U.S. stocks in freefall

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VictoriaF
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Re: U.S. stocks in freefall

Post by VictoriaF » Wed Sep 16, 2015 4:31 pm

GoldenFinch wrote:
nisiprius wrote:
Dulocracy wrote:
EyeYield wrote:Fun and market drops 30% in the same sentence? How's that for dry? :sharebeer
I am in the accumulation phase. A 30% drop would be a party for me, as everything goes on sale! :sharebeer
If, of course, it's really the very same stock that it was before the drop. But what if the stock you buy at a 30% discount is past its sell-by date?


Isn't this why Bogleheads don't buy individual stocks? It's so hard to find the sell-by date. :happy


Sell-by date is just a recommendation. You can always keep your stock in a refrigerator for a few more days {pun intended}.

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Re: U.S. stocks in freefall

Post by Uncle Pennybags » Wed Sep 16, 2015 4:38 pm

GoldenFinch wrote:Isn't this why Bogleheads don't buy individual stocks? It's so hard to find the sell-by date. :happy
Unless one has inside information or a private data line to an exchange trading is playing a shell game with those who have and do. Investing is easy and requires very little thought using the index fund asset allocation method. We don't make as much as the insiders but we make more than the traders.

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Re: U.S. stocks in freefall

Post by Dulocracy » Wed Sep 16, 2015 4:39 pm

nisiprius wrote:
Dulocracy wrote:
EyeYield wrote:Fun and market drops 30% in the same sentence? How's that for dry? :sharebeer
I am in the accumulation phase. A 30% drop would be a party for me, as everything goes on sale! :sharebeer
If, of course, it's really the very same stock that it was before the drop. But what if the stock you buy at a 30% discount is past its sell-by date?


That is why I buy the whole store!

GoldenFinch wrote:Isn't this why Bogleheads don't buy individual stocks? It's so hard to find the sell-by date. :happy


Exactly!
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.

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Re: U.S. stocks in freefall

Post by cfs » Wed Sep 16, 2015 5:04 pm

Plenty of options.

"That is why I buy the whole store!"

Others prefer to buy the stock-loaded refrigerator !
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Re: U.S. stocks in freefall

Post by GoldenFinch » Wed Sep 16, 2015 5:05 pm

Uncle Pennybags wrote:
GoldenFinch wrote:Isn't this why Bogleheads don't buy individual stocks? It's so hard to find the sell-by date. :happy
Unless one has inside information or a private data line to an exchange trading is playing a shell game with those who have and do. Investing is easy and requires very little thought using the index fund asset allocation method. We don't make as much as the insiders but we make more than the traders.


:sharebeer

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Re: U.S. stocks in freefall

Post by Johno » Wed Sep 16, 2015 5:35 pm

GoldenFinch wrote:
nisiprius wrote:
Dulocracy wrote:
EyeYield wrote:Fun and market drops 30% in the same sentence? How's that for dry? :sharebeer
I am in the accumulation phase. A 30% drop would be a party for me, as everything goes on sale! :sharebeer
If, of course, it's really the very same stock that it was before the drop. But what if the stock you buy at a 30% discount is past its sell-by date?


Isn't this why Bogleheads don't buy individual stocks? It's so hard to find the sell-by date. :happy

I take Nisiprius' comment to refer to stock as in the stock allocation as in stock market, not individual single stock, and agree with what I take to be its implication.

It only makes sense to be happy about stock (market) price declines if you think they imply higher future expected returns. It's common on this forum to see annoyance at the implication that today's high valuations imply low expected return, but the only reason to be outright happy about a market drop is if lower values imply higher expected returns.

But even if one is consistent about that, we don't know that a price drop implies a higher expected return. It could simply be commensurate with events, policies, etc. that make 'stock' different and less 'fresh' than before. Or it could imply a higher expected return but probably accompanied by higher risk (volatility is almost always much higher right after big sudden drops). I don't see a reason to respond to that categorically with 'happiness'. It's true an earlier accumulator has less relative reason to worry about it than a later one or 'distributor', at least insofar as investments, because they have less invested (not counting though the possible negative implications of the same events on their lives outside investing).

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Re: U.S. stocks in freefall

Post by Dulocracy » Wed Sep 16, 2015 6:59 pm

Johno wrote:It only makes sense to be happy about stock (market) price declines if you think they imply higher future expected returns.


That is somewhat silly. Of course I expect the stock portion of my portfolio to produce more money. If I did not, I would be a fool to put my money there.

Also, no matter the reason (political, valuations, etc), the stock price is lower when I am buying than if it had remained at a higher price.

The earliest that I anticipate needing to sell would be 30 years from now. 40 is more likely. If stocks to not appreciate in that time period, something went horribly wrong.

Presuming that stocks do NOT appreciate. Let us say that they end exactly where they are right now. Well, I sure am glad I bought them when they were at this price instead of at a higher one!

Best! :sharebeer
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.

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Re: U.S. stocks in freefall

Post by Johno » Wed Sep 16, 2015 7:18 pm

Dulocracy wrote:
Johno wrote:It only makes sense to be happy about stock (market) price declines if you think they imply higher future expected returns.

That is somewhat silly. Of course I expect the stock portion of my portfolio to produce more money. If I did not, I would be a fool to put my money there.
Also, no matter the reason (political, valuations, etc), the stock price is lower when I am buying than if it had remained at a higher price.
The earliest that I anticipate needing to sell would be 30 years from now. 40 is more likely. If stocks to not appreciate in that time period, something went horribly wrong.
Presuming that stocks do NOT appreciate. Let us say that they end exactly where they are right now. Well, I sure am glad I bought them when they were at this price instead of at a higher one!

I would say it's silly to obviously misread something and then claim it was somewhat silly. I said it's only a reason to be 'happy' at lower stock prices if that implies *higher* expected return. Your response seems to assume some statement that stocks might give no positive return at all. Well actually they might not even in 30 years, none of us can know that, but it's not what I said and not the point.

I said it's only reasonable to be strictly 'happy' at lower prices if lower prices imply higher future returns than when prices were higher. That might or might not be true. It's reasonable to keep buying some $ amount (or % of income etc) of stocks according to a plan and not worry much about the ups and downs of the market because they can't be predicted. But you're making a stronger and more questionable assumption to say it's a 'party' if stock prices drop.

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Re: U.S. stocks in freefall

Post by Uncle Pennybags » Wed Sep 16, 2015 7:48 pm

Johno wrote:It only makes sense to be happy about stock (market) price declines if you think they imply higher future expected returns
If one is accumulating stock using dollar cost averaging lower prices mean more stock for the same dollar. This is done automatically by keeping asset classes at the predetermined percent.

Uncle Pennybags wrote:
Browser wrote:Dip Buyer Alert! 200 250 :oops: point drop in the DOW ahead today!
That ain't noting, I bought REITs today. Now they are in free fall.
They are up 4.79% in two weeks and bonds are now squeaking for the grease. It hurts to do this if one gets emotional so just do it.

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Re: U.S. stocks in freefall

Post by Johno » Wed Sep 16, 2015 8:52 pm

Uncle Pennybags wrote:
Johno wrote:It only makes sense to be happy about stock (market) price declines if you think they imply higher future expected returns
If one is accumulating stock using dollar cost averaging lower prices mean more stock for the same dollar. This is done automatically by keeping asset classes at the predetermined percent.

It's already been stated that the person puts money in the market according to their plan (constant amount or % of their income as the case may be) so dollar cost average v some other method is not the issue.

The point is maybe so simple that's the reason people are reading something else into it. If stock prices go down because of a deterioration in long term fundamentals, that's not a reason to be particularly happy, though not particularly sad, not about money you haven't invested yet anyway. It's only a reason to be happy if you conclude the market is pricing more cheaply relative to long term fundamentals, which is harder to say.

A concrete example: the Russian stock market has very low PE. Should be really be happier or more enthusiastic now putting a given amount of money into it (say through our investment in a diversified EM fund) than before? One frequent poster I know thinks so, and that's fine as an opinion: his opinion is that expected return on Russian stocks has increased to some degree in inverse proportion to the price drop. But maybe price drop just reflects lower long term energy prices or rationally more pessimistic view of the country's long term diplomatic and internal political situation on its stocks. That's bad if you have money there already, though no use crying over spilled milk, but it's just neutral for money you haven't invested there yet, not a reason to 'party'. It's only time to party if you think the market is pricing it more cheaply *relative to long term fundamentals* than previously. That could be, but it's a significant assumption, not automatically true.

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Re: U.S. stocks in freefall

Post by nisiprius » Thu Sep 17, 2015 11:49 am

Johno wrote:A concrete example: the Russian stock market has very low PE. Should be really be happier or more enthusiastic now putting a given amount of money into it (say through our investment in a diversified EM fund) than before? One frequent poster I know thinks so, and that's fine as an opinion: his opinion is that expected return on Russian stocks has increased to some degree in inverse proportion to the price drop. But maybe price drop just reflects lower long term energy prices or rationally more pessimistic view of the country's long term diplomatic and internal political situation on its stocks. That's bad if you have money there already, though no use crying over spilled milk, but it's just neutral for money you haven't invested there yet, not a reason to 'party'. It's only time to party if you think the market is pricing it more cheaply *relative to long term fundamentals* than previously. That could be, but it's a significant assumption, not automatically true.
Precisely. The fact that the price drops tells you nothing except that the price dropped. Maybe it was overvalued before it dropped and now it is properly valued. Maybe it was properly valued before and now it is overvalued because folks don't fully appreciate how bad things actually are. Maybe it was undervalued before and still undervalued. Maybe it was undervalued before and now it is properly valued. Maybe it overvalued before and still overvalued. Maybe it was properly value before and now it is undervalued.

The price fluctuates. The value fluctuates too. Just because the price dropped doesn't mean the value stayed the same.
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Re: U.S. stocks in freefall

Post by oneleaf » Thu Sep 17, 2015 1:14 pm

broadstone wrote:As promised...I will be switching from a cash position Thursday or Friday if Fed announces what I think they will. If not, I'll be staying 100% cash.


So what did you expect? I notice you omitted what your actual expectation was.

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Re: U.S. stocks in freefall

Post by cfs » Thu Sep 17, 2015 6:42 pm

broadstone wrote: . . . I will be switching from a cash position Thursday or Friday if Fed announces what I think they will. If not, I'll be staying 100% cash . . .

Is this a done deal?

Back in the market?

Still 100% cash?

Waiting for Friday?
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Re: U.S. stocks in freefall

Post by Uncle Pennybags » Fri Sep 18, 2015 10:30 am

It is time to cut the B.S. What are you doing today. Call your shots or forever hold your peace. Today I'm investing one of ten monthly units in Vanguard total stock. Stocks are at 59.7% of my portfolio, the target is 60%. Perfect storm, total stock is down today and stocks need the grease. What me worry?

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Re: U.S. stocks in freefall

Post by oneleaf » Fri Sep 18, 2015 2:04 pm

Uncle Pennybags wrote:It is time to cut the B.S. What are you doing today. Call your shots or forever hold your peace. Today I'm investing one of ten monthly units in Vanguard total stock. Stocks are at 59.7% of my portfolio, the target is 60%. Perfect storm, total stock is down today and stocks need the grease. What me worry?


His last post was ambiguous enough that he can come back in a week and claim whatever he wants, based on how the market moved.

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Re: U.S. stocks in freefall

Post by Leeraar » Fri Sep 18, 2015 2:57 pm

Really,

What does anyone care? We know what the BH philosophy is, and so does the (sort of) OP of this part of the thread:

viewtopic.php?p=2623309#p2623309

I just feel I am in a crowd yelling to the man on the balcony, "Jump!"

L.
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Re: U.S. stocks in freefall

Post by Uncle Pennybags » Fri Sep 18, 2015 3:32 pm

Leeraar wrote:Really,

What does anyone care? .
There are lurkers looking for investing information; just keeping it real.

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Re: U.S. stocks in freefall

Post by Dulocracy » Mon Sep 21, 2015 5:38 pm

Johno wrote:
Dulocracy wrote:
Johno wrote:It only makes sense to be happy about stock (market) price declines if you think they imply higher future expected returns.

That is somewhat silly. Of course I expect the stock portion of my portfolio to produce more money. If I did not, I would be a fool to put my money there.
Also, no matter the reason (political, valuations, etc), the stock price is lower when I am buying than if it had remained at a higher price.
The earliest that I anticipate needing to sell would be 30 years from now. 40 is more likely. If stocks to not appreciate in that time period, something went horribly wrong.
Presuming that stocks do NOT appreciate. Let us say that they end exactly where they are right now. Well, I sure am glad I bought them when they were at this price instead of at a higher one!

I would say it's silly to obviously misread something and then claim it was somewhat silly. I said it's only a reason to be 'happy' at lower stock prices if that implies *higher* expected return. Your response seems to assume some statement that stocks might give no positive return at all. Well actually they might not even in 30 years, none of us can know that, but it's not what I said and not the point.

I said it's only reasonable to be strictly 'happy' at lower prices if lower prices imply higher future returns than when prices were higher. That might or might not be true. It's reasonable to keep buying some $ amount (or % of income etc) of stocks according to a plan and not worry much about the ups and downs of the market because they can't be predicted. But you're making a stronger and more questionable assumption to say it's a 'party' if stock prices drop.


Well, that is not exactly what you said, but sure, your qualified answer makes sense. As someone who plans on funding a retirement that should not start for at least 30 years, low stock prices are a party for me. Why? Expected return. If the market gives us 6% return over that time, and the market is down 20%, I can expect a lot of upward travel. Of course, that may never happen, but I have faith. Why faith? Faith is what is the basis of our monetary system in part, and it is the reason that I invest. Again, if the market is down, I party in my head as I buy more. Whether or not that party is for good cause or not will not be seen for years to come. Nonetheless, one must make certain assumptions, or there is no point to investing. I am expecting those returns, so I am investing. It is better than buying a gold brick.
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.

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Re: U.S. stocks in freefall

Post by sawhorse » Mon Sep 21, 2015 5:59 pm

Dulocracy wrote:I am in the accumulation phase. A 30% drop would be a party for me, as everything goes on sale! :sharebeer

A 30% drop that doesn't quickly rebound means that a lot of people will lose their jobs or see their salaries substantially cut. Even if you keep your job, it can take a psychological toll to see others suffer. Those in management who have to make decisions about whom to cut are often haunted by that for years.

A prolonged stock market crash doesn't happen in a vacuum. It's a party only for people who have bulletproof employment and lack empathy. And of course people whose employment gets better in bad times, such as bankruptcy attorneys.

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Re: U.S. stocks in freefall

Post by Browser » Mon Sep 21, 2015 9:18 pm

Have you noticed? Lower highs and lower lows. Folks, the trend is down. Good sailing shipmates!
We don't know where we are, or where we're going -- but we're making good time.

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Re: U.S. stocks in freefall

Post by HomerJ » Mon Sep 21, 2015 9:57 pm

Browser wrote:Have you noticed? Lower highs and lower lows. Folks, the trend is down. Good sailing shipmates!


Only took 3 years of proclaiming doom for you to be proven 10% right... Congrats, I guess.

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Re: U.S. stocks in freefall

Post by Uncle Pennybags » Tue Sep 22, 2015 8:37 am

Browser wrote: Good sailing shipmates!
I was told my asset allocation will lose money one year out of five. So what's the problem? I'm sailing on the good ship lollipop.

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Re: U.S. stocks in freefall

Post by Dulocracy » Tue Sep 22, 2015 8:42 am

sawhorse wrote:
Dulocracy wrote:I am in the accumulation phase. A 30% drop would be a party for me, as everything goes on sale! :sharebeer

A 30% drop that doesn't quickly rebound means that a lot of people will lose their jobs or see their salaries substantially cut. Even if you keep your job, it can take a psychological toll to see others suffer. Those in management who have to make decisions about whom to cut are often haunted by that for years.

A prolonged stock market crash doesn't happen in a vacuum. It's a party only for people who have bulletproof employment and lack empathy. And of course people whose employment gets better in bad times, such as bankruptcy attorneys.


Sawhorse, you are exactly right. I should have qualified the statement with the fact that in the current environment, I would anticipate a quick recovery rather than a prolonged one. That is what I anticipate, and I could be wrong. A prolonged period of recession would kick me in the groin, as I have a law firm that is steady if the economy is steady or booming, but not as much when it is down for prolonged periods of time (that incidentally does NOT do bankruptcy because I simply do not enjoy that kind of work).

Thank you for the considerate response in a situation wherein I gave a cavalier response.
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.

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Re: U.S. stocks in freefall

Post by Uncle Pennybags » Tue Sep 22, 2015 9:01 am

Image

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Re: U.S. stocks in freefall

Post by Bustoff » Tue Sep 22, 2015 9:46 am

I keep a small "mad money" trading account.

It satisfies my urge to "do something" when delusion convinces me that I possess mental powers others do not.

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Re: U.S. stocks in freefall

Post by Browser » Tue Sep 22, 2015 10:48 am

Here's a thought for you to chew on: do you own stocks or do they own you? Clearly, most of us viewing and participating in this thread have conceded too much ownership to our stocks. We need to take back our ownership role by selling down to the "I Don't Give a Damn" point of indifference. For many, that could mean zero, zip, nada is the appropriate stock allocation. Not such a bad idea really - since 2000 you could have gotten a 1% higher annual total return owning safe 5-year treasuries than being 100% invested in stock market.
We don't know where we are, or where we're going -- but we're making good time.

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Re: U.S. stocks in freefall

Post by TheRightKost87 » Tue Sep 22, 2015 11:08 am

Browser wrote:Here's a thought for you to chew on: do you own stocks or do they own you? Clearly, most of us viewing and participating in this thread have conceded too much ownership to our stocks. We need to take back our ownership role by selling down to the "I Don't Give a Damn" point of indifference. For many, that could mean zero, zip, nada is the appropriate stock allocation. Not such a bad idea really - since 2000 you could have gotten a 1% higher annual total return owning safe 5-year treasuries than being 100% invested in stock market.


Advocating for selling stocks in a bear market is pretty dangerous advice. Also, are you indicating the next 15 years will be the same as the past 15 years in terms of 5 year treasuries outperforming the stock market?
"The problem with diversification is that it works, whether or not we want it to"

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Re: U.S. stocks in freefall

Post by GoldenFinch » Tue Sep 22, 2015 12:42 pm

Browser wrote:Here's a thought for you to chew on: do you own stocks or do they own you? Clearly, most of us viewing and participating in this thread have conceded too much ownership to our stocks. We need to take back our ownership role by selling down to the "I Don't Give a Damn" point of indifference. For many, that could mean zero, zip, nada is the appropriate stock allocation. Not such a bad idea really - since 2000 you could have gotten a 1% higher annual total return owning safe 5-year treasuries than being 100% invested in stock market.


In response to your question, "do you own them or do they own you?" I own them! I know they go up and down. I am also optimistic so I am comfortable having a 75/25 AA.

I very seriously don't understand selling when averages are going down unless you just don't want to be invested in the market anymore. Market timing is stressful and often ends badly. If you are investing money that can only go up, then it probably shouldn't be in equities. :happy

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Re: U.S. stocks in freefall

Post by Browser » Tue Sep 22, 2015 12:43 pm

TheRightKost87 wrote:
Browser wrote:Here's a thought for you to chew on: do you own stocks or do they own you? Clearly, most of us viewing and participating in this thread have conceded too much ownership to our stocks. We need to take back our ownership role by selling down to the "I Don't Give a Damn" point of indifference. For many, that could mean zero, zip, nada is the appropriate stock allocation. Not such a bad idea really - since 2000 you could have gotten a 1% higher annual total return owning safe 5-year treasuries than being 100% invested in stock market.


Advocating for selling stocks in a bear market is pretty dangerous advice. Also, are you indicating the next 15 years will be the same as the past 15 years in terms of 5 year treasuries outperforming the stock market?

Are you advocating that it won't be the same? Nobody knows. So why get crazy over stocks?
We don't know where we are, or where we're going -- but we're making good time.

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Re: U.S. stocks in freefall

Post by TheRightKost87 » Tue Sep 22, 2015 1:10 pm

Browser wrote:
TheRightKost87 wrote:
Browser wrote:Here's a thought for you to chew on: do you own stocks or do they own you? Clearly, most of us viewing and participating in this thread have conceded too much ownership to our stocks. We need to take back our ownership role by selling down to the "I Don't Give a Damn" point of indifference. For many, that could mean zero, zip, nada is the appropriate stock allocation. Not such a bad idea really - since 2000 you could have gotten a 1% higher annual total return owning safe 5-year treasuries than being 100% invested in stock market.


Advocating for selling stocks in a bear market is pretty dangerous advice. Also, are you indicating the next 15 years will be the same as the past 15 years in terms of 5 year treasuries outperforming the stock market?

Are you advocating that it won't be the same? Nobody knows. So why get crazy over stocks?


I'm not advocating getting crazy over stocks. But I don't see the logic in waiting until stocks go down to decide to sell them either. If you can't handle XX% of your portfolio in stocks, it'd be better to realize that before they start to tank.
"The problem with diversification is that it works, whether or not we want it to"

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Re: U.S. stocks in freefall

Post by HomerJ » Tue Sep 22, 2015 1:14 pm

Browser wrote:selling down to the "I Don't Give a Damn" point of indifference.


This is not a new thought. I believe there are hundreds of posts on this board (many even in this very thread) that talk about selling to your sleeping point...

We've been saying that exact thing for years... even when the market was going up.

I am (and was for the past 5 years), 50/50 stocks/bonds myself for that reason.

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Re: U.S. stocks in freefall

Post by lee1026 » Tue Sep 22, 2015 1:16 pm

Selling to the point of sleeping well at night and selling to the point of indifference is is a bit different though. One of a function of your risk tolerance, amount of money in the bank, etc, the other is generally 0, or at most around 10-20% to counterbalance bond risk.

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Re: U.S. stocks in freefall

Post by gkaplan » Tue Sep 22, 2015 6:26 pm

Browser wrote:
TheRightKost87 wrote:
Browser wrote:Here's a thought for you to chew on: do you own stocks or do they own you? Clearly, most of us viewing and participating in this thread have conceded too much ownership to our stocks. We need to take back our ownership role by selling down to the "I Don't Give a Damn" point of indifference. For many, that could mean zero, zip, nada is the appropriate stock allocation. Not such a bad idea really - since 2000 you could have gotten a 1% higher annual total return owning safe 5-year treasuries than being 100% invested in stock market.


Advocating for selling stocks in a bear market is pretty dangerous advice. Also, are you indicating the next 15 years will be the same as the past 15 years in terms of 5 year treasuries outperforming the stock market?

Are you advocating that it won't be the same? Nobody knows. So why get crazy over stocks?


I think you are the one getting crazy over stocks.
Gordon

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Re: U.S. stocks in freefall

Post by backpacker » Tue Sep 22, 2015 9:21 pm

Browser wrote:Here's a thought for you to chew on: do you own stocks or do they own you? Clearly, most of us viewing and participating in this thread have conceded too much ownership to our stocks. We need to take back our ownership role by selling down to the "I Don't Give a Damn" point of indifference. For many, that could mean zero, zip, nada is the appropriate stock allocation. Not such a bad idea really - since 2000 you could have gotten a 1% higher annual total return owning safe 5-year treasuries than being 100% invested in stock market.


Presumably, some people might have to buy up to the level of indifference. Some investors, putting everything in cash, might prefer that the stock market go down to avoid regret. Who wants to be sitting on the sidelines while friends and family are making lots of money? But if you prefer that the market go one direction rather than another, you are by definition not indifferent. So you need more stock.

It is a bit interesting, Browser, that you disappear from this thread on up days and pop back in on down days. Then again, a cup of coffee is on the line. What will we get to first? A -50% loss or a new high for the S&P? :wink:

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Re: U.S. stocks in freefall

Post by Browser » Tue Sep 22, 2015 10:33 pm

It is a bit interesting, Browser, that you disappear from this thread on up days and pop back in on down days. Then again, a cup of coffee is on the line. What will we get to first? A -50% loss or a new high for the S&P? :wink:

After all, the title of the thread is "U.S. Stocks in Freefall" isn't it? I'm hoping for that cup of coffee and another opportunity to Buy Low (I blinked and missed the last two in 2000 and 2008 but this market looks promising). :(
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Re: U.S. stocks in freefall

Post by oneleaf » Tue Sep 22, 2015 10:43 pm

Browser wrote:
It is a bit interesting, Browser, that you disappear from this thread on up days and pop back in on down days. Then again, a cup of coffee is on the line. What will we get to first? A -50% loss or a new high for the S&P? :wink:

After all, the title of the thread is "U.S. Stocks in Freefall" isn't it? I'm hoping for that cup of coffee and another opportunity to Buy Low (I blinked and missed the last two in 2000 and 2008 but this market looks promising). :(


If you don't mind me asking, what is your asset allocation?

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Re: U.S. stocks in freefall

Post by TomatoTomahto » Wed Sep 23, 2015 6:13 am

Browser wrote:
It is a bit interesting, Browser, that you disappear from this thread on up days and pop back in on down days. Then again, a cup of coffee is on the line. What will we get to first? A -50% loss or a new high for the S&P? :wink:

After all, the title of the thread is "U.S. Stocks in Freefall" isn't it? I'm hoping for that cup of coffee and another opportunity to Buy Low (I blinked and missed the last two in 2000 and 2008 but this market looks promising). :(


Man, in 2008 that was a l-o-n-g blink you had. More like a shut my eyes and count to ... a really big number.

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Re: U.S. stocks in freefall

Post by Toons » Wed Sep 23, 2015 6:18 am

TomatoTomahto wrote:
Browser wrote:
It is a bit interesting, Browser, that you disappear from this thread on up days and pop back in on down days. Then again, a cup of coffee is on the line. What will we get to first? A -50% loss or a new high for the S&P? :wink:

After all, the title of the thread is "U.S. Stocks in Freefall" isn't it? I'm hoping for that cup of coffee and another opportunity to Buy Low (I blinked and missed the last two in 2000 and 2008 but this market looks promising). :(


Man, in 2008 that was a l-o-n-g blink you had. More like a shut my eyes and count to ... a really big number.



Like a "mini",Rip Van Winkle blink :happy
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Re: U.S. stocks in freefall

Post by Uncle Pennybags » Wed Sep 23, 2015 9:18 am

Browser wrote:After all, the title of the thread is "U.S. Stocks in Freefall" isn't it?
U.S. stocks are not in "freefall"; foreign stocks are in "freefall".

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Re: U.S. stocks in freefall

Post by backpacker » Wed Sep 23, 2015 1:18 pm

oneleaf wrote:
Browser wrote:
It is a bit interesting, Browser, that you disappear from this thread on up days and pop back in on down days. Then again, a cup of coffee is on the line. What will we get to first? A -50% loss or a new high for the S&P? :wink:

After all, the title of the thread is "U.S. Stocks in Freefall" isn't it? I'm hoping for that cup of coffee and another opportunity to Buy Low (I blinked and missed the last two in 2000 and 2008 but this market looks promising). :(


If you don't mind me asking, what is your asset allocation?


My impression is that Browser sold out of stocks and bonds and has all cash. Is that right?

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Re: U.S. stocks in freefall

Post by Uncle Pennybags » Wed Sep 23, 2015 8:58 pm

backpacker wrote:My impression is that Browser sold out of stocks and bonds and has all cash. Is that right?
Didn't he short the market?

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Re: U.S. stocks in freefall

Post by backpacker » Wed Sep 23, 2015 9:05 pm

Uncle Pennybags wrote:
backpacker wrote:My impression is that Browser sold out of stocks and bonds and has all cash. Is that right?
Didn't he short the market?


Dunno. He did bet me a coffe that the S&P would fall by half before reaching a new high. That's sort of like shorting the market. It's a pretty small position though. :happy

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Re: U.S. stocks in freefall

Post by sawhorse » Wed Sep 23, 2015 9:19 pm

Uncle Pennybags wrote:
backpacker wrote:My impression is that Browser sold out of stocks and bonds and has all cash. Is that right?
Didn't he short the market?

No that was someone else.

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Re: U.S. stocks in freefall

Post by Browser » Wed Sep 23, 2015 10:41 pm

Friendly jabs. :P But in the interest of keeping the party mood going let's not be too cavalier about the virtues of an asset (U.S. stocks) that have barely managed to produce a cumulative return equal to that of 5-year treasuries over the last 16 years, with a couple of heart-stopping drawdowns along the way. And only managed that due to the last 6+ years of ZIRP that have driven valuations to record highs, where we now sit. :(
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Re: U.S. stocks in freefall

Post by small_index » Wed Sep 23, 2015 11:07 pm

Browser wrote:... an asset (U.S. stocks) that have barely managed to produce a cumulative return equal to that of 5-year treasuries over the last 16 years.

I notice you didn't answer another poster about your asset allocation.

You could invest in Vanguard Intermediate Term Treasuries (VFITX) or Vanguard Total Stock Market (VTSMX):
Since VFITX's inception (Oct 28, 1991) until last quarter (June 30, 2015) it returned 6.14% before taxes, and 4.08% after taxes.
Since VTSMX's inception (Apr 27, 1992) until last quarter (June 30, 2015) it returned 9.49% before taxes, and 8.05% after taxes.

Also, treasuries obtain capital gains from falling interest rates. Over the past 16 years the 5-year treasury has fallen about 4.3% which yields capital gains for those holding it. With 5-year treasuries yielding 1.49%, how exactly will it fall further than 1.49%?

And back to that other poster, what was your asset allocation again?

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Re: U.S. stocks in freefall

Post by 111 » Wed Sep 23, 2015 11:47 pm

I decided I'd take advantage of the dip on Tuesday and moved about 5% of my TSP from G to C & S. So, if the market continues to drop you can probably blame me. :P

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Re: U.S. stocks in freefall

Post by yukon50 » Thu Sep 24, 2015 2:14 am

Uncle Pennybags wrote:
Browser wrote:After all, the title of the thread is "U.S. Stocks in Freefall" isn't it?
U.S. stocks are not in "freefall"; foreign stocks are in "freefall".


International stocks...where money goes to die... :annoyed

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Re: U.S. stocks in freefall

Post by rakaye47 » Thu Sep 24, 2015 4:16 am

yukon50 wrote:
Uncle Pennybags wrote:
Browser wrote:After all, the title of the thread is "U.S. Stocks in Freefall" isn't it?
U.S. stocks are not in "freefall"; foreign stocks are in "freefall".


International stocks...where money goes to die... :annoyed


early 2000s, US stocks is where money goes to die.

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Re: U.S. stocks in freefall

Post by Browser » Thu Sep 24, 2015 9:14 am

yukon50 wrote:
Uncle Pennybags wrote:
Browser wrote:After all, the title of the thread is "U.S. Stocks in Freefall" isn't it?
U.S. stocks are not in "freefall"; foreign stocks are in "freefall".


International stocks...where money goes to die... :annoyed

I don't think you understand the role of currencies in foreign stock returns. Actually, as of Sept 1, the S&P was down about 3% for the year, while US dollar hedged European stocks were slightly up. The negative returns of European stocks YTD are entirely due to the strength of the USD, while local returns are actually positive for the year.
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Re: U.S. stocks in freefall

Post by nisiprius » Thu Sep 24, 2015 9:27 am

Browser wrote:
yukon50 wrote:
Uncle Pennybags wrote:
Browser wrote:After all, the title of the thread is "U.S. Stocks in Freefall" isn't it?
U.S. stocks are not in "freefall"; foreign stocks are in "freefall".


International stocks...where money goes to die... :annoyed

I don't think you understand the role of currencies in foreign stock returns. Actually, as of Sept 1, the S&P was down about 3% for the year, while US dollar hedged European stocks were slightly up. The negative returns of European stocks YTD are entirely due to the strength of the USD, while local returns are actually positive for the year.
Yes, and during the decade of 2000-2009 most of the outperformance of international stocks was due to the weakening of the U. S. dollar, although it was pretty hard to find international stock advocates willing to admit that. And the ones who were willing to admit that were rolling on the floor laughing at the very idea that the dollar could ever possibly strengthen.
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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