U.S. stocks in free fall

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runninginvestor
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Re: U.S. stocks in free fall

Post by runninginvestor »

alfaspider wrote: Mon Jan 24, 2022 11:44 am
IslandTime wrote: Mon Jan 24, 2022 11:40 am
peskypesky wrote: Mon Jan 24, 2022 10:52 am
Kookaburra wrote: Mon Jan 24, 2022 10:34 am My question for y’all is: if the stock market continues to drop, will the housing market likely cool off too?
I would say yes.
I think housing could come off a little in price. Maybe. Especially in higher priced markets. But the issue with housing is there is so little inventory. Until the inventory moves up, it's hard to get prices to move much.

In the housing bust in 2008, inventory had started moving up in late 2005. And was WAY up by late 2006, still long before prices started really falling in Jan 2008. And right now in Jan 2022 housing inventories are the lowest on record. Inventory has only kept falling. So inventory would have to start moving up a lot, and even then there could be a delay.
I can see a stop to the meteoric rise, but I somewhat doubt we will see significant price declines. We never saw the totally speculative buying of the 00s housing crisis - people weren't using interest-only zero down NINJA loans to buy multiple properties worth 5x their income. Subprime borrowing is not anywhere close to what it was back then. The people who are buying houses in today's market can actually afford them for the most part. We'd really need to see an increase in supply for structural cooling to happen, but high lumber prices and land use issues make the supply part of the equation no quick fix.
I agree. I'd like to add that imo another way stock losses could lead to cooling housing market is if a stock market correction leads to a business recession and job losses mount, people forced to sell and move, and so forth. But that's just a different ave for inventory supply to increase as above poster mentions would need to happen.

The issue with low inventory though is for those who have to sell, where do they go? Back to areas with any low vacancy rentals? Parents/family?
EnjoyIt
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Re: U.S. stocks in free fall

Post by EnjoyIt »

quantAndHold wrote: Mon Jan 24, 2022 11:48 am
Kookaburra wrote: Mon Jan 24, 2022 10:34 am My question for y’all is: if the stock market continues to drop, will the housing market likely cool off too?
Maybe, maybe not. The stock market is certainly driving a lot of people’s ability to pay the higher prices, especially in HCOL markets that have a lot of people who own a lot of stock. But there is still a supply/demand imbalance on the housing market, which is not going away anytime soon.
When the market plummets do people still want to buy houses or are they fearful of further declines and figure waiting is better? Can demand decrease? I believe so.
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
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Spinola
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Re: U.S. stocks in free fall

Post by Spinola »

smalliebigs wrote: Mon Jan 24, 2022 11:05 am My wife took out all her play money in early Dec 2021 because she had a premonition that the market will crash. Now everyday I have to bear her teases and "I told you so"
Now ask her WHEN to get back in... we'll await your report..
"If more of us valued food and cheer and song above hoarded gold, it would be a merrier world." | Thorin Oakenshield
Marseille07
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Re: U.S. stocks in free fall

Post by Marseille07 »

carminered2019 wrote: Mon Jan 24, 2022 11:44 am
Chamade wrote: Mon Jan 24, 2022 11:35 am
carminered2019 wrote: Mon Jan 24, 2022 11:27 am Set to buy 75K in FSKAX today.
Is that part of a DCA move or are you lumping it in?
I am thinking this ain’t the bottom.
DCA and got more ammo and for every 5% drop I will add more.
I like what you're doing, the 70/30 -> 95/5 DCA I'm guessing. It's a good strategy.
investnoob
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Re: U.S. stocks in free fall

Post by investnoob »

this is the time of year that I buy mutual funds/etfs for my tax advantaged accounts. Put about $12K in etfs. Oh well.
Will probably do another $7k tomorrow for another account.
EnjoyIt
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Re: U.S. stocks in free fall

Post by EnjoyIt »

Marseille07 wrote: Mon Jan 24, 2022 11:51 am
carminered2019 wrote: Mon Jan 24, 2022 11:44 am
Chamade wrote: Mon Jan 24, 2022 11:35 am
carminered2019 wrote: Mon Jan 24, 2022 11:27 am Set to buy 75K in FSKAX today.
Is that part of a DCA move or are you lumping it in?
I am thinking this ain’t the bottom.
DCA and got more ammo and for every 5% drop I will add more.
I like what you're doing, the 70/30 -> 95/5 DCA I'm guessing. It's a good strategy.
Do I understand that right? Starting at 70/30 and with every 5% drop selling 5% of bonds and buying equities? Or are we buying equities and actual bullets?
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
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mrspock
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Re: U.S. stocks in free fall

Post by mrspock »

invest4 wrote: Mon Jan 24, 2022 11:29 am
mrspock wrote: Mon Jan 24, 2022 10:08 am
peskypesky wrote: Mon Jan 24, 2022 9:46 am
mrspock wrote: Mon Jan 24, 2022 9:30 am For new comers… and those who need a reminder: this is the part of investing where wealth flows from the pockets of people who panic, and into the pockets of those who just follow their AAs and/or rebalance per their plan.
Isn't this more like the part where wealth flows from the stock market into cash?

If someone sells a million dollars of stocks today, they still have their million dollars of assets, but in cash, instead of in stocks. They didn't give their million dollars of wealth to someone else.
No, people who bought at 4750 and sell to me at 4000, they are transferring the difference into my pocket. The only thing I have to do is wait. And I will.

I made a huge amount in 2020, and I’ll make money this time too… it’s only a question of how much.
How long will you wait Mrspock? Would be interested if you are willing to share. For example, the current ~10% or so isn't particularly moving to me when I look at the meteoric rise since the lows of 2020. YMMV.
I’ll get my first piece of this around -15% off the highs, then around -28%, and then around -45% or so. I’ll also TLH all the way down, which saves me huge money as well. I also do “overbalancing”, meaning I don’t instantly rebalance back on the way back up, instead I wait until the market reaches the prior high. Then I rebalance — and typically with new money, for tax reasons.

Honestly, I’ll be surprised if we get beyond -15%. To get two opportunities like this inside a few years, it seems unlikely. If it happens… wow.
Marseille07
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Re: U.S. stocks in free fall

Post by Marseille07 »

EnjoyIt wrote: Mon Jan 24, 2022 11:53 am
Marseille07 wrote: Mon Jan 24, 2022 11:51 am
carminered2019 wrote: Mon Jan 24, 2022 11:44 am
Chamade wrote: Mon Jan 24, 2022 11:35 am
carminered2019 wrote: Mon Jan 24, 2022 11:27 am Set to buy 75K in FSKAX today.
Is that part of a DCA move or are you lumping it in?
I am thinking this ain’t the bottom.
DCA and got more ammo and for every 5% drop I will add more.
I like what you're doing, the 70/30 -> 95/5 DCA I'm guessing. It's a good strategy.
Do I understand that right? Starting at 70/30 and with every 5% drop selling 5% of bonds and buying equities? Or are we buying equities and actual bullets?
I don't know their exact strategy, but it is an interesting one because their AA is fairly stable during good times and still having some DP to buy the dip like right now.
ship_at_sea
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Re: U.S. stocks in free fall

Post by ship_at_sea »

alfaspider wrote: Mon Jan 24, 2022 11:44 am
IslandTime wrote: Mon Jan 24, 2022 11:40 am
peskypesky wrote: Mon Jan 24, 2022 10:52 am
Kookaburra wrote: Mon Jan 24, 2022 10:34 am My question for y’all is: if the stock market continues to drop, will the housing market likely cool off too?
I would say yes.
I think housing could come off a little in price. Maybe. Especially in higher priced markets. But the issue with housing is there is so little inventory. Until the inventory moves up, it's hard to get prices to move much.

In the housing bust in 2008, inventory had started moving up in late 2005. And was WAY up by late 2006, still long before prices started really falling in Jan 2008. And right now in Jan 2022 housing inventories are the lowest on record. Inventory has only kept falling. So inventory would have to start moving up a lot, and even then there could be a delay.
I can see a stop to the meteoric rise, but I somewhat doubt we will see significant price declines. We never saw the totally speculative buying of the 00s housing crisis - people weren't using interest-only zero down NINJA loans to buy multiple properties worth 5x their income. Subprime borrowing is not anywhere close to what it was back then. The people who are buying houses in today's market can actually afford them for the most part. We'd really need to see an increase in supply for structural cooling to happen, but high lumber prices and land use issues make the supply part of the equation no quick fix.
I just bought a townhome last week (HCOL area), transitioning from renting. After having a few offers rejected at ~10% over asking, I was considering backing off until it got less competitive. Feedback from my Realtor was that that basically wasn't going to happen. More inventory might come up in the spring, but so will a significant number of buyers. And it seems straightforward that having more buyers than sellers will force prices up. With rising interest rates, it really doesn't make sense to wait with the expectation that housing might get less expensive in the future (possible exception if you're a cash buyer, not an option for me).

So my experience/intuition agree with you. Rising rates might push some buyers out of competition, but competition is so fierce right now that I don't see prices declining.
AlphaLess
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Re: U.S. stocks in free fall

Post by AlphaLess »

EnjoyIt wrote: Mon Jan 24, 2022 11:50 am When the market plummets do people still want to buy houses or are they fearful of further declines and figure waiting is better? Can demand decrease? I believe so.
For sure. People feel less affluent, more conservative. There are cross-asset contagions too.
I don't carry a signature because people are easily offended.
investorpeter
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Re: U.S. stocks in free fall

Post by investorpeter »

Took a little nibble back into stocks today and bought some Nvidia shares for my Roth when price dipped below 210. Normally my Roth is 100% stocks, but I completely sold out of all stock positions in my Roth on January 4. Not going to consider using up my dry powder at least until after the January Fed meeting. If we get a shrug of the shoulders response from the Fed to the market drop, which seems likely, we could see another 10% drop in the SP500.
alfaspider
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Re: U.S. stocks in free fall

Post by alfaspider »

runninginvestor wrote: Mon Jan 24, 2022 11:49 am
alfaspider wrote: Mon Jan 24, 2022 11:44 am
IslandTime wrote: Mon Jan 24, 2022 11:40 am
peskypesky wrote: Mon Jan 24, 2022 10:52 am
Kookaburra wrote: Mon Jan 24, 2022 10:34 am My question for y’all is: if the stock market continues to drop, will the housing market likely cool off too?
I would say yes.
I think housing could come off a little in price. Maybe. Especially in higher priced markets. But the issue with housing is there is so little inventory. Until the inventory moves up, it's hard to get prices to move much.

In the housing bust in 2008, inventory had started moving up in late 2005. And was WAY up by late 2006, still long before prices started really falling in Jan 2008. And right now in Jan 2022 housing inventories are the lowest on record. Inventory has only kept falling. So inventory would have to start moving up a lot, and even then there could be a delay.
I can see a stop to the meteoric rise, but I somewhat doubt we will see significant price declines. We never saw the totally speculative buying of the 00s housing crisis - people weren't using interest-only zero down NINJA loans to buy multiple properties worth 5x their income. Subprime borrowing is not anywhere close to what it was back then. The people who are buying houses in today's market can actually afford them for the most part. We'd really need to see an increase in supply for structural cooling to happen, but high lumber prices and land use issues make the supply part of the equation no quick fix.
I agree. I'd like to add that imo another way stock losses could lead to cooling housing market is if a stock market correction leads to a business recession and job losses mount, people forced to sell and move, and so forth. But that's just a different ave for inventory supply to increase as above poster mentions would need to happen.

The issue with low inventory though is for those who have to sell, where do they go? Back to areas with any low vacancy rentals? Parents/family?
Even during the financial crisis, the real "toxic" loans were the ones that were marginal in the first place. While some people did end up defaulting due to recession-created job losses, that wasn't what was causing the huge declines in prices in some areas. In fact, the areas that did not see huge speculative bubbles mostly saw stagnant prices rather than huge declines. You'd need some pretty extreme and extended job losses before it drastically impacts housing availability.

Another point: previous recessions caused by fed tightening were relatively short lived. A monetary supply induced recession tends to tamp down on inflation, which allows the fed to loosen up a bit. The market going down in response to the fed is one of the most benign reasons for it because its the most reversible.
andypanda
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Re: U.S. stocks in free fall

Post by andypanda »

"But what about the people who bought at 3000 and are selling to you at 4000?"

They pay taxes on the $1000 and have less to reinvest later? Meanwhile, if they wait to reinvest, maybe inflation is eating into the purchasing power of the cash.
AlphaLess
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Re: U.S. stocks in free fall

Post by AlphaLess »

[/b]
ship_at_sea wrote: Mon Jan 24, 2022 11:56 am I just bought a townhome last week (HCOL area), transitioning from renting. After having a few offers rejected at ~10% over asking, I was considering backing off until it got less competitive. Feedback from my Realtor was that that basically wasn't going to happen. More inventory might come up in the spring, but so will a significant number of buyers. And it seems straightforward that having more buyers than sellers will force prices up. With rising interest rates, it really doesn't make sense to wait with the expectation that housing might get less expensive in the future (possible exception if you're a cash buyer, not an option for me).

So my experience/intuition agree with you. Rising rates might push some buyers out of competition, but competition is so fierce right now that I don't see prices declining.
Mortgage bankers / brokers have been "advising" me since 2012 that rates won't stay this low, and it is time to buy.

Of course, rates could be higher in the future, but they could also be lower.
I don't carry a signature because people are easily offended.
Aaand...it'sgone
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Re: U.S. stocks in free fall

Post by Aaand...it'sgone »

Went ahead and funded our Roths today. Figure 12% down YTD is a big enough sale.
alfaspider
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Re: U.S. stocks in free fall

Post by alfaspider »

AlphaLess wrote: Mon Jan 24, 2022 12:07 pm [/b]
ship_at_sea wrote: Mon Jan 24, 2022 11:56 am I just bought a townhome last week (HCOL area), transitioning from renting. After having a few offers rejected at ~10% over asking, I was considering backing off until it got less competitive. Feedback from my Realtor was that that basically wasn't going to happen. More inventory might come up in the spring, but so will a significant number of buyers. And it seems straightforward that having more buyers than sellers will force prices up. With rising interest rates, it really doesn't make sense to wait with the expectation that housing might get less expensive in the future (possible exception if you're a cash buyer, not an option for me).

So my experience/intuition agree with you. Rising rates might push some buyers out of competition, but competition is so fierce right now that I don't see prices declining.
Mortgage bankers / brokers have been "advising" me since 2012 that rates won't stay this low, and it is time to buy.

Of course, rates could be higher in the future, but they could also be lower.
Yes. A realtor or Mortgage banker will always tell you that NOW is the time to buy.

Mortgage rates low? They won't get any better than this!
Mortgage rates high? Buy now before they go up even more!
Prices low? Great opportunity to get in during a down market!
Prices high? Better get in now before you are priced out entirely!
fulliautomatix
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Re: U.S. stocks in free fall

Post by fulliautomatix »

Just bought large growth ETF VUG for DW's Roth (3K). Bought 3K about 10 days ago and that buy is in the red.

It may fall from here but I am not good at calling the bottom so will keep nibbling on the way down.

I am 0% bonds so nothing available to rebalance. Just buying with new money.

I was planning to add 20K to I-Bonds, but wondering if I should put it into stocks instead. Will watch for a few weeks.
IslandTime
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Re: U.S. stocks in free fall

Post by IslandTime »

AlphaLess wrote: Mon Jan 24, 2022 12:07 pm [/b]
ship_at_sea wrote: Mon Jan 24, 2022 11:56 am I just bought a townhome last week (HCOL area), transitioning from renting. After having a few offers rejected at ~10% over asking, I was considering backing off until it got less competitive. Feedback from my Realtor was that that basically wasn't going to happen. More inventory might come up in the spring, but so will a significant number of buyers. And it seems straightforward that having more buyers than sellers will force prices up. With rising interest rates, it really doesn't make sense to wait with the expectation that housing might get less expensive in the future (possible exception if you're a cash buyer, not an option for me).

So my experience/intuition agree with you. Rising rates might push some buyers out of competition, but competition is so fierce right now that I don't see prices declining.
Mortgage bankers / brokers have been "advising" me since 2012 that rates won't stay this low, and it is time to buy.

Of course, rates could be higher in the future, but they could also be lower.
One of the few things I am confident in predicting, is that we will not see a 10 year treasury much above 2% for a long, long, long time. There is just too much government debt, corporate debt, commercial real estate debt, etc... for rates to ever go up much without crashing everything. And everything crashing causes them to come right back down again. So they can't go up much. I think the probability mortgage rates fall from here is much higher than the probability they rise.

I worry we just don't have the labor force in America to build lots of houses anymore. People just do not go into the construction trades like they used to. Labor is more expensive and less plentiful. If you look at charts of housing starts and completions...since the gfc in 2008, the USA has just never got even close back to the numbers of houses we used to build. Then you get into the inflation of housing material costs. All this is supportive of house prices.
jayk238
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Re: U.S. stocks in free fall

Post by jayk238 »

If a tree falls in a forest…

If the market falls and you dont sell…
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vanbogle59
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Re: U.S. stocks in free fall

Post by vanbogle59 »

jayk238 wrote: Mon Jan 24, 2022 12:18 pm If a tree falls in a forest…

If the market falls and you dont sell…
If a tree falls in a forest…
I hear it

If the market falls and you dont sell…
I feel it

:sharebeer
capran
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Re: U.S. stocks in free fall

Post by capran »

HomerJ wrote: Mon Jan 24, 2022 10:57 am
HomerJ wrote: Mon Jan 24, 2022 9:38 am
CurlyDave wrote: Mon Jan 24, 2022 9:25 am My trailing stops on QQQ have triggered.

So, The Curly Family Portfolio has an armory stuffed full of dry powder. :mrgreen:
You had some pretty deep trailing stops... You pretty much lost all of last year's gains.
Now, the tricky part starts...

When to deploy the dry powder? If you are lucky, we will drop another 10%, and then you can start thinking about buying back in, and start a buy order that makes sure you get back in lower than where you sold.

But what if we drop 5%, then gain 2%-3% the following day? Jump in right in case we're headed back up? But what if it starts dropping again the next day? Didn't really protect yourself too much if you get back in a couple of percent below where you sold, and then the crash continues.

But if you wait too long, and it actually goes ABOVE your selling price... Now what? Hope it drops back down below before buying? Or buy right away and lock the small losses? (but then it could start crashing again the following week)... Or wait around too long until it's up 10% from you sell point, and now you've definitely locked in some losses with your buying and selling.

Luckily for you, this doesn't matter too much, since this is all mostly play money for you... But I would be curious to see how this plays out.

Getting in and out can be hard... A lot of luck involved.
You mean there is another human being on the planet that got out, or even considered it? We were new to the market in 1999, and in the first year we were up over 40%. "Wow" we thought. We followed the sage advice of "buy and hold" and even monthly added money during those down years that followed, and it wasn't until late 2005 that we got up to what our balance if not for the intervening monthly deposits. In very late Dec 2006 through early 2007 we started selling and were entirely out by July 2007. We went all in on March 9, 2009, literally on the day the S&P closed at 676.53. But the spring as I neared my June 2013 retirement date, I started to worry. Since we were no longer working and contributing, could I stomach another market downturn the likes of 01 that we stayed in for, or the 09 downturn that we avoided? Who would have ever thought it possible for a market to go from 676 to 4796! Although when interest rates were at 2.3% we were earning over 40k a year in simple interest. I guess one only has a finite amount of luck in life.
jpdion
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Re: U.S. stocks in free fall

Post by jpdion »

And still . . . our balances are higher than what we retired with in 2015, even after withdrawals.
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pokebowl
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Re: U.S. stocks in free fall

Post by pokebowl »

"The end is nigh! The end is nigh!"

This sums up most social media and news outlets on the markets. Party like its March 2020 I say :sharebeer
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9-5 Suited
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Re: U.S. stocks in free fall

Post by 9-5 Suited »

ivgrivchuck wrote: Mon Jan 24, 2022 10:55 am Even after this correction CAPE is still around 35.

U.S. Stocks are still historically very expensive.

Maybe they remain that way, maybe they go to the bottom. Who knows...
Agreed, just like rebalancing bands it takes a lot more than a minor correction to move the needle tremendously. Someone can correct me if I'm misapplying numbers here, but seems like there's a pretty reasonable path toward a normal CAPE in about 5 years as long as earnings stay close to where they've been over the last 5 years.

Per the inflation adjusted past 10 year earnings on https://www.multpl.com/s-p-500-pe-ratio ...

Past 10 Year Average: 125.91 / CAPE10 of 34.1
Past 5 Year Average: 140.30 / CAPE'5' of 30.6
Past 5 Year Excluding 2020 COVID Year: 150.19 / CAPE'5Adj' of 28.6

With a bit of extra earnings growth and modest returns, it's easy to see a path toward cropping off that tail end of lower earnings over time and getting back toward 20-25, but it may not be a joyful ride for investors.
staustin
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Re: U.S. stocks in free fall

Post by staustin »

IslandTime wrote: Mon Jan 24, 2022 11:58 am The thing about the Fed is if they pivot again soon to save stocks, the whole world will know there is no way out of the Fed having to permanently buy treasury bonds and add them to their even growing balance sheet.

The Fed tried to unwind the balance sheet in 2018 and the markets crashed and Powell blinked and pivoted. If he pivots here, the whole world will know the truth. That they will never unwind that $9 trillion on the Fed balance sheet. The Fed will have to buy the US deficits forever. Question is the knock-off effects every one knowing there will never be an unwinding of the Fed's balance sheet? Lose of confidence in central banks?

by pivot you mean re-commenced another round of QE I assume.. as noted before, prior rounds didn't result in inflation. This one, combined with stimulus packages and supply chain disruptions DID and in a significant way. Inflation is very real this time and it's likely not transitory. so, then the Fed is likely limited in it's ability to again monetize further US debt issuances; particularly since rates have been zero range bound and govt debt negative already. that posture is is stimulating/expansionary/inflationary. In the fed's defense, such asset price increases were never it's intention.. it's a byproduct. stimulation of the economy, battling deflation, escaping the 'liquidity trap' was the larger goal. but, if history holds true, and inflation remains persistent, rates will need to rise fairly dramatically. that will be a very negative thing for stock prices. but, as has been discussed here many times, allocations to equities should only be for amounts which you're comfortable losing up to 50% of it's value for over a decade.
mjb7e
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Re: U.S. stocks in free fall

Post by mjb7e »


Yes. A realtor or Mortgage banker will always tell you that NOW is the time to buy.

Mortgage rates low? They won't get any better than this!
Mortgage rates high? Buy now before they go up even more!
Prices low? Great opportunity to get in during a down market!
Prices high? Better get in now before you are priced out entirely!
Just like there is always a time to have a drink.
Bummed out? Drown your sorrows.
Just got a promotion? Let's celebrate!
Bored? Beer time.
:sharebeer
CurlyDave
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Re: U.S. stocks in free fall

Post by CurlyDave »

HomerJ wrote: Mon Jan 24, 2022 9:38 am
CurlyDave wrote: Mon Jan 24, 2022 9:25 am My trailing stops on QQQ have triggered.

So, The Curly Family Portfolio has an armory stuffed full of dry powder. :mrgreen:
You had some pretty deep trailing stops... You pretty much lost all of last year's gains.
I have had the QQQ for longer than this, but if I start at the beginning of 2020 for the purpose of accounting, I was up 48.6% in 2020 and 27.4 % in 2021. Doing the math, (1.486) x (1.274) = 1.893. Now I had a 15% trailing stop, so when it activated I got 85% of the 1.893. Again, doing the math, (1.893) x (.85) = 1.609. So, the bottom line is that I gained 60.9% from the beginning of 2020. So, you are right, I did lose some of last years gains, not all of them, but certainly more than half.

BUT, this was always an alternative to a bond holding. So, lets compare to BND, which was up 8.84% in 2020, and down 1.86% in 2021. So that math works out to (1.0884) x (.981) = 1.068.

Now comes the trick question. Would you rather have a 60.9% gain or a 6.8% gain? And I realize there was more risk in the 60.9%, but not hugely more. In a giant rout the stop might activate but there would be a few percent more drop before the sell order would be accepted. But I think the risk is only a couple of percent.
Answering a question is easy -- asking the right question is the hard part.
Whakamole
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Re: U.S. stocks in free fall

Post by Whakamole »

I've lost my yearly contributions to 401k/backdoor Roth/Roth/HSA/etc. already. Still haven't hit my rebalancing bands yet.

Right now I'm eyeing TLH opportunities.
rgs92
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Re: U.S. stocks in free fall

Post by rgs92 »

FWIW, VXUS [Vang. total international etf] is a bit below where it was 4 years ago at a short term peak (1/26/2018). So if you were waiting to shift to a higher international allocation in your AA, I guess this would be as good a time as any.
1/26/2018: 61.17.
Today intraday: 1/26/2022: 60.42. Yield: ~2.4%
Last edited by rgs92 on Mon Jan 24, 2022 12:49 pm, edited 4 times in total.
InvestmentNewbee
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Re: U.S. stocks in free fall

Post by InvestmentNewbee »

EnjoyIt wrote: Mon Jan 24, 2022 11:50 am
quantAndHold wrote: Mon Jan 24, 2022 11:48 am
Kookaburra wrote: Mon Jan 24, 2022 10:34 am My question for y’all is: if the stock market continues to drop, will the housing market likely cool off too?
Maybe, maybe not. The stock market is certainly driving a lot of people’s ability to pay the higher prices, especially in HCOL markets that have a lot of people who own a lot of stock. But there is still a supply/demand imbalance on the housing market, which is not going away anytime soon.
When the market plummets do people still want to buy houses or are they fearful of further declines and figure waiting is better? Can demand decrease? I believe so.
I am just one data point but will share where we are at as I suspect we are not all that dissimilar for others out there.

We have been looking for a home for a few months now. We aren't in a crazy hurry but would love to be situated in a good school district by the time our son starts kindergarten next year. We are also expecting another kid in about 7 weeks so wanted 1 more bedroom. Goal was for this house to be our 20 year house until the kids are gone.

Over the last week we have pumped the breaks a bit on our search to see how things play out and have reduced our price point by about 750k. Why? because we really really really don't want to have to sell any stock to fund the down payment and both my wife's and my company stocks are cratering. We think our jobs are pretty darn stable but you never know. In short, we are no longer in a hurry and are moving down market.

We are lucky to have enough cash to still think about purchasing but I can totally see how someone not in that position would completely stop their search until this unwinds a bit.
Ed 2
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Re: U.S. stocks in free fall

Post by Ed 2 »

All aboard!
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
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UpsetRaptor
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Re: U.S. stocks in free fall

Post by UpsetRaptor »

whodidntante wrote: Mon Jan 24, 2022 10:39 am
andypanda wrote: Mon Jan 24, 2022 10:00 am Stocks are on sale. I love a sale. Go for it.
To be honest, I'm rooting for US valuations to come back down to Earth. We have pulled future returns to the present. Growth stocks, meme stocks, and bond valuations are all out of line presently. It's time to collect some tears, and in some pockets, blood is required to make things sensible again. :(
+1

We're overdue for a healthy correction. Particularly for some of the high flyers.
john0608
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Re: U.S. stocks in free fall

Post by john0608 »

MortgageOnBlack wrote: Mon Jan 24, 2022 11:43 am In for the long-haul, but since I'm first time taxable investor (started last year), I have calculated about $778 in loss if I were to sell my specific lots (VTSAX) that are showing a loss (dates back to April 2021!). The issue is I'm confused about triggering a wash sale with my Rollover IRA (Traditional) and ROTH IRA (currently hold 100% VASGX in both which holds VTSAX I believe (need to check)). I believe the 2 IRA's re-invest dividends.

Do I need to temporarily turn off auto-investment in the IRA's and sell previous 30 days of shares for another different fund before I even consider touching taxable? This has always confused. 30 days prior and 30 days after sale? Not sure what strategy other people do.
taxable accounts have nothing to do with your IRA accounts as related to wash sales - you can sell and buy anything in your IRA's every day (allowing for some mutual fund rebuy restrictions) and never have a tax impact (until you take distributions obviously).
only combine IRA and Taxable as part of your overall AA.
Also....dont sell now and in effect 'ensure your loss'.....hang on and hold tight......this is where the big boys make money ....the chickens lock in their losses by selling
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peskypesky
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Re: U.S. stocks in free fall

Post by peskypesky »

there is one asset up today. surprisingly.
but we can't talk about it here.
Morik
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Re: U.S. stocks in free fall

Post by Morik »

rgs92 wrote: Mon Jan 24, 2022 12:41 pm FWIW, VXUS [Vang. total international etf] is a bit below where it was 4 years ago at a short term peak (1/26/2018). So if you were waiting to shift to a a higher international allocation in your AA, I guess this would be as good a time as any.
1/26/2018: 61.17.
Today intraday: 1/26/2022: 60.42.
I just realized on 1/21 that market cap for US/international shifted; I have been using 55/45, looks like now it should be 60/40 or so (some all world indices seem to have 57.5/42.5). I must admit I'm market timing a little bit--instead of rebalancing this morning, I am waiting to see if US market slips further than international.
Though, the drift from 60/40 is ~3.6% for me (vs 0% for 55/45 as I just rebalanced on 1/21, but to 55/45; didn't see the updated market cap til after rebalancing), so yeah... this is pretty much the only form of timing I do (manually deciding when to rebalance). I don't do bands/etc. Just whenever I happen to update my tracking spreadsheet & look at drift, I usually rebalance if drift isn't fairly small. (Rebalancing in tax-advantaged accounts.)
I front-load into the market without timing though. (I.e., I never wait to add money to the market regardless of what is going on.)
Morik
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Re: U.S. stocks in free fall

Post by Morik »

john0608 wrote: Mon Jan 24, 2022 12:48 pm
MortgageOnBlack wrote: Mon Jan 24, 2022 11:43 am In for the long-haul, but since I'm first time taxable investor (started last year), I have calculated about $778 in loss if I were to sell my specific lots (VTSAX) that are showing a loss (dates back to April 2021!). The issue is I'm confused about triggering a wash sale with my Rollover IRA (Traditional) and ROTH IRA (currently hold 100% VASGX in both which holds VTSAX I believe (need to check)). I believe the 2 IRA's re-invest dividends.

Do I need to temporarily turn off auto-investment in the IRA's and sell previous 30 days of shares for another different fund before I even consider touching taxable? This has always confused. 30 days prior and 30 days after sale? Not sure what strategy other people do.
taxable accounts have nothing to do with your IRA accounts as related to wash sales - you can sell and buy anything in your IRA's every day (allowing for some mutual fund rebuy restrictions) and never have a tax impact (until you take distributions obviously).
only combine IRA and Taxable as part of your overall AA.
Also....dont sell now and in effect 'ensure your loss'.....hang on and hold tight......this is where the big boys make money ....the chickens lock in their losses by selling
This is false. The IRS has released guidance that you must consider transactions in your IRA when looking at wash sale rules.
From https://www.investopedia.com/articles/r ... e-rule.asp
"""
Does the Rule Apply to IRAs?
In 2008, the IRS issued "Revenue Ruling 2008-5," in which it addressed the question of whether the wash-sale rules apply to IRAs. In the ruling, the IRS explained that when shares are sold in a non-retirement account and substantially identical shares are purchased in an IRA within 30 days, the investor cannot claim tax losses for the sale, and the basis in the individual's IRA is not increased.
"""
donaldfair71
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Re: U.S. stocks in free fall

Post by donaldfair71 »

peskypesky wrote: Mon Jan 24, 2022 12:49 pm there is one asset up today. surprisingly.
but we can't talk about it here.
Gold is in a lot of threads here.
JHU ALmuni
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Re: U.S. stocks in free fall

Post by JHU ALmuni »

donaldfair71 wrote: Mon Jan 24, 2022 12:53 pm
peskypesky wrote: Mon Jan 24, 2022 12:49 pm there is one asset up today. surprisingly.
but we can't talk about it here.
Gold is in a lot of threads here.
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donaldfair71
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Re: U.S. stocks in free fall

Post by donaldfair71 »

Morik wrote: Mon Jan 24, 2022 12:51 pm
john0608 wrote: Mon Jan 24, 2022 12:48 pm
MortgageOnBlack wrote: Mon Jan 24, 2022 11:43 am In for the long-haul, but since I'm first time taxable investor (started last year), I have calculated about $778 in loss if I were to sell my specific lots (VTSAX) that are showing a loss (dates back to April 2021!). The issue is I'm confused about triggering a wash sale with my Rollover IRA (Traditional) and ROTH IRA (currently hold 100% VASGX in both which holds VTSAX I believe (need to check)). I believe the 2 IRA's re-invest dividends.

Do I need to temporarily turn off auto-investment in the IRA's and sell previous 30 days of shares for another different fund before I even consider touching taxable? This has always confused. 30 days prior and 30 days after sale? Not sure what strategy other people do.
taxable accounts have nothing to do with your IRA accounts as related to wash sales - you can sell and buy anything in your IRA's every day (allowing for some mutual fund rebuy restrictions) and never have a tax impact (until you take distributions obviously).
only combine IRA and Taxable as part of your overall AA.
Also....dont sell now and in effect 'ensure your loss'.....hang on and hold tight......this is where the big boys make money ....the chickens lock in their losses by selling
This is false. The IRS has released guidance that you must consider transactions in your IRA when looking at wash sale rules.
From https://www.investopedia.com/articles/r ... e-rule.asp
"""
Does the Rule Apply to IRAs?
In 2008, the IRS issued "Revenue Ruling 2008-5," in which it addressed the question of whether the wash-sale rules apply to IRAs. In the ruling, the IRS explained that when shares are sold in a non-retirement account and substantially identical shares are purchased in an IRA within 30 days, the investor cannot claim tax losses for the sale, and the basis in the individual's IRA is not increased.
"""
Yes, IRA purchases/sales impact wash sales for sure.
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Stinky
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Re: U.S. stocks in free fall

Post by Stinky »

Do we have a dead cat bounce?

S&P is up 90 points from its low for the day about 2 hours ago.
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YRT70
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Re: U.S. stocks in free fall

Post by YRT70 »

peskypesky wrote: Mon Jan 24, 2022 12:49 pm there is one asset up today. surprisingly.
but we can't talk about it here.
Gold is up too.
Gufomel
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Re: U.S. stocks in free fall

Post by Gufomel »

Stocks seem to be “roaring” back all of a sudden. Small cap value (VIOV) actually in green territory now.
drk
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Re: U.S. stocks in free fall

Post by drk »

What happened?! I was going to TLH this afternoon.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
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baconavocado
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Re: U.S. stocks in free fall

Post by baconavocado »

Aaand...it'sgone wrote: Mon Jan 24, 2022 12:09 pm Went ahead and funded our Roths today. Figure 12% down YTD is a big enough sale.
But funds/ETFs transferred to Roth accounts are priced at the end of the trading day, right? With all the volatility today, hard to tell what the closing prices will be.
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vanbogle59
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Re: U.S. stocks in free fall

Post by vanbogle59 »

vanbogle59 wrote: Mon Jan 24, 2022 9:10 am My rebalance trigger is VTI down 12.5%, so 214.
What say you?
While I was working, it triggered. But since then it's been "soaring".
And I use VTSAX, so only closing prices matter.
Much ado about nothing.
john0608
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Re: U.S. stocks in free fall

Post by john0608 »

Morik wrote: Mon Jan 24, 2022 12:51 pm
john0608 wrote: Mon Jan 24, 2022 12:48 pm
MortgageOnBlack wrote: Mon Jan 24, 2022 11:43 am In for the long-haul, but since I'm first time taxable investor (started last year), I have calculated about $778 in loss if I were to sell my specific lots (VTSAX) that are showing a loss (dates back to April 2021!). The issue is I'm confused about triggering a wash sale with my Rollover IRA (Traditional) and ROTH IRA (currently hold 100% VASGX in both which holds VTSAX I believe (need to check)). I believe the 2 IRA's re-invest dividends.

Do I need to temporarily turn off auto-investment in the IRA's and sell previous 30 days of shares for another different fund before I even consider touching taxable? This has always confused. 30 days prior and 30 days after sale? Not sure what strategy other people do.
taxable accounts have nothing to do with your IRA accounts as related to wash sales - you can sell and buy anything in your IRA's every day (allowing for some mutual fund rebuy restrictions) and never have a tax impact (until you take distributions obviously).
only combine IRA and Taxable as part of your overall AA.
Also....dont sell now and in effect 'ensure your loss'.....hang on and hold tight......this is where the big boys make money ....the chickens lock in their losses by selling
This is false. The IRS has released guidance that you must consider transactions in your IRA when looking at wash sale rules.
From https://www.investopedia.com/articles/r ... e-rule.asp
"""
Does the Rule Apply to IRAs?
In 2008, the IRS issued "Revenue Ruling 2008-5," in which it addressed the question of whether the wash-sale rules apply to IRAs. In the ruling, the IRS explained that when shares are sold in a non-retirement account and substantially identical shares are purchased in an IRA within 30 days, the investor cannot claim tax losses for the sale, and the basis in the individual's IRA is not increased.
"""
wow, good info by you. thanks for the update ......to quote johnny Carson - 'I did not know that'
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GeraniumLover
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Re: U.S. stocks in free fall

Post by GeraniumLover »

donaldfair71 wrote: Mon Jan 24, 2022 12:55 pm
Morik wrote: Mon Jan 24, 2022 12:51 pm
john0608 wrote: Mon Jan 24, 2022 12:48 pm
MortgageOnBlack wrote: Mon Jan 24, 2022 11:43 am In for the long-haul, but since I'm first time taxable investor (started last year), I have calculated about $778 in loss if I were to sell my specific lots (VTSAX) that are showing a loss (dates back to April 2021!). The issue is I'm confused about triggering a wash sale with my Rollover IRA (Traditional) and ROTH IRA (currently hold 100% VASGX in both which holds VTSAX I believe (need to check)). I believe the 2 IRA's re-invest dividends.

Do I need to temporarily turn off auto-investment in the IRA's and sell previous 30 days of shares for another different fund before I even consider touching taxable? This has always confused. 30 days prior and 30 days after sale? Not sure what strategy other people do.
taxable accounts have nothing to do with your IRA accounts as related to wash sales - you can sell and buy anything in your IRA's every day (allowing for some mutual fund rebuy restrictions) and never have a tax impact (until you take distributions obviously).
only combine IRA and Taxable as part of your overall AA.
Also....dont sell now and in effect 'ensure your loss'.....hang on and hold tight......this is where the big boys make money ....the chickens lock in their losses by selling
This is false. The IRS has released guidance that you must consider transactions in your IRA when looking at wash sale rules.
From https://www.investopedia.com/articles/r ... e-rule.asp
"""
Does the Rule Apply to IRAs?
In 2008, the IRS issued "Revenue Ruling 2008-5," in which it addressed the question of whether the wash-sale rules apply to IRAs. In the ruling, the IRS explained that when shares are sold in a non-retirement account and substantially identical shares are purchased in an IRA within 30 days, the investor cannot claim tax losses for the sale, and the basis in the individual's IRA is not increased.
"""
Yes, IRA purchases/sales impact wash sales for sure.
...and if you make the transactions in the wrong sequence, you could end up losing the ability to use the tax loss in its entirety (if the wash sale amount gets added to the cost basis of tax-deferred securities)
Gufomel
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Re: U.S. stocks in free fall

Post by Gufomel »

S&P rapidly trending toward finishing up for the day after being down nearly 4% at one point.
bostonboglehead123
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Re: U.S. stocks in free fall

Post by bostonboglehead123 »

IslandTime wrote: Mon Jan 24, 2022 11:58 am The thing about the Fed is if they pivot again soon to save stocks, the whole world will know there is no way out of the Fed having to permanently buy treasury bonds and add them to their even growing balance sheet.

The Fed tried to unwind the balance sheet in 2018 and the markets crashed and Powell blinked and pivoted. If he pivots here, the whole world will know the truth. That they will never unwind that $9 trillion on the Fed balance sheet. The Fed will have to buy the US deficits forever. Question is the knock-off effects every one knowing there will never be an unwinding of the Fed's balance sheet? Lose of confidence in central banks?
Why do they need to reduce the balance sheet just for the heck of it? They will do enough to get inflation under control and have the economy at full employment.
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AnnetteLouisan
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Re: U.S. stocks in free fall

Post by AnnetteLouisan »

Gufomel wrote: Mon Jan 24, 2022 1:03 pm S&P rapidly trending toward finishing up for the day after being down nearly 4% at one point.
Argh. That means my FSKAX order when it was down might price up. Ugh. Lesson learned.
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