wed Apr 20, 2016 7:20 am, edited 1 time in total.

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Re: U.S. stocks in freefall

Postby Leeraar » Tue Apr 19, 2016 7:33 pm

It's hard to get over the fact there are no reliable predictors of short term market performance, 3 months, six months, or a year. Even longer expectations ("expected returns") are iffy.

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Re: U.S. stocks in freefall

Postby protagonist » Tue Apr 19, 2016 9:09 pm

Leeraar wrote:It's hard to get over the fact there are no reliable predictors of short term market performance, 3 months, six months, or a year. Even longer expectations ("expected returns") are iffy.

L.


Predictors of long term performance are "iffier", since noise just compounds over time. Who would have predicted a Dow around 18000 back in 2008? Or a steady decline in the Japanese market over decades?

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Re: U.S. stocks in freefall

Postby sharpjm » Tue Apr 19, 2016 9:56 pm

broadstone wrote:in my heart, I'm a true Boglehead.

Based on your comments, you are actually the polar opposite of a boglehead. :oops:

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Re: U.S. stocks in freefall

Postby Yesterdaysnews » Tue Apr 19, 2016 10:44 pm

By almost every metric stocks are looking a bit pricey right now. I think most expect subdued returns going forward for the next 10-12 years in equities. Just means one need to save more money during this upcoming decade rather than rely solely on portfolio growth.

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Re: U.S. stocks in freefall

Postby HomerJ » Tue Apr 19, 2016 10:52 pm

broadstone wrote:Sometimes there are so many warning flags waving that you have to pay attention, other times not so much. Now is a time where technical analysis, and economic logic are screaming


They have screamed before. They will scream again. They will be right, every once in a while. Most of the time they are wrong.

You really need to tune out the noise. There are signs ALL THE TIME. Read this thread... For the past 5 years, there have been signs. Government shutdown, Greece Eurozone crisis, debt crisis. Meanwhile, the stock market has doubled. We may start a crash tomorrow... But we may not. You really don't know. No one does.

But hopefully I will be wrong, the naysayers will be right, I'll look foolish, you can say "we told you so", and I'll have lost out on some growth years. :oops:


We can already say that. You've already looked a little foolish, and you've already lost out on some serious growth years.

Even if the market crashes tomorrow, you've already proven you can't time the market... You already guaranteed we were heading to 1600 before heading back up, and you were wrong. It's okay to be wrong. Many of us have tried to time the market and discovered we couldn't do it. You're not alone in being wrong.

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Re: U.S. stocks in freefall

Postby nisiprius » Wed Apr 20, 2016 7:03 am

broadstone wrote:Sometimes there are so many warning flags waving that you have to pay attention, other times not so much. Now is a time where technical analysis, and economic logic are screaming, hey, it's June, the ice is melting but you're still standing in the middle of the lake like it's mid winter. I never wanted to be a market timer as I don't have the stomach for it and in my heart, I'm a true Boglehead. But there are so many warning sayings, proceed with extreme caution, that I can't ignore them anymore. The warning signs were there in 2007 and they're back now. History will repeat itself.

But hopefully I will be wrong, the naysayers will be right, I'll look foolish, you can say "we told you so", and I'll have lost out on some growth years. :oops:
I always get nervous, always, when "everyone" is saying something. I've been continuously nervous about my Vanguard Total Bond Fund since 2009, for example, when the forum got one of its earlier postings saying
I know people don't like to market time but interest rates are currently zero and whether rates rise in 2010 or 2011 or 2015, eventually they will rise and intermediate term bonds will get hit.

So isn't it wise to go short in this environment where rates can only go up?
Well, it's 2016 and I just stuck to Total Bond.

I also got nervous about Total Bond in 2011 when the headlines were screaming that bond genius Bill Gross had taken PIMCO Total Return entirely out of Treasuries altogether, and that turned out to be the year Total Bond beat PIMCO Total Return.

Heck, I got nervous about the Hindenburg Omen for stocks in 2010.

It's easy to say "tune out the noise." It's not easy to do.

Sometimes there are so many warning flags waving that you have to pay attention, other times not so much.
When were those "other times?" Please name one year when you think there were not many "warning flags." Then do a Google search on that year. You'll be surprised. In retrospect, when we know that a year was a good year, we forget all the warnings flags there seemed to be at the time.

Seriously, name a year and then let's go look.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: U.S. stocks in freefall

Postby dandypandys » Wed Apr 20, 2016 8:57 am

As a beginner, I am finding this thread really helpful- thanks Advisors!

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Re: U.S. stocks in freefall

Postby JW-Retired » Wed Apr 20, 2016 9:22 am

broadstone wrote: (April 19, 2016) I never wanted to be a market timer as I don't have the stomach for it and in my heart, I'm a true Boglehead. But there are so many warning sayings, proceed with extreme caution, that I can't ignore them anymore. The warning signs were there in 2007 and they're back now. History will repeat itself.

But hopefully I will be wrong, the naysayers will be right, I'll look foolish, you can say "we told you so", and I'll have lost out on some growth years. :oops:


broadstone wrote:(Aug 12, 2015) I liquidated to cash 2 months ago. The buying opportunity China will cause could be a once in a decade opportunity, so better start digging up the tins of cash from your backyard (gentle nod to Vegas Vacation movie). :sharebeer

broadstone,
So you went to cash around June 2015 and you stuck with it through 2 correction sized dips and recoveries. That's plenty of market timer stomach.

But I really disagree that you are proceeding with "extreme caution". A cautious market timer would have gone to only 1/3rd or 1/2 cash to cover that remote possibility that his tea leaves might be wrong. Why do you insist on all or nothing?
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Re: U.S. stocks in freefall

Postby broadstone » Wed Apr 20, 2016 10:53 am

JW-Retired wrote:
broadstone wrote: (April 19, 2016) I never wanted to be a market timer as I don't have the stomach for it and in my heart, I'm a true Boglehead. But there are so many warning sayings, proceed with extreme caution, that I can't ignore them anymore. The warning signs were there in 2007 and they're back now. History will repeat itself.

But hopefully I will be wrong, the naysayers will be right, I'll look foolish, you can say "we told you so", and I'll have lost out on some growth years. :oops:


broadstone wrote:(Aug 12, 2015) I liquidated to cash 2 months ago. The buying opportunity China will cause could be a once in a decade opportunity, so better start digging up the tins of cash from your backyard (gentle nod to Vegas Vacation movie). :sharebeer

broadstone,
So you went to cash around June 2015 and you stuck with it through 2 correction sized dips and recoveries. That's plenty of market timer stomach.

But I really disagree that you are proceeding with "extreme caution". A cautious market timer would have gone to only 1/3rd or 1/2 cash to cover that remote possibility that his tea leaves might be wrong. Why do you insist on all or nothing?
JW


To be honest I got a good case of the jitters, thought about it for a few days then made the decision. I had already made good gains on my accounts and decided not to be greedy. Greed got me in trouble during the housing collapse. Maybe overly conservative but I'm sticking with it, at least through the end of the year. With Brexit looming and an election, it's going to b a volatile year.

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Re: U.S. stocks in freefall

Postby LateStarter1975 » Wed Apr 20, 2016 11:21 am

broadstone wrote:
JW-Retired wrote:
broadstone wrote: (April 19, 2016) I never wanted to be a market timer as I don't have the stomach for it and in my heart, I'm a true Boglehead. But there are so many warning sayings, proceed with extreme caution, that I can't ignore them anymore. The warning signs were there in 2007 and they're back now. History will repeat itself.

But hopefully I will be wrong, the naysayers will be right, I'll look foolish, you can say "we told you so", and I'll have lost out on some growth years. :oops:


broadstone wrote:(Aug 12, 2015) I liquidated to cash 2 months ago. The buying opportunity China will cause could be a once in a decade opportunity, so better start digging up the tins of cash from your backyard (gentle nod to Vegas Vacation movie). :sharebeer

broadstone,
So you went to cash around June 2015 and you stuck with it through 2 correction sized dips and recoveries. That's plenty of market timer stomach.

But I really disagree that you are proceeding with "extreme caution". A cautious market timer would have gone to only 1/3rd or 1/2 cash to cover that remote possibility that his tea leaves might be wrong. Why do you insist on all or nothing?
JW


To be honest I got a good case of the jitters, thought about it for a few days then made the decision. I had already made good gains on my accounts and decided not to be greedy. Greed got me in trouble during the housing collapse. Maybe overly conservative but I'm sticking with it, at least through the end of the year. With Brexit looming and an election, it's going to b a volatile year.


Who knows, next year might be even more volatile. How can anyone predict this? Have you thought about holding cash through the end of next year?
Debt is dangerous...simple is beautiful

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Re: U.S. stocks in freefall

Postby livesoft » Wed Apr 20, 2016 11:24 am

It's always a volatile year. They are the best kind of years.
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Re: U.S. stocks in freefall

Postby GoldenFinch » Wed Apr 20, 2016 11:42 am

Also, what happens if you get back in at the end of the year and then the market tanks? Or what if the market goes up this year and continues to go up next year? Do you stay out? What's your long term strategy?

I know someone in his mid-30s who went to cash in his 401k on August 7th 2015 and is still out. He has missed out on dividends and has only been reinvesting new contributions in a money market all year, missing all of those down days. I guess he feels safe, but his money is just sitting there.

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Re: U.S. stocks in freefall

Postby EyeYield » Wed Apr 20, 2016 12:07 pm

broadstone wrote:a once in a lifetime buying opportunity is coming.

There's only one opportunity of a lifetime.

Start early, invest consistently and let compounding do it's thing over YOUR lifetime.

You're not alone. There isn't anyone who can totally escape their own psychology. Ignoring the noise industry, and it is an industry, is a discipline that takes practice.
Much like mastering a musical instrument, no matter how much you practice, you never fully master it.

When I have doubts and need reinforcement, I reread a Dr. Bernstein or Jack Bogle book which always seems to quiet the noise.

Try it.
"The stock market is a giant distraction from the business of investing." - Jack Bogle

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Re: U.S. stocks in freefall

Postby ensign » Wed Apr 20, 2016 12:20 pm

If one has years to work before retirement, then I completely agree with most here that contributing as much as one can each month with the use of index funds and "ignoring the noise" is the way to go.

What is not so easy if one, like me, has just retired and is sitting on (for me) sizable investments that must last another 30 years or so. I am 60/40 stocks/bond Vanguard ETFs but it is impossible to ignore statements like this one taken from an investing site today: "median price/earnings and price/sales ratios are higher than at the peaks in 2000 and 2007."

My point is that it is far easier to ignore the noise when dollar-cost-averaging over decades versus having significant assets and no opportunity to contribute during a downturn with FUTURE earnings.

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Re: U.S. stocks in freefall

Postby minesweep » Wed Apr 20, 2016 12:26 pm

broadstone wrote:Sometimes there are so many warning flags waving that you have to pay attention, other times not so much. Now is a time where technical analysis, and economic logic are screaming, hey, it's June, the ice is melting but you're still standing in the middle of the lake like it's mid winter. I never wanted to be a market timer as I don't have the stomach for it and in my heart, I'm a true Boglehead. But there are so many warning sayings, proceed with extreme caution, that I can't ignore them anymore. The warning signs were there in 2007 and they're back now. History will repeat itself.

But hopefully I will be wrong, the naysayers will be right, I'll look foolish, you can say "we told you so", and I'll have lost out on some growth years. :oops:

Yes, still 100% cash. I'm happy to sit on the sidelines for this one.

True Bogleheads develop an all-weather portfolio so they are able to ride out any stock market turbulence without feeling too much pain. Being 100% in cash is not part of the Boglehead investment philosophy either.


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