Market timer of 2007 2008 crash

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
freyj6
Posts: 447
Joined: Thu Jun 19, 2014 2:09 am

Re: Market timer of 2007 2008 crash

Post by freyj6 »

I got lucky in March 2020, and realized too late that if it kept going down another 20 or 30% I had nothing left to put in.

Being a little more cautious this time. Bought some today. Down to about 10% in cash right now, 90% equities.
User avatar
arcticpineapplecorp.
Posts: 10244
Joined: Tue Mar 06, 2012 9:22 pm

Re: Market timer of 2007 2008 crash

Post by arcticpineapplecorp. »

willthrill81 wrote: Fri May 06, 2022 10:11 am
Candor wrote: Fri May 06, 2022 10:04 am
willthrill81 wrote: Thu May 05, 2022 7:01 pm
HMSVictory wrote: Thu May 05, 2022 2:47 pm "I never met anyone who could successfully time the market. I never met anyone who ever met anyone who could successfully time the market" - Jack Bogle
Super ironic since he clearly did it himself in 2000.
The full quote:

“Sure, it’d be great to get out of stocks at the high and jump back in at the low. But in 55 years in the business, I not only have never met anybody who knew how to do it, I’ve never met anybody who had met anybody who knew how to do it.”
I know that he said that, but he still timed the market himself by his own admission, though he didn't specifically refer to it as 'market timing'.
realitytruthprozac wrote: Thu Sep 30, 2010 7:50 pm p.105: That the dividend yield as 2000 began was at an all-time low of just 1% and the PE at a near record high of 32 times earnings together explain why the average return on stocks in the current decade is at present running at an annual rate of less than 1%.

p. 237: "But, in late 1999, concerned about the (obviously) speculative level of stock prices, I reduced my equities to about 35% of assets, thereby increasing my bond position to about 65%."
viewtopic.php?t=60900
But if he was sure he would have gotten out altogether not risk a huge decline with any of his money, let alone 35%. He hedged. Because he couldn't be sure. No one can. Hindsight is 20/20 but one should never confuse outcome with strategy.

By the way this is the quote i see at: (https://financinglife.org/bogle-quotes/)
“The idea that a bell rings to signal when investors should get into or out of the market is simply not credible. After nearly 50 years in this business, I do not know of anybody who has done it successfully and consistently. I don’t even know anybody who knows anybody who has done it successfully and consistently.”
— John C. Bogle
See, it's about consistently timing, not getting it right once. Bogle got it right once. That's called luck not irony.
Last edited by arcticpineapplecorp. on Mon May 09, 2022 7:20 pm, edited 10 times in total.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
User avatar
willthrill81
Posts: 30774
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Market timer of 2007 2008 crash

Post by willthrill81 »

arcticpineapplecorp. wrote: Mon May 09, 2022 7:12 pm
willthrill81 wrote: Fri May 06, 2022 10:11 am
Candor wrote: Fri May 06, 2022 10:04 am
willthrill81 wrote: Thu May 05, 2022 7:01 pm
HMSVictory wrote: Thu May 05, 2022 2:47 pm "I never met anyone who could successfully time the market. I never met anyone who ever met anyone who could successfully time the market" - Jack Bogle
Super ironic since he clearly did it himself in 2000.
The full quote:

“Sure, it’d be great to get out of stocks at the high and jump back in at the low. But in 55 years in the business, I not only have never met anybody who knew how to do it, I’ve never met anybody who had met anybody who knew how to do it.”
I know that he said that, but he still timed the market himself by his own admission, though he didn't specifically refer to it as 'market timing'.
realitytruthprozac wrote: Thu Sep 30, 2010 7:50 pm p.105: That the dividend yield as 2000 began was at an all-time low of just 1% and the PE at a near record high of 32 times earnings together explain why the average return on stocks in the current decade is at present running at an annual rate of less than 1%.

p. 237: "But, in late 1999, concerned about the (obviously) speculative level of stock prices, I reduced my equities to about 35% of assets, thereby increasing my bond position to about 65%."
viewtopic.php?t=60900
But if he was sure he would have gotten out altogether not risk a huge decline with any of his money, let alone 35%. He hedged. Because he couldn't be sure. No one can. Hindsight is 20/20 but one should never confuse outcome with strategy.
He didn't go all in, but doing so is not necessary to time the market.

Nobody who is involved with the market in any way, whether buy-and-hold or market timing, can be sure of anything.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
Topic Author
pension4ever
Posts: 87
Joined: Tue Jul 26, 2016 2:35 pm

Re: Market timer of 2007 2008 crash

Post by pension4ever »

invest2bfree wrote: Thu May 05, 2022 6:46 pm
pension4ever wrote: Thu May 05, 2022 2:28 pm I am reading Annette Ls thread very closely so far it seems she is doing pretty good buying slowly slowly...

Do we have any BH here who successfully pulled something similar in 2007 2008 crash where they kept buying slowly...

For someone who moved to all cash in Dec and even Jan 2022, is still in good shape.

Obviously it's market timing, but if we go into a deep recession or even say VTI to 170 160 . I am not referring to buying single stocks on bargain, but rather the total stock or index sp500 fund itself.

I read even Bogle himself market timed in 2000.
170 is not a deep recession.

120 is a deep recession.

170 would mean all your gains for the pandemic is gone.
We closed at 138 today, 120 doesn't seem to far away.

Perhaps you meant 60 vti is a recession 🧐
Topic Author
pension4ever
Posts: 87
Joined: Tue Jul 26, 2016 2:35 pm

Re: Market timer of 2007 2008 crash

Post by pension4ever »

I got another 10k worth of VTI today not bad.
S4C5
Posts: 412
Joined: Sat May 05, 2018 11:49 am

Re: Market timer of 2007 2008 crash

Post by S4C5 »

I went all cash in Dec. Now accumulating gold in addition to cash.

This is not even close to over. People have no idea what is coming. We are living in a world where people think another 1929 and the subsequent FIFTEEN YEARS as well as hyperinflation are things that are not only improbable but actually impossible. That any crash will be met with a 2020 style recovery.

The entire country is living on a sense of false wealth. Paper wealth in their homes, in their crypto and stock accounts that are now stating to be wiped out. Tech companies with absurd valuations that shame even dot com era exuberance. We paid people to stay at home and they downloaded robinhood and blew the cash on meme stock trading. That has all been wiped out. Robinhood stock now down 70%. This will snowball. 50% of Americans don’t have $500 in savings. Let that sink in.
aragorn1
Posts: 46
Joined: Sun Jan 16, 2022 1:46 pm

Re: Market timer of 2007 2008 crash

Post by aragorn1 »

pension4ever wrote: Mon May 09, 2022 8:19 pm We closed at 138 today, 120 doesn't seem to far away.

Perhaps you meant 60 vti is a recession 🧐
VTI closed at 198.65 today.
S4C5 wrote: Mon May 09, 2022 11:14 pm 50% of Americans don’t have $500 in savings. Let that sink in.
Where did you get this number ?
S4C5
Posts: 412
Joined: Sat May 05, 2018 11:49 am

Re: Market timer of 2007 2008 crash

Post by S4C5 »

aragorn1 wrote: Mon May 09, 2022 11:17 pm
pension4ever wrote: Mon May 09, 2022 8:19 pm We closed at 138 today, 120 doesn't seem to far away.

Perhaps you meant 60 vti is a recession 🧐
VTI closed at 198.65 today.
S4C5 wrote: Mon May 09, 2022 11:14 pm 50% of Americans don’t have $500 in savings. Let that sink in.
Where did you get this number ?
These figures are quoted in lay press articles all the time because of the headlines they generate. You can Google them if you want. 47% of Americans don’t have savings to cover a surprise $500 expense, and similar things along those lines. I mean, is this shocking to you? 20% of the country functions at a survival level paycheck to paycheck where they literally can’t save anything and probably half is just stable where saving would mean forgoing modest discretionary spending. And now we’ve thrown rip-roaring inflation on top of that. Basically nobody in this very large demographic is reading this forum. This forum is top 10%ers with a very large percentage of top 1%ers. I think this can lead to losing sight of the reality of economic conditions and just looking at stock charts and thinking about “buying the dip” and not understand that it’s not a dip, it’s a cliff.

Stocks
Bonds
Crypto
Housing

All toast. Anything that rose exponentially in the past 2 years is going to get slaughtered. Some will be able to ride it out. Some will panic sell. Others, lots, are already stretched thin and will be forced to sell to meet debt obligations, snowballing prices even lower. Lessons will be learned about paper wealth. You thought you were rich because Zillow said your 1974 split level was worth 1 million and your bitcoins were worth 50k each. Now Zillow says your house is worth half that and your bitcoins are worth $500. Props to the handful who sold and cashed out and stayed out though.
User avatar
Beensabu
Posts: 1999
Joined: Sun Aug 14, 2016 3:22 pm

Re: Market timer of 2007 2008 crash

Post by Beensabu »

pension4ever wrote: Thu May 05, 2022 2:28 pm I am reading Annette Ls thread very closely so far it seems she is doing pretty good buying slowly slowly...
How closely? All of her employer plan contributions are going to equities. She's actually DCAing into the drawdown with periodic automated paycheck contributions. The other bit is just something she's doing to distract herself. There are probably many people who did the same (the DCA part) during 2007-2008 without any clue they were doing it (and people who knew what they were doing as well). And there are other people doing the same now (both knowingly and not).
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
Small Savanna
Posts: 369
Joined: Sat Feb 09, 2019 2:27 am

Re: Market timer of 2007 2008 crash

Post by Small Savanna »

Instead of market timing, think of it as bargain shopping. In 2008 I took a home equity loan and over the course of two years gradually bought stocks in companies that were profitable with modest debt and low P/E ratios. In that era there were a lot of bargains. I probably won't do the same this time because I'm a lot closer to retirement and I'm not as confident in my stock picking ability, but I think it was a reasonable strategy.
impatientInv
Posts: 220
Joined: Fri Sep 03, 2021 1:26 pm

Re: Market timer of 2007 2008 crash

Post by impatientInv »

pension4ever wrote: Mon May 09, 2022 8:26 pm I got another 10k worth of VTI today not bad.
In Feb 2020 before CoVID hit the markers, I was worried seeing how it was spreading, changed portfolio to slightly conservative. Did some TLH near the bottom. But couldn't buy back to pre Feb asset allocation fast enough. Overall was even.

Hope to stay the course this year. Maybe go more aggressive if stocks fall more.
VTI, VXUS... No individual stocks.
Chip
Posts: 3824
Joined: Wed Feb 21, 2007 4:57 am

Re: Market timer of 2007 2008 crash

Post by Chip »

S4C5 wrote: Mon May 09, 2022 11:14 pm I went all cash in Dec. Now accumulating gold in addition to cash.

This is not even close to over. People have no idea what is coming. We are living in a world where people think another 1929 and the subsequent FIFTEEN YEARS as well as hyperinflation are things that are not only improbable but actually impossible. That any crash will be met with a 2020 style recovery.
You seem quite certain about this. What if you're wrong?
kleiner
Posts: 139
Joined: Tue Jun 02, 2020 8:45 am

Re: Market timer of 2007 2008 crash

Post by kleiner »

What we did during the 2008 crash was to maintain contributions to our 401Ks and not stop automated monthly purchase of S&P index. I also looked at our portfolio just once a year :-)

This is a screenshot from a spreadsheet that I use to keep track of the basis for our S&P index fund shares

Image
Mr.BB
Posts: 2001
Joined: Sun May 08, 2016 10:10 am

Re: Market timer of 2007 2008 crash

Post by Mr.BB »

We just basically stay the course. Keep adding to my DW 401k, we have already maxed out our Roths for the year so now we just keeping adding to our taxable account funds. The only real adjustment I made this year was to lower our bond duration in the 401k. The only thing we are trying to take advantage of during this market pullback is doing Roth conversions. Personally I think the greatest hedge against inflation (if your not retired) is earning income.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."
S4C5
Posts: 412
Joined: Sat May 05, 2018 11:49 am

Re: Market timer of 2007 2008 crash

Post by S4C5 »

Chip wrote: Tue May 10, 2022 5:47 am
S4C5 wrote: Mon May 09, 2022 11:14 pm I went all cash in Dec. Now accumulating gold in addition to cash.

This is not even close to over. People have no idea what is coming. We are living in a world where people think another 1929 and the subsequent FIFTEEN YEARS as well as hyperinflation are things that are not only improbable but actually impossible. That any crash will be met with a 2020 style recovery.
You seem quite certain about this. What if you're wrong?
I miss out on a couple of years of sideways market trading, best case and end up with a stockpile of cash and gold.

But what if I am right?

Do people not realize that in 1929 wealthy people lost 90% of their net worth and lost their businesses and means to generate income to replace it? This was my point, that people think this can’t happen again. An actual sustained depression won’t happen again. And I honestly think we are closer to it than we have ever been in my lifetime.

In this environment, the downside risk is far far higher.
Chip
Posts: 3824
Joined: Wed Feb 21, 2007 4:57 am

Re: Market timer of 2007 2008 crash

Post by Chip »

S4C5 wrote: Tue May 10, 2022 11:56 am
Chip wrote: Tue May 10, 2022 5:47 am
S4C5 wrote: Mon May 09, 2022 11:14 pm I went all cash in Dec. Now accumulating gold in addition to cash.

This is not even close to over. People have no idea what is coming. We are living in a world where people think another 1929 and the subsequent FIFTEEN YEARS as well as hyperinflation are things that are not only improbable but actually impossible. That any crash will be met with a 2020 style recovery.
You seem quite certain about this. What if you're wrong?
I miss out on a couple of years of sideways market trading, best case and end up with a stockpile of cash and gold.

But what if I am right?

Do people not realize that in 1929 wealthy people lost 90% of their net worth and lost their businesses and means to generate income to replace it? This was my point, that people think this can’t happen again. An actual sustained depression won’t happen again. And I honestly think we are closer to it than we have ever been in my lifetime.

In this environment, the downside risk is far far higher.
While no one really knows, I seriously doubt a 1929 depression is in the cards. The government made mistakes then that deepened and prolonged the depression. I have a hard time seeing those mistakes repeated. They weren't in 2009.

Yes, high inflation is a risk. But hyperinflation? By that you mean 50% a year, right? Ala Weimar Republic? If we have that what is your cash going to be worth?

If I were willing to bet on it I'd assign worse than 100:1 odds for either scenario. But I believe that my 60/40 portfolio will probably just muddle through.
User avatar
Sandi_k
Posts: 1868
Joined: Sat May 16, 2015 11:55 am
Location: SF Bay Area

Re: Market timer of 2007 2008 crash

Post by Sandi_k »

dvvader wrote: Thu May 05, 2022 5:08 pm I've posted this before (during March 2020), but it applies here as well. I don't have a link to the original article unfortunately.
Here's the original article, I think:

https://laferlagroup.com/march-19-covid-update/
H-Town
Posts: 4389
Joined: Sun Feb 26, 2017 2:08 pm

Re: Market timer of 2007 2008 crash

Post by H-Town »

pension4ever wrote: Thu May 05, 2022 2:28 pm I am reading Annette Ls thread very closely so far it seems she is doing pretty good buying slowly slowly...

Do we have any BH here who successfully pulled something similar in 2007 2008 crash where they kept buying slowly...

For someone who moved to all cash in Dec and even Jan 2022, is still in good shape.

Obviously it's market timing, but if we go into a deep recession or even say VTI to 170 160 . I am not referring to buying single stocks on bargain, but rather the total stock or index sp500 fund itself.

I read even Bogle himself market timed in 2000.
Financially, she would come out way ahead if her AA is 60/40 vs. her market timing purchases to get to her 30/70 AA. It's just math. Stock returns have been pretty handsome since 2010.
Time is the ultimate currency.
Topic Author
pension4ever
Posts: 87
Joined: Tue Jul 26, 2016 2:35 pm

Re: Market timer of 2007 2008 crash

Post by pension4ever »

aragorn1 wrote: Mon May 09, 2022 11:17 pm
pension4ever wrote: Mon May 09, 2022 8:19 pm We closed at 138 today, 120 doesn't seem to far away.

Perhaps you meant 60 vti is a recession 🧐
VTI closed at 198.65 today.
S4C5 wrote: Mon May 09, 2022 11:14 pm 50% of Americans don’t have $500 in savings. Let that sink in.
Where did you get this number ?
Sorry I mixed up the number of Fidelitys Sp500 FXAIX.

I stand corrected.
ekid
Posts: 237
Joined: Tue Dec 18, 2007 4:10 pm
Location: central Indiana

Re: Market timer of 2007 2008 crash

Post by ekid »

"50% of Americans don’t have $500 in savings. Let that sink in."

A few years ago an article in "Atlantic" stated "most" Americans cannot pay $400 in unexpected bill. (emergency)
dboeger1
Posts: 1093
Joined: Fri Jan 13, 2017 7:32 pm

Re: Market timer of 2007 2008 crash

Post by dboeger1 »

So far in my investing career, I've been relatively lucky with timing in and out of investments, but it was generally not market timing so much as adjusting based on life circumstances and prevailing conditions. For example, we were close to buying a house anyway when the pandemic hit and interest rates fell, so we quickly snatched up a house before prices went crazy. Likewise, I was looking to shift from essentially 100% stocks to include some fixed income about a year ago; some of my mutual fund purchases happened to hit LTCG threshold right when I-bond yields spiked, so it seemed like a natural time to sell the former and buy the latter, and it turned out to be pretty close to optimal in local terms. Still, it's not like I'm trading in and out of the market or individual stocks every day.
User avatar
Sandi_k
Posts: 1868
Joined: Sat May 16, 2015 11:55 am
Location: SF Bay Area

Re: Market timer of 2007 2008 crash

Post by Sandi_k »

ekid wrote: Tue May 10, 2022 2:51 pm "50% of Americans don’t have $500 in savings. Let that sink in."

A few years ago an article in "Atlantic" stated "most" Americans cannot pay $400 in unexpected bill. (emergency)
And when you dug into that story, it turned out that folks did have funds - but they were in online banks, or in retirement investments.

Also, the ubiquitous story about "the average American's 401(k) savings are under $100k" - doesn't take into account multiple accounts, based on multiple employers, through the years.
S4C5
Posts: 412
Joined: Sat May 05, 2018 11:49 am

Re: Market timer of 2007 2008 crash

Post by S4C5 »

Chip wrote: Tue May 10, 2022 2:17 pm
S4C5 wrote: Tue May 10, 2022 11:56 am
Chip wrote: Tue May 10, 2022 5:47 am
S4C5 wrote: Mon May 09, 2022 11:14 pm I went all cash in Dec. Now accumulating gold in addition to cash.

This is not even close to over. People have no idea what is coming. We are living in a world where people think another 1929 and the subsequent FIFTEEN YEARS as well as hyperinflation are things that are not only improbable but actually impossible. That any crash will be met with a 2020 style recovery.
You seem quite certain about this. What if you're wrong?
I miss out on a couple of years of sideways market trading, best case and end up with a stockpile of cash and gold.

But what if I am right?

Do people not realize that in 1929 wealthy people lost 90% of their net worth and lost their businesses and means to generate income to replace it? This was my point, that people think this can’t happen again. An actual sustained depression won’t happen again. And I honestly think we are closer to it than we have ever been in my lifetime.

In this environment, the downside risk is far far higher.
While no one really knows, I seriously doubt a 1929 depression is in the cards. The government made mistakes then that deepened and prolonged the depression. I have a hard time seeing those mistakes repeated. They weren't in 2009.

Yes, high inflation is a risk. But hyperinflation? By that you mean 50% a year, right? Ala Weimar Republic? If we have that what is your cash going to be worth?

If I were willing to bet on it I'd assign worse than 100:1 odds for either scenario. But I believe that my 60/40 portfolio will probably just muddle through.
Nobody saw it then either. But I give you credit for saying the risk is not exactly zero like many do.

I feel you are off by a factor of 10 if not more in terms of odds. I am confident this is worse than 2008.

Gold is the hedge for the hyperinflation scenario.
jdamo
Posts: 171
Joined: Tue Apr 30, 2019 8:47 pm

Re: Market timer of 2007 2008 crash

Post by jdamo »

S4C5 wrote: Mon May 09, 2022 11:14 pm I went all cash in Dec. Now accumulating gold in addition to cash.

This is not even close to over. People have no idea what is coming. We are living in a world where people think another 1929 and the subsequent FIFTEEN YEARS as well as hyperinflation are things that are not only improbable but actually impossible. That any crash will be met with a 2020 style recovery.

The entire country is living on a sense of false wealth. Paper wealth in their homes, in their crypto and stock accounts that are now stating to be wiped out. Tech companies with absurd valuations that shame even dot com era exuberance. We paid people to stay at home and they downloaded robinhood and blew the cash on meme stock trading. That has all been wiped out. Robinhood stock now down 70%. This will snowball. 50% of Americans don’t have $500 in savings. Let that sink in.
This is all true. But I think you have to stay invested and bet on the ingenuity, innovation and benefits of the USA to pull through. I suspect there are a lot of Vanguard investors that didn't join in the Robinhood/Meme stock rage and stayed with the 3 fund or index fund approach that represent a much larger % of total investments and wealth.
dvvader
Posts: 131
Joined: Fri Nov 22, 2019 7:07 pm
Location: CA

Re: Market timer of 2007 2008 crash

Post by dvvader »

Sandi_k wrote: Tue May 10, 2022 2:37 pm
dvvader wrote: Thu May 05, 2022 5:08 pm I've posted this before (during March 2020), but it applies here as well. I don't have a link to the original article unfortunately.
Here's the original article, I think:

https://laferlagroup.com/march-19-covid-update/
Yeah that looks right. I'm pretty sure it must have been linked on Yahoo Finance though or somewhere similar otherwise I would have never found it. Advice is definitely relevant. Unless you remain invested, you are very likely to miss all or a portion of the recovery. And who knows, it could have started today.
Bogleheads® emphasize regular saving, broad diversification, and sticking to one's investment plan regardless of market conditions.
000
Posts: 7631
Joined: Thu Jul 23, 2020 12:04 am

Re: Market timer of 2007 2008 crash

Post by 000 »

S4C5 wrote: Mon May 09, 2022 11:14 pm I went all cash in Dec. Now accumulating gold in addition to cash.
It seems we always hear about these things after they happen. :mrgreen:
This is not even close to over. People have no idea what is coming. We are living in a world where people think another 1929 and the subsequent FIFTEEN YEARS as well as hyperinflation are things that are not only improbable but actually impossible. That any crash will be met with a 2020 style recovery.

The entire country is living on a sense of false wealth. Paper wealth in their homes, in their crypto and stock accounts that are now stating to be wiped out. Tech companies with absurd valuations that shame even dot com era exuberance. We paid people to stay at home and they downloaded robinhood and blew the cash on meme stock trading. That has all been wiped out. Robinhood stock now down 70%. This will snowball. 50% of Americans don’t have $500 in savings. Let that sink in.
Probably, but will it be right now or after another fakeout parabola that sucks many in before the ultimate dump? :twisted:
Wannaretireearly
Posts: 2526
Joined: Wed Mar 31, 2010 4:39 pm

Re: Market timer of 2007 2008 crash

Post by Wannaretireearly »

Had a fidelity session at work ‘ investing in volatile markets’.
Actually was really good info. Don’t bail. Maintain your AA etc.
Key slide had $10k invested in 1981 growing to over a $1M today. However if you missed just the 5 best market days that drops to $600k, miss 10 days drops to $400k, miss best 50 days drops to $50k etc. you get the idea, powerful stuff to ‘stay the course’.

I have the opposite ‘problem’ where I cannot help but get more aggressive during days/weeks like this. Today, I moved one of my smaller 401ks from TRD 2035 to 2065. I also moved 529s to be a notch or 3 more aggressive in the vanguard age/graduation based plans.

Talking about Bogle, I thought/read here he sold in 2000 around the same time as retirement? That seems reasonable market timing, cos it’s one way, no need to buy back into the market for the portion sold?! No matter what shenanigans I do now, moving from 80/20 to 90/10, I’ve got a target of around 75/25 in mind for retirement. Hopefully with a large stash of taxable cash being part of the safe 25%. I’ll probably market time a year or three before I target retirement.

Side note: there really is benefit to having this all controlled by a third party, for most people. The behavioral aspects of investing with emotion are real & strong!
Death and taxes. Only one is under your control!
User avatar
LadyGeek
Site Admin
Posts: 82124
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: Market timer of 2007 2008 crash

Post by LadyGeek »

I removed a contentious interchange regarding shoppers at Walmart. As a reminder, see: General Etiquette
At all times we must conduct ourselves in a respectful manner to other posters.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
Chip
Posts: 3824
Joined: Wed Feb 21, 2007 4:57 am

Re: Market timer of 2007 2008 crash

Post by Chip »

S4C5 wrote: Tue May 10, 2022 8:04 pm
Chip wrote: Tue May 10, 2022 2:17 pm While no one really knows, I seriously doubt a 1929 depression is in the cards. The government made mistakes then that deepened and prolonged the depression. I have a hard time seeing those mistakes repeated. They weren't in 2009.

Yes, high inflation is a risk. But hyperinflation? By that you mean 50% a year, right? Ala Weimar Republic? If we have that what is your cash going to be worth?

If I were willing to bet on it I'd assign worse than 100:1 odds for either scenario. But I believe that my 60/40 portfolio will probably just muddle through.
Nobody saw it then either. But I give you credit for saying the risk is not exactly zero like many do.

I feel you are off by a factor of 10 if not more in terms of odds. I am confident this is worse than 2008.

Gold is the hedge for the hyperinflation scenario.
How long are you willing to wait for either another Great Depression or hyperinflation to take hold? You seem to assign zero probability to the stock market going up from here. What will you do if this is the bottom?

These posters were certain things were going to get much worse, right at the pandemic bottom:

viewtopic.php?t=309434
viewtopic.php?t=308773

Of course they could have been right. But they weren't, and they saw NO chance that the market would improve, and especially no chance that it would recover as quickly as it did.

You're confident this is worse than 2008. Why? Do you see any major banks failing? Any indication that the entire financial system is ready to collapse? That's what I saw in 2008. And yet staying the course then was the right move. It probably is now as well, though there are no certainties.
Mr.BB
Posts: 2001
Joined: Sun May 08, 2016 10:10 am

Re: Market timer of 2007 2008 crash

Post by Mr.BB »

Chip wrote: Wed May 11, 2022 6:30 am
S4C5 wrote: Tue May 10, 2022 8:04 pm
Chip wrote: Tue May 10, 2022 2:17 pm While no one really knows, I seriously doubt a 1929 depression is in the cards. The government made mistakes then that deepened and prolonged the depression. I have a hard time seeing those mistakes repeated. They weren't in 2009.

Yes, high inflation is a risk. But hyperinflation? By that you mean 50% a year, right? Ala Weimar Republic? If we have that what is your cash going to be worth?

If I were willing to bet on it I'd assign worse than 100:1 odds for either scenario. But I believe that my 60/40 portfolio will probably just muddle through.
Nobody saw it then either. But I give you credit for saying the risk is not exactly zero like many do.

I feel you are off by a factor of 10 if not more in terms of odds. I am confident this is worse than 2008.

Gold is the hedge for the hyperinflation scenario.
How long are you willing to wait for either another Great Depression or hyperinflation to take hold? You seem to assign zero probability to the stock market going up from here. What will you do if this is the bottom?

These posters were certain things were going to get much worse, right at the pandemic bottom:

viewtopic.php?t=309434
viewtopic.php?t=308773

Of course they could have been right. But they weren't, and they saw NO chance that the market would improve, and especially no chance that it would recover as quickly as it did.

You're confident this is worse than 2008. Why? Do you see any major banks failing? Any indication that the entire financial system is ready to collapse? That's what I saw in 2008. And yet staying the course then was the right move. It probably is now as well, though there are no certainties.
+1
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."
Topic Author
pension4ever
Posts: 87
Joined: Tue Jul 26, 2016 2:35 pm

Re: Market timer of 2007 2008 crash

Post by pension4ever »

On days like this boy am I glad I DCA my 401k stable to Index SP500 slowly.

I got 7k 10k , 15k at 198 200 204 205.

And will continue to DCA ..I have more than 38 yrs before I can take the monies out so tell me these 10 to 20$ spreads per vti share multiplied compounded over 30 years the difference is negligible . I got lucky no denying that I exited Dec and Jan 2022 early but I am hoping this will help me long term..

As my math is not great...I hope this is not a rounded error over 40 years time frame :oops:

Lump sum generally works but ... :idea:
Topic Author
pension4ever
Posts: 87
Joined: Tue Jul 26, 2016 2:35 pm

Re: Market timer of 2007 2008 crash

Post by pension4ever »

Getting another 10k worth of VTi

Cheers
incognito_man
Posts: 106
Joined: Fri Sep 08, 2017 11:00 pm
Location: Madison, WI

Re: Market timer of 2007 2008 crash

Post by incognito_man »

willthrill81 wrote: Fri May 06, 2022 10:01 am
Firemenot wrote: Fri May 06, 2022 9:56 am
Marseille07 wrote: Fri May 06, 2022 9:48 am
ryman554 wrote: Fri May 06, 2022 8:38 am How on earth is this easy to do?

1. You are 75/25
2. Uh oh, crash!
3. Now you are 50/50 (equities tanked you know)
4. So you relance into 95/5
5. Yay recovery!
6. Now you are 97/3 (that's how it works)
7. Time to get back to 75/25

I mean, i guess I get it. But it relies on a) knowing when step 2 is done, otherwise you send good money after bad and b) knowing when 6 is done to cash out so you get the maximal return.

The real answer is that the person doing this should be 95/5 to begin with, since they are taking huge risks when things look bleak. Ergo, they have the stomach for it.
The steps you described are accurate. However, a) is not correct - you don't have to snipe the bottom; you just start buying after the S&P goes -10% or some threshold like that, that's pretty much it.

As far as b), the poster rebalances once the S&P500 renews ATH I believe.

This method probably trails being 95/5 the whole time, but what's nice about it is your "normal" allocation is quite resilient at 75/25.
If you’re going to do such an approach there must be an algorithm trading product already available. Or just a human controlled one with set rules and triggers. Just invest in it.
There are exceedingly few such instruments out there.
I've thought for awhile there is a market opportunity to develop such a tool. Essentially an open market for strategies that can be shopped and automatically implemented. There's so many good (and so many more bad) strategies out there, but no place to simply compare, match and employ them.

I have scratched this idea out a couple times in prose, but my engineering background wasn't strong enough in coding to actually start hammering away at this concept :)
Hydromod
Posts: 781
Joined: Tue Mar 26, 2019 10:21 pm

Re: Market timer of 2007 2008 crash

Post by Hydromod »

incognito_man wrote: Wed May 11, 2022 4:31 pm
willthrill81 wrote: Fri May 06, 2022 10:01 am
Firemenot wrote: Fri May 06, 2022 9:56 am
Marseille07 wrote: Fri May 06, 2022 9:48 am
ryman554 wrote: Fri May 06, 2022 8:38 am How on earth is this easy to do?

1. You are 75/25
2. Uh oh, crash!
3. Now you are 50/50 (equities tanked you know)
4. So you relance into 95/5
5. Yay recovery!
6. Now you are 97/3 (that's how it works)
7. Time to get back to 75/25

I mean, i guess I get it. But it relies on a) knowing when step 2 is done, otherwise you send good money after bad and b) knowing when 6 is done to cash out so you get the maximal return.

The real answer is that the person doing this should be 95/5 to begin with, since they are taking huge risks when things look bleak. Ergo, they have the stomach for it.
The steps you described are accurate. However, a) is not correct - you don't have to snipe the bottom; you just start buying after the S&P goes -10% or some threshold like that, that's pretty much it.

As far as b), the poster rebalances once the S&P500 renews ATH I believe.

This method probably trails being 95/5 the whole time, but what's nice about it is your "normal" allocation is quite resilient at 75/25.
If you’re going to do such an approach there must be an algorithm trading product already available. Or just a human controlled one with set rules and triggers. Just invest in it.
There are exceedingly few such instruments out there.
I've thought for awhile there is a market opportunity to develop such a tool. Essentially an open market for strategies that can be shopped and automatically implemented. There's so many good (and so many more bad) strategies out there, but no place to simply compare, match and employ them.

I have scratched this idea out a couple times in prose, but my engineering background wasn't strong enough in coding to actually start hammering away at this concept :)
https://www.composer.trade/ does some of this
aragorn1
Posts: 46
Joined: Sun Jan 16, 2022 1:46 pm

Re: Market timer of 2007 2008 crash

Post by aragorn1 »

pension4ever wrote: Wed May 11, 2022 12:50 pm I have more than 38 yrs before I can take the monies out so tell me these 10 to 20$ spreads per vti share multiplied compounded over 30 years the difference is negligible
Will the difference be negligible ? Has someone researched this ? Would be nice to find out.
S4C5
Posts: 412
Joined: Sat May 05, 2018 11:49 am

Re: Market timer of 2007 2008 crash

Post by S4C5 »

Chip wrote: Wed May 11, 2022 6:30 am
S4C5 wrote: Tue May 10, 2022 8:04 pm
Chip wrote: Tue May 10, 2022 2:17 pm While no one really knows, I seriously doubt a 1929 depression is in the cards. The government made mistakes then that deepened and prolonged the depression. I have a hard time seeing those mistakes repeated. They weren't in 2009.

Yes, high inflation is a risk. But hyperinflation? By that you mean 50% a year, right? Ala Weimar Republic? If we have that what is your cash going to be worth?

If I were willing to bet on it I'd assign worse than 100:1 odds for either scenario. But I believe that my 60/40 portfolio will probably just muddle through.
Nobody saw it then either. But I give you credit for saying the risk is not exactly zero like many do.

I feel you are off by a factor of 10 if not more in terms of odds. I am confident this is worse than 2008.

Gold is the hedge for the hyperinflation scenario.
How long are you willing to wait for either another Great Depression or hyperinflation to take hold? You seem to assign zero probability to the stock market going up from here. What will you do if this is the bottom?

These posters were certain things were going to get much worse, right at the pandemic bottom:

viewtopic.php?t=309434
viewtopic.php?t=308773

Of course they could have been right. But they weren't, and they saw NO chance that the market would improve, and especially no chance that it would recover as quickly as it did.

You're confident this is worse than 2008. Why? Do you see any major banks failing? Any indication that the entire financial system is ready to collapse? That's what I saw in 2008. And yet staying the course then was the right move. It probably is now as well, though there are no certainties.
I see crypto suddenly going to zero (where it and all Ponzi schemes belong and ultimately devolve to) and triggering a Lehman brothers type event.
S4C5
Posts: 412
Joined: Sat May 05, 2018 11:49 am

Re: Market timer of 2007 2008 crash

Post by S4C5 »

Sandi_k wrote: Tue May 10, 2022 2:57 pm
ekid wrote: Tue May 10, 2022 2:51 pm "50% of Americans don’t have $500 in savings. Let that sink in."

A few years ago an article in "Atlantic" stated "most" Americans cannot pay $400 in unexpected bill. (emergency)
And when you dug into that story, it turned out that folks did have funds - but they were in online banks, or in retirement investments.

Also, the ubiquitous story about "the average American's 401(k) savings are under $100k" - doesn't take into account multiple accounts, based on multiple employers, through the years.
Let’s try this again. I apologize if mentioning Walmart was somehow offensive. I shop there regularly as I live right next to one and felt it represented a broad overview of the general public.

The per capita income in California, one of the most expensive states to live in with is only $37,000. This is the average. The average rent for a 3 bedroom in California is $2100/month.

I do not think, and this my personal opinion, and not meant to be disrespectful or distracting or offensive or whatever, that many people on this forum do not realize how most Americans live if they are flummoxed at the idea of half of Americans not being able to come up with $500 on the spot or that most people don’t have 401k savings and think this is so-called fake news, disinformation, fact check misleading or whatever you want to call it.

I am a physician. Part of being a physician is that you are exposed to all socioeconomic groups and afforded perspective vs. somebody like a corporate lawyer who may rarely interact with people outside the top 1% on a personal level. Not that there’s anything wrong with being a corporate lawyer. I would say 50% of my patients can’t come up with $500. It might be higher. In fact I’d say many can’t come up with $100. I did not know people did not have indoor plumbing in America before I became a physician. I did not know how many people fluctuate in and out of homelessness (the destitute living in cars and motels vs. the drug addicted living in the street in tents as many associate) and how you can’t always tell just by looking at them.

These are people too and they count in the stats and there are a LOT of people who live paycheck to paycheck in this country.

In other words, I absolutely believe it.
Chip
Posts: 3824
Joined: Wed Feb 21, 2007 4:57 am

Re: Market timer of 2007 2008 crash

Post by Chip »

S4C5 wrote: Wed May 11, 2022 8:55 pm I see [.....] suddenly going to zero (where it and all Ponzi schemes belong and ultimately devolve to) and triggering a Lehman brothers type event.
I suggest you investigate the total market cap of and the Basel 3 capital requirements for banks to invest in the asset of which we do not speak. I would think a Lehman-type event nearly impossible from that cause. Even though I agree zero is a likely number.

Again, how long are you willing to wait for another Great Depression or Weimar Republic hyperinflation? What if you're wrong and the market goes up from here?
User avatar
StevieG72
Posts: 1643
Joined: Wed Feb 05, 2014 9:00 pm

Re: Market timer of 2007 2008 crash

Post by StevieG72 »

This current decline is especially nasty with bonds dropping along with stocks. This prevents a rebalancing trigger due to stock/bond allocation moving away from target.

In my opinion it is still best to just DCA with any funds that can be invested as they become available.

Sure you can get lucky, but long term a good investment regimen will beat lucky.
Fools think their own way is right, but the wise listen to others.
User avatar
StevieG72
Posts: 1643
Joined: Wed Feb 05, 2014 9:00 pm

Re: Market timer of 2007 2008 crash

Post by StevieG72 »

freyj6 wrote: Mon May 09, 2022 3:32 pm I got lucky in March 2020, and realized too late that if it kept going down another 20 or 30% I had nothing left to put in.

Being a little more cautious this time. Bought some today. Down to about 10% in cash right now, 90% equities.
I like the aggressive equity allocation, seems to make sense with bonds in the toilet. Do you not own bonds? Are you 90% equities / 10 % cash?
Fools think their own way is right, but the wise listen to others.
Oregano
Posts: 335
Joined: Fri Nov 22, 2019 9:30 pm

Re: Market timer of 2007 2008 crash

Post by Oregano »

Lee_WSP wrote: Thu May 05, 2022 2:49 pm
Marseille07 wrote: Thu May 05, 2022 2:46 pm
pension4ever wrote: Thu May 05, 2022 2:28 pm I am reading Annette Ls thread very closely so far it seems she is doing pretty good buying slowly slowly...

Do we have any BH here who successfully pulled something similar in 2007 2008 crash where they kept buying slowly...

For someone who moved to all cash in Dec and even Jan 2022, is still in good shape.

Obviously it's market timing, but if we go into a deep recession or even say VTI to 170 160 . I am not referring to buying single stocks on bargain, but rather the total stock or index sp500 fund itself.

I read even Bogle himself market timed in 2000.
There is a poster who maintains 75/25 but buys the dip during a correction / bear market until 95/5.

This is actually really easy to do, but the question is do you come out ahead of being 95/5 the whole time.
This has already been hashed out. You do not come out ahead of 95/5, but have historically done better than 75/25 and you have less drawdowns than 95/5.
Kind of depends on when/how they get back to 75/25, doesn't it? So there would need to be a fixed plan to both increase and decrease equity exposure over time.
User avatar
Beensabu
Posts: 1999
Joined: Sun Aug 14, 2016 3:22 pm

Re: Market timer of 2007 2008 crash

Post by Beensabu »

S4C5 wrote: Wed May 11, 2022 9:51 pm These are people too and they count in the stats and there are a LOT of people who live paycheck to paycheck in this country.

In other words, I absolutely believe it.
Thank you for trying. It's hard to convince anyone of something they haven't witnessed that's not a part of their own experience.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
Post Reply