U.S. stocks in freefall

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bling
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Re: U.S. stocks in freefall

Post by bling » Tue Feb 06, 2018 1:19 pm

i TLHed my US index earlier, but still debating whether i should harvest international. as of this post international is up 1% and emerging 2%. TLH is looking less and less appealing as the day goes by. my REIT allocation is still getting crushed -- may rebalance more into that.
Last edited by bling on Tue Feb 06, 2018 1:19 pm, edited 1 time in total.

Da5id
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Re: U.S. stocks in freefall

Post by Da5id » Tue Feb 06, 2018 1:19 pm

inbox788 wrote:
Tue Feb 06, 2018 1:15 pm
No, that was yesterday (mostly). Nikkei reference is Japan market open vs VXUS is US market open.
So you are saying this: https://www.marketwatch.com/investing/i ... trycode=jp

Is not current also? Hmm. I'm confused.

inbox788
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Re: U.S. stocks in freefall

Post by inbox788 » Tue Feb 06, 2018 1:21 pm

Da5id wrote:
Tue Feb 06, 2018 1:19 pm
inbox788 wrote:
Tue Feb 06, 2018 1:15 pm
No, that was yesterday (mostly). Nikkei reference is Japan market open vs VXUS is US market open.
So you are saying this: https://www.marketwatch.com/investing/i ... trycode=jp

Is not current also? Hmm. I'm confused.
Things are very fluid right now...Nikkei is closed.

Look at Nikkei Futures...
https://www.bloomberg.com/quote/NK1:IND

http://traderhq.com/nikkei-futures-what ... s-to-know/
Last edited by inbox788 on Tue Feb 06, 2018 1:29 pm, edited 1 time in total.

thangngo
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Re: U.S. stocks in freefall

Post by thangngo » Tue Feb 06, 2018 1:24 pm

bligh wrote:
Tue Feb 06, 2018 1:06 pm
Boy the Bulls and the Bears are really battling it out today arent they? Today's chart is like a yoyo.
Yeah.. I haven't seen this kind of battle for a while now. Interesting to watch.

Da5id
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Re: U.S. stocks in freefall

Post by Da5id » Tue Feb 06, 2018 1:31 pm

inbox788 wrote:
Tue Feb 06, 2018 1:21 pm
Da5id wrote:
Tue Feb 06, 2018 1:19 pm
inbox788 wrote:
Tue Feb 06, 2018 1:15 pm
No, that was yesterday (mostly). Nikkei reference is Japan market open vs VXUS is US market open.
So you are saying this: https://www.marketwatch.com/investing/i ... trycode=jp

Is not current also? Hmm. I'm confused.
Things are very fluid right now...Nikkei is closed.
With Nikkei closed, how fluid is it? Is VXUS pricing based on futures? Never even thought about how they price an international fund where some of the components are in closed and some in open markets.

rgs92
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Re: U.S. stocks in freefall

Post by rgs92 » Tue Feb 06, 2018 1:32 pm

You know, the market (total stock market) is where it was at Thanksgiving. Now here, there, and everywhere it sounds like the sky is falling. Given that, I think the actionable advice is just to have some perspective.

WhiteMaxima
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Re: U.S. stocks in freefall

Post by WhiteMaxima » Tue Feb 06, 2018 1:38 pm

Stay put and stay in course. Market correction is not over yet. It's not a bear market yet. US economy is still sound. But overpriced bond and equity need to be repriced> So I do see 10-20% correction before we can grow again. Stay put.

inbox788
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Re: U.S. stocks in freefall

Post by inbox788 » Tue Feb 06, 2018 1:42 pm

Da5id wrote:
Tue Feb 06, 2018 1:31 pm
With Nikkei closed, how fluid is it? Is VXUS pricing based on futures? Never even thought about how they price an international fund where some of the components are in closed and some in open markets.
No, but the futures provide a proxy to what the market is doing. When the Japanese market is closed, the individual stocks might be traded in other markets and have changing live prices. The VXUS, EJW and the futures need to take those into account in similar ways.

https://finance.google.com/finance?q=NYSE%3ATM

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jhfenton
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Re: U.S. stocks in freefall

Post by jhfenton » Tue Feb 06, 2018 1:50 pm

lostdog wrote:
Tue Feb 06, 2018 12:50 pm
Might be from emerging markets which is up 2%.
VWO is up nearly 2%, but VEMAX will be down substantially today, as the discount to NAV on the ETF has reversed to a premium today.

VSS is the same, but even more dramatic. VSS closed ($117.14) at a substantial discount to NAV ($118.47) yesterday, even with Vanguard's substantial fair value adjustments. At the moment, VSS is up 0.70%, while ^VSS-IV is down to $117.27 (from $120.30 reported at market close yesterday). (Vanguard fair-value adjusted that down to the $118.47 when valuing the funds' assets for calculating the NAV of the mutual fund share class.)

The movements are seldom quite so dramatic, especially substantial discounts, but I add a couple percent per year to the performance of VSS/VFSVX by arbitraging premiums and discounts. >50 bp premiums in VSS are quite common.

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Earl Lemongrab
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Re: U.S. stocks in freefall

Post by Earl Lemongrab » Tue Feb 06, 2018 1:52 pm

It's all my fault, sorry. I retired on 2/1, so once the market heard, well, you saw what happened.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

sreynard
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Re: U.S. stocks in freefall

Post by sreynard » Tue Feb 06, 2018 2:05 pm

Earl Lemongrab wrote:
Tue Feb 06, 2018 1:52 pm
It's all my fault, sorry. I retired on 2/1, so once the market heard, well, you saw what happened.
Congratulations Earl! Hopefully the remainder of your retirement won't be so "exciting". :D

Wish I could join you.... :sharebeer

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Re: U.S. stocks in freefall

Post by pkcrafter » Tue Feb 06, 2018 2:09 pm

RRAAYY3 wrote:
Tue Feb 06, 2018 1:15 pm
tarmangani wrote:
Tue Feb 06, 2018 12:57 pm
Da5id wrote:
Tue Feb 06, 2018 12:48 pm
lostdog wrote:
Tue Feb 06, 2018 12:42 pm
RRAAYY3 wrote:
Tue Feb 06, 2018 12:41 pm
not trying to jinx anything, but at least today is showing some advantage of owning 50/50 US/INT'L
+1
Focusing on one day results is not generally useful or applicable - what lessons might one draw from a single day's/week's/month's or for that matter single year's returns/. But each to their own. I'm a bit baffled by VXUS (which I own myself in fund form) is up so much, as Nikkei/FTSE/Stoxx indices have all tanked.
+1. I know this freefall thread's a free for all thread really, resembling more water cooler chatter than thoughtful analysis, but the amount of short-term thinking here has gotten out of control. Folks, you don't judge the viability of an investment vehicle, asset allocation, or basically anything financial, based on a few days of movement. A few months of movement, even. Throw years in while you're at it.
i'm very sorry for the casual observation. all i did was notice US and INT'L went in opposite directions (i.e. "Oh , this is why diversification is recommended. cool."). no short term viability analysis whatsoever - juuuuuuust an observation and friendly reminder for me to "stay the course".
Don't worry about it RRAAYY, I think what you were saying was clear enough. :happy


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Doom&Gloom
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Re: U.S. stocks in freefall

Post by Doom&Gloom » Tue Feb 06, 2018 2:12 pm

Earl Lemongrab wrote:
Tue Feb 06, 2018 1:52 pm
It's all my fault, sorry. I retired on 2/1, so once the market heard, well, you saw what happened.
We will forgive you--just this once. Welcome to the club! Now you can join us into shifting the blame to where it rightly belongs--on everyone else :twisted:

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willthrill81
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Re: U.S. stocks in freefall

Post by willthrill81 » Tue Feb 06, 2018 2:25 pm

thangngo wrote:
Tue Feb 06, 2018 12:58 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 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.
How do you feel now?
I'm not a big advocate of U.S. only portfolios, but international has a loooong way to go to catch up to the U.S.'s returns for the last 10, 20, and 30 years of underperformance (in total, obviously not every year).
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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willthrill81
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Re: U.S. stocks in freefall

Post by willthrill81 » Tue Feb 06, 2018 2:27 pm

Da5id wrote:
Tue Feb 06, 2018 11:57 am
rebalancing = buying/selling assets to move towards a pre-determined allocation when market gains/loses have triggered a need to do so, generally by a pre-determined rebalancing criteria
timing = buying/selling assets because of a belief that you have foreknowledge of the market direction and are on the fly adjusting your asset allocation to take advantage of that "knowledge"
According to that definition of timing, being a trend follower doesn't make me a market timer after all! I'm not trying to predict the market; I'm just buying and selling based on the recent trends.

Maybe the Bogleheads will leave me be now. :wink:
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

Da5id
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Re: U.S. stocks in freefall

Post by Da5id » Tue Feb 06, 2018 2:31 pm

willthrill81 wrote:
Tue Feb 06, 2018 2:27 pm
Da5id wrote:
Tue Feb 06, 2018 11:57 am
rebalancing = buying/selling assets to move towards a pre-determined allocation when market gains/loses have triggered a need to do so, generally by a pre-determined rebalancing criteria
timing = buying/selling assets because of a belief that you have foreknowledge of the market direction and are on the fly adjusting your asset allocation to take advantage of that "knowledge"
According to that definition of timing, being a trend follower doesn't make me a market timer after all! I'm not trying to predict the market; I'm just buying and selling based on the recent trends.
You are predicting that trends will persist in the short term future surely. But whatever floats your boat.

zeugmite
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Re: U.S. stocks in freefall

Post by zeugmite » Tue Feb 06, 2018 2:39 pm

jhfenton wrote:
Tue Feb 06, 2018 1:50 pm
lostdog wrote:
Tue Feb 06, 2018 12:50 pm
Might be from emerging markets which is up 2%.
VWO is up nearly 2%, but VEMAX will be down substantially today, as the discount to NAV on the ETF has reversed to a premium today.

VSS is the same, but even more dramatic. VSS closed ($117.14) at a substantial discount to NAV ($118.47) yesterday, even with Vanguard's substantial fair value adjustments. At the moment, VSS is up 0.70%, while ^VSS-IV is down to $117.27 (from $120.30 reported at market close yesterday). (Vanguard fair-value adjusted that down to the $118.47 when valuing the funds' assets for calculating the NAV of the mutual fund share class.)

The movements are seldom quite so dramatic, especially substantial discounts, but I add a couple percent per year to the performance of VSS/VFSVX by arbitraging premiums and discounts. >50 bp premiums in VSS are quite common.
Sorry, maybe a dumb question, but how do you know what the premium is/will be in the middle of the day?

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randomizer
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Re: U.S. stocks in freefall

Post by randomizer » Tue Feb 06, 2018 2:44 pm

My AA is about 1% off target. Could harvest some small losses but barely seems worth it. This investing business is not very exciting now, is it? (I know, I know, it's not supposed to be exciting.)
75:25 AA / Expected retirement: 2097

lostdog
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Re: U.S. stocks in freefall

Post by lostdog » Tue Feb 06, 2018 2:45 pm

https://www.marketwatch.com/story/xiv-t ... 2018-02-06

Title
"XIV trader: ‘I’ve lost $4 million, 3 years of work and other people’s money"

"The VelocityShares Daily Inverse VIX Short Term ETN XIV, -92.64% was created to give traders an opportunity to bet against a rise in volatility — the calmer the markets, the more profitable the trade. And it’s been one of the best plays out there amid the bull’s long and steady assault on new highs.

All that changed, however, when the stock market began to seriously flame out last week."
100% Vanguard Total World Equity Index. Simplicity 100%.

inbox788
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Re: U.S. stocks in freefall

Post by inbox788 » Tue Feb 06, 2018 2:56 pm

randomizer wrote:
Tue Feb 06, 2018 2:44 pm
My AA is about 1% off target. Could harvest some small losses but barely seems worth it. This investing business is not very exciting now, is it? (I know, I know, it's not supposed to be exciting.)
Yeah, same boat here. One of my funds went -$500 yesterday. I thought about TLH, but figured it might go down more before I bother. And if it recovers and goes up, c'est la vie.

Looks like threshold may be lower if short term losses are approaching 1 year.
viewtopic.php?t=172543
Last edited by inbox788 on Tue Feb 06, 2018 2:58 pm, edited 1 time in total.

RRAAYY3
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Re: U.S. stocks in freefall

Post by RRAAYY3 » Tue Feb 06, 2018 2:58 pm

glad I was busy at work most of the day - probably would be nauseous tracking the total us today.

I’ve been told this sort of volatility usually signals the “bottom” is near - obviously no idea how true that is since nobody knows anything it seems

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willthrill81
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Re: U.S. stocks in freefall

Post by willthrill81 » Tue Feb 06, 2018 3:06 pm

Da5id wrote:
Tue Feb 06, 2018 2:31 pm
willthrill81 wrote:
Tue Feb 06, 2018 2:27 pm
Da5id wrote:
Tue Feb 06, 2018 11:57 am
rebalancing = buying/selling assets to move towards a pre-determined allocation when market gains/loses have triggered a need to do so, generally by a pre-determined rebalancing criteria
timing = buying/selling assets because of a belief that you have foreknowledge of the market direction and are on the fly adjusting your asset allocation to take advantage of that "knowledge"
According to that definition of timing, being a trend follower doesn't make me a market timer after all! I'm not trying to predict the market; I'm just buying and selling based on the recent trends.
You are predicting that trends will persist in the short term future surely. But whatever floats your boat.
Actually, I'm not. I believe full well that after I sell, the market could go in either direction.

There's a difference between long-term statistical expectancy (which is what rules-based trend following does) and short-term prediction (which is what many, perhaps most, investors do).

When you flip a coin that's weighted to come up heads 52% of the time, a long-term statistical expectancy approach would say to bet heads every time, knowing full well that there will be periods where tails come up a lot. A short-term prediction approach would try to predict which side will come up on a specific flip.

And don't call me Shirley. :wink:
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

lostdog
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Re: U.S. stocks in freefall

Post by lostdog » Tue Feb 06, 2018 3:07 pm

willthrill81 wrote:
Tue Feb 06, 2018 3:06 pm
Da5id wrote:
Tue Feb 06, 2018 2:31 pm
willthrill81 wrote:
Tue Feb 06, 2018 2:27 pm
Da5id wrote:
Tue Feb 06, 2018 11:57 am
rebalancing = buying/selling assets to move towards a pre-determined allocation when market gains/loses have triggered a need to do so, generally by a pre-determined rebalancing criteria
timing = buying/selling assets because of a belief that you have foreknowledge of the market direction and are on the fly adjusting your asset allocation to take advantage of that "knowledge"
According to that definition of timing, being a trend follower doesn't make me a market timer after all! I'm not trying to predict the market; I'm just buying and selling based on the recent trends.
You are predicting that trends will persist in the short term future surely. But whatever floats your boat.
Actually, I'm not. I believe full well that after I sell, the market could go in either direction.

There's a difference between long-term statistical expectancy (which is what rules-based trend following does) and short-term prediction (which is what many, perhaps most, investors do).

When you flip a coin that's weighted to come up heads 52% of the time, a long-term statistical expectancy approach would say to bet heads every time, knowing full well that there will be periods where tails come up a lot. A short-term prediction approach would try to predict which side will come up on a specific flip.

And don't call me Shirley. :wink:
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CULater
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Re: U.S. stocks in freefall

Post by CULater » Tue Feb 06, 2018 3:10 pm

Up nearly 500 at end of day. Whaaaatttt!
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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bligh
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Re: U.S. stocks in freefall

Post by bligh » Tue Feb 06, 2018 3:13 pm

thangngo wrote:
Tue Feb 06, 2018 1:24 pm
bligh wrote:
Tue Feb 06, 2018 1:06 pm
Boy the Bulls and the Bears are really battling it out today arent they? Today's chart is like a yoyo.
Yeah.. I haven't seen this kind of battle for a while now. Interesting to watch.
Looks like the Bulls are going to get a decisive victory .... at least for today. Wow look at that climb.

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Re: U.S. stocks in freefall

Post by 2Birds1Stone » Tue Feb 06, 2018 3:19 pm

CULater wrote:
Tue Feb 06, 2018 3:10 pm
Up nearly 500 at end of day. Whaaaatttt!
Don't hold your breathe

sreynard
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Re: U.S. stocks in freefall

Post by sreynard » Tue Feb 06, 2018 3:22 pm

willthrill81 wrote:
Tue Feb 06, 2018 3:06 pm
Da5id wrote:
Tue Feb 06, 2018 2:31 pm
willthrill81 wrote:
Tue Feb 06, 2018 2:27 pm
Da5id wrote:
Tue Feb 06, 2018 11:57 am
rebalancing = buying/selling assets to move towards a pre-determined allocation when market gains/loses have triggered a need to do so, generally by a pre-determined rebalancing criteria
timing = buying/selling assets because of a belief that you have foreknowledge of the market direction and are on the fly adjusting your asset allocation to take advantage of that "knowledge"
According to that definition of timing, being a trend follower doesn't make me a market timer after all! I'm not trying to predict the market; I'm just buying and selling based on the recent trends.
You are predicting that trends will persist in the short term future surely. But whatever floats your boat.
Actually, I'm not. I believe full well that after I sell, the market could go in either direction.

There's a difference between long-term statistical expectancy (which is what rules-based trend following does) and short-term prediction (which is what many, perhaps most, investors do).

When you flip a coin that's weighted to come up heads 52% of the time, a long-term statistical expectancy approach would say to bet heads every time, knowing full well that there will be periods where tails come up a lot. A short-term prediction approach would try to predict which side will come up on a specific flip.

And don't call me Shirley. :wink:
So Shirley, out of curiosity, how long have you been a trend follower? I probably just didn't see it, but I don't recall hearing about you doing this before this year. How many trades have you made so far based on trend following? Do you have any statistics on how well you have done with this strategy and a comparison with a more Boglehead DCA approach?

Thanks Shirley!

:wink:

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Re: U.S. stocks in freefall

Post by AnalogKid22 » Tue Feb 06, 2018 3:24 pm

CULater wrote:
Tue Feb 06, 2018 3:10 pm
Up nearly 500 at end of day. Whaaaatttt!
The mascot for today's market:

[embedded animated GIF removed by admin LadyGeek, here's the link: https://m.popkey.co/9be03d/DQJye.gif]

CantPassAgain
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Re: U.S. stocks in freefall

Post by CantPassAgain » Tue Feb 06, 2018 3:27 pm

sreynard wrote:
Tue Feb 06, 2018 3:22 pm
willthrill81 wrote:
Tue Feb 06, 2018 3:06 pm
Da5id wrote:
Tue Feb 06, 2018 2:31 pm
willthrill81 wrote:
Tue Feb 06, 2018 2:27 pm
Da5id wrote:
Tue Feb 06, 2018 11:57 am
rebalancing = buying/selling assets to move towards a pre-determined allocation when market gains/loses have triggered a need to do so, generally by a pre-determined rebalancing criteria
timing = buying/selling assets because of a belief that you have foreknowledge of the market direction and are on the fly adjusting your asset allocation to take advantage of that "knowledge"
According to that definition of timing, being a trend follower doesn't make me a market timer after all! I'm not trying to predict the market; I'm just buying and selling based on the recent trends.
You are predicting that trends will persist in the short term future surely. But whatever floats your boat.
Actually, I'm not. I believe full well that after I sell, the market could go in either direction.

There's a difference between long-term statistical expectancy (which is what rules-based trend following does) and short-term prediction (which is what many, perhaps most, investors do).

When you flip a coin that's weighted to come up heads 52% of the time, a long-term statistical expectancy approach would say to bet heads every time, knowing full well that there will be periods where tails come up a lot. A short-term prediction approach would try to predict which side will come up on a specific flip.

And don't call me Shirley. :wink:
So Shirley, out of curiosity, how long have you been a trend follower? I probably just didn't see it, but I don't recall hearing about you doing this before this year. How many trades have you made so far based on trend following? Do you have any statistics on how well you have done with this strategy and a comparison with a more Boglehead DCA approach?

Thanks Shirley!

:wink:
Someone read a trend-following book in December I think.

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Re: U.S. stocks in freefall

Post by Noobvestor » Tue Feb 06, 2018 3:33 pm

Black Cat wrote:
Tue Feb 06, 2018 8:29 am
First it's great that this thread has been running since 2011... Hope to check back in a year or 10 on it.
I'm feeling like current horror sequel is "International Stocks in Freefall Too*

I was thinking along the lines of @parsi1 's post, about the arguable value of international. As of late, there have been recommendations for 30-50 % international on the vanguard website. While I realize this is only a few days, and very limited sample, I was hoping that the diversification would help. Now I'm slightly more skeptical of International Bonds as well. :confused
To expand on a point I made earlier in the thread: international equity is not generally useful in downturns. Maybe international bonds in some cases, but not international stocks. The diversification advantages come into play over longer periods, not sudden drops.

When the market gets spooked, risk assets tend to correlate and head in the same direction. To see how international performs differently from the US, look at 2000 to 2010, then 2010 to the present. US and international stocks took turns, but during crisis periods crashed together.

The real advantage to international (to me, at least) is hedging something like Japan's decades of stock underperformance. Individual markets can stay flat for decades - the global market hasn't, as yet. For 'sudden drops' though: bonds are where it's at.

As for international bonds: during 'flights to safety', Treasuries tend to be the best performers. I personally don't hold international bonds because they don't provide the same safety benefits (or: haven't historically, at least), plus currency risk, plus hedging costs if you use hedged, etc...
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

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Re: U.S. stocks in freefall

Post by Noobvestor » Tue Feb 06, 2018 3:53 pm

willthrill81 wrote:
Tue Feb 06, 2018 2:25 pm
thangngo wrote:
Tue Feb 06, 2018 12:58 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 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.
How do you feel now?
I'm not a big advocate of U.S. only portfolios, but international has a loooong way to go to catch up to the U.S.'s returns for the last 10, 20, and 30 years of underperformance (in total, obviously not every year).
Vanguard's projections for the next decade suggest not holding international would be a bad idea - note the lowest dot on the right:

Image

From this thread: viewtopic.php?t=233997
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

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Re: U.S. stocks in freefall

Post by digarei » Tue Feb 06, 2018 3:54 pm

I executed a buy order yesterday for a number of mutual funds representing multiple asset classes, including both US and international equities and bonds, and domestic REITs.

The price of each share purchased will be at today’s closing NAV.

I’m entirely indifferent as to whether the price is higher or lower than yesterday’s closing price. Having a diversified portfolio and a long term horizon enables this outlook.
Connect with Bogleheads in Northern California! Click the link under my user info/avatar.

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Re: U.S. stocks in freefall

Post by Tom_T » Tue Feb 06, 2018 4:07 pm

2Birds1Stone wrote:
Tue Feb 06, 2018 3:19 pm
CULater wrote:
Tue Feb 06, 2018 3:10 pm
Up nearly 500 at end of day. Whaaaatttt!
Don't hold your breathe
If you look at the fall of 2008, we had a number of Really Bad Days and Really Good Days... and the market didn't bottom out until March 2009. So one rebound day doesn't get me excited. I'll stick to my plan and rebalance when necessary.

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Re: U.S. stocks in freefall

Post by ruralavalon » Tue Feb 06, 2018 4:08 pm

Earl Lemongrab wrote:
Tue Feb 06, 2018 1:52 pm
It's all my fault, sorry. I retired on 2/1, so once the market heard, well, you saw what happened.
Congratulations on your retirement :) .

Now could you please fix all the damage you caused
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willthrill81
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Re: U.S. stocks in freefall

Post by willthrill81 » Tue Feb 06, 2018 4:57 pm

Noobvestor wrote:
Tue Feb 06, 2018 3:53 pm
willthrill81 wrote:
Tue Feb 06, 2018 2:25 pm
I'm not a big advocate of U.S. only portfolios, but international has a loooong way to go to catch up to the U.S.'s returns for the last 10, 20, and 30 years of underperformance (in total, obviously not every year).
Vanguard's projections for the next decade suggest not holding international would be a bad idea - note the lowest dot on the right:
They may be spot on, but I have my doubts about anyone's 10 year predictions going forward. The margin of error is usually too high for it to be practical.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: U.S. stocks in freefall

Post by HomerJ » Tue Feb 06, 2018 5:03 pm

sreynard wrote:
Tue Feb 06, 2018 3:22 pm
So Shirley, out of curiosity, how long have you been a trend follower? I probably just didn't see it, but I don't recall hearing about you doing this before this year. How many trades have you made so far based on trend following? Do you have any statistics on how well you have done with this strategy and a comparison with a more Boglehead DCA approach?

Thanks Shirley!

:wink:
Start a new thread if you want to talk about trend-following and all the rebuttals that will follow.

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Re: U.S. stocks in freefall

Post by HomerJ » Tue Feb 06, 2018 5:06 pm

willthrill81 wrote:
Tue Feb 06, 2018 4:57 pm
Noobvestor wrote:
Tue Feb 06, 2018 3:53 pm
willthrill81 wrote:
Tue Feb 06, 2018 2:25 pm
I'm not a big advocate of U.S. only portfolios, but international has a loooong way to go to catch up to the U.S.'s returns for the last 10, 20, and 30 years of underperformance (in total, obviously not every year).
Vanguard's projections for the next decade suggest not holding international would be a bad idea - note the lowest dot on the right:
They may be spot on, but I have my doubts about anyone's 10 year predictions going forward. The margin of error is usually too high for it to be practical.
Yes, some "experts" will give you an "expected" return of like 4.2% (notice the .2 - looks very precise, eh?), but they won't mention the "plus or minus 8%" caveat that goes along with that.

(And besides they don't even know if it's a normal distribution, so even "plus or minus 8%" is misleading)

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Re: U.S. stocks in freefall

Post by herpfinance » Tue Feb 06, 2018 5:54 pm

It's smaller drops like these that reinforce my decision to not hold 100% equities :sharebeer
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Re: U.S. stocks in freefall

Post by 220volt » Tue Feb 06, 2018 6:04 pm

They're are calling leveraged ETF's weapons of mass destruction and a major cause of these flash crashes and rallies.
https://youtu.be/O2fDQDwdAC4

And judging by the speed of the market these days, it does make one wonder how quickly could 9-year gains be completely wiped out. In few weeks of this, perhaps? Seems that every correction comes on stronger and faster.
"If I had only followed the advice of financial analysts in 2008, I'd have a million dollars today, provided I started with a hundred million dollars" - Jon Stewart

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Re: U.S. stocks in freefall

Post by jhfenton » Tue Feb 06, 2018 6:10 pm

zeugmite wrote:
Tue Feb 06, 2018 2:39 pm
jhfenton wrote:
Tue Feb 06, 2018 1:50 pm
lostdog wrote:
Tue Feb 06, 2018 12:50 pm
Might be from emerging markets which is up 2%.
VWO is up nearly 2%, but VEMAX will be down substantially today, as the discount to NAV on the ETF has reversed to a premium today.

VSS is the same, but even more dramatic. VSS closed ($117.14) at a substantial discount to NAV ($118.47) yesterday, even with Vanguard's substantial fair value adjustments. At the moment, VSS is up 0.70%, while ^VSS-IV is down to $117.27 (from $120.30 reported at market close yesterday). (Vanguard fair-value adjusted that down to the $118.47 when valuing the funds' assets for calculating the NAV of the mutual fund share class.)

The movements are seldom quite so dramatic, especially substantial discounts, but I add a couple percent per year to the performance of VSS/VFSVX by arbitraging premiums and discounts. >50 bp premiums in VSS are quite common.
Sorry, maybe a dumb question, but how do you know what the premium is/will be in the middle of the day?
I watch the IV (intraday indicative value) tickers, and I know from experience roughly how much of a fair-value adjustment Vanguard will make. The last two days were extreme, so I didn't know how much exactly Vanguard would fair-value adjust VFSVX, but I knew it wouldn't be the entire difference between the market price of VSS (close at $117.14) and the theoretical NAV ($120.30 at close). Today VSS flipped to a roughly $0.70 premium after fair-value adjustments, $1.77 based on the tickers.

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Re: U.S. stocks in freefall

Post by whodidntante » Tue Feb 06, 2018 6:37 pm

Earl Lemongrab wrote:
Tue Feb 06, 2018 1:52 pm
It's all my fault, sorry. I retired on 2/1, so once the market heard, well, you saw what happened.
All is forgiven. I think you should stay the course with your retirement. In fact, double retire if at all possible. I am still accumulating, and I need some cheap banged up stocks to buy.

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Re: U.S. stocks in freefall

Post by RRAAYY3 » Tue Feb 06, 2018 7:31 pm

just want to check in ... are equities cool again ?

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Re: U.S. stocks in freefall

Post by livesoft » Tue Feb 06, 2018 7:39 pm

willthrill81 wrote:
Tue Feb 06, 2018 2:27 pm
Maybe the Bogleheads will leave me be now. :wink:
C'mon! We know you love the attention.
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Re: U.S. stocks in freefall

Post by livesoft » Tue Feb 06, 2018 7:44 pm

jhfenton wrote:
Tue Feb 06, 2018 6:10 pm
I watch the IV (intraday indicative value) tickers, and I know from experience roughly how much of a fair-value adjustment Vanguard will make. The last two days were extreme, so I didn't know how much exactly Vanguard would fair-value adjust VFSVX, but I knew it wouldn't be the entire difference between the market price of VSS (close at $117.14) and the theoretical NAV ($120.30 at close). Today VSS flipped to a roughly $0.70 premium after fair-value adjustments, $1.77 based on the tickers.
VFSVX closed down today Feb 6: -0.13%
VSS closed up today Feb 6: 1.58%

I own both.
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Re: U.S. stocks in freefall

Post by willthrill81 » Tue Feb 06, 2018 7:49 pm

livesoft wrote:
Tue Feb 06, 2018 7:39 pm
willthrill81 wrote:
Tue Feb 06, 2018 2:27 pm
Maybe the Bogleheads will leave me be now. :wink:
C'mon! We know you love the attention.
Actually, I feel more like a punching bag sometimes, but that's to be expected on a forum like this.

At any rate, I think it's good to have friendly discourse and even disagreement about issues. All ideas should be challenged at times, and individuals must make up their own minds what is appropriate for them. If nothing else, it keeps this place from being an echo chamber, which is actually quite boring IMHO.
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Re: U.S. stocks in freefall

Post by LadyGeek » Tue Feb 06, 2018 7:57 pm

The thread is losing focus and starting to derail. Let's slow down and focus on U.S. stocks as it relates to your investments.
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Re: U.S. stocks in freefall

Post by willthrill81 » Tue Feb 06, 2018 8:18 pm

Tom_T wrote:
Tue Feb 06, 2018 4:07 pm
2Birds1Stone wrote:
Tue Feb 06, 2018 3:19 pm
CULater wrote:
Tue Feb 06, 2018 3:10 pm
Up nearly 500 at end of day. Whaaaatttt!
Don't hold your breathe
If you look at the fall of 2008, we had a number of Really Bad Days and Really Good Days... and the market didn't bottom out until March 2009. So one rebound day doesn't get me excited. I'll stick to my plan and rebalance when necessary.
Interestingly, the really bad days and the really good days have a strong tendency to occur relatively close in time to each, a phenomenon known as volatility clustering. This means that if you jump ship right after a really bad day, you're significantly more likely to miss the really good day that lifts you back up again.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: U.S. stocks in freefall

Post by abuss368 » Tue Feb 06, 2018 8:22 pm

Stay the course! I purchased as planned today.
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Re: U.S. stocks in freefall

Post by Doom&Gloom » Tue Feb 06, 2018 8:36 pm

I remember when this was my favorite thread on the BH forums.
Stay the course in posting as well as investing, folks!

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Re: U.S. stocks in freefall

Post by nedsaid » Tue Feb 06, 2018 9:19 pm

aaronl wrote:
Mon Feb 05, 2018 9:33 pm
nedsaid wrote:
Mon Feb 05, 2018 8:51 pm
Fourth, valuations matter and matter a lot. I was getting a bit uneasy at Forward P/E ratios in the market getting to almost 22. Lots of optimism there. We were getting to where the market was pricing in a perfect investing environment, which almost never exists in the real world. Somebody at a hedge fund realized the market environment wasn't 100% perfect, panicked and hit the sell button with a vengeance. Expectations were just too high.
I'm not so sure that valuations are relevant here. EM has been falling in lock-step with US stocks, and there's a pretty broad consensus that EM stocks are not as expensive. I share your concerns about valuations, and would love to see some of the excess unwind. But I'm not convinced that this is driving the declines.
Probably hedge funds doing heaven knows what. There are trillions in derivatives out there, hard to say how that affects markets. This was not caused by individual investors, this was likely a battle of the investing bots.
A fool and his money are good for business.

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