U.S. stocks in free fall

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
carminered2019
Posts: 1939
Joined: Fri Jun 21, 2019 7:06 pm

Re: U.S. stocks in free fall

Post by carminered2019 »

just bought another 10K of MSFT in IRA.
User avatar
vanbogle59
Posts: 1314
Joined: Wed Mar 10, 2021 7:30 pm

Re: U.S. stocks in free fall

Post by vanbogle59 »

Tamalak wrote: Wed Jan 26, 2022 2:18 pm People are saying the market is reacting crazily to a mild and expected intent to raise rates.

But if I sell Joe a potato today for $1, and sell another one to him tomorrow for $0.99, is that really crazy? Newsworthy?

It only has a crazy effect for people who have millions of dollars' worth of potatoes and do a daily check of their theoretical net worth if they sold every single potato that day. Don't say the market is hysterical, rather, perhaps what we are doing with our own resources is hysterical.
To be fair, in about the time it takes to cook one, the VTI potato went from 223 to 216.
:beer
vv19
Posts: 1159
Joined: Thu Aug 23, 2012 8:56 am

Re: U.S. stocks in free fall

Post by vv19 »

carminered2019 wrote: Wed Jan 26, 2022 2:26 pm just bought another 10K of MSFT in IRA.
Doesn't it seem expensive to you? Can't argue with its moat, though.
Semantics
Posts: 352
Joined: Tue Mar 10, 2020 1:42 pm

Re: U.S. stocks in free fall

Post by Semantics »

peskypesky wrote: Wed Jan 26, 2022 1:56 pm
Beensabu wrote: Wed Jan 26, 2022 11:48 am
AnalogKid22 wrote: Wed Jan 26, 2022 9:06 am If we decide to take on more risk than we can handle, we need to be prepared for the outcomes like we've seen this month. Using terms like "bloodbath" to refer to very minor (normal) corrections should be a red flag that one's AA might be too aggressive.
Yes. Anybody that has been freaking out lately has exceeded their risk tolerance and/or concentrated their equity position.
Or maybe they just don't like seeing things like the NASDAQ losing a whole year of returns BEFORE the Fed has even started to act.
Well, you don't wait for the flames to singe you before you head for the exit. IMHO think the fact there was such a run up for months even when everyone knew what was coming is a sign the bull market will continue - this is just a correction and rotation out of growth.
User avatar
peskypesky
Posts: 1023
Joined: Fri Mar 08, 2013 7:56 pm

Re: U.S. stocks in free fall

Post by peskypesky »

carminered2019 wrote: Wed Jan 26, 2022 2:26 pm just bought another 10K of MSFT in IRA.
Best of luck!! Hope it works out for you. My stock-picking days are behind me. I'm sticking with broad indexes.
INLAFF
Posts: 37
Joined: Fri Dec 04, 2020 4:50 pm

Re: U.S. stocks in free fall

Post by INLAFF »

gas_balloon wrote: Tue Jan 25, 2022 9:19 pm Here is my prediction for tomorrow.

Market will start lower until the FOMC meeting. After that it'll reverse direction since I don't think there will be anything of surprise in that meeting. S&P500 will end in positive territory end of day. Emerging markets will end negative.

Disclaimer: I'm very poor at predictions, so remove your blinders, wear your seatbelts & helmets. There may or may not be life vests🤣
There are still 28 minutes left in the trading day, but I'm going to go out on a limb and say this prediction will not turn out to have been accurate.
carminered2019
Posts: 1939
Joined: Fri Jun 21, 2019 7:06 pm

Re: U.S. stocks in free fall

Post by carminered2019 »

peskypesky wrote: Wed Jan 26, 2022 2:31 pm
carminered2019 wrote: Wed Jan 26, 2022 2:26 pm just bought another 10K of MSFT in IRA.
Best of luck!! Hope it works out for you. My stock-picking days are behind me. I'm sticking with broad indexes.
it's a portion of my 10% for individual stocks, 3 funds are the bulk of my portfolio and I got a chunk in FSKAX last couple days.
Last edited by carminered2019 on Wed Jan 26, 2022 2:54 pm, edited 1 time in total.
User avatar
peskypesky
Posts: 1023
Joined: Fri Mar 08, 2013 7:56 pm

Re: U.S. stocks in free fall

Post by peskypesky »

carminered2019 wrote: Wed Jan 26, 2022 2:43 pm
peskypesky wrote: Wed Jan 26, 2022 2:31 pm
carminered2019 wrote: Wed Jan 26, 2022 2:26 pm just bought another 10K of MSFT in IRA.
Best of luck!! Hope it works out for you. My stock-picking days are behind me. I'm sticking with broad indexes.
it's a portion of my 10% for individual stocks, 3 funds are the bulk of my portfolio and I got a chunk in FSKAX last couple days.
got it. smart.
pasadena
Posts: 2337
Joined: Sat Jul 02, 2016 1:23 am
Location: PNW

Re: U.S. stocks in free fall

Post by pasadena »

Today's graph looks like the mirror reflection of Monday and Tuesday's.
User avatar
vanbogle59
Posts: 1314
Joined: Wed Mar 10, 2021 7:30 pm

Re: U.S. stocks in free fall

Post by vanbogle59 »

INLAFF wrote: Wed Jan 26, 2022 2:32 pm
gas_balloon wrote: Tue Jan 25, 2022 9:19 pm Here is my prediction for tomorrow.

Market will start lower until the FOMC meeting. After that it'll reverse direction since I don't think there will be anything of surprise in that meeting. S&P500 will end in positive territory end of day. Emerging markets will end negative.

Disclaimer: I'm very poor at predictions, so remove your blinders, wear your seatbelts & helmets. There may or may not be life vests🤣
There are still 28 minutes left in the trading day, but I'm going to go out on a limb and say this prediction will not turn out to have been accurate.
LOL
Only now am I willing to concede. You win.
We had plenty of soaring after 3:30.
Oh, sorry. Wrong thread. :oops:
User avatar
ndomorph
Posts: 45
Joined: Thu Nov 04, 2021 10:56 am

Re: U.S. stocks in free fall

Post by ndomorph »

burritoLover wrote: Wed Jan 26, 2022 2:10 pm
ndomorph wrote: Wed Jan 26, 2022 1:59 pm
burritoLover wrote: Wed Jan 26, 2022 10:02 am I feel like if you have to force yourself not to look at your account or market news, your equity allocation is still too high.
Maybe. And maybe practicing discipline under discomfort is a means to outgrowing cognitive and emotional biases.
Closing your eyes to the truth isn't what I'd call discipline.
If I make this AA:discomfort ratio actionable during market moves, my ISP might say something like "Stick to my AA until the news shrills a hole in my eardrums and today's portfolio value is burned into my retina, then adjust my AA and sell!" :( If my AA says "Stick to AA!" then I'll do what I'm doing now, which is working on my self-discipline, with whatever tools keep me on my purpose.
Similarly, I don't keep chocolate cakes on my counter. :wink:
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

Re: U.S. stocks in free fall

Post by willthrill81 »

Folks, stocks were down -32% in 2020. We're not even a third of the way to that point so far. It's FAR too early to declare the end of anything (except logic it seems).
The Sensible Steward
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: U.S. stocks in free fall

Post by Nathan Drake »

I’ll start buying the US TSM dip whenever either two conditions occur:

1) CAPE10 gets back to 20 or lower
2) Value spreads narrow significantly
3) exUS has much higher valuations

For any of these to occur, US TSM would need significant valuation contraction or underperformance

But I’m still not seeing a screaming bargain for US TSM over the alternatives right now
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
User avatar
LadyGeek
Site Admin
Posts: 95686
Joined: Sat Dec 20, 2008 4:34 pm
Location: Philadelphia
Contact:

Re: U.S. stocks in free fall

Post by LadyGeek »

I removed a contentious post and a related interchange regarding forum threads (home affordability). The discussion was derailed.

Please stay on-topic.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
EnjoyIt
Posts: 8272
Joined: Sun Dec 29, 2013 7:06 pm

Re: U.S. stocks in free fall

Post by EnjoyIt »

willthrill81 wrote: Wed Jan 26, 2022 3:27 pm Folks, stocks were down -32% in 2020. We're not even a third of the way to that point so far. It's FAR too early to declare the end of anything (except logic it seems).
You have been here for 5 years of today. Happy anniversary.

In those 5 years how much hand wringing have you seen with every market movement.

“Ohh no, the market is crashing.”

“Ohh no, the market is going up so fast. It’s going to crash.“

That’s what is so nice about a good IPS (investment policy statement) and a boglehead style buy and hold portfolio. You do nothing until your IPS says to do something. My IPS is far from telling me to do anything right now. So to pass the time I hang out here.
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
User avatar
vanbogle59
Posts: 1314
Joined: Wed Mar 10, 2021 7:30 pm

Re: U.S. stocks in free fall

Post by vanbogle59 »

deleted
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

Re: U.S. stocks in free fall

Post by willthrill81 »

EnjoyIt wrote: Wed Jan 26, 2022 3:51 pm
willthrill81 wrote: Wed Jan 26, 2022 3:27 pm Folks, stocks were down -32% in 2020. We're not even a third of the way to that point so far. It's FAR too early to declare the end of anything (except logic it seems).
You have been here for 5 years of today. Happy anniversary.

In those 5 years how much hand wringing have you seen with every market movement.

“Ohh no, the market is crashing.”

“Ohh no, the market is going up so fast. It’s going to crash.“

That’s what is so nice about a good IPS (investment policy statement) and a boglehead style buy and hold portfolio. You do nothing until your IPS says to do something. My IPS is far from telling me to do anything right now. So to pass the time I hang out here.
Thanks!

It's true that many like to wring their hands about literally everything, just as you've aptly pointed out.

I just wish that those who've been to the rodeo multiple times would stop acting like Chicken Little every time they see a little red.
The Sensible Steward
User avatar
gmaynardkrebs
Posts: 2339
Joined: Sun Feb 10, 2008 10:48 am

Re: U.S. stocks in free fall

Post by gmaynardkrebs »

EnjoyIt wrote: Wed Jan 26, 2022 3:51 pm
willthrill81 wrote: Wed Jan 26, 2022 3:27 pm Folks, stocks were down -32% in 2020. We're not even a third of the way to that point so far. It's FAR too early to declare the end of anything (except logic it seems).
You have been here for 5 years of today. Happy anniversary.

In those 5 years how much hand wringing have you seen with every market movement.

“Ohh no, the market is crashing.”

“Ohh no, the market is going up so fast. It’s going to crash.“

That’s what is so nice about a good IPS (investment policy statement) and a boglehead style buy and hold portfolio. You do nothing until your IPS says to do something. My IPS is far from telling me to do anything right now. So to pass the time I hang out here.
What is your IPS?
Dottie57
Posts: 12379
Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: U.S. stocks in free fall

Post by Dottie57 »

pasadena wrote: Wed Jan 26, 2022 2:25 pm
pasadena wrote: Wed Jan 26, 2022 10:08 am
pasadena wrote: Tue Jan 25, 2022 3:54 pm
burritoLover wrote: Tue Jan 25, 2022 3:40 pm Please, please, please...more market carnage so I can buy cheaper.
I liquidated my VTI position in Roth today. I will buy FSKAX tomorrow with the proceeds, and also have a nice chunk of TLH to do in taxable, so I'm kinda hoping for another red day tomorrow.
And of course it's up 1%+ today :oops:
Or not :mrgreen:
Small arg. It was way up at 1:00pm central. Now it is a loss.
carminered2019
Posts: 1939
Joined: Fri Jun 21, 2019 7:06 pm

Re: U.S. stocks in free fall

Post by carminered2019 »

IPS or no IPS…why would you not starting to buy at -10% ?
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: U.S. stocks in free fall

Post by Nathan Drake »

carminered2019 wrote: Wed Jan 26, 2022 4:26 pm IPS or no IPS…why would you not starting to buy at -10% ?
Because valuations are still much higher than alternatives
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
getthatmarshmallow
Posts: 1171
Joined: Mon Dec 04, 2017 8:43 am

Re: U.S. stocks in free fall

Post by getthatmarshmallow »

vanbogle59 wrote: Wed Jan 26, 2022 2:27 pm
Tamalak wrote: Wed Jan 26, 2022 2:18 pm People are saying the market is reacting crazily to a mild and expected intent to raise rates.

But if I sell Joe a potato today for $1, and sell another one to him tomorrow for $0.99, is that really crazy? Newsworthy?

It only has a crazy effect for people who have millions of dollars' worth of potatoes and do a daily check of their theoretical net worth if they sold every single potato that day. Don't say the market is hysterical, rather, perhaps what we are doing with our own resources is hysterical.
To be fair, in about the time it takes to cook one, the VTI potato went from 223 to 216.
:beer
Lemme know when it's french fries. (I don't think my solution of having boring faculty meetings during market fluctuations generalizes, but reading about the excitement afterwards is kinda fun.)
User avatar
burritoLover
Posts: 4097
Joined: Sun Jul 05, 2020 12:13 pm

Re: U.S. stocks in free fall

Post by burritoLover »

ndomorph wrote: Wed Jan 26, 2022 3:27 pm
burritoLover wrote: Wed Jan 26, 2022 2:10 pm
ndomorph wrote: Wed Jan 26, 2022 1:59 pm
burritoLover wrote: Wed Jan 26, 2022 10:02 am I feel like if you have to force yourself not to look at your account or market news, your equity allocation is still too high.
Maybe. And maybe practicing discipline under discomfort is a means to outgrowing cognitive and emotional biases.
Closing your eyes to the truth isn't what I'd call discipline.
If I make this AA:discomfort ratio actionable during market moves, my ISP might say something like "Stick to my AA until the news shrills a hole in my eardrums and today's portfolio value is burned into my retina, then adjust my AA and sell!" :( If my AA says "Stick to AA!" then I'll do what I'm doing now, which is working on my self-discipline, with whatever tools keep me on my purpose.
Similarly, I don't keep chocolate cakes on my counter. :wink:
Good analogy!
User avatar
peskypesky
Posts: 1023
Joined: Fri Mar 08, 2013 7:56 pm

Re: U.S. stocks in free fall

Post by peskypesky »

willthrill81 wrote: Wed Jan 26, 2022 3:27 pm Folks, stocks were down -32% in 2020. We're not even a third of the way to that point so far. It's FAR too early to declare the end of anything (except logic it seems).
Yes, but the reason the markets recovered quickly in 2020 was that the Fed and the government pumped a TON of money into the system. They no longer have that arrow in their quiver.
drk
Posts: 3943
Joined: Mon Jul 24, 2017 10:33 pm

Re: U.S. stocks in free fall

Post by drk »

ndomorph wrote: Wed Jan 26, 2022 1:59 pm Maybe. And maybe practicing discipline under discomfort is a means to outgrowing cognitive and emotional biases.
Right, some people need to close their eyes when getting shots or having blood drawn, too. The discipline is putting up with the discomfort anyway.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
H-Town
Posts: 5905
Joined: Sun Feb 26, 2017 1:08 pm

Re: U.S. stocks in free fall

Post by H-Town »

willthrill81 wrote: Wed Jan 26, 2022 3:27 pm Folks, stocks were down -32% in 2020. We're not even a third of the way to that point so far. It's FAR too early to declare the end of anything (except logic it seems).
I was hoping folks in this free fall thread rooting for an actual free fall market.

Bear market makes fortune for those who stay the course. The bigger the drop, the richer we will all become.

But it seems like many here don't like any drop at all. You can't have a a cake and eat it too!
Time is the ultimate currency.
pasadena
Posts: 2337
Joined: Sat Jul 02, 2016 1:23 am
Location: PNW

Re: U.S. stocks in free fall

Post by pasadena »

carminered2019 wrote: Wed Jan 26, 2022 4:26 pm IPS or no IPS…why would you not starting to buy at -10% ?
Because all of my spare money is already invested?

And if I had such a rule, it would be in my IPS :)

Mine does ssay: "No market timing: do not sell when markets are down unless absolutely necessary. Instead, keep funding the investments with new money."
pasadena
Posts: 2337
Joined: Sat Jul 02, 2016 1:23 am
Location: PNW

Re: U.S. stocks in free fall

Post by pasadena »

H-Town wrote: Wed Jan 26, 2022 5:31 pm
willthrill81 wrote: Wed Jan 26, 2022 3:27 pm Folks, stocks were down -32% in 2020. We're not even a third of the way to that point so far. It's FAR too early to declare the end of anything (except logic it seems).
I was hoping folks in this free fall thread rooting for an actual free fall market.

Bear market makes fortune for those who stay the course. The bigger the drop, the richer we will all become.

But it seems like many here don't like any drop at all. You can't have a a cake and eat it too!
This thread isn't meant to be a fan club for falling stocks, but to discuss the current situation when it does happen.
lostdog
Posts: 5368
Joined: Thu Feb 04, 2016 1:15 pm

Re: U.S. stocks in free fall

Post by lostdog »

My 5% rebalancing band isn't even close. Just chilling.

For those that say they're going to "buy the dip", do you really have dry powder waiting? Do you worry about trying to catch a falling knife?
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: U.S. stocks in free fall

Post by Nathan Drake »

lostdog wrote: Wed Jan 26, 2022 5:37 pm My 5% rebalancing band isn't even close. Just chilling.

For those that say they're going to "buy the dip", do you really have dry powder waiting? Do you worry about trying to catch a falling knife?
I just mean with new contributions. I have five funds in my portfolio I allocate to
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Californiastate
Posts: 1516
Joined: Thu Feb 04, 2021 10:52 am

Re: U.S. stocks in free fall

Post by Californiastate »

pasadena wrote: Wed Jan 26, 2022 5:36 pm
H-Town wrote: Wed Jan 26, 2022 5:31 pm
willthrill81 wrote: Wed Jan 26, 2022 3:27 pm Folks, stocks were down -32% in 2020. We're not even a third of the way to that point so far. It's FAR too early to declare the end of anything (except logic it seems).
I was hoping folks in this free fall thread rooting for an actual free fall market.

Bear market makes fortune for those who stay the course. The bigger the drop, the richer we will all become.

But it seems like many here don't like any drop at all. You can't have a a cake and eat it too!
This thread isn't meant to be a fan club for falling stocks, but to discuss the current situation when it does happen.
My bad . I didn’t read the prospectus.
rockstar
Posts: 6326
Joined: Mon Feb 03, 2020 5:51 pm

Re: U.S. stocks in free fall

Post by rockstar »

Powell was super hawkish at the Q&A citing the low unemployment rate and basically saying that we're at full employment. He seemed to have no concern with the impact on the market of monetary policy changes. But he did mention a ceiling based on the amount of debt they had on the balance sheet for rate increases.

The ten year did jump past 1.85%, so my short term forecast is lower stock prices. If I'm wrong, I'll end up buying back in at more than I sold. And then I can humbly admit I made a mistake selling.

I wonder how low they go.
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: U.S. stocks in free fall

Post by Nathan Drake »

:twisted:
rockstar wrote: Wed Jan 26, 2022 5:46 pm Powell was super hawkish at the Q&A citing the low unemployment rate and basically saying that we're at full employment. He seemed to have no concern with the impact on the market of monetary policy changes. But he did mention a ceiling based on the amount of debt they had on the balance sheet for rate increases.

The ten year did jump past 1.85%, so my short term forecast is lower stock prices. If I'm wrong, I'll end up buying back in at more than I sold. And then I can humbly admit I made a mistake selling.

I wonder how low they go.
The market isn’t one of the Fed’s mandates
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
H-Town
Posts: 5905
Joined: Sun Feb 26, 2017 1:08 pm

Re: U.S. stocks in free fall

Post by H-Town »

lostdog wrote: Wed Jan 26, 2022 5:37 pm My 5% rebalancing band isn't even close. Just chilling.

For those that say they're going to "buy the dip", do you really have dry powder waiting? Do you worry about trying to catch a falling knife?
Sure we can be resourceful and find dry powder. There are multiple ways:

1) shifting bonds to buy equity
2) squeeze monthly cash flows to buy equity
3) raid the EF fund/cash reserve to buy equity

Cash is fungible...
Time is the ultimate currency.
pasadena
Posts: 2337
Joined: Sat Jul 02, 2016 1:23 am
Location: PNW

Re: U.S. stocks in free fall

Post by pasadena »

Californiastate wrote: Wed Jan 26, 2022 5:41 pm
pasadena wrote: Wed Jan 26, 2022 5:36 pm
H-Town wrote: Wed Jan 26, 2022 5:31 pm
willthrill81 wrote: Wed Jan 26, 2022 3:27 pm Folks, stocks were down -32% in 2020. We're not even a third of the way to that point so far. It's FAR too early to declare the end of anything (except logic it seems).
I was hoping folks in this free fall thread rooting for an actual free fall market.

Bear market makes fortune for those who stay the course. The bigger the drop, the richer we will all become.

But it seems like many here don't like any drop at all. You can't have a a cake and eat it too!
This thread isn't meant to be a fan club for falling stocks, but to discuss the current situation when it does happen.
My bad . I didn’t read the prospectus.
Ah! That didn't come out as I meant it to. Apologies :sharebeer
H-Town
Posts: 5905
Joined: Sun Feb 26, 2017 1:08 pm

Re: U.S. stocks in free fall

Post by H-Town »

rockstar wrote: Wed Jan 26, 2022 5:46 pm Powell was super hawkish at the Q&A citing the low unemployment rate and basically saying that we're at full employment. He seemed to have no concern with the impact on the market of monetary policy changes. But he did mention a ceiling based on the amount of debt they had on the balance sheet for rate increases.

The ten year did jump past 1.85%, so my short term forecast is lower stock prices. If I'm wrong, I'll end up buying back in at more than I sold. And then I can humbly admit I made a mistake selling.

I wonder how low they go.
not his job to focus solely on the market. the economy is not the market. we tend to focus solely on the market on this forum
Time is the ultimate currency.
carminered2019
Posts: 1939
Joined: Fri Jun 21, 2019 7:06 pm

Re: U.S. stocks in free fall

Post by carminered2019 »

lostdog wrote: Wed Jan 26, 2022 5:37 pm My 5% rebalancing band isn't even close. Just chilling.

For those that say they're going to "buy the dip", do you really have dry powder waiting? Do you worry about trying to catch a falling knife?
Isn't rebalancing the same as "buying the dip" at some point and could potentially be catching a falling knife ?
Silk McCue
Posts: 8951
Joined: Thu Feb 25, 2016 6:11 pm

Re: U.S. stocks in free fall

Post by Silk McCue »

carminered2019 wrote: Wed Jan 26, 2022 5:56 pm
lostdog wrote: Wed Jan 26, 2022 5:37 pm My 5% rebalancing band isn't even close. Just chilling.

For those that say they're going to "buy the dip", do you really have dry powder waiting? Do you worry about trying to catch a falling knife?
Isn't rebalancing the same as "buying the dip" at some point and could potentially be catching a falling knife ?
Do you suggest establishing a plan and then market time by not following that plan?

Cheers
andypanda
Posts: 2009
Joined: Sun Nov 12, 2017 8:11 pm
Location: Richmond, Virginia

Re: U.S. stocks in free fall

Post by andypanda »

"Yes, but the reason the markets recovered quickly in 2020 was that the Fed and the government pumped a TON of money into the system."

Are you certain it's not because the vast number of people who bailed out early and fled to safety took a deep breathe and got back in fairly quickly? Once it started back up more people piled in to get reinvested before the prices got too high.

Meanwhile, after the spring 2020 crash, the market boomed throughout the summer and the fall. I think some folks give the government too much credit when it comes to the stock market. :beer

Of course, I have no personal knowledge of when the free money checks were actually distributed. I know my friends spent theirs, they didn't invest any of it.
rockstar
Posts: 6326
Joined: Mon Feb 03, 2020 5:51 pm

Re: U.S. stocks in free fall

Post by rockstar »

Nathan Drake wrote: Wed Jan 26, 2022 5:50 pm :twisted:
rockstar wrote: Wed Jan 26, 2022 5:46 pm Powell was super hawkish at the Q&A citing the low unemployment rate and basically saying that we're at full employment. He seemed to have no concern with the impact on the market of monetary policy changes. But he did mention a ceiling based on the amount of debt they had on the balance sheet for rate increases.

The ten year did jump past 1.85%, so my short term forecast is lower stock prices. If I'm wrong, I'll end up buying back in at more than I sold. And then I can humbly admit I made a mistake selling.

I wonder how low they go.
The market isn’t one of the Fed’s mandates
True. But the Fed still pays attention to it. Just read Ben's book about his time at the Fed.
rockstar
Posts: 6326
Joined: Mon Feb 03, 2020 5:51 pm

Re: U.S. stocks in free fall

Post by rockstar »

andypanda wrote: Wed Jan 26, 2022 6:05 pm "Yes, but the reason the markets recovered quickly in 2020 was that the Fed and the government pumped a TON of money into the system."

Are you certain it's not because the vast number of people who bailed out early and fled to safety took a deep breathe and got back in fairly quickly? Once it started back up more people piled in to get reinvested before the prices got too high.

Meanwhile, after the spring 2020 crash, the market boomed throughout the summer and the fall. I think some folks give the government too much credit when it comes to the stock market. :beer

Of course, I have no personal knowledge of when the free money checks were actually distributed. I know my friends spent theirs, they didn't invest any of it.
I think, folks got back into the market because they knew the Fed had their back and because rates were ridiculously low. We now have a Fed that doesn't have our back and rates are climbing. They're still ridiculously low compared to 2019.

Thus, lower stock prices.

Now, Bill Gross seems to think the 10 year tops at 2% this year. That means it doesn't have a whole lot higher to go, so that should put some floor on stock prices. But that's at best a guess.
lostdog
Posts: 5368
Joined: Thu Feb 04, 2016 1:15 pm

Re: U.S. stocks in free fall

Post by lostdog »

carminered2019 wrote: Wed Jan 26, 2022 5:56 pm
lostdog wrote: Wed Jan 26, 2022 5:37 pm My 5% rebalancing band isn't even close. Just chilling.

For those that say they're going to "buy the dip", do you really have dry powder waiting? Do you worry about trying to catch a falling knife?
Isn't rebalancing the same as "buying the dip" at some point and could potentially be catching a falling knife ?
Good point. 👍
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
SilverSmurfer
Posts: 163
Joined: Sun Jan 16, 2022 7:41 pm

Re: U.S. stocks in free fall

Post by SilverSmurfer »

rockstar wrote: Wed Jan 26, 2022 5:46 pm Powell was super hawkish at the Q&A citing the low unemployment rate and basically saying that we're at full employment. He seemed to have no concern with the impact on the market of monetary policy changes. But he did mention a ceiling based on the amount of debt they had on the balance sheet for rate increases.

The ten year did jump past 1.85%, so my short term forecast is lower stock prices. If I'm wrong, I'll end up buying back in at more than I sold. And then I can humbly admit I made a mistake selling.

I wonder how low they go.
Oh no! 10 year notes are up at a rate not seen since... lemme check ...just before Covid.
Huh.
So are you saying the market will fall to pre-covid prices? 25% sale coming up!
rockstar
Posts: 6326
Joined: Mon Feb 03, 2020 5:51 pm

Re: U.S. stocks in free fall

Post by rockstar »

SilverSmurfer wrote: Wed Jan 26, 2022 6:23 pm
rockstar wrote: Wed Jan 26, 2022 5:46 pm Powell was super hawkish at the Q&A citing the low unemployment rate and basically saying that we're at full employment. He seemed to have no concern with the impact on the market of monetary policy changes. But he did mention a ceiling based on the amount of debt they had on the balance sheet for rate increases.

The ten year did jump past 1.85%, so my short term forecast is lower stock prices. If I'm wrong, I'll end up buying back in at more than I sold. And then I can humbly admit I made a mistake selling.

I wonder how low they go.
Oh no! 10 year notes are up at a rate not seen since... lemme check ...just before Covid.
Huh.
So are you saying the market will fall to pre-covid prices? 25% sale coming up!
No clue. But basic DCF says that as interest rates go up, the value of the future cash goes down, so valuations should go down. This is, of course, offset by earnings. Now, given supply constraints and worker shortages, Q1 earnings shouldn't be good. Another reason why prices should go down. I'm guessing based on rational thought, and the market isn't rational.
SilverSmurfer
Posts: 163
Joined: Sun Jan 16, 2022 7:41 pm

Re: U.S. stocks in free fall

Post by SilverSmurfer »

rockstar wrote: Wed Jan 26, 2022 6:25 pm
SilverSmurfer wrote: Wed Jan 26, 2022 6:23 pm
rockstar wrote: Wed Jan 26, 2022 5:46 pm Powell was super hawkish at the Q&A citing the low unemployment rate and basically saying that we're at full employment. He seemed to have no concern with the impact on the market of monetary policy changes. But he did mention a ceiling based on the amount of debt they had on the balance sheet for rate increases.

The ten year did jump past 1.85%, so my short term forecast is lower stock prices. If I'm wrong, I'll end up buying back in at more than I sold. And then I can humbly admit I made a mistake selling.

I wonder how low they go.
Oh no! 10 year notes are up at a rate not seen since... lemme check ...just before Covid.
Huh.
So are you saying the market will fall to pre-covid prices? 25% sale coming up!
No clue. But basic DCF says that as interest rates go up, the value of the future cash goes down, so valuations should go down. This is, of course, offset by earnings. Now, given supply constraints and worker shortages, Q1 earnings shouldn't be good. Another reason why prices should go down. I'm guessing based on rational thought, and the market isn't rational.
I'll take a 25% sale, followed by a nice rise as supply-chain and chip issues get resolved, then off to the moon! The Covid dip was so short we didn't get to buy much at reduced prices!
The recent volatility has been fun to watch, and seems quite irrational - that's for sure.
We're all clueless, but have fun talking about it anyways. :sharebeer :D
lostdog
Posts: 5368
Joined: Thu Feb 04, 2016 1:15 pm

Re: U.S. stocks in free fall

Post by lostdog »

Asia in free fall.

U.S futures in the red.
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
H-Town
Posts: 5905
Joined: Sun Feb 26, 2017 1:08 pm

Re: U.S. stocks in free fall

Post by H-Town »

lostdog wrote: Wed Jan 26, 2022 7:42 pm Asia in free fall.

U.S futures in the red.
The end is here
Time is the ultimate currency.
000
Posts: 8211
Joined: Thu Jul 23, 2020 12:04 am

Re: U.S. stocks in free fall

Post by 000 »

lostdog wrote: Wed Jan 26, 2022 7:42 pm Asia in free fall.

U.S futures in the red.
VIX futures are up. :shock:
EnjoyIt
Posts: 8272
Joined: Sun Dec 29, 2013 7:06 pm

Re: U.S. stocks in free fall

Post by EnjoyIt »

gmaynardkrebs wrote: Wed Jan 26, 2022 4:04 pm
EnjoyIt wrote: Wed Jan 26, 2022 3:51 pm
willthrill81 wrote: Wed Jan 26, 2022 3:27 pm Folks, stocks were down -32% in 2020. We're not even a third of the way to that point so far. It's FAR too early to declare the end of anything (except logic it seems).
You have been here for 5 years of today. Happy anniversary.

In those 5 years how much hand wringing have you seen with every market movement.

“Ohh no, the market is crashing.”

“Ohh no, the market is going up so fast. It’s going to crash.“

That’s what is so nice about a good IPS (investment policy statement) and a boglehead style buy and hold portfolio. You do nothing until your IPS says to do something. My IPS is far from telling me to do anything right now. So to pass the time I hang out here.
What is your IPS?
I'm not going to post my entire IPS, but the portion I think you are asking about is:
Tax loss harvest when losses are over $3k.
Rebalance when I'm 5% outside of my 70/30 portfolio with the permission to overbalance a little up to 74/26
Rebalance back only ofter returning to previous levels which means I will be outside of my original AA until recovery.
If markets continue to fall, I will rebalance again.

My IPS keeps me from fiddling too much, but still gives me the feeling like I'm doing positive things.
Last edited by EnjoyIt on Wed Jan 26, 2022 8:28 pm, edited 1 time in total.
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
EnjoyIt
Posts: 8272
Joined: Sun Dec 29, 2013 7:06 pm

Re: U.S. stocks in free fall

Post by EnjoyIt »

carminered2019 wrote: Wed Jan 26, 2022 4:26 pm IPS or no IPS…why would you not starting to buy at -10% ?
Why not 9% or 11%? What is so special about 10%?
That is what an IPS is for. So you don't have to use gut feeling to make decisions.
If your IPS says 10% then knock yourself out and buy. But don't do it because it feels right.

You wrote your IPS ideally when the market was more stable and you took your time in making that decision as opposed to now when the market is wild and your brain is telling you to do something.
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
Locked