U.S. stocks in freefall

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MindTheGAAP
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Re: U.S. stocks in freefall

Post by MindTheGAAP » Fri Feb 09, 2018 10:20 am

RRAAYY3 wrote:
Fri Feb 09, 2018 9:56 am
MindTheGAAP wrote:
Fri Feb 09, 2018 9:52 am
2Birds1Stone wrote:
Fri Feb 09, 2018 8:46 am
MindTheGAAP wrote:
Thu Feb 08, 2018 5:34 pm
2Birds1Stone wrote:
Thu Feb 08, 2018 5:09 pm
Purchased $10k of Total Stock Index and $5k of Total Bond Index around lunch time today, causing the afternoon slide.

I must say, this being my first real correction with a significant (to me) stock allocation, it makes me question my true risk tolerance.
Am I allowed to ask your age and current AA?
31 years old
68% stocks
32% bond, CD's, cash, commodities, etc.
Very interesting - much more conservative an AA than myself at 29, soon-to-be-30. Always interesting to see the variations in AA even within this homogeneous (or more tight) sub-pop.
shhhhhh .... calling this conservative is apparently a big NO NO

by the way, conservative is not an insult, just an observation. I'm pretty much 100/0 and I'm around his age - whatever works for us I guess. All i've been doing in this downturn is buying more.
You're right - this is a much more balanced AA than my own.
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute" - William Feather

MindTheGAAP
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Re: U.S. stocks in freefall

Post by MindTheGAAP » Fri Feb 09, 2018 10:22 am

ruralavalon wrote:
Fri Feb 09, 2018 10:16 am
MindTheGAAP wrote:
Fri Feb 09, 2018 9:52 am
2Birds1Stone wrote:
Fri Feb 09, 2018 8:46 am
MindTheGAAP wrote:
Thu Feb 08, 2018 5:34 pm
2Birds1Stone wrote:
Thu Feb 08, 2018 5:09 pm
Purchased $10k of Total Stock Index and $5k of Total Bond Index around lunch time today, causing the afternoon slide.

I must say, this being my first real correction with a significant (to me) stock allocation, it makes me question my true risk tolerance.
Am I allowed to ask your age and current AA?
31 years old
68% stocks32% bond, CD's, cash, commodities, etc.
Very interesting - much more conservative an AA than myself at 29, soon-to-be-30. Always interesting to see the variations in AA even within this homogeneous (or more tight) sub-pop.
Reviews done by DaleMaley using threads and posts on this site about "% stocks vs age", for age 30 had indicated around 76-84% in stocks. So 68% stocks at age 31 is pretty close to typical.

Sorry I can't give you a link, I'm posting on a tablet and can't just copy and paste a link for you.

Very interesting insight. Thanks ruralavalon
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute" - William Feather

Woodlake
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Re: U.S. stocks in freefall

Post by Woodlake » Fri Feb 09, 2018 10:23 am

MotoTrojan wrote:
Fri Feb 09, 2018 10:15 am
Woodlake wrote:
Fri Feb 09, 2018 10:13 am
29 here, just sold half IRA and 15K of stock today

still have ~50K in stock

i am all equity/stock, i have nothing to fear with 30 years down the road till retirement
Huh?! You cashed out 15K of stock after a 10% decline, because you have 30 years of time and nothing to fear? Those seem mutually exclusive.
I cashed out TCEHY because i cant set a stop-loss for it

basically i sold all my TCEHY from IRA and brokerage account

MindTheGAAP
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Re: U.S. stocks in freefall

Post by MindTheGAAP » Fri Feb 09, 2018 10:24 am

MotoTrojan wrote:
Fri Feb 09, 2018 10:15 am
Woodlake wrote:
Fri Feb 09, 2018 10:13 am
29 here, just sold half IRA and 15K of stock today

still have ~50K in stock

i am all equity/stock, i have nothing to fear with 30 years down the road till retirement
Huh?! You cashed out 15K of stock after a 10% decline, because you have 30 years of time and nothing to fear? Those seem mutually exclusive.
Glad I wasn't the only one baffled by this
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute" - William Feather

ThriftyPhD
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Re: U.S. stocks in freefall

Post by ThriftyPhD » Fri Feb 09, 2018 10:41 am

boglewannabe wrote:
Fri Feb 09, 2018 9:58 am
I understand all BH points - buy/hold; can't time market; index only; diversify. But, my take on this whole market thing is - it's no different from Bitcoin. All I hear about is "concerns about..... made the market fall". But none of us BH's have "concerns". We just sit there and buy/hold and balance AA. However, we are at the mercy of hordes of crazy people and computers with their "concerns" that make the market go up and down for NO REASON, just like Bitcoin with a little less volatility. "Safety of bond funds" = NOT. PE ratios, companies that are solid - none of that matters any more. Just the whim of the crazies is what matters, so lets admit to ourselves that we are gamblers with our hard earned money in a big Atlantic City, with a little bit better odds!
I think of the stock/bond market as two factors. You have the signal, which in stocks is the earnings of companies, and in bonds is the interest the bond pays out. Then you have the noise. That's people trying to guess how the earnings of companies will change in the future, or how the interest rate will change in the future, and then using those guesses to pay more or less for stocks or bonds based on their assumed future outcomes. Stocks have a strong signal, but also a lot of noise. Bonds have a weaker signal, and weaker noise. But if you hold and balance for the long term, the noise averages out and the signal grows. So for a long term investor, the noise doesn't matter, just stay the course and trust the signal.

For bitcoin, there is no signal. There are no earnings, no interest payments, no value. The entire market is noise. It is people trying to guess what people in the future will be willing to pay for bitcoin, and buying today with the goal of selling to those assumed future buyers and that assumed future price.

There is a big difference between stocks/bonds and bitcoin.

azanon
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Re: U.S. stocks in freefall

Post by azanon » Fri Feb 09, 2018 10:46 am

Here it goes again. How low can we go..... how low can we go.... :beer

sreynard
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Re: U.S. stocks in freefall

Post by sreynard » Fri Feb 09, 2018 10:57 am

boglewannabe wrote:
Fri Feb 09, 2018 9:58 am
I understand all BH points - buy/hold; can't time market; index only; diversify. But, my take on this whole market thing is - it's no different from Bitcoin. All I hear about is "concerns about..... made the market fall". But none of us BH's have "concerns". We just sit there and buy/hold and balance AA. However, we are at the mercy of hordes of crazy people and computers with their "concerns" that make the market go up and down for NO REASON, just like Bitcoin with a little less volatility. "Safety of bond funds" = NOT. PE ratios, companies that are solid - none of that matters any more. Just the whim of the crazies is what matters, so lets admit to ourselves that we are gamblers with our hard earned money in a big Atlantic City, with a little bit better odds!
If you believe that the market is no different than Bitcoin, then I would suggest you don't actually understand investing. At all. :(

An analogy would be to say, "I can see through both, so air and water are the same." While some characteristics are the same or similar, they are fundamentally different from our point of view. If you breath one you live, the other you die. So not the same. Stocks and Bitcoins are just as fundamentally different. Now you do have a point that there isn't much difference between "investing" in Bitcoins and going to Atlantic City, though Atlantic City probably has substantially better odds....

How did you reach the conclusion that BH's don't have "concerns"? Of course they do, just as many as any other group of human beings. BH's know they will have "concerns" so they attempt to position their lives and portfolios so that those "concerns" do not cause them to take harmful actions. We are not at "the mercy of hordes of crazy people and computers". We acknowledge that they are there, take steps to insulate ourselves from their insanity, and then try to ignore them. Eventually they will calm down. For a while. No gambling is required.

RRAAYY3
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Re: U.S. stocks in freefall

Post by RRAAYY3 » Fri Feb 09, 2018 11:02 am

Wow if this keeps up I may be shifting from Int’l to US buying ...

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willthrill81
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Re: U.S. stocks in freefall

Post by willthrill81 » Fri Feb 09, 2018 11:04 am

ruralavalon wrote:
Fri Feb 09, 2018 9:56 am
Earl Lemongrab wrote:
Fri Feb 09, 2018 1:53 am
Engineer250 wrote:
Fri Feb 09, 2018 1:49 am
Earl Lemongrab wrote:
Fri Feb 09, 2018 1:18 am
willthrill81 wrote:
Thu Feb 08, 2018 7:26 pm


Yes, it makes my DW's and my decision to rapidly accelerate our mortgage schedule early seem a bit more attractive since that money would otherwise have gone into stocks.
That makes you lucky, not smart, at least for the time being. However, the money is still gone and not available for investing. If the market turns around resumes its climb, it won't look so great.
What would the alternative have been, cash on the sidelines? Waiting?
Of course not. Investing money to plan. Like any other time.
Maybe the plan was to have the mortgage paid off by the time of retirement, or by some other specified date.
Our plan was simply to pay off our mortgage as quickly as possible while still saving more than 15% of our gross income in tax-deferred accounts. We hope to be done with our mortgage in a couple of years; both my DW and I are very debt averse. And considering that our investments are very aggressive, I'm fine with 'playing it safe' by getting a guaranteed good rate of return by paying off our mortgage early, especially now that we will no longer be able to itemize our taxes to take advantage of the mortgage interest deduction.
“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

RRAAYY3
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Re: U.S. stocks in freefall

Post by RRAAYY3 » Fri Feb 09, 2018 11:05 am

willthrill81 wrote:
Fri Feb 09, 2018 11:04 am
ruralavalon wrote:
Fri Feb 09, 2018 9:56 am
Earl Lemongrab wrote:
Fri Feb 09, 2018 1:53 am
Engineer250 wrote:
Fri Feb 09, 2018 1:49 am
Earl Lemongrab wrote:
Fri Feb 09, 2018 1:18 am

That makes you lucky, not smart, at least for the time being. However, the money is still gone and not available for investing. If the market turns around resumes its climb, it won't look so great.
What would the alternative have been, cash on the sidelines? Waiting?
Of course not. Investing money to plan. Like any other time.
Maybe the plan was to have the mortgage paid off by the time of retirement, or by some other specified date.
Our plan was simply to pay off our mortgage as quickly as possible while still saving more than 15% of our gross income in tax-deferred accounts. We hope to be done with our mortgage in a couple of years; both my DW and I are very debt averse. And considering that our investments are very aggressive, I'm fine with 'playing it safe' by getting a guaranteed good rate of return by paying off our mortgage early, especially now that we will no longer be able to itemize our taxes to take advantage of the mortgage interest deduction.
As someone who hates debt, well done! I have no debt, it’s nice knowing every dollar I make is actually mine.

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HomerJ
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Re: U.S. stocks in freefall

Post by HomerJ » Fri Feb 09, 2018 11:08 am

selters wrote:
Fri Feb 09, 2018 2:48 am
HomerJ wrote:
Thu Feb 08, 2018 8:29 pm
selters wrote:
Thu Feb 08, 2018 6:19 pm
Haven't you been paying attention in the past lew years? Valuations are outdated. Bogleheads know that valuations don't matter, ever. At least that's the impression I have been getting from reading Bogleheads.com in the last few years.
No, Bogleheads know that valuations aren't actionable.

I hope you understand the difference.t
If global index funds were available in 1989, would it not be actionable to use valuations data from the Japanese stock market to choose to underweight Japan in one's portfolio?
This is the wrong thread for this discussion. It simply doesn't work the way you describe. Anyone who thinks valuations are actionable would have gotten out of Japan long before 1989. And they would have gotten out of the U.S. stock market in 1996, not 2000. Sure, you can look back now, and make pretty models that fit the past perfectly, but like someone else said, there is no bell that rings at the top.

People have been talking about high valuations, since 2013. When the S&P 500 was at 1500.

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triceratop
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Re: U.S. stocks in freefall

Post by triceratop » Fri Feb 09, 2018 12:08 pm

I sold bonds and bought US stocks today. I slightly overbalanced into equities, and the selloff in the last few minutes should put my allocation back into alignment. Funny how that works!
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

H-Town
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Re: U.S. stocks in freefall

Post by H-Town » Fri Feb 09, 2018 12:12 pm

This market keeps me busy... I'll TLH again today.

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TSquare
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Re: U.S. stocks in freefall

Post by TSquare » Fri Feb 09, 2018 12:12 pm

inbox788 wrote:
Thu Feb 08, 2018 1:33 pm
TSquare wrote:
Thu Feb 08, 2018 12:32 pm
Leif wrote:
Mon Feb 05, 2018 4:46 pm
TSquare wrote:
Mon Feb 05, 2018 3:34 pm
Dead cat bounce! Hang on folks!
Looks like the cat bounced about 3:15 ET today. But who knows, it may have 8 additional lives.
Please keep your arms and legs inside the ride vehicle at all times!
Chartists have wonder descriptions, but their predictive value is only 100% in hindsight. We are seeing what looks like a dead cat bounce, which has bearish implications.

https://www.investopedia.com/terms/d/deadcatbounce.asp

But this is really just the second bottom of a double bottom, which has bullish implications.

https://www.investopedia.com/terms/d/deadcatbounce.asp

So which is it? Anyone?
Is there such thing as a triple bottom?

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oldzey
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Re: U.S. stocks in freefall

Post by oldzey » Fri Feb 09, 2018 12:25 pm

Stay the course, HAL.

Image
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letsgobobby
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Re: U.S. stocks in freefall

Post by letsgobobby » Fri Feb 09, 2018 12:45 pm

I personally believe this selloff is the start of something big.

Either that, or we are close to the end of this selloff.

:P

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VictoriaF
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Re: U.S. stocks in freefall

Post by VictoriaF » Fri Feb 09, 2018 12:46 pm

letsgobobby wrote:
Fri Feb 09, 2018 12:45 pm
I personally believe this selloff is the start of something big.

Either that, or we are close to the end of this selloff.

:P
Or the end will be big.

Victoria
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Houe
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Re: U.S. stocks in freefall

Post by Houe » Fri Feb 09, 2018 12:52 pm

Dow accelerating downward. Off 400+ points. Could this turn into a black Friday?!?

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walletless
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Re: U.S. stocks in freefall

Post by walletless » Fri Feb 09, 2018 12:53 pm

VictoriaF wrote:
Fri Feb 09, 2018 12:46 pm
letsgobobby wrote:
Fri Feb 09, 2018 12:45 pm
I personally believe this selloff is the start of something big.

Either that, or we are close to the end of this selloff.

:P
Or the end will be big.

Victoria
I agree. Markets will either go up, down or sideways from here on!

H-Town
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Re: U.S. stocks in freefall

Post by H-Town » Fri Feb 09, 2018 1:14 pm

Houe wrote:
Fri Feb 09, 2018 12:52 pm
Dow accelerating downward. Off 400+ points. Could this turn into a black Friday?!?
It'd be nice. But circuit breakers are in place to prevent that.

lostdog
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Re: U.S. stocks in freefall

Post by lostdog » Fri Feb 09, 2018 1:15 pm

RRAAYY3 wrote:
Fri Feb 09, 2018 11:02 am
Wow if this keeps up I may be shifting from Int’l to US buying ...
You mean US is dropping faster than international.

bgf
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Re: U.S. stocks in freefall

Post by bgf » Fri Feb 09, 2018 1:23 pm

Woodlake wrote:
Fri Feb 09, 2018 10:23 am
MotoTrojan wrote:
Fri Feb 09, 2018 10:15 am
Woodlake wrote:
Fri Feb 09, 2018 10:13 am
29 here, just sold half IRA and 15K of stock today

still have ~50K in stock

i am all equity/stock, i have nothing to fear with 30 years down the road till retirement
Huh?! You cashed out 15K of stock after a 10% decline, because you have 30 years of time and nothing to fear? Those seem mutually exclusive.
I cashed out TCEHY because i cant set a stop-loss for it

basically i sold all my TCEHY from IRA and brokerage account
keeping stop losses on your holdings can be quite risky. in times of rapid price dislocation for whatever reason, you can be stuck with shares sold at low prices that immediately rebounded.

during the quant meltdown, for brief moments, i think Accenture traded for pennies... after the fact, people were only reimbursed for losses in excess of 60%. if your trade was executed for a loss of 59%, you were stuck with it.

you might have already known this, just thought Id mention it.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

Crisium
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Re: U.S. stocks in freefall

Post by Crisium » Fri Feb 09, 2018 1:25 pm

I feel more comfortable now than it was going up like mad in January. Accumulation phase.

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DaftInvestor
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Re: U.S. stocks in freefall

Post by DaftInvestor » Fri Feb 09, 2018 1:27 pm

Funny how the media and folks here are all acting like this is a major event eroding all our portfolios. I suppose its because its the first minor correction that we've seen in a while.
All indexes are still much higher than they were this time last year. That said - I'm still trading some bonds for stocks today in order to re-balance a bit.

mrx
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Re: U.S. stocks in freefall

Post by mrx » Fri Feb 09, 2018 1:30 pm

Crisium wrote:
Fri Feb 09, 2018 1:25 pm
I feel more comfortable now than it was going up like mad in January. Accumulation phase.
+1. Although it makes me sad watching my portfolio shrinks for the first time ever since I started investing couple years ago. I am less worried about what happens now compared to January's madness.

foamypirate
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Re: U.S. stocks in freefall

Post by foamypirate » Fri Feb 09, 2018 1:31 pm

I had a hard time holding to my IPS today, though not for the usual reasons. I'm currently topping up my emergency fund to the 6 month level, and it was REALLY hard to put this weeks contribution into Prime Money Market, instead of buying stocks! :D

Crisium
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Re: U.S. stocks in freefall

Post by Crisium » Fri Feb 09, 2018 1:38 pm

mrx wrote:
Fri Feb 09, 2018 1:30 pm
Crisium wrote:
Fri Feb 09, 2018 1:25 pm
I feel more comfortable now than it was going up like mad in January. Accumulation phase.
+1. Although it makes me sad watching my portfolio shrinks for the first time ever since I started investing couple years ago. I am less worried about what happens now compared to January's madness.
I really only started in 2016, but I had a tiny bit invested from earlier that I saw go through the late 2015 / early 2016 correction and remember being worried. Not anymore, read enough BHs to be satisfied with knowing this is normal, and probably good for early accumulators.
Last edited by Crisium on Fri Feb 09, 2018 1:39 pm, edited 1 time in total.

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AnalogKid22
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Re: U.S. stocks in freefall

Post by AnalogKid22 » Fri Feb 09, 2018 1:39 pm

DaftInvestor wrote:
Fri Feb 09, 2018 1:27 pm
Funny how the media and folks here are all acting like this is a major event eroding all our portfolios. I suppose its because its the first minor correction that we've seen in a while.
All indexes are still much higher than they were this time last year. That said - I'm still trading some bonds for stocks today in order to re-balance a bit.
As they always do, the media is using fear to attract eyeballs and clicks. They don't report that the market is up, only that it has dropped a lot from its record highs, which scares investors into thinking the US economy is tanking, which couldn't be further from the truth.

US business has piles of money, there are tons of jobs (employees quitting to take better employment and higher wages), lowest unemployment in years, and yet investor confidence is plummeting as they pull money out of stocks. Threats of rising rates are only threats until the Fed actually raises them, which might not happen for years. There is also the fear of missing out (FOMO) crowd who got in late, poured in a lot of cash, only to watch it drop a few weeks later and now they're pulling out and taking their losses.

RRAAYY3
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Re: U.S. stocks in freefall

Post by RRAAYY3 » Fri Feb 09, 2018 1:42 pm

AnalogKid22 wrote:
Fri Feb 09, 2018 1:39 pm
DaftInvestor wrote:
Fri Feb 09, 2018 1:27 pm
Funny how the media and folks here are all acting like this is a major event eroding all our portfolios. I suppose its because its the first minor correction that we've seen in a while.
All indexes are still much higher than they were this time last year. That said - I'm still trading some bonds for stocks today in order to re-balance a bit.
As they always do, the media is using fear to attract eyeballs and clicks. They don't report that the market is up, only that it has dropped a lot from its record highs, which scares investors into thinking the US economy is tanking, which couldn't be further from the truth.

US business has piles of money, there are tons of jobs (employees quitting to take better employment and higher wages), lowest unemployment in years, and yet investor confidence is plummeting as they pull money out of stocks. Threats of rising rates are only threats until the Fed actually raises them, which might not happen for years. There is also the fear of missing out (FOMO) crowd who got in late, poured in a lot of cash, only to watch it drop a few weeks later and now they're pulling out and taking their losses.
Amen. My only current anxiety has to do with the fact that I’ve lowered my e-fund to 6 months expenses rather than 12 so I could buy even more

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Re: U.S. stocks in freefall

Post by adamsapple19 » Fri Feb 09, 2018 1:43 pm

Crisium wrote:
Fri Feb 09, 2018 1:25 pm
I feel more comfortable now than it was going up like mad in January. Accumulation phase.
Agreed. This seems to be the sentiment with those of us in this category.

Whether this is "just a correction" or whatever it is, a level of comfort has returned finally seeing some volatility.

Having said that, something new has kind of taken its place .. this sense of unease regarding the rapid descent. I know we're blaming that on computers at the moment (and that may well be) but it's a little unnerving knowing that going forward in the many years of accumulation we have that the algorithmic takeover of trading can (at a minimum) be the catalyst for such rapid swings.

Technology may have evolved to bring us to this point in the markets but human sentiment (and potential subsequent behavior) certainly has not.

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Johnnie
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Re: U.S. stocks in freefall

Post by Johnnie » Fri Feb 09, 2018 1:56 pm

I'm lucky but feel like a genius: My plan calls for annual rebalancing in February. But I decided that with a very high profile event happening in a very dicey corner of the world in February I would advance that to the last full week of January.

Been feeling smug about it since the first big decline a couple days later. :beer

I'll shut up and go away now. :twisted:
"I know nothing."

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Re: U.S. stocks in freefall

Post by saltycaper » Fri Feb 09, 2018 1:59 pm

HomerJ wrote:
Fri Feb 09, 2018 11:08 am

Anyone who thinks valuations are actionable would have gotten out of Japan long before 1989. And they would have gotten out of the U.S. stock market in 1996, not 2000.
Not necessarily. People use valuations as just one piece of information. There's differences of degree too.
Quod vitae sectabor iter?

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saltycaper
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Re: U.S. stocks in freefall

Post by saltycaper » Fri Feb 09, 2018 2:01 pm

El Greco wrote:
Thu Feb 08, 2018 5:30 pm
I'm hearing a lot of whistling past the graveyard here.
"Hell of a grave. Wish it were mine." --Royal Tenenbaum
Quod vitae sectabor iter?

MotoTrojan
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Re: U.S. stocks in freefall

Post by MotoTrojan » Fri Feb 09, 2018 2:03 pm

Woodlake wrote:
Fri Feb 09, 2018 10:23 am
MotoTrojan wrote:
Fri Feb 09, 2018 10:15 am
Woodlake wrote:
Fri Feb 09, 2018 10:13 am
29 here, just sold half IRA and 15K of stock today

still have ~50K in stock

i am all equity/stock, i have nothing to fear with 30 years down the road till retirement
Huh?! You cashed out 15K of stock after a 10% decline, because you have 30 years of time and nothing to fear? Those seem mutually exclusive.
I cashed out TCEHY because i cant set a stop-loss for it

basically i sold all my TCEHY from IRA and brokerage account
Hmm, a high-beta stock that is down more than 18% since the peak. Still not sure how this aligns with your 30 year, no fear statement, but if you now realized that buying individual stocks is risky and invested it in a broad index, then maybe it was a cheap lesson.

mchop
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Re: U.S. stocks in freefall

Post by mchop » Fri Feb 09, 2018 2:05 pm

Michael Batnick (the irrelevant investor) Feb 6th:-

If you weren’t worried this morning you don’t own enough stocks.

If you were nervous this morning, congratulations, you’re a human being. But if you weren’t nervous, kudos, you’ve earned the right to take a little more risk.

TravelforFun
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Re: U.S. stocks in freefall

Post by TravelforFun » Fri Feb 09, 2018 2:07 pm

triceratop wrote:
Fri Feb 09, 2018 12:08 pm
I sold bonds and bought US stocks today. I slightly overbalanced into equities, and the selloff in the last few minutes should put my allocation back into alignment. Funny how that works!
We're in the correction phase and on the average, it would take 4 months for the slide to stop. May not be a good time to buy right now.

TravelforFun

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HomerJ
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Re: U.S. stocks in freefall

Post by HomerJ » Fri Feb 09, 2018 2:10 pm

saltycaper wrote:
Fri Feb 09, 2018 1:59 pm
HomerJ wrote:
Fri Feb 09, 2018 11:08 am

Anyone who thinks valuations are actionable would have gotten out of Japan long before 1989. And they would have gotten out of the U.S. stock market in 1996, not 2000.
Not necessarily. People use valuations as just one piece of information. There's differences of degree too.
Point taken.

Sounds complicated though. The more variables you add into the mix, the harder it is to get it right.

MotoTrojan
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Re: U.S. stocks in freefall

Post by MotoTrojan » Fri Feb 09, 2018 2:11 pm

HomerJ wrote:
Fri Feb 09, 2018 2:10 pm
saltycaper wrote:
Fri Feb 09, 2018 1:59 pm
HomerJ wrote:
Fri Feb 09, 2018 11:08 am

Anyone who thinks valuations are actionable would have gotten out of Japan long before 1989. And they would have gotten out of the U.S. stock market in 1996, not 2000.
Not necessarily. People use valuations as just one piece of information. There's differences of degree too.
Point taken.

Sounds complicated though. The more variables you add into the mix, the harder it is to get it right.
1996 is the most interesting one for me, as you would've come out on-top had you just stayed in the market, rather than pulling out in 96.

H-Town
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Re: U.S. stocks in freefall

Post by H-Town » Fri Feb 09, 2018 2:13 pm

HomerJ wrote:
Fri Feb 09, 2018 11:08 am
selters wrote:
Fri Feb 09, 2018 2:48 am
HomerJ wrote:
Thu Feb 08, 2018 8:29 pm
selters wrote:
Thu Feb 08, 2018 6:19 pm
Haven't you been paying attention in the past lew years? Valuations are outdated. Bogleheads know that valuations don't matter, ever. At least that's the impression I have been getting from reading Bogleheads.com in the last few years.
No, Bogleheads know that valuations aren't actionable.

I hope you understand the difference.t
If global index funds were available in 1989, would it not be actionable to use valuations data from the Japanese stock market to choose to underweight Japan in one's portfolio?
This is the wrong thread for this discussion. It simply doesn't work the way you describe. Anyone who thinks valuations are actionable would have gotten out of Japan long before 1989. And they would have gotten out of the U.S. stock market in 1996, not 2000. Sure, you can look back now, and make pretty models that fit the past perfectly, but like someone else said, there is no bell that rings at the top.

People have been talking about high valuations, since 2013. When the S&P 500 was at 1500.
Valuation is actionable in my situation because I have to adjust my expectations for the long-term growth. I have been increasing my saving rates and lower my expectations during this bull markets. Does that make sense?

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jainn
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Re: U.S. stocks in freefall

Post by jainn » Fri Feb 09, 2018 2:14 pm

MotoTrojan wrote:
Fri Feb 09, 2018 2:03 pm
Woodlake wrote:
Fri Feb 09, 2018 10:23 am
MotoTrojan wrote:
Fri Feb 09, 2018 10:15 am
Woodlake wrote:
Fri Feb 09, 2018 10:13 am
29 here, just sold half IRA and 15K of stock today

still have ~50K in stock

i am all equity/stock, i have nothing to fear with 30 years down the road till retirement
Huh?! You cashed out 15K of stock after a 10% decline, because you have 30 years of time and nothing to fear? Those seem mutually exclusive.
I cashed out TCEHY because i cant set a stop-loss for it

basically i sold all my TCEHY from IRA and brokerage account
Hmm, a high-beta stock that is down more than 18% since the peak. Still not sure how this aligns with your 30 year, no fear statement, but if you now realized that buying individual stocks is risky and invested it in a broad index, then maybe it was a cheap lesson.
18% is nothing...look at this list of sp500 companies down as much as 60% below 52week highs.

https://www.cnbc.com/2018/02/09/nearly- ... arket.html

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Re: U.S. stocks in freefall

Post by RRAAYY3 » Fri Feb 09, 2018 2:16 pm

Fees, savings rate - that’s all I can control and it’s all I worry about

The stock market is nothing but a bunch of BS that if you have the stomach for will make you money over time

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saltycaper
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Re: U.S. stocks in freefall

Post by saltycaper » Fri Feb 09, 2018 2:21 pm

RRAAYY3 wrote:
Fri Feb 09, 2018 2:16 pm
Fees, savings rate - that’s all I can control and it’s all I worry about

The stock market is nothing but a bunch of BS that if you have the stomach for will make you money over time
It can be frustrating, but don't forget there are real companies with real earnings that are used to pay dividends, or buyback shares, or entice other investors to buy shares, or entice companies with mergers and acquisitions, all of which means $$$ for you. On the other hand, there is no guarantee you will make money over any particular time period, even a "long" one.
Quod vitae sectabor iter?

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Re: U.S. stocks in freefall

Post by triceratop » Fri Feb 09, 2018 2:21 pm

TravelforFun wrote:
Fri Feb 09, 2018 2:07 pm
triceratop wrote:
Fri Feb 09, 2018 12:08 pm
I sold bonds and bought US stocks today. I slightly overbalanced into equities, and the selloff in the last few minutes should put my allocation back into alignment. Funny how that works!
We're in the correction phase and on the average, it would take 4 months for the slide to stop. May not be a good time to buy right now.

TravelforFun
That sounds like market timing to me, not rebalancing to one's allocation and Investment Plan.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: U.S. stocks in freefall

Post by inbox788 » Fri Feb 09, 2018 2:29 pm

TSquare wrote:
Fri Feb 09, 2018 12:12 pm
Is there such thing as a triple bottom?
Yup!

https://www.investopedia.com/terms/t/triplebottom.asp

But maybe we're forming a complex reverse head and shoulder bottom ( http://thepatternsite.com/chsb.html ).

You can probably find a pattern for whatever you're looking for, and it might make perfect sense after the fact, but I've been unable to make heads or tails about their predictive value. But some folks swear by them.

http://samuelssonsrapport.se/wp-content ... fgfgfg.png
https://i.pinimg.com/originals/e5/29/94 ... 65d124.png

RRAAYY3
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Re: U.S. stocks in freefall

Post by RRAAYY3 » Fri Feb 09, 2018 2:37 pm

saltycaper wrote:
Fri Feb 09, 2018 2:21 pm
RRAAYY3 wrote:
Fri Feb 09, 2018 2:16 pm
Fees, savings rate - that’s all I can control and it’s all I worry about

The stock market is nothing but a bunch of BS that if you have the stomach for will make you money over time
It can be frustrating, but don't forget there are real companies with real earnings that are used to pay dividends, or buyback shares, or entice other investors to buy shares, or entice companies with mergers and acquisitions, all of which means $$$ for you. On the other hand, there is no guarantee you will make money over any particular time period, even a "long" one.
if i'm invested in total us/int'l and i don't make money long term, there's bigger issues than my asset allocation.

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digarei
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Re: U.S. stocks in freefall

Post by digarei » Fri Feb 09, 2018 2:41 pm

RRAAYY3 wrote:
Fri Feb 09, 2018 1:42 pm

... My only current anxiety has to do with the fact that I’ve lowered my e-fund to 6 months expenses rather than 12 so I could buy even more
Listen to yourself. There’s a good chance that you’d be fine and richer in the long run by entirely dissolving your emergency fund and putting it all into stocks. However, you established that emergency fund for a reason—self-insurance against unexpected loss of income and/or large expenses. You could now decide that 6 months is more than sufficient. Or that even six months is too much.

Best to make that decision before the market dips further.
Last edited by digarei on Fri Feb 09, 2018 2:47 pm, edited 1 time in total.
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Re: U.S. stocks in freefall

Post by GoldenFinch » Fri Feb 09, 2018 2:42 pm

digarei wrote:
Thu Feb 08, 2018 9:07 pm
Solair of Astora wrote:
Thu Feb 08, 2018 7:07 pm
The loose change in my sweep account was enough to buy a single share of VT today. I bought it.

As I read this thread, I imagine myself sitting on my front porch sipping a half tea half lemonade drink rocking back and forth watching the thread. Based off of the tone of the thread, there are people in the street and there are a few folks hooping, hollering and gesticulating wildly, but generally speaking it's a peaceful affair. I'm going to keep doing what I was doing until people start fainting in the flower beds.

“I'm going to keep doing what I was doing until people start fainting in the flower beds.”

Yes, sounds good. Then what? :mrgreen:
Thank you for the laugh and this imagery!

If I ever have to faint in reaction to the stock market, I am going to look around for a flower bed first! Maybe I’ll even wear my best dress and faint very slowly (to up the dramatic impact while reducing any damage to myself and the flowers).
Last edited by GoldenFinch on Fri Feb 09, 2018 2:43 pm, edited 1 time in total.

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AnalogKid22
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Re: U.S. stocks in freefall

Post by AnalogKid22 » Fri Feb 09, 2018 2:42 pm

RRAAYY3 wrote:
Fri Feb 09, 2018 2:16 pm
Fees, savings rate - that’s all I can control and it’s all I worry about

The stock market is nothing but a bunch of BS that if you have the stomach for will make you money over time
I think this is part of the reason many investors use advisors, so they aren't involved in the day-to-day. They pay someone else to worry about it. They just make regular contributions and check their statement, whether monthly, quarterly or annually. Advisors aren't for me though.

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Re: U.S. stocks in freefall

Post by saltycaper » Fri Feb 09, 2018 2:45 pm

RRAAYY3 wrote:
Fri Feb 09, 2018 2:37 pm

if i'm invested in total us/int'l and i don't make money long term, there's bigger issues than my asset allocation.
True, but that doesn't mean you can throw your hands up and forget about it. I'm not talking Armageddon. There's a decent chance the world will still be going on and you'll be around and left to deal with the outcome. In such a scenario, you'll still probably prefer to have more money than to have less money.
Quod vitae sectabor iter?

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Re: U.S. stocks in freefall

Post by Earl Lemongrab » Fri Feb 09, 2018 2:51 pm

A buddy of mine also retired from Megacorp, but he was a VP. He had lots of company stock, although a relatively minor portion of his total. Megacorp stock doubled in the past year, for whatever reason, and he has been divesting his holdings. He put a stop-loss on a portion of it, which triggered one of these past days. That was fine with him, as he doesn't have any plans to buy it back.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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