U.S. stocks in free fall

[princetontiger]

It is interesting to see how freaked out people can get just from the interest rate of the 10y hitting the 3% level.

When I bought my first home I never dreamt of an interest rate that low.

Well said. My parents had an 18% mortgage in 1982.

[sketchy9]

Hello darkness my old friend...I wonder if today is a harbinger of sustained losses or more of the same volatility that we've been dealing with this whole year? My IRR (prior to today) was essentially zero for the year on a 70/30 allocation, but I feel like we've had several days of heavy losses (combined with several of heavy gains). It makes the market interesting to read about, at least.

[Faisal]

Been busy with real life for the past month so really haven't visited or paid attention to the market. Seems that even after the "correction" the market has been bouncing around the 23k-24k mark.

Is this because of global geo-politicla turmoil or is it because of market fundamentals? Any opinion is welcome. Just trying to gauge what all the fuss is about.

[livesoft]

Been busy with real life for the past month so really haven't visited or paid attention to the market. Seems that even after the "correction" the market has been bouncing around the 23k-24k mark.

Is this because of global geo-politicla turmoil or is it because of market fundamentals? Any opinion is welcome. Just trying to gauge what all the fuss is about.

Probably for today, it is because 10-year Treasuries now yield above 3%.

Do they now yield above 3% because of turmoil or fundamentals? Yes.

[ruralavalon]

Been busy with real life for the past month so really haven't visited or paid attention to the market. Seems that even after the "correction" the market has been bouncing around the 23k-24k mark.

Is this because of global geo-politicla turmoil or is it because of market fundamentals? Any opinion is welcome. Just trying to gauge what all the fuss is about.

I have no idea.

[gmaynardkrebs]

The buy on the dips mentality is so firmly rooted, that I am sure this will be reversed soon.

[limeyx]

It is still early, but if I had my druthers, I think I would have preferred to be out of this market for THIS ONE DAY.

And undoubtedly more to come. If only I knew which ones they were ...

Its the days with all the red numbers....

[Doom&Gloom]

The buy on the dips mentality is so firmly rooted, that I am sure this will be reversed soon.

What goes down must go up.

Seems to happen more quickly these days than in the past. Will that continue to be the case? I have no idea.

[deltaneutral83]

Been busy with real life for the past month so really haven't visited or paid attention to the market. Seems that even after the "correction" the market has been bouncing around the 23k-24k mark.

Is this because of global geo-politicla turmoil or is it because of market fundamentals? Any opinion is welcome. Just trying to gauge what all the fuss is about.

The speculation component of a stock price (in addition to those pesky aspects like earnings and dividends) is strong over a month or two so you're guess is literally as good as the guys on CNBC. Over 30 years, speculation is nearly nil in the makeup of the market.

[Moochy]

Been busy with real life for the past month so really haven't visited or paid attention to the market. Seems that even after the "correction" the market has been bouncing around the 23k-24k mark.

Is this because of global geo-politicla turmoil or is it because of market fundamentals? Any opinion is welcome. Just trying to gauge what all the fuss is about.

It's not the ten year hitting the "3%" mark, it's the flattening of the yield curve and the spread between ten and thirty year bonds. That is signalling the economy is slowing down and we probably have hit peak earnings. The market is a forward looking mechanism.

[Alan S.]

Funny, a week ago Wall St was all stressed out about the flattening yield curve and it's possible indicator of a recession.

The yield curve is now steeper after today's activity, more so than in recent weeks. So Wall St should now be happy. Or not.

[cfs]

. . . It's not the ten year hitting the "3%" mark, it's the flattening of the yield curve and the spread between ten and thirty year bonds. That is signalling the economy is slowing down and we probably have hit peak earnings. The market is a forward looking mechanism . . .

Welcome aboard, your first post! Thanks for your contribution and please come back again, y gracias por leer ~cfs~

[Pelerus]

The buy on the dips mentality is so firmly rooted, that I am sure this will be reversed soon.

That is the implicit short volatility trade. It will prevail until it doesn’t. The explicit short volatility trade already blew up in February. Implicit may be next. When and if that happens, “buy the dip” becomes “sell the rip.”

Funny, a week ago Wall St was all stressed out about the flattening yield curve and it's possible indicator of a recession.

The yield curve is now steeper after today's activity, more so than in recent weeks. So Wall St should now be happy. Or not.

“All news is bad news” is the other side of the coin to the “all news is good news” mentality that dominated last year, and not inherently any more or less rational. As a sentiment indicator, it has its own value.

[motorcyclesarecool]

Sorry, my bad. As the penultimate chapter of my pursuit of a brokerage transfer bonus, I threw a cash lump sum into two different total stock market ETFs yesterday. My TSP contribution should have hit yesterday, too. Double whammy. I promise to sit tight for a few days.

[Slothmeister]

With the stock market doing jumping jacks, the housing market once again appears to be getting hot for sellers and more difficult for buyers.

[ReformedSpender]

With the stock market doing jumping jacks, the housing market once again appears to be getting hot for sellers and more difficult for buyers.

Location matters but overall, agree.

[ruralavalon]

Welcome to the forum .

Been busy with real life for the past month so really haven't visited or paid attention to the market. Seems that even after the "correction" the market has been bouncing around the 23k-24k mark.

Is this because of global geo-politicla turmoil or is it because of market fundamentals? Any opinion is welcome. Just trying to gauge what all the fuss is about.

It's not the ten year hitting the "3%" mark, it's the flattening of the yield curve and the spread between ten and thirty year bonds. That is signalling the economy is slowing down and we probably have hit peak earnings. The market is a forward looking mechanism.

[Faisal]

Thank you all for your comments. They have been helpful.

[Glockenspiel]

It is interesting to see how freaked out people can get just from the interest rate of the 10y hitting the 3% level.

When I bought my first home I never dreamt of an interest rate that low.

Well said. My parents had an 18% mortgage in 1982.

I refinanced my mortgage to a 2.50% 15-year loan in November 2012, and I doubt I'll ever see a rate that low again.

[lazydavid]

I refinanced my mortgage to a 2.50% 15-year loan in November 2012, and I doubt I'll ever see a rate that low again.

Refinanced to the same rate/term in July of 2016, so you could have seen it at least one more time... They're up to 4% now, so I agree with you that they're not coming back anytime soon.

[ImUrHuckleberry]

Now I feel like I got ripped off on my 2.95% 15-year term in 2012.

[ruralavalon]

It is interesting to see how freaked out people can get just from the interest rate of the 10y hitting the 3% level.

When I bought my first home I never dreamt of an interest rate that low.

Well said. My parents had an 18% mortgage in 1982.

When we bought a home at that time we were thrilled to be able to assume a mortgage with an 8.75% interest rate.

[willthrill81]

It is interesting to see how freaked out people can get just from the interest rate of the 10y hitting the 3% level.

When I bought my first home I never dreamt of an interest rate that low.

Well said. My parents had an 18% mortgage in 1982.

I refinanced my mortgage to a 2.50% 15-year loan in November 2012, and I doubt I'll ever see a rate that low again.

We too got a 2.5% 15 year mortgage in June, 2013. And I too doubt that we'll personally live to see rates that low again, but we might.

[david1082b]

PS you just don't want to be out of this thread for ONE DAY

[nisiprius]

With the stock market doing jumping jacks, the housing market once again appears to be getting hot for sellers and more difficult for buyers.

Ah, so that's why we're seeing article titles like this:

Dogen, who just last month wrote about how “real estate will always be more desirable than stocks,” flipped the script this week and listed several ways, in addition to the lure of better profits, that stocks are the better choice.

[cfs]

The Running of the Bulls

Back from my LUng Distance workout, just to find out that yes, they are running . . . see I told you so, you just don't want to be out of this market for ONE day!

Good luck y gracias por leer / cfs

[roymeo]

Is this now a running commentary?

[perl]

cfs, can you please stop posting the same thing over and over?

[cfs]

cfs, can you please stop posting the same thing over and over?

Thank you for the note, y gracias por leer / cfs

[GoldenFinch]

cfs, can you please stop posting the same thing over and over?

Thank you for the note, y gracias por leer / cfs

I actually like it. It’s a bit more enthusiastic than ‘stay the course.’ The words “stay the course” are steadying and serious and imply mastering a controlled unemotional state while staying focused on the mapped route and the destination. Although we all agree with the sentiment, sometimes you have to add a little spice to things to make them more interesting. Cfs is saying the same thing with a bit more generosity of emotion. Included in the words of encouragement are a ‘joie de vivre’ and the same clear message to not touch your money. It actually makes Bogleheads less repetitive!


Also, I just want to remind everyone that I’m pretty sure the main point of this thread, aside from collective hand holding during market volatility (very important), is to remind ourselves and each other to stay the course and that we really “don’t want to be out of this market for even just ONE day!”

[Dasnyc]

cfs, can you please stop posting the same thing over and over?

Thank you for the note, y gracias por leer / cfs

The repetitive posting is annoying to me as well...

[cfs]

cfs, can you please stop posting the same thing over and over?

Thank you for the note, y gracias por leer / cfs

I actually like it. It’s a bit more enthusiastic than ‘stay the course.’ The words “stay the course” are steadying and serious and imply mastering a controlled unemotional state while staying focused on the mapped route and the destination. Although we all agree with the sentiment, sometimes you have to add a little spice to things to make them more interesting. Cfs is saying the same thing with a bit more generosity of emotion. Included in the words of encouragement are a ‘joie de vivre’ and the same clear message to not touch your money. It actually makes Bogleheads less repetitive!


Also, I just want to remind everyone that I’m pretty sure the main point of this thread, aside from collective hand holding during market volatility (very important), is to remind ourselves and each other to stay the course and that we really “don’t want to be out of this market for even just ONE day!”

Thank you, y gracias por leer / cfs

[cfs]

cfs, can you please stop posting the same thing over and over?

Thank you for the note, y gracias por leer / cfs

The repetitive posting is annoying to me as well...

Thank you, y gracias por leer / cfs

[david1082b]

cfs, can you please stop posting the same thing over and over?

Thank you for the note, y gracias por leer / cfs

The repetitive posting is annoying to me as well...

Many of the other posts on here are pretty repetitive - on days when stocks are up people ironically post "what freefall?" When stocks are down a tiny amount people go "OMG what a terrible freefall, however will I sleep tonight?" On a Really Bad Day there will be "nice, i've been waiting for this type of day for ages! Time to get some bargains with the cash I've piled up."

The original context of the thread has been lost to history. 2011 was a different time. The mockery that is often poured on the opening poster is not particularly great imo and adds to the repetitive circus atmosphere.

[MichaelRpdx]

Is the freefall here yet?
Part of my retirement planning was a big drop at some point. This wimpy recent volatility doesn't seem like a big deal. I'd be happy to be wrong.

[rudeboy]

I find cfs's repetitive posts to be endearing.

[cfs]

I find cfs's repetitive posts to be endearing.

Thanks for the note.

break
break

I just came back from my daily LUng Distance workout, today taking an extremely hilly course carrying my Camino-Ready-Backpack (I carry my Camino-Ready-Backpack on every single workout), long live the really important things in my Active Retirement Life!

Gracias por leer ~cfs~

[LadyGeek]

Let's avoid repetition and stay focused.

Please stay on-topic, which is to provide comments relevant to current market activity.

[sergeant]

cfs, can you please stop posting the same thing over and over?

Thank you for the note, y gracias por leer / cfs

The repetitive posting is annoying to me as well...

Many of the other posts on here are pretty repetitive - on days when stocks are up people ironically post "what freefall?" When stocks are down a tiny amount people go "OMG what a terrible freefall, however will I sleep tonight?" On a Really Bad Day there will be "nice, i've been waiting for this type of day for ages! Time to get some bargains with the cash I've piled up."

The original context of the thread has been lost to history. 2011 was a different time. The mockery that is often poured on the opening poster is not particularly great imo and adds to the repetitive circus atmosphere.

The true meaning of this post will return when a real correction happens. It's coming, I don't know when but it will happen. Then we will see posts from people that are frightened and confused. It's coming...

[gmaynardkrebs]

cfs, can you please stop posting the same thing over and over?

Thank you for the note, y gracias por leer / cfs

The repetitive posting is annoying to me as well...

Many of the other posts on here are pretty repetitive - on days when stocks are up people ironically post "what freefall?" When stocks are down a tiny amount people go "OMG what a terrible freefall, however will I sleep tonight?" On a Really Bad Day there will be "nice, i've been waiting for this type of day for ages! Time to get some bargains with the cash I've piled up."

The original context of the thread has been lost to history. 2011 was a different time. The mockery that is often poured on the opening poster is not particularly great imo and adds to the repetitive circus atmosphere.

The true meaning of this post will return when a real correction happens. It's coming, I don't know when but it will happen. Then we will see posts from people that are frightened and confused. It's coming...

How panicky will investors be after what happened after 20008? I think, very little. Unpleasant yes; sell? No.

[ReformedSpender]

Thank you for the note, y gracias por leer / cfs

The repetitive posting is annoying to me as well...

Many of the other posts on here are pretty repetitive - on days when stocks are up people ironically post "what freefall?" When stocks are down a tiny amount people go "OMG what a terrible freefall, however will I sleep tonight?" On a Really Bad Day there will be "nice, i've been waiting for this type of day for ages! Time to get some bargains with the cash I've piled up."

The original context of the thread has been lost to history. 2011 was a different time. The mockery that is often poured on the opening poster is not particularly great imo and adds to the repetitive circus atmosphere.

The true meaning of this post will return when a real correction happens. It's coming, I don't know when but it will happen. Then we will see posts from people that are frightened and confused. It's coming...

How panicky will investors be after what happened after 20008? I think, very little. Unpleasant yes; sell? No.

Same argument could have been made during 2008 after 2001. Or 2001 after 1987.

We must not forget there are years worth of 'new investors' since the financial crisis that have never experienced a true crash theoretically. History has a tendency to repeat itself imo

[UpperNwGuy]

There's been one heckuva a lot of volatility recently compared to the smooth upward flow of the last two years. The S&P 500 index closed yesterday at about the same level as it did on Dec 15, 2017, so all those ups and downs in the last four and a half months have been like running in place: lots of energy expended with no real progress.

[pokebowl]

[edit] Double posted.

[pokebowl]

How panicky will investors be after what happened after 20008? I think, very little. Unpleasant yes; sell? No.

John Titor is that you?

On a serious note, while I do not see this community panicking as much, some of the other communities I frequent may not fair so well. We've been in a fairly consistent bull market since '08. You could say those that have entered the game since that time a decade ago, have only known stock volatility as relatively mundane, or worth the risk to over-leverage on. Such is the case with every crash, time heals all wounds and lessons will be learned again and again. Even during the February event, there were more panic postings here than I initially thought I would see over such a minor correction.

[Clever_Username]

We must not forget there are years worth of 'new investors' since the financial crisis that have never experienced a true crash theoretically. History has a tendency to repeat itself imo

As one of those new investors (I had low four figures invested in 2008 and I'm not sure I knew how to even check the balances or change anything), I find every comment in this thread informative to some degree.

[kappy]

so all those ups and downs in the last four and a half months have been like running in place: lots of energy expended with no real progress.

It let me TLH so there was a small amount of progress for me.

[UpperNwGuy]

Even during the February event, there were more panic postings here than I initially thought I would see over such a minor correction.

Those panic postings surprised me, too. Even more surprising was the number of posts from folks who were dismayed that Total Bond had lost value.

[willthrill81]

Even during the February event, there were more panic postings here than I initially thought I would see over such a minor correction.

Those panic postings surprised me, too. Even more surprising was the number of posts from folks who were dismayed that Total Bond had lost value.

It goes to show how much recency bias plays into our perceptions. Even John Bogle was proclaiming that he'd never seen anything like it, which was preposterous.

I don't see why people think that bonds are 'safe' from drawdowns and volatility; it's probably another case of recency bias. From 1977 to 1981, intermediate term Treasuries had a real drawdown of -32.5%.

[gmaynardkrebs]

I don't see why people think that bonds are 'safe' from drawdowns and volatility; it's probably another case of recency bias. From 1977 to 1981, intermediate term Treasuries had a real drawdown of -32.5%.

Do you mean a real decline of 32.5%?

[willthrill81]

I don't see why people think that bonds are 'safe' from drawdowns and volatility; it's probably another case of recency bias. From 1977 to 1981, intermediate term Treasuries had a real drawdown of -32.5%.

Do you mean a real decline of 32.5%?

Yes. By real drawdown, I mean peak to trough decline in real dollars.