U.S. stocks in freefall

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rerod
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Re: U.S. stocks in freefall

Post by rerod » Mon Feb 05, 2018 9:03 am

limeyx wrote:
Fri Feb 02, 2018 11:46 pm
I just put in a bunch of buy orders for Monday. So ... of course it will keep going down :)
Yeah same here.. Good thing I dca.. But never fails.. As soon as I bought my bonds 6 years ago.. Bam! As soon as I buy equities.. Bam! Oh well

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ruralavalon
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Re: U.S. stocks in freefall

Post by ruralavalon » Mon Feb 05, 2018 9:06 am

Houe wrote:
Mon Feb 05, 2018 8:54 am
So who is a buyer in this market? It not like bonds are a safe alternative...
"Safe" is not the issue.

Bonds are safer than stocks.

Invest in whichever better suits your needs. In my opinion, not investing is not one of the choices.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

SocalLiving
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Re: U.S. stocks in freefall

Post by SocalLiving » Mon Feb 05, 2018 9:09 am

Houe wrote:
Mon Feb 05, 2018 8:54 am
So who is a buyer in this market? It not like bonds are a safe alternative...
Last 5 contributions were to Total Bond Index Fund. But after purchasing I-Bonds and the current slide, we get to purchase some Total Stock Market Index this week according to our AA.

Da5id
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Re: U.S. stocks in freefall

Post by Da5id » Mon Feb 05, 2018 9:33 am

SocalLiving wrote:
Mon Feb 05, 2018 9:09 am
Houe wrote:
Mon Feb 05, 2018 8:54 am
So who is a buyer in this market? It not like bonds are a safe alternative...
Last 5 contributions were to Total Bond Index Fund. But after purchasing I-Bonds and the current slide, we get to purchase some Total Stock Market Index this week according to our AA.
Even if today's futures hold and the S&P drops another 0.5%, I'll be about at my target AA. I had been positive on stocks even after a rebalance in early January, and will not need to buy bonds. Mind you, the fact that bonds have slipped as well has made me stay nearer my AA despite the stock fall of the past month.

lazydavid
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Re: U.S. stocks in freefall

Post by lazydavid » Mon Feb 05, 2018 9:53 am

azanon wrote:
Fri Feb 02, 2018 11:38 am
thangngo wrote:
Fri Feb 02, 2018 11:27 am
On a day like this, some people will see their portfolio lose in value similar to the cost of a luxury European car.
The only one day market loss in history that could have the chance of matching or exceeding what you would lose driving a new European luxury car off of a dealer lot would be the one that occurred on 10/19/1987.
Meh, I "lost" $27k on Friday, my two BMWs cost me $34k and $38.5k respectively, so this minor blip wasn't too far off. Wouldn't take a "black monday" event to have one-day losses higher than I will likely ever pay for a luxury car (which is all I buy). Would probably take a RBD, but there's a lot of space between that and 1987.

Bacchus01
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Re: U.S. stocks in freefall

Post by Bacchus01 » Mon Feb 05, 2018 9:55 am

Yep. Just checked. Still can't TLH.

My lowest return after tax investment is still up 4% from my buy in December in TSM.

My lowest return after tax return in S&P 500 index, purchased in September, is just 11%.

Guess I'll keep waiting to TLH :D

Da5id
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Re: U.S. stocks in freefall

Post by Da5id » Mon Feb 05, 2018 9:56 am

Bacchus01 wrote:
Mon Feb 05, 2018 9:55 am
Yep. Just checked. Still can't TLH.
I have some bonds in taxable I could TLH, but not enough $ involved to make me do it. Stocks are very from from TLH for me...

lazydavid
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Re: U.S. stocks in freefall

Post by lazydavid » Mon Feb 05, 2018 10:02 am

oldcomputerguy wrote:
Fri Feb 02, 2018 7:35 pm
RRAAYY3 wrote:
Fri Feb 02, 2018 5:00 pm
Brutal; market hasn’t been this low since January 10th, 2018.

How are you guys breaking the news to loved ones?
With grilled hamburgers and a nice bottle of Pinot Grigio.
:beer
IMO Pinot's a little too delicate for hamburgers, I'd suggest at least a Malbec. We did our burgers with a nice Winter Ale (that I brewed myself!). :beer

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EyeYield
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Re: U.S. stocks in freefall

Post by EyeYield » Mon Feb 05, 2018 10:13 am

Every year, the market provides us with some important lessons on prudent investment strategy. Many times, the market will offer investors remedial courses, covering lessons that it has already delivered in previous years. That’s why one of my favorite sayings is that there’s nothing new in investing—there’s only investment history you don’t yet know.
-Larry Swedroe

Ahh, come on guys, it's so simple, maybe you need a refresher course....
-Fletch
"The stock market is a giant distraction from the business of investing." - Jack Bogle

smpatel
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Re: U.S. stocks in freefall

Post by smpatel » Mon Feb 05, 2018 10:13 am

Bacchus01 wrote:
Mon Feb 05, 2018 9:55 am
Yep. Just checked. Still can't TLH.

My lowest return after tax investment is still up 4% from my buy in December in TSM.

My lowest return after tax return in S&P 500 index, purchased in September, is just 11%.

Guess I'll keep waiting to TLH :D
That is usually the case with me, I wait until everything regresses to mean and reminds me that paper money is exactly that, don't change your saving or spending habits due to inflated portfolio/deflated portfolio due to market winds! Keep buying good businesses at good price. Market may convert your 30 years plan into 3 days.

Bwlonge
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Re: U.S. stocks in freefall

Post by Bwlonge » Mon Feb 05, 2018 10:15 am

I learned a lesson. I leveraged ~5k from low interest loans and put it in to a stock ETF. But when push came to shove, using the money to get closer to having 0 debt looked a lot more attractive. So I pulled out without losing anything. I'm not quite yet in a position to start investing, truly investing, through a taxable account. Oh well. I'll pay off the little bit left on my student loan and pick up a checking account bonus or two instead.

azanon
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Re: U.S. stocks in freefall

Post by azanon » Mon Feb 05, 2018 10:19 am

lazydavid wrote:
Mon Feb 05, 2018 9:53 am
azanon wrote:
Fri Feb 02, 2018 11:38 am
thangngo wrote:
Fri Feb 02, 2018 11:27 am
On a day like this, some people will see their portfolio lose in value similar to the cost of a luxury European car.
The only one day market loss in history that could have the chance of matching or exceeding what you would lose driving a new European luxury car off of a dealer lot would be the one that occurred on 10/19/1987.
Meh, I "lost" $27k on Friday, my two BMWs cost me $34k and $38.5k respectively, so this minor blip wasn't too far off. Wouldn't take a "black monday" event to have one-day losses higher than I will likely ever pay for a luxury car (which is all I buy). Would probably take a RBD, but there's a lot of space between that and 1987.
My comment was percent-based so it would be applicable to anyone. The percent of value you lose driving a new luxury European car off a lot is so great, it takes the fall of 87' to match it.

But if you want to indirectly tell the forum how much money you have, that's your business.

NotWhoYouThink
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Re: U.S. stocks in freefall

Post by NotWhoYouThink » Mon Feb 05, 2018 10:39 am

azanon wrote:
Mon Feb 05, 2018 10:19 am
lazydavid wrote:
Mon Feb 05, 2018 9:53 am
azanon wrote:
Fri Feb 02, 2018 11:38 am
thangngo wrote:
Fri Feb 02, 2018 11:27 am
On a day like this, some people will see their portfolio lose in value similar to the cost of a luxury European car.
The only one day market loss in history that could have the chance of matching or exceeding what you would lose driving a new European luxury car off of a dealer lot would be the one that occurred on 10/19/1987.
Meh, I "lost" $27k on Friday, my two BMWs cost me $34k and $38.5k respectively, so this minor blip wasn't too far off. Wouldn't take a "black monday" event to have one-day losses higher than I will likely ever pay for a luxury car (which is all I buy). Would probably take a RBD, but there's a lot of space between that and 1987.
My comment was percent-based so it would be applicable to anyone. The percent of value you lose driving a new luxury European car off a lot is so great, it takes the fall of 87' to match it.

But if you want to indirectly tell the forum how much money you have, that's your business.
Your post was not at all clear, that you were referring to the percentage value lost driving the car off the lot rather than the dollar value of the car, or dollar value loss driving it off the lot. I assume the original post was referring to the dollar value gained or lost on a trading day compared to the price of a new car. You were/are welcome to change the subject, as always.

nolesrule
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Re: U.S. stocks in freefall

Post by nolesrule » Mon Feb 05, 2018 11:12 am

We're only down in the lots we purchased on 2/1, and it's not all that much, so not really worth it. In addition we had just also put money into Total International in the Roth IRAs, so we'd run into wash sale issues.

Since our IPS currently has 100% of Roth going into Total International and 75% / 25% split between Total US and Total International in taxable, I think in future years I'm going to change the strategy on our taxable buys to avoid the Total International purchases in the beginning of the year. As a side benefit it'll also help mitigate the fact that with the Roth's we're overloading on International at the beginning of the year (though not enough to trigger rebalance bands) and then spending the rest of the year playing catch-up with the other asset class contributions.

lazydavid
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Re: U.S. stocks in freefall

Post by lazydavid » Mon Feb 05, 2018 11:32 am

NotWhoYouThink wrote:
Mon Feb 05, 2018 10:39 am
azanon wrote:
Mon Feb 05, 2018 10:19 am
My comment was percent-based so it would be applicable to anyone. The percent of value you lose driving a new luxury European car off a lot is so great, it takes the fall of 87' to match it.

But if you want to indirectly tell the forum how much money you have, that's your business.
Your post was not at all clear, that you were referring to the percentage value lost driving the car off the lot rather than the dollar value of the car, or dollar value loss driving it off the lot. I assume the original post was referring to the dollar value gained or lost on a trading day compared to the price of a new car. You were/are welcome to change the subject, as always.
This. The original post and my response were in dollars, and you (azanon) did not in any clear way indicate that you were changing the metric to percentage. Had you done so, I probably would have agreed with you. Although, my current car was bought as a demo after a completely redesigned new model came out, so despite never being titled, nearly all of the depreciation was baked into the sale price, and it lost VERY little value in the first year. So in at least this one case, Friday would still have been pretty close. :)

And I've directly told the forum how much money I have in the past--in the Investing Help section--as have literally thousands of others. So I don't see why indirectly would be an issue. My NW has nearly doubled since then, thanks in very large part to advice received here, advice which has also given me the perspective to take only minor notice of a "loss" that at that time I would have considered devastatingly large. My time here has taught me that such perspective is contagious, so I was merely giving back to the cause.

WhiteMaxima
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Re: U.S. stocks in freefall

Post by WhiteMaxima » Mon Feb 05, 2018 11:58 am

It's just normal correction. makes market more healthier.

limeyx
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Re: U.S. stocks in freefall

Post by limeyx » Mon Feb 05, 2018 12:02 pm

rerod wrote:
Mon Feb 05, 2018 9:03 am
limeyx wrote:
Fri Feb 02, 2018 11:46 pm
I just put in a bunch of buy orders for Monday. So ... of course it will keep going down :)
Yeah same here.. Good thing I dca.. But never fails.. As soon as I bought my bonds 6 years ago.. Bam! As soon as I buy equities.. Bam! Oh well
Yup, all orders went through and of course everything is already down from there. But the reality is that if these funds don't double or triple in the next 20 years, retirement would not be possible anyway so just shove it in and walk away!

CULater
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Re: U.S. stocks in freefall

Post by CULater » Mon Feb 05, 2018 12:17 pm

WhiteMaxima wrote:
Mon Feb 05, 2018 11:58 am
It's just normal correction. makes market more healthier.
I always smile when I see these theories. Reminds me of medicine in the Middle Ages, when it was believed that leeches and bloodletting were therapeutic:
Bloodletting (or blood-letting) is the withdrawal of blood from a patient to prevent or cure illness and disease. Bloodletting was based on an ancient system of medicine in which blood and other bodily fluids were regarded as "humours" that had to remain in proper balance to maintain health.
"A stock market correction (or blood-letting) is the withdrawal of money from the stock market to prevent or cure illness and disease in the market. This is based on the system of investment in which the rapid growth of stock price, like the multiplying cells of a cancer, was regarded as an abnormality, and had to remain in proper balance to maintain the health of the stock market."
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

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oldcomputerguy
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Re: U.S. stocks in freefall

Post by oldcomputerguy » Mon Feb 05, 2018 12:18 pm

lazydavid wrote:
Mon Feb 05, 2018 10:02 am
oldcomputerguy wrote:
Fri Feb 02, 2018 7:35 pm
RRAAYY3 wrote:
Fri Feb 02, 2018 5:00 pm
Brutal; market hasn’t been this low since January 10th, 2018.

How are you guys breaking the news to loved ones?
With grilled hamburgers and a nice bottle of Pinot Grigio.
:beer
IMO Pinot's a little too delicate for hamburgers, I'd suggest at least a Malbec. We did our burgers with a nice Winter Ale (that I brewed myself!). :beer
Yeah, forgive me, it was all I had on hand (unless I wanted to break into my stash of Beaujolais Nouveau).
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

letsgobobby
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Re: U.S. stocks in freefall

Post by letsgobobby » Mon Feb 05, 2018 12:24 pm

WhiteMaxima wrote:
Mon Feb 05, 2018 11:58 am
It's just normal correction..
I sure hope not. Need at least a 30% market decline to make stocks at all attractive for the long run.

Engineer250
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Re: U.S. stocks in freefall

Post by Engineer250 » Mon Feb 05, 2018 12:26 pm

CULater wrote:
Mon Feb 05, 2018 12:17 pm
WhiteMaxima wrote:
Mon Feb 05, 2018 11:58 am
It's just normal correction. makes market more healthier.
I always smile when I see these theories. Reminds me of medicine in the Middle Ages, when it was believed that leeches and bloodletting were therapeutic:
Bloodletting (or blood-letting) is the withdrawal of blood from a patient to prevent or cure illness and disease. Bloodletting was based on an ancient system of medicine in which blood and other bodily fluids were regarded as "humours" that had to remain in proper balance to maintain health.
"A stock market correction (or blood-letting) is the withdrawal of money from the stock market to prevent or cure illness and disease in the market. This is based on the system of investment in which the rapid growth of stock price, like the multiplying cells of a cancer, was regarded as an abnormality, and had to remain in proper balance to maintain the health of the stock market."
I see your cherry picking analogy and raise you another: would a business be healthy if it could never fire or lay of anyone?
Where the tides of fortune take us, no man can know.

rgs92
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Re: U.S. stocks in freefall

Post by rgs92 » Mon Feb 05, 2018 12:28 pm

I just look at the 1-year chart for the total stock market and feel great. How could anyone who has been a long term holder be anything else but very satisfied? (And of course, 1 year is nothing near really long-term.)

Gufomel
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Re: U.S. stocks in freefall

Post by Gufomel » Mon Feb 05, 2018 12:33 pm

deleted

WhiteMaxima
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Re: U.S. stocks in freefall

Post by WhiteMaxima » Mon Feb 05, 2018 12:37 pm

letsgobobby wrote:
Mon Feb 05, 2018 12:24 pm
WhiteMaxima wrote:
Mon Feb 05, 2018 11:58 am
It's just normal correction..
I sure hope not. Need at least a 30% market decline to make stocks at all attractive for the long run.
I think so. A 30% correction and start from there with 7 to 8% annual return seems more sustainable. But people (include many BH) believe quick money. As soon I see market up 5% during the 1st month of 2018, I pull 50% off the market. That's too much of the gain during the 1st month of the year. But I do believe 7% long term is achievable not 20% or even 12% a year.

Gufomel
Posts: 257
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Re: U.S. stocks in freefall

Post by Gufomel » Mon Feb 05, 2018 12:48 pm

WhiteMaxima wrote:
Mon Feb 05, 2018 12:37 pm
letsgobobby wrote:
Mon Feb 05, 2018 12:24 pm
WhiteMaxima wrote:
Mon Feb 05, 2018 11:58 am
It's just normal correction..
I sure hope not. Need at least a 30% market decline to make stocks at all attractive for the long run.
I think so. A 30% correction and start from there with 7 to 8% annual return seems more sustainable. But people (include many BH) believe quick money. As soon I see market up 5% during the 1st month of 2018, I pull 50% off the market. That's too much of the gain during the 1st month of the year. But I do believe 7% long term is achievable not 20% or even 12% a year.
50% of your total stock portfolio or 50% of that 5% gain?
Last edited by Gufomel on Mon Feb 05, 2018 12:50 pm, edited 1 time in total.

CULater
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Re: U.S. stocks in freefall

Post by CULater » Mon Feb 05, 2018 12:48 pm

Engineer250 wrote:
Mon Feb 05, 2018 12:26 pm
CULater wrote:
Mon Feb 05, 2018 12:17 pm
WhiteMaxima wrote:
Mon Feb 05, 2018 11:58 am
It's just normal correction. makes market more healthier.
I always smile when I see these theories. Reminds me of medicine in the Middle Ages, when it was believed that leeches and bloodletting were therapeutic:
Bloodletting (or blood-letting) is the withdrawal of blood from a patient to prevent or cure illness and disease. Bloodletting was based on an ancient system of medicine in which blood and other bodily fluids were regarded as "humours" that had to remain in proper balance to maintain health.
"A stock market correction (or blood-letting) is the withdrawal of money from the stock market to prevent or cure illness and disease in the market. This is based on the system of investment in which the rapid growth of stock price, like the multiplying cells of a cancer, was regarded as an abnormality, and had to remain in proper balance to maintain the health of the stock market."
I see your cherry picking analogy and raise you another: would a business be healthy if it could never fire or lay of anyone?
Market prices are a random walk. Where they are going has nada to do with where they've been. Terms like "correction" imply that they do, which is incorrect.
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

Engineer250
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Re: U.S. stocks in freefall

Post by Engineer250 » Mon Feb 05, 2018 12:52 pm

CULater wrote:
Mon Feb 05, 2018 12:48 pm
Engineer250 wrote:
Mon Feb 05, 2018 12:26 pm
CULater wrote:
Mon Feb 05, 2018 12:17 pm
WhiteMaxima wrote:
Mon Feb 05, 2018 11:58 am
It's just normal correction. makes market more healthier.
I always smile when I see these theories. Reminds me of medicine in the Middle Ages, when it was believed that leeches and bloodletting were therapeutic:
Bloodletting (or blood-letting) is the withdrawal of blood from a patient to prevent or cure illness and disease. Bloodletting was based on an ancient system of medicine in which blood and other bodily fluids were regarded as "humours" that had to remain in proper balance to maintain health.
"A stock market correction (or blood-letting) is the withdrawal of money from the stock market to prevent or cure illness and disease in the market. This is based on the system of investment in which the rapid growth of stock price, like the multiplying cells of a cancer, was regarded as an abnormality, and had to remain in proper balance to maintain the health of the stock market."
I see your cherry picking analogy and raise you another: would a business be healthy if it could never fire or lay of anyone?
Market prices are a random walk. Where they are going has nada to do with where they've been. Terms like "correction" imply that they do, which is incorrect.
Stop moving the goal posts. You're telling me the 2000 tech crash would have been the same even if the '90s market run-up hadn't happened?
Where the tides of fortune take us, no man can know.

CULater
Posts: 1412
Joined: Sun Nov 13, 2016 10:59 am

Re: U.S. stocks in freefall

Post by CULater » Mon Feb 05, 2018 1:14 pm

Engineer250 wrote:
Mon Feb 05, 2018 12:52 pm
CULater wrote:
Mon Feb 05, 2018 12:48 pm
Engineer250 wrote:
Mon Feb 05, 2018 12:26 pm
CULater wrote:
Mon Feb 05, 2018 12:17 pm
WhiteMaxima wrote:
Mon Feb 05, 2018 11:58 am
It's just normal correction. makes market more healthier.
I always smile when I see these theories. Reminds me of medicine in the Middle Ages, when it was believed that leeches and bloodletting were therapeutic:
Bloodletting (or blood-letting) is the withdrawal of blood from a patient to prevent or cure illness and disease. Bloodletting was based on an ancient system of medicine in which blood and other bodily fluids were regarded as "humours" that had to remain in proper balance to maintain health.
"A stock market correction (or blood-letting) is the withdrawal of money from the stock market to prevent or cure illness and disease in the market. This is based on the system of investment in which the rapid growth of stock price, like the multiplying cells of a cancer, was regarded as an abnormality, and had to remain in proper balance to maintain the health of the stock market."
I see your cherry picking analogy and raise you another: would a business be healthy if it could never fire or lay of anyone?
Market prices are a random walk. Where they are going has nada to do with where they've been. Terms like "correction" imply that they do, which is incorrect.
Stop moving the goal posts. You're telling me the 2000 tech crash would have been the same even if the '90s market run-up hadn't happened?
I don't know -- did you?
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

MotoTrojan
Posts: 2298
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Re: U.S. stocks in freefall

Post by MotoTrojan » Mon Feb 05, 2018 1:21 pm

CULater wrote:
Mon Feb 05, 2018 1:14 pm
Engineer250 wrote:
Mon Feb 05, 2018 12:52 pm
CULater wrote:
Mon Feb 05, 2018 12:48 pm
Engineer250 wrote:
Mon Feb 05, 2018 12:26 pm
CULater wrote:
Mon Feb 05, 2018 12:17 pm


I always smile when I see these theories. Reminds me of medicine in the Middle Ages, when it was believed that leeches and bloodletting were therapeutic:



"A stock market correction (or blood-letting) is the withdrawal of money from the stock market to prevent or cure illness and disease in the market. This is based on the system of investment in which the rapid growth of stock price, like the multiplying cells of a cancer, was regarded as an abnormality, and had to remain in proper balance to maintain the health of the stock market."
I see your cherry picking analogy and raise you another: would a business be healthy if it could never fire or lay of anyone?
Market prices are a random walk. Where they are going has nada to do with where they've been. Terms like "correction" imply that they do, which is incorrect.
Stop moving the goal posts. You're telling me the 2000 tech crash would have been the same even if the '90s market run-up hadn't happened?
I don't know -- did you?
Oh come on. Nobody knows what will happen tomorrow, next week, next year, or in the next decade. That is not the same as saying there is causation between today's conditions and what happens in the future. Just because you can't predict things exactly, does not disprove that. There is a massive human element to the market which is swayed by market behavior.

The tech crash didn't occur by chance.

WhiteMaxima
Posts: 1399
Joined: Thu May 19, 2016 5:04 pm

Re: U.S. stocks in freefall

Post by WhiteMaxima » Mon Feb 05, 2018 1:23 pm

Gufomel wrote:
Mon Feb 05, 2018 12:48 pm
WhiteMaxima wrote:
Mon Feb 05, 2018 12:37 pm
letsgobobby wrote:
Mon Feb 05, 2018 12:24 pm
WhiteMaxima wrote:
Mon Feb 05, 2018 11:58 am
It's just normal correction..
I sure hope not. Need at least a 30% market decline to make stocks at all attractive for the long run.
I think so. A 30% correction and start from there with 7 to 8% annual return seems more sustainable. But people (include many BH) believe quick money. As soon I see market up 5% during the 1st month of 2018, I pull 50% off the market. That's too much of the gain during the 1st month of the year. But I do believe 7% long term is achievable not 20% or even 12% a year.
50% of your total stock portfolio or 50% of that 5% gain?
I use to have 100% equity. Now I am do to 50%. Put 50% into stable value (not bond, the bond investor deserve more yield, so bond price need to be repriced). The stable value is kind of short term money market fund earning 2.5%. I leave 50% to capture 50% gain or loss. Leave 50% as my seed.

Bacchus01
Posts: 1836
Joined: Mon Dec 24, 2012 9:35 pm

Re: U.S. stocks in freefall

Post by Bacchus01 » Mon Feb 05, 2018 1:32 pm

The DOW has not been this low since.....January 5th! The S&P since Jan 4th!

Oh the horror.

Gufomel
Posts: 257
Joined: Sat Feb 14, 2015 9:52 pm

Re: U.S. stocks in freefall

Post by Gufomel » Mon Feb 05, 2018 1:33 pm

WhiteMaxima wrote:
Mon Feb 05, 2018 1:23 pm
Gufomel wrote:
Mon Feb 05, 2018 12:48 pm
WhiteMaxima wrote:
Mon Feb 05, 2018 12:37 pm
letsgobobby wrote:
Mon Feb 05, 2018 12:24 pm
WhiteMaxima wrote:
Mon Feb 05, 2018 11:58 am
It's just normal correction..
I sure hope not. Need at least a 30% market decline to make stocks at all attractive for the long run.
I think so. A 30% correction and start from there with 7 to 8% annual return seems more sustainable. But people (include many BH) believe quick money. As soon I see market up 5% during the 1st month of 2018, I pull 50% off the market. That's too much of the gain during the 1st month of the year. But I do believe 7% long term is achievable not 20% or even 12% a year.
50% of your total stock portfolio or 50% of that 5% gain?
I use to have 100% equity. Now I am do to 50%. Put 50% into stable value (not bond, the bond investor deserve more yield, so bond price need to be repriced). The stable value is kind of short term money market fund earning 2.5%. I leave 50% to capture 50% gain or loss. Leave 50% as my seed.
What triggers moving your 50% back into equity?

Engineer250
Posts: 1046
Joined: Wed Jun 22, 2016 1:41 pm

Re: U.S. stocks in freefall

Post by Engineer250 » Mon Feb 05, 2018 1:36 pm

WhiteMaxima wrote:
Mon Feb 05, 2018 1:23 pm
Gufomel wrote:
Mon Feb 05, 2018 12:48 pm
WhiteMaxima wrote:
Mon Feb 05, 2018 12:37 pm
letsgobobby wrote:
Mon Feb 05, 2018 12:24 pm
WhiteMaxima wrote:
Mon Feb 05, 2018 11:58 am
It's just normal correction..
I sure hope not. Need at least a 30% market decline to make stocks at all attractive for the long run.
I think so. A 30% correction and start from there with 7 to 8% annual return seems more sustainable. But people (include many BH) believe quick money. As soon I see market up 5% during the 1st month of 2018, I pull 50% off the market. That's too much of the gain during the 1st month of the year. But I do believe 7% long term is achievable not 20% or even 12% a year.
50% of your total stock portfolio or 50% of that 5% gain?
I use to have 100% equity. Now I am do to 50%. Put 50% into stable value (not bond, the bond investor deserve more yield, so bond price need to be repriced). The stable value is kind of short term money market fund earning 2.5%. I leave 50% to capture 50% gain or loss. Leave 50% as my seed.
This confirms my theory this little blip is only a blip. I am confident we won’t even see 10% total over all the days together. I still say 2020 is the year. Or whatever. But I like you as a contrary indicator this year. Check the forum for all the people that pulled their money out in 2011, 2012, 2013, 2014, 2015, 2016, 2017...all waiting to get back in.
Where the tides of fortune take us, no man can know.

MotoTrojan
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Re: U.S. stocks in freefall

Post by MotoTrojan » Mon Feb 05, 2018 1:50 pm

WhiteMaxima wrote:
Mon Feb 05, 2018 1:23 pm
Gufomel wrote:
Mon Feb 05, 2018 12:48 pm
WhiteMaxima wrote:
Mon Feb 05, 2018 12:37 pm
letsgobobby wrote:
Mon Feb 05, 2018 12:24 pm
WhiteMaxima wrote:
Mon Feb 05, 2018 11:58 am
It's just normal correction..
I sure hope not. Need at least a 30% market decline to make stocks at all attractive for the long run.
I think so. A 30% correction and start from there with 7 to 8% annual return seems more sustainable. But people (include many BH) believe quick money. As soon I see market up 5% during the 1st month of 2018, I pull 50% off the market. That's too much of the gain during the 1st month of the year. But I do believe 7% long term is achievable not 20% or even 12% a year.
50% of your total stock portfolio or 50% of that 5% gain?
I use to have 100% equity. Now I am do to 50%. Put 50% into stable value (not bond, the bond investor deserve more yield, so bond price need to be repriced). The stable value is kind of short term money market fund earning 2.5%. I leave 50% to capture 50% gain or loss. Leave 50% as my seed.
I too believe 7% long term is achievable, but I think in order to get that you need the unsustainable double digit years to make up for everything else.

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oldzey
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Re: U.S. stocks in freefall

Post by oldzey » Mon Feb 05, 2018 1:52 pm

Happy Monday!

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WhiteMaxima
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Re: U.S. stocks in freefall

Post by WhiteMaxima » Mon Feb 05, 2018 2:00 pm

Watch 10 year treasure yield. If it's above 3%, I would be cautious. If it's above 3.5%, I would sell equity and get into 3.5% bond. Safety is always no 1. Vanguard predict next 10 years average return at 4.5%. 3.5% secure return or 4.5% projected return . Equity investor demand more than 1.0% premium for taking the risk. But I do believe a bear market is good for investor because it create a very good opportunity to buy equity cheap. I hold my cash tight.

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munemaker
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Re: U.S. stocks in freefall

Post by munemaker » Mon Feb 05, 2018 2:11 pm

WhiteMaxima wrote:
Mon Feb 05, 2018 2:00 pm
Watch 10 year treasure yield. If it's above 3%, I would be cautious. If it's above 3.5%, I would sell equity and get into 3.5% bond. ...
Or alternatively, you could just maintain your current asset allocation per you investment policy.

Engineer250
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Re: U.S. stocks in freefall

Post by Engineer250 » Mon Feb 05, 2018 2:13 pm

WhiteMaxima wrote:
Mon Feb 05, 2018 2:00 pm
Watch 10 year treasure yield. If it's above 3%, I would be cautious. If it's above 3.5%, I would sell equity and get into 3.5% bond. Safety is always no 1. Vanguard predict next 10 years average return at 4.5%. 3.5% secure return or 4.5% projected return . Equity investor demand more than 1.0% premium for taking the risk. But I do believe a bear market is good for investor because it create a very good opportunity to buy equity cheap. I hold my cash tight.
When did you sell from 100% equity to 50%? And what’s the yield of your stable value? Seems only fair to benchmark your plan.

Have you ever sold and bought before like this?
Where the tides of fortune take us, no man can know.

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Re: U.S. stocks in freefall

Post by WhiteMaxima » Mon Feb 05, 2018 2:15 pm

Stable value is around 2.5%, equity is already up 5%. Do you prefer a turtle or a rabbit? until end of this year (still 10 more months to go). I don't know. Or you could do nothing and let market play it out. I do believe equity will over perform fix income long run. Only you can do is to ignore the market.

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Re: U.S. stocks in freefall

Post by parsi1 » Mon Feb 05, 2018 2:22 pm

I have a feeling Buffett and Bogle have been right all along. There is no need for international in the portfolio. The total international index is falling more than US market.
So what is the point of having international in your portfolio?
No benefit in having international when the market is going up since US does better and no benefit in down turns since they lose more than US.
Last edited by parsi1 on Mon Feb 05, 2018 2:27 pm, edited 1 time in total.

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Re: U.S. stocks in freefall

Post by CULater » Mon Feb 05, 2018 2:24 pm

WhiteMaxima wrote:
Mon Feb 05, 2018 2:15 pm
Stable value is around 2.5%, equity is already up 5%. Do you prefer a turtle or a rabbit? until end of this year (still 10 more months to go). I don't know. Or you could do nothing and let market play it out. I do believe equity will over perform fix income long run. Only you can do is to ignore the market.
Bad metaphor. You do remember how the fable of the tortoise and the hare came out, yes? (hint: the rabbit came in second).
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

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bogleblitz
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Re: U.S. stocks in freefall

Post by bogleblitz » Mon Feb 05, 2018 2:27 pm

I saw a 1.5% drop today and there was a smile on my face.

I was actually a bit worried that the market has gone up too much in January. Now we are back to the beginning of January. Time to go back to sleep.

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Re: U.S. stocks in freefall

Post by RRAAYY3 » Mon Feb 05, 2018 2:27 pm

parsi1 wrote:
Mon Feb 05, 2018 2:22 pm
I have a feeling Buffett and Bogle have been right all along. There is no need for international in the portfolio. The total international index is falling more than US market.
So what is the point of having then in your portfolio?
No benefit in having international when the market is going up since US does better and no benefit in down turns since they lose more than US.
I’m finding this equally interesting and concerning ... Why is this happening ?

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Re: U.S. stocks in freefall

Post by CULater » Mon Feb 05, 2018 2:27 pm

parsi1 wrote:
Mon Feb 05, 2018 2:22 pm
I have a feeling Buffett and Bogle have been right all along. There is no need for international in the portfolio. The total international index is falling more than US market.
So what is the point of having then in your portfolio?
No benefit in having international when the market is going up since US does better and no benefit in down turns since they lose more than US.
I have the strong feeling that this is correct, until it isn't. Problem is I don't know when we'll get to "isn't".
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

Engineer250
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Re: U.S. stocks in freefall

Post by Engineer250 » Mon Feb 05, 2018 2:32 pm

Market weights and index funds for me. I enjoy following along but there’s nothing for me to do.

I don’t have a big pot of cash on the sidelines (just my emergency fund, which is staying cash, and pretty meager compared to my retirement accounts anyways). My 401k/IRA money goes in Tuesday and Wednesday. Not enough to tip the scale anyways. I’m investing as much as I can as soon as I have the money. In another two weeks a little more will go in. Might be back up by then for all I know.
Where the tides of fortune take us, no man can know.

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Re: U.S. stocks in freefall

Post by DanMahowny » Mon Feb 05, 2018 2:36 pm

letsgobobby wrote:
Mon Feb 05, 2018 12:24 pm
I sure hope not. Need at least a 30% market decline to make stocks at all attractive for the long run.
I'm looking for a 50% decline. That'd be fabulous!
Funding secured

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parsi1
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Re: U.S. stocks in freefall

Post by parsi1 » Mon Feb 05, 2018 2:39 pm

CULater wrote:
Mon Feb 05, 2018 2:27 pm
parsi1 wrote:
Mon Feb 05, 2018 2:22 pm
I have a feeling Buffett and Bogle have been right all along. There is no need for international in the portfolio. The total international index is falling more than US market.
So what is the point of having then in your portfolio?
No benefit in having international when the market is going up since US does better and no benefit in down turns since they lose more than US.
I have the strong feeling that this is correct, until it isn't. Problem is I don't know when we'll get to "isn't".
But by the time we get to "isn't" the US market has out performed international significantly and when US drops the international drops as well.

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Re: U.S. stocks in freefall

Post by Accrual » Mon Feb 05, 2018 2:39 pm

A lot of doubt circling this board. Somewhat troubling.

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Re: U.S. stocks in freefall

Post by bloom2708 » Mon Feb 05, 2018 2:42 pm

Fallible wrote:
Fri May 19, 2017 1:29 pm
It's not this drop, or its size, or how it's reported (yawn). It's the reasons for it.
The big media outlets have been salivating for "bad news" to blast out to all. Fear! Panic! Greed! Sell now!

Ignore the noise.

Think of all the people opening their browsers, seeing the DOW down another 600 or 1,000 or 1,500. Oh my, this is the big crash. I better sell something. :annoyed
Last edited by bloom2708 on Mon Feb 05, 2018 3:13 pm, edited 1 time in total.
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Re: U.S. stocks in freefall

Post by WhiteMaxima » Mon Feb 05, 2018 2:44 pm

Market correction creates opportunities. It is a good thing.

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