U.S. stocks in free fall

[greg24]

How do you explain that not much has happened today?

Animal spirits.

[livesoft]

Other than the trade war (which could end suddenly), there's not an obvious catalyst for a big drop in the same way there was in 2008.

Brexit uncertainty is up there with "the trade war", isn't it?

[livesoft]

How do you explain that not much has happened today?

Animal spirits.

That makes sense. Investors seem to be very busy figuring out things about dog attacks right now.

[alfaspider]

Other than the trade war (which could end suddenly), there's not an obvious catalyst for a big drop in the same way there was in 2008.

Brexit uncertainty is up there with "the trade war", isn't it?

Perhaps, but it's not up there with the suprime crisis. The UK is a big economy, but a disorderly Brexit would be more of a headache than a real calamity here. Plus, Brexit could resolve relatively suddenly as well. There's a big chance someone blinks before the end of the month.

[TheTimeLord]

People here need to figure out the source of their stress and angst. My guess is a lot of it stems from spending a large part of each day looking forward to retiring instead of living in the present. Be careful, you might start trying to hang on to your money too tightly and that could lead to behavioral mistakes.

[ruralavalon]

People here need to figure out the source of their stress and angst. My guess is a lot of it stems from spending a large part of each day looking forward to retiring instead of living in the present. Be careful, you might start trying to hang on to your money too tightly and that could lead to behavioral mistakes.

I agree.

Behavioral mistakes are always a danger, and are as large a danger as any other currently on the horizon.

[Rus In Urbe]

drk

Rus In Urbe wrote: ↑Fri Mar 08, 2019 7:19 am
This thread-title is completely hyperbolic of course. Free Fall? Not yet. But it could happen soon.

Note the timing of the first post.

THANKS for pointing that out, drk!

The original post was written August 2011 on a day when the market skidded down 550 points. I wouldn't really call that "free fall" either. 550 points is sure scary, but I recall being unimpressed by that slump. We bought more. By Aug 2011 our accounts (and yours too no doubt) had recovered and then some, and we were well into the Great Recovery!

But the !YIKES! title of this thread is doubtless why I clicked on it.
And why it's over 200 pages by now . . . Our amygdalas are super-stimulated by fear!

[GoldenFinch]

drk

Rus In Urbe wrote: ↑Fri Mar 08, 2019 7:19 am
This thread-title is completely hyperbolic of course. Free Fall? Not yet. But it could happen soon.

Note the timing of the first post.

THANKS for pointing that out, drk!

The original post was written August 2011 on a day when the market skidded down 550 points. I wouldn't really call that "free fall" either. 550 points is sure scary, but I recall being unimpressed by that slump. We bought more. By Aug 2011 our accounts (and yours too no doubt) had recovered and then some, and we were well into the Great Recovery!

But the !YIKES! title of this thread is doubtless why I clicked on it.
And why it's over 200 pages by now . . . Our amygdalas are super-stimulated by fear!

When subtle or severe changes in market direction stimulate the fight or flight response in the minds of some Bogleheads, the fighters show up to reassure the flighters (thus the beauty of this thread).

[bck63]

People here need to figure out the source of their stress and angst. My guess is a lot of it stems from spending a large part of each day looking forward to retiring instead of living in the present. Be careful, you might start trying to hang on to your money too tightly and that could lead to behavioral mistakes.

I can relate to this and need to be constantly vigilant about it. I'm not so much concerned about making behavioral mistakes as just not being present and happy in the current moment. Lots of wonderful things around me to be grateful for and happy about. Have to enjoy things while I'm here. As someone once said, you never saw an armored car following a hearse.

[Doom&Gloom]

drk

Rus In Urbe wrote: ↑Fri Mar 08, 2019 7:19 am
This thread-title is completely hyperbolic of course. Free Fall? Not yet. But it could happen soon.

Note the timing of the first post.

THANKS for pointing that out, drk!

The original post was written August 2011 on a day when the market skidded down 550 points. I wouldn't really call that "free fall" either. 550 points is sure scary, but I recall being unimpressed by that slump. We bought more. By Aug 2011 our accounts (and yours too no doubt) had recovered and then some, and we were well into the Great Recovery!

But the !YIKES! title of this thread is doubtless why I clicked on it.
And why it's over 200 pages by now . . . Our amygdalas are super-stimulated by fear!

When subtle or severe changes in market direction stimulate the fight or flight response in the minds of some Bogleheads, the fighters show up to reassure the flighters (thus the beauty of this thread).

Nice POV!

I agree. The thread is entertaining while being a source of support for some who may need it when they need it most.

[StandingRock]

It's interesting to go through these old posts and see the same fears and doubts and complaints over politics etc. that you see today. Also of note that some posts were referring to the "bear market" in mid 2011.

[ruralavalon]

It's interesting to go through these old posts and see the same fears and doubts and complaints over politics etc. that you see today. Also of note that some posts were referring to the "bear market" in mid 2011.

For perspective, since this thread began August 8, 2011 total return of Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) is up 165%, and $10,000 invested then has turned into $26,499.

[gvsucavie03]

It's interesting to go through these old posts and see the same fears and doubts and complaints over politics etc. that you see today. Also of note that some posts were referring to the "bear market" in mid 2011.

For perspective, since this thread began August 8, 2011 total return of Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) is up 165%, and $10,000 invested then has turned into $26,499.

"The sky is falling" is a way more exciting topic. Don't cloud it with facts...

[drk]

We bought more. By Aug 2011 our accounts (and yours too no doubt) had recovered and then some, and we were well into the Great Recovery!

Alas, I was a broke recent grad at the time, so my accounts were still pretty empty. I remember fearing the double-dip recession, though.

[willthrill81]

It's interesting to go through these old posts and see the same fears and doubts and complaints over politics etc. that you see today. Also of note that some posts were referring to the "bear market" in mid 2011.

For perspective, since this thread began August 8, 2011 total return of Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) is up 165%, and $10,000 invested then has turned into $26,499.

"The sky is falling" is a way more exciting topic. Don't cloud it with facts...

This is evidenced by the high number of posts to this thread when the market hits all time highs.

Pessimists can always find something to complain about.

[RobLyons]

I love how after discovering this site and the lazy 3 fund portfolio that all my fears of market volatility have gone away.

[sambb]

if one has enough in bonds to last 5 years of expenses, cant one just put all future earnings into stocks and increase allocation to stocks over time, as you will have more than enough? Yes. more swings during freefall, but you have 5 years of bonds as backup, so you can wait 5 years for rebound - ?? should one increase allocation

[J G Bankerton]

if one has enough in bonds to last 5 years of expenses, cant one just put all future earnings into stocks and increase allocation to stocks over time, as you will have more than enough? Yes. more swings during freefall, but you have 5 years of bonds as backup, so you can wait 5 years for rebound - ?? should one increase allocation

I assume you mean actual bonds and not a mutual fund. Bonds can fall in value until they mature so selling bonds may not be an option. What I do is keep a fixed amount in a money market fund, it almost keeps me even with inflation after taxes, and the rest is in stocks. Just be ready for big swings in account balances.

[yukon50]

I went 100% cash several weeks ago as I have friends who work the financial markets in Hong Kong who had warned me about the China signs. I thought the worse that happens is I hop out and hop back in if it turned out to be noise about nothing. Well, I haven't bought back in yet. Turns out these financial guys do know things us common folks don't. I think this landslide has some legs.

Broadstone, update? Looks like you went to all cash in Aug 2015. S&P 500 is now at 2,810.

[yukon50]

I liquidated to cash 2 months ago. The buying opportunity China will cause could be a once in a decade opportunity, so better start digging up the tins of cash from your backyard (gentle nod to Vegas Vacation movie).

2009 was less than 10 years ago...

This buying opportunity will be greater than that?

By the way, I hope you don't disappear from this site if the markets go back up...

We've had a lot of people claiming they went 100% to cash.... in 2011... in 2012... in 2013.... in2014... And then as the market continued to climb, they just stopped posting for some reason.

Also, please post when you get back into the market... I'll go ahead and let you claim you got out 2 months ago... but please real-time post when you get back in.

Good luck to you!

You called it...he hasn't posted since 2016.

[H-Town]

I love how after discovering this site and the lazy 3 fund portfolio that all my fears of market volatility have gone away.

You either die rich, or live long enough to see half of your assets wiped out

[TomCat96]

Every two weeks when my contributions purchase up shares, all I can think of is "Man I wish I could buy this for cheaper"

[willthrill81]

Every two weeks when my contributions purchase up shares, all I can think of is "Man I wish I could buy this for cheaper"

Many years ago, I was told that real estate is expensive when you're young and outrageous when you're old.

[Time2Quit]

I read somewhere that the 10 year bull market ended in 2018 with the crash and we are in a new bull market.

[willthrill81]

I read somewhere that the 10 year bull market ended in 2018 with the crash and we are in a new bull market.

The market hasn't yet risen 20% above the lows back in December, so we're still in a bear market.

[BeBH65]

My understanding is that we only experienced a correction, not a bear and certainly not a crazh. We are still in the bull market. This according to the definition that a bear market starts when the closing price is 20% lower then the top. We did not decend that low in December.

[willthrill81]

My understanding is that we only experienced a correction, not a bear and certainly not a crazh. We are still in the bull market. This according to the definition that a bear market starts when the closing price is 20% lower then the top. We did not decend that low in December.

Yes, the market did drop that much. The closing price of SPY on 9/20/18 was $293.58. On 12/24/18, it was $234.34, just over a 20% drop. Similarly, VTSAX dropped from $73.65 to $58.19, a drop of 21%. By both measures, that's a bear market.

[corn18]

Nobody knows nuthin. The market will do whatever it will regardless of labels we apply.

[TheTimeLord]

My understanding is that we only experienced a correction, not a bear and certainly not a crazh. We are still in the bull market. This according to the definition that a bear market starts when the closing price is 20% lower then the top. We did not decend that low in December.

Yes, the market did drop that much. The closing price of SPY on 9/20/18 was $293.58. On 12/24/18, it was $234.34, just over a 20% drop. Similarly, VTSAX dropped from $73.65 to $58.19, a drop of 21%. By both measures, that's a bear market.

The S&P 500 came up short of a 20% decline, at -19.778214% using closing prices. You should be using the closing prices of the actual index not the prices of mutual funds and ETFs.

[willthrill81]

My understanding is that we only experienced a correction, not a bear and certainly not a crazh. We are still in the bull market. This according to the definition that a bear market starts when the closing price is 20% lower then the top. We did not decend that low in December.

Yes, the market did drop that much. The closing price of SPY on 9/20/18 was $293.58. On 12/24/18, it was $234.34, just over a 20% drop. Similarly, VTSAX dropped from $73.65 to $58.19, a drop of 21%. By both measures, that's a bear market.

The S&P 500 came up short of a 20% decline, at -19.778214% using closing prices. You should be using the closing prices of the actual index not the prices of mutual funds and ETFs.

That's a matter of opinion. No one can own the index, only a fund representing it. And VTSAX was definitely below the 20% mark and arguably a better measure of the market than SPY.

[TheTimeLord]

My understanding is that we only experienced a correction, not a bear and certainly not a crazh. We are still in the bull market. This according to the definition that a bear market starts when the closing price is 20% lower then the top. We did not decend that low in December.

Yes, the market did drop that much. The closing price of SPY on 9/20/18 was $293.58. On 12/24/18, it was $234.34, just over a 20% drop. Similarly, VTSAX dropped from $73.65 to $58.19, a drop of 21%. By both measures, that's a bear market.

The S&P 500 came up short of a 20% decline, at -19.778214% using closing prices. You should be using the closing prices of the actual index not the prices of mutual funds and ETFs.

That's a matter of opinion. No one can own the index, only a fund representing it. And VTSAX was definitely below the 20% mark and arguably a better measure of the market than SPY.

You think the timing of a dividend distribution might skewed your results?

[BeBH65]

A reference https://www.yardeni.com/pub/stmktbullbearmkt.pdf

[willthrill81]

My understanding is that we only experienced a correction, not a bear and certainly not a crazh. We are still in the bull market. This according to the definition that a bear market starts when the closing price is 20% lower then the top. We did not decend that low in December.

Yes, the market did drop that much. The closing price of SPY on 9/20/18 was $293.58. On 12/24/18, it was $234.34, just over a 20% drop. Similarly, VTSAX dropped from $73.65 to $58.19, a drop of 21%. By both measures, that's a bear market.

The S&P 500 came up short of a 20% decline, at -19.778214% using closing prices. You should be using the closing prices of the actual index not the prices of mutual funds and ETFs.

That's a matter of opinion. No one can own the index, only a fund representing it. And VTSAX was definitely below the 20% mark and arguably a better measure of the market than SPY.

You think the timing of a dividend distribution might skewed your results?

Skewed? Possibly. Invalidated? I don't think so.

[LiterallyIronic]

Here we go again. 19.8% or 20%, "bear" or "bull", whatever. Is anyone here making an investing decision based on how long it's been since the most recent "bear market"? I hope not.

[willthrill81]

A reference https://www.yardeni.com/pub/stmktbullbearmkt.pdf

Like TheTimeLord, they are tracking the S&P 500 index, not any funds representing it. I believe the latter to be more accurate because it is impossible for anyone to own the index directly. Portfolio Visualizer uses actual funds to represent asset classes.

[willthrill81]

Here we go again. 19.8% or 20%, "bear" or "bull", whatever. Is anyone here making an investing decision based on how long it's been since the most recent "bear market"? I hope not.

I certainly hope not as well. Part of the problem I perceive is that many believe that if a bull market goes on long enough, the likelihood of a bear market occurring increases, which is historically false.

[Taj_Mahalo]

Right. Age alone wouldn't kill an extended business cycle. It's almost like flipping a coin. If you land on heads 10 times in a row you'll start thinking more and more that your next flip has to be tails. No one knows what will happen.

[Earl Lemongrab]

It gets into "angels dancing" territory. Some definitions of "bear" require a 20% drop and maintain below that level for a certain period. So sharp correction, bear, eh, it was a drop anyway.

[ruralavalon]

It gets into "angels dancing" territory. Some definitions of "bear" require a 20% drop and maintain below that level for a certain period. So sharp correction, bear, eh, it was a drop anyway.

I agree.

This is definitely "angels dancing" territory.

[RobLyons]

I love how after discovering this site and the lazy 3 fund portfolio that all my fears of market volatility have gone away.

You either die rich, or live long enough to see half of your assets wiped out

[walletless]

Time for a bump!

[DonIce]

Time for a bump!

4.5% off the all time high. Quite the free fall.

[H-Town]

Time for a bump!

3/22/2019: First day of 2019 recession.

[Admiral]

Let's recall that the S&P was up over 1% yesterday <cushioning the blow>.

[GoldenFinch]

March 21 = Easy money!
March 22 = Hey! Where did all that money go!

[corpgator]

Surprised it took this long to get back to the front page.

[LiterallyIronic]

Maybe it will turn out that MarketTimer was right. I hope so, because I could go for a drop that allows me to buy stocks on the cheap. DOW under 20,000 would be cool (as long as I didn't lose my job).

[TheTimeLord]

Let's recall that the S&P was up over 1% yesterday <cushioning the blow>.

And I was about to announce my retirement, now stocks are in a free fall (won't be shocked if the end near flat though). Guess I need to put that announcement on hold.

[inbox788]

March 21 = Easy money!
March 22 = Hey! Where did all that money go!

Sell, sell, sell, then buy, buy, buy.
https://www.youtube.com/watch?v=mypHpsSoF8o

[Earl Lemongrab]

Is this an ex-dividend day? I thought someone mentioned that. I don't pay a lot of attention to it.