Did you buy the 600+ dip last week ?

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TheTimeLord
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Re: Did you buy the 600+ dip last week ?

Post by TheTimeLord » Wed May 15, 2019 8:36 pm

The Wizard wrote:
Wed May 15, 2019 5:48 pm
Bacchus01 wrote:
Wed May 15, 2019 5:28 pm
There was a drop? Huh. I didn’t notice
This is why folks should monitor things daily when convenient.
The dip was actually at closing on Monday the 13th, not last week...
Word.
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TheTimeLord
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Re: Did you buy the 600+ dip last week ?

Post by TheTimeLord » Wed May 15, 2019 8:39 pm

Monday I sold equities in my Tax Deferred account and repurchased that same amount between my Roth and Taxable accounts. So I still have the same amount of equities just in better neighborhoods.
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Earl Lemongrab
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Re: Did you buy the 600+ dip last week ?

Post by Earl Lemongrab » Wed May 15, 2019 9:03 pm

Jimsad wrote:
Wed May 15, 2019 5:02 pm
I am curious how many of you put in extra money last week when market fell 600+ points .
I did but am not sure if it makes a difference .
What extra money? I don't purposefully hold a cash fund for market timing. I check the accounts once a month and direct any new money to lagging allocations.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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Re: Did you buy the 600+ dip last week ?

Post by DesertDiva » Wed May 15, 2019 9:16 pm

No market timing here! :!:
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Re: Did you buy the 600+ dip last week ?

Post by lkar » Wed May 15, 2019 9:19 pm

I am doing a decent sized Roth conversion this year. I am generally scheduled to do it in even chunks throughout the year but am accelerating here or there if there are dips. I converted about a sixth of the money for the year right after the big drop this week.

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Re: Did you buy the 600+ dip last week ?

Post by Carter3 » Wed May 15, 2019 9:31 pm

I purchased per my usual schedule last week. Felt stupid when the market dropped.

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Re: Did you buy the 600+ dip last week ?

Post by LadyGeek » Wed May 15, 2019 9:44 pm

This thread is now in the Investing - Theory, News & General forum (general discussion).
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Re: Did you buy the 600+ dip last week ?

Post by Dick D » Wed May 15, 2019 10:14 pm

I have not purchased on a dip on years and do not ever intend to do so again. Why? A few days later there was another dip? Would there be another dip the day after ?

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Re: Did you buy the 600+ dip last week ?

Post by m@ver1ck » Wed May 15, 2019 11:37 pm

Put 5K in 529 from bonds in taxable and moved 5K from bonds to stocks in 401K

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Re: Did you buy the 600+ dip last week ?

Post by NYCwriter » Wed May 15, 2019 11:53 pm

People here take an interesting pride in never purchasing on a dip.

I did add to equities on Dec 24. Last month after doing taxes and reviewing my plan I decided to set up VOO/VXF in Roth, where I still have mutual funds, to reduce expense ratios (I hold VTSAX in taxable). Last week I reduced a mutual fund to add that amount, and did so on 5/13. It wasn't a huge drop.

My allocation isn't pinpoint and I try to add small amounts to my taxable monthly (retirement is on auto) so if there's a drop it's a 'why not today?' opportunity.

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Re: Did you buy the 600+ dip last week ?

Post by Earl Lemongrab » Wed May 15, 2019 11:55 pm

I never had any specific goals. It was always to develop a smart investing plan and execute. Now, even though a scientist by training and aware of the fallacy of round numbers, I did still notice when I topped 1mil.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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Re: Did you buy the 600+ dip last week ?

Post by Earl Lemongrab » Wed May 15, 2019 11:55 pm

NYCwriter wrote:
Wed May 15, 2019 11:53 pm
People here take an interesting pride in never purchasing on a dip.
It's not pride, it's noting that I have an investing plan and that isn't part of it.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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Re: Did you buy the 600+ dip last week ?

Post by stlutz » Wed May 15, 2019 11:56 pm

I bought on Christmas Eve. Didn't figure I could have that kind of timing twice in six months. :moneybag

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curiouskitty
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Re: Did you buy the 600+ dip last week ?

Post by curiouskitty » Thu May 16, 2019 3:20 am

I bought last week after several large down days but there was one big drop after I bought still. I had a feeling I should have waited a little longer but went with the boglehead advice to just buy.

Should all be noise soon although it was a big purchase so every cent of basis counts!

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Re: Did you buy the 600+ dip last week ?

Post by Jimsad » Thu May 16, 2019 4:10 am

arcticpineapplecorp. wrote:
Wed May 15, 2019 8:33 pm
It's percentages, not points that matter.

You're not sure if buying on the dip makes a difference?

If it does make a difference, why?

If it doesn't make a difference, why?
If you put in a large enough amount , it will make a difference but I do not want to take that much risk

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Re: Did you buy the 600+ dip last week ?

Post by RickBoglehead » Thu May 16, 2019 5:00 am

dcw213 wrote:
Wed May 15, 2019 5:56 pm
Unless you moved a serious chunk of money, the impact of “buying this dip” will be nothing in the grand scheme of investing. For a forum of “ignore the noise” rationale I see a lot of folks focusing on the noise when it gets them an extra $100 but writing off when the opposite happens as “noise”. Did you really dump enough money in that saving 3% off your purchase price will be valuable in the grand scheme of your wealth building?
Agree.
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Re: Did you buy the 600+ dip last week ?

Post by RobLyons » Thu May 16, 2019 5:06 am

Jimsad wrote:
Wed May 15, 2019 5:02 pm
I am curious how many of you put in extra money last week when market fell 600+ points .
I did but am not sure if it makes a difference .

I didn't. After finding this site and Taylor's 3 fund portfolio post, I literally do not follow the stock market at all. VTSAX, VTIAX, and my normal 403b contribution, and paying off debt, week after week..
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Re: Did you buy the 600+ dip last week ?

Post by JBeck » Thu May 16, 2019 5:31 am

Yes, but by luck. I was rolling over a 401K to an IRA.

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Re: Did you buy the 600+ dip last week ?

Post by F150HD » Thu May 16, 2019 5:37 am

Jimsad wrote:
Wed May 15, 2019 5:36 pm
For various reasons , I do not think there will be many huge drops like this one in near future .
Hence it may be better to jump when these happen , of course, if you have cash to spare and it does not alter your target asset allocation too much .
clarify? how do you know? :moneybag :moneybag

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Re: Did you buy the 600+ dip last week ?

Post by JediMisty » Thu May 16, 2019 5:42 am

Not enough of a dip to affect my asset allocation triggers. I bought the planned amount in my 401k which I do regardless of the market situation.

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Re: Did you buy the 600+ dip last week ?

Post by arcticpineapplecorp. » Thu May 16, 2019 6:03 am

Jimsad wrote:
Thu May 16, 2019 4:10 am
arcticpineapplecorp. wrote:
Wed May 15, 2019 8:33 pm
It's percentages, not points that matter.

You're not sure if buying on the dip makes a difference?

If it does make a difference, why?

If it doesn't make a difference, why?
If you put in a large enough amount , it will make a difference but I do not want to take that much risk
There is risk in the stock market. If you don't want to take "that much risk" then what does it really matter what happens in the market if you're not investing "a large enough amount"? It would have no effect on you. So why ask the question? Do you want to know if others are willing to take more risk than you? How is that helpful? Everyone's different. Do you want to know if people got excited (happy or anxious) about a 600 point drop (even though the percentage drop was less than 2%)?
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Re: Did you buy the 600+ dip last week ?

Post by z3r0c00l » Thu May 16, 2019 6:05 am

Didn't even buy the dip in winter 2018! Beyond being a poor strategy, buying the dip is the kind of thing that would lead me to worse behavior and so I avoid it. Everything is done by a pre-set schedule. The only good thing is bi-weekly 401K purchases and they sometimes capture good deals. That can feel good but if stocks go down after the 401K contribution, I remember that money is going to sit until at least 2040. What happens this year doesn't really matter for 2040.

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Re: Did you buy the 600+ dip last week ?

Post by The Wizard » Thu May 16, 2019 6:13 am

Dick D wrote:
Wed May 15, 2019 10:14 pm
I have not purchased on a dip on years and do not ever intend to do so again. Why? A few days later there was another dip? Would there be another dip the day after ?
If/when there are lots of dips in succession, then it could be TLH time, like around Christmas last year.
So one still needs to watch what things are doing...
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Re: Did you buy the 600+ dip last week ?

Post by JonnyDVM » Thu May 16, 2019 6:30 am

RickBoglehead wrote:
Thu May 16, 2019 5:00 am
dcw213 wrote:
Wed May 15, 2019 5:56 pm
Unless you moved a serious chunk of money, the impact of “buying this dip” will be nothing in the grand scheme of investing. For a forum of “ignore the noise” rationale I see a lot of folks focusing on the noise when it gets them an extra $100 but writing off when the opposite happens as “noise”. Did you really dump enough money in that saving 3% off your purchase price will be valuable in the grand scheme of your wealth building?
Agree.

Why does everyone on this forum make an effort to rain on a parade no matter how small? If I am about to buy something for $1.00 and it goes on sale for $0.98 am I not allowed to be pleased that I saved 0.02? If I happen to get lucky and find $500 on the sidewalk am I not allowed to be excited that I got a free $500 even though the impact to my overall pursuit of wealth building will be negligible? In the grand scheme of the universe nothing we do matters.
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Re: Did you buy the 600+ dip last week ?

Post by rkhusky » Thu May 16, 2019 6:32 am

I anticipated falling below my rebalance limit and moved some money from bonds to stocks on Monday.

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Re: Did you buy the 600+ dip last week ?

Post by Psyayeayeduck » Thu May 16, 2019 6:41 am

I bought a piece of it via my Roth IRA since I haven't started contribute to it for 2019. I was going to contribute in a month regardless if the markets were up or down but the opportunity presented itself.

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Re: Did you buy the 600+ dip last week ?

Post by bargainhuntingking » Thu May 16, 2019 6:42 am

Of course not. I bought the day before it happened, as usual. :oops:

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Re: Did you buy the 600+ dip last week ?

Post by TheTimeLord » Thu May 16, 2019 6:43 am

dcw213 wrote:
Wed May 15, 2019 5:56 pm
Unless you moved a serious chunk of money, the impact of “buying this dip” will be nothing in the grand scheme of investing. For a forum of “ignore the noise” rationale I see a lot of folks focusing on the noise when it gets them an extra $100 but writing off when the opposite happens as “noise”. Did you really dump enough money in that saving 3% off your purchase price will be valuable in the grand scheme of your wealth building?
Define a serious chunk of money.
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Re: Did you buy the 600+ dip last week ?

Post by The Wizard » Thu May 16, 2019 6:46 am

JonnyDVM wrote:
Thu May 16, 2019 6:30 am

...Why does everyone on this forum make an effort to rain on a parade no matter how small? If I am about to buy something for $1.00 and it goes on sale for $0.98 am I not allowed to be pleased that I saved 0.02? If I happen to get lucky and find $500 on the sidewalk am I not allowed to be excited that I got a free $500 even though the impact to my overall pursuit of wealth building will be negligible? In the grand scheme of the universe nothing we do matters.
Correct. Buying a chunk of TSM on sale is a good thing.

For decades, I put decent amounts into my 403(b) plan with my employer each pay day, automatically.
But now I have a choice on what to do with excess retirement income, so I tend to buy when sales happen, hopefully not right before quarterly dividends come out...
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Re: Did you buy the 600+ dip last week ?

Post by arcticpineapplecorp. » Thu May 16, 2019 6:48 am

JonnyDVM wrote:
Thu May 16, 2019 6:30 am
RickBoglehead wrote:
Thu May 16, 2019 5:00 am
dcw213 wrote:
Wed May 15, 2019 5:56 pm
Unless you moved a serious chunk of money, the impact of “buying this dip” will be nothing in the grand scheme of investing. For a forum of “ignore the noise” rationale I see a lot of folks focusing on the noise when it gets them an extra $100 but writing off when the opposite happens as “noise”. Did you really dump enough money in that saving 3% off your purchase price will be valuable in the grand scheme of your wealth building?
Agree.

Why does everyone on this forum make an effort to rain on a parade no matter how small? If I am about to buy something for $1.00 and it goes on sale for $0.98 am I not allowed to be pleased that I saved 0.02? If I happen to get lucky and find $500 on the sidewalk am I not allowed to be excited that I got a free $500 even though the impact to my overall pursuit of wealth building will be negligible? In the grand scheme of the universe nothing we do matters.
because there are three larger issues here we're trying to help the OP understand:

1. points don't matter. percentages do. To say "600 point drop" could be meaningful when the Dow (bad example of "the market" because it's only 30 stocks but let's go with it anyway) is at 2600 (a 23% drop) but less meaning full when the Dow is at 26,000 (a 2.3% drop) and even less meaningful as the Dow climbs higher. The media just either doesn't get this or disregards it because they need a splashy new headline every day. To reiterate what the media is spouting without really understanding the meaningless of talking in "points" rather than percentages is to fall prey to the media which wants you to "to something" rather than just stand there. To continue talking in "points" is to further the uneducation regarding investing. It should be corrected. Points dont matter. Speak in percentages, which is what really matters.

2. the market goes up and down. Understand the difference between a really bad day and ordinary volatility. There is a difference. People are saying this was inconsequential as a buying opportunity. Not that it's not wise to buy on the dips, but that it's not life changing when the dip is so small.

3. a thread that asks about what people did when the market moved on a particular day (or couple days) smacks of market timing. This is not investing. It's short-termism. Investing is about the long term. So again, what happens in one (or two) days in the market is of no real consequence to your overall investment history which likely is decades (or should be).

ta ta for now.
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Re: Did you buy the 600+ dip last week ?

Post by gilgamesh » Thu May 16, 2019 6:52 am

Jimsad wrote:
Thu May 16, 2019 4:10 am
arcticpineapplecorp. wrote:
Wed May 15, 2019 8:33 pm
It's percentages, not points that matter.

You're not sure if buying on the dip makes a difference?

If it does make a difference, why?

If it doesn't make a difference, why?
If you put in a large enough amount , it will make a difference but I do not want to take that much risk
What is(are) the risk(s) you are taking?

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Jimsad
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Re: Did you buy the 600+ dip last week ?

Post by Jimsad » Thu May 16, 2019 6:58 am

gilgamesh wrote:
Thu May 16, 2019 6:52 am
Jimsad wrote:
Thu May 16, 2019 4:10 am
arcticpineapplecorp. wrote:
Wed May 15, 2019 8:33 pm
It's percentages, not points that matter.

You're not sure if buying on the dip makes a difference?

If it does make a difference, why?

If it doesn't make a difference, why?
If you put in a large enough amount , it will make a difference but I do not want to take that much risk
What is(are) the risk(s) you are taking?
Risk of losing money if Market keeps dropping ; risk of deviating from my preferred asset allocation of 65:35

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gilgamesh
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Re: Did you buy the 600+ dip last week ?

Post by gilgamesh » Thu May 16, 2019 7:16 am

Jimsad wrote:
Thu May 16, 2019 6:58 am
gilgamesh wrote:
Thu May 16, 2019 6:52 am
Jimsad wrote:
Thu May 16, 2019 4:10 am
arcticpineapplecorp. wrote:
Wed May 15, 2019 8:33 pm
It's percentages, not points that matter.

You're not sure if buying on the dip makes a difference?

If it does make a difference, why?

If it doesn't make a difference, why?
If you put in a large enough amount , it will make a difference but I do not want to take that much risk
What is(are) the risk(s) you are taking?
Risk of losing money if Market keeps dropping ; risk of deviating from my preferred asset allocation of 65:35
The second risk is the issue in your case. You are buying the dip by selling bonds and emergency funds, changing your preferred AA. The first risk is just the result of this.

If you are ok with the riskier AA, waiting for the dip and not changing the AA sooner actually reduces your overall expected return if time horizon was appropriate.

Changing AA to be riskier during these so called dips will have lower expected return than setting the AA to be more riskier all along...if you don’t want to take that higher risk all along, then taking it after a dip does not reduce your risk - you are increasing risk without a corresponding increase in expected return.
Last edited by gilgamesh on Thu May 16, 2019 7:26 am, edited 1 time in total.

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Jimsad
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Re: Did you buy the 600+ dip last week ?

Post by Jimsad » Thu May 16, 2019 7:20 am

arcticpineapplecorp. wrote:
Thu May 16, 2019 6:48 am
JonnyDVM wrote:
Thu May 16, 2019 6:30 am
RickBoglehead wrote:
Thu May 16, 2019 5:00 am
dcw213 wrote:
Wed May 15, 2019 5:56 pm
Unless you moved a serious chunk of money, the impact of “buying this dip” will be nothing in the grand scheme of investing. For a forum of “ignore the noise” rationale I see a lot of folks focusing on the noise when it gets them an extra $100 but writing off when the opposite happens as “noise”. Did you really dump enough money in that saving 3% off your purchase price will be valuable in the grand scheme of your wealth building?
Agree.

Why does everyone on this forum make an effort to rain on a parade no matter how small? If I am about to buy something for $1.00 and it goes on sale for $0.98 am I not allowed to be pleased that I saved 0.02? If I happen to get lucky and find $500 on the sidewalk am I not allowed to be excited that I got a free $500 even though the impact to my overall pursuit of wealth building will be negligible? In the grand scheme of the universe nothing we do matters.
So again, what happens in one (or two) days in the market is of no real consequence to your overall investment history which likely is decades (or should be).

Is it not the that many times significant moves occur in a few day span and investors who miss out On these , may lose out on returns ?
So I am not sure that I agree with this statement

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Jimsad
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Re: Did you buy the 600+ dip last week ?

Post by Jimsad » Thu May 16, 2019 7:27 am

gilgamesh wrote:
Thu May 16, 2019 7:16 am
Jimsad wrote:
Thu May 16, 2019 6:58 am
gilgamesh wrote:
Thu May 16, 2019 6:52 am
Jimsad wrote:
Thu May 16, 2019 4:10 am
arcticpineapplecorp. wrote:
Wed May 15, 2019 8:33 pm
It's percentages, not points that matter.

You're not sure if buying on the dip makes a difference?

If it does make a difference, why?

If it doesn't make a difference, why?
If you put in a large enough amount , it will make a difference but I do not want to take that much risk
What is(are) the risk(s) you are taking?
Risk of losing money if Market keeps dropping ; risk of deviating from my preferred asset allocation of 65:35
The second risk is the issue in your case. You are buying the dip by selling bonds and emergency funds, changing your preferred AA. The first risk is just the result of this.

If you are ok with the riskier AA, waiting for the dip and not changing the AA sooner actually reduces your overall expected return if time horizon was appropriate.

Changing AA to be riskier during these so called dips will have lower return than setting the AA to be more riskier all along...if you don’t want to take that higher risk all along, then taking it after a dip does not reduce your risk - you are increasing risk without a corresponding increase in expected return.
I agree with what you are saying .
But I try to use mostly my ‘play money ‘ fund to do this kind of stuff

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Re: Did you buy the 600+ dip last week ?

Post by lostdog » Thu May 16, 2019 7:30 am

No. Contribute to 401k and taxable every paycheck friday when money is available.
I don't invest looking in the rear view mirror and I know absolutely nothing about the future. I invest in Vanguard Total World Stock Index.

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Re: Did you buy the 600+ dip last week ?

Post by BuckyBadger » Thu May 16, 2019 7:33 am

Of course not. I don't keep spare cash on hand for market timing. I contribute everything in my plan as soon as it is available to invest.

I didn't know there was a dip until I came on here and saw this thread.

I don't listen to noise. I have better things to do with my life!

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Re: Did you buy the 600+ dip last week ?

Post by OldBallCoach » Thu May 16, 2019 7:35 am

There was a dip?

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Re: Did you buy the 600+ dip last week ?

Post by hulburt1 » Thu May 16, 2019 7:38 am

When the market drops 15% I will do a Roth conversation. In Dec, I did one and felt it was a way to come out a head. I'm at 12% tax I exchanges my Ira S&P to My Roth S&P. About $30000. I have 4 years to 70 and I can see a real tax bite coming my way. :sharebeer

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gilgamesh
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Re: Did you buy the 600+ dip last week ?

Post by gilgamesh » Thu May 16, 2019 7:48 am

Jimsad wrote:
Thu May 16, 2019 7:27 am
gilgamesh wrote:
Thu May 16, 2019 7:16 am
Jimsad wrote:
Thu May 16, 2019 6:58 am
gilgamesh wrote:
Thu May 16, 2019 6:52 am
Jimsad wrote:
Thu May 16, 2019 4:10 am


If you put in a large enough amount , it will make a difference but I do not want to take that much risk
What is(are) the risk(s) you are taking?
Risk of losing money if Market keeps dropping ; risk of deviating from my preferred asset allocation of 65:35
The second risk is the issue in your case. You are buying the dip by selling bonds and emergency funds, changing your preferred AA. The first risk is just the result of this.

If you are ok with the riskier AA, waiting for the dip and not changing the AA sooner actually reduces your overall expected return if time horizon was appropriate.

Changing AA to be riskier during these so called dips will have lower return than setting the AA to be more riskier all along...if you don’t want to take that higher risk all along, then taking it after a dip does not reduce your risk - you are increasing risk without a corresponding increase in expected return.
I agree with what you are saying .
But I try to use mostly my ‘play money ‘ fund to do this kind of stuff
I think that’s ok...but it’s good to make aware of the full implication. It’s so easy to fall into the trap of ‘buying the dip’ and not having a full understanding.

Some might be holding on to cash thinking they want to buy the stock that’s $1 to buy at $0.98, and when it actually reaches $0.98, thinking they’ve done something good to their portfolio without realizing during the waiting, the $1 may have had an expected return of 5%, and thus they lost out on the $1 going to $1.05 - an overall loss.

Having said that, I am at about 25% bond allocation...if S&P drops 30%-%50 I might be tempted to do the same as you 😜...in December with the 20% drop, I was so tempted to overbalance.

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Jimsad
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Re: Did you buy the 600+ dip last week ?

Post by Jimsad » Thu May 16, 2019 8:03 am

hulburt1 wrote:
Thu May 16, 2019 7:38 am
When the market drops 15% I will do a Roth conversation. In Dec, I did one and felt it was a way to come out a head. I'm at 12% tax I exchanges my Ira S&P to My Roth S&P. About $30000. I have 4 years to 70 and I can see a real tax bite coming my way. :sharebeer
I am not sure I understand . How does this help ? Is this a way of tax loss harvesting ?

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Re: Did you buy the 600+ dip last week ?

Post by gilgamesh » Thu May 16, 2019 8:10 am

hulburt1 wrote:
Thu May 16, 2019 7:38 am
When the market drops 15% I will do a Roth conversation. In Dec, I did one and felt it was a way to come out a head. I'm at 12% tax I exchanges my Ira S&P to My Roth S&P. About $30000. I have 4 years to 70 and I can see a real tax bite coming my way. :sharebeer
Even if you just switch between S&P 500 to S&P 500, when you move from traditional to Roth the ‘Tax-adjusted AA’ changes. So. You are changing the ‘tax-adjusted’ AA which is what you get to spend, to be more stock heavy.

https://www.bogleheads.org/wiki/Tax-adj ... allocation

P.S: I haven’t looked into what exactly it means - whether this strategy still comes out ahead correcting for the various tax adjustments.
Last edited by gilgamesh on Thu May 16, 2019 8:18 am, edited 1 time in total.

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gilgamesh
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Re: Did you buy the 600+ dip last week ?

Post by gilgamesh » Thu May 16, 2019 8:14 am

Jimsad wrote:
Thu May 16, 2019 8:03 am
hulburt1 wrote:
Thu May 16, 2019 7:38 am
When the market drops 15% I will do a Roth conversation. In Dec, I did one and felt it was a way to come out a head. I'm at 12% tax I exchanges my Ira S&P to My Roth S&P. About $30000. I have 4 years to 70 and I can see a real tax bite coming my way. :sharebeer
I am not sure I understand . How does this help ? Is this a way of tax loss harvesting ?
He paid taxes on the $30k when it was down by 15%, so when the market recovers to the original amount he basically got the higher amount into Roth by paying taxes on the lower amount. Investments were both in S&P 500, not from bond to stocks, so non-Tax-adjusted AA remains the same ... the typical AA most assume didn’t change.

All of these depend on stocks going up to its original amount - given enough time frame, we all assume that.

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midareff
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Re: Did you buy the 600+ dip last week ?

Post by midareff » Thu May 16, 2019 8:17 am

Not even close....... opportunity looks more like a 25% - 30% drop to me, minimum, not a 2% wiggle..

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Jimsad
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Re: Did you buy the 600+ dip last week ?

Post by Jimsad » Thu May 16, 2019 8:20 am

gilgamesh wrote:
Thu May 16, 2019 8:14 am
Jimsad wrote:
Thu May 16, 2019 8:03 am
hulburt1 wrote:
Thu May 16, 2019 7:38 am
When the market drops 15% I will do a Roth conversation. In Dec, I did one and felt it was a way to come out a head. I'm at 12% tax I exchanges my Ira S&P to My Roth S&P. About $30000. I have 4 years to 70 and I can see a real tax bite coming my way. :sharebeer
I am not sure I understand . How does this help ? Is this a way of tax loss harvesting ?
He paid taxes on the $30k when it was down by 15%, so when the market recovers to the original amount he basically got the higher amount into Roth by paying taxes on the lower amount. Investments were both in S&P 500, not from bond to stocks, so non-Tax-adjusted AA remains the same ... the typical AA most assume didn’t change.

All of these depend on stocks going up to its original amount - given enough time frame, we all assume that.
Makes sense . Thanks

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Re: Did you buy the 600+ dip last week ?

Post by jebmke » Thu May 16, 2019 8:23 am

midareff wrote:
Thu May 16, 2019 8:17 am
Not even close....... opportunity looks more like a 25% - 30% drop to me, minimum, not a 2% wiggle..
my re-balance point is around -20% (probably a little less, since bonds will probably edge up a bit at the same time equities drop).
When you discover that you are riding a dead horse, the best strategy is to dismount.

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Re: Did you buy the 600+ dip last week ?

Post by The Wizard » Thu May 16, 2019 8:24 am

gilgamesh wrote:
Thu May 16, 2019 7:48 am

...I think that’s ok...but it’s good to make aware of the full implication. It’s so easy to fall into the trap of ‘buying the dip’ and not having a full understanding.

Some might be holding on to cash thinking they want to buy the stock that’s $1 to buy at $0.98, and when it actually reaches $0.98, thinking they’ve done something good to their portfolio without realizing during the waiting, the $1 may have had an expected return of 5%, and thus they lost out on the $1 going to $1.05 - an overall loss.

Having said that, I am at about 25% bond allocation...if S&P drops 30%-%50 I might be tempted to do the same as you 😜...in December with the 20% drop, I was so tempted to overbalance.
Situations vary, so having a full understanding needs to vary also.
I retired in 2013, so I'm not really saving for retirement anymore.
I accumulate excess funds beyond around $10k in checking into my taxable investment account, which is 100% stock funds.
This account is used to buy new vehicles every so often but is otherwise just backup money.

"New money" hits my checking account at various times each month, most notably around the 1st.
So I might move $1500 immediately into TSM or I might move it into my settlement account (MM fund). If stock indices are hitting new highs, there's a good chance I'll park that $1500 in MM to await a better buying opportunity. It's all good...
Attempted new signature...

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gilgamesh
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Re: Did you buy the 600+ dip last week ?

Post by gilgamesh » Thu May 16, 2019 8:51 am

The Wizard wrote:
Thu May 16, 2019 8:24 am
gilgamesh wrote:
Thu May 16, 2019 7:48 am

...I think that’s ok...but it’s good to make aware of the full implication. It’s so easy to fall into the trap of ‘buying the dip’ and not having a full understanding.

Some might be holding on to cash thinking they want to buy the stock that’s $1 to buy at $0.98, and when it actually reaches $0.98, thinking they’ve done something good to their portfolio without realizing during the waiting, the $1 may have had an expected return of 5%, and thus they lost out on the $1 going to $1.05 - an overall loss.

Having said that, I am at about 25% bond allocation...if S&P drops 30%-%50 I might be tempted to do the same as you 😜...in December with the 20% drop, I was so tempted to overbalance.
Situations vary, so having a full understanding needs to vary also.
I retired in 2013, so I'm not really saving for retirement anymore.
I accumulate excess funds beyond around $10k in checking into my taxable investment account, which is 100% stock funds.
This account is used to buy new vehicles every so often but is otherwise just backup money.

"New money" hits my checking account at various times each month, most notably around the 1st.
So I might move $1500 immediately into TSM or I might move it into my settlement account (MM fund). If stock indices are hitting new highs, there's a good chance I'll park that $1500 in MM to await a better buying opportunity. It's all good...
There is nothing wrong with ‘all time highs’...if your investment horizon is appropriate, then investing during today’s all-time high is just fine - your expected return is still higher rather than waiting. If your investment horizon is not appropriate, as in retirement, then change the AA. ‘All-time high’ doesn’t have anything to do with it.

All these shifting doesn’t change a thing...just layers to mask the underlying fault. One can put enough buckets, and several layers to trick one into thinking they are doing something good - but in reality it doesn’t do a thing.

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Re: Did you buy the 600+ dip last week ?

Post by TheTimeLord » Thu May 16, 2019 8:54 am

midareff wrote:
Thu May 16, 2019 8:17 am
Not even close....... opportunity looks more like a 25% - 30% drop to me, minimum, not a 2% wiggle..
In that case I don't believe you have seen an opportunity in the past 10 years. FWIW, I believe it was around 5% in total.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

jebmke
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Re: Did you buy the 600+ dip last week ?

Post by jebmke » Thu May 16, 2019 9:05 am

TheTimeLord wrote:
Thu May 16, 2019 8:54 am
midareff wrote:
Thu May 16, 2019 8:17 am
Not even close....... opportunity looks more like a 25% - 30% drop to me, minimum, not a 2% wiggle..
In that case I don't believe you have seen an opportunity in the past 10 years. FWIW, I believe it was around 5% in total.
My last net purchase was in the early summer of 2009. . So, you are correct.
When you discover that you are riding a dead horse, the best strategy is to dismount.

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