U.S. stocks in freefall

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dbCooperAir
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Re: U.S. stocks in freefall

Post by dbCooperAir » Fri Jan 15, 2016 12:54 pm

I'm going all in on Oil, Gold and Silver......Just Kidding.
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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ray.james
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Re: U.S. stocks in freefall

Post by ray.james » Fri Jan 15, 2016 12:54 pm

JW-Retired 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.

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.


What are your thoughts on roth conversion at a higher tax brackets during downturn with 30 years to go? I was looking around for a calculator but no luck. Trying to see if it is worth it.
When in doubt, http://www.bogleheads.org/forum/viewtopic.php?f=1&t=79939

M1garand30064
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Re: U.S. stocks in freefall

Post by M1garand30064 » Fri Jan 15, 2016 1:16 pm

ray.james wrote:
JW-Retired 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.

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.


What are your thoughts on roth conversion at a higher tax brackets during downturn with 30 years to go? I was looking around for a calculator but no luck. Trying to see if it is worth it.


The only thing that matters is what tax bracket you are in now versus what you will be in retirement. If you will be in a lower bracket when you retire then it does not make sense to do the conversion.

Bungo
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Re: U.S. stocks in freefall

Post by Bungo » Fri Jan 15, 2016 1:22 pm

Don't worry, my next 401(k) contribution is due next Tuesday, so the market will probably reverse all the losses of the past two weeks on Monday. :oops:

Tom_T
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Re: U.S. stocks in freefall

Post by Tom_T » Fri Jan 15, 2016 1:35 pm

Bungo wrote:Don't worry, my next 401(k) contribution is due next Tuesday, so the market will probably reverse all the losses of the past two weeks on Monday. :oops:

You're in luck: the market is closed on Monday for Martin Luther King Day !

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VictoriaF
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Re: U.S. stocks in freefall

Post by VictoriaF » Fri Jan 15, 2016 1:44 pm

I have identified a meaningful correlation!

Market drops of over 2% are correlated with the number of simultaneous visitors to the Bogleheads Forum.

At 13:44 ET, The Boglheads Forum wrote:In total there are 708 users online :: 103 registered, 13 hidden and 592 guests (based on users active over the past 5 minutes)
Most users ever online was 1009 on 24 Aug 2015, 10:07


Victoria
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Re: U.S. stocks in freefall

Post by GoldenFinch » Fri Jan 15, 2016 3:11 pm

VictoriaF wrote:I have identified a meaningful correlation!

Market drops of over 2% are correlated with the number of simultaneous visitors to the Bogleheads Forum.

At 13:44 ET, The Boglheads Forum wrote:In total there are 708 users online :: 103 registered, 13 hidden and 592 guests (based on users active over the past 5 minutes)
Most users ever online was 1009 on 24 Aug 2015, 10:07


Victoria


When stocks are in freefall it doubles as a support (stay the course) group. :happy

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walletless
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Re: U.S. stocks in freefall

Post by walletless » Fri Jan 15, 2016 3:17 pm

Good sale going on at Wall Street! It may not be liquidation sale, but its a pretty good discount :-)

fanmail
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Re: U.S. stocks in freefall

Post by fanmail » Fri Jan 15, 2016 3:25 pm

walletless wrote:Good sale going on at Wall Street! It may not be liquidation sale, but its a pretty good discount :-)


Problem is your own inventory is also being marked down at the same time.

grettman
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Re: U.S. stocks in freefall

Post by grettman » Fri Jan 15, 2016 3:28 pm

Down about $90,000 this month so far.

Dumped $3K yesterday into my wife's IRA because money I budgeted for something else became available.

Would have put more into her IRA today but my pay check deposit was a tad late so Schwab won't let me buy.

I hate it when there is a sale going on and I don't have any money to buy!

Hopefully Monday will be down or at least flat.....

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walletless
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Re: U.S. stocks in freefall

Post by walletless » Fri Jan 15, 2016 3:32 pm

fanmail wrote:
walletless wrote:Good sale going on at Wall Street! It may not be liquidation sale, but its a pretty good discount :-)


Problem is your own inventory is also being marked down at the same time.

Yes, but I am just hoarding right now :-)

flyersrule
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Re: U.S. stocks in freefall

Post by flyersrule » Fri Jan 15, 2016 3:46 pm

I just pumped my yearly contribution into my IRA which only help bonds but I had to get in on a Total Market Fund.

Is it good or bad to transfer assets from one down fund to another in a tax advantaged account??? Going to shift a few things from Fund to Fund? Basically take one fund that is majorly down and allocate to another?

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oldzey
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Re: U.S. stocks in freefall

Post by oldzey » Fri Jan 15, 2016 4:03 pm

oldzey wrote:TGIF! :twisted: :beer


Have a relaxing weekend! :sharebeer
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

JW-Retired
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Re: U.S. stocks in freefall

Post by JW-Retired » Fri Jan 15, 2016 4:15 pm

M1garand30064 wrote:
ray.james wrote:
JW-Retired wrote: 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.


What are your thoughts on roth conversion at a higher tax brackets during downturn with 30 years to go? I was looking around for a calculator but no luck. Trying to see if it is worth it.


The only thing that matters is what tax bracket you are in now versus what you will be in retirement. If you will be in a lower bracket when you retire then it does not make sense to do the conversion.

Still makes sense to do a conversion if you need to clear the deck for future back door Roth contributions and have nowhere to hide your TIRA. Also if you wish to eventually leave your heirs Roths instead of depleted-by-your-RMDs tIRA accounts.
JW
Retired at Last

ge1
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Re: U.S. stocks in freefall

Post by ge1 » Fri Jan 15, 2016 4:22 pm

grettman wrote:Down about $90,000 this month so far.

Dumped $3K yesterday into my wife's IRA because money I budgeted for something else became available.

Would have put more into her IRA today but my pay check deposit was a tad late so Schwab won't let me buy.

I hate it when there is a sale going on and I don't have any money to buy!

Hopefully Monday will be down or at least flat.....


Markets are closed Monday, so I think chances are high the market will be flat :D

lee1026
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Re: U.S. stocks in freefall

Post by lee1026 » Fri Jan 15, 2016 4:46 pm

NYSE is closed, but the CME will be open and trading.

sawhorse
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Re: U.S. stocks in freefall

Post by sawhorse » Fri Jan 15, 2016 6:15 pm

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


A 30% drop would set us back to March 21, 2000! :shock:

That's even worse than March 2009 which was a setback to May 14, 1996.

Just the thought makes me feel like crying.

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tennisplyr
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Re: U.S. stocks in freefall

Post by tennisplyr » Fri Jan 15, 2016 6:20 pm

Learn to control the things you can control and forget about the rest. You can't control the market, but you control how you react to it. This too shall pass.
Those who move forward with a happy spirit will find that things always work out.

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Re: U.S. stocks in freefall

Post by FullYellowJacket » Fri Jan 15, 2016 6:38 pm

My TR 2050 fund is now over 15% down from it's peak. That seems like a full on global correction if you ask me. What will it do next? I don't know, but it may be time to make my annual IRA contribution. Or maybe a month from now. Who knows?

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ofcmetz
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Re: U.S. stocks in freefall

Post by ofcmetz » Fri Jan 15, 2016 6:50 pm

tennisplyr wrote:Learn to control the things you can control and forget about the rest. You can't control the market, but you control how you react to it. This too shall pass.



Well said. Having watch my investments drop in August and then recover, causes this to not bother me as much for some reason. I can't imagine how different I would feel if I was living off of them though. Moments like this are scary for investors while they are happening because it could be the start of something worse or another 2011 all over again.

Don't do anything drastic guys. Stick to your plan unless you find yourself laid off or with some other major life change.

Best of luck all.
Never underestimate the power of the force of low cost index funds.

KidneyMD
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Re: U.S. stocks in freefall

Post by KidneyMD » Fri Jan 15, 2016 7:12 pm

Time to make our Roth contributions soon. Glad that my birthday is in 2 weeks, expecting some cash gifts :)

sawhorse
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Re: U.S. stocks in freefall

Post by sawhorse » Fri Jan 15, 2016 7:26 pm

ofcmetz wrote:Don't do anything drastic guys. Stick to your plan unless you find yourself laid off or with some other major life change.

Best of luck all.

That's the situation I'm in now. Can't buy low because of unemployment.

I lump summed my Roth into the Vanguard target 2045 fund last May; the 52 week high for the fund was May 21.

Thankfully around the same time I put a sizable chunk of my retirement money, more than would be recommended for my age, in a stable value fund yielding 3.35%.

That's given me a lot of peace of mind.

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Re: U.S. stocks in freefall

Post by Christine_NM » Fri Jan 15, 2016 8:05 pm

Close call yesterday (Thu) -- almost bought VWO at 29.59 but cancelled the order. Thought it must be near bottom. Today it closed at 28.76. "Buy low, sell high" is meant to be ironic advice, right? We never know what low is until it shows up in the rearview mirror.
10% cash 45% stock 45% bond. Retired, w/d rate 1.5%

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dbCooperAir
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Re: U.S. stocks in freefall

Post by dbCooperAir » Fri Jan 15, 2016 8:21 pm

Whats all the fuss about?

Its Friday, gave a new rib recipe a whirl and enjoyed a couple of adult cocktails, life it good. The market can do what it wants 8-)
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-

crg11
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Re: U.S. stocks in freefall

Post by crg11 » Fri Jan 15, 2016 9:11 pm

Oh man, I wish I had the $$$ to contribute to our 2015 Roth IRAs. But with last year being the first time I maxed my 401k, there isn't much slack right now to work with :(

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TheTimeLord
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Re: U.S. stocks in freefall

Post by TheTimeLord » Sat Jan 16, 2016 10:16 am

I am surprised that with all the threads about TLH it seems everyone is focus on various retirement instead of taxable accounts when talking about buying. Seems you could buy in taxable if things continue to go down just TLH, if they go up sit back and think man I'm smart. I also don't get the "I'm really cool this don't bother me" or "The I didn't even notice" posts. Personally any time 5 digits disappears from my account without a new car appearing in my driveway I am a little grumpy and I do take notice. The reality is it is like when they ask someone on the news weren't you scared and they say of course I was scared but I did what I had to do. Feelings are normal it is how we deal with and channel that energy that differentiates people.
Run, You Clever Boy!

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burt
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Re: U.S. stocks in freefall

Post by burt » Sat Jan 16, 2016 5:09 pm

TheTimeLord wrote:Personally any time 5 digits disappears from my account without a new car appearing in my driveway I am a little grumpy and I do take notice.


Very good. That's funny !

burt

hnzw rui
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Re: U.S. stocks in freefall

Post by hnzw rui » Sun Jan 17, 2016 2:21 pm

TheTimeLord wrote:Personally any time 5 digits disappears from my account without a new car appearing in my driveway I am a little grumpy and I do take notice.

It's different when you're still in accumulation. :P My Roth IRA hasn't even reached 5 figures yet (should get there by mid-2016) and despite the falling market, new contributions in 457b are greater than unrealized losses so balance still keeps going up. :D

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TheTimeLord
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Re: U.S. stocks in freefall

Post by TheTimeLord » Sun Jan 17, 2016 2:24 pm

hnzw rui wrote:
TheTimeLord wrote:Personally any time 5 digits disappears from my account without a new car appearing in my driveway I am a little grumpy and I do take notice.

It's different when you're still in accumulation. :P My Roth IRA hasn't even reached 5 figures yet (should get there by mid-2016) and despite the falling market, new contributions in 457b are greater than unrealized losses so balance still keeps going up. :D


You are correct, feeling can be very situation dependent.
Run, You Clever Boy!

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HomerJ
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Re: U.S. stocks in freefall

Post by HomerJ » Sun Jan 17, 2016 6:29 pm

broadstone wrote:I believe the S&P will fall to about 1600 which is when I'll be re-investing.


Oh, will the U.S. debt problem be fixed when the S&P 500 drops to 1600? That was the reason you gave for getting out of the market in the first place.

Still, good that you finally gave a real number... That last post of yours was pretty bad. "I'll do something, but I'm not saying what, depending if the Fed does what I think it will, but I'm not saying what I think it will do either".

sawhorse
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Re: U.S. stocks in freefall

Post by sawhorse » Sun Jan 17, 2016 10:16 pm

TheTimeLord wrote:
hnzw rui wrote:
TheTimeLord wrote:Personally any time 5 digits disappears from my account without a new car appearing in my driveway I am a little grumpy and I do take notice.

It's different when you're still in accumulation. :P My Roth IRA hasn't even reached 5 figures yet (should get there by mid-2016) and despite the falling market, new contributions in 457b are greater than unrealized losses so balance still keeps going up. :D


You are correct, feeling can be very situation dependent.

If the market goes back to levels seen in 2000, which will happen if there is a 30% drop, it'll really have been a hellish 16 years for retirees. Huge crash in 2000, then just when it had recovered an even larger crash, and then after 5 years of recovery there's yet another crash.

It's easy to tell people to not sell, to keep putting more in. Retirees don't have that luxury. Even with a pretty balanced portfolio, you can't avoid low selling indefinitely. And there's a limit to how much bonds can help. With the yields the last decade, no way could bonds have supported a 4% withdrawal rate.

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zaboomafoozarg
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Re: U.S. stocks in freefall

Post by zaboomafoozarg » Sun Jan 17, 2016 10:24 pm

sawhorse wrote:It's easy to tell people to not sell, to keep putting more in. Retirees don't have that luxury. Even with a pretty balanced portfolio, you can't avoid low selling indefinitely. And there's a limit to how much bonds can help. With the yields the last decade, no way could bonds have supported a 4% withdrawal rate.


That's why I am trying to save an amount where dividends alone could support me. Because that might be the only way that works in the 21st century.

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TheTimeLord
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Re: U.S. stocks in freefall

Post by TheTimeLord » Sun Jan 17, 2016 10:55 pm

sawhorse wrote:
TheTimeLord wrote:
hnzw rui wrote:
TheTimeLord wrote:Personally any time 5 digits disappears from my account without a new car appearing in my driveway I am a little grumpy and I do take notice.

It's different when you're still in accumulation. :P My Roth IRA hasn't even reached 5 figures yet (should get there by mid-2016) and despite the falling market, new contributions in 457b are greater than unrealized losses so balance still keeps going up. :D


You are correct, feeling can be very situation dependent.

If the market goes back to levels seen in 2000, which will happen if there is a 30% drop, it'll really have been a hellish 16 years for retirees. Huge crash in 2000, then just when it had recovered an even larger crash, and then after 5 years of recovery there's yet another crash.

It's easy to tell people to not sell, to keep putting more in. Retirees don't have that luxury. Even with a pretty balanced portfolio, you can't avoid low selling indefinitely. And there's a limit to how much bonds can help. With the yields the last decade, no way could bonds have supported a 4% withdrawal rate.


According to Morningstar $10,000 invested in Vanguard's Total Bond Index on 1/1/2000 is now worth $22,459 or a 124.5% gain as opposed to $17,112 or a 71.1% gain if you'd invested in Vanguard's S&P 500 Index fund. Bonds aren't CDs, there is more to them than yield.
Run, You Clever Boy!

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randomizer
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Re: U.S. stocks in freefall

Post by randomizer » Sun Jan 17, 2016 11:11 pm

zaboomafoozarg wrote:That's why I am trying to save an amount where dividends alone could support me. Because that might be the only way that works in the 21st century.


And who's to say even that will work. It's all a big unknown.

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HomerJ
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Re: U.S. stocks in freefall

Post by HomerJ » Sun Jan 17, 2016 11:27 pm

sawhorse wrote:It's easy to tell people to not sell, to keep putting more in. Retirees don't have that luxury. Even with a pretty balanced portfolio, you can't avoid low selling indefinitely. And there's a limit to how much bonds can help. With the yields the last decade, no way could bonds have supported a 4% withdrawal rate.


(1) You can't avoid low selling indefinitely... but I would hope you could afford to avoid low-selling for 3 weeks at least... There's a lot of panic here over a drop that started 17 days ago. I would hope retirees have a decent amount of cash, and plenty of bonds to get them through a 5-10 year stock crash.

(2) Bonds absolutely supported a 4% withdrawal rate over the last decade, since rates have gone down. They may not over the next decade. Guess we will have to wait and see.

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ofcmetz
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Re: U.S. stocks in freefall

Post by ofcmetz » Wed Jan 20, 2016 4:45 am

I just got off work and am watching Bloomberg. It's looking like things may be down big again today. $692 from my Friday paycheck is getting deposited in my 457B account today so that's something. I plan on following my IPS still and hope you guys can as well. Another big move down and I'll be rebalancing from fixed income towards equites.
Never underestimate the power of the force of low cost index funds.

Mureke
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Re: U.S. stocks in freefall

Post by Mureke » Wed Jan 20, 2016 5:40 am

My portfolio in the EU (close to world market, though double weight on EM) was down more than 3% in the morning. My currency-hedged global bonds were up 0.4%.

It's all abstract to me with such an AA. That's not to say that I wouldn't feel silly if this was the start of another 90 % decline with no recovery for 20 years. I'm not sure that I could stay the course for 20 years, but I'm prepared to try it.

scsiguru
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Re: U.S. stocks in freefall

Post by scsiguru » Wed Jan 20, 2016 8:09 am

Sounds like even the BH's are moving to safer investments.

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Toons
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Re: U.S. stocks in freefall

Post by Toons » Wed Jan 20, 2016 8:12 am

Keep Both Hands on the Wheel...
Stay On Course.
It is a long distance journey.
Not a quick trip. :happy :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

2Birds1Stone
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Re: U.S. stocks in freefall

Post by 2Birds1Stone » Wed Jan 20, 2016 8:29 am

I wish I could lock myself out of my Personal Capital account till DJIA is back over 18k

BahamaMan
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Re: U.S. stocks in freefall

Post by BahamaMan » Wed Jan 20, 2016 9:02 am

scsiguru wrote:Sounds like even the BH's are moving to safer investments.


Actually just the reverse. A true BH would have had his/her Asset Allocation set before the downturn and would be re-balancing into more equities.

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Bustoff
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Re: U.S. stocks in freefall

Post by Bustoff » Wed Jan 20, 2016 9:22 am

Enjoy the ride and don't look down!

scsiguru
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Re: U.S. stocks in freefall

Post by scsiguru » Wed Jan 20, 2016 9:25 am

BahamaMan wrote:
scsiguru wrote:Sounds like even the BH's are moving to safer investments.


Actually just the reverse. A true BH would have had his/her Asset Allocation set before the downturn and would be re-balancing into more equities.


Not much $$ to be made there.

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Toons
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Re: U.S. stocks in freefall

Post by Toons » Wed Jan 20, 2016 9:28 am

I think you will find,,that as a majority,
The Bogleheads are a "patient lot" of investors.
Understanding that volatility is an Inherent part of Investing.
I repeat "Inherent".
And accepting that fact. :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

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czeckers
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Re: U.S. stocks in freefall

Post by czeckers » Wed Jan 20, 2016 9:30 am

I know that the markets dipped whenever this thread pops up.

I was planning on doing a bathroom remodel this spring, but it seems it might be a good time to throw a little extra into ye olde investments instead. :sharebeer
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Mureke
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Re: U.S. stocks in freefall

Post by Mureke » Wed Jan 20, 2016 9:32 am

BahamaMan wrote:
scsiguru wrote:Sounds like even the BH's are moving to safer investments.


Actually just the reverse. A true BH would have had his/her Asset Allocation set before the downturn and would be re-balancing into more equities.


A true BH would have a set plan, and would adhere to that plan. However, I don't believe re-balancing makes a BH if re-balancing was not part of the plan in the first place.

mattshwink
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Re: U.S. stocks in freefall

Post by mattshwink » Wed Jan 20, 2016 9:41 am

scsiguru wrote:Sounds like even the BH's are moving to safer investments.


Not me....although I probably have 15 years to retirement. Slowly moving my AA towards an eventual 60/40 in retirement. But I am 90%+ in stocks right now (60/30/10 domestic/international/REIT) and other than gradually shifting roughly 2% more per year towards bonds (which I am doing every year regardless of markets) I am not making any changes.

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dbCooperAir
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Re: U.S. stocks in freefall

Post by dbCooperAir » Wed Jan 20, 2016 9:50 am

mattshwink wrote:
scsiguru wrote:Sounds like even the BH's are moving to safer investments.


Not me....although I probably have 15 years to retirement. Slowly moving my AA towards an eventual 60/40 in retirement. But I am 90%+ in stocks right now (60/30/10 domestic/international/REIT) and other than gradually shifting roughly 2% more per year towards bonds (which I am doing every year regardless of markets) I am not making any changes.


At this rate you may self balance to your desired AA :twisted:
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-

MnD
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Re: U.S. stocks in freefall

Post by MnD » Wed Jan 20, 2016 9:50 am

Rebalanced equity:fixed income yesterday per my IPS to the middle of my bands - too bad my 401-K provider does same-day funds transfers - a one-day lag would have been nice given how it's looking today. I don't rebalance individual asset classes since I take a "total world" approach, but will do some additional TLH'ing between emerging market pairs when the 30-days is up from the last swap - which is fast approaching. Was able to consolidate two EM funds to one with the swaps - so one less portfolio position as a consolation prize!

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goodenyou
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Re: U.S. stocks in freefall

Post by goodenyou » Wed Jan 20, 2016 9:58 am

czeckers wrote:I know that the markets dipped whenever this thread pops up.

I was planning on doing a bathroom remodel this spring, but it seems it might be a good time to throw a little extra into ye olde investments instead. :sharebeer



The way the stock market is going lately, and the economy in general, you may want reconsider. You may need that bathroom.
"Ignorance more frequently begets confidence than does knowledge" | "The best years you have left are the ones you have right now"

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