U.S. stocks in free fall
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Re: U.S. stocks in free fall
It’s the professional / institution money buying.
What does Buffett say… the stock market moves money from the impatient to the patient.
What does Buffett say… the stock market moves money from the impatient to the patient.
Re: U.S. stocks in free fall
You can't compare QQQ (even with a trailing sell order) and BND as equivalent risk assets.HomerJ wrote: ↑Tue Jan 25, 2022 9:31 amSeems like a solid plan to me. I just hope it doesn't go up 5% and then crash 20% more afterwards...
The excessive risk was that QQQ could have dropped 15% immediately when you invested in it. You saw how fast it happened this time (or during Covid). And then you would have triggered your sell limit order, and been out 15%.
You can't compare QQQ (even with a trailing sell order) and BND as equivalent risk assets.
You are right on that, but the trailing stop puts the QQQ into a different risk category than without. My thinking was, and still is, that when I retired the primary purpose of fixed income was/is to give me enough of a cushion to ride out a downturn without having to reduce my lifestyle too much.
I am willing to take the chance on a 15% reduction in that part of my portfolio, but not a lot more. Between that and the bonds I have 8 or 9 years of expenses covered with no reduction in spending. If there is a really bad market for even a few years I can reduce spending to make that last longer.
Remember that we should never take too much or too little risk. 40% bonds seems like too little to me, so 20% bonds and 20% stopped out QQQ is better for me.
Answering a question is easy -- asking the right question is the hard part.
Re: U.S. stocks in free fall
I'm confident there are many portfolios who will do better than the 3 fund portfolio. I'm even more confident that more will do worse. Only decades from now will we know for sure. Until then, a 3 fund portfolio is a reliable way to get what the market gives you and I'm willing to take my chances that I don't have the best. I will tell you this much, as an investor, I am far more comfortable with a 3 fund portfolio compared with a Small cap value / treasuries / Gold portfolio that historically has been more resilient from 1971 to today. Of course the future of such resilience may not repeat itself in the next 50 years.willthrill81 wrote: ↑Tue Jan 25, 2022 12:14 pmI didn't say that retirees would not be served well by the 3-fund portfolio. However, the 3-fund portfolio in its most common iterations has been very erratic in its performance over time, and many other portfolios have been much less so. But that's heretical to many here, I know. I don't want to derail this thread, so I'll leave it at that.HomerJ wrote: ↑Tue Jan 25, 2022 12:11 pmThat's an interesting statement. Your way may be just as good or maybe even better, but you really think the 3-fund portfolio does not serve retirees well?willthrill81 wrote: ↑Tue Jan 25, 2022 11:04 am That said, I agree that retirees would be well served with resilient portfolios, and the 3-fund does not qualify IMHO.
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Re: U.S. stocks in free fall
This really needs to be in its own thread. Discussing/debating different portfolios is a useful exercise, IMO.EnjoyIt wrote: ↑Tue Jan 25, 2022 1:27 pmI'm confident there are many portfolios who will do better than the 3 fund portfolio. I'm even more confident that more will do worse. Only decades from now will we know for sure. Until then, a 3 fund portfolio is a reliable way to get what the market gives you and I'm willing to take my chances that I don't have the best. I will tell you this much, as an investor, I am far more comfortable with a 3 fund portfolio compared with a Small cap value / treasuries / Gold portfolio that historically has been more resilient from 1971 to today. Of course the future of such resilience may not repeat itself in the next 50 years.willthrill81 wrote: ↑Tue Jan 25, 2022 12:14 pmI didn't say that retirees would not be served well by the 3-fund portfolio. However, the 3-fund portfolio in its most common iterations has been very erratic in its performance over time, and many other portfolios have been much less so. But that's heretical to many here, I know. I don't want to derail this thread, so I'll leave it at that.HomerJ wrote: ↑Tue Jan 25, 2022 12:11 pmThat's an interesting statement. Your way may be just as good or maybe even better, but you really think the 3-fund portfolio does not serve retirees well?willthrill81 wrote: ↑Tue Jan 25, 2022 11:04 am That said, I agree that retirees would be well served with resilient portfolios, and the 3-fund does not qualify IMHO.
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Re: U.S. stocks in free fall
Already did, this one.HomerJ wrote: ↑Tue Jan 25, 2022 12:17 pmThanks for the response...willthrill81 wrote: ↑Tue Jan 25, 2022 12:14 pmI didn't say that retirees would not be served well by the 3-fund portfolio. However, the 3-fund portfolio in its most common iterations has been very erratic in its performance over time, and many other portfolios have been much less so. But that's heretical to many here, I know. I don't want to derail this thread, so I'll leave it at that.HomerJ wrote: ↑Tue Jan 25, 2022 12:11 pmThat's an interesting statement. Your way may be just as good or maybe even better, but you really think the 3-fund portfolio does not serve retirees well?willthrill81 wrote: ↑Tue Jan 25, 2022 11:04 am That said, I agree that retirees would be well served with resilient portfolios, and the 3-fund does not qualify IMHO.
You should start a new thread to talk about those other portfolios that were better... I think that would be interesting.
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Re: U.S. stocks in free fall
The point was that despite the recent drop in stocks, they still outperformed bonds over that period.AlphaLess wrote: ↑Tue Jan 25, 2022 12:59 pmApologies: no disrespect was meant to you.willthrill81 wrote: ↑Tue Jan 25, 2022 12:03 pm1. Any starting period is arbitrary.AlphaLess wrote: ↑Tue Jan 25, 2022 12:02 pmIll-posed question, IMO.willthrill81 wrote: ↑Mon Jan 24, 2022 9:10 pm Since October 1st of 2021, which do you intuitively think performed better, U.S. total stocks or total bonds?
1. period chosen too arbitrary,
2. definition of "intuitive" too loose.
2. We don't define every word of every post.
With no disrespect intended, you missed the forest for the trees.
Can you please help me see the forest?
Many have become irrationally worried about the sudden drop in stocks and have forgotten about the huge runup they experienced last year.
The Sensible Steward
Re: U.S. stocks in free fall
I agree that the immediate uncertainty and intense anxiety may be similar in nature, but as the bear goes deeper and longer, I know I felt more intense anxiety. And my point was, the 2020 "mini-bear" lasted only 1 month and 4 days, (and decline of only 33.9%) and the time near the bottom was only a few days with a relatively quick rebound, hitting new all time highs by August 18,2020 and continuing upward from there. In comparison of the 07-09 bear decline of 56.77% and a duration of 16 months, which was only the sixth longest, but second largest bear in terms of percentage. (although I must admit that the near back-to-back official bear markets that began in 1929 and lasted until 1933 (-44%, -44%,-32%,-42%,-61%, -40%), interspersed with some "bull markets" of course, must have been something other worldly to live through. And by perspective, the S&P was 31.86 on September 16,1929. It did not get back to above that number until the bull market of 1957 to 1961. But, of course, that was a different time, and we will never have to worry that the market could literally remain flat for another 32 year period.Fortitude wrote: ↑Tue Jan 25, 2022 11:50 amWhen the market enters bear territory, no one knows how long that particular bear market will last. So the immediate uncertainty and intense anxiety that many experience is no different from one bear market to another. Of course the nature of the underlying events and the actions that the Fed can take can have a significant impact on a bear market’s duration.capran wrote: ↑Tue Jan 25, 2022 10:42 amI am always learning. So, are you saying the short term pull back, that started days after the high on February 19,2020 of 3386.15, and hitting a low of 2237.40 on March 23, 2020 and returned to a new high on August 18,2020 of 3389.78 is comparable to the dot com or the 09 decline in both scope and duration? I am always trying to learn more and understand. But in my mind, the 2020 decline was much less in both duration and percentage lost in comparison to the other two periods I mentioned. But please, if I am misreading or misinterpreting the comparison, I am all ears.Fortitude wrote: ↑Mon Jan 24, 2022 10:31 pmIt seems you have a pretty short memory. Don’t you think those young investors remember what happened slightly less than two years ago?capran wrote: ↑Mon Jan 24, 2022 10:21 pmI sure hope so! Even Vanguard posted a paper a week ago on their website starting with this line in BOLD: "U.S. equities more overvalued than any time since the dot-com bubble". I feel a lot better buying when there is "blood in the streets", and when nearly everyone is bearish, and we are not there. We really are very overdue for something along the two bears of 2000-01 and 2009. There are a lot of young investors out there that have never experienced that kind of pain.
2020’s bear market is a perfect example of that. 2008 was very different that was caused by a near collapse of the entire U.S. banking and financial system. There was no way that was being resolved in a few months. The economy in 2020, prior to the pandemic, was one of the strongest we had seen. Two different bear markets with two different underlying economies with the market drawdowns caused by two very different events.
We all have the benefit of hindsight looking back on 2020’s bear market to say that it wasn’t bad at all especially since most portfolios performed well. But that was all on the back of Fed stimulus and QE. How were you feeling in late February through the spring of 2020 before anyone had any idea of how long that bear market was going to last or how deep the drawdown was going to be? And once the Fed took action, did you have the foresight we’d be out of the woods so fast not to mention that the year was going to end as well as it did and be followed by another year in 2021 with stellar returns?
In regards to your comment that there’s no “blood in the streets” yet, I’m not quite sure how you determine when that occurs. It sounds like your trying to time the market or a bottom. The fact is that no one knows how this current scenario will play out. There may be a bear market or there may not. The most important thing is to stick to your plan’s Asset Allocation and rebalance accordingly.
I really know very little about investing, which is why I am here. I have had so many nuts and bolts answers here for which I am very grateful. But as far as anxiety goes, I know a little bit after a 40 year career in counseling. And short term situational anxiety is usually not so debilitating, whereas the longer it continues, and the more intense, is generally thought of to be worse. I was simply applying that same standard to market declines- less severe, shorter declines less bothersome than long term, significant declines. There are no guarantees in life, or in the markets, and past performance is no guarantee of future results. It's all interesting and instructive, I suppose.
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Re: U.S. stocks in free fall
Truth is --- a different asset mix has performed best over each decade.
Chasing the last hot thing or "overfitting" the past is simply trying to make a pattern out of unpredictable noise.
Yes if we can predict world events and macro-economic trends consistently above the rest of the market - we'd all be billionaires.
You don't want to chase shiny objects and "quick riches" per se --- stuff that isn't fundamentally sound -- (crypto comes to mind) -- but you DO want to keep an open mind and dispense with "traditional" knowledge as soon as it becomes outdated.
The only "free lunch" is diversification at the end of the day.
If you want to get real deep into philosophy, the "safest" investment is your own education/ skills (for producing income) as it can recover from $0 unlike the other investments. And eventually, even though I missed the boat in 2020/ early 2021, your own house somewhat. NOT because it performs better than other investments per se, but I believe it's somewhat more predictable as it "produces" the self-same living quarters generally regardless of market conditions.
Chasing the last hot thing or "overfitting" the past is simply trying to make a pattern out of unpredictable noise.
Yes if we can predict world events and macro-economic trends consistently above the rest of the market - we'd all be billionaires.
You don't want to chase shiny objects and "quick riches" per se --- stuff that isn't fundamentally sound -- (crypto comes to mind) -- but you DO want to keep an open mind and dispense with "traditional" knowledge as soon as it becomes outdated.
The only "free lunch" is diversification at the end of the day.
If you want to get real deep into philosophy, the "safest" investment is your own education/ skills (for producing income) as it can recover from $0 unlike the other investments. And eventually, even though I missed the boat in 2020/ early 2021, your own house somewhat. NOT because it performs better than other investments per se, but I believe it's somewhat more predictable as it "produces" the self-same living quarters generally regardless of market conditions.
Re: U.S. stocks in free fall
Staging a little afternoon comeback right now
Re: U.S. stocks in free fall
I’m going to start going 100% 3x leveraged QQQ at lunch and sell right before close. What could go wrong?
Re: U.S. stocks in free fall
"I guess some people are ok with being hit in the face with a hammer."
That's funny, the stock market doesn't have a hammer. Meanwhile, back in reality, the DJIA is UP 0.33% right now.
That's funny, the stock market doesn't have a hammer. Meanwhile, back in reality, the DJIA is UP 0.33% right now.
Re: U.S. stocks in free fall
Keep on doing the same thing. The US "Lost Decade" was followed by one of the best bull runs in history.carminered2019 wrote: ↑Tue Jan 25, 2022 12:37 pmIt could happen but how would you invest based on that ?sureshoe wrote: ↑Tue Jan 25, 2022 12:26 pmThere is no reason to believe the market won't do exactly what Japan did back in the 90s. The US market did it in the 2000s. We certainly could repeat that.carminered2019 wrote: ↑Tue Jan 25, 2022 12:00 pmWe are not in Japan and never invest based on the end of the world scenario!!goodenyou wrote: ↑Tue Jan 25, 2022 10:38 amI wonder if Japanese investors said the same thing in 1990.carminered2019 wrote: ↑Tue Jan 25, 2022 8:53 am The cool thing is 10 years from now I will not remember any of these except my portfolio will grow much bigger than today 1/25/22.
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Re: U.S. stocks in free fall
You can't compare QQQ (even with a trailing sell order) and BND as equivalent risk assets.HomerJ wrote: ↑Tue Jan 25, 2022 9:31 amSeems like a solid plan to me. I just hope it doesn't go up 5% and then crash 20% more afterwards...
The excessive risk was that QQQ could have dropped 15% immediately when you invested in it. You saw how fast it happened this time (or during Covid). And then you would have triggered your sell limit order, and been out 15%.
You can't compare QQQ (even with a trailing sell order) and BND as equivalent risk assets.
Lets not get too excited here. I never said they were equivalent. But the trailing stop does put QQQ in a much lower category of risk than just the plain ETF.
And another question has come up. Why do I need defined entry and exit points for what is now a cash holding? Has cash suddenly stopped being a legitimate investment?
Just sitting tight for today.
Answering a question is easy -- asking the right question is the hard part.
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Re: U.S. stocks in free fall
Sort of like the hedonic treadmill, people got the nice 2021 return and think “I’m worth that now”… so a loss feels painful.willthrill81 wrote: ↑Tue Jan 25, 2022 1:34 pmThe point was that despite the recent drop in stocks, they still outperformed bonds over that period.AlphaLess wrote: ↑Tue Jan 25, 2022 12:59 pmApologies: no disrespect was meant to you.willthrill81 wrote: ↑Tue Jan 25, 2022 12:03 pm1. Any starting period is arbitrary.AlphaLess wrote: ↑Tue Jan 25, 2022 12:02 pmIll-posed question, IMO.willthrill81 wrote: ↑Mon Jan 24, 2022 9:10 pm Since October 1st of 2021, which do you intuitively think performed better, U.S. total stocks or total bonds?
1. period chosen too arbitrary,
2. definition of "intuitive" too loose.
2. We don't define every word of every post.
With no disrespect intended, you missed the forest for the trees.
Can you please help me see the forest?
Many have become irrationally worried about the sudden drop in stocks and have forgotten about the huge runup they experienced last year.
Bulls make money, bears make money, pigs get slaughtered.
Re: U.S. stocks in free fall
Yes, but you go back one WEEK to 9/24/2021, and bonds out-performed stocks.willthrill81 wrote: ↑Tue Jan 25, 2022 1:34 pmThe point was that despite the recent drop in stocks, they still outperformed bonds over that period.AlphaLess wrote: ↑Tue Jan 25, 2022 12:59 pmApologies: no disrespect was meant to you.willthrill81 wrote: ↑Tue Jan 25, 2022 12:03 pm1. Any starting period is arbitrary.AlphaLess wrote: ↑Tue Jan 25, 2022 12:02 pmIll-posed question, IMO.willthrill81 wrote: ↑Mon Jan 24, 2022 9:10 pm Since October 1st of 2021, which do you intuitively think performed better, U.S. total stocks or total bonds?
1. period chosen too arbitrary,
2. definition of "intuitive" too loose.
2. We don't define every word of every post.
With no disrespect intended, you missed the forest for the trees.
Can you please help me see the forest?
Many have become irrationally worried about the sudden drop in stocks and have forgotten about the huge runup they experienced last year.
You can prove any point you want with different start dates.
I agree that people shouldn't be so worried about the sudden drop in stocks after 3 years of good gains. Helps if you rebalance. I locked in a decent chunk of that run-up (reduced my returns of course doing it - there's always a trade-off).
But I don't have to worry about giving that chunk back.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Re: U.S. stocks in free fall
100% agree.PeterParker wrote: ↑Tue Jan 25, 2022 1:35 pm Truth is --- a different asset mix has performed best over each decade.
Chasing the last hot thing or "overfitting" the past is simply trying to make a pattern out of unpredictable noise.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Re: U.S. stocks in free fall
My wife keeps me grounded...canadianbacon wrote: ↑Tue Jan 25, 2022 2:04 pm Sort of like the hedonic treadmill, people got the nice 2021 return and think “I’m worth that now”… so a loss feels painful.
Every time I told her "Hey we are worth this much more after this week!", she always said "Meh, it will drop back down again someday"
I still remember being amazed when SP500 went over 4000, and everything above that has seemed like pure gravy to me, so I think I rooted myself around the 4000 number. It has to go below that before I start feeling sad I think.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Re: U.S. stocks in free fall
From 1990 to 2000, "The Lost Decade", saw effectively a flat return for 10 years (since the following years stayed messy). It's not entirely the same thing, but 2000-2009 had a similar problem.marcopolo wrote: ↑Tue Jan 25, 2022 12:41 pmYou think Japan like scenario happened in US in the 2000's?!?sureshoe wrote: ↑Tue Jan 25, 2022 12:26 pmThere is no reason to believe the market won't do exactly what Japan did back in the 90s. The US market did it in the 2000s. We certainly could repeat that.carminered2019 wrote: ↑Tue Jan 25, 2022 12:00 pmWe are not in Japan and never invest based on the end of the world scenario!!goodenyou wrote: ↑Tue Jan 25, 2022 10:38 amI wonder if Japanese investors said the same thing in 1990.carminered2019 wrote: ↑Tue Jan 25, 2022 8:53 am The cool thing is 10 years from now I will not remember any of these except my portfolio will grow much bigger than today 1/25/22.
That would be news to me.
For the US, if you put $10k in the S&P on January 1, 2000, you would have lost about $1k by the end of 2009 - one decade later.
Re: U.S. stocks in free fall
I think the analogy loses steam and distracts from anything constructive.peskypesky wrote: ↑Tue Jan 25, 2022 1:10 pmI guess some people are ok with being hit in the face with a hammer.sureshoe wrote: ↑Tue Jan 25, 2022 10:54 amFirst - in the case of the stock market, I KNOW I'm going to get smacked in the face, so I wear a helmet (bonds/AA/etc.) But once I'm hit, I can't undo it. I think the response you're seeing is "so what". If "this isn't good", so what? In 2009, the response was to buy in more. In the Covid Crash, the response was to buy in more.peskypesky wrote: ↑Tue Jan 25, 2022 9:04 amYour reasoning is odd. Damage to portfolios and people's wealth is already happening. Right now. You don't need to predict anything to see that. It's already happening.Volando wrote: ↑Tue Jan 25, 2022 8:56 amEven if it was the worst start to the year in history, what predictive value does that hold? It seems to me these types of historical comparisons only get you so far. It could bode poorly for the future but it could not. Even if one grants that it means poor performance in the short term, it doesn't tell us anything about the intermediate-long term. It could be the worst start followed by the best end to the year, the worst start followed by the worst end to the year or something in between.
If someone comes up and smacks you in the face with a hammer, are you going to respond "so what? Just because you smacked me in the face with a hammer doesn't mean you're going to smack me again"?
This pullback is nothing. The market is only down 5-6% over the last 90 days. It's only down 6-7% in the last 30 days. The market is up 15%+ over the last year. We had ~30% drop over 30 days not too long ago. I think a lot of people have been spoiled by 20% annualized returns.
If the market losses are serious to you, then what's your recommendation that is actually actionable?
Re: U.S. stocks in free fall
I think our wives might be related.
Although mine always tells me that it’s difficult for her to get excited when the portfolio’s way up and says it’ll be back down in a day or two.
It seems you get to ride that emotional high a little longer than me.
Re: U.S. stocks in free fall
Well, that was a fun little pop. Back down we go!
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Re: U.S. stocks in free fall
I don't think a lot of people really understand the volatility of stocks - especially if you started your investing "career" in the last 10 years. When Alan Greenspan gave his irrational exuberance speech in 1996, 4 years from the top of the dot com bubble, had you moved your entire portfolio to short-term treasuries on his speech, you would have been up over an all-US stock portfolio at 7 years (2003) and at 13 years (2009).
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Re: U.S. stocks in free fall
And I don't think your original comments were constructive. And I think the analogy holds steam.sureshoe wrote: ↑Tue Jan 25, 2022 2:25 pmI think the analogy loses steam and distracts from anything constructive.peskypesky wrote: ↑Tue Jan 25, 2022 1:10 pmI guess some people are ok with being hit in the face with a hammer.sureshoe wrote: ↑Tue Jan 25, 2022 10:54 amFirst - in the case of the stock market, I KNOW I'm going to get smacked in the face, so I wear a helmet (bonds/AA/etc.) But once I'm hit, I can't undo it. I think the response you're seeing is "so what". If "this isn't good", so what? In 2009, the response was to buy in more. In the Covid Crash, the response was to buy in more.peskypesky wrote: ↑Tue Jan 25, 2022 9:04 amYour reasoning is odd. Damage to portfolios and people's wealth is already happening. Right now. You don't need to predict anything to see that. It's already happening.Volando wrote: ↑Tue Jan 25, 2022 8:56 am
Even if it was the worst start to the year in history, what predictive value does that hold? It seems to me these types of historical comparisons only get you so far. It could bode poorly for the future but it could not. Even if one grants that it means poor performance in the short term, it doesn't tell us anything about the intermediate-long term. It could be the worst start followed by the best end to the year, the worst start followed by the worst end to the year or something in between.
If someone comes up and smacks you in the face with a hammer, are you going to respond "so what? Just because you smacked me in the face with a hammer doesn't mean you're going to smack me again"?
This pullback is nothing. The market is only down 5-6% over the last 90 days. It's only down 6-7% in the last 30 days. The market is up 15%+ over the last year. We had ~30% drop over 30 days not too long ago. I think a lot of people have been spoiled by 20% annualized returns.
If the market losses are serious to you, then what's your recommendation that is actually actionable?
Re: U.S. stocks in free fall
What’s most amazing to me is thinking of getting 5.16% CAGR from short-term treasuries for 13 yearsburritoLover wrote: ↑Tue Jan 25, 2022 2:26 pm I don't think a lot of people really understand the volatility of stocks - especially if you started your investing "career" in the last 10 years. When Alan Greenspan gave his irrational exuberance speech in 1996, 4 years from the top of the dot com bubble, had you moved your entire portfolio to short-term treasuries on his speech, you would have been up over an all-US stock portfolio at 7 years (2003) and at 13 years (2009).
Re: U.S. stocks in free fall
50% of both smoothed out that line nicely, and you still did well.burritoLover wrote: ↑Tue Jan 25, 2022 2:26 pm I don't think a lot of people really understand the volatility of stocks - especially if you started your investing "career" in the last 10 years. When Alan Greenspan gave his irrational exuberance speech in 1996, 4 years from the top of the dot com bubble, had you moved your entire portfolio to short-term treasuries on his speech, you would have been up over an all-US stock portfolio at 7 years (2003) and at 13 years (2009).
50/50 was pretty good during that time period.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Re: U.S. stocks in free fall
Maybe combining both would make sense for the current situation: trying to figure out this market is like hitting steam with a hammer.peskypesky wrote: ↑Tue Jan 25, 2022 2:31 pmAnd I don't think your original comments were constructive. And I think the analogy holds steam.sureshoe wrote: ↑Tue Jan 25, 2022 2:25 pmI think the analogy loses steam and distracts from anything constructive.peskypesky wrote: ↑Tue Jan 25, 2022 1:10 pmI guess some people are ok with being hit in the face with a hammer.sureshoe wrote: ↑Tue Jan 25, 2022 10:54 amFirst - in the case of the stock market, I KNOW I'm going to get smacked in the face, so I wear a helmet (bonds/AA/etc.) But once I'm hit, I can't undo it. I think the response you're seeing is "so what". If "this isn't good", so what? In 2009, the response was to buy in more. In the Covid Crash, the response was to buy in more.peskypesky wrote: ↑Tue Jan 25, 2022 9:04 am
Your reasoning is odd. Damage to portfolios and people's wealth is already happening. Right now. You don't need to predict anything to see that. It's already happening.
If someone comes up and smacks you in the face with a hammer, are you going to respond "so what? Just because you smacked me in the face with a hammer doesn't mean you're going to smack me again"?
This pullback is nothing. The market is only down 5-6% over the last 90 days. It's only down 6-7% in the last 30 days. The market is up 15%+ over the last year. We had ~30% drop over 30 days not too long ago. I think a lot of people have been spoiled by 20% annualized returns.
If the market losses are serious to you, then what's your recommendation that is actually actionable?
(Steam is an invisible gas for those that may not be aware, it’s easily confused with water vapor in day to day conversation)
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Re: U.S. stocks in free fall
I love this.Silverado wrote: ↑Tue Jan 25, 2022 2:41 pm Maybe combining both would make sense for the current situation: trying to figure out this market is like hitting steam with a hammer.
(Steam is an invisible gas for those that may not be aware, it’s easily confused with water vapor in day to day conversation)
Re: U.S. stocks in free fall
Here's my problem with all this: I just retired and need to move my 401K (25-year employee, so it's a bit of money) to TD Ameritrade where my IRAs are kept.
After this big move down, what are the chances the DOW shoots back up to previous levels in a few days while my money is in limbo as it gets moved?
I don't mind staying the course. What I don't want is to take these losses now and miss out on the (potential) rocket ship back up while I'm moving the money. Feh.
After this big move down, what are the chances the DOW shoots back up to previous levels in a few days while my money is in limbo as it gets moved?
I don't mind staying the course. What I don't want is to take these losses now and miss out on the (potential) rocket ship back up while I'm moving the money. Feh.
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Re: U.S. stocks in free fall
Nobody knows. Too many binary events coming up, there's one tomorrow at 2 pm.Atilla wrote: ↑Tue Jan 25, 2022 2:44 pm Here's my problem with all this: I just retired and need to move my 401K (25-year employee, so it's a bit of money) to TD Ameritrade where my IRAs are kept.
After this big move down, what are the chances the DOW shoots back up to previous levels in a few days while my money is in limbo as it gets moved?
I don't mind staying the course. What I don't want is to take these losses now and miss out on the (potential) rocket ship back up while I'm moving the money. Feh.
I would not expect rocket ship back up right here but that's just me.
Last edited by Marseille07 on Tue Jan 25, 2022 2:50 pm, edited 1 time in total.
Re: U.S. stocks in free fall
Are your investments still in the employer’s 401K plan? If so, aren’t you able to keep it invested for a certain amount of time (subject to a maximum) and start the rollover once the market recovers? Or is it mandated that you perform the rollover immediately upon your retirement?Atilla wrote: ↑Tue Jan 25, 2022 2:44 pm Here's my problem with all this: I just retired and need to move my 401K (25-year employee, so it's a bit of money) to TD Ameritrade where my IRAs are kept.
After this big move down, what are the chances the DOW shoots back up to previous levels in a few days while my money is in limbo as it gets moved?
I don't mind staying the course. What I don't want is to take these losses now and miss out on the (potential) rocket ship back up while I'm moving the money. Feh.
Re: U.S. stocks in free fall
That's a tough one. I went through the same thing last year while the market was relatively calm and ended up 'losing' a few thousand during the transition. It was a little stressful for a few days but it was pretty minor in the big picture. If I had to do it right now I think I would go on a vacation and not look at the market.Atilla wrote: ↑Tue Jan 25, 2022 2:44 pm Here's my problem with all this: I just retired and need to move my 401K (25-year employee, so it's a bit of money) to TD Ameritrade where my IRAs are kept.
After this big move down, what are the chances the DOW shoots back up to previous levels in a few days while my money is in limbo as it gets moved?
I don't mind staying the course. What I don't want is to take these losses now and miss out on the (potential) rocket ship back up while I'm moving the money. Feh.
The fool, with all his other faults, has this also - he is always getting ready to live. - Seneca Epistles < c. 65AD
Re: U.S. stocks in free fall
https://postimg.cc/zbWyCg3HGufomel wrote: ↑Tue Jan 25, 2022 2:35 pmWhat’s most amazing to me is thinking of getting 5.16% CAGR from short-term treasuries for 13 yearsburritoLover wrote: ↑Tue Jan 25, 2022 2:26 pm I don't think a lot of people really understand the volatility of stocks - especially if you started your investing "career" in the last 10 years. When Alan Greenspan gave his irrational exuberance speech in 1996, 4 years from the top of the dot com bubble, had you moved your entire portfolio to short-term treasuries on his speech, you would have been up over an all-US stock portfolio at 7 years (2003) and at 13 years (2009).
I don't carry a signature because people are easily offended.
- willthrill81
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Re: U.S. stocks in free fall
Exactly. People quickly anchored to their portfolio's new balance, making the current losses feel worse. Had the market been literally flat for the last 4 months, they wouldn't feel nearly as badly, even though they would be in exactly the same position.canadianbacon wrote: ↑Tue Jan 25, 2022 2:04 pmSort of like the hedonic treadmill, people got the nice 2021 return and think “I’m worth that now”… so a loss feels painful.willthrill81 wrote: ↑Tue Jan 25, 2022 1:34 pmThe point was that despite the recent drop in stocks, they still outperformed bonds over that period.AlphaLess wrote: ↑Tue Jan 25, 2022 12:59 pmApologies: no disrespect was meant to you.willthrill81 wrote: ↑Tue Jan 25, 2022 12:03 pm1. Any starting period is arbitrary.
2. We don't define every word of every post.
With no disrespect intended, you missed the forest for the trees.
Can you please help me see the forest?
Many have become irrationally worried about the sudden drop in stocks and have forgotten about the huge runup they experienced last year.
The Sensible Steward
Re: U.S. stocks in free fall
And now Microsoft is off 5% after hours after posting an excellent quarter. It seems everyone is going to be punished in this market for the time being.
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Re: U.S. stocks in free fall
Sometimes the AH reaction is knee-jerk and can reverse by the morning. Not saying this one will or won't, but I've seen them happen.
It does feel like the investors are looking for reasons to sell, though.
Re: U.S. stocks in free fall
"Has cash suddenly stopped being a legitimate investment?
For me it stopped being an investment when CD rates got down to less than 1%, and banks around here were paying 0.05%, and cash was quickly losing ground to inflation (based on the things we regularly buy.) Cash, like my box of childhood comics and baseball cards, is worth something, but it's not much of an investment these days.
That doesn't mean I don't have substantial cash in my piggy bank, three checking accounts, one money market account, and another $250k in CDs. It just means I'm retired and like having some cash on hand in addition to my serious investments.
Meanwhile, I will shortly be paying for 2.5 composite decks and 2 bathroom tear outs. It's okay though, my wife has cash from an inheritance she doesn't want to invest (and will probably end up giving to her son, wife and grandkids.)
Cash is good. I don't want to have to sell shares/units when they're down if the market drops by half.
Her 3rd year of retirement and my 10th. She's five years younger and we've been married since the end of '18.
For me it stopped being an investment when CD rates got down to less than 1%, and banks around here were paying 0.05%, and cash was quickly losing ground to inflation (based on the things we regularly buy.) Cash, like my box of childhood comics and baseball cards, is worth something, but it's not much of an investment these days.
That doesn't mean I don't have substantial cash in my piggy bank, three checking accounts, one money market account, and another $250k in CDs. It just means I'm retired and like having some cash on hand in addition to my serious investments.
Meanwhile, I will shortly be paying for 2.5 composite decks and 2 bathroom tear outs. It's okay though, my wife has cash from an inheritance she doesn't want to invest (and will probably end up giving to her son, wife and grandkids.)
Cash is good. I don't want to have to sell shares/units when they're down if the market drops by half.
Her 3rd year of retirement and my 10th. She's five years younger and we've been married since the end of '18.
Re: U.S. stocks in free fall
Ok, fine, my comments weren't constructive.peskypesky wrote: ↑Tue Jan 25, 2022 2:31 pmAnd I don't think your original comments were constructive. And I think the analogy holds steam.sureshoe wrote: ↑Tue Jan 25, 2022 2:25 pmI think the analogy loses steam and distracts from anything constructive.peskypesky wrote: ↑Tue Jan 25, 2022 1:10 pmI guess some people are ok with being hit in the face with a hammer.sureshoe wrote: ↑Tue Jan 25, 2022 10:54 amFirst - in the case of the stock market, I KNOW I'm going to get smacked in the face, so I wear a helmet (bonds/AA/etc.) But once I'm hit, I can't undo it. I think the response you're seeing is "so what". If "this isn't good", so what? In 2009, the response was to buy in more. In the Covid Crash, the response was to buy in more.peskypesky wrote: ↑Tue Jan 25, 2022 9:04 am
Your reasoning is odd. Damage to portfolios and people's wealth is already happening. Right now. You don't need to predict anything to see that. It's already happening.
If someone comes up and smacks you in the face with a hammer, are you going to respond "so what? Just because you smacked me in the face with a hammer doesn't mean you're going to smack me again"?
This pullback is nothing. The market is only down 5-6% over the last 90 days. It's only down 6-7% in the last 30 days. The market is up 15%+ over the last year. We had ~30% drop over 30 days not too long ago. I think a lot of people have been spoiled by 20% annualized returns.
If the market losses are serious to you, then what's your recommendation that is actually actionable?
What's your recommendation that is actually actionable?
Re: U.S. stocks in free fall
1. Why do you think it was an excellent quarter?
2. Why do you think it is being punished. Look, asset price discovery is just like business. There is no such thing as punish and reward.
I don't carry a signature because people are easily offended.
Re: U.S. stocks in free fall
This is honestly silly at this point.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
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Re: U.S. stocks in free fall
I removed a contentious post. The discussion is getting a bit heated.
Please remove the emotion from your post and state your concerns in a civil, factual manner.
Please remove the emotion from your post and state your concerns in a civil, factual manner.
Re: U.S. stocks in free fall
why is it silly, could Microsoft be over priced even considering an excellent quarter? May be people are hoping for even better result and bid it up in advance.
Re: U.S. stocks in free fall
Re: U.S. stocks in free fall
Interesting . Good for you and your wife.HomerJ wrote: ↑Tue Jan 25, 2022 2:13 pmMy wife keeps me grounded...canadianbacon wrote: ↑Tue Jan 25, 2022 2:04 pm Sort of like the hedonic treadmill, people got the nice 2021 return and think “I’m worth that now”… so a loss feels painful.
I told my spouse at the bottom of the Mar 2020 that we were down more than 7 figure.
Their response was like:
"OMG, that is a lot of money".
"Please don't tell me, I can't handle it".
And comments like that.
For me, it was just about doing the correct operational tasks:
- calc asset allocation (spread over several accounts),
- TLH without screwing up,
- buy / sell.
It does not help that my own job has to do with trading too, as it can be hard to find time at 3:45 pm to do these things, especially on days when VIX is at 70.
So doing a bit of homework at 7 pm, and then deciding what needs to be done that night is helpful.
I also tend to discuss decisions with a friend or two who are also bogle-heads just to make sure I am not screwing up.
There were some good opportunities in Mar of 2020, when Mutual Fund vs ETF NAVs were way off.
I don't carry a signature because people are easily offended.
- burritoLover
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Re: U.S. stocks in free fall
Please, please, please...more market carnage so I can buy cheaper.
Re: U.S. stocks in free fall
Financial also higher today.
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Re: U.S. stocks in free fall
Do you need to move it all at once? Maybe do a quarter or a third at a time to minimize assets out of the market.Atilla wrote: ↑Tue Jan 25, 2022 2:44 pm Here's my problem with all this: I just retired and need to move my 401K (25-year employee, so it's a bit of money) to TD Ameritrade where my IRAs are kept.
After this big move down, what are the chances the DOW shoots back up to previous levels in a few days while my money is in limbo as it gets moved?
I don't mind staying the course. What I don't want is to take these losses now and miss out on the (potential) rocket ship back up while I'm moving the money. Feh.
Re: U.S. stocks in free fall
MSFT beats on earnings. Stock is down -5% after hours. Buckle up
All posts are my own opinions and are not financial advice.
Re: U.S. stocks in free fall
The market has been going up on any, and all, bad news for over a year. That was silly.
All posts are my own opinions and are not financial advice.