Buy today [on the dip?]
Buy today [on the dip?]
Since the market is down today is it a good time to buy ? On sale ? VOO/VTI?
Been reading Bogleheads advice/books and I gather this is an opportunity to buy on sale.
Please advise
TIA
Been reading Bogleheads advice/books and I gather this is an opportunity to buy on sale.
Please advise
TIA
Re: Buy today
What are the guidelines that you have set in your investment plan? I have not hit a re-balance trigger with today's move (very far from it, in fact) so I'm not buying.
If you don't have a plan, I'd focus on that first in order to avoid making decisions based on emotions or wild guessing.
If you don't have a plan, I'd focus on that first in order to avoid making decisions based on emotions or wild guessing.
Stay hydrated; don't sweat the small stuff
Re: Buy today
I am just starting to build my portfolio ( accumulating phase ) . Have only 20K in VTI/VOO ( 50:50)jebmke wrote: ↑Mon Sep 20, 2021 2:34 pm What are the guidelines that you have set in your investment plan? I have not hit a re-balance trigger with today's move (very far from it, in fact) so I'm not buying.
If you don't have a plan, I'd focus on that first in order to avoid making decisions based on emotions or wild guessing.
Re: Buy today
No. It’s not a good time to buy unless today was your planned purchase day or you hit your rebalancing trigger.
Re: Buy today
Could you please explain why ? I am new just starting to learn about investing and was under the impression that its low today so buy for long term .Thanks
Re: Buy today
I believe quite a few people target a 5% movement as the starting point for any rebalancing (which we have not seen today). Of course, no one knows what will happen tomorrow...could be better or worse. Suggest you do some research for yourself to figure out what approach works for you...and hopefully not something like "I feel like the market will do X" as your basis of decision making.
Re: Buy today
What if it goes down another 2% tomorrow?
Keeping cash to "buy the dip" is not a winning strategy, in general. You should decide how much you can invest every week/month and invest that regardless of what the market is doing. Any other behavior is sub-optimal and subject to emotional errors.
Time in the market, not timing the market.
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Re: Buy today
The problem with market timing is there's never a perfect indicator. Yes stocks are down today, so it might be a good time to buy. But what if they drop all week?
I do all my buys on a schedule, on Fridays. If there's a big drop (2% or more) I add a little in my taxable play money account just to feel like I'm doing something smart. That's using money I'd normally not plan to invest.
I do all my buys on a schedule, on Fridays. If there's a big drop (2% or more) I add a little in my taxable play money account just to feel like I'm doing something smart. That's using money I'd normally not plan to invest.
Last edited by blueberrypi on Mon Sep 20, 2021 2:44 pm, edited 1 time in total.
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Re: Buy today
Today is a good day to buy.
Tomorrow is another good day to buy.
Yesterday was not a good day, because markets were closed. But last Friday was.
Re: Buy today
if you are thinking of buying, that means you are sitting on cash, right? Except for an emergency fund, IMO cash should be deployed as soon as it exists irrespective of that the markets are doing.Bogli wrote: ↑Mon Sep 20, 2021 2:36 pmI am just starting to build my portfolio ( accumulating phase ) . Have only 20K in VTI/VOO ( 50:50)jebmke wrote: ↑Mon Sep 20, 2021 2:34 pm What are the guidelines that you have set in your investment plan? I have not hit a re-balance trigger with today's move (very far from it, in fact) so I'm not buying.
If you don't have a plan, I'd focus on that first in order to avoid making decisions based on emotions or wild guessing.
Stay hydrated; don't sweat the small stuff
Re: Buy today
Because it is market timing, driven by emotions. If you would not have considered buying today if the market went up 2%, you shouldn't automatically buy because it went down 2%.
This could be the start of a 10% or 20% drawdown. Or, it could stay at this level for the next 12 weeks. Or maybe it'll go up 3% tomorrow.
Re: Buy today
Bogleheads are known to despise market timing which this sounds like it is. In general the advice here is to invest when you have the money to and to sell when you need the money. What the market did/is doing has no bearing on the above.
Re: Buy today
Why do you think it stocks are on sale today?
"Sale" means that stocks are trading below their intrinsic value. Maybe stocks were overvalued by 10% yesterday so are still 5% overvalued today?
For context, stocks do not have a mean reversion characteristic. So today's decline does not mean much.
"Sale" means that stocks are trading below their intrinsic value. Maybe stocks were overvalued by 10% yesterday so are still 5% overvalued today?
For context, stocks do not have a mean reversion characteristic. So today's decline does not mean much.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
Re: Buy today
Hyperchicken wrote: ↑Mon Sep 20, 2021 2:44 pmToday is a good day to buy.
Tomorrow is another good day to buy.
Yesterday was not a good day, because markets were closed. But last Friday was.
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Re: Buy today
It is down 2%. Will that really, materially, impact your portfolio?
Re: Buy today
Good point .. thanks !alex_686 wrote: ↑Mon Sep 20, 2021 2:50 pm Why do you think it stocks are on sale today?
"Sale" means that stocks are trading below their intrinsic value. Maybe stocks were overvalued by 10% yesterday so are still 5% overvalued today?
For context, stocks do not have a mean reversion characteristic. So today's decline does not mean much.
Re: Buy today
Question: when the market was rising through the level it closed at today, did you make a similar purchase at that time? If not why not? Is there something magical about it once having been at a higher level?
Re: Buy today
From my point of view, today will leave me about where I was almost exactly two months ago.
Two months ago didn't particularly leap out as any special time calling out to buy.
So what makes today any different?
Two months ago didn't particularly leap out as any special time calling out to buy.
So what makes today any different?
"The Quality of the Answer Depends on the Quality of Your Question."
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Re: Buy today
Developed market indexes are down ~2-3% today, emerging markets indexes (which are heavily weighted towards China) are down ~3%. Even with that, the market is objectively expensive using most valuation metrics.
That said, it's hard to time if or when there will be a correction. Most people get burned. For 99% of people, setting a plan and sticking with it makes most sense. So for example, to balance out some of the possible market frothiness, you could aim to make equal investments with your cash into the market over a number of purchases over the course of the next 6-12 months. This way, if the market keeps going up, you don't entirely miss out, but if it goes down, you have some benefit too.
For further context for the S&P 500:
-A 2-3% down day probably happens at least once every month on average.
-A 5% decline will trigger circuit breakers. It's less likely, but happens when there are big events or traders are acting out.
-A 10% decline (usually over days / weeks) from a recent high is usually the definition of a "correction."
-A 20% decline (over days / weeks / months) is the average for a "minor recession."
-A 30% decline is the average for a "major recession."
-The S&P 500 fell ~35% between it's February high and it's March Low
-The S&P 500 fell ~50% from peak to trough during the Financial Crisis.
So in the big scheme of things, the pull back we've seen in the last month isn't that much, the S&P 500 is down 4% from peak.
That said, it's hard to time if or when there will be a correction. Most people get burned. For 99% of people, setting a plan and sticking with it makes most sense. So for example, to balance out some of the possible market frothiness, you could aim to make equal investments with your cash into the market over a number of purchases over the course of the next 6-12 months. This way, if the market keeps going up, you don't entirely miss out, but if it goes down, you have some benefit too.
For further context for the S&P 500:
-A 2-3% down day probably happens at least once every month on average.
-A 5% decline will trigger circuit breakers. It's less likely, but happens when there are big events or traders are acting out.
-A 10% decline (usually over days / weeks) from a recent high is usually the definition of a "correction."
-A 20% decline (over days / weeks / months) is the average for a "minor recession."
-A 30% decline is the average for a "major recession."
-The S&P 500 fell ~35% between it's February high and it's March Low
-The S&P 500 fell ~50% from peak to trough during the Financial Crisis.
So in the big scheme of things, the pull back we've seen in the last month isn't that much, the S&P 500 is down 4% from peak.
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Re: Buy today
I think the confusion here is that (1) Sure, today is a good day to buy. It's cheaper now than it was this morning. (2) You should not be waiting for "good days" to buy. Once your plan is fully implemented days like today shouldn't change your behavior.
There are Bogleheads who like to play games around "Really Bad Days" and the like, but that's largely fun money once the bulk of your portfolio is invested along standard principles.
Re: Buy today
To extend a little bit, you should consider the stock market to be a "Random Walk". In fact, a very good book on investing is call "A Random Walk Down Wall Street". This means that past stock movements mean nothing.
This is not quite true, but the math is deep, the results are nuanced, and the impact is low.
Edit: There is a exception to the rule. Do you have a strong (and hopefully informed) conviction on imploding Chinese property developers, the Chinese's government response, and the resulting impact on US high yield bonds (a.k.a. junk bonds) and social media companies? If so, you should really put in a order. Or even better yet, but in a order for options to really lever up your portfolio.
I am joking - kind of. I am a moderate protonate of active trading. I have trained in it and believe it can be done. However, it is a hard nut to crack involving skill, luck, and risk. I stick mostly to passive investing for good reason.
Last edited by alex_686 on Mon Sep 20, 2021 3:51 pm, edited 1 time in total.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
Re: Buy today
Thank you, great explanation.. helps me understand !Hannibal Barca wrote: ↑Mon Sep 20, 2021 3:25 pm Developed market indexes are down ~2-3% today, emerging markets indexes (which are heavily weighted towards China) are down ~3%. Even with that, the market is objectively expensive using most valuation metrics.
That said, it's hard to time if or when there will be a correction. Most people get burned. For 99% of people, setting a plan and sticking with it makes most sense. So for example, to balance out some of the possible market frothiness, you could aim to make equal investments with your cash into the market over a number of purchases over the course of the next 6-12 months. This way, if the market keeps going up, you don't entirely miss out, but if it goes down, you have some benefit too.
For further context for the S&P 500:
-A 2-3% down day probably happens at least once every month on average.
-A 5% decline will trigger circuit breakers. It's less likely, but happens when there are big events or traders are acting out.
-A 10% decline (usually over days / weeks) from a recent high is usually the definition of a "correction."
-A 20% decline (over days / weeks / months) is the average for a "minor recession."
-A 30% decline is the average for a "major recession."
-The S&P 500 fell ~35% between it's February high and it's March Low
-The S&P 500 fell ~50% from peak to trough during the Financial Crisis.
So in the big scheme of things, the pull back we've seen in the last month isn't that much, the S&P 500 is down 4% from peak.
Re: Buy today
alex_686 wrote: ↑Mon Sep 20, 2021 3:33 pmTo extend a little bit, you should consider the stock market to be a "Random Walk". In fact, a very good book on investing is call "A Random Walk Down Wall Street". This means that past stock movements mean nothing.
This is not quite true, but the math is deep, the results are nuanced, and the impact is low.
Edit: There is a exception to the rule. Do you have a strong (and hopefully informed) conviction on imploding Chinese property developers, the Chinese's government response, and the resulting impact on US high yield bonds (a.k.a. junk bonds) and social media companies? If so, you should really put in a order. Or even better yet, but in a order for options to really lever up your portfolio.
I am joking - kind of. I am a moderate protonate of active trading. I have trained in it and believe it can be done. However, it is a hard nut to crack involving skill, luck, and risk. I stick mostly to passive investing for good reason.
Thank you , yes have read a few books already but this one would be next to read.
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Re: Buy today
Unless your question was purely hypothetical, I assume you have money available to be invested in stocks (ie, not needed for other purposes such as emergency fund or major upcoming purchase). Therefore, the important question to ask is “why didn’t you buy stocks earlier?” If the money only just became available, then you’re lucky that the market fell today, and you should buy. If it’s because you were waiting for the market to fall, then you’re making the mistake of market timing.
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Re: Buy today
The global financial markets are composed of many investors and financial institutions. Those institutions spend vast sums of money to try to gather and understand an enormous amount of data. Based on that, they make decisions to buy, sell, or hold whatever financial assets are in question.
The above process ("the market") plays out constantly. There is no credible mechanism by which any investor, fund, or institution can repeatedly and indefinitely beat the market. Many funds which do manage to do this for a short while tend to charge high fees, so the investor would have been better off with a low-cost index fund anyway. If some new situation arises by luck which gives an advantage to this investor or that fund, maybe they can profit off of it. However, as soon as they do that, every other market actor has that as yet another piece of information, which is factored into their own decisions in "the market".
In the short run the market is random. In the long run it represents the collective judgement of all of those actors on the long-run value of everything.
With regard to investment timing and diversification, Bogleheads tend to own broad market indexes and to buy those by some automatic feature, often on pay day. We do not think it is possible to beat the market in any meaningful, consistent, and low-cost way. So instead we buy the whole market as cheaply (referring to fees) as possible. This does not mean you will or will not get lucky or unlucky on any particular day, week, year, or decade. It just means that you control what you can; what you invest and the fees you pay, not what you cannot; magically timing the market perfectly in a replicable way.
The above process ("the market") plays out constantly. There is no credible mechanism by which any investor, fund, or institution can repeatedly and indefinitely beat the market. Many funds which do manage to do this for a short while tend to charge high fees, so the investor would have been better off with a low-cost index fund anyway. If some new situation arises by luck which gives an advantage to this investor or that fund, maybe they can profit off of it. However, as soon as they do that, every other market actor has that as yet another piece of information, which is factored into their own decisions in "the market".
In the short run the market is random. In the long run it represents the collective judgement of all of those actors on the long-run value of everything.
With regard to investment timing and diversification, Bogleheads tend to own broad market indexes and to buy those by some automatic feature, often on pay day. We do not think it is possible to beat the market in any meaningful, consistent, and low-cost way. So instead we buy the whole market as cheaply (referring to fees) as possible. This does not mean you will or will not get lucky or unlucky on any particular day, week, year, or decade. It just means that you control what you can; what you invest and the fees you pay, not what you cannot; magically timing the market perfectly in a replicable way.
85% Global Stock, 15% US Fixed Income
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Re: Buy today
I think the general consensus is to remain fully invested.
So if you have cash that is not part of an emergency fund and is not needed for a long time, it should be invested ASAP.
If this cash however is for some sort of near term purchase (less than 10yrs), it should not go into stocks. Maybe bonds or something else depending on your goals, timeline, and risk tolerance.
What if you invest at the wrong time? Well it doesn't matter in the long run.
So if you have cash that is not part of an emergency fund and is not needed for a long time, it should be invested ASAP.
If this cash however is for some sort of near term purchase (less than 10yrs), it should not go into stocks. Maybe bonds or something else depending on your goals, timeline, and risk tolerance.
What if you invest at the wrong time? Well it doesn't matter in the long run.
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
Re: Buy today
I would but... can someone send cash I already bought when I had the money to invest..... When I get paid again, I will have some more and it will invest automatically.
The sage advice for planting trees: The best time to plan a tree was 20 years ago, the second best is today.
Investing is similar.... second best time to invest is when when you have money to invest.
Ignore the noise....
The sage advice for planting trees: The best time to plan a tree was 20 years ago, the second best is today.
Investing is similar.... second best time to invest is when when you have money to invest.
Ignore the noise....
|
Rob |
Its a dangerous business going out your front door. - J.R.R.Tolkien
Re: Buy today
And of course that answer is a resounding NO. So that 2% means the S&P is only up 15% YTD now???? Sure, buy today if you're sitting on cash and it makes you feel good. Waiting for the market to go down to buy doesn't normally work.runner3081 wrote: ↑Mon Sep 20, 2021 2:51 pm It is down 2%. Will that really, materially, impact your portfolio?
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Re: Buy today
We typically invest in taxable once a month when we do our budget. (Our 401(k)'s are both on auto pilot.)
Theoretically, we could borrow from existing surplus and move that up in order to buy taxable equities today, but that could result in two outcomes:
a) Stocks decline a great deal further by the time we do our budget and we would have been better off waiting.
b) Stocks recover somewhat in the meantime, and by acting now we would potentially have made our monthly purchase at a small, 1-2% discount.
In my view, it's much, much better to stick to the plan, because sticking to the plan is the driver of the ultimate goal.
However, the plan does include provisions for rebalancing from bonds when we hit a significant drop. (5%, 10%, 20%)
So if things continue to decline, we'll act outside of our monthly budget, and sell a small amount of Long Term Treasuries and purchase equities. For that to trigger, it would mean the S+P 500 would have to be around 4160 (so May / June 2021 levels) not 4357 like today's close.
We did sell bonds and rebalance on Feb 28, 2020. In that case, things continued to drop so we also sold a larger amount of bonds in March, 2020.
For perspective the S+P 500 was at 2957 on Feb 28, 2020 and then fell to 2397 when we sold bonds and purchased again on March 18, 2020.
Theoretically, we could borrow from existing surplus and move that up in order to buy taxable equities today, but that could result in two outcomes:
a) Stocks decline a great deal further by the time we do our budget and we would have been better off waiting.
b) Stocks recover somewhat in the meantime, and by acting now we would potentially have made our monthly purchase at a small, 1-2% discount.
In my view, it's much, much better to stick to the plan, because sticking to the plan is the driver of the ultimate goal.
However, the plan does include provisions for rebalancing from bonds when we hit a significant drop. (5%, 10%, 20%)
So if things continue to decline, we'll act outside of our monthly budget, and sell a small amount of Long Term Treasuries and purchase equities. For that to trigger, it would mean the S+P 500 would have to be around 4160 (so May / June 2021 levels) not 4357 like today's close.
We did sell bonds and rebalance on Feb 28, 2020. In that case, things continued to drop so we also sold a larger amount of bonds in March, 2020.
For perspective the S+P 500 was at 2957 on Feb 28, 2020 and then fell to 2397 when we sold bonds and purchased again on March 18, 2020.
Re: Buy today
I understand the appeal of buying "on sale"
But in the long run it doesn't matter if a few of your shares were $98 or $100. All that matters that you bought and you held.
But in the long run it doesn't matter if a few of your shares were $98 or $100. All that matters that you bought and you held.
60-20-20 us-intl-bond
Re: Buy today
Why buy today and not July when the market was even lower?
Re: Buy today
Today was a great day to buy, for me. I recently opened a new brokerage account and for administrative failure reasons my new deposit money was on hold for nearly a week preventing me from buying all last week. Today I was able to finally execute a buy, so I did.
I guess it was 2% lower than when I was trying to buy last week, but I missed the "dip" today which was about 1% even lower. Oh well. Maybe tomorrow it'll go up, or down. But in twenty years I hope it'll be up from today, so it seemed like a good time to buy.
I guess it was 2% lower than when I was trying to buy last week, but I missed the "dip" today which was about 1% even lower. Oh well. Maybe tomorrow it'll go up, or down. But in twenty years I hope it'll be up from today, so it seemed like a good time to buy.
Re: Buy today
Dear OP:
Welcome to the forum. You have arrived at the right place.
My humble suggestion is that you start here: https://www.bogleheads.org/wiki/Getting_started.
- Taylor Larimore
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Re: Buy today ?
Better go back and read the "Bogleheads advice/books" again.
I am the author or co-author of all three Boglehead books. I can't recall any of us giving advice to "to buy on sale" when the market is down. Our advice in all three books is to avoid market timing. Instead "Stay the Course."
Best wishes
Taylor
Jack Bogle's Words of Wisdom: "No matter what happens, stick to your program. I've said "Stay the course" a thousand times, and I meant it every time. It is the most important single piece of investment wisdom I can give to you."
"Simplicity is the master key to financial success." -- Jack Bogle
Re: Buy today
Sometimes I"ll borrow from a HELOC until next paycheck to put a few hundred in on a down day... It's emotionally rewarding, so why not. If you're sitting on invest-able cash, then you should have already put it in there.
Re: Buy today
Welcome to the forum, the best time to invest is when money becomes available. Since you are just starting out try to set up an automatic investment plan that will invest weekly or monthly. It will be on autopilot and you will be buying the dips automatically, as well as buying at market highs. In the long run it will serve you well.
Fools think their own way is right, but the wise listen to others.
Re: Buy today
Yup. Like many on this forum, my time to buy is when I get my paycheck, all on autopilot. I have no idea what the market has done the past couple weeks nor what it will do in the next couple weeks.StevieG72 wrote: ↑Mon Sep 20, 2021 8:52 pm Welcome to the forum, the best time to invest is when money becomes available. Since you are just starting out try to set up an automatic investment plan that will invest weekly or monthly. It will be on autopilot and you will be buying the dips automatically, as well as buying at market highs. In the long run it will serve you well.
May all your index funds gain +0.5% today.
Re: Buy today [on the dip?]
If we're talking about "on sale", wake me up when we hit -50%.
Re: Buy today [on the dip?]
This is why I don't follow financial news or current market values. If the market actually tanks -20% or more, there will be tons of people screaming about it here and other places. Then I can consider rebalancing to stocks.
May all your index funds gain +0.5% today.
Re: Buy today [on the dip?]
Re: Buy today [on the dip?]
Yes, great day to buy. Wish I had cash to buy. I'd have bought more... I bought on Friday. I buy when I have money, and there is a down day in the market.
"Know what you own, and know why you own it." — Peter Lynch
Re: Buy today [on the dip?]
Does the sentiment against timing the market also apply to rebalancing? (i.e. Timing the rebalancing to take advantage of a dip rather than doing it the usual time).
Re: Buy today [on the dip?]
I don't think it applies to rebalancing. I see the "dip" as the trigger for rebalancing. If you wanna rebalance on the dip, you can do it. How often would you do it though? Every time there is a big dip, like about 2%, are you gonna do this?... In practice, I rebalance after the calendar year ends. It helps avoid unnecessary rebalancing in a volatile market.
"Know what you own, and know why you own it." — Peter Lynch
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Re: Buy today [on the dip?]
Every day I buy is the dip.
Promise is one thing. Fulfilling that promise is quite another. - Sir Alex Ferguson |
20% IVV / 40% IBIT / 20% IXUS / 20% VGLT + chill
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Re: Buy today [on the dip?]
I am overweight in cash, I bought - to keep my cash allocation and my stock allocation in line.
Works for me.
Works for me.
Re: Buy today [on the dip?]
All else being equal, It’s better to buy stocks on a day when the price is lower, as opposed to on a day when the price is higher—unless that’s your strategy.