U.S. stocks in freefall

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
User avatar
VictoriaF
Posts: 17576
Joined: Tue Feb 27, 2007 7:27 am
Location: Black Swan Lake

Re: U.S. stocks in freefall

Post by VictoriaF » Wed Jan 20, 2016 9:59 am

Bustoff wrote:Enjoy the ride and don't look down!


Should not you look in the direction of the movement?

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

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

Re: U.S. stocks in freefall

Post by broadstone » Wed Jan 20, 2016 10:04 am

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


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

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


Very immature post. Adding text I never wrote makes you look foolish. Don't be mad at me for predicting this correction months ago :sharebeer

TheRightKost87
Posts: 262
Joined: Tue Aug 13, 2013 12:25 am
Location: Boston, MA

Re: U.S. stocks in freefall

Post by TheRightKost87 » Wed Jan 20, 2016 10:23 am

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


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

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


Very immature post. Adding text I never wrote makes you look foolish. Don't be mad at me for predicting this correction months ago :sharebeer


Homer was paraphrasing, I wouldn't say that make's one foolish. Below is your actual quote, which by the ambiguity of it causes many posters to dismiss any claims you make for having done what now looks good in hindsight. But what should you care if no one on the Bogleheads message board believes you? You're dodging the bullet that the rest of us are taking right now (allegedly).

:sharebeer

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.
"The problem with diversification is that it works, whether or not we want it to"

FullYellowJacket
Posts: 278
Joined: Thu Apr 03, 2014 8:21 am

Re: U.S. stocks in freefall

Post by FullYellowJacket » Wed Jan 20, 2016 10:40 am

Forget about US stocks! Vanguard total international (VXUS) is 28% off of it's peak. Emerging markets are down 38% since last May. Blood is on the streets in international markets, especially for US investors. Compared to those the S&P 500 is only down about 14%.

Fortunately DW and I are young, are not home owners, and have been busy paying off school outside of our retirement accounts. We actually just finished this month!

Imbros
Posts: 183
Joined: Mon Jan 23, 2012 11:41 pm
Location: Wisconsin

Re: U.S. stocks in freefall

Post by Imbros » Wed Jan 20, 2016 10:47 am

FullYellowJacket wrote:Forget about US stocks! Vanguard total international (VXUS) is 28% off of it's peak. Emerging markets are down 38% since last May. Blood is on the streets in international markets, especially for US investors. Compared to those the S&P 500 is only down about 14%.

Fortunately DW and I are young, are not home owners, and have been busy paying off school outside of our retirement accounts. We actually just finished this month!


It is amazing how much the Emerging Markets (VEIEX) has come down. Just when I think it will stop its decline, it goes down a couple of more percentage. It reminds me again that I suck at market timing. :happy
There is no greatness where there is no simplicity, goodness and truth. -L. Tolstoy

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

Re: U.S. stocks in freefall

Post by Bustoff » Wed Jan 20, 2016 11:03 am

VictoriaF wrote:
Bustoff wrote:Enjoy the ride and don't look down!


Should not you look in the direction of the movement?

Victoria

You're right! When I zip lined across the Royal Gorge I looked down the entire way.

scone
Posts: 1390
Joined: Wed Jul 11, 2012 4:46 pm

Re: U.S. stocks in freefall

Post by scone » Wed Jan 20, 2016 11:08 am

Hold on tight for the ride, Yee- Hah! :D

Major Kong Rides the Bomb, from Dr. Strangelove https://www.youtube.com/watch?v=wcW_Ygs6hm0

"Express Elevator to Hell," from Aliens https://www.youtube.com/watch?v=uDLQg8ZKBS8
"My bond allocation is the amount of money that I cannot afford to lose." -- Taylor Larimore

User avatar
HomerJ
Posts: 10464
Joined: Fri Jun 06, 2008 12:50 pm

Re: U.S. stocks in freefall

Post by HomerJ » Wed Jan 20, 2016 11:23 am

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


I am curious though... What will change with the U.S. debt situation when S&P 500 drops to 1600?

broadstone wrote:It was only a matter of time the USA's massive debt sunk the stock market.


broadstone wrote:The economy / financial markets could not sustain at those bullish levels, especially with our debt levels which are out of control.


broadstone wrote:But this decision I made because I truly believe the US economy is a house of cards that will fall and be rebuilt soon enough. People stuck their heads in the sand regarding the housing market in pre-2006, same thing going on now in regards to the debt problem.

User avatar
TheTimeLord
Posts: 4883
Joined: Fri Jul 26, 2013 2:05 pm

Re: U.S. stocks in freefall

Post by TheTimeLord » Wed Jan 20, 2016 11:52 am

Still looking for VTI selling at $89.
Run, You Clever Boy! 8723

b23
Posts: 21
Joined: Wed Dec 30, 2015 12:48 pm

Re: U.S. stocks in freefall

Post by b23 » Wed Jan 20, 2016 12:20 pm

Everyone hang on, here we Gooo :greedy
........................................ooo :greedy
.............................................oo :greedy
.................................................o :greedy
...................................................o :greedy
.....................................................o :greedy
.......................................................o :greedy

User avatar
Toons
Posts: 12101
Joined: Fri Nov 21, 2008 10:20 am
Location: Hills of Tennessee

Re: U.S. stocks in freefall

Post by Toons » Wed Jan 20, 2016 12:22 pm

This reminds me of the 2000 decline.
Investors were ready to jump out the window....
The first floor window :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

b23
Posts: 21
Joined: Wed Dec 30, 2015 12:48 pm

Re: U.S. stocks in freefall

Post by b23 » Wed Jan 20, 2016 12:27 pm

Hide behind BOND!!! :idea:

:!: DISCLAIMER: Well, the above statement is not investment advice!

flyingaway
Posts: 1528
Joined: Fri Jan 17, 2014 10:19 am

Re: U.S. stocks in freefall

Post by flyingaway » Wed Jan 20, 2016 12:27 pm

I had filled up the Roth accounts of my wife's and mine until last Friday. I will buy more in taxable account when S&P is down 20%, and again at -30%. In my opinion, you just do what you believe in.

tj
Posts: 1977
Joined: Thu Dec 24, 2009 12:10 am

Re: U.S. stocks in freefall

Post by tj » Wed Jan 20, 2016 12:32 pm

flyingaway wrote:I had filled up the Roth accounts of my wife's and mine until last Friday. I will buy more in taxable account when S&P is down 20%, and again at -30%. In my opinion, you just do what you believe in.


How do you know that it is going to -20% and -30% before it goes +20% or +30%?

This sell-off seems irrational to me. Why are so many sellign ownership in quality companies for such a reduced asking price? I just put in another buy order...

Crushtheturtle
Posts: 88
Joined: Sat Mar 15, 2014 10:29 pm

Re: U.S. stocks in freefall

Post by Crushtheturtle » Wed Jan 20, 2016 12:40 pm

I revised my periodic taxable purchases from monthly to weekly.

Must. Get. Money. Into. Market. Faster.

flyingaway
Posts: 1528
Joined: Fri Jan 17, 2014 10:19 am

Re: U.S. stocks in freefall

Post by flyingaway » Wed Jan 20, 2016 1:12 pm

tj wrote:
flyingaway wrote:I had filled up the Roth accounts of my wife's and mine until last Friday. I will buy more in taxable account when S&P is down 20%, and again at -30%. In my opinion, you just do what you believe in.


How do you know that it is going to -20% and -30% before it goes +20% or +30%?

This sell-off seems irrational to me. Why are so many sellign ownership in quality companies for such a reduced asking price? I just put in another buy order...


I do not know where the market will go. What I meant was I will buy more then it goes to -20% and -30%. If it does not go that direction, I have my Costa Rica vacation planned in March and Europe vacation in May.

ge1
Posts: 235
Joined: Sat Apr 28, 2012 8:15 pm

Re: U.S. stocks in freefall

Post by ge1 » Wed Jan 20, 2016 1:14 pm

Crushtheturtle wrote:....

Must. Get. Money. Into. Market. Faster.


We have been spoiled for a long time in the sense that any market drops were almost immediately follows by sharp upswings (recovery from the 2009 low being the prime example). This one may test our patience a bit more.

GoldenFinch
Posts: 1385
Joined: Mon Nov 10, 2014 11:34 pm

Re: U.S. stocks in freefall

Post by GoldenFinch » Wed Jan 20, 2016 1:39 pm

If the market continues to tank and I feel compelled to check my balances and make note of the carnage, I am going to remind myself to watch this "U.S. stocks in freefall" soundtrack instead. :happy :D :happy

oldzey wrote:This thread really needs a soundtrack for full effect.

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

Re: U.S. stocks in freefall

Post by broadstone » Wed Jan 20, 2016 3:07 pm

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


I am curious though... What will change with the U.S. debt situation when S&P 500 drops to 1600?

broadstone wrote:It was only a matter of time the USA's massive debt sunk the stock market.


Lack of confidence is one of the reasons the market is declining. There are many articles that explain why the stock market is correcting but you already knew that. Stock consumers are doing what they did in 2008, heading for the exits when things turn South. I was just lucky (luck?) enough to get out when I saw the many warning signs last year.

And of course you know nothing will change regarding the debt situation. It's just one of the factors that's causing this mess.

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

Re: U.S. stocks in freefall

Post by broadstone » Wed Jan 20, 2016 3:12 pm

TheRightKost87 wrote:

Homer was paraphrasing, I wouldn't say that make's one foolish. Below is your actual quote, which by the ambiguity of it causes many posters to dismiss any claims you make for having done what now looks good in hindsight. But what should you care if no one on the Bogleheads message board believes you? You're dodging the bullet that the rest of us are taking right now (allegedly).



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.


What's ambiguous? I said I was going to 100% cash and I would reinvest when the S&P dropped to 1600. I cashed out when the Fed announced the interest rate hike as I knew thought it would be the straw that breaks the camels back.

User avatar
HomerJ
Posts: 10464
Joined: Fri Jun 06, 2008 12:50 pm

Re: U.S. stocks in freefall

Post by HomerJ » Wed Jan 20, 2016 3:20 pm

broadstone wrote:
TheRightKost87 wrote:

Homer was paraphrasing, I wouldn't say that make's one foolish. Below is your actual quote, which by the ambiguity of it causes many posters to dismiss any claims you make for having done what now looks good in hindsight. But what should you care if no one on the Bogleheads message board believes you? You're dodging the bullet that the rest of us are taking right now (allegedly).



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.


What's ambiguous? I said I was going to 100% cash and I would reinvest when the S&P dropped to 1600. I cashed out when the Fed announced the interest rate hike as I knew thought it would be the straw that breaks the camels back.


Really? "if they announce what I think they will"? That's a clear-cut statement to you? Did you think they would raise interest rates or keep them the same, or lower them? How are we supposed to know what you "thought they would do"?

Plus, what do you mean you cashed out when the Fed raised interest rates? You've supposedly have been 100% cash since June (What was different from April to June, by the way? Prices were just as high in April).

TheRightKost87
Posts: 262
Joined: Tue Aug 13, 2013 12:25 am
Location: Boston, MA

Re: U.S. stocks in freefall

Post by TheRightKost87 » Wed Jan 20, 2016 3:36 pm

broadstone wrote: What's ambiguous? I said I was going to 100% cash and I would reinvest when the S&P dropped to 1600. I cashed out when the Fed announced the interest rate hike as I knew thought it would be the straw that breaks the camels back.

Again, your quote from earlier:
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.


By "staying 100% cash" I think most people would interpret that as you were already 100% cash leading up to the Fed announcement in September. By "switching from a cash position on Thursday or Friday if the Fed announces what I think they will" I think most people would interpret that as you would be invested in equities (i.e. no longer 100% cash), if the Fed did what you thought. By your most recent quote, you knew the Fed would be raising interest rates (which they did). Therefore, they did what you thought they would, which triggered your "if" statement from before, meaning you were no longer 100% cash as of the Thursday or Friday of that week.

That is... unless what you've said in your posts haven't accurately tracked what you've done.
"The problem with diversification is that it works, whether or not we want it to"

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

Re: U.S. stocks in freefall

Post by dbCooperAir » Wed Jan 20, 2016 4:07 pm

Its the biggest sale of the year and everyone is running out of the building :twisted:
Neither a wise man nor a brave man lies down on the tracks of history to wait for the train of the future to run over him. | -Dwight D. Eisenhower-

User avatar
ray.james
Posts: 858
Joined: Tue Jul 19, 2011 4:08 am

Re: U.S. stocks in freefall

Post by ray.james » Wed Jan 20, 2016 4:27 pm

dbCooperAir wrote:Its the biggest sale of the year and everyone is running out of the building :twisted:


lol! what a see-saw day.
When in doubt, http://www.bogleheads.org/forum/viewtopic.php?f=1&t=79939

MrMojoRisin
Posts: 92
Joined: Tue Dec 01, 2015 7:25 pm

Re: U.S. stocks in freefall

Post by MrMojoRisin » Wed Jan 20, 2016 4:39 pm

I bailed in 2008 and the market continued to fall for a bit.
However I developed "decisional paralysis" about getting back in.

If I had left things alone I would have been better off.

My AA must be correct, I'm not logging into a half dozed different sites and moving funds about.

This is my sound track.....

https://www.youtube.com/watch?v=DI_rkZIuHzw

User avatar
mlebuf
Posts: 1789
Joined: Tue Feb 20, 2007 8:27 pm
Location: Paradise Valley, Arizona

Re: U.S. stocks in freefall

Post by mlebuf » Wed Jan 20, 2016 4:44 pm

The ants are prepared, bearing down, and staying the course. The grasshoppers are watching bubble vision, panicking and going to bonds/gold/cash....if they have any money in the market. If you think education is expensive, try ignorance.
Best wishes, | Michael | | Invest your time actively and your money passively.

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

Re: U.S. stocks in freefall

Post by dbCooperAir » Wed Jan 20, 2016 4:51 pm

MrMojoRisin wrote:This is my sound track.....
https://www.youtube.com/watch?v=DI_rkZIuHzw


Fitting song this week, RIP Glenn Frey.
Neither a wise man nor a brave man lies down on the tracks of history to wait for the train of the future to run over him. | -Dwight D. Eisenhower-

PandaParty
Posts: 25
Joined: Wed Feb 18, 2015 12:47 pm

Re: U.S. stocks in freefall

Post by PandaParty » Wed Jan 20, 2016 6:22 pm

I was stuck in meetings all day! Did I miss the Bear Market?

User avatar
oneleaf
Posts: 2272
Joined: Mon Feb 19, 2007 5:48 pm

Re: U.S. stocks in freefall

Post by oneleaf » Wed Jan 20, 2016 6:39 pm

broadstone wrote:
TheRightKost87 wrote:

Homer was paraphrasing, I wouldn't say that make's one foolish. Below is your actual quote, which by the ambiguity of it causes many posters to dismiss any claims you make for having done what now looks good in hindsight. But what should you care if no one on the Bogleheads message board believes you? You're dodging the bullet that the rest of us are taking right now (allegedly).



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.


What's ambiguous? I said I was going to 100% cash and I would reinvest when the S&P dropped to 1600. I cashed out when the Fed announced the interest rate hike as I knew thought it would be the straw that breaks the camels back.


So when they decided not to raise rates, you switched from a cash position back when you made the comment? And then sold in Dec when they raised rates? Or have you stayed in cash the whole time (which does not match your logic). What you thought they did, what they actually did, and what you actually did is still ambiguous.

It would be a lot easier to make a post on the day you sell saying "I sold all stocks" and make another post when you buy back in, saying "I bought back in". Unless of course this is all BS, as it is increasingly looking to be.

User avatar
oneleaf
Posts: 2272
Joined: Mon Feb 19, 2007 5:48 pm

Re: U.S. stocks in freefall

Post by oneleaf » Wed Jan 20, 2016 6:42 pm

TheRightKost87 wrote: By your most recent quote, you knew the Fed would be raising interest rates (which they did). Therefore, they did what you thought they would, which triggered your "if" statement from before, meaning you were no longer 100% cash as of the Thursday or Friday of that week.


But back then, when he made the post, the Fed decided not to raise rates. It did not happen until months later.

User avatar
TomatoTomahto
Posts: 6946
Joined: Mon Apr 11, 2011 1:48 pm

Re: U.S. stocks in freefall

Post by TomatoTomahto » Wed Jan 20, 2016 6:45 pm

oneleaf wrote:Unless of course this is all BS, as it is increasingly looking to be.

Winner winner chicken dinner.

User avatar
packet
Posts: 781
Joined: Sun Nov 23, 2014 11:23 am
Location: The pub

Re: U.S. stocks in freefall

Post by packet » Wed Jan 20, 2016 8:11 pm

MrMojoRisin wrote:I bailed in 2008 ... If I had left things alone I would have been better off.

Thank you for posting.
Much better than the other thread within this thread... :/
Stay strong, we're all in this together.

:beerCheers,
packet
First round’s on me.

CantPassAgain
Posts: 431
Joined: Fri Mar 15, 2013 8:49 pm

Re: U.S. stocks in freefall

Post by CantPassAgain » Wed Jan 20, 2016 8:58 pm

TomatoTomahto wrote:
oneleaf wrote:Unless of course this is all BS, as it is increasingly looking to be.

Winner winner chicken dinner.


This is a good one:

postby broadstone » Tue Jun 02, 2015 8:16 pm
I too started investing again in 2015 and think about being late to the bull party.

carofe
Posts: 300
Joined: Thu Mar 20, 2014 7:21 pm

Re: U.S. stocks in freefall

Post by carofe » Thu Jan 21, 2016 12:34 am

Warren Buffett said:

The stock market is designed to transfer money from the active to the patient


And I think that's happening this year.

We have been spoiled for a long time in the sense that any market drops were almost immediately follows by sharp upswings (recovery from the 2009 low being the prime example). This one may test our patience a bit more.

+1. Good point.
US Total Stock Market + Intermediate Term Bond. That's it.

shelanman
Posts: 441
Joined: Tue Feb 27, 2007 8:35 pm

Re: U.S. stocks in freefall

Post by shelanman » Thu Jan 21, 2016 12:57 am

You know... rightly or wrongly, I'm not really that worried about what's going on in the market these days.

But it sure was fun to watch balances grow much faster than contributions when times were good, and it is just so much less fulfilling to watch the number stay the same, or worse, decline somewhat, despite contributions.

Up-and-to-the-right always just feels so good in exactly the way that down-and-to-the-right just doesn't.

AndrewHMeador
Posts: 38
Joined: Tue Dec 23, 2014 6:00 am

Re: U.S. stocks in freefall

Post by AndrewHMeador » Thu Jan 21, 2016 1:12 am

shelanman wrote:Up-and-to-the-right always just feels so good in exactly the way that down-and-to-the-right just doesn't.


Down and to the left looks just the same as up and to the right! At least, when you're backtesting...

lack_ey
Posts: 5800
Joined: Wed Nov 19, 2014 11:55 pm

Re: U.S. stocks in freefall

Post by lack_ey » Thu Jan 21, 2016 1:12 am

Just imagine if US returns were what emerging markets was the last 10 years:

Image

Negative after inflation. Well, it's happened for 16 years in the US, certainly much longer than that in other markets. And even Vanguard's relatively optimistic annual investment outlooks would put that at a ~15% chance or so for the next ten years here starting about today (the exact number is unclear because it falls between histogram bins).

Better be ready for anything, whether it's some more nosediving, a rebound, a whole lot of sideways, or whatever.

visualguy
Posts: 352
Joined: Thu Jan 30, 2014 1:32 am

Re: U.S. stocks in freefall

Post by visualguy » Thu Jan 21, 2016 2:05 am

lack_ey wrote:Negative after inflation. Well, it's happened for 16 years in the US, certainly much longer than that in other markets. And even Vanguard's relatively optimistic annual investment outlooks would put that at a ~15% chance or so for the next ten years here starting about today (the exact number is unclear because it falls between histogram bins).

Better be ready for anything, whether it's some more nosediving, a rebound, a whole lot of sideways, or whatever.


Correct, but it seems that many Bogleheads don't realize that their strategy doesn't necessarily work even over periods of many years.

User avatar
peterinjapan
Posts: 299
Joined: Fri May 15, 2015 8:41 am
Location: Japan!

Re: U.S. stocks in freefall

Post by peterinjapan » Thu Jan 21, 2016 3:15 am

This drop is not fun, but we'll get through it all. I am awfully glad to have those rental properties in San Diego as a foil against stock problems. I can see why people like real estate investing...it's a lot more "real."

carofe
Posts: 300
Joined: Thu Mar 20, 2014 7:21 pm

Re: U.S. stocks in freefall

Post by carofe » Thu Jan 21, 2016 2:09 pm

Very interesting and encouraging article.

http://www.wsj.com/articles/markets-are ... 1453336114

Unfortunately, you'll need a WSJ subscription for it.

Summarizing, we are doing better than we think, and the dependency of US businesses on China's demand represents less than 1% of our GDP, and on emerging markets also is not much. He also states that the oil problem in the US doesn't represent really a big problem for the economy. Lower prices are good for the American economy and the unemployment in the oil industry it can cause really it is not a big number comparing with the employment in the whole country.
US Total Stock Market + Intermediate Term Bond. That's it.

User avatar
Leif
Posts: 2201
Joined: Wed Sep 19, 2007 4:15 pm

Re: U.S. stocks in freefall

Post by Leif » Thu Jan 21, 2016 3:05 pm

carofe wrote:Very interesting and encouraging article.

http://www.wsj.com/articles/markets-are ... 1453336114

I agree with the article. I'm in wonder when pundits on TV talk about a decline on oil prices as if it is a bad thing for the US economy. Are we a net importer or exporter? I'm guessing the market is taking the decline as a sign of a world-wide economic slowdown. I'm taking it as part a China story and part an oil price war from the producers. Anyway, the net effect on me is to feel more confident in my rebalancing. However, the market has proved me wrong in the past. Let's see.
Investors should diversify across many asset-classes so that whatever happens, we will not have all our investments in underperforming asset classes and thereby fail to meet our goals-Taylor Larimore

scone
Posts: 1390
Joined: Wed Jul 11, 2012 4:46 pm

Re: U.S. stocks in freefall

Post by scone » Thu Jan 21, 2016 4:48 pm

It's the ripple effect from the oil patch that could cause problems. Job loss, real estate downturn, small business failures, pullback from investment. The China issue is more complicated; our exports to China might not be huge, but if China implodes, that effects Europe. The big issue everywhere IMO is lack of organic demand. Central bank stimulus may pull that forward some, but it's not enough.
"My bond allocation is the amount of money that I cannot afford to lose." -- Taylor Larimore

CantPassAgain
Posts: 431
Joined: Fri Mar 15, 2013 8:49 pm

Re: U.S. stocks in freefall

Post by CantPassAgain » Fri Jan 22, 2016 4:00 pm

visualguy wrote:
lack_ey wrote:Negative after inflation. Well, it's happened for 16 years in the US, certainly much longer than that in other markets. And even Vanguard's relatively optimistic annual investment outlooks would put that at a ~15% chance or so for the next ten years here starting about today (the exact number is unclear because it falls between histogram bins).

Better be ready for anything, whether it's some more nosediving, a rebound, a whole lot of sideways, or whatever.


Correct, but it seems that many Bogleheads don't realize that their strategy doesn't necessarily work even over periods of many years.


Sure does seem like a lot of boglehead slagging going on on the boglehead forums nowadays.

Please, let us in on the strategy that "necessarily works"

visualguy
Posts: 352
Joined: Thu Jan 30, 2014 1:32 am

Re: U.S. stocks in freefall

Post by visualguy » Fri Jan 22, 2016 4:44 pm

CantPassAgain wrote:Please, let us in on the strategy that "necessarily works"


The point is that long-term buy and hold of stock market indices sometimes works and sometimes it doesn't, even over very long periods of time such as 16 years.

There is a widespread belief here that if you "stay the course", you will be rewarded. Looking at historical results, it's clear that this is the case only some of the time. It's particularly hard to justify this belief if you look at foreign markets. It has been a bit more solid in the US (i.e. there were more periods when the strategy worked), but whether the US will continue to be somewhat exceptional is a difficult question.

The question about what you can do instead with your money is an orthogonal question, and a different discussion.

User avatar
oldzey
Posts: 741
Joined: Sun Apr 13, 2014 8:38 pm
Location: Land of Lincoln

Re: U.S. stocks in freefall

Post by oldzey » Fri Jan 22, 2016 7:44 pm

TGIF! :beer
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

mmcmonster
Posts: 183
Joined: Sun Jan 12, 2014 1:18 pm

Re: U.S. stocks in freefall

Post by mmcmonster » Fri Jan 22, 2016 8:08 pm

I have a weekly purchase set up to buy Total Stock Market, and whenever I have a little extra money I buy in bulk.

Just put in a buy order on Wednesday to buy about two paychecks worth.

Figure I'll live off my emergency cash for the next couple weeks. If the market is still lower at that time, I'll do the same. If it's rebounding, maybe I'll start saving up just in case I owe taxes.

Life is good. :sharebeer

User avatar
HomerJ
Posts: 10464
Joined: Fri Jun 06, 2008 12:50 pm

Re: U.S. stocks in freefall

Post by HomerJ » Fri Jan 22, 2016 8:39 pm

visualguy wrote:
CantPassAgain wrote:Please, let us in on the strategy that "necessarily works"


The point is that long-term buy and hold of stock market indices sometimes works and sometimes it doesn't, even over very long periods of time such as 16 years.

There is a widespread belief here that if you "stay the course", you will be rewarded. Looking at historical results, it's clear that this is the case only some of the time.


We here are aware of the 16-year period from 1966-1982... However, 16-years is not what I would consider long-term for someone saving for retirement.

Anyone who "stayed the course" over that 16-year period still did fine. It was an incredible time to accumulate (tough time to retire). The 30-year period of 1966-1996 gave incredible returns... All the money you saved for 16 years from 1966-1982 increased TEN times over the next 17 years.

So I believe you are incorrect. Looking at U.S. historical results, so far, it has always been the case that we have been rewarded for "stay the course".

It's particularly hard to justify this belief if you look at foreign markets. It has been a bit more solid in the US (i.e. there were more periods when the strategy worked), but whether the US will continue to be somewhat exceptional is a difficult question.


Japan is indeed an example that is scary (Although over-stated... No one invested all their money on one day at the very top).

And true, no one knows the future... I don't think the U.S. has been exceptional, however. I think many nations were still developing and that the other mature markets were held down by wars, and actual physical destruction. I don't see why we have to fall down to their historical returns; I expect them to come up to ours.

There's 1 billion Indians and Chinese joining the middle-class over the next 30 years, and they are going to want to buy Cokes and washing machines.

lack_ey
Posts: 5800
Joined: Wed Nov 19, 2014 11:55 pm

Re: U.S. stocks in freefall

Post by lack_ey » Fri Jan 22, 2016 8:50 pm

So what's the reason our returns haven't been as good as Australia's or South Africa's?

mattshwink
Posts: 287
Joined: Mon Sep 21, 2015 10:01 am

Re: U.S. stocks in freefall

Post by mattshwink » Fri Jan 22, 2016 9:02 pm

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


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


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


In the short term, I have definitely shifted more into bonds as the stock portions of my portfolio have declined. But I'm in for the long term. The short term corrections, recessions, etc. don't bother me. In fact, a depressed market for 5-10 years with a run up afterwards like we saw after 2008-2009 would be great for me since I'm buying $47,000+ per year.

wesgreen
Posts: 141
Joined: Fri Jan 07, 2011 9:14 am

Re: U.S. stocks in freefall

Post by wesgreen » Fri Jan 22, 2016 9:07 pm

visualguy wrote:
CantPassAgain wrote:Please, let us in on the strategy that "necessarily works"


The point is that long-term buy and hold of stock market indices sometimes works and sometimes it doesn't, even over very long periods of time such as 16 years.

There is a widespread belief here that if you "stay the course", you will be rewarded. Looking at historical results, it's clear that this is the case only some of the time. It's particularly hard to justify this belief if you look at foreign markets. It has been a bit more solid in the US (i.e. there were more periods when the strategy worked), but whether the US will continue to be somewhat exceptional is a difficult question.

The question about what you can do instead with your money is an orthogonal question, and a different discussion.

If you think of 16 years as a " very long period of time", Bogle's strategy probably isn't for you.

Post Reply