With Stock Market heading south

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mule
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With Stock Market heading south

Post by mule » Fri Aug 21, 2015 12:51 pm

With the stock market heading down and may get worse heading in to September what is your thoughts? I'm sure for most is to ride it out and try not to look or be to concerned. There isn't much a person can do and if you make a move it maybe more dramatic then just hoping things turn around.

livesoft
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Re: With Stock Market heading south

Post by livesoft » Fri Aug 21, 2015 12:54 pm

My thoughts are same ol' same ol' and this thread should be merged with the old "stocks in free fall" thread.
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patrick013
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Re: With Stock Market heading south

Post by patrick013 » Fri Aug 21, 2015 2:14 pm

I noticed yesterday that corporate profits are down, so it must be
a real quantitative price adjustment rather than a stall in prices
due to flat or slow growth. But that's a business cycle for you.
age in bonds, buy-and-hold, 10 year business cycle

SimonJester
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Re: With Stock Market heading south

Post by SimonJester » Fri Aug 21, 2015 2:17 pm

With 20+ years until I can touch retirement money I'm going to buy buy buy, everything is going on sale.

In actuality I'm going to stick to my target AA plan and perhaps re-balance at the end of the year.
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin

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Re: With Stock Market heading south

Post by nakedbird226 » Fri Aug 21, 2015 2:19 pm

I am thinking about increasing my 401 contribution :D

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Re: With Stock Market heading south

Post by runner26 » Fri Aug 21, 2015 2:20 pm

Doing TIRA to Roth conversions to top of 15% bracket.

mule
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Re: With Stock Market heading south

Post by mule » Fri Aug 21, 2015 4:00 pm

Sorry if this upset someone or there was a post started already. I was wondering what people thoughts are and what they maybe doing? Thank you for the input.

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climber2020
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Re: With Stock Market heading south

Post by climber2020 » Fri Aug 21, 2015 4:08 pm

I'm thinking I won't remember much of this week in 35 years when I actually need this money.

Yesterday I did my first tax loss harvest in my international allocation which will significantly increase my tax return this year. Today I got paid, so just like on every other 2nd Friday for the last few years, I bought a bunch of shares in my taxable account in line with my predetermined asset allocation. Tomorrow is the local beer festival, which I will likely be attending :beer

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Re: With Stock Market heading south

Post by mephistophles » Fri Aug 21, 2015 4:14 pm

mule wrote:Sorry if this upset someone or there was a post started already. I was wondering what people thoughts are and what they maybe doing? Thank you for the input.
Thanks for your thread. People don't really begin to develop and understand their own risk tolerance until they have experienced
market downturns from small to large. Some learn that they have no stomach for risk and should not be investing. Those people
are best served by FDIC savings vehicles or something similar.
ole meph

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Kevin M
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Re: With Stock Market heading south

Post by Kevin M » Fri Aug 21, 2015 4:15 pm

My thought is that you should follow your investment policy, and if you don't have one, make one.

As I mentioned in another post, what I did today was tax-loss harvest from one emerging markets ETF into another one, and added a tiny amount of cash in an IRA to the new EM ETF. I probably will buy more international, more EM than developed, when a CD matures next month, but since no rebalancing band thresholds have been breached, I'm not scrambling to raise cash to buy more stocks, even though it's tempting.

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Re: With Stock Market heading south

Post by Jeff P » Fri Aug 21, 2015 4:18 pm

Oh, is the stock market down? I hadn't noticed.

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Re: With Stock Market heading south

Post by nisiprius » Fri Aug 21, 2015 4:18 pm

mule wrote:With the stock market heading down and may get worse heading in to September what is your thoughts? I'm sure for most is to ride it out and try not to look or be to concerned. There isn't much a person can do and if you make a move it maybe more dramatic then just hoping things turn around.
Yep. It's easy to dodge into a bullet.

Of course I'm worried, and my plan is "feel the fear and do nothing anyway." We were able to do that in 2011 and we were able to do that in 2008-2009.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: With Stock Market heading south

Post by abugarcias » Fri Aug 21, 2015 4:24 pm

I'm going to buy more on the way down.

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Phineas J. Whoopee
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Re: With Stock Market heading south

Post by Phineas J. Whoopee » Fri Aug 21, 2015 4:31 pm

mule wrote:Sorry if this upset someone or there was a post started already. I was wondering what people thoughts are and what they maybe doing? Thank you for the input.
I, for one, am not upset, I just didn't think I had anything new to say, but since you've asked twice:

Conflating verb tenses can be hazardous to one's wealth.

Stock markets headed south. We don't know if they're still heading there. They may stick to their present latitude or even head north. We won't find out until after the fact, when it's too late to do anything about it, just like always.

Stock market declines are coming. We don't know when or by how much or for how long, just like always. Any plan should take that fact, and it is a fact, into account.

I designed my financial plan and portfolio for my personal situation, incorporating its great uncertainties, and assuming stocks may go down 50%+ as soon as tomorrow (well, Monday anyway). If due to market movements my stock/bond ratio gets more than 5% off target, I'll rebalance. Barring that, I'll do nothing.

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Re: With Stock Market heading south

Post by magneto » Fri Aug 21, 2015 4:57 pm

Phineas J. Whoopee wrote:
I designed my financial plan and portfolio for my personal situation, incorporating its great uncertainties, and assuming stocks may go down 50%+ as soon as tomorrow (well, Monday anyway). If due to market movements my stock/bond ratio gets more than 5% off target, I'll rebalance. Barring that, I'll do nothing.

PJW
The oft quoted 50% rule is a good measure and the band action more apppropriate than time periods in a declining market.
But what happens if the 50% drawdown takes 10 or 20 rebalances in a slowly declining market?
Is 50% stock loss the max loss or is the rule then left in tatters, by the continual rebalancing into the losing asset class (adding ever more fuel to the destructive fire)?
Rather than waiting for a 50% drawdown before springing into optimal action (realise impractical)?
Suppose the question is are we kidding ourselves with the 50% rule?
'There is a tide in the affairs of men ...', Brutus (Market Timer)

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Re: With Stock Market heading south

Post by letsgobobby » Fri Aug 21, 2015 5:03 pm

My only feeling is that I'm just starting to get that little itchy scratch giddy feeling I haven't felt since summer 2011. Since I'm 41 and accumulating I do prefer to buy stocks when they are trading at generational lows in prices and valuations than at all time highs. So stocks look about 10% more appealing to me today than they did 3 months ago. Unfortunately, 10% off a very high number is still a pretty high number, so I'm afraid I shouldn't actually do anything (like rebalance) for quite a while. 2 days ago my stock/bond ratio was precisely 60.00%/40.00%, which is right on target. So what are we at today, about 57/43? Not much to get excited about. At 50/50 I'll have to actually do something.

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Re: With Stock Market heading south

Post by scone » Fri Aug 21, 2015 5:04 pm

^ There was a really good thread on this topic, "rebalancing into a black hole," some time back. The upshot was that you can't tell if you are "rebalancing into poverty," so you might want to set some sort of limits. IIRC Larry Swedroe said he doesn't even rebalance on the down side any more. I wish I could remember the title of the thread, but my brain is fried. I'm sure some kind soul will pipe up. :happy
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Phineas J. Whoopee
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Re: With Stock Market heading south

Post by Phineas J. Whoopee » Fri Aug 21, 2015 5:13 pm

magneto wrote:
Phineas J. Whoopee wrote:
I designed my financial plan and portfolio for my personal situation, incorporating its great uncertainties, and assuming stocks may go down 50%+ as soon as tomorrow (well, Monday anyway). If due to market movements my stock/bond ratio gets more than 5% off target, I'll rebalance. Barring that, I'll do nothing.

PJW
The oft quoted 50% rule is a good measure
Thanks. I don't believe it is a rule, and I was explicit about it being potentially more than 50% (writing 50%+). It was down 89% one time.
magneto wrote:and the band action more apppropriate than time periods in a declining market.
How can a person tell if it's still a declining market? We don't find out until after the fact, by which time it's too late to do anything about it.
magneto wrote:But what happens if the 50% drawdown takes 10 or 20 rebalances in a slowly declining market?
Then there are 10 or 20 smaller rebalancing moves rather than one big one.
magneto wrote:Is 50% stock loss the max loss
No. I wrote 50%+, it's been 89%, and some markets, following political revolutions, have gone to zero. It is not the maximum possible loss.
magneto wrote:or is the rule then left in tatters, by the continual rebalancing into the losing asset class (adding ever more fuel to the destructive fire)?
Ten is more than four. Which is more valuable: ten dimes or four quarters?
magneto wrote:Rather than waiting for a 50% drawdown before springing into optimal action (realise impractical)?
'Tain't no optimal known in advance, and I said explicitly my tolerance band is 10% wide, that is, 5% on either side of the target, in the section of my post you quoted.
magneto wrote:Suppose the question is are we kidding ourselves with the 50% rule?
Anybody who thinks there is a 50% rule is doing just what you said.

PJW

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arcticpineapplecorp.
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Re: With Stock Market heading south

Post by arcticpineapplecorp. » Fri Aug 21, 2015 5:14 pm

mule wrote:With the stock market heading down and may get worse heading in to September what is your thoughts? I'm sure for most is to ride it out and try not to look or be to concerned. There isn't much a person can do and if you make a move it maybe more dramatic then just hoping things turn around.
The market has gone down. As in "the past". Will it continue to "head down" in "the future"? Nobody knows and anyone who tells you otherwise is merely guessing. Some will be right, others wrong.

Some things to think about--

1. If the market has gone down then you've temporarily lost some money. What do you do about that? You can't sell now or you'd be taking a temporary loss and making it permanent.

2. If you continue to hold (the obvious choice provided you're properly invested in a diversified way and not in individual stocks) then the market will eventually return to its previous value (and likely climb higher given a long enough time frame). Was there any cause for concern then?

3. If the market has gone down then instead of worrying, shouldn't one be buying more shares at now lower prices? By that measure, shouldn't investors adding new money be hoping (or praying as Warren Buffett puts it) for a bear market for buying opportunities? The only people not hoping for that are retirees. If you were happy to buy shares at higher prices in the past (before the correction or whatever you want to call it) then shouldn't you be 10% happier (or whatever amount it's fallen) to be able to buy shares at a 10% discount?

4. If you have a sufficiently long time frame, then none of this should matter. It's merely noise. Tune it out. Do you have an IPS? What does it say? Declines in the market from time to time are part of the plan of getting higher returns over time. Stick to your plan. Otherwise, if you realize you've taken more risk than you planned then reduce your risk (by increasing bonds and decreasing stocks) ONLY AFTER you've recovered your money (the market gets back to where it was. Otherwise to change plans now will be to lock in losses (to have bought higher in the past only to sell lower now).
Last edited by arcticpineapplecorp. on Sun Aug 23, 2015 4:08 pm, edited 1 time in total.
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Re: With Stock Market heading south

Post by tibbitts » Fri Aug 21, 2015 5:34 pm

arcticpineapplecorp. wrote:
mule wrote:With the stock market heading down and may get worse heading in to September what is your thoughts? I'm sure for most is to ride it out and try not to look or be to concerned. There isn't much a person can do and if you make a move it maybe more dramatic then just hoping things turn around.
By that measure, shouldn't investors adding new money be hoping (or praying as Warren Buffett puts it) for a bear market for buying opportunities? The only people not hoping for that are retirees. If you were happy to buy shares at higher prices in the past (before the correction or whatever you want to call it) then shouldn't you be 10% happier (or whatever amount it's fallen) to be able to buy shares at a 10% discount?
Yes, except that as a result of the general economic conditions corresponding to the decline in equities, there will only be a handful of people who still have income to invest. And yes, WB may be one of them. The rest will be unemployed or retired, whether they choose to be or not, and will be drawing down their portfolio at depressed prices.

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Bearloom
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Re: With Stock Market heading south

Post by Bearloom » Fri Aug 21, 2015 5:45 pm

The stock market's heading south? I guess I'd been too busy not getting caught up in day-to-day fluctuations to notice.

The only real way this impacts me is that my 401k contributions will have more of an impact until things bounce back; I'm okay with this.

sawhorse
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Re: With Stock Market heading south

Post by sawhorse » Fri Aug 21, 2015 5:52 pm

The stock market has headed south, but it's unclear whether it will continue to head south. At this point, I don't see a resemblance between the events of 2008 and current events.

Nonetheless, there is always the potential for it to get much worse. If that happens, I think unemployment should be a greater worry for most people than investments. Unemployment is devastating.

So focus on saving more of your income, paying down debt, reducing your spending, and building a larger emergency fund.

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Re: With Stock Market heading south

Post by protagonist » Fri Aug 21, 2015 5:56 pm

mule wrote:With the stock market heading down and may get worse heading in to September what is your thoughts? I'm sure for most is to ride it out and try not to look or be to concerned. There isn't much a person can do and if you make a move it maybe more dramatic then just hoping things turn around.
Riding it out and hoping things turn around, just like in 2008-10.

Being retired with little income, I don't think of "buying opportunities". My stock allocation will decrease with my portfolio, which is, in a way, comforting. I was getting a bit "stock-heavy". I didn't even notice the downturn until I saw this post and realized the Dow was back into the 16Ks.

If I lose all my stock, I will still survive.

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Re: With Stock Market heading south

Post by Clever_Username » Fri Aug 21, 2015 6:01 pm

mule wrote:Sorry if this upset someone or there was a post started already. I was wondering what people thoughts are and what they maybe doing? Thank you for the input.
I don't think you upset anyone, beyond that it gets discussed a lot. Most people will have the same reaction -- "I'm not doing anything I wouldn't be doing it it were headed up instead."

There are some stocks I was going to sell next week *anyway*, and now darn, looks like I might not get as much for them as I previously thought I would. This doesn't change my plans at all though.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_

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Phineas J. Whoopee
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Re: With Stock Market heading south

Post by Phineas J. Whoopee » Fri Aug 21, 2015 6:07 pm

sawhorse wrote:... At this point, I don't see a resemblance between the events of 2008 and current events.
...
Good points overall, but I want to say that in 2008 nobody saw a resemblance between what turned out to be the events of 2008 - 2009 and then-current events.

Maybe you can name a permabear or two who said the end is near, but they always say that. Sooner or later they get to be right.

PJW

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Re: With Stock Market heading south

Post by vencat » Fri Aug 21, 2015 6:10 pm

Missed yesterday because of work. Did buy some today though

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Re: With Stock Market heading south

Post by Ged » Fri Aug 21, 2015 6:21 pm

Well I'm retired now so I'm not making contributions. OTOH my allocation is only 40% equities. My plan says to re-balance in April and October. So maybe I'll calculate my allocation then to see where I am.

I do have a vacation coming up in October though, so I could be busy or tired or someth.... zzzzzZZZzzz.

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FelixTheCat
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Re: With Stock Market heading south

Post by FelixTheCat » Fri Aug 21, 2015 6:28 pm

It's simple. If the current market noise is bothering you, you probably have the wrong asset allocation.
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UADM
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Re: With Stock Market heading south

Post by UADM » Fri Aug 21, 2015 6:33 pm

arcticpineapplecorp. wrote:
mule wrote:With the stock market heading down and may get worse heading in to September what is your thoughts? I'm sure for most is to ride it out and try not to look or be to concerned. There isn't much a person can do and if you make a move it maybe more dramatic then just hoping things turn around.
The market has gone down. As in "the past". Will in continue to "head down" in "the future"? Nobody knows and anyone who tells you otherwise is merely guessing. Some will be right, others wrong.

Some things to think about--

1. If the market has gone down then you've temporarily lost some money. What do you do about that? You can't sell now or you'd be taking a temporary loss and making it permanent.

2. If you continue to hold (the obvious choice provided you're properly invested in a diversified way and not in individual stocks) then the market will eventually return to its previous value (and likely climb higher given a long enough time frame). Was there any cause for concern then?

3. If the market has gone down then instead of worrying, shouldn't one be buying more shares at now lower prices? By that measure, shouldn't investors adding new money be hoping (or praying as Warren Buffett puts it) for a bear market for buying opportunities? The only people not hoping for that are retirees. If you were happy to buy shares at higher prices in the past (before the correction or whatever you want to call it) then shouldn't you be 10% happier (or whatever amount it's fallen) to be able to buy shares at a 10% discount?

4. If you have a sufficiently long time frame, then none of this should matter. It's merely noise. Tune it out. Do you have an IPS? What does it say? Declines in the market from time to time are part of the plan of getting higher returns over time. Stick to your plan. Otherwise, if you realize you've taken more risk than you planned then reduce your risk (by increasing bonds and decreasing stocks) ONLY AFTER you've recovered your money (the market gets back to where it was. Otherwise to change plans now will be to lock in losses (to have bought higher in the past only to sell lower now).

I don't understand this line of thinking. For your number 1, why do you think it has to be only temporarily. You've lost money. Take out the word temporarily. There is no guarantee.

For your number 4, there is no guarantee that the US stock market has to be up in 25 years' time. The past does not guarantee the future.

For number 3. The market went from 6.6 to 18.4, settled in the 17s, and has had 2 down days...and you want to BUY already? Yesterday, in a thread, someone said the SAME THING! Yes, buy after every single day that there is a correction. You will be wiped out in no time. And what will you do if it goes to 16k or 15k? Just keep buying? At 10k, you'd be toast...

"If you continue to hold (the obvious choice provided you're properly invested in a diversified way and not in individual stocks) then the market will eventually return to its previous value "- There is no guarantee of this. This is why people didn't learn a single thing from 2008. They only learned that the market has to explode on the upside after any correction.

Note that I am not saying that the market has to go down. I am merely stating that this mantra of holding no matter what, and buying after every tiny correction does NOT have to go your way...People should have learned to fear the stock market after 2008... They did not learn.

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Re: With Stock Market heading south

Post by staythecourse » Fri Aug 21, 2015 6:40 pm

FelixTheCat wrote:It's simple. If the current market noise is bothering you, you probably have the wrong asset allocation.
I thought I read somewhere that 401k participants accounts were looked at over the 2008-9 period and found MAJORITY of folks did not sell anything. So the myth that folks sell when the market tanks may not be accurate.

I think it is more then reasonable (or may I say human) to feel anxiety or stress when the market tanks, but the more important aspect is understanding just because you gut is burning does not mean you head has to follow. I have learned in my short investing career is that it isn't that great investors don't get worried like everyone else, but understand that is just part of the nature of equity investing which allows them to "stay the course". Reminds me of the story of Chance the Gardner.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Re: With Stock Market heading south

Post by UADM » Fri Aug 21, 2015 6:45 pm

staythecourse wrote:
FelixTheCat wrote:It's simple. If the current market noise is bothering you, you probably have the wrong asset allocation.
I thought I read somewhere that 401k participants accounts were looked at over the 2008-9 period and found MAJORITY of folks did not sell anything. So the myth that folks sell when the market tanks may not be accurate.

I think it is more then reasonable (or may I say human) to feel anxiety or stress when the market tanks, but the more important aspect is understanding just because you gut is burning does not mean you head has to follow. I have learned in my short investing career is that it isn't that great investors don't get worried like everyone else, but understand that is just part of the nature of equity investing which allows them to "stay the course". Reminds me of the story of Chance the Gardner.

Good luck.
Is your definition of a "great investor" someone that rode the market down and back up? Doesn't that make them pretty much like everyone else?

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Re: With Stock Market heading south

Post by arcticpineapplecorp. » Fri Aug 21, 2015 6:47 pm

UADM wrote:
arcticpineapplecorp. wrote:
mule wrote:With the stock market heading down and may get worse heading in to September what is your thoughts? I'm sure for most is to ride it out and try not to look or be to concerned. There isn't much a person can do and if you make a move it maybe more dramatic then just hoping things turn around.
The market has gone down. As in "the past". Will in continue to "head down" in "the future"? Nobody knows and anyone who tells you otherwise is merely guessing. Some will be right, others wrong.

Some things to think about--

1. If the market has gone down then you've temporarily lost some money. What do you do about that? You can't sell now or you'd be taking a temporary loss and making it permanent.

2. If you continue to hold (the obvious choice provided you're properly invested in a diversified way and not in individual stocks) then the market will eventually return to its previous value (and likely climb higher given a long enough time frame). Was there any cause for concern then?

3. If the market has gone down then instead of worrying, shouldn't one be buying more shares at now lower prices? By that measure, shouldn't investors adding new money be hoping (or praying as Warren Buffett puts it) for a bear market for buying opportunities? The only people not hoping for that are retirees. If you were happy to buy shares at higher prices in the past (before the correction or whatever you want to call it) then shouldn't you be 10% happier (or whatever amount it's fallen) to be able to buy shares at a 10% discount?

4. If you have a sufficiently long time frame, then none of this should matter. It's merely noise. Tune it out. Do you have an IPS? What does it say? Declines in the market from time to time are part of the plan of getting higher returns over time. Stick to your plan. Otherwise, if you realize you've taken more risk than you planned then reduce your risk (by increasing bonds and decreasing stocks) ONLY AFTER you've recovered your money (the market gets back to where it was. Otherwise to change plans now will be to lock in losses (to have bought higher in the past only to sell lower now).

I don't understand this line of thinking. For your number 1, why do you think it has to be only temporarily. You've lost money. Take out the word temporarily. There is no guarantee.

For your number 4, there is no guarantee that the US stock market has to be up in 25 years' time. The past does not guarantee the future.

For number 3. The market went from 6.6 to 18.4, settled in the 17s, and has had 2 down days...and you want to BUY already? Yesterday, in a thread, someone said the SAME THING! Yes, buy after every single day that there is a correction. You will be wiped out in no time. And what will you do if it goes to 16k or 15k? Just keep buying? At 10k, you'd be toast...

"If you continue to hold (the obvious choice provided you're properly invested in a diversified way and not in individual stocks) then the market will eventually return to its previous value "- There is no guarantee of this. This is why people didn't learn a single thing from 2008. They only learned that the market has to explode on the upside after any correction.

Note that I am not saying that the market has to go down. I am merely stating that this mantra of holding no matter what, and buying after every tiny correction does NOT have to go your way...People should have learned to fear the stock market after 2008... They did not learn.
True there are no guarantees of anything. But if one wants a guarantee, then one should not be investing at all in equities and should only invest in either I Bonds or a stable value fund.

Yes there's no guarantee that the U.S. market has to be up in 25 years time. But would you bet against that? Again, if you don't think the economy will improve over the next 25 years (or even recover from the current decline) then why would you invest at all in equities? The only reason to invest in equities is because you expect the economy to continue to grow over time. Yes, it may only be an optimistic viewpoint and not based in reality, but what other choice do you have? To not invest at all? Good luck with that as your purchasing power erodes over time.

Investing is a marathon, not a sprint. If/when the market recovers, having bought on all the dips will have proven profitable. You're assuming that the market doesn't ever get back to where it was. That's the exact opposite of expecting that it will. Neither are guaranteed, but you either believe that the economy of the planet will continue to move forward or not. If you believe not, then stockpile food, water and ammo and don't worry about anyone's views on investing, including mine.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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Re: With Stock Market heading south

Post by J295 » Fri Aug 21, 2015 6:57 pm

by Kevin M » Fri Aug 21, 2015 3:15 pm
My thought is that you should follow your investment policy, and if you don't have one, make one.
This is a good comment ....

We made an IPS a few years ago when we transitioned at age 53 from on FTE to one very part time worker. That was after stumbling through 1987, early 2000, and 2008-09, with some good and some poor outcomes -- but lessons learned. So now, this activity isn't a big deal to us. Having said that, I can understand discomfort for anyone getting close to reaching their "number" with thoughts of transitioning as material declines create a risk of pushing the transition time for these folks further back.

For perspective, take a look at your net worth 1-1-13 and compare it to now .... probably not so grim.

Enjoy the weekend.

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Re: With Stock Market heading south

Post by stevewolfe » Fri Aug 21, 2015 7:05 pm

The IPS really does help you hold your feet down and not do something you'll regret.

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Re: With Stock Market heading south

Post by Twins Fan » Fri Aug 21, 2015 7:11 pm

Gotta say, it's been interesting to see the threads and comments the past couple days... or this year really.

Most of the year I would call it just movements up and down, or... noise. The last part of this week, sure I would call that a dip. I'm nowhere near a veteran investor. I finally got in the game when the S&P 500 was about 1400 (don't remember exactly) and it was a fairly smooth ride up to 2100. Now, it has bounced around 2100 most of the year, and the last couple/few days are causing definite concern... maybe panic for some.

I remember reading early on that one won't know their risk tolerance until a correction or bear market hits. I'm pretty sure we're not at either of those right now (yet) and look how some are reacting. Makes me glad to be cruising along at 60/40 and not even sweating it. :D

May be time for some to rethink their AA, if the last few days freaked them out???

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Re: With Stock Market heading south

Post by TXJuice » Fri Aug 21, 2015 7:16 pm

At 28 it does't matter for my retirement accounts. Also, I begin receiving my company's match in 2 weeks, so it's actually a good thing.
The decline in the few stocks that I own isn't fun to look at though (AAPL/DIS). :(

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Re: With Stock Market heading south

Post by protagonist » Fri Aug 21, 2015 7:19 pm

Twins Fan wrote: I finally got in the game when the S&P 500 was about 1400 (don't remember exactly) and it was a fairly smooth ride up to 2100. Now, it has bounced around 2100 most of the year, and the last couple/few days are causing definite concern... maybe panic for some.
Right. S+P is still up 11.4% over a year ago today. It will take quite a hit to make up for the run-up of the past few years.

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Re: With Stock Market heading south

Post by Twins Fan » Fri Aug 21, 2015 7:21 pm

Isn't it funny... and, some are like what should I/we do?? Enjoy it! :happy

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Re: With Stock Market heading south

Post by IPer » Fri Aug 21, 2015 7:24 pm

Well if it dips another 5-8% then it kind of auto balances my portfolio! I have had less cash coming in and
didn't want to sell any equities to rebalance, looks like Mr Market might be doing that for me but who can
really tell what's in store, right?! In the meanwhile any cash that comes in contributes to the balance to my
AA, I am not looking to sell anything for another 20-30 years so there is no way of me knowing how things will
turn out.
Read the Wiki Wiki !

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Re: With Stock Market heading south

Post by Twins Fan » Fri Aug 21, 2015 7:30 pm

IPer wrote:I am not looking to sell anything for another 20-30 years so there is no way of me knowing how things will
turn out.
Hopefully upwards... that's why we're all in, right? :beer

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Re: With Stock Market heading south

Post by IPer » Fri Aug 21, 2015 7:35 pm

Twins Fan wrote:
IPer wrote:I am not looking to sell anything for another 20-30 years so there is no way of me knowing how things will
turn out.
Hopefully upwards... that's why we're all in, right? :beer
Well upward meaning 2-3% return on equities after tax, 5% or 8% per year? Or are we looking at the Dave Ramsey 12???!
No one knows! :wink:
...so party on :sharebeer
cha ching :moneybag :moneybag
Read the Wiki Wiki !

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Re: With Stock Market heading south

Post by Kevin M » Sat Aug 22, 2015 2:43 am

stevewolfe wrote:The IPS really does help you hold your feet down and not do something you'll regret.
Yes! The BH chatter moved me to publish a blog post for family and friends on exactly this: The Value of an Investment Policy.

Kevin
Wiki ||.......|| Suggested format for Asking Portfolio Questions (edit original post)

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Re: With Stock Market heading south

Post by knucklehead » Sat Aug 22, 2015 3:01 am

Investing is a marathon, not a sprint. If/when the market recovers, having bought on all the dips will have proven profitable. You're assuming that the market doesn't ever get back to where it was. That's the exact opposite of expecting that it will. Neither are guaranteed, but you either believe that the economy of the planet will continue to move forward or not. If you believe not, then stockpile food, water and ammo and don't worry about anyone's views on investing, including mine.
Well said.

One thing I learned in 2008 is how happy the media were to pile on the wagon of the doom and gloom. Markets do crash and they do recover -- esp if you have invested in total US and total Global. If these two don't recover -- well, the obvious reasons for that reality may make us worrying about our nest eggs a silly thing indeed.

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Re: With Stock Market heading south

Post by czeckers » Sat Aug 22, 2015 4:24 am

I'm 20+ years from retirement so am excited to have an opportunity to buy more shares at cheaper prices.
The Espresso portfolio: | | 16% LCV, 16% SCV, 16% EM, 8% Int'l Value, 8% Int'l Sm, 8% US REIT, 8% Int'l REIT, 20% Inter-term US Treas | | "A journey of a thousand miles begins with a single step."

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Re: With Stock Market heading south

Post by corn18 » Sat Aug 22, 2015 5:03 am

nakedbird226 wrote:I am thinking about increasing my 401 contribution :D
That's what I just did.

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Re: With Stock Market heading south

Post by grayfox » Sat Aug 22, 2015 5:04 am

I'm surprised nobody has mentioned that the simple moving average has been crossed, the so-called Death Cross. :twisted: Or maybe I missed the reference.

$SPX 200-Day MA Chart

Mebane Faber Timing Model

If you are following the 200-day SMA, now is the time to get out of both US and Foreign Stocks.

But the last time it crossed in Oct 2014, it was a false alarm. And the time before that in Nov 2013 was also a false alarm. There are a lot of false alarms with the 200-day SMA.

Also, the VIX has spiked up to 28.03. The highest since back in Nov 2011.

Volatility S&P500 (^VIX)
http://finance.yahoo.com/echarts?s=%5EV ... king":true}

The options market is expecting higher volatility over the next 30 days.

Edit: I might have had it wrong. Maybe the Death Cross is when the 50-day SMA crosses the 200-day SMA. In that case, carry on. Or is it the Exponential moving average? Or...
Last edited by grayfox on Sat Aug 22, 2015 5:24 am, edited 3 times in total.

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Re: With Stock Market heading south

Post by coachz » Sat Aug 22, 2015 5:18 am

[OT comment removed by admin LadyGeek]

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Re: With Stock Market heading south

Post by corn18 » Sat Aug 22, 2015 5:47 am

Can someone help me find the 530 point drop that happened yesterday? I may need some new glasses.

Image

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Re: With Stock Market heading south

Post by avenger » Sat Aug 22, 2015 6:20 am

As a 35-year-old who only had the means to start investing in 2011, this week allowed me to let out a sigh of relief in one way. Since it is early in my investing career, I want to buy stocks on the cheap.
cheers ... -Mark | "Our life is frittered away with detail. Simplify. Simplify." -Henry David Thoreau | [3 fund portfolio: VTI, VXUS, SV fund (yield 3.01%)]

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Re: With Stock Market heading south

Post by Twins Fan » Sat Aug 22, 2015 7:12 am

You did buy on the cheap. What was the S&P 500 at in 2011, 2012, 2013....?? Someday, S&P at 1900 and 2100 will probably seem cheap also.

I think people stress about the "dips" way too much. Unless one is investing from only from years 2015 to 2017, who cares about the dips...

Like I'm going to look back in the year 2030 and think, remember when I got to make a deferred comp. contribution where the S&P was at 1980 instead of 2100 that lucky week in August 2015... yeah, that was so great. :wink:

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