U.S. stocks in free fall
Re: U.S. stocks in freefall
+108livesoft wrote:More importantly, the Cubs won the World Series.
Re: U.S. stocks in freefall
I would like to thank the Brexit blip for preparing me for this moment.
Re: U.S. stocks in freefall
+1cpw84 wrote:I would like to thank the Brexit blip for preparing me for this moment.
Stocks-80% || Bonds-20% || VTI/VXUS/AOR
Re: U.S. stocks in freefall
Unless the 5% Govt Bonds comes with 10% inflation.Bongleur wrote:What this country needs is a good 5% Govt Bond. I could live on 5% Govt Bonds.
- EternalOptimist
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Re: U.S. stocks in freefall
How is thread still open....it is not actionable and has become political.
"When nothing goes right....go left"
Re: U.S. stocks in freefall
I love this thread. Every time my husband is worried about the stock market, I say, "Let's go see if the Bogleheads have bumped the Freefall thread." And there it is. Calms him down every time.
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Re: U.S. stocks in freefall
I say the same thing to my wife. So funny.Miakis wrote:I love this thread. Every time my husband is worried about the stock market, I say, "Let's go see if the Bogleheads have bumped the Freefall thread." And there it is. Calms him down every time.
Re: U.S. stocks in freefall
Yep. The international 50% of our portfolio is down based on last night's drop, but the broad U.S. market is up 0.4% and small-cap value VBR (our largest holding is the Admiral Shares version VSIAX) is up 1.37%. Shocking after watching the futures fall >5% last night and hit limit down.Minot wrote:What freefall?
Re: U.S. stocks in freefall
It is a reminder to stay the course and ignore the noise.EternalOptimist wrote:How is thread still open....it is not actionable and has become political.
It prompts tax loss harvesring opportunities
It discusses the effect on the stock market rather than politics
etc
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Re: U.S. stocks in freefall
I agree this thread makes me calm. It makes me calm when things are "in freefall" and calm when everyone is panicked about how "overpriced" the stock market is. I need this thread.Miakis wrote:I love this thread. Every time my husband is worried about the stock market, I say, "Let's go see if the Bogleheads have bumped the Freefall thread." And there it is. Calms him down every time.
Where the tides of fortune take us, no man can know.
Re: U.S. stocks in freefall
I have seen friends post on social media about cashing out their 401(k)s, so I put a little PSA out there reminding people not to panic.
Then this young guy I know asked if it was a good time to buy, so I told him it's always a good time to buy and that time in the market is more important than timing the market. Thank you all for preparing me for such conversations.
Then this young guy I know asked if it was a good time to buy, so I told him it's always a good time to buy and that time in the market is more important than timing the market. Thank you all for preparing me for such conversations.
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Re: U.S. stocks in freefall
I really like this thread. It provides Boglehead social support when the market is volatile or thought to be potentially volatile. I'm guessing a lot of people like it or there wouldn't be 65 pages.jjface wrote:It is a reminder to stay the course and ignore the noise.EternalOptimist wrote:How is thread still open....it is not actionable and has become political.
It prompts tax loss harvesring opportunities
It discusses the effect on the stock market rather than politics
etc
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Re: U.S. stocks in freefall
This thread is an emotional necessity for me. I read through it this morning and saw the sky-is-falling posts from 12hrs ago, and the subsequent sky-is-still-there from market open. This thread is the reason why I'm not selling off all equities in my 401k.
Re: U.S. stocks in freefall
Yes this thread is priceless.flyersrule wrote:I say the same thing to my wife. So funny.Miakis wrote:I love this thread. Every time my husband is worried about the stock market, I say, "Let's go see if the Bogleheads have bumped the Freefall thread." And there it is. Calms him down every time.
Stocks-80% || Bonds-20% || VTI/VXUS/AOR
Re: U.S. stocks in freefall
It seems you are right on the first part.Valuethinker wrote:
I think Krugman is overreacting, and he will retract that.
With the benefit of hindsight, it appears that a better answer would have been "almost immediately". I see this as a multi-layered Boglehead moment of triumph. We have a so-called "expert" using emotion, political views, and a short term market change to predict the long (infinite?) term future of the market. How could it go wrong?Paul Krugman wrote: Still, I guess people want an answer: If the question is when markets will recover, a first-pass answer is never.
Re: U.S. stocks in freefall
As they say, economists have predicted nine of the past five recessions.dspencer wrote:It seems you are right on the first part.Valuethinker wrote:
I think Krugman is overreacting, and he will retract that.
With the benefit of hindsight, it appears that a better answer would have been "almost immediately". I see this as a multi-layered Boglehead moment of triumph. We have a so-called "expert" using emotion, political views, and a short term market change to predict the long (infinite?) term future of the market. How could it go wrong?Paul Krugman wrote: Still, I guess people want an answer: If the question is when markets will recover, a first-pass answer is never.
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Re: U.S. stocks in freefall
After removing a number of political posts, I locked this thread for a few days to let the political climate cool down.
I'm now reopening it but be aware that any further political posts will result in a warning or suspension and a permanent lock.
I'm now reopening it but be aware that any further political posts will result in a warning or suspension and a permanent lock.
Best Regards - Mel |
|
Semper Fi
Re: U.S. stocks in freefall
Only bonds and foreign stocks in freefall right now. US stocks did great this last week.
Never underestimate the power of the force of low cost index funds.
Re: U.S. stocks in freefall
Does anyone feel this sudden (unusual?) diversion would call for an unscheduled rebalancing?
(By diversion, I mean a big drop in both the International allocation and Bond allocation, coupled with a rise in US Stocks. This would stand out in a 3-fund portfolio.)
Or would that just be market timing. But this has been so quick, it seems strange, so maybe it makes sense here. Not sure...
(By diversion, I mean a big drop in both the International allocation and Bond allocation, coupled with a rise in US Stocks. This would stand out in a 3-fund portfolio.)
Or would that just be market timing. But this has been so quick, it seems strange, so maybe it makes sense here. Not sure...
Last edited by rgs92 on Sat Nov 12, 2016 6:53 am, edited 1 time in total.
Re: U.S. stocks in freefall
I think many folks do not rebalance on a schedule, but check their rebalancing bands. Furthermore, even if folks do not actively rebalance, they may passively rebalance by switching which funds get contributions if still accumulating and which funds get withdrawals if decumulating.
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Re: U.S. stocks in freefall
rgs92:rgs92 wrote:Does anyone feel this sudden (unusual?) diversion would call for an unscheduled rebalancing?
(By diversion, I mean a big drop in both the International allocation and Bond allocation, coupled with a rise in US Stocks. This would stand out in a 3-fund portfolio.)
Or would that just be market timing. But this has been so quick, it seems strange, so maybe it makes sense here. Not sure...
I personally feel that it is not worthwhile to rebalance unless a desired fund allocation differs 10% or more.
Tax-Loss Harvesting in taxable accounts should usually be done whenever there is a meaningful loss.
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: U.S. stocks in freefall
Betcha it won't stand out for my nominal 60/40 AA. It takes what feels like a huge change in something to produce much AA impact. Still, my last checked AA (Sept 30, 35.7% bonds) was nearing a band edge so perhaps I should take a look.rgs92 wrote:Does anyone feel this sudden (unusual?) diversion would call for an unscheduled rebalancing?
(By diversion, I mean a big drop in both the International allocation and Bond allocation, coupled with a rise in US Stocks. This would stand out in a 3-fund portfolio.)
Or would that just be market timing. But this has been so quick, it seems strange, so maybe it makes sense here. Not sure...
I'll get back to you. ............ oops, it won't be soon as my 401k plan site is locked for maintanence for the weekend.
JW
Retired at Last
Re: U.S. stocks in freefall
Thanks Taylor, that was also my intuition after sleeping on it.
To JW: yes but you don't have international which has been more dramatic (or at least adds to the drama).
But this is just blip in the long run of course.
To JW: yes but you don't have international which has been more dramatic (or at least adds to the drama).
But this is just blip in the long run of course.
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Re: U.S. stocks in freefall
Little or no international bonds, but If you meant international equities of course I have some.rgs92 wrote:Thanks Taylor, that was also my intuition after sleeping on it.
To JW: yes but you don't have international which has been more dramatic (or at least adds to the drama).
But this is just blip in the long run of course.
Retired at Last
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Re: U.S. stocks in freefall
I don't rebalance to increase returns. Increasing potential returns would be best achieved by increasing my stock allocation. I rebalance to keep my portfolio from drifting away from my chosen asset allocation. As such, I have established a rebalancing schedule independent from market movements and I strictly rebalance according to this schedule, keeping emotions out of my investing.
Variable Percentage Withdrawal (bogleheads.org/wiki/VPW) | One-Fund Portfolio (bogleheads.org/forum/viewtopic.php?t=287967)
Re: U.S. stocks in freefall
Step one: rebalance yet again into international
Step two: hold breath
Step three: see how it's going in 20 years
Step two: hold breath
Step three: see how it's going in 20 years
I’d trade it all for a little more |
-C Montgomery Burns
Re: U.S. stocks in freefall
Absolute or relative of the "desired fund allocation"? If I had 10% allocated to REITS would I rebalance at 0% or 20% (absolute), or relative 9% - 11%?Taylor Larimore wrote: I personally feel that it is not worthwhile to rebalance unless a desired fund allocation differs 10% or more.
How do you define "meaningful" in this context?Taylor Larimore wrote:Tax-Loss Harvesting in taxable accounts should usually be done whenever there is a meaningful loss.
Re: U.S. stocks in freefall
It's way too soon to tell for sure what will actually happen, but the market seems to be pricing some disadvantage to foreign firms especially in emerging markets. In the 3 days since the election, here are how world equity markets reacted:columbia wrote:I'm not sure how to ask this without it opening up a political discussion, so please delete as needed:
Were certain protectionist measures to be implemented in the coming years, what would be the expected effect on international stock holdings?
SPY +1-2% (S&P500)
VEA -1-2% (world developed)
EEM -8% (emerging)
Re: U.S. stocks in freefall
This appears to be flight to quality when the market is dealing with uncertainty. It was also interesting that bonds fell too. I would not have expected the drop in bonds.Tanelorn wrote:It's way too soon to tell for sure what will actually happen, but the market seems to be pricing some disadvantage to foreign firms especially in emerging markets. In the 3 days since the election, here are how world equity markets reacted:columbia wrote:I'm not sure how to ask this without it opening up a political discussion, so please delete as needed:
Were certain protectionist measures to be implemented in the coming years, what would be the expected effect on international stock holdings?
SPY +1-2% (S&P500)
VEA -1-2% (world developed)
EEM -8% (emerging)
A fool and his money are good for business.
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Re: U.S. stocks in freefall
Could it be in anticipation of a change at the Fed? Any change, even anticipated change, brings uncertainty and therefore flight.nedsaid wrote:I would not have expected the drop in bonds.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
Re: U.S. stocks in freefall
It could also be in anticipation of a more vigorous economy. Who knows?bertilak wrote:Could it be in anticipation of a change at the Fed? Any change, even anticipated change, brings uncertainty and therefore flight.nedsaid wrote:I would not have expected the drop in bonds.
A fool and his money are good for business.
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Re: U.S. stocks in freefall
I had 35% in bonds, which was probably a little light for my circumstances, but I had planned to delay increasing it to 40% on 1-1-18. I had also planned to eliminate one fund from my slice-and-dice portfolio on 1-1-17. I made both moves on Wednesday. I also rebalanced my REIT allocation. Except for possible rebalancing, I'm now done until another planned move on 1-1-18. Call me a wild and crazy trader!
Anyone know when and where the next meeting of Market Timers Anonymous is?
Anyone know when and where the next meeting of Market Timers Anonymous is?
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Re: U.S. stocks in freefall
Midnight. 666 South Street. Knock three times on the basement door. Tell them Mad Jim sent you. Wear a tie.Doom&Gloom wrote:Anyone know when and where the next meeting of Market Timers Anonymous is?
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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Tax loss harvesting and rebalancing ?
My answer: $500-$1,000.Leif wrote:Absolute or relative of the "desired fund allocation"? If I had 10% allocated to REITS would I rebalance at 0% or 20% (absolute), or relative 9% - 11%?Taylor Larimore wrote: I personally feel that it is not worthwhile to rebalance unless a desired fund allocation differs 10% or more.
My answer: Absolute.Taylor Larimore wrote:Tax-Loss Harvesting in taxable accounts should usually be done whenever there is a meaningful loss.How do you define "meaningful" in this context?
Leif: When to rebalance and when to tax-loss harvest is not set in stone. Some investors don't even bother. Nevertheless, I think it is important to maintain my overall stock/bond ratio within 10% of my target allocation.
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
- Doom&Gloom
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Re: U.S. stocks in freefall
bertilak wrote:Midnight. 666 South Street. Knock three times on the basement door. Tell them Mad Jim sent you. Wear a tie.Doom&Gloom wrote:Anyone know when and where the next meeting of Market Timers Anonymous is?
The tie may be a deal-breaker. Except for funerals, I don't think I've put one on for > 40 years.
Re: U.S. stocks in freefall
Apparently its possible to fall upwards if there is enough wind !
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Re: U.S. stocks in freefall
Besides an increase in real rates, inflation expectations also have increased, the impact of which can be seen in falling prices/rising rates especially on the long part of the curve. Funds like Vanguard Extended Duration clobbered this week. IMO, the reason is neither uncertainty nor merely expectations of a more vigorous economy, but rather _ _ _ _ _ _ _ _ _ _ _ _ _ _. I'll leave it to your imagination to fill in the blanks.nedsaid wrote:It could also be in anticipation of a more vigorous economy. Who knows?bertilak wrote:Could it be in anticipation of a change at the Fed? Any change, even anticipated change, brings uncertainty and therefore flight.nedsaid wrote:
I would not have expected the drop in bonds.
Quod vitae sectabor iter?
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Re: U.S. stocks in freefall
added Monday....... OK, got to my account and my overall bond allocation has dropped from 35.7% on Sept 30 to 35.5% on Nov 13. Ultra ho-hum.JW-Retired wrote:Betcha it won't stand out for my nominal 60/40 AA. It takes what feels like a huge change in something to produce much AA impact. Still, my last checked AA (Sept 30, 35.7% bonds) was nearing a band edge so perhaps I should take a look.rgs92 wrote:Does anyone feel this sudden (unusual?) diversion would call for an unscheduled rebalancing?
(By diversion, I mean a big drop in both the International allocation and Bond allocation, coupled with a rise in US Stocks. This would stand out in a 3-fund portfolio.)
Or would that just be market timing. But this has been so quick, it seems strange, so maybe it makes sense here. Not sure...
I'll get back to you. ............ oops, it won't be soon as my 401k plan site is locked for maintenance for the weekend.
JW
Admittedly, I have little or no international bonds. My percentage of foreign stocks dropped from 20.6% to 20.2%. Ho-hum again.
But thanks for enticing me to look!... I noticed a small but worthwhile tax loss harvesting opportunity.
JW
Retired at Last
Re: U.S. stocks in freefall
Thanks for unlocking this! Best thread in the forums
My 50% in international is hurting me right now, but the lower it goes, the crappier it'll have to do in the future to underperform.. there's a bottom somewhere!
My 50% in international is hurting me right now, but the lower it goes, the crappier it'll have to do in the future to underperform.. there's a bottom somewhere!
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Re: U.S. stocks in freefall
Yeah, it's really nice to have a long record of people's responses to potentially significant events, including the current one. I've experienced much bigger stock market events since I started investing, though not yet anything like 2008. But this is by far the biggest political shock since I started. Somehow that made a bigger impression on me, even though logically it shouldn't have. I won't need the money for 20-30 years anyway. Why was I worried? Human nature, I guess.Tamalak wrote:Thanks for unlocking this! Best thread in the forums
Re: U.S. stocks in freefall
Protip: don't hold your breath for 20 years, you will dieJonnyDVM wrote:Step one: rebalance yet again into international
Step two: hold breath
Step three: see how it's going in 20 years
This thread is fun and informative. Don't ruin it with political posts!
Re: U.S. stocks in freefall
How about this for a future market timing signal: When DGS drops less in one day than BND does, then it is time to buy more foreign equities.
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Re: U.S. stocks in freefall
Sure, but that doesn't help with the topic of "U.S. stocks in freefall"livesoft wrote:How about this for a future market timing signal: When DGS drops less in one day than BND does, then it is time to buy more foreign equities.
We need a long thread on "International stocks going nowhere -- fast!"
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."
Re: U.S. stocks in freefall
True dat. IJS (US small-cap value) is now up about 12% this month alone. That's not a freefall at all.triceratop wrote:Sure, but that doesn't help with the topic of "U.S. stocks in freefall"
We need a long thread on "International stocks going nowhere -- fast!"
Re: U.S. stocks in freefall
Alternatively, you can think of this as "bond yields are off the lows." <- glass half full
"My bond allocation is the amount of money that I cannot afford to lose." -- Taylor Larimore
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Re: U.S. stocks in freefall
I tried to use Brexit to initiate such a thread: International stocks in free fall. I guess posters got bored when the luster of Brexit faded into the background for U.S.-based investors. Posters also seem content to start a new "Why int'l?" thread as soon as the last one falls off the homepage.triceratop wrote:Sure, but that doesn't help with the topic of "U.S. stocks in freefall"livesoft wrote:How about this for a future market timing signal: When DGS drops less in one day than BND does, then it is time to buy more foreign equities.
We need a long thread on "International stocks going nowhere -- fast!"
Quod vitae sectabor iter?
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Re: U.S. stocks in freefall
Some source I listened to said they thought it was because people are expecting lower taxes and large infrastructure bill to result in more US debt. That is to say, these speculators think the market for buyers of bonds will be better. Therefore, they predict better yields in the future as well as want some better yields now. Wanting better yields now meant price drop on existing. That was just one source's interpretation. I am also paraphrasing.bertilak wrote:Could it be in anticipation of a change at the Fed? Any change, even anticipated change, brings uncertainty and therefore flight.nedsaid wrote:I would not have expected the drop in bonds.
Where the tides of fortune take us, no man can know.
Re: U.S. stocks in freefall
Maybe there were just more sellers than buyers and the price had to drop to maintain market equilibrium. Who really knows?Engineer250 wrote:Some source I listened to said they thought it was because people are expecting lower taxes and large infrastructure bill to result in more US debt. That is to say, these speculators think the market for buyers of bonds will be better. Therefore, they predict better yields in the future as well as want some better yields now. Wanting better yields now meant price drop on existing. That was just one source's interpretation. I am also paraphrasing.bertilak wrote:Could it be in anticipation of a change at the Fed? Any change, even anticipated change, brings uncertainty and therefore flight.nedsaid wrote:I would not have expected the drop in bonds.
A fool and his money are good for business.