Do you Continue to invest even in down market??

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OmG Im late
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Do you Continue to invest even in down market??

Post by OmG Im late » Mon Mar 19, 2018 10:40 pm

Hello All, Simple question for most of you but I am new to investing outside of my 401k. Simply, do I continue to invest money when the stock prices are losing (declining) in my current portfolio? Do I change my allocation? Or ride it out and keep contributing? Should I only open a non retirement account after i've maxed out pretax contributions? :oops: :oops: :oops:

PFInterest
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Re: Do you Continue to invest even in down market??

Post by PFInterest » Mon Mar 19, 2018 10:41 pm

Yes. I only buy on down days.

Sockpuppet
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Re: Do you Continue to invest even in down market??

Post by Sockpuppet » Mon Mar 19, 2018 10:43 pm

Downturns are historically great times to buy. As long as you are diversified and have a long time horizon you will be fine.

You should adjust your allocations for your risk tolerance and time horizon but shouldn’t adjust because of market activity.

Dottie57
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Re: Do you Continue to invest even in down market??

Post by Dottie57 » Mon Mar 19, 2018 10:45 pm

OmG Im late wrote:
Mon Mar 19, 2018 10:40 pm
Hello All, Simple question for most of you but I am new to investing outside of my 401k. Simply, do I continue to invest money when the stock prices are losing (declining) in my current portfolio? Do I change my allocation? Or ride it out and keep contributing? Should I only open a non retirement account after i've maxed out pretax contributions? :oops: :oops: :oops:

Keep contributing to thru all markets. Think of it as buying on sale. Rebalance to meet your asset allcation.

bjames310
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Re: Do you Continue to invest even in down market??

Post by bjames310 » Tue Mar 20, 2018 12:36 am

PFInterest wrote:
Mon Mar 19, 2018 10:41 pm
Yes. I only buy on down days.
Does this mean you buy ETFs so you know the price you’re buying at immediately, or do mutual funds and just wait to see the final price at the end of the day?

animarising
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Re: Do you Continue to invest even in down market??

Post by animarising » Tue Mar 20, 2018 12:40 am

Keep investing in your 401(k) because slow and steady wins the race. And think about changing from pre-tax contributions to Roth.

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randomizer
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Re: Do you Continue to invest even in down market??

Post by randomizer » Tue Mar 20, 2018 1:46 am

I keep investing until I get laid off.
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b.lock
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Re: Do you Continue to invest even in down market??

Post by b.lock » Tue Mar 20, 2018 2:21 am

1000 times yes. the only thing that matters is what the price will be in the future. The terminology "Down" markets insinuates that markets are down and will keep going down, but how do you know what the market will do?

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Re: Do you Continue to invest even in down market??

Post by Grt2bOutdoors » Tue Mar 20, 2018 6:24 am

randomizer wrote:
Tue Mar 20, 2018 1:46 am
I keep investing until I get laid off.
+1. Best time to buy is when there is a sale. If investments were a good buy at $68 per share, then a markdown to $64 will be a bargain. I’ll admit no one likes to see the value of their investment decline, but if you have an investment time horizon of 7 years plus, I’d keep buying and ignore those who say they are going to “cash”.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: Do you Continue to invest even in down market??

Post by Iliketoridemybike » Tue Mar 20, 2018 6:30 am

That’s when you make your money.

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bottlecap
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Re: Do you Continue to invest even in down market??

Post by bottlecap » Tue Mar 20, 2018 6:30 am

Especially in a down market.

JT

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flossy21
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Re: Do you Continue to invest even in down market??

Post by flossy21 » Tue Mar 20, 2018 6:39 am

Dec. 10, 2001: Warren Buffett on the stock market
“To refer to a personal taste of mine, I’m going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the ‘Hallelujah Chorus’ in the Buffett household. When hamburgers go up in price, we weep. For most people, it’s the same with everything in life they will be buying — except stocks. When stocks go down and you can get more for your money, people don’t like them anymore.

Yes - you continue to invest no matter the market conditions. The peaks and valleys even out and you ride the upward trend over the long term. That's the Boglehead way to wealth.

As to your non-retirement (aka taxable) account...it depends. Read this from the Bogleheads wiki -- https://www.bogleheads.org/wiki/Priorit ... nvestments

1.) Contribute to the work-based plan (401(k), 403b,) enough to get the full employer match (the match is like free money, your best possible investment),
2.) Pay off high interest debt (a guaranteed high return, the next best thing to free money),
Contribute to a Health Savings Account (HSA) if available (unlike many other tax deductions, there are no income restrictions to contribute to an HSA),[1][note 1]
3.) Contribute the maximum to an IRA, traditional or Roth (or backdoor Roth technique[note 2]), depending on eligibility and personal circumstances,
4.) Contribute the remainder of the maximum employee contribution to the work-based plan,
5.) Contribute to a taxable investing account,
6.) Contribute to non-deductible IRAs (may be better than taxable in certain circumstances) or annuities.

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nisiprius
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Re: Do you Continue to invest even in down market??

Post by nisiprius » Tue Mar 20, 2018 6:43 am

On the one hand, I do not agree with IMHO too-optimistic ideas, such as the idea that stocks are "on sale" (just as good as before but cheaper) in a downturn, nor that "the average" (or, worse-yet "typical") bear market is only eighteen months and therefore are no big deal, you just need a little patience.

But on the other hand, I feel strongly that the evidence of "the gap" between investor returns and fund returns is convincing. That is to say, a hypothetical investor who simply buys once and holds, and thus every year gets the listed total return of the fund, is so often higher than the actually average returns of investors who were in the fund (because they bought and sold at various times in between).

I also think it is very important to make a plan and stick to it.

Almost everything you read about investing talks about the importance of the long term and justifies advice by looking at past long-term results. Well, you only get the long-term performance of the stock market by buying and holding the stock market over a long term. If you like the idea that the long-term performance of the whole stock market is good enough, then remember that a) you can actually get it, by buying and holding a total market index fund, for the long term; b) if you in fact are constantly reviewing and adjusting your portfolio every six months or every year, than you are not a long-term investor and going forward you will get results that are different from the long-term return of the stock market. Maybe better, maybe worse, but different.

A "long-term" plan that is changed every few years is not a long-term plan.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

SGM
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Re: Do you Continue to invest even in down market??

Post by SGM » Tue Mar 20, 2018 8:03 am

Continuing to invest in down markets Is an excellent plan during the accumulation stage when you are a long way off from needing to cash out. This was always my plan during the accumulation stage. In 401ks you can automate this plan and don't decrease the amounts put into stock funds because of a down draft. Schedule your IRA deposits as early in the year as possible and stick to an aggressive plan despite market changes. If you have money left over to put into taxable accounts also invest with every paycheck. The market tends to do best after there is a lot of fear and poor results. Stay invested. Pick an asset allocation you can maintain even if the market is down.

In our case we stuck with 100% stock funds unless we needed the money for a specific large purchase. Mostly we sold high but took tax loss harvesting without moving out of the market if we had a loss.

When you are retired you have a different situation. You must have some concerns about the sequence of returns while you are taking out distributions from your portfolio. In my opinion the withdrawal phase is more difficult and should be very individualized.

aristotelian
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Re: Do you Continue to invest even in down market??

Post by aristotelian » Tue Mar 20, 2018 8:08 am

Who was it who says that stocks are the only thing people seem to want to buy when prices are low but sell when they are on sale?

PFInterest
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Re: Do you Continue to invest even in down market??

Post by PFInterest » Tue Mar 20, 2018 9:03 am

bjames310 wrote:
Tue Mar 20, 2018 12:36 am
PFInterest wrote:
Mon Mar 19, 2018 10:41 pm
Yes. I only buy on down days.
Does this mean you buy ETFs so you know the price you’re buying at immediately, or do mutual funds and just wait to see the final price at the end of the day?
MF. I dont use ETFs.

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Re: Do you Continue to invest even in down market??

Post by southpaw328 » Tue Mar 20, 2018 9:40 am

Stay the course.

You should, essentially, always be investing regardless of how the market is doing at that time. When the market goes down, the prices are cheaper and the risk is less. When it goes up, the prices are higher and the risk is greater.

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HomerJ
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Re: Do you Continue to invest even in down market??

Post by HomerJ » Tue Mar 20, 2018 9:45 am

OmG Im late wrote:
Mon Mar 19, 2018 10:40 pm
Hello All, Simple question for most of you but I am new to investing outside of my 401k. Simply, do I continue to invest money when the stock prices are losing (declining) in my current portfolio? Do I change my allocation? Or ride it out and keep contributing? Should I only open a non retirement account after i've maxed out pretax contributions? :oops: :oops: :oops:
The best time to buy is when stocks are declining.

But don't change your AA. Pick an AA that you can stick with even in a declining market. Because the market could start declining tomorrow.

Buy and hold. Stay the course.

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Re: Do you Continue to invest even in down market??

Post by UpperNwGuy » Tue Mar 20, 2018 9:45 am

bjames310 wrote:
Tue Mar 20, 2018 12:36 am
PFInterest wrote:
Mon Mar 19, 2018 10:41 pm
Yes. I only buy on down days.
Does this mean you buy ETFs so you know the price you’re buying at immediately, or do mutual funds and just wait to see the final price at the end of the day?
Mutual funds. I usually buy about 15 minutes before the market closes.
Retiree with a pension and a 60/40 taxable portfolio: Total Stock + Total Int'l + Total Bond + Interm Term Tax Exempt.

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cfs
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Re: Do you Continue to invest even in down market??

Post by cfs » Tue Mar 20, 2018 9:46 am

Good to buy "when there is blood on the street" (as long as it is NOT my blood). Do what you need to do, my signature applies. Gracias por leer / cfs
~ Member of the Active Retired Force since 2014 ~

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Clever_Username
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Re: Do you Continue to invest even in down market??

Post by Clever_Username » Tue Mar 20, 2018 9:50 am

OmG Im late wrote:
Mon Mar 19, 2018 10:40 pm
Hello All, Simple question for most of you but I am new to investing outside of my 401k. Simply, do I continue to invest money when the stock prices are losing (declining) in my current portfolio? Do I change my allocation? Or ride it out and keep contributing? Should I only open a non retirement account after i've maxed out pretax contributions? :oops: :oops: :oops:
Pick an allocation you like and stick with it. Contribute regularly. If your non-401(k) investments are for retirement, consider it a total allocation. Do you have an IRA or is this taxable space?

Read the wiki's getting started page here if you haven't already: https://www.bogleheads.org/wiki/Getting_started
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_

lostdog
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Re: Do you Continue to invest even in down market??

Post by lostdog » Tue Mar 20, 2018 9:52 am

Yes keep investing through thick and thin.

http://jlcollinsnh.com/2018/03/16/stock ... ck-market/

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k66
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Re: Do you Continue to invest even in down market??

Post by k66 » Tue Mar 20, 2018 4:21 pm

OP: Should I/we continue to invest in a down market?

I do... and I will make you an offer: Send me any money that you don't want to invest while the market is down and I will return it without interest once the market is up.
LOSER of the Boglehead Contest 2015 | lang may yer lum reek

FraggleRock
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Do you Continue to invest?

Post by FraggleRock » Tue Mar 20, 2018 9:19 pm

No.
At age 69.3, I am done with “adding”.
As soon as I “retire” (I am in one more day mode), I am going to subtraction mode.

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fortyofforty
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Re: Do you Continue to invest even in down market??

Post by fortyofforty » Tue Mar 20, 2018 9:53 pm

To the OP, you've got to. There is no more important component to successful equity investing than investing in down markets. Down markets, crashes, bears... if you're trying to increase your net worth, keep pumping money in.
"In a time of universal deceit, telling the truth becomes a revolutionary act." - George Orwell | There are many roads to doublin'. | Original Vanguard Diehard

heyyou
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Re: Do you Continue to invest even in down market??

Post by heyyou » Tue Mar 20, 2018 10:24 pm

For 25 years, my 401k contributions were on automatic investment since that was the only option in those days. With that length of time period, it worked out fine (retired early).

Just my opinion, but striving for more, also introduces more risk, not just the chance for more returns. What did work was saving more.

BlackHat
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Re: Do you Continue to invest even in down market??

Post by BlackHat » Wed Mar 21, 2018 12:53 pm

I just buy all the time. Every payday until retirement.
“Life is really simple, but we insist on making it complicated.” -- Confucius

infotrader
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Re: Do you Continue to invest even in down market??

Post by infotrader » Wed Mar 21, 2018 1:02 pm

I basically don't do much in up days, but very active and excited in down days.

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Artsdoctor
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Re: Do you Continue to invest even in down market??

Post by Artsdoctor » Wed Mar 21, 2018 1:03 pm

OmG Im late wrote:
Mon Mar 19, 2018 10:40 pm
Hello All, Simple question for most of you but I am new to investing outside of my 401k. Simply, do I continue to invest money when the stock prices are losing (declining) in my current portfolio? Do I change my allocation? Or ride it out and keep contributing? Should I only open a non retirement account after i've maxed out pretax contributions? :oops: :oops: :oops:
One size does not fit all.

Certainly when you're in the accumulation mode, you're going to stick with your asset allocation through thick and thin. Inevitably, if the equity markets fall, you may wind up buying more equity fund shares in order to stay with your asset allocation.

However, in late retirement, you're probably going to find fewer people doing this. I manage my mom's investments and she's in her 80's; I have a rough idea of what asset allocation will suit her needs best but I don't buy equity fund shares any longer for her portfolio.

davidkw
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Re: Do you Continue to invest even in down market??

Post by davidkw » Wed Mar 21, 2018 1:03 pm

I buy more. Great to buy when a sale is going on
David | | From Jack Brennan's "Straight Talk on Investing", page 23 "Living below your means is the ultimate financial strategy"

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220volt
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Re: Do you Continue to invest even in down market??

Post by 220volt » Wed Mar 21, 2018 1:49 pm

Would you rather buy a same BMW at $50,000 or $30,000?
"If I had only followed the advice of financial analysts in 2008, I'd have a million dollars today, provided I started with a hundred million dollars" - Jon Stewart

magneto
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Re: Do you Continue to invest even in down market??

Post by magneto » Wed Mar 21, 2018 2:08 pm

There is an awkward issue here, that have not observed mentioned thus far.
Namely 'momentum'.
This may be troubling the OP?
Since Stocks have no 'mass', then theoretically Stock momentum should not exist?
But unfortunately it does appear to exist, and has been latched on by some respected BH authors as a 'factor'.

One way of tackling this awkward momentum business, was mentioned in the past by another poster.
To buy Stocks as they "go on sale", but in a planned phased manner, such as moving 10% towards target per month.
Effectively this adds 'time diversification', similar to DCA or Value Averaging and makes rebalancing a process, rather than a snap judgement.
May help to stabilise the investor and their portfolio by minimising otherwise unsettling step changes..
'There is a tide in the affairs of men ...', Brutus (Market Timer)

ddurrett896
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Re: Do you Continue to invest even in down market??

Post by ddurrett896 » Wed Mar 21, 2018 2:11 pm

That's the best time to invest!

H-Town
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Re: Do you Continue to invest even in down market??

Post by H-Town » Wed Mar 21, 2018 2:20 pm

OmG Im late wrote:
Mon Mar 19, 2018 10:40 pm
Hello All, Simple question for most of you but I am new to investing outside of my 401k. Simply, do I continue to invest money when the stock prices are losing (declining) in my current portfolio? Do I change my allocation? Or ride it out and keep contributing? Should I only open a non retirement account after i've maxed out pretax contributions? :oops: :oops: :oops:

No. Sell everything and keep your money under your mattress.

^ Or just do the opposite.

CurlyDave
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Re: Do you Continue to invest even in down market??

Post by CurlyDave » Thu Mar 22, 2018 2:22 am

bjames310 wrote:
Tue Mar 20, 2018 12:36 am

Does this mean you buy ETFs so you know the price you’re buying at immediately, or do mutual funds and just wait to see the final price at the end of the day?
Some like mutuals, I only buy ETFs.

The difference is similar to Nike sneakers vs. Adidas. Some people see a huge difference, some people only know that either one beats the heck out of going barefoot.

Keep on buying in all markets.

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F150HD
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Re: Do you Continue to invest even in down market??

Post by F150HD » Thu Mar 22, 2018 5:40 am

PFInterest wrote:
Mon Mar 19, 2018 10:41 pm
Yes. I only buy on down days.
if the market drops 1% today, 2% tomorrow and 3% the day following, how do you know which day to purchase on? :happy

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stemikger
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Re: Do you Continue to invest even in down market??

Post by stemikger » Thu Mar 22, 2018 5:44 am

Of course! As Mr. Buffett always says that when the price of hamburger drops the Buffett Family sings the Hallelujah Chorus. The best time to buy is when stocks are going down not up.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

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fortyofforty
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Re: Do you Continue to invest even in down market??

Post by fortyofforty » Thu Mar 22, 2018 6:47 am

F150HD wrote:
Thu Mar 22, 2018 5:40 am
PFInterest wrote:
Mon Mar 19, 2018 10:41 pm
Yes. I only buy on down days.
if the market drops 1% today, 2% tomorrow and 3% the day following, how do you know which day to purchase on? :happy
With apologies to Will Rogers, if it is going to drop 3% in two days, just buy then.
"In a time of universal deceit, telling the truth becomes a revolutionary act." - George Orwell | There are many roads to doublin'. | Original Vanguard Diehard

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Toons
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Re: Do you Continue to invest even in down market??

Post by Toons » Thu Mar 22, 2018 7:45 am

You should welcome a declining market if you are investing for retirement in your 401k.Share acquisition. Do not let market noise derail your longterm investing plan

😎
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

staythecourse
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Re: Do you Continue to invest even in down market??

Post by staythecourse » Thu Mar 22, 2018 8:00 am

Great question. Simple answer is yes. Just with my short investing lifespan I have noticed you make decent money being buy and hold when market is up or down, but BUYING when the market goes down is like putting rockets on your portfolio. No one likes to do it, but it makes a big impact. I love the phrase from Dr. Bernstein in "IAA" (paraphrasing) putting money into the asset when it is down is like throwing money down a rat hole. To me that is what it feels like, but I know now after the fact that there is light at the end of that tunnel.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Psyayeayeduck
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Re: Do you Continue to invest even in down market??

Post by Psyayeayeduck » Thu Mar 22, 2018 8:09 am

For my main investments, I have a "stay the course" method for my HSA, 401k, and Roth IRA and hit their maximum limits. This gives me solid foundation that if things fall to the wayside, I have a financial safety net to catch me.

For my secondary investments where I'm using extra money to make more extra money, I buy even more on down markets.

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Re: Do you Continue to invest even in down market??

Post by 2Birds1Stone » Thu Mar 22, 2018 8:38 am

I only buy when Market is at all time highs, and sell in the down market.

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nisiprius
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Re: Do you Continue to invest even in down market??

Post by nisiprius » Thu Mar 22, 2018 9:22 am

I would phrase it this way: hold a stock allocation that is low enough that you can stand the idea of continuing to invest, even in a down market.

During 2008-2009, I did not make any changes in my automatic contributions to my 401(k) plan. I did not place orders to perform any transactions at all in my 401(k) plan or in my own Vanguard account. I did not have the will to issue orders to rebalance during the crash, although much of my holdings were in balanced funds that did this automatically. My wife and I were both in agreement to do nothing, although as I've always said it was closer to "deer caught in the headlights" than "staying the course." My asset allocations have always been very conservative, "too conservative" by most conventional-advice standards (but basically not below the most conservative curve on Morningstar's glide-slope benchmark chart). Before the crash I had almost gotten to thinking I was being too conservative, but afterwards, judging by my feelings, my wife's feelings, and our actual behavior, I decided we had gauged it about right. Maybe a skosh too high.

Go ahead, call me a fraidycat. Sticks 'n stones can break my bones, but names can never hurt me.

The mental trap I think people fall into is a kind of greed: people want the historically higher long-term returns of stocks, but they are not really willing to accept the risks. I feel that the wish to get the equity risk premium without really taking the risk is like the search for perpetual motion. At some very fundamental level it just can't be done. In particular, the risks of investing in stocks do not magically go away, simply by intending to hold them for a long time. At a fundamental level, yes, there is risk. Real risk that you personally might encounter.

My feeling is that the stock market is a good gamble. 1) good, 2) a gamble. It is a good gamble because in casino gambling, your expected return negative, minus-the-house-percentage-per-play, while in stock market investing, the historical return has been positive six percent real per year.

But you should accept the gambling or chance aspect of the stock market, and not water it down by kidding yourself the risk is pretty much negligible--because you "are a long-term investor" or "know how to time the market" or "are diversified." The best way to get the long-term return of the market is to stay in for the long term, and the best way to do that is not to have so much at stake that you cannot bear to stick to your plan when things go badly.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: Do you Continue to invest even in down market??

Post by Darth Xanadu » Thu Mar 22, 2018 10:28 am

F150HD wrote:
Thu Mar 22, 2018 5:40 am
PFInterest wrote:
Mon Mar 19, 2018 10:41 pm
Yes. I only buy on down days.
if the market drops 1% today, 2% tomorrow and 3% the day following, how do you know which day to purchase on? :happy
I get your point, but to be fair to PFInterest, I read it as he only makes purchases on down days (i.e. lower than the previous day). Not sure if that means every down day or that he has to make a purchase if it's a down day.
"A courageous teacher, failure is."

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goingup
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Re: Do you Continue to invest even in down market??

Post by goingup » Thu Mar 22, 2018 10:40 am

Yes. Invest in up, down and sideways markets. I automate almost all purchases. Accumulators gotta accumulate, regardless. Take the long view for your retirement savings. If you're saving a down payment for a house, then that's a different thing.

Nate79
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Re: Do you Continue to invest even in down market??

Post by Nate79 » Thu Mar 22, 2018 11:28 am

What down market?

PFInterest
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Re: Do you Continue to invest even in down market??

Post by PFInterest » Thu Mar 22, 2018 1:19 pm

F150HD wrote:
Thu Mar 22, 2018 5:40 am
PFInterest wrote:
Mon Mar 19, 2018 10:41 pm
Yes. I only buy on down days.
if the market drops 1% today, 2% tomorrow and 3% the day following, how do you know which day to purchase on? :happy
i only buy once a month at the end. so if the 30th is down, that day. if the 26 is down, that day. if nothing is down, i buy the last day. i have an IPS.

3funder
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Re: Do you Continue to invest even in down market??

Post by 3funder » Thu Mar 22, 2018 1:23 pm

Absolutely.

LFKB
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Re: Do you Continue to invest even in down market??

Post by LFKB » Thu Mar 22, 2018 3:06 pm

I just bought stocks today given the S&P500 went down 2.4%, so yes

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munemaker
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Re: Do you Continue to invest even in down market??

Post by munemaker » Thu Mar 22, 2018 3:09 pm

You may be familiar with the old saw: "Buy low. Sell high." This is the opportunity to buy low. The lower it goes, the more enthusiastically you should be about investing in accord with your plan.

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