A time to EVALUATE your jitters

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nisiprius
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Re: A time to EVALUATE your jitters

Post by nisiprius »

This is not any kind of prediction or observation, not intended to create reassurance or fear... just a comment on the word "parabolic."

I don't believe the market "went parabolic" either in 2000 or 2008. However, in order to test that, one would need a clean definition of what it means to "go parabolic." I believe it is a phrase used by speculative investors who are trying to profit from bubbles, and refers to a situation in which an asset price not only rises faster than justified by any fundamentals, but the rate of rise keeps increasing as more and more investors are drawn in by the rise. On a chart, then, such an asset would have a continuing bend upward. A typical time scale appears to be several years.

That is, we're looking for an upward curve, not just rapid growth but a rapidly accelerating growth rate.

I think I see this in bitcoin, 2016-2018:

Image

I think I see this in the NASDAQ-tracking ETF, QQQ, 1998-1999.

Image

I don't think I see it either in 2009-present, or in 2001-2006. I don't know what to say about 1986-2000. There's definitely a bend of some kind around 1994, but it is more in the nature of a corner between two straight-line segments, not a general upward curve as a mania pulls in more and more investors.

Image
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helloeveryone
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Re: A time to EVALUATE your jitters

Post by helloeveryone »

Nice work showing the trends. I entered the workforce in 2004 but didn’t started maxing retirement accounts until 2009. Thus my retirement look amazing for 9 years of maxing things out. I’m hoping to retire in 15 years.

Hopefully the trend you might be implying will be friendly to me by 2033 if I stay the course and continue maxing out retirement accounts during the downtimes.
RollTide31457
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Re: A time to EVALUATE your jitters

Post by RollTide31457 »

Lesson learned from 2008/2009 is that cash is always king. Been working on accumulating as much cash reserves as possible since 2009.
jvini
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Re: A time to EVALUATE your jitters

Post by jvini »

RollTide31457 wrote: Sat Dec 22, 2018 9:50 am Lesson learned from 2008/2009 is that cash is always king. Been working on accumulating as much cash reserves as possible since 2009.
Hi RollTide. Do you mean you've been putting all your money in cash since 2009 or including cash as a part of your asset allocation? If the former, you've missed out on one of the longest bull runs in history where equities have multiplied many times.

I hope you mean the latter. Cash can be a part of a portfolio, but I wouldn't call it king. Personally, I prefer rebalancing out of bonds if my allocations get out of whack, and don't keep too much cash on hand.
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Re: A time to EVALUATE your jitters

Post by RollTide31457 »

jvini wrote: Sat Dec 22, 2018 10:29 am
RollTide31457 wrote: Sat Dec 22, 2018 9:50 am Lesson learned from 2008/2009 is that cash is always king. Been working on accumulating as much cash reserves as possible since 2009.
Hi RollTide. Do you mean you've been putting all your money in cash since 2009 or including cash as a part of your asset allocation? If the former, you've missed out on one of the longest bull runs in history where equities have multiplied many times.

I hope you mean the latter. Cash can be a part of a portfolio, but I wouldn't call it king. Personally, I prefer rebalancing out of bonds if my allocations get out of whack, and don't keep too much cash on hand.

Hello! The latter has been the strategy - focusing on having cash reserves to survive several years. This was the lesson learned from 2008/2009.
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Re: A time to EVALUATE your jitters

Post by squirm »

this is nothing, looking at the early 2001 charts, there was a period where the nasdaq was falling hard week after week for eight weeks.
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Re: A time to EVALUATE your jitters

Post by carol-brennan »

nisiprius wrote: Fri Dec 21, 2018 1:44 pm I don't think I see it either in 2009-present, or in 2001-2006.
If 2009-present is not "parabolic," I don't think the word has any practical value so far as chart talk goes.
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Re: A time to EVALUATE your jitters

Post by carol-brennan »

kuttolas wrote: Fri Nov 23, 2018 12:49 pm Thank you nispirius for the timely post. I couldn't have come across this at a better time in my life.

Although this is not my first exposure to major market fluctuations, I was seriously considering to not invest for a while. I first started investing for the first time in Sep-2008, two weeks before the bottom fell out of the market. Those downturns did not bother me because I had very little money to loose and and was an opportunity to buy cheap. However 10 years later, it's a different story, We have significant amount saved up in Roth IRA and 401(k). Even small blips changes value by thousands of dollars and I find myself completely unprepared to handle the emotions that comes with market fluctuations.

So once again thank you for putting this post together
If you, very understandably, get jitters over watching your portfolio dip by a few thousand dollars, imagine what a 10 or 20 year bear market would do to you, one where the market went down and never really recovered in your remaining years. What would you do? Sell at the bottom?

Very few alive and investing today have experienced such a market, but they have existed. That's the biggest fear I have, for everyone involved. Both 2000 and 2008 have taught investors that markets always snap back and go on to new heights. That's not always been the case in a standard lifespan. And given the unprecedented steps that the Fed took in getting us out of 2008 and the very few monetary "bullets" left to fight off the next wave of panic selling, I am very concerned that the next downturn could be the end of many an investor today, all of whom are green in the bigger picture.

It's times like those when people sour permanently on the notion of stock ownership and capitalism. We got a taste, just a taste, of that in 2008.
StandingRock
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Re: A time to EVALUATE your jitters

Post by StandingRock »

carol-brennan wrote: Sun Mar 17, 2019 5:27 pm
kuttolas wrote: Fri Nov 23, 2018 12:49 pm Thank you nispirius for the timely post. I couldn't have come across this at a better time in my life.

Although this is not my first exposure to major market fluctuations, I was seriously considering to not invest for a while. I first started investing for the first time in Sep-2008, two weeks before the bottom fell out of the market. Those downturns did not bother me because I had very little money to loose and and was an opportunity to buy cheap. However 10 years later, it's a different story, We have significant amount saved up in Roth IRA and 401(k). Even small blips changes value by thousands of dollars and I find myself completely unprepared to handle the emotions that comes with market fluctuations.

So once again thank you for putting this post together
If you, very understandably, get jitters over watching your portfolio dip by a few thousand dollars, imagine what a 10 or 20 year bear market would do to you, one where the market went down and never really recovered in your remaining years. What would you do? Sell at the bottom?

Very few alive and investing today have experienced such a market, but they have existed. That's the biggest fear I have, for everyone involved. Both 2000 and 2008 have taught investors that markets always snap back and go on to new heights. That's not always been the case in a standard lifespan. And given the unprecedented steps that the Fed took in getting us out of 2008 and the very few monetary "bullets" left to fight off the next wave of panic selling, I am very concerned that the next downturn could be the end of many an investor today, all of whom are green in the bigger picture.

It's times like those when people sour permanently on the notion of stock ownership and capitalism. We got a taste, just a taste, of that in 2008.
That's not the Fed's job. It's certainly not part of their "mandate" that they like to tout.
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Re: A time to EVALUATE your jitters

Post by MotoTrojan »

carol-brennan wrote: Sun Mar 17, 2019 5:21 pm
nisiprius wrote: Fri Dec 21, 2018 1:44 pm I don't think I see it either in 2009-present, or in 2001-2006.
If 2009-present is not "parabolic," I don't think the word has any practical value so far as chart talk goes.
It is a scientific word. Growth has been quite steady meaning linear, not parabolic growth. January 2018 looked like the start of true parabolic growth but it couldn’t hold on.
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Re: A time to EVALUATE your jitters

Post by FlyerJack »

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stocknoob4111
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Re: A time to EVALUATE your jitters

Post by stocknoob4111 »

2018 to date has been a disaster... I hope going forward we see some progress.
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Re: A time to EVALUATE your jitters

Post by minimalistmarc »

stocknoob4111 wrote: Sat Jun 15, 2019 12:58 am 2018 to date has been a disaster... I hope going forward we see some progress.
What was the disaster?
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Re: A time to EVALUATE your jitters

Post by stocknoob4111 »

minimalistmarc wrote: Sat Jun 15, 2019 1:01 am What was the disaster?
Disaster is that you have to wait a year and a half with zero returns and negative inflation adjusted returns AND the possibility of more downturns to follow with the stupid media constantly preaching how we are still in the best bull market in history... it ISN'T the BEST bull market in history if we have negative inflation adjusted returns for a significant period of time is it? The whole situation with the media is just ridiculous!

Actually Jeffrey Gundlach had an interview recently where he echoed my exact sentiment, he told the media to STOP saying best bull market because it isn't anymore, it's a terrible market.

But what is even worse is that because the market is completely stalled at the Jan 2018 level, accumulators like myself who are saving like crazy are completely buying at elevated valuations and are not even able to lower our cost basis so we continue to pump money into a market that can go sideways for a few years then crash 50%, how terrific!
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Re: A time to EVALUATE your jitters

Post by minimalistmarc »

stocknoob4111 wrote: Sat Jun 15, 2019 1:06 am
minimalistmarc wrote: Sat Jun 15, 2019 1:01 am What was the disaster?
Disaster is that you have to wait a year and a half with zero returns and negative inflation adjusted returns AND the possibility of more downturns to follow with the stupid media constantly preaching how we are still in the best bull market in history... it ISN'T the BEST bull market in history if we have negative inflation adjusted returns for a significant period of time is it? The whole situation with the media is just ridiculous!

Actually Jeffrey Gundlach had an interview recently where he echoed my exact sentiment, he told the media to STOP saying best bull market because it isn't anymore, it's a terrible market.

But what is even worse is that because the market is completely stalled at the Jan 2018 level, accumulators like myself who are saving like crazy are completely buying at elevated valuations and are not even able to lower our cost basis so we continue to pump money into a market that can go sideways for a few years then crash 50%, how terrific!
Maybe your asset allocation is too high in equities if you are worried about this.

Stop watching the financial media. Ignore people like Jeff Gundlach, whoever he is.
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Re: A time to EVALUATE your jitters

Post by stocknoob4111 »

minimalistmarc wrote: Sat Jun 15, 2019 4:52 am Maybe your asset allocation is too high in equities if you are worried about this.
not worried, just making a note that the market is not great. The bull run ended in Jan 2018 which is quite a long time ago.
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Re: A time to EVALUATE your jitters

Post by lostdog »

stocknoob4111 wrote: Sat Jun 15, 2019 12:12 pm
minimalistmarc wrote: Sat Jun 15, 2019 4:52 am Maybe your asset allocation is too high in equities if you are worried about this.
not worried, just making a note that the market is not great. The bull run ended in Jan 2018 which is quite a long time ago.
Similar to 2015 and 2016.
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
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Re: A time to EVALUATE your jitters

Post by awdesign »

minimalistmarc wrote: Sat Jun 15, 2019 1:01 am .. accumulators like myself who are saving like crazy are completely buying at elevated valuations and are not even able to lower our cost basis so we continue to pump money into a market that can go sideways for a few years then crash 50%, how terrific!
Being age 62, I am also afraid of a big market crash and recessions. To me stocks went crazy and very very expensive now. Holding 70% of my investment in Vanguard Money Market.
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Re: A time to EVALUATE your jitters

Post by William Million »

awdesign wrote: Sat Jun 15, 2019 5:07 pm
minimalistmarc wrote: Sat Jun 15, 2019 1:01 am .. accumulators like myself who are saving like crazy are completely buying at elevated valuations and are not even able to lower our cost basis so we continue to pump money into a market that can go sideways for a few years then crash 50%, how terrific!
Being age 62, I am also afraid of a big market crash and recessions. To me stocks went crazy and very very expensive now. Holding 70% of my investment in Vanguard Money Market.
I would reread Nisprius' post from Dec 2018 above. That puts it into perspective.

Get an asset allocation you are comfortable with. If the market falls, rebalance into stocks at discount prices.

I'm just a bit younger than you and slightly less than 50% equities. I'm also concerned about a hefty and long=term drop just after I retire (hopefully soon). However, 50% in fixed income lets me sleep at night.
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Re: A time to EVALUATE your jitters

Post by Dargo »

Have to try to filter out the noise and ignore the hysteria
Life is what happens to you when you are busy making other plans..John Lennon
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Re: A time to EVALUATE your jitters

Post by Frank2012 »

Jitters? I have high anxiety! I'm 30% stocks and 70% bonds/cash...this allows me to sleep at night.
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Re: A time to EVALUATE your jitters

Post by fortyofforty »

I'm glad that there are still people complaining about the market, and claiming that record highs are not really record highs. That indicates to me that the market still has room to run. I love the negativity. It's good for long term investors like myself. :moneybag
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Re: A time to EVALUATE your jitters

Post by tesuzuki2002 »

stocknoob4111 wrote: Sat Jun 15, 2019 1:06 am
minimalistmarc wrote: Sat Jun 15, 2019 1:01 am What was the disaster?
Disaster is that you have to wait a year and a half with zero returns and negative inflation adjusted returns AND the possibility of more downturns to follow with the stupid media constantly preaching how we are still in the best bull market in history... it ISN'T the BEST bull market in history if we have negative inflation adjusted returns for a significant period of time is it? The whole situation with the media is just ridiculous!

Actually Jeffrey Gundlach had an interview recently where he echoed my exact sentiment, he told the media to STOP saying best bull market because it isn't anymore, it's a terrible market.

But what is even worse is that because the market is completely stalled at the Jan 2018 level, accumulators like myself who are saving like crazy are completely buying at elevated valuations and are not even able to lower our cost basis so we continue to pump money into a market that can go sideways for a few years then crash 50%, how terrific!

Don’t buy at elevated valuations. You want to buy low, then sell high.
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Re: A time to EVALUATE your jitters

Post by stocknoob4111 »

fortyofforty wrote: Sat Jul 06, 2019 11:45 am I'm glad that there are still people complaining about the market, and claiming that record highs are not really record highs. That indicates to me that the market still has room to run. I love the negativity. It's good for long term investors like myself. :moneybag
Which "market" are you talking about?

The "market" is not the S&P 500 for most people, a lot of us have other many asset classes that have performed miserably in the last 18 months aggregate. For instance Total International is NEGATIVE -4.5% real since Jan 2018, which is dismal.

FFFFX Fidelity Freedom 2040 Target Date, which a ridiculous number of people invest everything into has a real return of 0.51% since Jan 2018. Just plain awful.

Small Caps since Jan 2018 has performed very POORLY at 0.17% real.

So unless you're holding 100% US Large Cap then it's been less than great. Yeah, 18 months is too small of a window to extrapolate anything long term but we're talking about recent performance here anyway and that has not been great for the broader "market".
fortyofforty
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Re: A time to EVALUATE your jitters

Post by fortyofforty »

stocknoob4111 wrote: Sat Jul 06, 2019 1:01 pm
fortyofforty wrote: Sat Jul 06, 2019 11:45 am I'm glad that there are still people complaining about the market, and claiming that record highs are not really record highs. That indicates to me that the market still has room to run. I love the negativity. It's good for long term investors like myself. :moneybag
Which "market" are you talking about?

The "market" is not the S&P 500 for most people, a lot of us have other many asset classes that have performed miserably in the last 18 months aggregate. For instance Total International is NEGATIVE -4.5% real since Jan 2018, which is dismal.

FFFFX Fidelity Freedom 2040 Target Date, which a ridiculous number of people invest everything into has a real return of 0.51% since Jan 2018. Just plain awful.

Small Caps since Jan 2018 has performed very POORLY at 0.17% real.

So unless you're holding 100% US Large Cap then it's been less than great. Yeah, 18 months is too small of a window to extrapolate anything long term but we're talking about recent performance here anyway and that has not been great for the broader "market".
I hold the majority of my equity allocation in American stocks, either Total Stock Market or S&P 500 substitutes. Those are capitalization-weighted indices. If some of your equity allocation is underperforming because you have placed money in international or value or small cap or even small cap value or other such "diversifiers," congratulations and welcome to the wonderful world of diversification. If you are surprised, I posit that you didn't understand what diversification means. I am quite pleased that the bulk of my equities in the form of capitalization-weighted indices touched new highs this past week. I underperformed the S&P 500 because I was not 100% S&P 500, and I am fine with that because I am diversified. For most American investors, it is logical that the bulk of their money is in domestic equities and they have done quite well. Only Bogleheads can find room to complain because emerging market small cap value REITs are not hitting new highs. :mrgreen:
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Re: A time to EVALUATE your jitters

Post by bogledyte2018 »

I like the comment about Asset Allocation for jitters. I'm feeling jittery and amazed at the new heights of the S&P500, sold off a small amount of VTI to take some profit and keep more in cash. I just can't help thinking it if it's going so high, it's going to be a big crash, to come back to the mean. Had 80% Equities, moved it down to 60%, since Bond prices also went up, keeping it in cash. I'm surprised Bond prices are going up too? I thought they usually went in the opposite direction. (I'm still new at this). Enjoyed reading this thread.
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Re: A time to EVALUATE your jitters

Post by Leesbro63 »

bogledyte2018 wrote: Wed Jul 24, 2019 2:40 pm I like the comment about Asset Allocation for jitters. I'm feeling jittery and amazed at the new heights of the S&P500, sold off a small amount of VTI to take some profit and keep more in cash. I just can't help thinking it if it's going so high, it's going to be a big crash, to come back to the mean. Had 80% Equities, moved it down to 60%, since Bond prices also went up, keeping it in cash. I'm surprised Bond prices are going up too? I thought they usually went in the opposite direction. (I'm still new at this). Enjoyed reading this thread.
On the other hand/positive thinking, if you look at stock returns for the past 20 years or so, perhaps this great run-up of the last 10 years IS the return to the mean.
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Re: A time to EVALUATE your jitters

Post by Nowizard »

Yes, there are definitely areas of the market performing much better or worse than others, but that is the primary reason for diversification. Without unreasonable risk, to pile everything into one sector is, of course, unsustainable for most everyone. We have no complaints, though we are "underperforming" if defined in context of the S&P. We have "only" increased by approximately 12% this year which is above our IPS predicted goal. As the OP said in 2011, we all evaluate our portfolios within our own parameters.

Tim
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Re: A time to EVALUATE your jitters

Post by Sheepdog »

RollTide31457 wrote: Sat Dec 22, 2018 10:33 am

Hello! The latter has been the strategy - focusing on having cash reserves to survive several years. This was the lesson learned from 2008/2009.
Yes Yes Yes Especially so if retired and living off of investments..
Unless you try to do something beyond what you have already mastered you will never grow. (Ralph Waldo Emerson)
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Re: A time to EVALUATE your jitters

Post by Grt2bOutdoors »

Sheepdog wrote: Fri Jul 26, 2019 7:46 am
RollTide31457 wrote: Sat Dec 22, 2018 10:33 am

Hello! The latter has been the strategy - focusing on having cash reserves to survive several years. This was the lesson learned from 2008/2009.
Yes Yes Yes Especially so if retired and living off of investments..
+1 OR unemployed/with job insecurity, you have enough in safe vehicles so you can live.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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Re: A time to EVALUATE your jitters

Post by guyinlaw »

bogledyte2018 wrote: Wed Jul 24, 2019 2:40 pm I like the comment about Asset Allocation for jitters. I'm feeling jittery and amazed at the new heights of the S&P500, sold off a small amount of VTI to take some profit and keep more in cash. I just can't help thinking it if it's going so high, it's going to be a big crash, to come back to the mean. Had 80% Equities, moved it down to 60%, since Bond prices also went up, keeping it in cash. I'm surprised Bond prices are going up too? I thought they usually went in the opposite direction. (I'm still new at this). Enjoyed reading this thread.
Consider putting cash in Ultrashort bond ETFs like ICSH, SHV or Vanguard money market. 2-2.6% yield now. You probably do something similar...
Time is your friend; impulse is your enemy. - John C. Bogle
squirm
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Re: A time to EVALUATE your jitters

Post by squirm »

The market has been churning, the internals stink and it's been like that for the past year and half. For the past year it's just been a bear market rally.
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Re: A time to EVALUATE your jitters

Post by BlackDiamond »

This 8 yr old thread just proves once again the old adage that "time in the market" is more important than "timing the market".

I've personally witnessed 4 major stock market corrections as an adult - 1987, 1990-91, 2000-01 and 2008-09. If you are young (under 40 reading this), just invest in good, solid companies with great balance sheets that have excellent growth. Trust me, you'll do MUCH better just parking it in equities over your lifetime rather than trying to get cute and thinking short-term. It's not rocket science.

If you haven't watched this Charlie Munger video, it's one of the best 11 min equity education lessons you'll ever get ;)

https://www.youtube.com/watch?v=3WkpQ4PpId4
cali
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Re: A time to EVALUATE your jitters

Post by cali »

i am feeling the jitters -- thinking I should sell for profit some of my stocks shares that are in taxable acct. Also have contra fund in taxable acct (cause I didn't know better back then and there is cap gains) If the market dives, I don't have much cash to add to it. stocks i have in taxable are apple, amazon, chevron, exxon, att, mastercard, visa, starbucks, salesforce, costco, boeing, conaco phillips, qcom, berk-b, disney, comcast, and etf/index funds. Apple and Chevron are my largest individual stock holdings.

I have a muni bond fund about $25K.

My IRAs haven't done as well as my taxable acct. they include stocks and mutual funds, etf

Im being told I missed the boat on gold and bonds and tbills? My mentor (father) keeps telling me for the last yr to buy more stocks… he has a lot of dividend stocks. Esp gas/oil.

International -- i don't have and not sure I want that at this point…not sure.

Im not sure who to talk to. I have an acct at fidelity and Vanguard. Not sure if Vanguard gives advice over the phone but I know I can go to Fidelity though never been impressed. Ive been encouraged to do this on my own and have not been able to meet with anyone this last year for personal reasons.

Is it too late to diversify….? I was told it was (by my father) as well as a few other friends..


Retirement is 5 yrs. My goal with the taxable acct and stocks was to pass that to my kids when i die so they have the step up cost basis. If I sell, I would pay taxes now which isn't so good. there is an overall gain for each stock though there are some shares bought at certain times for a particular stock (like conoco phillips - down this yr) at a loss and I was thinking sell those at a loss then take profit from another stock (like apple or QQQ).to even things out so I don't pay taxes. However, I usually sell $3k loss a yr to help with taxes.

My main question, really is, is it too late to get into some bonds, treasuries, gold for protection.?
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Re: A time to EVALUATE your jitters

Post by engineerahead »

nisiprius wrote: Fri Dec 21, 2018 1:44 pm This is not any kind of prediction or observation, not intended to create reassurance or fear...
Its 9/6/19, everyone is talking about brexit, soon upcoming recession and bubbles all around the world, also warnings of too much % of market being in indexes; and I have just stumbled upon this post, not checking the date it was created in. I just read your beautiful first post, explaining well how feelings come into the judgment, how bad the bad things can be and how probable it is. I was absolutely sure the post was made for today, not years ago.
I just wanted to express my gratitude, the post is informative to anybody who finds it, its well put together and provide much needed assurance going onwards. The bad things will happen and the risk will always be present, thats something closely tied to the stock market. But historically it has always come up in a way. This just shows how timeless your article is, amazing job!
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Re: A time to EVALUATE your jitters

Post by fortyofforty »

cali wrote: Tue Sep 03, 2019 12:19 am i am feeling the jitters -- thinking I should sell for profit some of my stocks shares that are in taxable acct. Also have contra fund in taxable acct (cause I didn't know better back then and there is cap gains) If the market dives, I don't have much cash to add to it. stocks i have in taxable are apple, amazon, chevron, exxon, att, mastercard, visa, starbucks, salesforce, costco, boeing, conaco phillips, qcom, berk-b, disney, comcast, and etf/index funds. Apple and Chevron are my largest individual stock holdings.

I have a muni bond fund about $25K.

My IRAs haven't done as well as my taxable acct. they include stocks and mutual funds, etf

Im being told I missed the boat on gold and bonds and tbills? My mentor (father) keeps telling me for the last yr to buy more stocks… he has a lot of dividend stocks. Esp gas/oil.

International -- i don't have and not sure I want that at this point…not sure.

Im not sure who to talk to. I have an acct at fidelity and Vanguard. Not sure if Vanguard gives advice over the phone but I know I can go to Fidelity though never been impressed. Ive been encouraged to do this on my own and have not been able to meet with anyone this last year for personal reasons.

Is it too late to diversify….? I was told it was (by my father) as well as a few other friends..


Retirement is 5 yrs. My goal with the taxable acct and stocks was to pass that to my kids when i die so they have the step up cost basis. If I sell, I would pay taxes now which isn't so good. there is an overall gain for each stock though there are some shares bought at certain times for a particular stock (like conoco phillips - down this yr) at a loss and I was thinking sell those at a loss then take profit from another stock (like apple or QQQ).to even things out so I don't pay taxes. However, I usually sell $3k loss a yr to help with taxes.

My main question, really is, is it too late to get into some bonds, treasuries, gold for protection.?
It's not "too late", it's just that the benefits, if any, might not be felt for years. What you might do is invest the dividends in bonds, for example, rather than reinvesting in stocks. You're getting them anyway, and will have to pay taxes on them, so why not use them to reduce your overall exposure to stocks?
boglesmind
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Re: A time to EVALUATE your jitters

Post by boglesmind »

Jeffrey Gundlach? :oops:
See Here’s the price to be paid for listening to ‘Armageddonist’ predictions from the likes of Soros, Icahn and Gundlach
Image
BlackDiamond wrote: Mon Aug 19, 2019 11:16 am This 8 yr old thread just proves once again the old adage that "time in the market" is more important than "timing the market".
+1
Boglesmind
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unclescrooge
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Re: A time to EVALUATE your jitters

Post by unclescrooge »

boglesmind wrote: Wed Nov 13, 2019 3:22 pm Jeffrey Gundlach? :oops:
See Here’s the price to be paid for listening to ‘Armageddonist’ predictions from the likes of Soros, Icahn and Gundlach
Image
BlackDiamond wrote: Mon Aug 19, 2019 11:16 am This 8 yr old thread just proves once again the old adage that "time in the market" is more important than "timing the market".
+1
Boglesmind
I'm surprised Hussman is down only 30%. His mutual funds had been decimated.
I'm not surprised to see Schiff, Faber and a few others. I was surprised to not see Dennis Gartman.
LITeacher
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Re: A time to EVALUATE your jitters

Post by LITeacher »

I am 33 and wife 32. We just had a newborn. We have about 330k invested at 82/18 equities/bonds, and I am getting very jittery about our asset allocation. I haven’t really experienced a recession before with my portfolio because i had barely any investments during th last one. I’m considering going to 50/50. Would this be considered market timing? Am I insane to go that high in bonds at my age?
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alpine_boglehead
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Re: A time to EVALUATE your jitters

Post by alpine_boglehead »

LITeacher wrote: Fri Nov 29, 2019 9:44 am I am 33 and wife 32. We just had a newborn. We have about 330k invested at 82/18 equities/bonds, and I am getting very jittery about our asset allocation. I haven’t really experienced a recession before with my portfolio because i had barely any investments during th last one. I’m considering going to 50/50. Would this be considered market timing? Am I insane to go that high in bonds at my age?
What does your IPS say? The proposed shift seems quite dramatic. Think about what is really making you jittery. If it's because you personal circumstances changed (e.g. you have increased safety needs due to your newborn), that's not market timing. If it's because you have some gut feeling that stock prices are too high - that's market timing.

What's different now than when the market was 10% lower? The market could have dropped by 50% (or some other number) from there, and it can drop by 50% (or the other number) from where it is now.

One thing's obvious - 82/18 is probably too aggressive for you if you're "very jittery". How about doing a moderate shift to e.g. 75/25 and then reevaluate things? Assuming you still have many years of potential income and saving ahead, you can see it this way - if stocks drop, good for you, because you can purchase more at cheap prices. If stocks continue to rise, good for you, because the amount already invested continues to grow.
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Re: A time to EVALUATE your jitters

Post by krb »

LITeacher wrote: Fri Nov 29, 2019 9:44 am I am 33 and wife 32. We just had a newborn. We have about 330k invested at 82/18 equities/bonds, and I am getting very jittery about our asset allocation. I haven’t really experienced a recession before with my portfolio because i had barely any investments during th last one. I’m considering going to 50/50. Would this be considered market timing? Am I insane to go that high in bonds at my age?
HI. You are young. It seems to me asset allocation depends on two things: 1) expected return, 2) risk tolerance.
You are young. If you are too aggressive you will see big changes up and down but none of those will be permanent unless you freak out and sell after the crash. So far after every crash the market has always recovered. Might take a few years but it always recovers. If you are not aggressive enough, don’t forget inflation is a real risk. At your young age you need equities to grow your portfolio. Equities outperform bonds long term. However if your risk tolerance is low and you will freak out and sell low you will do badly.

So you want the highest long term ROI.
Stocks will outperform bonds LT. But they are much more volatile.
For money you need > 20 years from now it seems to me it should be in equities.
For money you need <5 years from now it has to be risk free (eg CD’s, maybe bond funds?)
For money you will freak out if it loses 50% and sell after it crashes, keep it away from equities! This however is a behavior question not an investment question!

Everyone here will think I’m crazy but I’m 90/10, planning on not touching my investments for at least 20 y (we’ll see what G-d plans though). 50 y old, planning on working till 70. Only now I’m increasing my bond holdings and decreasing my equity contributions.
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Re: A time to EVALUATE your jitters

Post by krb »

RollTide31457 wrote: Sat Dec 22, 2018 9:50 am Lesson learned from 2008/2009 is that cash is always king. Been working on accumulating as much cash reserves as possible since 2009.
Don’t forget inflation relentlessly eats away cash. So you need 2-3% ROI or so just to tread water! If you have substantial assets in cash you are sinking, not even treading water. There is a 100% risk in being not aggressive enough. So there’s risk not only in being too aggressive. It’s just that inflation is an invisible risk whereas market changes are very visible.
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Re: A time to EVALUATE your jitters

Post by krb »

carol-brennan wrote: Sun Mar 17, 2019 5:27 pm
kuttolas wrote: Fri Nov 23, 2018 12:49 pm Thank you nispirius for the timely post. I couldn't have come across this at a better time in my life.

Although this is not my first exposure to major market fluctuations, I was seriously considering to not invest for a while. I first started investing for the first time in Sep-2008, two weeks before the bottom fell out of the market. Those downturns did not bother me because I had very little money to loose and and was an opportunity to buy cheap. However 10 years later, it's a different story, We have significant amount saved up in Roth IRA and 401(k). Even small blips changes value by thousands of dollars and I find myself completely unprepared to handle the emotions that comes with market fluctuations.

So once again thank you for putting this post together
If you, very understandably, get jitters over watching your portfolio dip by a few thousand dollars, imagine what a 10 or 20 year bear market would do to you, one where the market went down and never really recovered in your remaining years. What would you do? Sell at the bottom?

Very few alive and investing today have experienced such a market, but they have existed. That's the biggest fear I have, for everyone involved. Both 2000 and 2008 have taught investors that markets always snap back and go on to new heights. That's not always been the case in a standard lifespan. And given the unprecedented steps that the Fed took in getting us out of 2008 and the very few monetary "bullets" left to fight off the next wave of panic selling, I am very concerned that the next downturn could be the end of many an investor today, all of whom are green in the bigger picture.

It's times like those when people sour permanently on the notion of stock ownership and capitalism. We got a taste, just a taste, of that in 2008.
Actually - I could be wrong - I don’t believe there’s ever been a 20 year period in the history of the market that the market ended lower than it began. I think there has been one or two 15 year periods and a handful of rolling ten year periods. That is why if you don’t need your money for 15-20 years it is safe in equities. If you need it in ten years you are taking a risk though not a huge risk. There is a risk in not being in equities too as inflation eats your savings.
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Re: A time to EVALUATE your jitters

Post by krb »

stocknoob4111 wrote: Sat Jun 15, 2019 1:06 am
minimalistmarc wrote: Sat Jun 15, 2019 1:01 am What was the disaster?
Disaster is that you have to wait a year and a half with zero returns and negative inflation adjusted returns AND the possibility of more downturns to follow with the stupid media constantly preaching how we are still in the best bull market in history... it ISN'T the BEST bull market in history if we have negative inflation adjusted returns for a significant period of time is it? The whole situation with the media is just ridiculous!

Actually Jeffrey Gundlach had an interview recently where he echoed my exact sentiment, he told the media to STOP saying best bull market because it isn't anymore, it's a terrible market.

But what is even worse is that because the market is completely stalled at the Jan 2018 level, accumulators like myself who are saving like crazy are completely buying at elevated valuations and are not even able to lower our cost basis so we continue to pump money into a market that can go sideways for a few years then crash 50%, how terrific!
I hate to be a nanny, but anyone who is looking at 1- or 3- or 5- year returns should not have that money in equities. If you are concerned about short term volatility you need a safe, low return investment. Equities can go up and down dramatically. If you are in equities you need to be prepared for several years bear market. You will end up ahead. Equities so far always outperform everything else long term. But the return comes with increased volatility. If you are going to stress out about a 5 year downturn in your investment portfolio you should not have that money in equities. It is part of the fundamental rules of investing.
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Re: A time to EVALUATE your jitters

Post by krb »

stocknoob4111 wrote: Sat Jun 15, 2019 1:06 am
minimalistmarc wrote: Sat Jun 15, 2019 1:01 am What was the disaster?
Disaster is that you have to wait a year and a half with zero returns and negative inflation adjusted returns AND the possibility of more downturns to follow with the stupid media constantly preaching how we are still in the best bull market in history... it ISN'T the BEST bull market in history if we have negative inflation adjusted returns for a significant period of time is it? The whole situation with the media is just ridiculous!

Actually Jeffrey Gundlach had an interview recently where he echoed my exact sentiment, he told the media to STOP saying best bull market because it isn't anymore, it's a terrible market.

But what is even worse is that because the market is completely stalled at the Jan 2018 level, accumulators like myself who are saving like crazy are completely buying at elevated valuations and are not even able to lower our cost basis so we continue to pump money into a market that can go sideways for a few years then crash 50%, how terrific!
Two things:
1) Everyone does this when they get started - buy an introduction to personal finance or investing book. Dummies guide or idiot’s guide. I did years ago. It’s immensely helpful. Or Bogleheads guide. But buy an introduction to investment book.

2) YOU SHOULD BE PRAYING FOR THE WORST BEAR MARKET IN THE WORLD RIGHT NOW!!!!! I am not. that would be horrible. But if you are just starting to invest you want to buy stocks as cheap as possible. You do NOT want a bull! I do because I’m in the second half of my life - please permabull!!! The market crashing is the best thing that could happen to someone in the first half of his career. You are buying stocks on a great sale.
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Re: A time to EVALUATE your jitters

Post by krb »

cali wrote: Tue Sep 03, 2019 12:19 am i am feeling the jitters -- thinking I should sell for profit some of my stocks shares that are in taxable acct. Also have contra fund in taxable acct (cause I didn't know better back then and there is cap gains) If the market dives, I don't have much cash to add to it. stocks i have in taxable are apple, amazon, chevron, exxon, att, mastercard, visa, starbucks, salesforce, costco, boeing, conaco phillips, qcom, berk-b, disney, comcast, and etf/index funds. Apple and Chevron are my largest individual stock holdings.

I have a muni bond fund about $25K.

My IRAs haven't done as well as my taxable acct. they include stocks and mutual funds, etf

Im being told I missed the boat on gold and bonds and tbills? My mentor (father) keeps telling me for the last yr to buy more stocks… he has a lot of dividend stocks. Esp gas/oil.

International -- i don't have and not sure I want that at this point…not sure.

Im not sure who to talk to. I have an acct at fidelity and Vanguard. Not sure if Vanguard gives advice over the phone but I know I can go to Fidelity though never been impressed. Ive been encouraged to do this on my own and have not been able to meet with anyone this last year for personal reasons.

Is it too late to diversify….? I was told it was (by my father) as well as a few other friends..


Retirement is 5 yrs. My goal with the taxable acct and stocks was to pass that to my kids when i die so they have the step up cost basis. If I sell, I would pay taxes now which isn't so good. there is an overall gain for each stock though there are some shares bought at certain times for a particular stock (like conoco phillips - down this yr) at a loss and I was thinking sell those at a loss then take profit from another stock (like apple or QQQ).to even things out so I don't pay taxes. However, I usually sell $3k loss a yr to help with taxes.

My main question, really is, is it too late to get into some bonds, treasuries, gold for protection.?
Everything you have in equities could drop 50% tomorrow and not be back for ten years. If you are looking at retirement in 5 years it seems to me you need nearly 100% certain funds that will be there in 5 years, but bonds don't return so great so you do need equities for long term. Smarter people than me would say how much, but you need your assets to be invested very conservatively if you expect it to be there enough to last 5-10 years. For assets you will need no less than ten years from now, that's what should be progressively increasing as you get farther out in equities.
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tadamsmar
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Re: A time to EVALUATE your jitters

Post by tadamsmar »

Here's what nisiprius says in the OP:
nisiprius wrote: Sun Aug 07, 2011 7:00 am And one final thought. If we're lucky, and the stock market comes back at least part way and seems to stabilize for a while... or if it comes roaring back and soars (yes, that' could happen, too)... don't forget how you feel right now. If you feel that you are close to the edge of your risk tolerance right now, then you have too much in stocks. If you manage to tough it out and we get a calm spell, don't forget how you feel now and at least consider making an adjustment then.
I personally recall having no jitters in 2011. I recall not noticing anything scary.
However, if you had jitters and you stayed in back in 2011, then maybe you have too much in stocks.
And everyone who stayed in :sharebeer.

Was 2011 worst than the little blippipoo we had late last year? The not-quite correction.
krb
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Re: A time to EVALUATE your jitters

Post by krb »

tadamsmar wrote: Fri Nov 29, 2019 2:07 pm Here's what nisiprius says in the OP:
nisiprius wrote: Sun Aug 07, 2011 7:00 am And one final thought. If we're lucky, and the stock market comes back at least part way and seems to stabilize for a while... or if it comes roaring back and soars (yes, that' could happen, too)... don't forget how you feel right now. If you feel that you are close to the edge of your risk tolerance right now, then you have too much in stocks. If you manage to tough it out and we get a calm spell, don't forget how you feel now and at least consider making an adjustment then.
I personally recall having no jitters in 2011. I recall not noticing anything scary.
However, if you had jitters and you stayed in back in 2011, then maybe you have too much in stocks.
And everyone who stayed in :sharebeer.

Was 2011 worst than the little blippipoo we had late last year? The not-quite correction.
I remember in Dec 2018 as it went down what - 10%? 15%? - I was thinking it's time to buy! Then I looked back and I saw the price was the same as say 9 months earlier. So it didn't really go down as much as it went back in time to a few months earlier. So I thought "well if I didn't dump all mt money in 9 months ago when it was this price, it's not as on sale as it seems to be today!"

Not like I had a ton of money in the bank. I had one experience with market timing and DCA'd instead of dumping in and still regret it. I was just thinking dump what I have in the bank into the market if it really crashed but it only stumbled - didn't really crash...
oragne lovre
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Re: A time to EVALUATE your jitters

Post by oragne lovre »

tadamsmar wrote: Fri Nov 29, 2019 2:07 pm Here's what nisiprius says in the OP:
nisiprius wrote: Sun Aug 07, 2011 7:00 am And one final thought. If we're lucky, and the stock market comes back at least part way and seems to stabilize for a while... or if it comes roaring back and soars (yes, that' could happen, too)... don't forget how you feel right now. If you feel that you are close to the edge of your risk tolerance right now, then you have too much in stocks. If you manage to tough it out and we get a calm spell, don't forget how you feel now and at least consider making an adjustment then.
I personally recall having no jitters in 2011. I recall not noticing anything scary.
However, if you had jitters and you stayed in back in 2011, then maybe you have too much in stocks.
And everyone who stayed in :sharebeer.

Was 2011 worst than the little blippipoo we had late last year? The not-quite correction.
I did not recall jitters in 2011 either. I actually felt more shaken in 2008 or so but decided to tough it out. According to National Bureau of Economic Research, the US Great Recession began in December 2007 and ended in June 2009. My guess is that psychological reverberation of the Great Recession was still strong in 2011 and nisiprius's post was timely, relevant, and insightful.
The finest, albeit the most difficult, of all human achievements is being reasonable.
CheepSkate
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Re: A time to EVALUATE your jitters

Post by CheepSkate »

Wow. This thread is some hardcore jitters therapy.

To hear how scared people were 50% or 100% or 150% ago, and how there was always some sort of economic crisis on the horizon, to read those old links - just an amazing perspective! And to read the accounts of people putting it all in money market accounts years ago :shock:

I’ve had a too-conservative AA since 2009, and it’s the reason I’m not retired. This thread brings back memories of how I listened to too much media and social media chatter, came to believe what was being repeated (the propaganda effect), and let my emotions drive without realizing it even when in the grand scheme I had many years to go and merely a few hundred grand at risk.

Yet here I am with my underwater hedges and bonds looking at the recent inverted yield curve and wondering how much further the US economy can grow at 3.5% unemployment (exactly who are these expanding businesses going to hire?). I’m looking at a graying demographic picture for the entire western world plus China that resembles Japan in about 1990 and I see policy makers who are oblivious to the connection between graying demographics and disinflation.

There’s always a worry when the only right answer has ever been to buy and hold. Yet I still can’t convince myself to go all in. The market would surely crash the very next day. :oops:
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