U.S. stocks in freefall

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bayview
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Re: U.S. stocks in freefall

Post by bayview » Sat Jan 09, 2016 1:45 pm

Leeraar wrote:
Bushido1 wrote:I was wondering, what are your thoughts on this argument below?

It's garbage, classic investment porn. Tomorrow he'll write that there will not be a recession because it's an election year.

You should stop reading this stuff. Tune out the noise.

L.

+1

It can worm its way into the minds of the most confident, but less experienced, investors, leading you to question what you know and what you've decided.

It's just a whole lot of emotion with zero real information. But it does make the authors money, I guess. * click * click * click *
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carofe
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Re: U.S. stocks in freefall

Post by carofe » Sat Jan 09, 2016 3:20 pm

Leeraar wrote:
Bushido1 wrote:I was wondering, what are your thoughts on this argument below?

It's garbage, classic investment porn. Tomorrow he'll write that there will not be a recession because it's an election year.

You should stop reading this stuff. Tune out the noise.

L.


90/10 AA, and I told to myself: tough it up, rebalance and move on :D.
I don't think I'm going to read the news for a while. See ya' at the bottom, Lol.
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Re: U.S. stocks in freefall

Post by sawhorse » Sat Jan 09, 2016 5:01 pm

MrVargas wrote:I don't know anything about anything and I can find a flaw in your arguments. Every single one. IT'S ALREADY PRICED IN! The thousands of investors, many with high iq's, ivy league degrees, decades of experience and look at these numbers daily have spoken and about half the money thinks prices are too high and about half think the prices are just right or too low. Why do you believe that you are smarter than their collective wisdom?

This argument only works when information is equally available and insider trading and price manipulation aren't factors.

When information is not equally available, and people act upon informational advantages, the argument falls apart. There is an effective way to outguess the market: Insider knowledge. If you sat on the FDA approval committee and were willing and able to break laws, I guarantee you'd be able to far outperform a pharmaceutical index fund.

Insider information and the ability of some to manipulate price are bigger factors in China than in the US. Much of the market is owned by government entities. Only recently have they started to crack down in insider trading by private individuals, and there is a lot more still to crack down on.

So what, you say. You'll follow the index. That way you reap part of the advantage that insiders have. That makes sense if liquidity is equal. But liquidity is not equal. There are restrictions on how often different sets of investors, including index fund managers, can trade. If everyone else except a certain fund can sell, then that fund will perform worse than everyone else even if it's an index fund.

With China, the biggest concern for me is currency risk. They've been messing with their currency lately. If they try to prop up the market by devaluing their currency, then gains in terms of RMB will not translate to gains after conversion to USD.

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DonCamillo
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Re: U.S. stocks in freefall

Post by DonCamillo » Mon Jan 11, 2016 10:44 am

I can't resist some minor market timing.

If I think the market is down, I am more tempted to do a Roth conversion to take advantage of the lower price and save on taxes.

If I think the market is going down, I can delay my Roth contribution.

But I am largely moving less than 1% of my portfolio based on a 20% variance on that 1%. I guess I want to do something, but I want to do so and still stay the course.
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Re: U.S. stocks in freefall

Post by MrVargas » Tue Jan 12, 2016 11:23 pm

sawhorse wrote:
MrVargas wrote:I don't know anything about anything and I can find a flaw in your arguments. Every single one. IT'S ALREADY PRICED IN! The thousands of investors, many with high iq's, ivy league degrees, decades of experience and look at these numbers daily have spoken and about half the money thinks prices are too high and about half think the prices are just right or too low. Why do you believe that you are smarter than their collective wisdom?

This argument only works when information is equally available and insider trading and price manipulation aren't factors.

When information is not equally available, and people act upon informational advantages, the argument falls apart. There is an effective way to outguess the market: Insider knowledge. If you sat on the FDA approval committee and were willing and able to break laws, I guarantee you'd be able to far outperform a pharmaceutical index fund.

Insider information and the ability of some to manipulate price are bigger factors in China than in the US. Much of the market is owned by government entities. Only recently have they started to crack down in insider trading by private individuals, and there is a lot more still to crack down on.

So what, you say. You'll follow the index. That way you reap part of the advantage that insiders have. That makes sense if liquidity is equal. But liquidity is not equal. There are restrictions on how often different sets of investors, including index fund managers, can trade. If everyone else except a certain fund can sell, then that fund will perform worse than everyone else even if it's an index fund.

With China, the biggest concern for me is currency risk. They've been messing with their currency lately. If they try to prop up the market by devaluing their currency, then gains in terms of RMB will not translate to gains after conversion to USD.

No one is talking about insider info. TJ is using publicly available information in his reasoning.

broadstone
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Re: U.S. stocks in freefall

Post by broadstone » Wed Jan 13, 2016 2:49 pm

I'm still 100% cash since my last post late 2015. Rubbing hands together waiting for the big correction that fundamentally has to happen. :sharebeer

cusetownusa
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Re: U.S. stocks in freefall

Post by cusetownusa » Wed Jan 13, 2016 2:52 pm

broadstone wrote:I'm still 100% cash since my last post late 2015. Rubbing hands together waiting for the big correction that fundamentally has to happen. :sharebeer


awesome...when will you get back in?

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Re: U.S. stocks in freefall

Post by letsgobobby » Wed Jan 13, 2016 3:01 pm

cusetownusa wrote:
broadstone wrote:I'm still 100% cash since my last post late 2015. Rubbing hands together waiting for the big correction that fundamentally has to happen. :sharebeer


awesome...when will you get back in?

the week before he posts, telling us he got back in at the bottom.

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Bustoff
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Re: U.S. stocks in freefall

Post by Bustoff » Wed Jan 13, 2016 3:11 pm

broadstone wrote:I'm still 100% cash since my last post late 2015. Rubbing hands together waiting for the big correction that fundamentally has to happen. :sharebeer

Been there...did that...got carved up.

Image

CoAndy
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Re: U.S. stocks in freefall

Post by CoAndy » Wed Jan 13, 2016 3:16 pm

broadstone wrote:I'm still 100% cash since my last post late 2015. Rubbing hands together waiting for the big correction that fundamentally has to happen. :sharebeer
Please let us know when the upward trajectory will begin.

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Re: U.S. stocks in freefall

Post by Boglenaut » Wed Jan 13, 2016 3:26 pm

DonCamillo wrote:I can't resist some minor market timing.

If I think the market is down, I am more tempted to do a Roth conversion to take advantage of the lower price and save on taxes.

If I think the market is going down, I can delay my Roth contribution.


Do the Roth conversion either way. If the market is down more at the end of the year, recharacterize back and let the government share the loss.

I stumbled into that one in 2008.

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Re: U.S. stocks in freefall

Post by CoAndy » Wed Jan 13, 2016 3:28 pm

S&P 500 is now down about 11% off its high. Thinking of moving some money out of my SVF and putting it into VINIX.
Last edited by CoAndy on Wed Jan 13, 2016 3:48 pm, edited 1 time in total.

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Re: U.S. stocks in freefall

Post by nisiprius » Wed Jan 13, 2016 3:31 pm

Bushido1 wrote:...I was wondering, what are your thoughts on this argument below?

http://seekingalpha.com/article/3796226 ... ter-widget
He says there's a recession coming.

1) The NBER won't even say there's a recession in progress. They're smart. They won't call it until it's over. If you can't even tell a recession when you're in one, then you sure as heck can't predict one. And basically you can't. The track record of those who've tried is ludicrously bad.

2) Jeremy Siegel did an interesting analysis and found that even if you could predict recessions, going to cash on the day each recession began and buying back in on the day it ended made virtually no difference in your results. The problem is that recession and the stock market actually aren't that well synchronized. As I recall, the recession "signals" come months too late.
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Re: U.S. stocks in freefall

Post by cfs » Wed Jan 13, 2016 4:01 pm

This was another good day.

To add to your Roth IRA.
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oldzey
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Re: U.S. stocks in freefall

Post by oldzey » Wed Jan 13, 2016 4:01 pm

Stocked up on some more cat food today. :D
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

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oneleaf
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Re: U.S. stocks in freefall

Post by oneleaf » Wed Jan 13, 2016 4:29 pm

broadstone wrote:I'm still 100% cash since my last post late 2015. Rubbing hands together waiting for the big correction that fundamentally has to happen. :sharebeer


In your last post on this subject in September, you wrote an ambiguous post: "As promised...I will be switching from a cash position Thursday or Friday if Fed announces what I think they will. If not, I'll be staying 100% cash."

Convenient how your post did not actually say what you were planning to do, nor did you confirm what you did back then.

It seems any unambigous claims you make are made after-the-fact. You should start a newsletter.

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zaboomafoozarg
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Re: U.S. stocks in freefall

Post by zaboomafoozarg » Wed Jan 13, 2016 4:31 pm

Nice, shaved $2k off my 2016 taxable income this afternoon.

tenkuky
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Re: U.S. stocks in freefall

Post by tenkuky » Wed Jan 13, 2016 4:33 pm

Regarding Roth conversions in a down market, is it possible to designate specific lot IDs to do this to take advantage of lowest cost-basis at conversion?

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Re: U.S. stocks in freefall

Post by Leeraar » Wed Jan 13, 2016 4:49 pm

tenkuky wrote:Regarding Roth conversions in a down market, is it possible to designate specific lot IDs to do this to take advantage of lowest cost-basis at conversion?

I am not sure this question makes any sense. If it does, the answer is surely "No". No one keeps track of tax lots in any accounts you might convert to a Roth.

L.
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tenkuky
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Re: U.S. stocks in freefall

Post by tenkuky » Wed Jan 13, 2016 4:50 pm

Leeraar wrote:
tenkuky wrote:Regarding Roth conversions in a down market, is it possible to designate specific lot IDs to do this to take advantage of lowest cost-basis at conversion?

I am not sure this question makes any sense. If it does, the answer is surely "No". No one keeps track of tax lots in any accounts you might convert to a Roth.

L.


My bad, you are right. Only in my taxable.
Got carried away with the "noise" on Roth conversions.
Teach me to stay the course, luckily just a passing fancy :oops:

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VictoriaF
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Re: U.S. stocks in freefall

Post by VictoriaF » Wed Jan 13, 2016 4:58 pm

tenkuky wrote:
Leeraar wrote:
tenkuky wrote:Regarding Roth conversions in a down market, is it possible to designate specific lot IDs to do this to take advantage of lowest cost-basis at conversion?

I am not sure this question makes any sense. If it does, the answer is surely "No". No one keeps track of tax lots in any accounts you might convert to a Roth.

L.


My bad, you are right. Only in my taxable.
Got carried away with the "noise" on Roth conversions.
Teach me to stay the course, luckily just a passing fancy :oops:


Roth conversion is not the same as asset allocation within Roth. Right now, I have a large amount of cash in my Roth. I am planning to simultaneously sell stocks in my taxable account and buy the same amount of stocks in Roth. My net stock holdings will not change, however I will have less in taxable gains (sell "low" in a taxable account) and more tax-free growth in Roth.

I should have done it today, but I was busy with other things.

Victoria
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Re: U.S. stocks in freefall

Post by livesoft » Wed Jan 13, 2016 5:01 pm

VictoriaF wrote:Roth conversion is not the same as asset allocation within Roth. Right now, I have a large amount of cash in my Roth. I am planning to simultaneously sell stocks in my taxable account and buy the same amount of stocks in Roth. My net stock holdings will not change, however I will have less in taxable gains (sell "low" in a taxable account) and more tax-free growth in Roth.

Great idea! I am doing something similar. And no possibility of wash sales since we are not selling at a loss. ;)

But I have added a twist to this: I bought some things today in tax-advantaged, but did not sell in my taxable account yet, so I am "doubled-up" at the moment. This is a calculated bet that things will go up a little bit in the next few days, so that I can make a few percent extra gain over "cash" in a few days.
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tenkuky
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Re: U.S. stocks in freefall

Post by tenkuky » Wed Jan 13, 2016 5:04 pm

livesoft wrote:
VictoriaF wrote:Roth conversion is not the same as asset allocation within Roth. Right now, I have a large amount of cash in my Roth. I am planning to simultaneously sell stocks in my taxable account and buy the same amount of stocks in Roth. My net stock holdings will not change, however I will have less in taxable gains (sell "low" in a taxable account) and more tax-free growth in Roth.

Great idea! I am doing something similar. And no possibility of wash sales since we are not selling at a loss. ;)



Victoria, Livesoft:
I wish I could do the same.
No free cash in Roth, and my taxable is fresh out of TLH. I am all up in those holdings since apparently I bought most of them in 2008!
Oh well...
Back to my day job and family :happy

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Re: U.S. stocks in freefall

Post by livesoft » Wed Jan 13, 2016 5:08 pm

I didn't have any cash in the tax-advantaged account, so I just sold some bond fund ETFs to get the cash. A day like today is one reason I do not have 100% equities in a Roth normally, but after today the Roth is 100% equities ... at least for a little while.
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Re: U.S. stocks in freefall

Post by broadstone » Wed Jan 13, 2016 5:24 pm

oneleaf wrote:
broadstone wrote:I'm still 100% cash since my last post late 2015. Rubbing hands together waiting for the big correction that fundamentally has to happen. :sharebeer


In your last post on this subject in September, you wrote an ambiguous post: "As promised...I will be switching from a cash position Thursday or Friday if Fed announces what I think they will. If not, I'll be staying 100% cash."

Convenient how your post did not actually say what you were planning to do, nor did you confirm what you did back then.

It seems any unambigous claims you make are made after-the-fact. You should start a newsletter.


Sorry but this forum isn't my life. I believe the S&P will fall to about 1600 which is when I'll be re-investing. In the meantime, I've been getting 7-13% returns from peer-peer lending without the volatility.

I think the days of stable markets are over and volatility will rule thanks to hedge funds and traders. Times change so we have to change with it.

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Re: U.S. stocks in freefall

Post by TheRightKost87 » Wed Jan 13, 2016 5:24 pm

cfs wrote:This was another good day.

To add to your Roth IRA.


I did exactly this today, and am very happy in doing so. That money (invested into TSM), will outperform TSM for the year by 8% or so.
"The problem with diversification is that it works, whether or not we want it to"

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Re: U.S. stocks in freefall

Post by sawhorse » Wed Jan 13, 2016 5:31 pm

Boglenaut wrote:
DonCamillo wrote:I can't resist some minor market timing.

If I think the market is down, I am more tempted to do a Roth conversion to take advantage of the lower price and save on taxes.

If I think the market is going down, I can delay my Roth contribution.


Do the Roth conversion either way. If the market is down more at the end of the year, recharacterize back and let the government share the loss.

I stumbled into that one in 2008.

Can you convert and un-convert more than once per year?

TheRightKost87 wrote:
cfs wrote:This was another good day.

To add to your Roth IRA.


I did exactly this today, and am very happy in doing so. That money (invested into TSM), will outperform TSM for the year by 8% or so.

Wow, I've never thought about it that way.

I hope my math is correct on this. Because a percentage drop of X requires a gain of Y to break even, where Y is greater than X, you actually will outperform by 8.7%. (A drop of 8% requires a rise of 8.7% to break even.)

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Re: U.S. stocks in freefall

Post by 2Birds1Stone » Wed Jan 13, 2016 6:03 pm

:sharebeer the only thing to do on days like today!

hnzw rui
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Re: U.S. stocks in freefall

Post by hnzw rui » Wed Jan 13, 2016 7:10 pm

sawhorse wrote:I hope my math is correct on this. Because a percentage drop of X requires a gain of Y to break even, where Y is greater than X, you actually will outperform by 8.7%. (A drop of 8% requires a rise of 8.7% to break even.)

Yup. 100%/92% - 100% = 8.7%. Imagine a 50% drop. You'd need 100% gain to break even.

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Re: U.S. stocks in freefall

Post by ofcmetz » Wed Jan 13, 2016 7:55 pm

TheRightKost87 wrote:
cfs wrote:This was another good day.

To add to your Roth IRA.


I did exactly this today, and am very happy in doing so. That money (invested into TSM), will outperform TSM for the year by 8% or so.



I've been accelerating my ROTH contributions for the year. Might as well get those contributions in earlier.
Never underestimate the power of the force of low cost index funds.

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Re: U.S. stocks in freefall

Post by CantPassAgain » Wed Jan 13, 2016 8:21 pm

broadstone wrote:
oneleaf wrote:
broadstone wrote:I'm still 100% cash since my last post late 2015. Rubbing hands together waiting for the big correction that fundamentally has to happen. :sharebeer


In your last post on this subject in September, you wrote an ambiguous post: "As promised...I will be switching from a cash position Thursday or Friday if Fed announces what I think they will. If not, I'll be staying 100% cash."

Convenient how your post did not actually say what you were planning to do, nor did you confirm what you did back then.

It seems any unambigous claims you make are made after-the-fact. You should start a newsletter.


Sorry but this forum isn't my life. I believe the S&P will fall to about 1600 which is when I'll be re-investing. In the meantime, I've been getting 7-13% returns from peer-peer lending without the volatility.

I think the days of stable markets are over and volatility will rule thanks to hedge funds and traders. Times change so we have to change with it.


Sure, sure.

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Re: U.S. stocks in freefall

Post by jasonwc » Wed Jan 13, 2016 9:13 pm

I read through a few pages of the posts in August 2011 and it was amazing to see all the doom and gloom. Some of the posters seemed convinced that stocks would continue falling and that it would be another "lost decade." Even with the ~10% drop in the last few weeks, VTI is still up 60% since Aug 15, 2011. Those that stomached the volatility and continued to invest in equities were rewarded handily. Those that sat in cash waiting for the bottom likely missed out on at least some of the gains. The major takeaway from reading those posts is that nobody really has a clue what's going to happen. It simply isn't possible to predict with any reasonable certainty. And yet, people continue to talk about sitting in cash until we hit bottom etc. If it was that easy to time the market, why is is that virtually every study shows market timers significantly underperform the overall market, and even the very mutual funds in which they invest?

Instead of trying to figure out which direction the market will move, I'm simply going to continue my automatic investments every pay period. I'll also increase my savings rate as my income increases, as I have done every year. I only started my investing journey a few years ago, and I've got 25-35 years to go. I'm pretty confident that if I minimize fees, maximize my savings rate, and choose a reasonable asset allocation, I'll be fine. In any case, I don't think there's much more that can be done.

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Re: U.S. stocks in freefall

Post by nisiprius » Wed Jan 13, 2016 10:07 pm

broadstone wrote:...I think the days of stable markets are over and volatility will rule thanks to hedge funds and traders. Times change so we have to change with it...
When were those "days of stable markets?" I don't remember any "days of stable markets." When was this golden age? 2008-2009? The "dot-bomb" era of 2000? 1987, still the record for a single-day percentage drop in the Dow? 1966-1982, the "death of equities?" The crash of 1929, the crash of 1937, the Great Depression?
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Re: U.S. stocks in freefall

Post by Toons » Wed Jan 13, 2016 10:19 pm

jasonwc wrote:I read through a few pages of the posts in August 2011 and it was amazing to see all the doom and gloom. Some of the posters seemed convinced that stocks would continue falling and that it would be another "lost decade." Even with the ~10% drop in the last few weeks, VTI is still up 60% since Aug 15, 2011. Those that stomached the volatility and continued to invest in equities were rewarded handily. Those that sat in cash waiting for the bottom likely missed out on at least some of the gains. The major takeaway from reading those posts is that nobody really has a clue what's going to happen. It simply isn't possible to predict with any reasonable certainty. And yet, people continue to talk about sitting in cash until we hit bottom etc. If it was that easy to time the market, why is is that virtually every study shows market timers significantly underperform the overall market, and even the very mutual funds in which they invest?

Instead of trying to figure out which direction the market will move, I'm simply going to continue my automatic investments every pay period. I'll also increase my savings rate as my income increases, as I have done every year. I only started my investing journey a few years ago, and I've got 25-35 years to go. I'm pretty confident that if I minimize fees, maximize my savings rate, and choose a reasonable asset allocation, I'll be fine. In any case, I don't think there's much more that can be done.



+1
Smart,Smart,Smart.
Your comments are some of the best I have read in a while.
Simple,Common Sense Investing.
Controlling that which you can,how much to save and invest.
Accepting how the market behaves.
You are well on your way to a secure financial future.
Stay the course ,don't waver.
:happy
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Re: U.S. stocks in freefall

Post by JW-Retired » Thu Jan 14, 2016 9:44 am

Leeraar wrote:
tenkuky wrote: Regarding Roth conversions in a down market, is it possible to designate specific lot IDs to do this to take advantage of lowest cost-basis at conversion?

I am not sure this question makes any sense. If it does, the answer is surely "No". No one keeps track of tax lots in any accounts you might convert to a Roth.

No tax lots in an IRA, but IMO Roth conversions in a down market still make sense. We will be taking the RMD from DW's (bond-heavy) tIRA today, and then converting another tax budgeted amount from the tIRA to her (100% equities) Roth tomorrow. This is about as far as we ever go with market timing. :wink:

Very probably these two operations could be done in the same day but we have not done that before. Don't want to risk confusing Vanguard.
JW
(ps added) I did both operations today. The web interface appeared to be fool-proof.
Last edited by JW-Retired on Thu Jan 14, 2016 2:21 pm, edited 1 time in total.
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Re: U.S. stocks in freefall

Post by Jozxyqk » Thu Jan 14, 2016 10:34 am

broadstone wrote:
oneleaf wrote:
broadstone wrote:I'm still 100% cash since my last post late 2015. Rubbing hands together waiting for the big correction that fundamentally has to happen. :sharebeer


In your last post on this subject in September, you wrote an ambiguous post: "As promised...I will be switching from a cash position Thursday or Friday if Fed announces what I think they will. If not, I'll be staying 100% cash."

Convenient how your post did not actually say what you were planning to do, nor did you confirm what you did back then.

It seems any unambigous claims you make are made after-the-fact. You should start a newsletter.


Sorry but this forum isn't my life. I believe the S&P will fall to about 1600 which is when I'll be re-investing. In the meantime, I've been getting 7-13% returns from peer-peer lending without the volatility.

I think the days of stable markets are over and volatility will rule thanks to hedge funds and traders. Times change so we have to change with it.


This is funny. The forum isn't your life, but you pop up on down days to tell us all about how you switched to cash long before the dip, then disappear when your predicted full-on crash doesn't happen. I'm guessing if the market rebounds, we won't see you again for a while.... at least until the next dip.

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Re: U.S. stocks in freefall

Post by ruralavalon » Thu Jan 14, 2016 11:32 am

The market in free fall again!!!

Toons wrote:
jasonwc wrote: . . . . .
Instead of trying to figure out which direction the market will move, I'm simply going to continue my automatic investments every pay period. I'll also increase my savings rate as my income increases, as I have done every year. I only started my investing journey a few years ago, and I've got 25-35 years to go. I'm pretty confident that if I minimize fees, maximize my savings rate, and choose a reasonable asset allocation, I'll be fine. In any case, I don't think there's much more that can be done.

+1
Smart,Smart,Smart.
Your comments are some of the best I have read in a while.
Simple,Common Sense Investing.
Controlling that which you can,how much to save and invest.
Accepting how the market behaves.
You are well on your way to a secure financial future.
Stay the course ,don't waver.
:happy

Absolutely right. For anyone not yet retired:
1) increase your savings rate if you can;
2) continue automatic investments every pay period;
3) keep expenses low;
4) use a reasonable asset allocation; and
5) hang in there :D .
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

broadstone
Posts: 121
Joined: Wed Jan 14, 2015 1:14 pm
Location: USA

Re: U.S. stocks in freefall

Post by broadstone » Thu Jan 14, 2016 11:40 am

Jozxyqk wrote:
broadstone wrote:
oneleaf wrote:
broadstone wrote:I'm still 100% cash since my last post late 2015. Rubbing hands together waiting for the big correction that fundamentally has to happen. :sharebeer


In your last post on this subject in September, you wrote an ambiguous post: "As promised...I will be switching from a cash position Thursday or Friday if Fed announces what I think they will. If not, I'll be staying 100% cash."

Convenient how your post did not actually say what you were planning to do, nor did you confirm what you did back then.

It seems any unambigous claims you make are made after-the-fact. You should start a newsletter.


Sorry but this forum isn't my life. I believe the S&P will fall to about 1600 which is when I'll be re-investing. In the meantime, I've been getting 7-13% returns from peer-peer lending without the volatility.

I think the days of stable markets are over and volatility will rule thanks to hedge funds and traders. Times change so we have to change with it.


This is funny. The forum isn't your life, but you pop up on down days to tell us all about how you switched to cash long before the dip, then disappear when your predicted full-on crash doesn't happen. I'm guessing if the market rebounds, we won't see you again for a while.... at least until the next dip.


Correct, you'll see me post when I reinvest per requested. Trust me, the market isn't rebounding anytime soon.

TheRightKost87
Posts: 259
Joined: Tue Aug 13, 2013 12:25 am
Location: Boston, MA

Re: U.S. stocks in freefall

Post by TheRightKost87 » Thu Jan 14, 2016 11:44 am

broadstone wrote:
Correct, you'll see me post when two weeks after I supposedly reinvest per requested. Trust me, the market isn't rebounding anytime soon.


Fixed that for ya :wink:
"The problem with diversification is that it works, whether or not we want it to"

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Toons
Posts: 11744
Joined: Fri Nov 21, 2008 10:20 am
Location: Hills of Tennessee

Re: U.S. stocks in freefall

Post by Toons » Thu Jan 14, 2016 12:55 pm

ruralavalon wrote:The market in free fall again!!!

Toons wrote:
jasonwc wrote: . . . . .
Instead of trying to figure out which direction the market will move, I'm simply going to continue my automatic investments every pay period. I'll also increase my savings rate as my income increases, as I have done every year. I only started my investing journey a few years ago, and I've got 25-35 years to go. I'm pretty confident that if I minimize fees, maximize my savings rate, and choose a reasonable asset allocation, I'll be fine. In any case, I don't think there's much more that can be done.

+1
Smart,Smart,Smart.
Your comments are some of the best I have read in a while.
Simple,Common Sense Investing.
Controlling that which you can,how much to save and invest.
Accepting how the market behaves.
You are well on your way to a secure financial future.
Stay the course ,don't waver.
:happy

Absolutely right. For anyone not yet retired:
1) increase your savings rate if you can;
2) continue automatic investments every pay period;
3) keep expenses low;
4) use a reasonable asset allocation; and
5) hang in there :D .


Exactly Right,,,
It Really Isn't that complicated.
It is Emotion that derails many a simple investment plan :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

Pinotage
Posts: 150
Joined: Sat Nov 12, 2011 6:02 am

Re: U.S. stocks in freefall

Post by Pinotage » Thu Jan 14, 2016 7:12 pm

Pinotage wrote:Agree with the numerous other posters that this is just a bump. A blip. A relative nothing.

I say that based on:

1- Our specific frame of reference for market turbulence (invested through far bigger dips before)
2 - Our investing horizon (many decades to go)
3 - Our asset allocation (relatively conservative for age)
4 - The rest of our financial picture

I think it is important to remember all of these factors, and probably more, work in concert to stoke or soothe one's emotions.

Particularly number 4.

A dip, however small or large, looks worse when you are unemployed. It looks worse if you are carrying a too-large mortgage. It looks worse if you have health issues. It looks worse if you have other demands on your time and resources, demands that aren't deferrable or scalable based on market performance.

It even looks worse if you stub your toe, have low blood sugar, or discover a leaky pipe in your basement. Or read a bunch of negative posts. Emotional triggers feed on one another and can skew an otherwise rational perspective pretty fast.

So if the recent dip really looks bad to you, take a moment to consider why. Is it because your AA is too aggressive? Or is it because other areas of your financial life need more attention than your investments? Or have your emotions temporarily gotten the best of you?

Full disclosure: I'm writing this post with hopes to balance some of the negative over-reaction, but also as a reminder to myself how I felt at this specific moment in time. I hope to refer back to this post in days, weeks, or years when I'm feeling emotional about the market.

Best wishes to all!


I just referred back to myself when feeling emotional about the market, and I'm glad to say "stay the course"

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dbCooperAir
Posts: 1107
Joined: Tue Jan 07, 2014 10:13 pm

Re: U.S. stocks in freefall

Post by dbCooperAir » Fri Jan 15, 2016 11:50 am

Just doing my public duty, little surprised I get to bump the thread, its almost humbling :wink:

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Neither a wise man nor a brave man lies down on the tracks of history to wait for the train of the future to run over him. | -Dwight D. Eisenhower-

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TheTimeLord
Posts: 4252
Joined: Fri Jul 26, 2013 2:05 pm

Re: U.S. stocks in freefall

Post by TheTimeLord » Fri Jan 15, 2016 12:20 pm

S&P 500 - 2,134.72
1,920 - 10%
1,813 - 15%
1,707 - 20%
1,600 - 25%
1,493 - 30%
Run, You Clever Boy!

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Bustoff
Posts: 1979
Joined: Sat Mar 03, 2012 6:45 pm

Re: U.S. stocks in freefall

Post by Bustoff » Fri Jan 15, 2016 12:23 pm

TheTimeLord wrote:S&P 500 - 2,134.72
1,920 - 10%
1,813 - 15%
1,707 - 20%
1,600 - 25%
1,493 - 30%

When do circuit breakers kick in?

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TheTimeLord
Posts: 4252
Joined: Fri Jul 26, 2013 2:05 pm

Re: U.S. stocks in freefall

Post by TheTimeLord » Fri Jan 15, 2016 12:26 pm

Bustoff wrote:
TheTimeLord wrote:S&P 500 - 2,134.72
1,920 - 10%
1,813 - 15%
1,707 - 20%
1,600 - 25%
1,493 - 30%

When do circuit breakers kick in?

Please note the numbers above have nothing to do with circuit breakers but are just the approximate value the S&P 500 has to hit to be down that percentage from its all-time high.

https://personal.vanguard.com/us/conten ... ersJSP.jsp

Circuit breakers
Circuit-breaker points represent the thresholds at which trading is halted market-wide for single-day declines in the S&P 500 Index. Circuit breakers halt trading on the nation's stock markets during dramatic drops and are set at 7%, 13%, and 20% of the closing price for the previous day. The circuit breakers are calculated daily.

Level 1 halt (7%)

Trading will halt for 15 minutes if drop occurs before 3:25 p.m.
At or after 3:25 p.m.—trading shall continue, unless there is a Level 3 halt.

Level 2 halt (13%)

Trading will halt for 15 minutes if drop occurs before 3:25 p.m.
At or after 3:25 p.m.—trading shall continue, unless there is a Level 3 halt.

Level 3 halt (20%)

At any time during the trading day—trading shall halt for the remainder of the trading day.
Single stock price bands

The SEC implemented a new marketplace rule, known as the Limit Up-Limit Down Rule, designed to prevent trades from executing outside of price bands established throughout the day for individual stocks and exchange-traded funds (ETFs).
Run, You Clever Boy!

tj
Posts: 1842
Joined: Thu Dec 24, 2009 12:10 am

Re: U.S. stocks in freefall

Post by tj » Fri Jan 15, 2016 12:30 pm

Is there any logic for this recent seemingly higher than normal volatility? A lot of "big" gains and drops these past few weeks...

PeterSteele
Posts: 18
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Re: U.S. stocks in freefall

Post by PeterSteele » Fri Jan 15, 2016 12:33 pm

Stay the course... I know I know. But I didn't... I panicked and sold fearing that the rebound from the last dip was losing steam around 17600 and instead of buying back in I've been sitting on two 401ks (my wife's TSP account and mine of course) invested in fixed income funds that historically average 2-3% returns even during downturns. Now I'm stuck in the bad mindset of thinking "hey, the market will just keep going down at this point so why not wait?" even though market-timing is impossible. Dammit.. I should have known my extreme anxiety disorder and investing were a volatile mix. Now if I was playing with another person's money, I would have stayed the course :sharebeer

GoldenFinch
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Re: U.S. stocks in freefall

Post by GoldenFinch » Fri Jan 15, 2016 12:39 pm

Holy cow! It's an actual free fall!

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6miths
Posts: 611
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Location: Toronto, Canada

Re: U.S. stocks in freefall

Post by 6miths » Fri Jan 15, 2016 12:49 pm

nisiprius wrote:
broadstone wrote:...I think the days of stable markets are over and volatility will rule thanks to hedge funds and traders. Times change so we have to change with it...
When were those "days of stable markets?" I don't remember any "days of stable markets." When was this golden age? 2008-2009? The "dot-bomb" era of 2000? 1987, still the record for a single-day percentage drop in the Dow? 1966-1982, the "death of equities?" The crash of 1929, the crash of 1937, the Great Depression?


+1

Thinking the same thing. Collectively we have such short memories.
'It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so!' Mark Twain

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dbCooperAir
Posts: 1107
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Re: U.S. stocks in freefall

Post by dbCooperAir » Fri Jan 15, 2016 12:52 pm

The news people have something to talk about today :shock:
Neither a wise man nor a brave man lies down on the tracks of history to wait for the train of the future to run over him. | -Dwight D. Eisenhower-

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