U.S. stocks in freefall

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cj2018
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Re: U.S. stocks in freefall

Post by cj2018 » Mon Jun 25, 2018 12:29 pm

Whakamole wrote:
Mon Jun 25, 2018 12:25 pm
Why do people say the market is volatile when it goes down 1% in a day but not when it goes up 1% in a day? :confused
Risk-aversion: we hate lost much more than gain even if it's the same % in each direction :)

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pokebowl
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Re: U.S. stocks in freefall

Post by pokebowl » Mon Jun 25, 2018 12:36 pm

I feel this dip is primarily impacting those who invested in Chinese meme stocks over this last week. :mrgreen:

lostdog
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Re: U.S. stocks in freefall

Post by lostdog » Mon Jun 25, 2018 12:52 pm

Whakamole wrote:
Mon Jun 25, 2018 12:25 pm
Why do people say the market is volatile when it goes down 1% in a day but not when it goes up 1% in a day? :confused
media noise
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thangngo
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Re: U.S. stocks in freefall

Post by thangngo » Mon Jun 25, 2018 1:28 pm

ReformedSpender wrote:
Mon Jun 25, 2018 12:23 pm
triceratop wrote:
Mon Jun 25, 2018 12:14 pm
US Stocks are not even 4% off of their all-time highs. Very exciting.
Agreed, yet the sentiment would have you believe otherwise more often than not.

Makes one wonder if many have become too comfortable/complacent with annual returns since '09.

:beer
I saw quite a few posters here expecting return of 12-20% like last year... Recency bias has a lot to do with unrealistic expectations from the market.

I only care about long terms. So the less returns I have during my accumulation phase, the better overall return I will get when all dusts are settled.

kaeltor
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Re: U.S. stocks in freefall

Post by kaeltor » Mon Jun 25, 2018 1:30 pm

Kompass wrote:
Mon Jun 25, 2018 12:24 pm
When VTSAX hits a 20% discount (real bear for me) I'll jump in the buying pool. Until then I'll just enjoy being one of the folks in the peanut gallery with "too much" in ca$h.

:beer
Isn't that timing the market?

bgf
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Re: U.S. stocks in freefall

Post by bgf » Mon Jun 25, 2018 1:51 pm

thangngo wrote:
Mon Jun 25, 2018 1:28 pm
ReformedSpender wrote:
Mon Jun 25, 2018 12:23 pm
triceratop wrote:
Mon Jun 25, 2018 12:14 pm
US Stocks are not even 4% off of their all-time highs. Very exciting.
Agreed, yet the sentiment would have you believe otherwise more often than not.

Makes one wonder if many have become too comfortable/complacent with annual returns since '09.

:beer
I saw quite a few posters here expecting return of 12-20% like last year... Recency bias has a lot to do with unrealistic expectations from the market.

I only care about long terms. So the less returns I have during my accumulation phase, the better overall return I will get when all dusts are settled.
or they were being "contrarian" to the majority of reports that returns would NOT be as good.

this 'theory of the mind' stuff is pointless to consider.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

Sidney
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Re: U.S. stocks in freefall

Post by Sidney » Mon Jun 25, 2018 1:54 pm

kaeltor wrote:
Mon Jun 25, 2018 1:30 pm
Kompass wrote:
Mon Jun 25, 2018 12:24 pm
When VTSAX hits a 20% discount (real bear for me) I'll jump in the buying pool. Until then I'll just enjoy being one of the folks in the peanut gallery with "too much" in ca$h.

:beer
Isn't that timing the market?
Not if it triggers a re-balance plan.
I always wanted to be a procrastinator.

GMan82
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Re: U.S. stocks in freefall

Post by GMan82 » Mon Jun 25, 2018 2:01 pm

Ooh this is the first time I’m going to attempt TLH. Estimating about $1000 in short term losses in VTIAX (Total Intl). 35% federal bracket, so I’m happy.

Vanguard warned that July 25 is 30 days as part of their frequent trading policy, so that means I have to wait until July 26 to reinvest right? I figure I’ll just keep the funds in tax exempt MMF until that day and re-purchase on July 26. Reminder set for July 26 to make sure I remember to re-enter the market.

livesoft
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Re: U.S. stocks in freefall

Post by livesoft » Mon Jun 25, 2018 2:23 pm

One would exchange from VTIAX to VFWAX if one did not want to be out of the market with that money for those 31 days.

As for frequent trading policy, it is trivial to work around. There are many posts at a website called "bogleheads.org" that you can check out on that.
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StrangePenguin
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Re: U.S. stocks in freefall

Post by StrangePenguin » Mon Jun 25, 2018 2:26 pm

GMan82 wrote:
Mon Jun 25, 2018 2:01 pm
Ooh this is the first time I’m going to attempt TLH. Estimating about $1000 in short term losses in VTIAX (Total Intl). 35% federal bracket, so I’m happy.

Vanguard warned that July 25 is 30 days as part of their frequent trading policy, so that means I have to wait until July 26 to reinvest right? I figure I’ll just keep the funds in tax exempt MMF until that day and re-purchase on July 26. Reminder set for July 26 to make sure I remember to re-enter the market.
You should also make yourself aware of the Wash Sale rules. https://www.bogleheads.org/wiki/Wash_sale

minesweep
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Re: U.S. stocks in freefall

Post by minesweep » Mon Jun 25, 2018 2:41 pm

post deleted
Last edited by minesweep on Mon Jun 25, 2018 2:49 pm, edited 1 time in total.

heyeaglefn
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Re: U.S. stocks in freefall

Post by heyeaglefn » Mon Jun 25, 2018 2:43 pm

Whakamole wrote:
Mon Jun 25, 2018 12:25 pm
Why do people say the market is volatile when it goes down 1% in a day but not when it goes up 1% in a day? :confused
Same reason why most people turn to prayer when times are bad and not when things are good.

CULater
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Re: U.S. stocks in freefall

Post by CULater » Mon Jun 25, 2018 4:41 pm

Hey, price only dropped by 0.39% if you owned USMV (minimum volatility ETF), but was down by 1.40% for TSM. So, they say min vol doesn't work? Heh, heh.
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GMan82
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Re: U.S. stocks in freefall

Post by GMan82 » Mon Jun 25, 2018 5:15 pm

StrangePenguin wrote:
Mon Jun 25, 2018 2:26 pm
GMan82 wrote:
Mon Jun 25, 2018 2:01 pm
Ooh this is the first time I’m going to attempt TLH. Estimating about $1000 in short term losses in VTIAX (Total Intl). 35% federal bracket, so I’m happy.

Vanguard warned that July 25 is 30 days as part of their frequent trading policy, so that means I have to wait until July 26 to reinvest right? I figure I’ll just keep the funds in tax exempt MMF until that day and re-purchase on July 26. Reminder set for July 26 to make sure I remember to re-enter the market.
You should also make yourself aware of the Wash Sale rules. https://www.bogleheads.org/wiki/Wash_sale
Thanks. I’ve read that wiki post before, but the refresher is always good. The VTIAX shares I’m selling go back to Aug 2017 and I take dividends in cash to be manually redeployed. I’m hoping to reinvest on July 26, 31 days after today.

Kompass
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Re: U.S. stocks in freefall

Post by Kompass » Mon Jun 25, 2018 6:02 pm

kaeltor wrote:
Mon Jun 25, 2018 1:30 pm
Kompass wrote:
Mon Jun 25, 2018 12:24 pm
When VTSAX hits a 20% discount (real bear for me) I'll jump in the buying pool. Until then I'll just enjoy being one of the folks in the peanut gallery with "too much" in ca$h.

:beer
Isn't that timing the market?
:mrgreen: Probably

It's part of my IPS, so it's planned timing. On that premise one could call rebalancing timing also.

At least that's what I tell myself. :shock:
The large print giveth and the fine print taketh away.

Katietsu
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Re: U.S. stocks in freefall

Post by Katietsu » Mon Jun 25, 2018 6:21 pm

GMan82 wrote:
Mon Jun 25, 2018 2:01 pm
Ooh this is the first time I’m going to attempt TLH. Estimating about $1000 in short term losses in VTIAX (Total Intl). 35% federal bracket, so I’m happy.

Vanguard warned that July 25 is 30 days as part of their frequent trading policy, so that means I have to wait until July 26 to reinvest right? I figure I’ll just keep the funds in tax exempt MMF until that day and re-purchase on July 26. Reminder set for July 26 to make sure I remember to re-enter the market.
Did you see the Livesoft post? If you are just using TLH and not also trying to time the market, you would not leave the market for a month. You would use a similar but different investment. What if your investment would have gone up by the $1000 during the 30 days you were out of the market? Then you would have traded a $1000 gain for at most a $350 tax savings. Not a good trade.

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Re: U.S. stocks in freefall

Post by MotoTrojan » Mon Jun 25, 2018 6:24 pm

Katietsu wrote:
Mon Jun 25, 2018 6:21 pm
GMan82 wrote:
Mon Jun 25, 2018 2:01 pm
Ooh this is the first time I’m going to attempt TLH. Estimating about $1000 in short term losses in VTIAX (Total Intl). 35% federal bracket, so I’m happy.

Vanguard warned that July 25 is 30 days as part of their frequent trading policy, so that means I have to wait until July 26 to reinvest right? I figure I’ll just keep the funds in tax exempt MMF until that day and re-purchase on July 26. Reminder set for July 26 to make sure I remember to re-enter the market.
Did you see the Livesoft post? If you are just using TLH and not also trying to time the market, you would not leave the market for a month. You would use a similar but different investment. What if your investment would have gone up by the $1000 during the 30 days you were out of the market? Then you would have traded a $1000 gain for at most a $350 tax savings. Not a good trade.
Was just typing a similar response. VFWAX is close enough in correlation to hold forever and gives you identical market exposure. If it is a loss after 31 days you can even exchange back! Would be reckless to sit out of the market a month and miss a potential run up.

If particular, you could do 90/10 with VFSVX (small caps) to nearly perfectly replicate.

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zaboomafoozarg
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Re: U.S. stocks in freefall

Post by zaboomafoozarg » Mon Jun 25, 2018 7:20 pm

pokebowl wrote:
Mon Jun 25, 2018 12:36 pm
I feel this dip is primarily impacting those who invested in Chinese meme stocks over this last week. :mrgreen:
Queue the $IQ jokes :D

thangngo
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Re: U.S. stocks in freefall

Post by thangngo » Mon Jun 25, 2018 10:21 pm

GMan82 wrote:
Mon Jun 25, 2018 2:01 pm
Ooh this is the first time I’m going to attempt TLH. Estimating about $1000 in short term losses in VTIAX (Total Intl). 35% federal bracket, so I’m happy.

Vanguard warned that July 25 is 30 days as part of their frequent trading policy, so that means I have to wait until July 26 to reinvest right? I figure I’ll just keep the funds in tax exempt MMF until that day and re-purchase on July 26. Reminder set for July 26 to make sure I remember to re-enter the market.
Not a good idea to TLH a mutual fund and be out of the market 30 days later. The mechanic is to exchange to another fund (ETF is more preferable here) on the same trading day.

GMan82
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Re: U.S. stocks in freefall

Post by GMan82 » Wed Jun 27, 2018 8:48 pm

But does it really make a difference in the long run to be out for 31 days? I could have sworn I’ve seen Taylor post about it not having that much of an impact.

I do see your points though.

MotoTrojan
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Re: U.S. stocks in freefall

Post by MotoTrojan » Wed Jun 27, 2018 8:50 pm

GMan82 wrote:
Wed Jun 27, 2018 8:48 pm
But does it really make a difference in the long run to be out for 31 days? I could have sworn I’ve seen Taylor post about it not having that much of an impact.

I do see your points though.
If you missed the best 5 days a year through the last 100 years you’d have lost almost all of your money. Yes it matters.

livesoft
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Re: U.S. stocks in freefall

Post by livesoft » Wed Jun 27, 2018 8:51 pm

GMan82 wrote:
Wed Jun 27, 2018 8:48 pm
But does it really make a difference in the long run to be out for 31 days? I could have sworn I’ve seen Taylor post about it not having that much of an impact.
Yes, it can definitely make a difference. One sells at a loss when the market is down which is exactly the time to be buying. If one only sells 0.1% of their portfolio, then yes, it won't make a difference. But if somebody just had a windfall and lump-summed into the market the whole shebang and then tax-loss harvested after a 20% drop the entire amount, any upwards movement in the next 31 days will make a huge difference.

I think we can say that Taylor Larimore is NOT in the accumulation mode anymore, so his mileage does vary as does any amounts that he can possibly tax-loss harvest.
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Re: U.S. stocks in freefall

Post by willthrill81 » Wed Jun 27, 2018 9:19 pm

MotoTrojan wrote:
Wed Jun 27, 2018 8:50 pm
GMan82 wrote:
Wed Jun 27, 2018 8:48 pm
But does it really make a difference in the long run to be out for 31 days? I could have sworn I’ve seen Taylor post about it not having that much of an impact.

I do see your points though.
If you missed the best 5 days a year through the last 100 years you’d have lost almost all of your money. Yes it matters.
The issue I have with the statement that "If you missed the best X days in the market over the last Y years, your return would have been Z less" is because it is only true if the investor was out of the market only those specific days, which would be close to a statistical impossibility. Further, it also ignores the fact that the market's best days tend to group around the worst days. Historically, if one avoided both the best and the worst days, long-term returns would have been significantly higher than buy-and-hold.

No one ever says "If you had missed the worst 5 days during the last year, your return would have been Z."
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Re: U.S. stocks in freefall

Post by mega317 » Wed Jun 27, 2018 9:51 pm

willthrill81 wrote:
Wed Jun 27, 2018 9:19 pm
No one ever says "If you had missed the worst 5 days during the last year, your return would have been Z."
What a thought. Z = yacht

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oldzey
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Re: U.S. stocks in freefall

Post by oldzey » Wed Jun 27, 2018 10:00 pm

Equities are going on sale - right before my automatic monthly 403b contributions. :sharebeer
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

MotoTrojan
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Re: U.S. stocks in freefall

Post by MotoTrojan » Wed Jun 27, 2018 10:59 pm

willthrill81 wrote:
Wed Jun 27, 2018 9:19 pm
MotoTrojan wrote:
Wed Jun 27, 2018 8:50 pm
GMan82 wrote:
Wed Jun 27, 2018 8:48 pm
But does it really make a difference in the long run to be out for 31 days? I could have sworn I’ve seen Taylor post about it not having that much of an impact.

I do see your points though.
If you missed the best 5 days a year through the last 100 years you’d have lost almost all of your money. Yes it matters.
The issue I have with the statement that "If you missed the best X days in the market over the last Y years, your return would have been Z less" is because it is only true if the investor was out of the market only those specific days, which would be close to a statistical impossibility. Further, it also ignores the fact that the market's best days tend to group around the worst days. Historically, if one avoided both the best and the worst days, long-term returns would have been significantly higher than buy-and-hold.

No one ever says "If you had missed the worst 5 days during the last year, your return would have been Z."
Well the poster just TLH’d so I guess the odds are good this bad day is grouped around a good one then? Best be exposed to the market.

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willthrill81
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Re: U.S. stocks in freefall

Post by willthrill81 » Thu Jun 28, 2018 12:22 am

MotoTrojan wrote:
Wed Jun 27, 2018 10:59 pm
willthrill81 wrote:
Wed Jun 27, 2018 9:19 pm
MotoTrojan wrote:
Wed Jun 27, 2018 8:50 pm
GMan82 wrote:
Wed Jun 27, 2018 8:48 pm
But does it really make a difference in the long run to be out for 31 days? I could have sworn I’ve seen Taylor post about it not having that much of an impact.

I do see your points though.
If you missed the best 5 days a year through the last 100 years you’d have lost almost all of your money. Yes it matters.
The issue I have with the statement that "If you missed the best X days in the market over the last Y years, your return would have been Z less" is because it is only true if the investor was out of the market only those specific days, which would be close to a statistical impossibility. Further, it also ignores the fact that the market's best days tend to group around the worst days. Historically, if one avoided both the best and the worst days, long-term returns would have been significantly higher than buy-and-hold.

No one ever says "If you had missed the worst 5 days during the last year, your return would have been Z."
Well the poster just TLH’d so I guess the odds are good this bad day is grouped around a good one then? Best be exposed to the market.
You might want to research the topic of volatility clustering. The best days in stocks tend to be close in time to the worst days, and all of those tend to exist primarily during bear markets.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

bayview
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Re: U.S. stocks in freefall

Post by bayview » Thu Jun 28, 2018 6:15 am

oldzey wrote:
Wed Jun 27, 2018 10:00 pm
Equities are going on sale - right before my automatic monthly 403b contributions. :sharebeer
Except that it will be up today (Thursday), when my TSP goes in.

Then it will return to the sale. :D
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

bayview
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Re: U.S. stocks in freefall

Post by bayview » Thu Jun 28, 2018 4:08 pm

bayview wrote:
Thu Jun 28, 2018 6:15 am
oldzey wrote:
Wed Jun 27, 2018 10:00 pm
Equities are going on sale - right before my automatic monthly 403b contributions. :sharebeer
Except that it will be up today (Thursday), when my TSP goes in.

Then it will return to the sale. :D
update: you thought I was kidding, right? :oops:
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

thangngo
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Re: U.S. stocks in freefall

Post by thangngo » Fri Jun 29, 2018 3:04 pm

Who on here was selling 30 minutes before the market closed?

Image

MotoTrojan
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Re: U.S. stocks in freefall

Post by MotoTrojan » Fri Jun 29, 2018 3:14 pm

thangngo wrote:
Fri Jun 29, 2018 3:04 pm
Who on here was selling 30 minutes before the market closed?

Image
Happy Q2!

GMan82
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Re: U.S. stocks in freefall

Post by GMan82 » Fri Jun 29, 2018 3:49 pm

livesoft wrote:
Wed Jun 27, 2018 8:51 pm
GMan82 wrote:
Wed Jun 27, 2018 8:48 pm
But does it really make a difference in the long run to be out for 31 days? I could have sworn I’ve seen Taylor post about it not having that much of an impact.
Yes, it can definitely make a difference. One sells at a loss when the market is down which is exactly the time to be buying. If one only sells 0.1% of their portfolio, then yes, it won't make a difference. But if somebody just had a windfall and lump-summed into the market the whole shebang and then tax-loss harvested after a 20% drop the entire amount, any upwards movement in the next 31 days will make a huge difference.

I think we can say that Taylor Larimore is NOT in the accumulation mode anymore, so his mileage does vary as does any amounts that he can possibly tax-loss harvest.
Thought about it. Read some of your old posts on TLH. I decided to go ahead and exchange into VFWAX (FTSE AW EX-US).

livesoft
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Re: U.S. stocks in freefall

Post by livesoft » Fri Jun 29, 2018 4:14 pm

GMan82 wrote:
Fri Jun 29, 2018 3:49 pm
Thought about it. Read some of your old posts on TLH. I decided to go ahead and exchange into VFWAX (FTSE AW EX-US).
Good luck! I'm rooting for you on this one.
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jebmke
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Re: U.S. stocks in freefall

Post by jebmke » Fri Jun 29, 2018 4:19 pm

^ With the variety of funds available today that track fairly closely and have good expense characteristics there is no compelling reason to stay out of position for 31 days. Many of the alternatives are quite acceptable long term holds - one of my criteria for TLH pairs is that the destination should be something I would be comfortable holding forever if things reversed quickly and steadily.
When you discover that you are riding a dead horse, the best strategy is to dismount.

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