The Dark Side of "Stay the Course"

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Enganerd
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The Dark Side of "Stay the Course"

Post by Enganerd »

I started investing in 2010. I never have been tested in a significant, concerning market cycle like the tech bubble or the Great Recession. However, I did my homework and internalized the buy and hold long term investor should expect harrowing times. Odds are if you tune in to the news and try to time the market, you will lose out to the long term DCA investor, therefore do not expect it to be easy and "Stay the Course." I am an aggressive saver, some years I have put over 50% gross income into equities.

Right now I am disappointed in myself. Not because the market dropped and I lost $. But because it was obvious to me that it was more likely to drop in large %s than increase in large %s in the near future. I feel like I gave up my agency to an mantra/ideology. There were multiple visible risks. In general ppl were downplaying these risks or ignorant of them, but they were empirically there. By 2/08 it was apparent Chinese manufacturing had been significantly reduced and this would lead to global gdp hit. It was apparent COVID19 would turn up in the US if it was not already. We already have low interest rates and QE. It was bothering me that weekend so the following Monday I made move from 100/0 to 95/5. I have read here that small inconsequential moves can ease the psychological need to do something without veering too far off course. So I did, but I still feel regret about not sticking to my intuition. Again, right now this does not feel like it is about the $ as much as it is just regret over not acting in line with my beliefs.

I feel like many are still underestimating long term potential market effects. But I am a bit too stubborn to sell after last weeks sell off. I will simply tighten the belt more, work hard, and start buying back in. I still believe that in 20+ years public equities will yield returns based off today's prices. But these next 8-12 months will be very interesting with a wide range of potential outcomes. Stay safe and wash your hands.
Last edited by Enganerd on Sun Mar 01, 2020 10:33 am, edited 1 time in total.
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climber2020
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Re: The Dark Side of "Stay the Course"

Post by climber2020 »

Easy to say all this after the fact.

Get yourself a notebook. Every time you have a prediction about what the market will do in the short term, write it down. Be specific, and do this consistently.

Then go back and see how often you were actually correct.
cableguy
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Re: The Dark Side of "Stay the Course"

Post by cableguy »

29 people died from drink driving yesterday. 1 person from coronavirus. In the USA. Wars, 9/11, Natural Disasters, etc.......this too shall pass.....
anil686
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Re: The Dark Side of "Stay the Course"

Post by anil686 »

Well, I find that it cuts both ways though. When the market is charging up, we get a lot of posts about staying the course even though the market seems to be pricey and sometimes overvalued. During which time, posters are not saying that they are avoiding buying equities, but rather they are pouring more money in or posting *100% equities* threads. This makes little sense - you are paying increasingly more for a dollar of dividends with higher and higher share prices. On the other hand, as stocks get cheaper, this is the time you want your dividends to be re-invested at lower share prices. If anything, this is the time to be putting more in the market, not less. It is ironic that so many posters state “buy low and sell high” but then when situations like this happen, they have a hard time buying low. I understand what you are alluding to, you felt you had some insight that the market was going to really struggle before this past week. An alternative approach would be to have a balanced fund of some sort (TR fund, LS fund, balanced index fund) that allows you over time to buy bonds as the stock market roars up and to buy stocks as it falls. No issues with placing orders or website glitches, no behavioral regrets - always buying low and selling high. In a taxable account, just hold equities and adjust the bond totals in the tax deferred side in balanced funds to accomplish your asset allocation.

I think Warren Buffet had a good parable about this - something about hamburgers as proxy for the stock market and how people are generally irrational when if they thought about it like buying hamburgers, it would make more sense.

Hope that helps...
MikeG62
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Re: The Dark Side of "Stay the Course"

Post by MikeG62 »

OK, here is some tough love.

What you are suggesting is that you should/can use your intuition to trade in and out of the market? You realize that this would be tantamount to market timing right?

Do you honestly think you can successfully and consistently call the tops and bottoms of the market? Both Jack Bogle and Warren Buffett have said that they've never met anyone (or met anyone who has met anyone) who could consistently make money timing the market. As yet you believe you can do it using your gut intuition? Not only would you sell at or near the top, but you would have the courage to buy back in at or near the bottom (when the future looks the most bleak)? Good luck with that.

One reason this is so difficult is because markets tend to climb a wall of worry. So despite storm clouds on the horizon markets can and often do quite well.

You should have a risk tolerance that allows you to sleep at night. 100% stocks works fine for you in a rising market, but clearly not so well in a declining one.

No one wants or likes to lose money (me included). However, absorbing losses form time to time is the price of entry for the long-term upside the market has provided. If you can't or won't accept that, then owning stocks for the long run is going to be very painful for you with lots of sleepless nights. You appear young (having started investing only 10 years ago). You have a long time to ride out any downturn and see new highs again (many, many times over) during your investing lifetime.
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ReformedSpender
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Re: The Dark Side of "Stay the Course"

Post by ReformedSpender »

Cashing out is easy, knowing when to get back in is not. What if the market gains all that it lost next week?

Hence why staying the course is staying the course...

:beer
Market history shows that when there's economic blue sky, future returns are low, and when the economy is on the skids, future returns are high. The best fishing is done in the most stormy waters.
mega317
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Re: The Dark Side of "Stay the Course"

Post by mega317 »

yep. Anything can seem obvious in retrospect. Even if covid is pretty awful there is no telling what happens to the stock market in the coming weeks or years. All you care about are years, right?
https://www.bogleheads.org/forum/viewtopic.php?t=6212
Triple digit golfer
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Re: The Dark Side of "Stay the Course"

Post by Triple digit golfer »

How long have you felt this way? If you felt this way in September, then as ofnoww, you've come out ahead by staying the course rather than selling in September.

I have felt for a few years that the market was due for a crash. Had I gotten out in 2017 I would have been very disappointed. Keyword is "felt." I don't invest based on my short term feelings. I invest according to the plan I set years ago when I was not thinking about market conditions or feelings. Now, I simply execute the plan. No feelings or intuition needed.
2b2
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Re: The Dark Side of "Stay the Course"

Post by 2b2 »

Equity Risk Premium

... if you want the Premium, ya gotta take the Risk.

2b2
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Top99%
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Re: The Dark Side of "Stay the Course"

Post by Top99% »

ReformedSpender wrote: Sun Mar 01, 2020 9:05 am Cashing out is easy, knowing when to get back in is not. What if the market gains all that it lost next week?

Hence why staying the course is staying the course...

:beer
Indeed. One of my coworkers got out in early 2008 and is still waiting to get back in...
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Elysium
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Re: The Dark Side of "Stay the Course"

Post by Elysium »

These two statements below contradict each other:
Enganerd wrote: Sun Mar 01, 2020 8:50 am However, I did my homework and internalized the buy and hold long term investor should expect harrowing times.
Enganerd wrote: Sun Mar 01, 2020 8:50 am I feel like I gave up my agency to an mantra/ideology.
If you have truly understood based on logical reasoning and all available data that staying the course is the best form of investing for long term success, then you would not feel you gave up any agency to an ideology. The fact that you used the term mantra/ideology says you are trying to externalize it to another group of people who are responsible for this way of thinking, and not something you truly believe, or you start doubting your beliefs at the outset of a small correction.

The real problem could be this:
Enganerd wrote: Sun Mar 01, 2020 8:50 am I started investing in 2010. I never have been tested in a significant, concerning market cycle like the tech bubble or the Great Recession.
You need to experience a real bear market and recession before you can actually say you have become a true buy & hold long term investor.

Rest of your post about obvious signals etc have no meaning. It will always look like that after the fact, but before facts there are always other reasons to believe the opposite. Besides, none of that has any value if you have established a plan with an IPS that tells you exactly what you should do in times like this. If you hit re-balancing bands then execute them, if you haven't then don't do anything. Leave emotions out and let your plan dictate things. There are people running around abandoning their plans (or had no plans), these weak hands fold first, there will be many more, the strongest buy & hold long term investor will hold through all of that and come out ahead.
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Watty
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Re: The Dark Side of "Stay the Course"

Post by Watty »

Enganerd wrote: Sun Mar 01, 2020 8:50 am It was bothering me that weekend so the following Monday I made move from 100/0 to 95/5.
"Stay the course" does not make sense if you are not on the right course.

The problem may be that you have been using the wrong asset allocation and need to reconsider your situation and decide that you need to permanently use a more conservative asset allocation and decide to update your Investing Policy Statement (IPS) then changing your asset allocation is a lot different than trying to time the markets.

If you do not already have a written IPS then now is a good time to write one.

https://www.bogleheads.org/wiki/Investm ... _statement

There have been lots of post by people touting 100% stocks and they will have done well through the record bull market but that does not mean that they were right. There is a Warren Buffett quote, "Only when the tide goes out do you discover who's been swimming naked." and the tide started to go out some this week.

This weeks decline may have been sharp but a 10%(ish) stock market decline is not all that unusual and if you invest for another 50 years you will go through a LOT worse than that and there will be bear markets that are measured in years. You need to have an asset allocation that you will be OK with during times like that.

In looking at what asset allocation to use I like to check to see what asset allocation target date funds use as a starting point. For example if you are likely to retire in 2050 look at the 2050 funds. Be sure to look at several companies funds for the same date since they will use significantly different asset allocations.
razorbacker
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Re: The Dark Side of "Stay the Course"

Post by razorbacker »

Hmm, sounds like you needed a lower "sleep better" stock AA before the drop. Remember you haven't "lost" anything until you sell. Not sure of your age but think a little more about 10 years from now instead of the next few months.
angelescrest
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Re: The Dark Side of "Stay the Course"

Post by angelescrest »

Enganerd wrote: Sun Mar 01, 2020 8:50 ambecause it was obvious to me that it was more likely to drop in large %s than increase in large %s in the near future. I feel like I gave up my agency to an mantra/ideology. There were multiple visible risks.
Thanks for being honest, really.

1. Is it really that obvious, and everyone else who didn’t sell off was missing the right details of events?
2. How does your gut instincts work when you try to get back into the marketplace? Because when the market is at the bottom, the news is even worse. Run like hell, Forrest, the apocalypse is here. Will your instincts tell you that it’s obvious to get back into the market? Look at history, the biggest gains in the market often happen on unexpected days when the market is low. Just by missing those handful of big gains, you miss out on a huge percentage. It’s impossible to time.
3. You have no clue what you’re made of until you experience your first real downturn with serious hard earned money in the markets. We don’t even know yet if this counts, but pay close attention to how you respond to this experience. It’ll tell you a lot about yourself.
4. I always believed the FIRE movement would have a come to Jesus moment when many of the millennials experienced their first real downturn after large savings and gains.

There is seriously nothing wrong with you not giving up your agency—that has to do with living out your values. And that’s important. Especially if you feel like you’ve chosen the wrong ideology. If you want to get out, then go for it. It would be great though if you would keep posting on the forum so we can see how things play out in real time.
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Third Son
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Re: The Dark Side of "Stay the Course"

Post by Third Son »

Enganerd wrote: Sun Mar 01, 2020 8:50 am I started investing in 2010. I never have been tested in a significant, concerning market cycle like the tech bubble or the Great Recession. However, I did my homework and internalized the buy and hold long term investor should expect harrowing times.

you should have stopped here

Odds are if you tune in to the news and try to time the market, you will lose out to the long term DCA investor, therefore do not expect it to be easy and "Stay the Course." I am an aggressive saver, some years I have put over 50% gross income into equities.

Right now I am disappointed in myself. Not because the market dropped and I lost $. But because it was obvious to me that it was more likely to drop in large %s than increase in large %s in the near future.

How do you know this? Why does it matter if you have several more years until retirement?

I feel like I gave up my agency to an mantra/ideology. There were multiple visible risks. In general ppl were downplaying these risks or ignorant of them, but they were empirically there.

markets are risky. Risk is always empirically there

By 2/08 it was apparent Chinese manufacturing had been significantly reduced and this would lead to global gdp hit. It was apparent COVID19 would turn up in the US if it was not already. We already have low interest rates and QE. It was bothering me that weekend so the following Monday I made move from 100/0 to 95/5. I have read here that small inconsequential moves can ease the psychological need to do something without veering too far off course. So I did, but I still feel regret about not sticking to my intuition.

intuition is a bad strategy

Again, right now this does not feel like it is about the $ as much as it is just regret over not acting in line with my beliefs.

I feel like many are still underestimating long term potential market effects.

feelings are also a bad strategy

But I am a bit too stubborn to sell after last weeks sell off.

No, that was smart

I will simply tighten the belt more, work hard, and start buying back in. I still believe that in 20+ years public equities will yield returns based off today's prices. But these next 8-12 months will be very interesting with a wide range of potential outcomes. Stay safe and wash your hands.
"A part of all you earn is yours to keep" | | -The Richest Man in Babylon
coachd50
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Re: The Dark Side of "Stay the Course"

Post by coachd50 »

Enganerd wrote: Sun Mar 01, 2020 8:50 am I started investing in 2010. I never have been tested in a significant, concerning market cycle like the tech bubble or the Great Recession. However, I did my homework and internalized the buy and hold long term investor should expect harrowing times. Odds are if you tune in to the news and try to time the market, you will lose out to the long term DCA investor, therefore do not expect it to be easy and "Stay the Course." I am an aggressive savor, some years I have put over 50% gross income into equities.

Right now I am disappointed in myself. Not because the market dropped and I lost $. But because it was obvious to me that it was more likely to drop in large %s than increase in large %s in the near future. I feel like I gave up my agency to an mantra/ideology. There were multiple visible risks. In general ppl were downplaying these risks or ignorant of them, but they were empirically there. By 2/08 it was apparent Chinese manufacturing had been significantly reduced and this would lead to global gdp hit. It was apparent COVID19 would turn up in the US if it was not already. We already have low interest rates and QE. It was bothering me that weekend so the following Monday I made move from 100/0 to 95/5. I have read here that small inconsequential moves can ease the psychological need to do something without veering too far off course. So I did, but I still feel regret about not sticking to my intuition. Again, right now this does not feel like it is about the $ as much as it is just regret over not acting in line with my beliefs.

I feel like many are still underestimating long term potential market effects. But I am a bit too stubborn to sell after last weeks sell off. I will simply tighten the belt more, work hard, and start buying back in. I still believe that in 20+ years public equities will yield returns based off today's prices. But these next 8-12 months will be very interesting with a wide range of potential outcomes. Stay safe and wash your hands.
You are misidentifying the problem here. The problem isn't a dark side of "stay the course". The problem is that you as an individual are not comfortable being in a 100% equity allocation. And that is fine. This past week has taught you something. Time to learn from it.

Now the trick is not to compound the problem in 2 years if the market is back up by thinking "Hey, I should be 100% equities".

"Stay the course" is a roadmap to being "ok" once you no longer use human capital for income (ie retired). It is a roadmap that should work for everyone, and it is a roadmap that really doesn't rely on work from the individual investor. It isn't really about becoming " rich", as the only way that happens is if you have a large income with which to follow the roadmap.
thx1138
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Re: The Dark Side of "Stay the Course"

Post by thx1138 »

Enganerd wrote: Sun Mar 01, 2020 8:50 am But because it was obvious to me that it was more likely to drop in large %s than increase in large %s in the near future.
This is true at least once or twice every year of a bull market. If you acted on all of them you'd be out of the market way too often.
I feel like I gave up my agency to an mantra/ideology.
We all have agency to do stupid things that feel intuitively obvious. Mantras exist to remind ourselves of the wisdom and experience of others that have shown that intuition is usually wrong and that acting on it is on average a losing proposition.
There were multiple visible risks. In general ppl were downplaying these risks or ignorant of them, but they were empirically there. By 2/08 it was apparent Chinese manufacturing had been significantly reduced and this would lead to global gdp hit. It was apparent COVID19 would turn up in the US if it was not already. We already have low interest rates and QE.
You can find similar arguments for many other significant events in the past ten years all of which appeared to predict a down turn but never did.
It was bothering me that weekend so the following Monday I made move from 100/0 to 95/5. I have read here that small inconsequential moves can ease the psychological need to do something without veering too far off course. So I did, but I still feel regret about not sticking to my intuition. Again, right now this does not feel like it is about the $ as much as it is just regret over not acting in line with my beliefs.
Psychology is key. Most all investing failures are behavioral in nature. This sounds like you've analyzed the situation correctly (it is a behavioral problem) and come up with a sensible way to mitigate it. Nicely done!

The other suggestion I would make is to go back and look at all the other "catastrophes" that never actually happened. Go back and read about Brexit just as it was happening. Read about the Chinese trade war that never actually happened. Read articles from the time and put yourself back in that moment and understand how convincing the arguments were to leave the market. Then feel good about yourself that you made the correct call to stay the course back then.
I feel like many are still underestimating long term potential market effects.
And many are probably overestimating the long term potential market effects. We have no way to know who is right. Again go back in the past and see how many times the dire predictions did not come to pass. Even if the dire events no one thought would occur actually did occur (e.g. Brexit, 2016 election).
But I am a bit too stubborn to sell after last weeks sell off. I will simply tighten the belt more, work hard, and start buying back in. I still believe that in 20+ years public equities will yield returns based off today's prices. But these next 8-12 months will be very interesting with a wide range of potential outcomes. Stay safe and wash your hands.
Sounds sensible!
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Enganerd
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Re: The Dark Side of "Stay the Course"

Post by Enganerd »

climber2020 wrote: Sun Mar 01, 2020 8:58 am Easy to say all this after the fact.

I agree, the market climbed the entire week after I moved to 95/5. It did cause me to 2nd guess myself a bit.

Get yourself a notebook. Every time you have a prediction about what the market will do in the short term, write it down. Be specific, and do this consistently.

Then go back and see how often you were actually correct.

I will do that.
I do not mean to imply I knew it would drop. What I mean is it was apparent that the Chinese quarantines would have downstream consequences. Credible epidemiologists were expecting the virus to spread globally. This spread appeared concerning both because of the hospitalization rates and the measures China was taking. Our media an politicians seemed to be downplaying these risks (which is confusing given the business model of media incentivizes sensationalism.) All those factors coupled with the market highs and nature of the market since the GR really changes the odds of gain/loss. Even Vanguard has been warning investors to expect lower future returns, and this was before observable economic impact of COVID19 and the FUD that comes with a novel virus. So I don't think I had a crystal ball, but I stand by the reasoning that one could observe those facts coupled with other's dismissal of them and adjust rationally adjust AA.
sambb
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Re: The Dark Side of "Stay the Course"

Post by sambb »

Enganerd wrote: Sun Mar 01, 2020 9:57 am
climber2020 wrote: Sun Mar 01, 2020 8:58 am Easy to say all this after the fact.

I agree, the market climbed the entire week after I moved to 95/5. It did cause me to 2nd guess myself a bit.

Get yourself a notebook. Every time you have a prediction about what the market will do in the short term, write it down. Be specific, and do this consistently.

Then go back and see how often you were actually correct.

I will do that.
I do not mean to imply I knew it would drop. What I mean is it was apparent that the Chinese quarantines would have downstream consequences. Credible epidemiologists were expecting the virus to spread globally. This spread appeared concerning both because of the hospitalization rates and the measures China was taking. Our media an politicians seemed to be downplaying these risks (which is confusing given the business model of media incentivizes sensationalism.) All those factors coupled with the market highs and nature of the market since the GR really changes the odds of gain/loss. Even Vanguard has been warning investors to expect lower future returns, and this was before observable economic impact of COVID19 and the FUD that comes with a novel virus. So I don't think I had a crystal ball, but I stand by the reasoning that one could observe those facts coupled with other's dismissal of them and adjust rationally adjust AA.
Good points to the OP
REad the thread on "chinese stocks plunge on monday". You will see many lessons learned from a month ago
The market DID NOT READ the risk. The market is not always right. But that doesnt mean that the market is predictable in real time.
heyyou
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Re: The Dark Side of "Stay the Course"

Post by heyyou »

"It will fluctuate" was said about a century ago. For perspective, to what previous date's level, did the drop, return the market to? My point is-- all fluctuations are part of normal stock market behavior. Since we do not like the market drops, in the long run, we are paid more to tolerate stock market fluctuations, than we are paid for owning more stable investments. Risk and reward are immutable, but the dang risks are not pleasant to endure on our high return investments.

With no medical education, I can make the following analogies: Our hearts stop to refill after every pump outflow, but that stop is so quick that we are not considered dead for that time period. We breathe out but soon breathe in again, and are not considered dead between those two opposite flows. The stock market fluctuates, but as long as it continues to function, your shares have value, just not the value that you prefer. Note how subjective that will be with the length of time since each investor bought their shares.

I likely had some IRAs before my employer started the 401k about 1980. I'm really going to hate index investing when my share values drop to 1980 levels.
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Garco
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Re: The Dark Side of "Stay the Course"

Post by Garco »

Some good responses to the OP.

"Stay the course" makes great sense if you have a good course to begin with. Events like the one we're going through now are a good time to reflect on your plan. But this is maybe not a time to take immediate action (trades, transfers, reallocations) when the markets are highly volatile day-to-day.

Another factor, which is especially relevant to me, is where you are in your investing and working career. I'm retired and have no income from work. I live on my savings, investments, and Social Security. Several years ago as I was approaching retirement I gradually moderateed my exposure to equities (stocks). No longer 70-80% stocks; now 40-50%. But I've made no moves immediately in response to events such as we've experienced in the last week or so. I collect my social security, I take my RMD's from my tax deferred accounts -- the same amount this month as in January and February of this year. But I don't totally ignore larger market trends, because within the context of keeping a certain allocation I may decide to make some small changes in the choice of individual investments in the future. In other words I don't just do something, and I don't just stand there. I try to think long term, which includes what has already happened as well as what might occur in the future.
yohac
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Re: The Dark Side of "Stay the Course"

Post by yohac »

Enganerd wrote: Sun Mar 01, 2020 8:50 am But because it was obvious to me that it was more likely to drop in large %s than increase in large %s in the near future. I feel like I gave up my agency to an mantra/ideology. There were multiple visible risks.
There are multiple visible risks every day. Tariffs, recession, North Korea, ominous technical indicators that "never fail", global warning, etc. No one would ever jump in if they were waiting for an all-clear, because that never happens.
surfstar
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Re: The Dark Side of "Stay the Course"

Post by surfstar »

So, looking in the rearview mirror, you KNEW it would drop? Sure. 20/20 hindsight. Good luck finding an actionable process with that.

Starting from about 2013, there were many, many threads of people and "experts" touting that the market was due for a drop/correction/etc that year. If you "listened" to your gut feelings, or whichever talking head happened to match your feelings, you might have "known" the market was going to drop and sold.

NOBODY KNOWS 'NUTHIN


but the more dangerous people (to their own portfolios) are the ones who think they know something. Hope that one day you will be smart enough to realize that you know nothing. :mrgreen:
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AerialWombat
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Re: The Dark Side of "Stay the Course"

Post by AerialWombat »

The problem isn’t the “mantra”. The problem is your AA. You picked an AA you thought you would be comfortable with, but you’re not. Sorry to be blunt, but that’s on you, not the “ideology”.

Me: 30/70 for life, hakuna matata.
For entertainment purposes only.
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Enganerd
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Re: The Dark Side of "Stay the Course"

Post by Enganerd »

Thanks for the replies everyone, really.

For clarity, I was not technically 100% equities. My employer has a mandatory pension contribution and so 6% of my earnings have been accumulating with 5% that I have no investing direction over. Also, I have a paid off rental property and a 6 month emergency fund.

Also, I do not believe I knew which direction the market was going. In the real world certainty does not exist, we all think in expected probabilities. I felt there were plenty of reasons to adjust AA since mid January. The facts of the quarantine and FUD regarding pandemic were readily available. Most acted ignorant of them, downplayed them by talking about current flu deaths compared to current COVID19 deaths, or leaned on normalcy bias to disregard the concerns. While it is true I had/have no insider info nor special competitive advantage in analyzing these news stories it would be incorrect that one can not state that a commonly expressed opinions are either uneducated/inaccurate or both.

It still seems every country's actions are not in line with the it's "just the flu" narrative. Wouldn't it be naive to think those with more information and skin in the game to feel negative consequences by quarantines and cancelling public gathering are grossly over reacting?
columbia
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Re: The Dark Side of "Stay the Course"

Post by columbia »

Unless you’re talking about tax loss harvesting (and there’s a thread here now on when to do that), you should stay the course.

If your instinct was/is to sell (in non-taxable), you’ve already missed that opportunity.
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Re: The Dark Side of "Stay the Course"

Post by 9-5 Suited »

I applaud your self-reflective post and having the guts to post it on a forum dedicated to disagreeing with its premise :)

It's important for all of us to run through these emotions we process. Some of the people shouting "stay the course!" the loudest appear to be trying to do a form of self-encouragement. Like if I can externalize this stoic and strong attitude to the world, maybe it will help me calm the feelings of fear, uncertainty, doubt, and regret that are existing in little back corners of my brain. I personally would say I do that from time to time. It's therapeutic and helpful to reinforce that mantra, especially since I know it will serve me in the long run to avoid emotional decisions.

I think you said it best at the end of your post. In 20+ years the market is likely to be higher than it was during any point in these last few Corona-infected weeks. As others have said, it's easy to see these declines in retrospect with perfect information about the past. Easier still to become the type of person who predicts 20 out of every 2 recessions. That's a dangerous path best avoided.
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Re: The Dark Side of "Stay the Course"

Post by dbr »

I will pile in to reinforce the observation that staying the course assumes one has the right course in the first place. In this case the issue is having the right asset allocation. There is good reason people keep harping about need, ability, and willingness to take risk, sleep at night, etc., etc.

Sorry for beating a drum, but there is more to investing than stay the course.

I also congratulate the OP for posting this discussion.
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Re: The Dark Side of "Stay the Course"

Post by Xrayman69 »

The market is forward looking Tool for the most part and yet can have periods of irrational undulation.

corona virus is a health care and human well being/safety related issue. Does it affect the market, absolutely. However how much is likely based upon currently unknown. Will a treatment to alleviate severity be identified, will a vaccine eventually available, will governments around the globe restrict travel of people and goods, will government restrict travel within their countries and people going to work, restaurants, stores, etc. will the virus be shown to have increased mortality compared to other communicable viral infections or on par with others,.

How long will all these “obvious” questions take to answer along with all the other “obvious” ancillary issues such as who will win all the local, state, and national elections that will have “obvious” affects on the market. The elections occur this year in November and will have clearly “obvious” Predicable actionable results for the OP.

I suspect the OP “knows nothing” as we all “know nothing” because the market is a highly efficient tool long term but invariably affected by short term “emotions” that can cause irrational behavior.

October 2018 there was a rapid correction and within 12 months record highs. I’m glad the only thing I know is that there is too much information that affects an infinite amount of other information and that I can not process all this information on my own in a timely manner to be able to come out ahead. What I can do is have an IPS that is within my own personal comfort range and act accordingly. I have not given up my autonomy to a slogan but rather empowered myself to be able to define my IPS. The act of not doing anything is an active choice as much as the act of selling in a panic.
Last edited by Xrayman69 on Sun Mar 01, 2020 10:32 am, edited 1 time in total.
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Enganerd
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Re: The Dark Side of "Stay the Course"

Post by Enganerd »

Also I should add I have a secure job and plan on working another 20 years. I honestly feel like I could handle losing my investments and move on with my life and still live happily and provide for my family. This really does not feel like I am just using hindsight is 20-20 logic. I guess it probably never does for those expressing that logic.

But for reference, I never considered acting when the market experienced downturns in 2016 and 2018. I proudly told personal friends/acquaintances not to act based on emotion and that they should have an IPS. But when ppl that have asked for my advice this past week I still steer them towards bogleheads wiki but I feel a bit sheepish in doing so.
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Re: The Dark Side of "Stay the Course"

Post by JoMoney »

There's certainly hindsight bias and/or confirmation bias involved when looking at these things.

You didn't pick a precise exit point/day, nor have you picked a re-entry point, so there's no way of telling how much your insight would have been worth (if anything) at all.

It would be impossible for investors as a group to garner anything extra by racing to beat each other out before prices fall, and back in before prices rise. That's a zero-sum game. To the extent that some do manage to get some above market return that way, it's at the expense of others who lost. If you insist on playing the trading game, the results will be based on how much better you play than others. While there is a long-term advantage to being an 'owner' of businesses, I don't know how one gets an advantage in the trading game. Being a "passive investor" involves ignoring the trading game all together. If you average your purchases (and eventual sales) over time you'll get something close to the average returns available over your investing horizon.
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Re: The Dark Side of "Stay the Course"

Post by DrPayItBack »

Enganerd wrote: Sun Mar 01, 2020 10:18 am I felt there were plenty of reasons to adjust AA since mid January.
This is the issue, and it's how you continue to demonstrate that you haven't quite 'gotten' the purpose of an asset allocation. An AA is not something you are meant to adjust on the basis of the 'news of the day'. It should be something that you choose with a level head, for the long run. There are always going to be situations where stocks are 'overvalued', and likewise other times when they are 'undervalued'. You do not know when these times are. But by picking an asset allocation that you can stick with IN GOOD TIMES AND BAD, and then REBALANCING BACK TO THAT ALLOCATION at fixed intervals or after large (and pre-chosen) deviations, you will capture a good portion of the gains and avoid a good portion of the losses.
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Re: The Dark Side of "Stay the Course"

Post by ionball »

"Stay the Course" only works if your AA is correct. If your AA aligns with your projected needs and time horizon, then the dark side probably does not exist.
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Re: The Dark Side of "Stay the Course"

Post by coachd50 »

dbr wrote: Sun Mar 01, 2020 10:27 am I will pile in to reinforce the observation that staying the course assumes one has the right course in the first place. In this case the issue is having the right asset allocation. There is good reason people keep harping about need, ability, and willingness to take risk, sleep at night, etc., etc.

Sorry for beating a drum, but there is more to investing than stay the course.

I also congratulate the OP for posting this discussion.
I think this is a very important point. In many of these "corona based down market threads" it has become apparent that the very foundations of the "boglehead" plan are not strong with some investors. It is painfully obvious that many (unless they are simply trolls) don't really respect the idea of writing an Investment Policy Statement or really putting thought into the term "risk tolerance".

Without those two foundational points being solid, everything else will be weak when tested.
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Re: The Dark Side of "Stay the Course"

Post by Call_Me_Op »

Enganerd wrote: Sun Mar 01, 2020 10:29 am Also I should add I have a secure job and plan on working another 20 years. I honestly feel like I could handle losing my investments and move on with my life and still live happily and provide for my family. This really does not feel like I am just using hindsight is 20-20 logic. I guess it probably never does for those expressing that logic.

But for reference, I never considered acting when the market experienced downturns in 2016 and 2018. I proudly told personal friends/acquaintances not to act based on emotion and that they should have an IPS. But when ppl that have asked for my advice this past week I still steer them towards bogleheads wiki but I feel a bit sheepish in doing so.
Even when I was 20 younger than I am now (I am now approaching retirement), I did not have a large percentage of my assets in stocks. That's because I understood my risk tolerance. As others have said, if you are thinking of jumping ship, you did not have the right AA when this downturn started.
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Re: The Dark Side of "Stay the Course"

Post by JD2775 »

9-5 Suited wrote: Sun Mar 01, 2020 10:19 am I think you said it best at the end of your post. In 20+ years the market is likely to be higher than it was during any point in these last few Corona-infected weeks.
This is the part where I think a lot of ppl struggle with. At first glance someone might think “20 years to get back to where it was a few weeks ago?? What’s the point of that? I may as well take my money out and put it in a CD where it’s earning something at least”. What they don’t realize is if you “stay the course” you are continually buying into the market at reduced prices per share, so you are buying more shares...so in 20 years if the DOW mirrors what it was 3 weeks ago you will MUCH more money than you do now. To be honest that was a concept that didn’t come overnight for me either
Last edited by JD2775 on Sun Mar 01, 2020 10:43 am, edited 1 time in total.
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Re: The Dark Side of "Stay the Course"

Post by Enganerd »

JoMoney wrote: Sun Mar 01, 2020 10:37 am There's certainly hindsight bias and/or confirmation bias involved when looking at these things.

You didn't pick a precise exit point/day, nor have you picked a re-entry point, so there's no way of telling how much your insight would have been worth (if anything) at all.

It would be impossible for investors as a group to garner anything extra by racing to beat each other out before prices fall, and back in before prices rise. That's a zero-sum game. To the extent that some do manage to get some above market return that way, it's at the expense of others who lost. If you insist on playing the trading game, the results will be based on how much better you play than others. While there is a long-term advantage to being an 'owner' of businesses, I don't know how one gets an advantage in the trading game. Being a "passive investor" involves ignoring the trading game all together. If you average your purchases (and eventual sales) over time you'll get something close to the average returns available over your investing horizon.
Well I executed the small trade on 2/10. Now I am conflicted about moving back in to lock in the gains that trade with the regret that I did not move more out. I admit that is a contradiction. I simultaneously want to lock in the gains of moving 5% out of equities while wishing I had sold more equities.
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Re: The Dark Side of "Stay the Course"

Post by rascott »

Enganerd wrote: Sun Mar 01, 2020 10:42 am
JoMoney wrote: Sun Mar 01, 2020 10:37 am There's certainly hindsight bias and/or confirmation bias involved when looking at these things.

You didn't pick a precise exit point/day, nor have you picked a re-entry point, so there's no way of telling how much your insight would have been worth (if anything) at all.

It would be impossible for investors as a group to garner anything extra by racing to beat each other out before prices fall, and back in before prices rise. That's a zero-sum game. To the extent that some do manage to get some above market return that way, it's at the expense of others who lost. If you insist on playing the trading game, the results will be based on how much better you play than others. While there is a long-term advantage to being an 'owner' of businesses, I don't know how one gets an advantage in the trading game. Being a "passive investor" involves ignoring the trading game all together. If you average your purchases (and eventual sales) over time you'll get something close to the average returns available over your investing horizon.
Well I executed the small trade on 2/10. Now I am conflicted about moving back in to lock in the gains that trade with the regret that I did not move more out. I admit that is a contradiction. I simultaneously want to lock in the gains of moving 5% out of equities while wishing I had sold more equities.
What are you doing with your ongoing savings that are upwards of 50% of your income? If you are buying equities on one hand and selling them with the other, that's rather illogical.
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Re: The Dark Side of "Stay the Course"

Post by Enganerd »

DrPayItBack wrote: Sun Mar 01, 2020 10:38 am
Enganerd wrote: Sun Mar 01, 2020 10:18 am I felt there were plenty of reasons to adjust AA since mid January.
This is the issue, and it's how you continue to demonstrate that you haven't quite 'gotten' the purpose of an asset allocation. An AA is not something you are meant to adjust on the basis of the 'news of the day'. It should be something that you choose with a level head, for the long run. There are always going to be situations where stocks are 'overvalued', and likewise other times when they are 'undervalued'. You do not know when these times are. But by picking an asset allocation that you can stick with IN GOOD TIMES AND BAD, and then REBALANCING BACK TO THAT ALLOCATION at fixed intervals or after large (and pre-chosen) deviations, you will capture a good portion of the gains and avoid a good portion of the losses.
I understand I am using "adjust AA" as a means to market time. I should not do that because it does confuse the issue. I would think we all agree the "you have not lost anything until you sell logic is flawed." Therefore, even if you are an investor and not a trader there can come a time when you feel like the investment is not worth the risk and change your portfolio. That would in effect change my AA but I agree it is not how AA is talked about on this forum or with writing an IPS.
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Re: The Dark Side of "Stay the Course"

Post by retiredjg »

Enganerd wrote: Sun Mar 01, 2020 8:50 am Again, right now this does not feel like it is about the $ as much as it is just regret over not acting in line with my beliefs.
Let's say your instincts were 100% right this time. That does not mean that following your instincts is a good idea when it comes to investing. Your instiincts will be wrong just as often as right, if not more often.

What would happen if you follow your instincts and get it wrong next time?

You did the right thing and you should keep doing it. There is absolutely nothing logical or predictable about the market in the long run.
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Re: The Dark Side of "Stay the Course"

Post by Enganerd »

rascott wrote: Sun Mar 01, 2020 10:46 am
Enganerd wrote: Sun Mar 01, 2020 10:42 am
JoMoney wrote: Sun Mar 01, 2020 10:37 am There's certainly hindsight bias and/or confirmation bias involved when looking at these things.

You didn't pick a precise exit point/day, nor have you picked a re-entry point, so there's no way of telling how much your insight would have been worth (if anything) at all.

It would be impossible for investors as a group to garner anything extra by racing to beat each other out before prices fall, and back in before prices rise. That's a zero-sum game. To the extent that some do manage to get some above market return that way, it's at the expense of others who lost. If you insist on playing the trading game, the results will be based on how much better you play than others. While there is a long-term advantage to being an 'owner' of businesses, I don't know how one gets an advantage in the trading game. Being a "passive investor" involves ignoring the trading game all together. If you average your purchases (and eventual sales) over time you'll get something close to the average returns available over your investing horizon.
Well I executed the small trade on 2/10. Now I am conflicted about moving back in to lock in the gains that trade with the regret that I did not move more out. I admit that is a contradiction. I simultaneously want to lock in the gains of moving 5% out of equities while wishing I had sold more equities.
What are you doing with your ongoing savings that are upwards of 50% of your income? If you are buying equities on one hand and selling them with the other, that's rather illogical.
Well I have already funded my roth for 2020 and I have not changed my 457 or HSA contributions automatically set up on my pay check. I have considered it. As far as after tax advantaged space I have just been putting it in MM. I agree, I need to make a decision about paycheck contributions.
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Re: The Dark Side of "Stay the Course"

Post by Fallible »

Enganerd wrote: Sun Mar 01, 2020 8:50 am I started investing in 2010. I never have been tested in a significant, concerning market cycle like the tech bubble or the Great Recession. However, I did my homework and internalized the buy and hold long term investor should expect harrowing times. Odds are if you tune in to the news and try to time the market, you will lose out to the long term DCA investor, therefore do not expect it to be easy and "Stay the Course." I am an aggressive savor, some years I have put over 50% gross income into equities.

Right now I am disappointed in myself. ...
There's nothing to be disappointed about here, just a lot to learn from by actually experiencing a market downturn versus reading about them. You've shared your important and honest introspection on the forum, which I think will help you and others who probably have similar feelings. And the feelings are all too human.

Stay the course means a course that is right for you, one that reflects how much risk you can and want to take. There really is no "dark side" to staying any course if it is the right course.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: The Dark Side of "Stay the Course"

Post by Cyclesafe »

Education and experience interpreted by intelligence can't predict the unknowable. Covid19 is among a long parade of horribles, a version of one of the four horsemen of the apocalypse, if you will. Only preppers think about this stuff. IOW's if this doesn't blow over, we have much bigger life problems than the balances in our 401k's.

Thinking out decades, with faith in exorable global economic growth, 100% equity trumps all else. When I was starting I wish I had this wisdom. Alas.

With a concern for sequence of returns risk, the calculus is different. I do not want to be forced to liquidate depressed equity to fund my life. So I have fixed as part of my portfolio. With my net worth and projected spending, my 60/40 allocation is, from a perspective of logic, too conservative. But it lets me sleep well at night. It used to be 50/50, and I let it gradually drift up. No regrets.

But. When faced with a required pending withdrawal, I do "market time". If stocks seem frothy, I pull from equity. If not, I pull from fixed. When Roth converting, I do the opposite: I convert fixed from my t-IRA.

The downside here is that if equity nevertheless appreciates, I've lost a momentarily greater tax free gain, but since my (overall, not after tax) asset allocation never changed, I still get a lesser benefit of the equity's appreciation in my t-IRA. And if there is a dip I can always shift Roth fixed to equity.

So. If one has decades stay the course. If there are required annual actions (RMD's, conversions, lifestyle funding), one's asset allocation shouldn't change, but how one effects these changes should bear consideration.
"Plans are useless; planning is indispensable.” (Dwight Eisenhower) | "Man plans, God laughs" (Yiddish proverb)
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Re: The Dark Side of "Stay the Course"

Post by rascott »

Enganerd wrote: Sun Mar 01, 2020 10:50 am
rascott wrote: Sun Mar 01, 2020 10:46 am
Enganerd wrote: Sun Mar 01, 2020 10:42 am
JoMoney wrote: Sun Mar 01, 2020 10:37 am There's certainly hindsight bias and/or confirmation bias involved when looking at these things.

You didn't pick a precise exit point/day, nor have you picked a re-entry point, so there's no way of telling how much your insight would have been worth (if anything) at all.

It would be impossible for investors as a group to garner anything extra by racing to beat each other out before prices fall, and back in before prices rise. That's a zero-sum game. To the extent that some do manage to get some above market return that way, it's at the expense of others who lost. If you insist on playing the trading game, the results will be based on how much better you play than others. While there is a long-term advantage to being an 'owner' of businesses, I don't know how one gets an advantage in the trading game. Being a "passive investor" involves ignoring the trading game all together. If you average your purchases (and eventual sales) over time you'll get something close to the average returns available over your investing horizon.
Well I executed the small trade on 2/10. Now I am conflicted about moving back in to lock in the gains that trade with the regret that I did not move more out. I admit that is a contradiction. I simultaneously want to lock in the gains of moving 5% out of equities while wishing I had sold more equities.
What are you doing with your ongoing savings that are upwards of 50% of your income? If you are buying equities on one hand and selling them with the other, that's rather illogical.
Well I have already funded my roth for 2020 and I have not changed my 457 or HSA contributions automatically set up on my pay check. I have considered it. As far as after tax advantaged space I have just been putting it in MM. I agree, I need to make a decision about paycheck contributions.
Seems as though you are still fairly young? You should be buying with both hands..... and be happy if it continues to drop. If you don't need this money for 10+ years..... why should you care? You admit you believe nobody can reliably time the market.... but then trying to rationalize doing exactly that. Not logical.

Best thing I ever did was exponentially increase my equity buying throughout 2008/9... not go the opposite direction.
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Re: The Dark Side of "Stay the Course"

Post by White Coat Investor »

Enganerd wrote: Sun Mar 01, 2020 8:50 am I started investing in 2010. I never have been tested in a significant, concerning market cycle like the tech bubble or the Great Recession.
What about 2011 and 2018?
Enganerd wrote: Sun Mar 01, 2020 8:50 am Right now I am disappointed in myself. Not because the market dropped and I lost $. But because it was obvious to me that it was more likely to drop in large %s than increase in large %s in the near future. I feel like I gave up my agency to an mantra/ideology. There were multiple visible risks. In general ppl were downplaying these risks or ignorant of them, but they were empirically there. By 2/08 it was apparent Chinese manufacturing had been significantly reduced and this would lead to global gdp hit. It was apparent COVID19 would turn up in the US if it was not already. We already have low interest rates and QE. It was bothering me that weekend so the following Monday I made move from 100/0 to 95/5. I have read here that small inconsequential moves can ease the psychological need to do something without veering too far off course. So I did, but I still feel regret about not sticking to my intuition. Again, right now this does not feel like it is about the $ as much as it is just regret over not acting in line with my beliefs.

I feel like many are still underestimating long term potential market effects. But I am a bit too stubborn to sell after last weeks sell off. I will simply tighten the belt more, work hard, and start buying back in. I still believe that in 20+ years public equities will yield returns based off today's prices. But these next 8-12 months will be very interesting with a wide range of potential outcomes. Stay safe and wash your hands.
Now you know why all the books talk about how hard it is to stay the course. The risks are always there, but they only show up some of the time. If you bailed out every time there were risks, you'd never earn the equity risk premium.

Besides, if you bailed out, you'd now have to decide when to get back in. Will it drop 10%, 20%, 30%, or 40%? If you're like me and you're honest with yourself, you'll admit you have no idea. So you might as well stick with your long-term written plan which is highly likely to work because this too shall pass. The annualized stock market return for 1918-1919 was 19%. The 1920s were a great decade for stock returns too. Yes, this will have economic effects, but not enough that you should change a good long term plan.

And yes, probably something like 10-40% of us are going to get Covid-19 and it's probably going to kill something like 0.9% of those who get it.
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Re: The Dark Side of "Stay the Course"

Post by Pikel »

Enganerd wrote: Sun Mar 01, 2020 8:50 am it was obvious to me that it was more likely to drop in large %s than increase in large %s in the near future.

....

But these next 8-12 months will be very interesting with a wide range of potential outcomes.
So the correction in the last week of February was predictable, but now in present day the crystal ball is foggy again.

I agree with the other responses that the real issue here is your AA is much too aggressive.

Remind yourself on March 1 2021 you were not capable of predicting the market response to coronavirus on March 1 2020.
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Re: The Dark Side of "Stay the Course"

Post by Case59 »

One of the best things I ever read on the failure of market timing is this piece by Mark Hulbert. The key is that while it may seem easy to know when to leave the market, it's hard to know when to get back in. And if you miss even a few of the best days of the rebound you've impaired your returns for the long-term.

"Consider performance since the bull market high in October 2007, when the Dow Jones Industrial Average DJIA +0.28% closed at 14,165 and the S&P 500 index SPX +0.12% closed at 1,565. The period since then would appear to be tailor-made to showcase the advantages of market timing, since any strategy that sidestepped even a portion of the greater-than-50% loss produced by the 2007-2009 bear market should have a huge leg up on buying and holding.
Yet try telling that to the top performers since October 2007 in the HFD rankings {mutual fund rankings}. Believe it or not, each of the top 10 since then have been fully invested over the entire 5+ years.
I think the proper lesson to draw has to do with how difficult it is to be a successful market timer. To beat the market through market timing, you have to do more than just make one correct call: A well-timed sell signal translates into beating the market only if it’s followed by a well-timed re-entry buy signal.
And that is something that very few market timers appear able to do consistently. Of those who moved to cash during the 2007-2009 bear market, for example, most failed in the subsequent bull market to get back into stocks in a timely fashion."

http://www.marketwatch.com/story/top-10 ... eid=yhoof2
Last edited by Case59 on Sun Mar 01, 2020 11:15 am, edited 1 time in total.
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Re: The Dark Side of "Stay the Course"

Post by angelescrest »

9-5 Suited wrote: Sun Mar 01, 2020 10:19 am I applaud your self-reflective post and having the guts to post it on a forum dedicated to disagreeing with its premise :)

It's important for all of us to run through these emotions we process. Some of the people shouting "stay the course!" the loudest appear to be trying to do a form of self-encouragement. Like if I can externalize this stoic and strong attitude to the world, maybe it will help me calm the feelings of fear, uncertainty, doubt, and regret that are existing in little back corners of my brain. I personally would say I do that from time to time. It's therapeutic and helpful to reinforce that mantra, especially since I know it will serve me in the long run to avoid emotional decisions.

I think you said it best at the end of your post. In 20+ years the market is likely to be higher than it was during any point in these last few Corona-infected weeks. As others have said, it's easy to see these declines in retrospect with perfect information about the past. Easier still to become the type of person who predicts 20 out of every 2 recessions. That's a dangerous path best avoided.
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Re: The Dark Side of "Stay the Course"

Post by tadamsmar »

Enganerd wrote: Sun Mar 01, 2020 8:50 am I started investing in 2010. I never have been tested in a significant, concerning market cycle like the tech bubble or the Great Recession. However, I did my homework and internalized the buy and hold long term investor should expect harrowing times. Odds are if you tune in to the news and try to time the market, you will lose out to the long term DCA investor, therefore do not expect it to be easy and "Stay the Course." I am an aggressive saver, some years I have put over 50% gross income into equities.

Right now I am disappointed in myself. Not because the market dropped and I lost $. But because it was obvious to me that it was more likely to drop in large %s than increase in large %s in the near future. I feel like I gave up my agency to an mantra/ideology. There were multiple visible risks. In general ppl were downplaying these risks or ignorant of them, but they were empirically there. By 2/08 it was apparent Chinese manufacturing had been significantly reduced and this would lead to global gdp hit. It was apparent COVID19 would turn up in the US if it was not already. We already have low interest rates and QE. It was bothering me that weekend so the following Monday I made move from 100/0 to 95/5. I have read here that small inconsequential moves can ease the psychological need to do something without veering too far off course. So I did, but I still feel regret about not sticking to my intuition. Again, right now this does not feel like it is about the $ as much as it is just regret over not acting in line with my beliefs.

I feel like many are still underestimating long term potential market effects. But I am a bit too stubborn to sell after last weeks sell off. I will simply tighten the belt more, work hard, and start buying back in. I still believe that in 20+ years public equities will yield returns based off today's prices. But these next 8-12 months will be very interesting with a wide range of potential outcomes. Stay safe and wash your hands.
The idea is to have a retirement plan that is likely to be successful and involves a steady savings rate.

If you have such a plan, why do you have to tighten your belt?

If you don't have such a plan, why not?

PS: You should probably not go back to 100/0 since you don't seem to have the risk tolerance for that.
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Re: The Dark Side of "Stay the Course"

Post by Enganerd »

tadamsmar wrote: Sun Mar 01, 2020 11:14 am
Enganerd wrote: Sun Mar 01, 2020 8:50 am I started investing in 2010. I never have been tested in a significant, concerning market cycle like the tech bubble or the Great Recession. However, I did my homework and internalized the buy and hold long term investor should expect harrowing times. Odds are if you tune in to the news and try to time the market, you will lose out to the long term DCA investor, therefore do not expect it to be easy and "Stay the Course." I am an aggressive saver, some years I have put over 50% gross income into equities.

Right now I am disappointed in myself. Not because the market dropped and I lost $. But because it was obvious to me that it was more likely to drop in large %s than increase in large %s in the near future. I feel like I gave up my agency to an mantra/ideology. There were multiple visible risks. In general ppl were downplaying these risks or ignorant of them, but they were empirically there. By 2/08 it was apparent Chinese manufacturing had been significantly reduced and this would lead to global gdp hit. It was apparent COVID19 would turn up in the US if it was not already. We already have low interest rates and QE. It was bothering me that weekend so the following Monday I made move from 100/0 to 95/5. I have read here that small inconsequential moves can ease the psychological need to do something without veering too far off course. So I did, but I still feel regret about not sticking to my intuition. Again, right now this does not feel like it is about the $ as much as it is just regret over not acting in line with my beliefs.

I feel like many are still underestimating long term potential market effects. But I am a bit too stubborn to sell after last weeks sell off. I will simply tighten the belt more, work hard, and start buying back in. I still believe that in 20+ years public equities will yield returns based off today's prices. But these next 8-12 months will be very interesting with a wide range of potential outcomes. Stay safe and wash your hands.
The idea is to have a retirement plan that is likely to be successful and involves a steady savings rate.

If you have such a plan, why do you have to tighten your belt?

If you don't have such a plan, why not?

PS: You should probably not go back to 100/0 since you don't seem to have the risk tolerance for that.
Well tighten the belt meaning, for go some luxuries I would normally indulge in to buy more equities now that their valuation has increased. Mental coping mainly, I know I purchased plenty in early 2020 so now they are an even better deal.
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