Booming Stock Market
Quote: terapinedDown 500 points so far today
Was down 666 Fri
The downward slide continues
Down over 400 today so far
if it dallies with that, it will also be down more than 20% ... I'd start cautiously buying [probably before then]
Quote: lilredroosterThe stock market has gone up almost every day since Trump won. It did almost the same but not quite as strongly after the Brits voted for Brexit. Virtually all of the pundits said the opposite was sure to happen; that the market was sure to fall and fall badly if Trump won and if Brexit won the vote . It shows the hopelessness of looking towards these talking heads for advice on what to do. These clowns never acknowledge their past errors which are too numerous to count. They just go right on predicting; pretending that they can see the future.
I wonder if the OP cares to comment now
LOL
Quote: terapinedI wonder if the OP cares to comment now
LOL
S&P 500 is up +20% since OP on 11/26/16 plus dividends likely puts it over 22% to the positive...even with the last two days down draft...so your LOL comment above looks pretty sharp indeed! Have you been in cash or bonds since November of 2016?
I believe there is another 10% to come off the broader indexes...S&P 500 goes down to 2,500 and Naz down to 6400 before this is over.
It will be tough to be disciplined and not buy on the way down, I already nibbled a bit on some smaller names late today that aren't as expensive P/E-wise as the big caps.
But Terps definitely keep those November 2016 dollars in cash until the 2018 mid-terms...if the Dems have any success in November it will definitely be time to invest your cash in equities on 11/7/18.
(from CNN)
What happened a short while ago was the largest intra-day point decline of all time. The Dow was down 1,597.08 points at its low. That shattered the previous record, 1,089.42, on Aug. 24, 2015.
The Dow’s largest closing loss was 777.68 points, on Sept. 29, 2008, during the financial crisis. The Dow is down more than 800 points right now.
The Dow has fallen about 1,600 points in two sessions. That would easily be the biggest two-day point decline in history.
However...
In percentage terms, this is nowhere near a record. On Black Monday in 1987, the Dow fell 22%. During the financial crisis in 2008, the Dow fell 7% on several individual days. The Dow is down about 4% today and about 6% over two days.
Quote: lilredroosterI almost never make predictions about the stock market.
But I'm going to make an exception.
I'm going to predict that on Monday, the traders who sat on the sidelines during Friday's carnage are going to get back into action heavily on the buy side and the market as a whole will go significantly up on Monday.
The indexes that most closely reflect the market as a whole, and fell a lot on Friday, will do very well.
Bear markets are very closely correlated to recessions, and there is no recession in sight right now.
And if I'm wrong, no, I won't be giving out my home address to anyone.
What's your home address again?
Quote: boymimboWhat's your home address again?
My home address is 8 Merengue Blvd; Guayaquil, Ecuador (no extradition treaty with U.S.)
my home phone is 1-800-not my fault
Quote: lilredroosterI almost never make predictions about the stock market.
as of this moment I'm changing that to absolutely never
Wall St. does it and it's time to panic.
Doom. Doom and gloom.
Quote: billryanMacys runs a 4% off sale and the public yawns.
Wall St. does it and it's time to panic.
Doom. Doom and gloom.
Macys marks the stuff up 400%+ after they buy it wholesale though.
my brokerage, t rowe price, is still downQuote: linkCHAOTIC system outages trap money
https://www.express.co.uk/finance/city/914976/Wall-Street-Dow-Jones-futures-latest-US-stock-market-Vanguard-TD-Ameritrade-T-Rowe-Price
fear will drive the market down further in one day than greed will push it up in one day
Quote: lilredroosterthe market came back big time today up 567 points
fear will drive the market down further in one day than greed will push it up in one day
It's not fear, it's automated trading programs. They kick in quicker as the market descends than when it rises.
Quote: IbeatyouracesAnother awesome day today!
I'm only upset that I won't have any money to invest for at least a few more weeks....
Quote: IbeatyouracesAnother awesome day today!
#thanksObama
Quote: ParadigmI believe there is another 10% to come off the broader indexes...S&P 500 goes down to 2,500 and Naz down to 6400 before this is over.
Still another 80pts/3% to the downside on S&P500 to get to the 2,500 level...I think intraday we'll see a low of 2420 (down 6% from today's levels)...then lots of stocks get really interesting.
Naz has another 400 points to the downside, or 6% before hitting the 6,400 level...and I think we will get down to 6250-6300 intraday....down almost 8% from today's close. There is more pain to come.
That will give you a headline of "markets off 15%-17% from their highs" and all the talking heads will be spreading the Bear Market hysterisa speech. I'll be loading up with at least half of the 1/2 of my 35% cash position in great companies that have been thrown out like babies with the bath water...unless there is a fundamental change in the economy or the 10 Year continues to spike and closes above 3.25%.
The markets will be up for YTD at the end of Q3 (09/30/18), you could see a 20%+ move from the upcoming low...come late September the markets will get cautious again with the mid-terms on the horizon. If the Dems win a majority in the House, all bets are off when it comes to making money in equities...and a Dem House Majority will mean 2018 will be a down year for the markets...that may be the time that bonds finally look like a good place to be!
after today's 1000pt drop, my bonds are finally doing better than the stock index I sold out of!Quote: ParadigmI think you were only a month early (stop listening to BBB's broker :-P),
Tax Reform wasn't effectively priced in over the holidays, giving us a very nice Jan...but I would move the bonds to cash and bring your cash % up to 35%-40% of the total portfolio. I did that this week having an 8% rate of return YTD...market is going to rest a bit from here...but hey, still leaving 60% on the table, so I must not be that convinced :-).
I haven't been in bonds for a long time and mostly been wrong as interest rates stayed low for a lot longer than I expected. But now bonds are scary, they don't do well in a rising interest rate environment and rates are going up this year and beyond. Mid to Long Term Bonds are the biggest asset bubble out there in my opinion.
um.. I have long term corp bonds. your reasoning explains why it's doing poorer than total bond index. (-4% vs -2%)
so sell my long term corp bonds and buy back Total Market after indexes drops another 6%??
Quote: 100xOddsmoved 25% of my portfolio from S+P 500 to bonds on Jan 2.
S+P up 5%, Bonds down 1% so far. :(
Quote: Paradigm on Feb 1, 2018I think you were only a month early (stop listening to BBB's broker)
and the stock market dropped -1100 points in 2 days.
now below the Feb 8th low. (see previous post above)
so swapping out my stocks in beginning of year for Bonds was THREE months early.
lol
now waiting for entry point to swap Bonds back to stocks.
I think I'm a little low on my bond funds anyway, so maybe I'll grab some of those.
Quote: 100xOddsand the stock market dropped -1100 points in 2 days.
now below the Feb 8th low.
As a wise man once said "there are lies, damn lies, and statistics". Market indices are of the statistical variety of lies in that they are artificial constructs that people tend to view as some sort of gospel truth. While a given indicator (e.g. S&P 550) may have dropped by X% you know that doesn't mean specific stocks have done the same. My philosophy is focus on individual stocks and/or specific sectors. Broad indicies are good mainly for the cable news shows in that it gives them an easy way to present complex stuff in a simplified sound bite.
*If I was 30 years younger, though, I might get interested more quickly. It makes a difference
http://www.businessinsider.com/forgetful-investors-performed-best-2014-9
Quote:O'Shaughnessy: "Fidelity had done a study as to which accounts had done the best at Fidelity. And what they found was..."
Ritholtz: "They were dead."
O'Shaughnessy: "...No, that's close though! They were the accounts of people who forgot they had an account at Fidelity."
Decades of research shows that almost no one can pick winning stocks or time the market. If you think you're Warren Buffet, go for it. For me, I'll stick with index funds.
On the other hand, you are supposed to have a balance between stocks and bonds. That automatically means you buy stocks when the market is low and you sell them when it is high. Even if you have funds, you buy and sell those funds too.Quote: AcesAndEightsDecades of research shows that almost no one can pick winning stocks or time the market. If you think you're Warren Buffet, go for it. For me, I'll stick with index funds.
So how do we square these two things "they" say.
yup, I tried to time the market.Quote: AcesAndEightsLow-cost index funds and ETFs, buy and hold, stop trying to time the market. Recent study:
http://www.businessinsider.com/forgetful-investors-performed-best-2014-9Quote:O'Shaughnessy: "Fidelity had done a study as to which accounts had done the best at Fidelity. And what they found was..."
Ritholtz: "They were dead."
O'Shaughnessy: "...No, that's close though! They were the accounts of people who forgot they had an account at Fidelity."
Decades of research shows that almost no one can pick winning stocks or time the market. If you think you're Warren Buffet, go for it. For me, I'll stick with index funds.
moved from stocks to bonds in Jan.
3months later, and even with the big drop yesterday, I would still have 1% more if I kept the stocks. :(
hopefully the market drops another 10% to make my gamble worthwhile.
would like a 10% profit on this endeavor.
heh
Quote: odiousgambitOn the other hand, you are supposed to have a balance between stocks and bonds. That automatically means you buy stocks when the market is low and you sell them when it is high. Even if you have funds, you buy and sell those funds too.
So how do we square these two things "they" say.
Yeah this is true. It's not market timing if you rebalance based on a set schedule, or if your allocation gets too far out of line. So that's how you reconcile it. Plus as you age and your investing objectives change, you should also change your allocation. Again this is not market timing but following an investing strategy based on your objectives and rules set up ahead of time, so that you don't give in to emotion and try to time things.
I follow the Boglehead strategy and recently read about writing an Investment Policy Statement for yourself. Generally an IPS is something written and agreed upon between a client and a financial advisor. But if you manage your own investments, it's good to write this up for yourself to keep yourself honest in times of market turmoil (or market exuberance like presently). More info:
https://www.bogleheads.org/wiki/Investment_policy_statement
Lastly let me add that I understand looking at the current prices and the value you are getting for your money. IMO it's possible to follow all of the above and still make a decision to funnel your new investment money in to something else, like e.g. paying down your mortgage if you want. Folks argue about this a lot given the current low rates, but it's a guaranteed return over the life of your mortgage (assuming you don't default on the loan). You could even include this in your IPS. "If the market P/E is over X, invest Y in extra principal payments." This is different from selling existing investments and buying bonds though. I would never stop contributing to my 401(k) though, regardless of pricing, since that is a huge tax advantage, and I get an employer match like almost anyone.
Quote: AcesAndEightsBeing relatively young and having ~10 years of buying ahead of me, I would LOVE a big market crash right now. In fact I was disappointed that the February correction wasn't bigger. More shares for my money going in to the market over the following years. Greedy when others are scared, and scared when they are greedy...
Why would you want a big stock market crash? O.O
People are flocking to Toys R Us right now, for their 10-20% off sales. Smart people flock to Wall St when it has a similar sale.
The problem is that most stocks are so overvalued right now that finding true bargains, even at 20% off, isn't that easy. Stocks that trade at rational 8-1 ratios are selling for 20X instead.
25% more.Quote: billryanWhen the market goes down 20%, $1,000 investment gets you 20% more.
sounds great
but hold on a minute. where is your money while your waiting for this big drop? it would have to be in much less risky stuff earning very little or the strategy wouldn't make any sense.
consider this scenario: stock indexes have gone steadily up with a few minor dips since 2009
that's about 9.5 years and still counting.
how much gain are you sacrificing waiting to buy on a major market downward move?
stock indexes went steadily up from 1991 to 2000 before taking a big hit. a lot would have been lost waiting on the sidelines
the same is true - indexes went up steadily from 2003 to 2007
that's a lot of waiting
I'm unconvinced and will stay strong with my buy and hold strategy. HODL (hold on for dear life) is my mantra. every crystal ball I ever bought was defective.
Quote: WatchMeWin...... but Monday Morning QBs are always right.
I've made some good money in the market with my strategy
not CEO fortune 500 money or anything like that, but for me at my level; pretty damn good
but the funny thing is; I really haven't enjoyed it much
winning a $100 bet at the track is so much more fun
Quote: billryanBecause you only care about your investments, not the overall economy. Got it.
Don't most of us want both, but if we had a choice of only one, pick ourselves? Seems an easy choice to me.
Quote: WatchMeWinAnyone who is wishing / hoping for a 20 % crash / correction in the stock market is someone who obviously is not in the market and is envious of those who are profiting while he/she is not. But the savvy and smart investor would be able to profit either way the stocks move, whether up or down. Dont hate the player, hate the game.
I am in the market, in a big way (most of my net worth), but won't be selling for 10-15 years. I will be buying during those years. Why wouldn't I want a 20% crash? I don't day trade, or even week trade or month trade. I buy and hold for the long term. A crash today means a discount on the shares I'm purchasing tomorrow.
Quote: AcesAndEightsI am in the market, in a big way (most of my net worth), but won't be selling for 10-15 years. I will be buying during those years. Why wouldn't I want a 20% crash? I don't day trade, or even week trade or month trade. I buy and hold for the long term. A crash today means a discount on the shares I'm purchasing tomorrow.
I think there is a 'loss in perception' here.. I can understand wanting to buy more of a stock once it has dropped in value 20% or so to lower your cost basis and accumulate more shares.... but to say that you want a stock to crash 20% so you can do that is not prudent. Why not just short the stock or sell it , then buy it back once it has dropped? Stock value today is your value today....
Quote: WatchMeWinI think there is a 'loss in perception' here.. I can understand wanting to buy more of a stock once it has dropped in value 20% or so to lower your cost basis and accumulate more shares.... but to say that you want a stock to crash 20% so you can do that is not prudent. Why not just short the stock or sell it , then buy it back once it has dropped? Stock value today is your value today....
What is being wished for is a 20% drop that will change to recovery in a reasonable time period. It can even take a couple of years to recover and it's ok [speaking for myself]. The problem is, there are longer periods. 5 year doldrums are common, and I am not wishing for one of those. There are no guarantees.
So why wait to buy when stocks are down? We're gamblers, aren't we? There's your answer.
some more thoughts:
*the 2007/8 crash was terrifying but actually what you want: a big downturn that recovers in a reasonable time frame. Anything you had the courage to buy in 2009 turned out very well, and if you never panic-sold, by early 2013 you were back to all-time highs.
*Portfolio recovery was actually faster than that, since purchases are made over time. Only someone who started with no stocks at all, then bought all his stocks at the all-time high of 2007, only that investor had to wait till 2013 for full recovery
*someone who waits for lower prices doesn't buy *any* stocks during all time highs!
*dollar-cost-average your buying when you think it is time to buy; if the market still goes down, you are still buying, you haven't tried to guess where the bottom was [such investors often miss out entirely too]
Quote: WatchMeWinBut the savvy and smart investor would be able to profit either way the stocks move, whether up OR DOWN.
profiting from stocks moving down is usually done by short selling. it's a very difficult way to go. hedge fund superstars do that all the time and lately a lot of them have been getting beaten badly compared to the indexes.
think about what probably 95% of those active in the market are thinking for a new trade. (I'm not talking about profiting or salvaging from an old buy). I'm talking about a brand new trade not related to anything in the past. 95% (I'm estimating) are planning to buy, not sell.
to me, there is one and only one thing to hang your hat on. that is that the market has a long term upward bias that can be shown over billions and billions of transactions.
many other strategies are highly speculative and more akin to gambling than investing.
and there are those who say any involvement in the market is gambling.
I don't buy that point of view at all.
Quote: lilredrooster
many other strategies are highly speculative and more akin to gambling than investing.
and there are those who say any involvement in the market is gambling.
I don't buy that point of view at all.
Anytime you are putting something of value at risk where the outcome is uncertain is considered gambling. Now there are degrees of risk that vary from extremely risky to very low risk, and based upon those volatile levels, your projected gain or loss will vary greatly.
Yes, I agree with the buy-and-hold long-term thesis as this has proven to be successful in the u.s. stock market over time... but how much time does one have? How much money is someone looking to gain on a percentage basis? Are you looking just to preserve or to grow your money? All questions that each individual has their own answers to.
When I first started investing in the market I was in extreme growth mode and high-risk assets, as I do not come from money and no one has handed money so I needed to make money...A 10% return on an annual basis did not excite me whatsoever. After I gained enough profit to where I was comfortable, then I started going into more preserve mode and investing in less risky equities.... but still alocating 20% of my portfolio for riskier stocks.
Note: these are not the kind of scooters you ride on like a motorcycle (see picture in link)
https://www.cnbc.com/2018/06/14/scooter-start-ups-like-lime-and-bird-why-investors-love.html
https://www.washingtonpost.com/news/innovations/wp/2018/06/22/electric-scooter-companies-conquer-with-a-simple-strategy-act-first-answer-questions-later/?utm_term=.a19d5ac86eac
my quoted post was from march 2018.Quote: 100xOddsyup, I tried to time the market.
moved from stocks to bonds in Jan.
3months later, and even with the big drop yesterday, I would still have 1% more if I kept the stocks. :(
hopefully the market drops another 10% to make my gamble worthwhile.
would like a 10% profit on this endeavor.
heh
now dec 2018, my 'long term corp bond' fund is finally beating the market by 1%.
and will be more today since the dow is currently dropping -600 points.
(mutual funds update a few hrs after close of the market)
now for the million $ question:
when to switch back to total market stock fund?
or I probably should stop gambling on the stock market and rebalance everything into 4 asset classes:
1) emergency cash/bank account (1 year's worth of expenses)
what's left over:
2) total market (50%)
3) total international (20%)
4) total bonds (30%)
Quote: 100xOdds
or I probably should stop gambling on the stock market and rebalance everything into 4 asset classes:
1) emergency cash/bank account (1 year's worth of expenses)
what's left over:
2) total market (50%)
3) total international (20%)
4) total bonds (30%)
This is the correct answer.
Quote: AcesAndEightsThis is the correct answer.
According to whom? Someone's grandfather? That's straight out of the 1960s.
Quote: billryanAccording to whom? Someone's grandfather? That's straight out of the 1960s.
According to the many, MANY studies that say you can't win with market timing. Buy and hold broad, diversified index funds. That's the winning long-term strategy.
https://www.fool.com/investing/2017/04/02/yet-another-study-shows-that-timing-the-market-doe.aspx
https://www.businessinsider.com/forgetful-investors-performed-best-2014-9
Yes, there are aberrations like Warren Buffet. I will begrudgingly admit that some people, a vanishingly small fraction, have the skill to pick stocks and consistently beat the market. But you and I aren't that guy. And it's basically a full time job.
Buy and hold. Index funds. Use asset allocation to tune to your risk. 100xOdds's bond allocation is a little high for me, but it's probably just right for him.
Quote: billryanAccording to whom? Someone's grandfather? That's straight out of the 1960s.
Additionally, index funds didn't even exist in the 1960s. Jack Bogle launched the first one in 1975. Not sure what you're on about.
Quote: AcesAndEightsAdditionally, index funds didn't even exist in the 1960s. Jack Bogle launched the first one in 1975. Not sure what you're on about.
Until you mentioned them in this sentence, no one had brought up index funds.
The NY Mets were formed in 1962. An equally factual statement that also has nothing to do with the subject at hand.
Nor have I argued that there is anything wrong with buying and holding. Its what I've done my whole life.
Investing 50% of your portfolio in bonds and international is not the way to ensure a happy retirement. Bonds don't grow your portfiolio, they act as a hedge. Unless you are in your seventies, 30% in bonds is overkill. The link you posted recommends 10% bonds for younger investors.
