U.S. stocks in freefall

[deltaneutral83]

Seriously, 1-2% is an event???

Most social media platforms weren't blasting news (if they were around in 08/09) every 3 hours. 90% of Americans, and this is generous, have no idea how the stock market operates. But then again, no one can say how it will operate in the future, just how it's operated in the past. But with "news" being forced down your throat every couple of hours some people honestly do not know the difference.

[Vanguard Fan 1367]

I get a kick out of the realization that if it weren't for the existence of this thread, I'd likely have no idea that the markets had a pretty big down day. Over the last four months I've cut down my news media consumption by about 95% or more. I'm more likely to check financial news than anything else and I do that rarely, too.

I have done the same. My mental and financial health does much better with as little news as possible.

[Doom&Gloom]

Hmmm. Stocks up again today. Let's keep this thread going.

Dead cat bounce

[Earl Lemongrab]

Hmmm. Stocks up again today. Let's keep this thread going.

Dead cat bounce

Was the cat killed by a falling knife?

[nedsaid]

Hmmm. Stocks up again today. Let's keep this thread going.

Dead cat bounce

Was the cat killed by a falling knife?

Death by market clichés.

[Uncle Pennybags]

That was a rough one but I rode it out and didn't sell.

At which point would you sell?

Hopefully never, though retired I'm still in the accumulation phase. I feel for those who need their investments to pay the bills.

[ResearchMed]

That was a rough one but I rode it out and didn't sell.

At which point would you sell?

Hopefully never, though retired I'm still in the accumulation phase. I feel for those who need their investments to pay the bills.

[emphasis added]

Say what!?

I've rarely seen such a condescending statement here.

I'm sure we are not alone in feeling very *good* about having saved PRECISELY so that we would have a comfortable and pleasant retirement... and "pay the bills"... by selling investments and spending the proceeds.

We have no relatives who need or are expecting an inheritance.
(Besides which, it would be one thing if there were relatives who *needed* the money, but any who just wanted it...? That would be different anyway.)

At this point, we are not retired, but no longer in the accumulation stage.

We aren't "saving" more, but we are definitely paying attention to managing the investments we have.
But we aren't spending yet either, although we certainly could anytime it was "needed". Or if we "just wanted to".
And it will be needed, once DH fully or partially retires.
Again, that is precisely why we saved: to pay the bills in retirement.

RM

[MotoTrojan]

That was a rough one but I rode it out and didn't sell.

At which point would you sell?

Hopefully never, though retired I'm still in the accumulation phase. I feel for those who need their investments to pay the bills.

[emphasis added]

Say what!?

I've rarely seen such a condescending statement here.

I'm sure we are not alone in feeling very *good* about having saved PRECISELY so that we would have a comfortable and pleasant retirement... and "pay the bills"... by selling investments and spending the proceeds.

We have no relatives who need or are expecting an inheritance.
(Besides which, it would be one thing if there were relatives who *needed* the money, but any who just wanted it...? That would be different anyway.)

At this point, we are not retired, but no longer in the accumulation stage.

We aren't "saving" more, but we are definitely paying attention to managing the investments we have.
But we aren't spending yet either, although we certainly could anytime it was "needed". Or if we "just wanted to".
And it will be needed, once DH fully or partially retires.
Again, that is precisely why we saved: to pay the bills in retirement.

RM

I agree the phrasing was poor, but I read this as hopefully never being forced to sell out of fear of losing wealth in a crash, and that they feel for retirees that don't have the time/reaccumulation to mend a crashes impact on ones portfolio.

[ResearchMed]

That was a rough one but I rode it out and didn't sell.

At which point would you sell?

Hopefully never, though retired I'm still in the accumulation phase. I feel for those who need their investments to pay the bills.

[emphasis added]

Say what!?

I've rarely seen such a condescending statement here.

I'm sure we are not alone in feeling very *good* about having saved PRECISELY so that we would have a comfortable and pleasant retirement... and "pay the bills"... by selling investments and spending the proceeds.

We have no relatives who need or are expecting an inheritance.
(Besides which, it would be one thing if there were relatives who *needed* the money, but any who just wanted it...? That would be different anyway.)

At this point, we are not retired, but no longer in the accumulation stage.

We aren't "saving" more, but we are definitely paying attention to managing the investments we have.
But we aren't spending yet either, although we certainly could anytime it was "needed". Or if we "just wanted to".
And it will be needed, once DH fully or partially retires.
Again, that is precisely why we saved: to pay the bills in retirement.

RM

I agree the phrasing was poor, but I read this as hopefully never being forced to sell out of fear of losing wealth in a crash, and that they feel for retirees that don't have the time/reaccumulation to mend a crashes impact on ones portfolio.

Hmmm. I might have been able to view it that way if there was not that bit about hoping to *hopefully never* needing or even wanting to sell.
That rather dismisses a relatively regular planned approach of withdrawing when retired, which he already is... and still accumulating, so general priorities are clear.
Or so it seemed to me, given the specific wording, including that "never"...
Having that pity statement about those who generally plan to "need their investments to pay bills" that follows...?

RM

[Uncle Pennybags]

We have no relatives who need or are expecting an inheritance.

I'm single life annuitized, 3/5 inflation protected, guaranteed by the full faith and credit of the US of A.
I’m thankful I don’t have to worry about outliving my money; I don’t have the temperament for that. I know many who have to rely on their children to get by; that would make me cry.
"When a father gives to his son, both laugh; when a son gives to his father, both cry?"

I agree the phrasing was poor, ....

What he said.

[JonnyDVM]

Don't ruin the thread,just let it go. How can you guys lose focus at a time like this? Market's in full meltdown crisis mode and you're discussing improper post phrasing!

[zaboomafoozarg]

Don't ruin the thread,just let it go. How can you guys lose focus at a time like this?

I absolutely agree, this thread is a national treasure!

[Uncle Pennybags]

I'm having a personal free-fall. VZ is down 18% YTD; it was 15% of my portfolio.
Personal free-falls may be the only ones we have for awhile.
Anyone else want to share?

[HomerJ]

I'm having a personal free-fall. VZ is down 18% YTD; it was 15% of my portfolio.
Personal free-falls may be the only ones we have for awhile.
Anyone else want to share?

Why is one stock (Verizon?) 15% of your portfolio?

[Leif]

I'm having a personal free-fall. VZ is down 18% YTD; it was 15% of my portfolio.
Personal free-falls may be the only ones we have for awhile.
Anyone else want to share?

Sure, don't buy individual stocks. You are taking extra risk. If you want extra risk increase your stock/bond ratio.

[Uncle Pennybags]

Why is one stock (Verizon?) 15% of your portfolio?

It's not anymore.
It's a long story about a poison pill LESOP and tax avoidance.
I look on the bright side, VZ dividend is now 5.13%.
That 18% loss is really 12.6% after taxes as it is in a pretax account.

[MotoTrojan]

Why is one stock (Verizon?) 15% of your portfolio?

It's not anymore.
It's a long story about a poison pill LESOP and tax avoidance.
I look on the bright side, VZ dividend is now 5.13%.
That 18% loss is really 12.6% after taxes as it is in a pretax account.

Not a loss until you sell.

[roflwaffle]

Why is one stock (Verizon?) 15% of your portfolio?

It's not anymore.
It's a long story about a poison pill LESOP and tax avoidance.
I look on the bright side, VZ dividend is now 5.13%.
That 18% loss is really 12.6% after taxes as it is in a pretax account.

Not a loss until you sell.

Or you can't sell.

[Uncle Pennybags]

Not a loss until you sell.

Or you can't sell.

I have a must sell in 2018 when required minimum distribution begins. Pity this Boglehead; he is going to attempt market timing his RMD. It's scary to think some people are still 100% invested in company stock.

My portfolio is up again today so I won't have to eat dog food for lunch, I'll survive.
Is it just me or is everybody making money hand over foot?

[ResearchMed]

Not a loss until you sell.

Or you can't sell.

I have a must sell in 2018 when required minimum distribution begins. Pity this Boglehead; he is going to attempt market timing his RMD. It's scary to think some people are still 100% invested in company stock.

My portfolio is up again today so I won't have to eat dog food for lunch, I'll survive.

If you are selling just because of the RMD, then either transfer in kind to a taxable account (allowed from IRA's, but not from 403b's/etc., I think), and pay the tax from other cash.

Or... sell, and then buy back in taxable. Same thing, but possibly small transaction fee.

It doesn't need to be a loss if it's just due to RMD's.
IF it's due to "needing the money", that's what cash or bond buffer is for.

RM

[munemaker]

Not a loss until you sell.

Or you can't sell.

I have a must sell in 2018 when required minimum distribution begins. Pity this Boglehead; he is going to attempt market timing his RMD. It's scary to think some people are still 100% invested in company stock.

My portfolio is up again today so I won't have to eat dog food for lunch, I'll survive.
Is it just me or is everybody making money hand over foot?

I have an inherited IRA that I am required to take distributions from. It is invested in Vanguard mutual funds. I simply do a TRANSFER from the IRA to the taxable account. No fees, no change in value, no market timing, no muss, no fuss.

[CurlyDave]

...I have an inherited IRA that I am required to take distributions from. It is invested in Vanguard mutual funds. I simply do a TRANSFER from the IRA to the taxable account. No fees, no change in value, no market timing, no muss, no fuss.

Do you transfer the entire RMD early in January each year?

IMHO this would be the most tax-efficient way to do it. The reason is that the market goes up 80% of the time. A transfer early in the year means that the gains for the year are in your cash account, where presumably they would be capital gains. If you need money from the account, sell older securities at LTCG tax rate, and hold the transferred securities for at least a year...

[MotoTrojan]

Everybody, I am up over 1% today, lets keep this thread on topic .

[Vanguard Fan 1367]

...I have an inherited IRA that I am required to take distributions from. It is invested in Vanguard mutual funds. I simply do a TRANSFER from the IRA to the taxable account. No fees, no change in value, no market timing, no muss, no fuss.

Do you transfer the entire RMD early in January each year?

IMHO this would be the most tax-efficient way to do it. The reason is that the market goes up 80% of the time. A transfer early in the year means that the gains for the year are in your cash account, where presumably they would be capital gains. If you need money from the account, sell older securities at LTCG tax rate, and hold the transferred securities for at least a year...

I have had great success with an Inherited IRA in Vanguard's Admiral S & P 500 fund. It goes up more than the RMD. I was thinking that since tax free increases are considered a good idea that to wait till the end of the year would be a better idea. I have been using early February but am changing to December.

[Vanguard Fan 1367]

Everybody, I am up over 1% today, lets keep this thread on topic .

Like Frank Sinatra sang, you are down, but back up, I am recovering from the free fall of yesterday today!

[BW1985]

Every time I see this front page I think the market must be down big today, then I check and it's actually up.

[ResearchMed]

...I have an inherited IRA that I am required to take distributions from. It is invested in Vanguard mutual funds. I simply do a TRANSFER from the IRA to the taxable account. No fees, no change in value, no market timing, no muss, no fuss.

Do you transfer the entire RMD early in January each year?

IMHO this would be the most tax-efficient way to do it. The reason is that the market goes up 80% of the time. A transfer early in the year means that the gains for the year are in your cash account, where presumably they would be capital gains. If you need money from the account, sell older securities at LTCG tax rate, and hold the transferred securities for at least a year...

I have had great success with an Inherited IRA in Vanguard's Admiral S & P 500 fund. It goes up more than the RMD. I was thinking that since tax free increases are considered a good idea that to wait till the end of the year would be a better idea. I have been using early February but am changing to December.

The increase within an IRA is not "tax free".
It's "tax deferred", meaning you'll later pay tax at the full marginal rate.

OTOH, if you remove it early in the year (taxed at full rate), then at least any *increase* that year (and in future years) will be at long-term gains rates, as long as it's held long enough before selling.

RM

[Uncle Pennybags]

Every time I see this front page I think the market must be down big today, then I check and it's actually up.

Sorry, I was having a personal free fall. The marked was down yesterday but has recovered. We may have to redefine "free-fall".

[Vanguard Fan 1367]

...I have an inherited IRA that I am required to take distributions from. It is invested in Vanguard mutual funds. I simply do a TRANSFER from the IRA to the taxable account. No fees, no change in value, no market timing, no muss, no fuss.

Do you transfer the entire RMD early in January each year?

IMHO this would be the most tax-efficient way to do it. The reason is that the market goes up 80% of the time. A transfer early in the year means that the gains for the year are in your cash account, where presumably they would be capital gains. If you need money from the account, sell older securities at LTCG tax rate, and hold the transferred securities for at least a year...

I have had great success with an Inherited IRA in Vanguard's Admiral S & P 500 fund. It goes up more than the RMD. I was thinking that since tax free increases are considered a good idea that to wait till the end of the year would be a better idea. I have been using early February but am changing to December.

The increase within an IRA is not "tax free".
It's "tax deferred", meaning you'll later pay tax at the full marginal rate.

OTOH, if you remove it early in the year (taxed at full rate), then at least any *increase* that year (and in future years) will be at long-term gains rates, as long as it's held long enough before selling.

RM

I have learned some useful tidbits in my perusing these forums. That is an interesting perspective about withdrawals and then enjoying the low tax consequences of something like Total Stock Market Index Fund. Thanks for taking the time to post.

[flyingaway]

Looks like some dips are coming.

[munemaker]

Looks like some dips are coming.

It has been so long since a true freefall, I guess we have to get excited about even the possibility of a dip.

[Vanguard Fan 1367]

Looks like some dips are coming.

It has been so long since a true freefall, I guess we have to get excited about even the possibility of a dip.

[Will do good]

I wish for a big dip...with a short recovery

[Uncle Pennybags]

CNBC used the word "correction". S&P 500 down for June. Stay calm, don't panic.

[saltycaper]

We see this intraday chart frequently. My theory: Sellers fret all night and thus have trouble resting. They wring their hands and sell all morning while drops of sweat bead on their faces. Meanwhile, buyers sleep soundly and care not what prices are. They tend to more important business in the morning (or sleep in) before turning their attention to the markets in the afternoon, some before tea, some after. Both morning sellers and afternoon buyers transact with the same group of traders.

[Teague]

Here's an explanation for today's drop from a Reuters article:

"Part of the reason why tech is down today is the steam in the recent rotation out of some of big tech winners and into banks," said Michael Scanlon, portfolio manager at Manulife Asset Management in Boston..."

Steam, that's the problem. Good to know.

[flyingaway]

I was expecting a significant dip, maybe tomorrow. Volatility is coming back, though.

[Hawaiishrimp]

I want it to drop more so I can buy more...

[TD2626]

Every time I see this front page I think the market must be down big today, then I check and it's actually up.

The market has roughly doubled since this thread has started.
(Portfolio Visualizer, Total Returns on $10k in S&P 500, Aug. 2011 to today - $10k would have grown to roughly $21k).

Of course, US stocks could plummet at any point - but this can't be anticipated or predicted. Stay the course.

(Arguably, one could claim that any minor, short term downtick is "freefall" but in reality it's noise.)

[EnjoyIt]

I'm having a personal free-fall. VZ is down 18% YTD; it was 15% of my portfolio.
Personal free-falls may be the only ones we have for awhile.
Anyone else want to share?

I too own VZ and XOM. They are my only 2 legacy stocks from back in the day I was a dividend investor. Capital gains tax at 23.8% keep me from selling though exxon is pretty close to being a loss which makes me not want to sell when they are so low. . I know! Anyways at one time they were about 20% of my investment portfolio. Today they are closer to 6%. My hope is that they don't bottom out in the next 15 years and they will likely be one of the first things I sell when I retire early. The rest of my investments are 70/30 index funds.

Both of those stocks are in my investment policy which states I will keep those stocks, dividend reinvest them, and evaluate their appropriateness when I am on a fixed income.

I have always enjoyed the quarterly dividend buying shares and thereby increasing dividends every year. If their value does not change, they will be less than 5% of my portfolio in under 2 years.

[triceratop]

I'm having a personal free-fall. VZ is down 18% YTD; it was 15% of my portfolio.
Personal free-falls may be the only ones we have for awhile.
Anyone else want to share?

I too own VZ and XOM. They are my only 2 legacy stocks from back in the day I was a dividend investor. Capital gains tax at 23.8% keep me from selling though exxon is pretty close to being a loss which makes me not want to sell when they are so low. . I know! Anyways at one time they were about 20% of my investment portfolio. Today they are closer to 6%. My hope is that they don't bottom out in the next 15 years and they will likely be one of the first things I sell when I retire early. The rest of my investments are 70/30 index funds.

Both of those stocks are in my investment policy which states I will keep those stocks, dividend reinvest them, and evaluate their appropriateness when I am on a fixed income.

I have always enjoyed the quarterly dividend buying shares and thereby increasing dividends every year. If their value does not change, they will be less than 5% of my portfolio in under 2 years.

This reads like cognitive dissonance to me. If you are reinvesting dividends from individual stocks back into those stocks, you are still a dividend investor and the stocks are not "legacy" holdings which you are keeping for tax reasons. They are legacy holdings if you direct dividends to your new portfolio.

[EnjoyIt]

I'm having a personal free-fall. VZ is down 18% YTD; it was 15% of my portfolio.
Personal free-falls may be the only ones we have for awhile.
Anyone else want to share?

I too own VZ and XOM. They are my only 2 legacy stocks from back in the day I was a dividend investor. Capital gains tax at 23.8% keep me from selling though exxon is pretty close to being a loss which makes me not want to sell when they are so low. . I know! Anyways at one time they were about 20% of my investment portfolio. Today they are closer to 6%. My hope is that they don't bottom out in the next 15 years and they will likely be one of the first things I sell when I retire early. The rest of my investments are 70/30 index funds.

Both of those stocks are in my investment policy which states I will keep those stocks, dividend reinvest them, and evaluate their appropriateness when I am on a fixed income.

I have always enjoyed the quarterly dividend buying shares and thereby increasing dividends every year. If their value does not change, they will be less than 5% of my portfolio in under 2 years.

This reads like cognitive dissonance to me. If you are reinvesting dividends from individual stocks back into those stocks, you are still a dividend investor and the stocks are not "legacy" holdings which you are keeping for tax reasons. They are legacy holdings if you direct dividends to your new portfolio.

I fully agree with you. Yes it is, yet here I am accepting it and moving along. I have a hard time breaking free from those 2 stocks and those dividend investor days despite my complete understanding of total returns and the tax drag I am getting on those dividends.

[ResearchMed]

I'm having a personal free-fall. VZ is down 18% YTD; it was 15% of my portfolio.
Personal free-falls may be the only ones we have for awhile.
Anyone else want to share?

I too own VZ and XOM. They are my only 2 legacy stocks from back in the day I was a dividend investor. Capital gains tax at 23.8% keep me from selling though exxon is pretty close to being a loss which makes me not want to sell when they are so low. . I know! Anyways at one time they were about 20% of my investment portfolio. Today they are closer to 6%. My hope is that they don't bottom out in the next 15 years and they will likely be one of the first things I sell when I retire early. The rest of my investments are 70/30 index funds.

Both of those stocks are in my investment policy which states I will keep those stocks, dividend reinvest them, and evaluate their appropriateness when I am on a fixed income.

I have always enjoyed the quarterly dividend buying shares and thereby increasing dividends every year. If their value does not change, they will be less than 5% of my portfolio in under 2 years.

This reads like cognitive dissonance to me. If you are reinvesting dividends from individual stocks back into those stocks, you are still a dividend investor and the stocks are not "legacy" holdings which you are keeping for tax reasons. They are legacy holdings if you direct dividends to your new portfolio.

I fully agree with you. Yes it is, yet here I am accepting it and moving along. I have a hard time breaking free from those 2 stocks and those dividend investor days despite my complete understanding of total returns and the tax drag I am getting on those dividends.

Why not just "keep the total holdings of each, per now", and take those dividends and invest them elsewhere?
Then you aren't "breaking free", and you are still getting those dividends, of course.

RM

[EnjoyIt]

I'm having a personal free-fall. VZ is down 18% YTD; it was 15% of my portfolio.
Personal free-falls may be the only ones we have for awhile.
Anyone else want to share?

I too own VZ and XOM. They are my only 2 legacy stocks from back in the day I was a dividend investor. Capital gains tax at 23.8% keep me from selling though exxon is pretty close to being a loss which makes me not want to sell when they are so low. . I know! Anyways at one time they were about 20% of my investment portfolio. Today they are closer to 6%. My hope is that they don't bottom out in the next 15 years and they will likely be one of the first things I sell when I retire early. The rest of my investments are 70/30 index funds.

Both of those stocks are in my investment policy which states I will keep those stocks, dividend reinvest them, and evaluate their appropriateness when I am on a fixed income.

I have always enjoyed the quarterly dividend buying shares and thereby increasing dividends every year. If their value does not change, they will be less than 5% of my portfolio in under 2 years.

This reads like cognitive dissonance to me. If you are reinvesting dividends from individual stocks back into those stocks, you are still a dividend investor and the stocks are not "legacy" holdings which you are keeping for tax reasons. They are legacy holdings if you direct dividends to your new portfolio.

I fully agree with you. Yes it is, yet here I am accepting it and moving along. I have a hard time breaking free from those 2 stocks and those dividend investor days despite my complete understanding of total returns and the tax drag I am getting on those dividends.

Why not just "keep the total holdings of each, per now", and take those dividends and invest them elsewhere?
Then you aren't "breaking free", and you are still getting those dividends, of course.

RM

As a dividend groth investor, you want those dividends to grow (I guess currently I am a 6% dividend growth investor.) They ideal grow every year because the company raises them. They also grow every year because you reinvested them into more stock. This works great when the stock drops in value for a year or two and you end up buying low. Yes it is all psychological, but I am enjoying the show it provides. I am curious what these stocks will look like in 14 years when I plan on firing. I am also curious how they will perform in the next recession when dividends reinvest and buy really low. I don't even keep them in my Vanguard account.

[MoonOrb]

As long as it's a small part of your portfolio it's. not a big deal; the big thing is that for the vast majority of your holdings you've committed toward diversifying and low cost. It's obviously nice to optimize but for whatever reason not all of us are 100% optimized and that's ok.

[EnjoyIt]

As long as it's a small part of your portfolio it's. not a big deal; the big thing is that for the vast majority of your holdings you've committed toward diversifying and low cost. It's obviously nice to optimize but for whatever reason not all of us are 100% optimized and that's ok.

That's kinda how I figure it. And lets be honest it is not a horrible mistake.

[Wakefield1]

I consider myself a dividend investor but for some time I have tried to direct such dividends as collect into stocks other than the ones that produce the nice dividends (generally into Vanguard Mutual Funds) or into my "emergency house downpayment fund"
just sent a check to purchase some more Mid Cap Index--so I guess I don't mind if the stocks freefall a little bit before that check gets to Vanguard

[nedsaid]

Oh man! One down day and this thread pops back up. The market rebounds the next day right on cue! Amazing. This thread has been a pretty good contrary indicator.

[Doom&Gloom]

Oh man! One down day and this thread pops back up. The market rebounds the next day right on cue! Amazing. This thread has been a pretty good contrary indicator.

More than an indicator. This thread has magical powers!

[sreynard]

Oh man! One down day and this thread pops back up. The market rebounds the next day right on cue! Amazing. This thread has been a pretty good contrary indicator.

Wow, I must be going blind! I looked for this thread all day yesterday and didn't see it. I was afraid you guys weren't paying attention to the freefall. Thanks for reassuring me all is right with the world. . . .