U.S. stocks in freefall

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visualguy
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Re: U.S. stocks in freefall

Post by visualguy » Sat Feb 13, 2016 2:21 am

bayview and VictoriaF,

You have decades worth of living expenses in safe places such as cash. I agree that the stock market behavior is less of a concern for people like you. I'm pretty much in the same boat because I keep only 20% of my invested assets in the stock market, and I often wonder why I bother even with that since it's too volatile, and it has performed overall worse than my other investments. I'm thinking about leaving only my 401(k) in the stock market, or maybe not even that.

I may be wrong, but I don't think that our situation is typical for people on this forum...

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ofcmetz
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Re: U.S. stocks in freefall

Post by ofcmetz » Sat Feb 13, 2016 3:35 am

visualguy wrote:bayview and VictoriaF,

You have decades worth of living expenses in safe places such as cash. I agree that the stock market behavior is less of a concern for people like you. I'm pretty much in the same boat because I keep only 20% of my invested assets in the stock market, and I often wonder why I bother even with that since it's too volatile, and it has performed overall worse than my other investments. I'm thinking about leaving only my 401(k) in the stock market, or maybe not even that.

I may be wrong, but I don't think that our situation is typical for people on this forum...


You have only a fifth of your portfolio and you are worried about that? There are so many reasons to own equity. Look at the value of the stock market when this thread was started. It has given us a nice increase in value including dividends since 2011. We need equities to be volatile otherwise there would be no risk premium for owning them. Unfortunately there aren't many alternatives for those of us who need to grow our money. Fixed income is nice for wealth preservation, but not much chance of growth there at these interest rate levels. If you can put 40 years of expenses in fixed income then I say, maybe then don't bother.

Bogleheads,

We can't predict the future, but we can learn from the past. Make a well thought out plan for your asset allocation and then stick with it regardless of recent market movements.
Never underestimate the power of the force of low cost index funds.

truenorth418
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Re: U.S. stocks in freefall

Post by truenorth418 » Sat Feb 13, 2016 4:12 am

mickroark wrote:I use Cash, Bonds, Gold, Alternative investments, and a Long Short strategy. This is because I have learned from the past. My portfolio is down only 1.6% YTD, and this I can look at every day and not panic and sell at the wrong time.


That's quite an impressive performance. Could you please enlighten us with more specifics?

wearahat
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Re: U.S. stocks in freefall

Post by wearahat » Sat Feb 13, 2016 4:23 am

ofcmetz wrote:We need equities to be volatile otherwise there would be no risk premium for owning them.


I think your view of equities is mixed up.

Let's get to the fundamental reason why there should be a risk premium for owning equities. And it's not price volatility.
A business has multiple stakeholders. How does the business decide which stakeholder has to be paid first? There's a pecking order from first to last:

- Employees - A CEO can run your business into the ground. Although the CEO was responsible, they get paid first.
- Secured creditors
- Unsecured creditors
- Shareholders

Shareholders, who know they are the last to be paid, won't pay a price for the company where they're expected to earn less than creditors.
Bonds have outperformed stocks because of changing rates and rate expectations. Unfortunately, bonds aren't able to achieve the 1000% returns seen by some small cap stocks in a year.
Getting back to volatility, data suggests that stocks with lower volatility have outperformed those with higher volatility.

Fixed income is nice for wealth preservation, but not much chance of growth there at these interest rate levels.


Rates are low because inflationary expectations are low if not negative. If deflation turns out to be a persistent and significant problem, then in real terms those zero rates are spectacular, especially when rates go lower into negative territory.

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ofcmetz
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Re: U.S. stocks in freefall

Post by ofcmetz » Sat Feb 13, 2016 11:37 am

wearahat wrote:
ofcmetz wrote:We need equities to be volatile otherwise there would be no risk premium for owning them.


I think your view of equities is mixed up.

Let's get to the fundamental reason why there should be a risk premium for owning equities. And it's not price volatility.
A business has multiple stakeholders. How does the business decide which stakeholder has to be paid first? There's a pecking order from first to last:

- Employees - A CEO can run your business into the ground. Although the CEO was responsible, they get paid first.
- Secured creditors
- Unsecured creditors
- Shareholders

Shareholders, who know they are the last to be paid, won't pay a price for the company where they're expected to earn less than creditors.
Bonds have outperformed stocks because of changing rates and rate expectations. Unfortunately, bonds aren't able to achieve the 1000% returns seen by some small cap stocks in a year.
Getting back to volatility, data suggests that stocks with lower volatility have outperformed those with higher volatility.



Let me try to explain. And yes, I'm probably confusing terms as I'm not a finance professional.

If equities always went up constantly year in and year out with out a few crashes here and there, then then everyone would own them and we'd be constantly buying at high PE's. I think it's good that they are being viewed as risky which is what they are. I'm not buying individual stocks, but the entire market. I guess I view the risk premium as the excess returns over risk free investments that I (might or might not )get by owning something other than treasuries. The more risky equities are seen, then the more the risk premium could become for owning them. Of course, we may just get the risk without the premium.
Never underestimate the power of the force of low cost index funds.

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VictoriaF
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Re: U.S. stocks in freefall

Post by VictoriaF » Sun Feb 14, 2016 2:44 pm

visualguy wrote:bayview and VictoriaF,

You have decades worth of living expenses in safe places such as cash. I agree that the stock market behavior is less of a concern for people like you. I'm pretty much in the same boat because I keep only 20% of my invested assets in the stock market, and I often wonder why I bother even with that since it's too volatile, and it has performed overall worse than my other investments. I'm thinking about leaving only my 401(k) in the stock market, or maybe not even that.

I may be wrong, but I don't think that our situation is typical for people on this forum...


In my case, the desire to retire and live my life to the fullest was stronger than the desire to have as much money as possible. I was on track to retire in 2013, when 2008-2009 have happened. At the time, no one knew how much more the markets could drop, and whether and when they would recover. Grudgingly, I started contemplating Plan-B of working longer.

Thankfully, I reverted to Plan-A. Thankfully, 2008-2009 have taught me to make cash for the living expenses the priority.

Those who are still years away from retirement can take more risk in the markets. The trick is to know when to start reducing risk.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

sawhorse
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Re: U.S. stocks in freefall

Post by sawhorse » Sun Feb 14, 2016 4:46 pm

tj wrote:I have to maintain a $100k average with Merrill Edge to hit Platinum Honors, so I just keep pumping $$$ into it out of my salary every couple weeks...it takes a lot of the emotion out of it I guess. :D

Once you hit status, you keep it for 12 months even if your balance drops below. After 12 months, if you're below, you have to have the qualifying balance for the next 3 months in order to keep status. So if you don't care about keeping status next year, you essentially get it for 15 months.

The 12 month period starts when you first hit the balance, not when you first fall below the balance.

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ray.james
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Re: U.S. stocks in freefall

Post by ray.james » Sun Feb 14, 2016 5:31 pm

sawhorse wrote:
tj wrote:I have to maintain a $100k average with Merrill Edge to hit Platinum Honors, so I just keep pumping $$$ into it out of my salary every couple weeks...it takes a lot of the emotion out of it I guess. :D

Once you hit status, you keep it for 12 months even if your balance drops below. After 12 months, if you're below, you have to have the qualifying balance for the next 3 months in order to keep status. So if you don't care about keeping status next year, you essentially get it for 15 months.

The 12 month period starts when you first hit the balance, not when you first fall below the balance.


That is a nice tip. My wife and I have BOFA cards. so we are trying this. Bofa travel rewards is 2.625% with this which makes highest rewards flat card.
When in doubt, http://www.bogleheads.org/forum/viewtopic.php?f=1&t=79939

tj
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Re: U.S. stocks in freefall

Post by tj » Sun Feb 14, 2016 6:16 pm

sawhorse wrote:
tj wrote:I have to maintain a $100k average with Merrill Edge to hit Platinum Honors, so I just keep pumping $$$ into it out of my salary every couple weeks...it takes a lot of the emotion out of it I guess. :D

Once you hit status, you keep it for 12 months even if your balance drops below. After 12 months, if you're below, you have to have the qualifying balance for the next 3 months in order to keep status. So if you don't care about keeping status next year, you essentially get it for 15 months.

The 12 month period starts when you first hit the balance, not when you first fall below the balance.



yes...They enrolled me in Platinum last week. It has the 3 month average of 70k even though I started with a 100k deposit. who know. I'm guessing it will go Platinum Honors next month barring market collapse.

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packet
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Re: U.S. stocks in freefall

Post by packet » Wed Feb 17, 2016 10:14 am

Should we start a thread, "U.S. stocks in freerise"?

Or is there one that I've missed... ?

:beerCheers,
packet
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FullYellowJacket
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Re: U.S. stocks in freefall

Post by FullYellowJacket » Wed Feb 17, 2016 10:37 am

I think we are currently in the mysterious, fabled, quadruple dead cat bounce!

But seriously, I won't gloat to anyone until we are back in the 2100s.

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Re: U.S. stocks in freefall

Post by GoldenFinch » Wed Feb 17, 2016 10:38 am

packet wrote:Should we start a thread, "U.S. stocks in freerise"?

Or is there one that I've missed... ?

:beerCheers,
packet


Actually, to be more precise about true market behavior, we should have a thread titled, "U.S. stocks go UP and DOWN."

Someone more creative than me could write a song to go with the thread (put to the music of THE WHEELS ON THE BUS GO UP AND DOWN).

U.S. Stocks go up and down, up and down, up and down,
U.S. Stocks go up and down, all through the year

Sometimes they go up day after day, people get excited and start to say, "I sure hope the market stays this way"
But of course it won't ...

(Feel free to add more...) :sharebeer

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Re: U.S. stocks in freefall

Post by nisiprius » Wed Feb 17, 2016 11:32 am

FullYellowJacket wrote:I think we are currently in the mysterious, fabled, quadruple dead cat bounce!

But seriously, I won't gloat to anyone until we are back in the 2100s.
The S&P 500 index, or the century? :happy
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

prettybogle
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Re: U.S. stocks in freefall

Post by prettybogle » Wed Feb 17, 2016 12:17 pm

I love this thread - although it can be monotonous at times it still is a powerful confidence builder for 'stay the course' :happy

NMJack
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Re: U.S. stocks in freefall

Post by NMJack » Wed Feb 17, 2016 12:58 pm

GoldenFinch wrote:
packet wrote:Should we start a thread, "U.S. stocks in freerise"?

Or is there one that I've missed... ?

:beerCheers,
packet


Actually, to be more precise about true market behavior, we should have a thread titled, "U.S. stocks go UP and DOWN."

Someone more creative than me could write a song to go with the thread (put to the music of THE WHEELS ON THE BUS GO UP AND DOWN).

U.S. Stocks go up and down, up and down, up and down,
U.S. Stocks go up and down, all through the year

Sometimes they go up day after day, people get excited and start to say, "I sure hope the market stays this way"
But of course it won't ...

(Feel free to add more...) :sharebeer


Nice! The difference of course being at the end of the year, the bus wheels are always where they started. Unlike the bus wheels, the market goes up more than down.... :moneybag

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nisiprius
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Re: U.S. stocks in freefall

Post by nisiprius » Wed Feb 17, 2016 4:10 pm

GoldenFinch wrote:
packet wrote:Should we start a thread, "U.S. stocks in freerise"?

Or is there one that I've missed... ?

:beerCheers,
packet


Actually, to be more precise about true market behavior, we should have a thread titled, "U.S. stocks go UP and DOWN."

Someone more creative than me could write a song to go with the thread (put to the music of THE WHEELS ON THE BUS GO UP AND DOWN).

U.S. Stocks go up and down, up and down, up and down,
U.S. Stocks go up and down, all through the year

Sometimes they go up day after day, people get excited and start to say, "I sure hope the market stays this way"
But of course it won't ...

(Feel free to add more...) :sharebeer
Oh, my! The verses write themselves... no problems with those pesky rhymes.

The people on the tube say "Dead cat bounce!" "Dead cat bounce!" "Dead cat bounce!"
The people on the tube say "Dead cat bounce," all though the year.

The broker on the phone says "Buy the dips!" "Buy the dips!" "Buy the dips!"
The broker on the phone says "Buy the dips," all through the year.

The little banner ad says "Warren's picks!" "Warren's picks!" "Warren's picks!"
The little banner ad says "Warren's picks," all through the year.

The cable talking head says "Stocks on sale!" "Stocks on sale!" "Stocks on sale!"
The cable talking head says "Stocks on sale," all through the year.

And Bogle's boring bunch says "Stay the course!" "Stay the course!" "Stay the course!"
Bogle's boring bunch says "Stay the course," all through the year!
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Toons
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Re: U.S. stocks in freefall

Post by Toons » Wed Feb 17, 2016 4:11 pm

"The Show Must Go On" :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

GoldenFinch
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Re: U.S. stocks in freefall

Post by GoldenFinch » Wed Feb 17, 2016 5:39 pm

nisiprius wrote:
GoldenFinch wrote:
packet wrote:Should we start a thread, "U.S. stocks in freerise"?

Or is there one that I've missed... ?

:beerCheers,
packet


Actually, to be more precise about true market behavior, we should have a thread titled, "U.S. stocks go UP and DOWN."

Someone more creative than me could write a song to go with the thread (put to the music of THE WHEELS ON THE BUS GO UP AND DOWN).

U.S. Stocks go up and down, up and down, up and down,
U.S. Stocks go up and down, all through the year

Sometimes they go up day after day, people get excited and start to say, "I sure hope the market stays this way"
But of course it won't ...

(Feel free to add more...) :sharebeer
Oh, my! The verses write themselves... no problems with those pesky rhymes.

The people on the tube say "Dead cat bounce!" "Dead cat bounce!" "Dead cat bounce!"
The people on the tube say "Dead cat bounce," all though the year.

The broker on the phone says "Buy the dips!" "Buy the dips!" "Buy the dips!"
The broker on the phone says "Buy the dips," all through the year.

The little banner ad says "Warren's picks!" "Warren's picks!" "Warren's picks!"
The little banner ad says "Warren's picks," all through the year.

The cable talking head says "Stocks on sale!" "Stocks on sale!" "Stocks on sale!"
The cable talking head says "Stocks on sale," all through the year.

And Bogle's boring bunch says "Stay the course!" "Stay the course!" "Stay the course!"
Bogle's boring bunch says "Stay the course," all through the year!


You get an A+ and a gold star! We'll pretend the bus is going up hill with dips and valleys along the way. :sharebeer
(I clearly need another hobby, but I get so much useful information, and often a good laugh, out of this site.) :D

NMJack
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Re: U.S. stocks in freefall

Post by NMJack » Wed Feb 17, 2016 10:35 pm

GoldenFinch wrote:You get an A+ and a gold star! We'll pretend the bus is going up hill with dips and valleys along the way. :sharebeer
(I clearly need another hobby, but I get so much useful information, and often a good laugh, out of this site.) :D


Bingo!! I don't know why I didn't see that bus going up hill.

crg11
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Re: U.S. stocks in freefall

Post by crg11 » Thu Mar 17, 2016 7:22 pm

And just like that, we are positive for the year.

http://in.reuters.com/article/us-usa-st ... NKCN0WJ1GH

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Taylor Larimore
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Market timing or Stay the course.

Post by Taylor Larimore » Thu Mar 17, 2016 8:49 pm

Bogleheads:

LBill started this thread titled, "U.S.stocks in freefall," in August 2011. The Dow August close in 2011 was 11,613. Today it is 17,481 (not including dividends).

More evidence that market-timing is a loser's game.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

bayview
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Re: U.S. stocks in freefall

Post by bayview » Thu Mar 17, 2016 9:31 pm

VictoriaF wrote:
visualguy wrote:bayview and VictoriaF,

You have decades worth of living expenses in safe places such as cash. I agree that the stock market behavior is less of a concern for people like you. I'm pretty much in the same boat because I keep only 20% of my invested assets in the stock market, and I often wonder why I bother even with that since it's too volatile, and it has performed overall worse than my other investments. I'm thinking about leaving only my 401(k) in the stock market, or maybe not even that.

I may be wrong, but I don't think that our situation is typical for people on this forum...


In my case, the desire to retire and live my life to the fullest was stronger than the desire to have as much money as possible. I was on track to retire in 2013, when 2008-2009 have happened. At the time, no one knew how much more the markets could drop, and whether and when they would recover. Grudgingly, I started contemplating Plan-B of working longer.

Thankfully, I reverted to Plan-A. Thankfully, 2008-2009 have taught me to make cash for the living expenses the priority.

Those who are still years away from retirement can take more risk in the markets. The trick is to know when to start reducing risk.

Victoria

And in my case, DH and I have far less (far, far, far, far less) saved for retirement than most who post on this forum. (From what I read, though, there are quite a few in our situation who simply lurk.)

We don't have enough assets to gamble. We do have enough in current and projected SS income and projected pension to cover basic expenses, plus the occasional new roof and furnace. Fun things like vacations will come from savings. So by the time I retire, we should have 20-25 years (quite a bit more, actually, but I do pessimistic planning) in dead-safe investments for those fun things plus (yikes) disasters, plus additional funds in a 70/30 AA that will ride the roulette wheel through this period. It's sure not perfect, but it's the most prudent use of what we have. For that part of our savings, the stock market is most definitely a concern, although more in the whaddaya-gonna-do department. So I sure don't ignore stocks. I'd have way more in equities if I had the ability to take risk.

Warning: mild rant --at times it feels as though posters here on BH view the world as divided between prudent, cautious, foresightful, and responsible people well on the road to $2 million in savings by age 35 vs. the feckless idiots who have <$15k in retirement savings at age 64, expecting everyone else to bail them out. In fact, there are quite a few of us who through various circumstances of fate, often involving marital misadventures, find ourselves working two jobs, maxing out retirement accounts at $24k/ year but nothing left over for Roths, etc., and (omg) retiring with mortgages. We have our own tracks to retirement, muddling along pretty much OK, and we won't be a burden to our kids. Chacon a son gout, and all that.

/mild rant
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

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TomatoTomahto
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Re: U.S. stocks in freefall

Post by TomatoTomahto » Thu Mar 17, 2016 9:54 pm

@bayview, I plead guilty to sometimes doing what you mildly ranted about. Maybe that's what keeps some lurking, and I apologize. Fwiw, if you go back 35 years, I was suffering the effects of marital and other misadventures, and my net worth was zero. In the meantime, I was lucky, but shame on me if I sometimes make it sound as though it was all well planned.

bayview
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Re: U.S. stocks in freefall

Post by bayview » Fri Mar 18, 2016 4:47 am

TomatoTomahto wrote:@bayview, I plead guilty to sometimes doing what you mildly ranted about. Maybe that's what keeps some lurking, and I apologize. Fwiw, if you go back 35 years, I was suffering the effects of marital and other misadventures, and my net worth was zero. In the meantime, I was lucky, but shame on me if I sometimes make it sound as though it was all well planned.

It's all good. :beer I probably read one too many "Can I afford to retire" threads. :D
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

IlliniDave
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Re: U.S. stocks in freefall

Post by IlliniDave » Fri Mar 18, 2016 6:31 am

bayview wrote:And in my case, DH and I have far less (far, far, far, far less) saved for retirement than most who post on this forum. (From what I read, though, there are quite a few in our situation who simply lurk.)

We don't have enough assets to gamble. We do have enough in current and projected SS income and projected pension to cover basic expenses, plus the occasional new roof and furnace. Fun things like vacations will come from savings. So by the time I retire, we should have 20-25 years (quite a bit more, actually, but I do pessimistic planning) in dead-safe investments for those fun things plus (yikes) disasters, plus additional funds in a 70/30 AA that will ride the roulette wheel through this period.


You certainly aren't alone. My main marital misadventure played itself out a bit more than 8 years ago, leaving me in my mid-forties, right on the cusp of the financial crisis meltdown, with my finances devastated (and that was before the big crash), and no real plan. Being conservative I'm more comfortable with a 3% rather than 4% WR. I'm enough of a math nerd that i figured out that every $1,000/mo I cut out out of my routine spending meant $400,000 less I had to pile up. I found it easier and more satisfying to approach the problem by developing a satisfying lifestyle that minimized spending. I experiment on an ongoing basis, and where I overshoot with the frugality I pull back, where it works, I push more. So by definition I won't be groveling in abject discontent for lack of spending. I'm wandering off track, but I'll be retiring sometime before my 56th birthday, and it would be easy to make an inaccurate assumption about how much wealth I have piled up. SS and a small retirement annuity figure prominently for me as well. I have little enough in invested financial assets that I have to take measured risk. I suppose I have become callous to it having weathered sufficient bad times. Hopefully it won't be my undoing. I had to make some difficult choices. I could work an additional 10 years to buy myself the safety of being able to pour it all into safe assets, but I value the 10 years more than safety. The last 4-5 months have been frustrating , but enduring those times and worse is ultimately what we as equity investors get paid for. Good luck to you!
Don't do something. Just stand there!

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riptide
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Re: U.S. stocks in freefall

Post by riptide » Fri Mar 18, 2016 6:56 am

Hey everybody,
Is the market back to a decent level now? I have no idea whether is up or down, I only know I have left my portfolio alone through all this. It has been so volatile I don't know if it is back up after the correction we had a couple months ago. Is it still in freefall? Does it matter??
Brokerage account 70/30 | VG total Market 40% | VG total Intl 12% | VG small cap value 12% | VG Reit index 6% | VG Total Bond 30% | TSP Account 75/25 | C Fund 45%, S 15%, I 15%, G 25% | EE Bonds=Emergency Fund

IlliniDave
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Re: U.S. stocks in freefall

Post by IlliniDave » Fri Mar 18, 2016 7:53 am

riptide wrote:Hey everybody,
Is the market back to a decent level now? I have no idea whether is up or down, I only know I have left my portfolio alone through all this. It has been so volatile I don't know if it is back up after the correction we had a couple months ago. Is it still in freefall? Does it matter??


In the words of Jack Bogle, the markets are a giant distraction from the business of investing. I think the indices are still below where they were at the middle of last summer, maybe slightly below where they ended last year. For the most part my vote is: doesn't matter. I believe you're doing the right thing just leaving things be during these short-term movements.
Don't do something. Just stand there!

FullYellowJacket
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Re: U.S. stocks in freefall

Post by FullYellowJacket » Fri Mar 18, 2016 12:03 pm

riptide wrote:Hey everybody,
Is the market back to a decent level now? I have no idea whether is up or down, I only know I have left my portfolio alone through all this. It has been so volatile I don't know if it is back up after the correction we had a couple months ago. Is it still in freefall? Does it matter??


It's been sideways for a while now. Technically, 2016 has been a profitable year to invest so far... it just took an adventurous route to get there.

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HomerJ
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Re: U.S. stocks in freefall

Post by HomerJ » Fri Mar 18, 2016 12:37 pm

HomerJ wrote:This thread serves a great purpose, showing how people confidently predicted a crash was coming because of XXX, and then it didn't happen.


Once again, we had people confidently proclaiming we were on our way to a huge crash just a few months ago.

It's not that crashes don't happen. They do and will. Not if, it's a when. There WILL be another crash at some point. Maybe even tomorrow. The people who are waiting for a crash may indeed be proven right.

What I object to is people claiming that crashes are predictable or easy to spot ahead of time. It's possible the market may head down again tomorrow. It's also possible that today may be the lowest the market will ever be going forward.

If you told someone in 1996, with a PE10 ratio of 25, after a 14-year bull market, and 500% gains, that the market was as cheap as it would ever be, who would have believed you? (in was in the 5000s in 1996, and the DOW has never gone that low since).

Nobody knows enough to predict anything with any accuracy.

50/50 buy and hold through everything seems a lot less stressful to me (and easier) than jumping in and out of the market based on guesses.

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Re: U.S. stocks in freefall

Post by VictoriaF » Fri Mar 18, 2016 1:04 pm

HomerJ wrote:What I object to is people claiming that crashes are predictable or easy to spot ahead of time. It's possible the market may head down again tomorrow. It's also possible that today may be the lowest the market will ever be going forward.


There are two types of people: those who think they can predict crashes and those who think it's impossible. These types always talk past each other. "Predictors" will always find some past events and pronouncements that were clear signs of the upcoming crash. "Impossibles" will always find some past predictions of crashes that have not happened.

You and I are impossibles. We know what we know, but trying to convert predictors to our type is an uphill a losing battle.

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Re: U.S. stocks in freefall

Post by Grogs » Fri Mar 18, 2016 3:22 pm

I've been missing this thread. And I didn't even have to wait for a market drop for it to return. :D

I was reading an article on the NBC news site today, and it said something like if the stocks remain at this level through the end of the month, it will be the biggest single-quarter recovery since 1933. Once I read past the first paragraph, they started talking about what the technical analysts thought. Apparently the charts are showing some sort of "double dip" formation, and they're certain the bull market is over and the stock market will soon head south. What I thought ironic was that right in the middle of the article describing the doom and gloom to come, they had a link to another article titled "Jim Cramer says the stock market is about to take off". :confused

I think I would be more likely to base my stock market decisions on advice from Miss Cleo of the Psychic Hotline than from either Jim Cramer or technical analysis.

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Re: U.S. stocks in freefall

Post by telemark » Fri Mar 18, 2016 3:49 pm

riptide wrote:Is it still in freefall? Does it matter??

The market is a feather fluttering in the wind...

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Re: U.S. stocks in freefall

Post by VictoriaF » Fri Mar 18, 2016 6:15 pm

telemark wrote:
riptide wrote:Is it still in freefall? Does it matter??

The market is a feather fluttering in the wind...


Or a butterfly flapping its wings in Beijing and causing chaos in Washington.

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Re: U.S. stocks in freefall

Post by triceratop » Fri Mar 18, 2016 6:34 pm

VictoriaF wrote:
telemark wrote:
riptide wrote:Is it still in freefall? Does it matter??

The market is a feather fluttering in the wind...


Or a butterfly flapping its wings in Beijing and causing chaos in Washington.

Victoria


I don't think you need a butterfly flapping its wings to cause chaos in Washington. :wink:

nitpicking, but chaos is the process by which the effects of the butterfly are felt in Washington, it is not the end result.

On topic: it is good to see the market doing its thing, but I wouldn't count on it holding this level forever. Markets will fluctuate. I just wish I had a few more months to DCA in at those SCV / international prices. This thread is a good reminder to stay the course though!
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Re: U.S. stocks in freefall

Post by VictoriaF » Fri Mar 18, 2016 6:37 pm

triceratop wrote:
VictoriaF wrote:
telemark wrote:
riptide wrote:Is it still in freefall? Does it matter??

The market is a feather fluttering in the wind...


Or a butterfly flapping its wings in Beijing and causing chaos in Washington.

Victoria


I don't think you need a butterfly flapping its wings to cause chaos in Washington. :wink:

nitpicking, but chaos is the process by which the effects of the butterfly are felt in Washington, it is not the end result.


Nitpicking back: In Washington, chaos is a process.

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Re: U.S. stocks in freefall

Post by Fallible » Fri Mar 18, 2016 7:04 pm

Grogs wrote:I've been missing this thread. And I didn't even have to wait for a market drop for it to return. :D

I was reading an article on the NBC news site today, and it said something like if the stocks remain at this level through the end of the month, it will be the biggest single-quarter recovery since 1933. Once I read past the first paragraph, they started talking about what the technical analysts thought. Apparently the charts are showing some sort of "double dip" formation, and they're [b]certain the bull market is over and the stock market will soon head south.[/b] ...


Are you certain they used the word "certain"? Forecasters usually use qualifiers when predicting, such as "may," "could," "if," "depending upon," etc.
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Re: U.S. stocks in freefall

Post by Grogs » Fri Mar 18, 2016 7:20 pm

Fallible wrote:
Grogs wrote:I've been missing this thread. And I didn't even have to wait for a market drop for it to return. :D

I was reading an article on the NBC news site today, and it said something like if the stocks remain at this level through the end of the month, it will be the biggest single-quarter recovery since 1933. Once I read past the first paragraph, they started talking about what the technical analysts thought. Apparently the charts are showing some sort of "double dip" formation, and they're [b]certain the bull market is over and the stock market will soon head south.[/b] ...


Are you certain they used the word "certain"? Forecasters usually use qualifiers when predicting, such as "may," "could," "if," "depending upon," etc.


The article is here: http://www.nbcnews.com/business/markets/dow-could-be-mounting-its-biggest-quarterly-comeback-1933-n541431

Ross noted that the index has formed a double bottom, which is similar to what was seen during the August and September swoon. This type of pattern describes when a stock falls to a low, rallies and then drops to the same low only to rebound another time.

"We failed miserably back in October," said Ross. "We expect that to happen again."

"When you zoom out and look at the weekly chart, you are staring at a six-year bull market with a two-year distributive top," said the head of technical analysis at Evercore ISI. "I think this marks the end of a bull market."


What could be clearer than "a six-year bull market with a two-year distributive top". If that's not enough to make you sell all your stocks and buy supplies for the bomb shelter, I don't know what is. :D

And the title of the Cramer article linked in the middle is: Read More from CNBC: Signs a Massive Rally Could Be Coming, Cramer Says

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Re: U.S. stocks in freefall

Post by blueblock » Fri Mar 18, 2016 7:21 pm

I have a strong gut feeling that all hell is about to break loose, but an equally strong gut feeling that everything is coming up roses.

I guess I'll do nothing and see what happens.

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Re: U.S. stocks in freefall

Post by hnzw rui » Fri Mar 18, 2016 8:01 pm

blueblock wrote:I have a strong gut feeling that all hell is about to break loose, but an equally strong gut feeling that everything is coming up roses.

I guess I'll do nothing and see what happens.

And this is why I'm so glad I switched from ETFs to mutual funds with automatic investing. I don't have to place buy/sell orders or even look at my account. Whatever the market does, I'm not paralyzed and second guessing myself about what action to take. Investments just get automatically deducted from the paycheck/bank account.

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Re: U.S. stocks in freefall

Post by peppers » Fri Mar 18, 2016 8:13 pm

nisiprius wrote:
FullYellowJacket wrote:I think we are currently in the mysterious, fabled, quadruple dead cat bounce!

But seriously, I won't gloat to anyone until we are back in the 2100s.
The S&P 500 index, or the century? :happy


I had a feeling someone would work the space time continuum into this thread. :)
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Re: U.S. stocks in freefall

Post by VictoriaF » Fri Mar 18, 2016 8:17 pm

peppers wrote:
nisiprius wrote:
FullYellowJacket wrote:I think we are currently in the mysterious, fabled, quadruple dead cat bounce!

But seriously, I won't gloat to anyone until we are back in the 2100s.
The S&P 500 index, or the century? :happy


I had a feeling someone would work the space time continuum into this thread. :)


2100 is a beautiful multiple of 42.

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Re: U.S. stocks in freefall

Post by Toons » Fri Mar 18, 2016 8:20 pm

hnzw rui wrote:
blueblock wrote:I have a strong gut feeling that all hell is about to break loose, but an equally strong gut feeling that everything is coming up roses.

I guess I'll do nothing and see what happens.

And this is why I'm so glad I switched from ETFs to mutual funds with automatic investing. I don't have to place buy/sell orders or even look at my account. Whatever the market does, I'm not paralyzed and second guessing myself about what action to take. Investments just get automatically deducted from the paycheck/bank account.



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

Post by Toons » Fri Mar 18, 2016 8:22 pm

hnzw rui wrote:
blueblock wrote:I have a strong gut feeling that all hell is about to break loose, but an equally strong gut feeling that everything is coming up roses.

I guess I'll do nothing and see what happens.

And this is why I'm so glad I switched from ETFs to mutual funds with automatic investing. I don't have to place buy/sell orders or even look at my account. Whatever the market does, I'm not paralyzed and second guessing myself about what action to take. Investments just get automatically deducted from the paycheck/bank account.



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

Post by Fallible » Fri Mar 18, 2016 9:41 pm

Grogs wrote:
Fallible wrote:
Grogs wrote:I've been missing this thread. And I didn't even have to wait for a market drop for it to return. :D

I was reading an article on the NBC news site today, and it said something like if the stocks remain at this level through the end of the month, it will be the biggest single-quarter recovery since 1933. Once I read past the first paragraph, they started talking about what the technical analysts thought. Apparently the charts are showing some sort of "double dip" formation, and they're [b]certain the bull market is over and the stock market will soon head south.[/b] ...


Are you certain they used the word "certain"? Forecasters usually use qualifiers when predicting, such as "may," "could," "if," "depending upon," etc.


The article is here: http://www.nbcnews.com/business/markets/dow-could-be-mounting-its-biggest-quarterly-comeback-1933-n541431

Ross noted that the index has formed a double bottom, which is similar to what was seen during the August and September swoon. This type of pattern describes when a stock falls to a low, rallies and then drops to the same low only to rebound another time.

"We failed miserably back in October," said Ross. "We expect that to happen again."

"When you zoom out and look at the weekly chart, you are staring at a six-year bull market with a two-year distributive top," said the head of technical analysis at Evercore ISI. "I think this marks the end of a bull market."


What could be clearer than "a six-year bull market with a two-year distributive top". If that's not enough to make you sell all your stocks and buy supplies for the bomb shelter, I don't know what is. :D

And the title of the Cramer article linked in the middle is: Read More from CNBC: Signs a Massive Rally Could Be Coming, Cramer Says


And there are the qualifiers: "expect," "think," and "could be."
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Re: U.S. stocks in freefall

Post by prettybogle » Sat Mar 19, 2016 11:44 am

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

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Re: U.S. stocks in freefall

Post by jrinvestor » Sat Mar 19, 2016 1:45 pm

I just started investing summer of last year, right before the fall in stock prices. It was really upsetting to be losing money right away, but as of yesterday prices have just about recovered. Good lesson for me about not to panic.

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Welcome jrinvestor!

Post by Taylor Larimore » Sat Mar 19, 2016 2:09 pm

jrinvestor:

Welcome to the Bogleheads forum where our investing is based on academic research--not self-serving industry marketing.

Best wishes
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Re: U.S. stocks in freefall

Post by prettybogle » Wed Mar 30, 2016 8:31 pm

These huge gyrations in market this year are good reminders to always stay invested. What a amazing comeback from the "crash" early this year. I still am not able to believe this and trying very hard to not sell i.e. Time the market. How are y'all coping ? Getting tempted to sell this rally and wait for corrction ?

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Re: U.S. stocks in freefall

Post by livesoft » Wed Mar 30, 2016 8:34 pm

There is nothing wrong with selling if your rebalancing plan calls for it. By the same token, there is nothing wrong with buying if you have cash to invest or if your rebalancing plan calls for it. I will be selling since I have hit a rebalancing band on the high end. One reason I hit the target is because I bought in Jan-Feb when I hit the rebalancing target on the low side.

While folks will say "This time is not different", I think that modern communication methods, no transaction fees, and one-click buy/sell transactions make it more likely that 10% movements in either direction will occur in shorter time periods than in the past when it took longer for news to reach people. Of course, that does NOT mean that all 10% movements have to happen in 30 days or less. Large movements can still play out over months … or not.
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Re: U.S. stocks in freefall

Post by carofe » Thu Mar 31, 2016 12:54 am

I just re-balanced my portfolio. I had a 3% drift. It was a little bit hard to sell winning index funds and buy loser ones :D, but I did it even though a little voice was telling me "let the winners keep winning", lol. I also resisted the temptation today to buy some individual stocks.
I think I'm getting good at this 8-).
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