U.S. stocks in free fall

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Re: U.S. stocks in freefall

Post by lostdog »

Not much movement.
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Re: U.S. stocks in freefall

Post by emoore »

livesoft wrote:More importantly, the Cubs won the World Series.
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Re: U.S. stocks in freefall

Post by cpw84 »

I would like to thank the Brexit blip for preparing me for this moment.
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Re: U.S. stocks in freefall

Post by lostdog »

cpw84 wrote:I would like to thank the Brexit blip for preparing me for this moment.
+1
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Re: U.S. stocks in freefall

Post by jrbdmb »

Bongleur wrote:What this country needs is a good 5% Govt Bond. I could live on 5% Govt Bonds.
Unless the 5% Govt Bonds comes with 10% inflation.
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Re: U.S. stocks in freefall

Post by EternalOptimist »

How is thread still open....it is not actionable and has become political.
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Re: U.S. stocks in freefall

Post by Miakis »

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

Post by WentzWagon »

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.
I say the same thing to my wife. So funny.
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Re: U.S. stocks in freefall

Post by Minot »

What freefall?
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Re: U.S. stocks in freefall

Post by jhfenton »

Minot wrote:What 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.
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Re: U.S. stocks in freefall

Post by jfave33 »

EternalOptimist wrote:How is thread still open....it is not actionable and has become political.
It is a reminder to stay the course and ignore the noise.

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

Post by Engineer250 »

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.
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.
Where the tides of fortune take us, no man can know.
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Re: U.S. stocks in freefall

Post by cpw84 »

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.
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Re: U.S. stocks in freefall

Post by GoldenFinch »

jjface wrote:
EternalOptimist wrote:How is thread still open....it is not actionable and has become political.
It is a reminder to stay the course and ignore the noise.

It prompts tax loss harvesring opportunities

It discusses the effect on the stock market rather than politics

etc
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.
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Re: U.S. stocks in freefall

Post by TheCowbell »

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.
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Re: U.S. stocks in freefall

Post by lostdog »

flyersrule wrote:
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.
I say the same thing to my wife. So funny.
Yes this thread is priceless. :D
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Re: U.S. stocks in freefall

Post by dspencer »

Valuethinker wrote:
I think Krugman is overreacting, and he will retract that.
It seems you are right on the first part.
Paul Krugman wrote: Still, I guess people want an answer: If the question is when markets will recover, a first-pass answer is never.
:oops: 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?
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Re: U.S. stocks in freefall

Post by Whakamole »

dspencer wrote:
Valuethinker wrote:
I think Krugman is overreacting, and he will retract that.
It seems you are right on the first part.
Paul Krugman wrote: Still, I guess people want an answer: If the question is when markets will recover, a first-pass answer is never.
:oops: 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?
As they say, economists have predicted nine of the past five recessions.
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Re: U.S. stocks in freefall

Post by Mel Lindauer »

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.
Best Regards - Mel | | Semper Fi
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Re: U.S. stocks in freefall

Post by ofcmetz »

Only bonds and foreign stocks in freefall right now. US stocks did great this last week.
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Re: U.S. stocks in freefall

Post by rgs92 »

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...
Last edited by rgs92 on Sat Nov 12, 2016 6:53 am, edited 1 time in total.
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Re: U.S. stocks in freefall

Post by livesoft »

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

Post by Taylor Larimore »

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...
rgs92:

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
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Re: U.S. stocks in freefall

Post by JW-Retired »

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...
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. :|

I'll get back to you. ............ oops, it won't be soon as my 401k plan site is locked for maintanence for the weekend.:annoyed
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Re: U.S. stocks in freefall

Post by rgs92 »

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.
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Re: U.S. stocks in freefall

Post by JW-Retired »

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.
Little or no international bonds, but If you meant international equities of course I have some.
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Re: U.S. stocks in freefall

Post by longinvest »

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.
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Re: U.S. stocks in freefall

Post by JonnyDVM »

Step one: rebalance yet again into international
Step two: hold breath
Step three: see how it's going in 20 years
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Re: U.S. stocks in freefall

Post by Leif »

Taylor Larimore wrote: I personally feel that it is not worthwhile to rebalance unless a desired fund allocation differs 10% or more.
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:Tax-Loss Harvesting in taxable accounts should usually be done whenever there is a meaningful loss.
How do you define "meaningful" in this context?
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Re: U.S. stocks in freefall

Post by Tanelorn »

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?
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:

SPY +1-2% (S&P500)
VEA -1-2% (world developed)
EEM -8% (emerging)
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Re: U.S. stocks in freefall

Post by nedsaid »

Tanelorn wrote:
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?
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:

SPY +1-2% (S&P500)
VEA -1-2% (world developed)
EEM -8% (emerging)
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.
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Re: U.S. stocks in freefall

Post by bertilak »

nedsaid wrote:I would not have expected the drop in bonds.
Could it be in anticipation of a change at the Fed? Any change, even anticipated change, brings uncertainty and therefore flight.
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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Re: U.S. stocks in freefall

Post by nedsaid »

bertilak wrote:
nedsaid wrote:I would not have expected the drop in bonds.
Could it be in anticipation of a change at the Fed? Any change, even anticipated change, brings uncertainty and therefore flight.
It could also be in anticipation of a more vigorous economy. Who knows?
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Re: U.S. stocks in freefall

Post by Doom&Gloom »

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?
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Re: U.S. stocks in freefall

Post by bertilak »

Doom&Gloom wrote:Anyone know when and where the next meeting of Market Timers Anonymous is?
Midnight. 666 South Street. Knock three times on the basement door. Tell them Mad Jim sent you. Wear a tie.
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Tax loss harvesting and rebalancing ?

Post by Taylor Larimore »

Leif wrote:
Taylor Larimore wrote: I personally feel that it is not worthwhile to rebalance unless a desired fund allocation differs 10% or more.
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%?

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?
My answer: $500-$1,000.

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
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Re: U.S. stocks in freefall

Post by Doom&Gloom »

bertilak wrote:
Doom&Gloom wrote:Anyone know when and where the next meeting of Market Timers Anonymous is?
Midnight. 666 South Street. Knock three times on the basement door. Tell them Mad Jim sent you. Wear a tie.
:mrgreen:

The tie may be a deal-breaker. Except for funerals, I don't think I've put one on for > 40 years.

:sharebeer
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Re: U.S. stocks in freefall

Post by Gary Guss »

Apparently its possible to fall upwards if there is enough wind !
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Re: U.S. stocks in freefall

Post by saltycaper »

nedsaid wrote:
bertilak wrote:
nedsaid wrote:
I would not have expected the drop in bonds.
Could it be in anticipation of a change at the Fed? Any change, even anticipated change, brings uncertainty and therefore flight.
It could also be in anticipation of a more vigorous economy. Who knows?
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.
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Re: U.S. stocks in freefall

Post by JW-Retired »

JW-Retired wrote:
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...
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. :|

I'll get back to you. ............ oops, it won't be soon as my 401k plan site is locked for maintenance for the weekend.:annoyed
JW
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.
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. :)
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Re: U.S. stocks in freefall

Post by Tamalak »

Thanks for unlocking this! Best thread in the forums :sharebeer

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! 8-)
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Re: U.S. stocks in freefall

Post by OakPhilliesFan »

Tamalak wrote:Thanks for unlocking this! Best thread in the forums :sharebeer
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.
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Re: U.S. stocks in freefall

Post by jpelder »

JonnyDVM wrote:Step one: rebalance yet again into international
Step two: hold breath
Step three: see how it's going in 20 years
Protip: don't hold your breath for 20 years, you will die

This thread is fun and informative. Don't ruin it with political posts!
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Re: U.S. stocks in freefall

Post by livesoft »

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

Post by triceratop »

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.
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!"
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Re: U.S. stocks in freefall

Post by livesoft »

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!"
True dat. IJS (US small-cap value) is now up about 12% this month alone. That's not a freefall at all.
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Re: U.S. stocks in freefall

Post by scone »

Alternatively, you can think of this as "bond yields are off the lows." :beer <- glass half full
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Re: U.S. stocks in freefall

Post by saltycaper »

triceratop wrote:
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.
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!"
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.
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Re: U.S. stocks in freefall

Post by Engineer250 »

bertilak wrote:
nedsaid wrote:I would not have expected the drop in bonds.
Could it be in anticipation of a change at the Fed? Any change, even anticipated change, brings uncertainty and therefore flight.
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.
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Re: U.S. stocks in freefall

Post by nedsaid »

Engineer250 wrote:
bertilak wrote:
nedsaid wrote:I would not have expected the drop in bonds.
Could it be in anticipation of a change at the Fed? Any change, even anticipated change, brings uncertainty and therefore flight.
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.
Maybe there were just more sellers than buyers and the price had to drop to maintain market equilibrium. Who really knows?
A fool and his money are good for business.
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