Market decline in 2019 ?

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typical.investor
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Re: Market decline in 2019 ?

Post by typical.investor » Fri Oct 12, 2018 6:30 am

Mark2614 wrote:
Mon Oct 08, 2018 10:45 am
Most people believe we are in a bubble and will see a big market decline (anywhere from 20-50%) soon. A lot of "experts" believe this could be in 2019. Most people on this forum probably also believe a significant market decline will probably come eventually.

The Bogleheads philosophy is "stay the course." But after 10 years of market rallys -- where do we draw the line? Is anyone here switching from equities to cash in hopes to avoid a big market decline in the next year or two?
No.

Even if US stocks are extremely over valued (which may not be completely true), it doesn’t mean there will be a crash to correct pricing. A slower rise over the next decade or even two could do the same.

There is simply no way to know when a better time than today is to buy.

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Flymore
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Re: Market decline in 2019 ?

Post by Flymore » Fri Oct 12, 2018 7:00 am

Statistically speaking, anything is possible. :)

quantAndHold
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Re: Market decline in 2019 ?

Post by quantAndHold » Fri Oct 12, 2018 7:11 am

Stop reading financial news. It’s bad for your portfolio. If you want to read something, read books about investing instead. Especially the ones listed in the wiki.

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Taj_Mahalo
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Re: Market decline in 2019 ?

Post by Taj_Mahalo » Fri Oct 12, 2018 7:36 am

HomerJ wrote:
Mon Oct 08, 2018 1:48 pm
Remember, the long-term historical 10% return from the stock market INCLUDES the crashes. Read that again.

You didn't have to avoid the crashes in the past to get a very good return and became wealthy.
Great advice! Comforting for a young investor like myself.
Income is not wealth. Wealth is not income. Both are equally as important and either is capable of producing the other.

Dottie57
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Re: Market decline in 2019 ?

Post by Dottie57 » Fri Oct 12, 2018 7:51 am

UpperNwGuy wrote:
Mon Oct 08, 2018 1:58 pm
Mark2614 wrote:
Mon Oct 08, 2018 10:45 am
Is anyone here switching from equities to cash in hopes to avoid a big market decline in the next year or two?
Not me. I chose my asset allocation with the understanding that stocks could decline. I'm staying the course.
+1. I haven’t hit rebalance band yet.

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watchnerd
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Re: Market decline in 2019 ?

Post by watchnerd » Fri Oct 12, 2018 7:56 am

typical.investor wrote:
Fri Oct 12, 2018 6:30 am
There is simply no way to know when a better time than today is to buy.

Image

https://www.cnbc.com/2018/10/10/fundstr ... lainternal
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columbia
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Re: Market decline in 2019 ?

Post by columbia » Fri Oct 12, 2018 8:00 am

watchnerd wrote:
Fri Oct 12, 2018 7:56 am
typical.investor wrote:
Fri Oct 12, 2018 6:30 am
There is simply no way to know when a better time than today is to buy.

Image

https://www.cnbc.com/2018/10/10/fundstr ... lainternal

That’s the gentleman, who is always pushing Bitcoin.

RetireBy55
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Re: Market decline in 2019 ?

Post by RetireBy55 » Fri Oct 12, 2018 8:01 am

To answer OPs question - yes, we plan to move more heavily to cash. We're retiring this year (me next month, DW by end of year) and are more interested at this point in our lives with preserving what we have than in just running up the NW number further.

I've run spreadsheets until the cows come home, and if we don't LOSE (albeit, "on paper") what we have we're good to go. I can pay the bills on dividends, interest and manageable portfolio draw-downs. We'll keep "some" equities and bond funds for long-term growth, but the markets IMHO have run too far for too long, and I don't want to face the risk of going through multiple years (let alone a decade) at a lower NW than we have today, for the potential it might be higher at some point.

As Bernstein famously said.."when you've won the game, quit playing". After the ~1,700+ point drop the past couple of weeks, I find that I no longer have the appetite for risk that I once had, just to run up the score further. All JMHO and YMMV.

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watchnerd
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Re: Market decline in 2019 ?

Post by watchnerd » Fri Oct 12, 2018 8:02 am

columbia wrote:
Fri Oct 12, 2018 8:00 am
watchnerd wrote:
Fri Oct 12, 2018 7:56 am
typical.investor wrote:
Fri Oct 12, 2018 6:30 am
There is simply no way to know when a better time than today is to buy.

Image

https://www.cnbc.com/2018/10/10/fundstr ... lainternal

That’s the gentleman, who is always pushing Bitcoin.
Seriously?

Like just kind conceptually, or like 'go out and buy some bitcoin now'?
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TheOscarGuy
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Re: Market decline in 2019 ?

Post by TheOscarGuy » Fri Oct 12, 2018 8:14 am

Mark2614 wrote:
Mon Oct 08, 2018 10:45 am
Most people believe we are in a bubble and will see a big market decline (anywhere from 20-50%) soon. A lot of "experts" believe this could be in 2019. Most people on this forum probably also believe a significant market decline will probably come eventually.

The Bogleheads philosophy is "stay the course." But after 10 years of market rallys -- where do we draw the line? Is anyone here switching from equities to cash in hopes to avoid a big market decline in the next year or two?
If I were very close to retirement, maybe I would consider moving *some* of my allocation to bonds/cash. But I am not. I also can predict with 100% certainty that market will go down. At some point. I also know that NO ONE can predict when.

My counter argument: are you prepared to be out of the market if it goes up by 50% in 2019? Do you know for certain that that is not a possibility?

balbrec2
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Re: Market decline in 2019 ?

Post by balbrec2 » Fri Oct 12, 2018 8:19 am

If you have to cut and run, your AA is likely too aggressive.

frugalmama
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Re: Market decline in 2019 ?

Post by frugalmama » Fri Oct 12, 2018 8:23 am

No. I'm invested for the long haul. I've never sold before and have no plans to now.

harvestbook
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Re: Market decline in 2019 ?

Post by harvestbook » Fri Oct 12, 2018 8:24 am

watchnerd wrote:
Fri Oct 12, 2018 7:56 am
typical.investor wrote:
Fri Oct 12, 2018 6:30 am
There is simply no way to know when a better time than today is to buy.

Image

https://www.cnbc.com/2018/10/10/fundstr ... lainternal
This guy is their resident "extreme optimist" that they trundle out to wash away the bitter aftertaste of Marc Faber or Gartman. At the start of the year, he predicted Bitcoin would hit $25,000 by the end of the year.

Pundits have a pretty bland outlook couched to be reasonable (their yearly predictions are generally for a 7 to 9 percent increase and the recession is always just slightly beyond the horizon, so right now 2019 looks like a safe and reasonable time to call for it.) But the clicks come from the extremists.

I wouldn't be at all surprised if the seeds of the recession are already sprouting beneath the surface, if you look at declining home sales, rising rates, inflation, etc. But I wouldn't be at all surprised if that's not happening. People who believe a certain thing believe "most people" share their--to them--perfectly reasonable view, but most people are wrong about most things, especially predictions.
I'm not smart enough to know, and I can't afford to guess.

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watchnerd
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Re: Market decline in 2019 ?

Post by watchnerd » Fri Oct 12, 2018 8:31 am

balbrec2 wrote:
Fri Oct 12, 2018 8:19 am
If you have to cut and run, your AA is likely too aggressive.
You mean like?

ACT AdvisorShares Vice ETF 20.00%
UPRO ProShares UltraPro S&P500 20.00%
EWI iShares MSCI Italy Capped ETF 20.00%
GLD SPDR Gold Shares 20.00%
USO United States Oil 20.00%
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2pedals
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Re: Market decline in 2019 ?

Post by 2pedals » Fri Oct 12, 2018 8:56 am

Mark2614 wrote:
Mon Oct 08, 2018 10:45 am
Is anyone here switching from equities to cash in hopes to avoid a big market decline in the next year or two?
Not me. I have a AA that lets me sleep well at night. I am not smarter than the rest of stock market investors, buyers and sellers. Most people think they’ll guess right more often than wrong. We have a strong desire to believe we’re right all the time.

It is not very difficult to avoid a big market decline by not participating in the market, but you are more likely to miss out on big gains in the stock market, i.e. when do you buy back in? You have to be right more than once to win at this game.

typical.investor
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Re: Market decline in 2019 ?

Post by typical.investor » Fri Oct 12, 2018 8:47 pm

watchnerd wrote:
Fri Oct 12, 2018 8:02 am
columbia wrote:
Fri Oct 12, 2018 8:00 am
watchnerd wrote:
Fri Oct 12, 2018 7:56 am
typical.investor wrote:
Fri Oct 12, 2018 6:30 am
There is simply no way to know when a better time than today is to buy.

Image

https://www.cnbc.com/2018/10/10/fundstr ... lainternal

That’s the gentleman, who is always pushing Bitcoin.
Seriously?

Like just kind conceptually, or like 'go out and buy some bitcoin now'?
By the way, did you see bitcoin might be losing it's "gold" status in the eyes of investors -- i.e. bonds and stocks tanked and gold was up but bitcoin was in the tanking camp.

Anyway, if you are a long term investor, I still maintain that there is simply no way to know when a better time than today is to buy. I'm not in the camp of holding any amount out waiting for a big chance.

If you are retiring soon, then of course less of your money is in the long term investment category and you should consider reallocating. That doesn't have so much to do with current market performance though, does it?

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watchnerd
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Re: Market decline in 2019 ?

Post by watchnerd » Fri Oct 12, 2018 8:58 pm

typical.investor wrote:
Fri Oct 12, 2018 8:47 pm


By the way, did you see bitcoin might be losing it's "gold" status in the eyes of investors -- i.e. bonds and stocks tanked and gold was up but bitcoin was in the tanking camp.

I don't think Bitcoin ever really had such status amongst serious investors. I don't see pensions buying bitcoin.

It had status with speculators, "dark web" transactors, and the anti-fiat money crowd.

Yeah, it took a big hit last week:

Image

But it took bigger hits earlier in the last 3 months:

Image
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wootwoot
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Re: Market decline in 2019 ?

Post by wootwoot » Fri Oct 12, 2018 9:02 pm

This is the biggest troll thread ever. The OP won't even return to defend their original post. Throw out baseless speculation and uncertainty then watch the boglehead forum jump all over it.

youdiditr2
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Re: Market decline in 2019 ?

Post by youdiditr2 » Fri Oct 12, 2018 9:07 pm

watchnerd wrote:
Fri Oct 12, 2018 7:56 am
typical.investor wrote:
Fri Oct 12, 2018 6:30 am
There is simply no way to know when a better time than today is to buy.

Image

https://www.cnbc.com/2018/10/10/fundstr ... lainternal
Tom Lee scares me. I do the oppposite of what he and Cramer say. Both Tom Lee and Cramer say BUY BUY BUY. Hmmmm.

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watchnerd
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Re: Market decline in 2019 ?

Post by watchnerd » Fri Oct 12, 2018 9:14 pm

youdiditr2 wrote:
Fri Oct 12, 2018 9:07 pm
watchnerd wrote:
Fri Oct 12, 2018 7:56 am
typical.investor wrote:
Fri Oct 12, 2018 6:30 am
There is simply no way to know when a better time than today is to buy.

Image

https://www.cnbc.com/2018/10/10/fundstr ... lainternal
Tom Lee scares me. I do the oppposite of what he and Cramer say. Both Tom Lee and Cramer say BUY BUY BUY. Hmmmm.
It's a lot of technical analysis dog and pony that is good for tv.

But as far as I know, chart-jockeys with their Bollinger bands haven't proven to consistently give superior risk-adjusted returns across most market conditions.
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lostdog
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Re: Market decline in 2019 ?

Post by lostdog » Fri Oct 12, 2018 9:35 pm

willthrill81 wrote:
Thu Oct 11, 2018 10:27 am
SchruteB&B wrote:
Thu Oct 11, 2018 6:58 am
Mark2614 wrote:
Mon Oct 08, 2018 10:45 am
But after 10 years of market rallys -
AND market declines! August 2011 never gets any respect. I’m usually a stickler for rules, but c’mon! That was a bear. In any case, there have certainly been solid corrections along the way.
The current bull market has only been going since early 2016. It certainly isn't nine years old.
+1

The news outlets want you to think otherwise.

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AtlasShrugged?
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Re: Market decline in 2019 ?

Post by AtlasShrugged? » Sat Oct 13, 2018 6:55 am

I have never seen a bull market so unloved by it's participants. /SMH

If you don't have a written IPS, write one. Then follow it. No one can predict the future, and no one can control the market. But what you can do is control yourself. An IPS will go a long way toward doing just that.

Real life example: This last week (10/10-10/11), the market dipped 5%. I rebalanced from bonds into equities on the RBD, per my IPS. Is that rational? Hell yeah. But ask yourself, if you did not have that thought out and written down, would you normally buy equities as they fall? Probably not. Most people would either sell, or freeze like a deer in the headlights.
“If you don't know, the thing to do is not to get scared, but to learn.”

carolinaman
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Re: Market decline in 2019 ?

Post by carolinaman » Sat Oct 13, 2018 7:40 am

Ron Scott wrote:
Mon Oct 08, 2018 10:52 am
Mark2614 wrote:
Mon Oct 08, 2018 10:45 am
Most people believe we are in a bubble and will see a big market decline (anywhere from 20-50%) soon. A lot of "experts" believe this could be in 2019. Most people on this forum probably also believe a significant market decline will probably come eventually.

The Bogleheads philosophy is "stay the course." But after 10 years of market rallys -- where do we draw the line? Is anyone here switching from equities to cash in hopes to avoid a big market decline in the next year or two?
There is no reason not to take your nervousness seriously and rethink your asset allocation. If that's where you're at, now is probably a good time to do so.

I do not plan to change, or rebalance in the future, although I might cheat and buy some more equities in a big drop...
+1. You need to have an AA that fits your risk tolerance. A long term investor knows that there will be major drops in market from time to time and has an AA that he/she is most comfortable with in up and down markets. Find an AA that allows you to be more comfortable during down markets. Down markets can be nerve wracking for even the most seasoned investor but they know that "staying the course" is the best thing to do.

Also, I do not accept your premise that "most people" believe we will see a major decline soon. I am 100% confident we will see a major decline at some point. I am also 100% confident that the market will recover from that. I do not know when either of those will occur and neither does anyone else. News sources love to run articles about this sort of thing because it gets people's attention. You could have read those types of articles anytime during last 5 years. Timing the market is a fool's errand. You have to get it right twice: when to get out and when to get back in. Few people are successful at that.

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watchnerd
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Re: Market decline in 2019 ?

Post by watchnerd » Sat Oct 13, 2018 9:56 am

carolinaman wrote:
Sat Oct 13, 2018 7:40 am

+1. You need to have an AA that fits your risk tolerance. A long term investor knows that there will be major drops in market from time to time and has an AA that he/she is most comfortable with in up and down markets. Find an AA that allows you to be more comfortable during down markets. Down markets can be nerve wracking for even the most seasoned investor but they know that "staying the course" is the best thing to do.

Also, I do not accept your premise that "most people" believe we will see a major decline soon. I am 100% confident we will see a major decline at some point. I am also 100% confident that the market will recover from that. I do not know when either of those will occur and neither does anyone else. News sources love to run articles about this sort of thing because it gets people's attention. You could have read those types of articles anytime during last 5 years. Timing the market is a fool's errand. You have to get it right twice: when to get out and when to get back in. Few people are successful at that.
Talking about good invest practices is like talking about good nutrition....

--Eat your vegetables / live below your means
--Don't eat too much junk food / don't take on too much debt
--Don't drink too much / take on more risk than you can handle
--Get enough sleep / stay the course

...its inherently boring, repetitive, and makes for bad TV and entertainment.

It's much more exciting to focus on the drama.

If you really, really, really need to feed your financial industry news addiction, watch the news from other countries. There is a lot less "Cramer" and a lot more boring facts.
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