Is the worst of the bear market behind us?

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ebeb
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Re: Is the worst of the bear market behind us?

Post by ebeb »

invest2bfree wrote: Tue Dec 06, 2022 10:20 am Jack has a excellent video on this-

09 Jack Bogle on Asset Allocation and Market Collapse (2014)

https://youtu.be/k6ra5POdsYg
Thanks for the video. As opposed to those bogleheads who state that best to stick to your fixed asset allocation, unless I am hearing it wrong, even the venerable Jack Bogle seems to advocate a tactical Asset Allocation strategy. He says in the video if you think the market is substantially out of line take your 65:35 AA to 50:50 AA. As a matter of fact I did change my AA from 70:30 down to 55:45 in earlier part of 2022 and now slowly moving back higher 60:40 AA and more over time :)
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Parkinglotracer
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Re: Is the worst of the bear market behind us?

Post by Parkinglotracer »

No one knows. That is why one picks a long term asset allocation that is consistent with one’s ability and willingness to assume risk. Of course Taylor could reply with his sobering post of what his family financially experienced while living thru the depression. Here is a summary that isn’t as depressing as his more detailed post I’ve read.

https://www.bogleheads.org/blog/2017/01 ... r-markets/
1moreyr
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Re: Is the worst of the bear market behind us?

Post by 1moreyr »

I have no idea what's going to happen. All I can tell you , I was so frustrated with the declines recently I seriously considered taking a loss and pulling a bunch out of stocks at a loss and putting it in treasuries.

That very same day the market rallied 1000 points which I would have missed.
I am just going to make sure i have enough to do what I need in retirement and stay the course. That's how I got to be retired, why am I messing with it?
Tom_T
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Re: Is the worst of the bear market behind us?

Post by Tom_T »

OP, ask yourself this question: what indicator will tell you that the bear market is over? I submit to you that by the time you get a clear indicator, you will have already missed out on a sizeable gain. The market looks forward and moves quickly. Look how fast the market moved up when the Fed hinted at possible slower rate hikes. And look how fast it reversed course early this week. You can't possibly stay ahead of the curve with any consistency.
Archie Bunker
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Re: Is the worst of the bear market behind us?

Post by Archie Bunker »

Tom_T wrote: Wed Dec 07, 2022 5:50 am OP, ask yourself this question: what indicator will tell you that the bear market is over?

Im not vouching for this......but is there some evidence here (if this chart is true) that there is a "centrally planned" component to the "open markets"?

What somewhat seems concerning (if there is validity to this chart) os that the pivot this time may come during a time
when the market at large is already going down. The other pivots seem to have generally occurred before the downturn.

I guess we shall see......

Image
Last edited by Archie Bunker on Wed Dec 07, 2022 8:05 am, edited 1 time in total.
Archie Bunker
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Re: Is the worst of the bear market behind us?

Post by Archie Bunker »

Parkinglotracer wrote: Wed Dec 07, 2022 4:04 am Of course Taylor could reply with his sobering post of what his family financially experienced while living thru the depression. Here is a summary that isn’t as depressing as his more detailed post I’ve read.

https://www.bogleheads.org/blog/2017/01 ... r-markets/
Goodness gracious lets hope for nothing like that again. Thankfully though, as inflation I think was very low during this period, folks that were able to hang on for the 10-12 years would have seen less of a real loss than they would have otherwise. Whew😰
invest2bfree
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Re: Is the worst of the bear market behind us?

Post by invest2bfree »

ebeb wrote: Wed Dec 07, 2022 3:16 am
invest2bfree wrote: Tue Dec 06, 2022 10:20 am Jack has a excellent video on this-

09 Jack Bogle on Asset Allocation and Market Collapse (2014)

https://youtu.be/k6ra5POdsYg
Thanks for the video. As opposed to those bogleheads who state that best to stick to your fixed asset allocation, unless I am hearing it wrong, even the venerable Jack Bogle seems to advocate a tactical Asset Allocation strategy. He says in the video if you think the market is substantially out of line take your 65:35 AA to 50:50 AA. As a matter of fact I did change my AA from 70:30 down to 55:45 in earlier part of 2022 and now slowly moving back higher 60:40 AA and more over time :)
Jack bogle and Benjamin graham recommend 50/50 as default in retirement.

Bogle says do 65/35 when market is normal.
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andypanda
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Re: Is the worst of the bear market behind us?

Post by andypanda »

Great chart. The S&P is still up. Of course, I look at all of the years going back to when I started buying stock in 1970. Even with the recent slight decline, the trend is still up.

I suppose anyone who just recently began investing during the past decade or two sees the chart differently - only looking at the very right side.

The Depression affected everyone differently. Some people - mine - didn't have stocks or bonds or much if any savings. What they had was a little room to grow food. Half of America lived on farms. I expect the next depression, if there is one, will not mirror the first one because we live in a different economy that is more urban-based.

My father was born in '22 and my mother in '24. They spent the Depression on small family farms raising the food they could, milking a cow, gathering honey, hunting small game, etc. Now don't start thinking the Ponderosa/Bonanza, think about an episode of The Waltons, except a lot farther back in the mountains. My father actually loaded peaches with Earl Hamner one weekend when they were teens. Earl lived over near the flatlands near Charlottesville. My father was born a mile-and-a-half up Hungrytown Hollow Road on the family apple orchard. My grandfather and his two brothers did all of the work except when they had to hire pickers in the fall.

Money was very scarce, times were hard, but they could feed themselves and help their neighbors. Of course, they were already set up for canning food in jars, salting meat and such. The small farm depression started after WWI, the Great Depression came along much later.

https://inflationdata.com/articles/infl ... 1930-1939/

"The great depression officially began with the stock market crash on September 4, 1929. But for over 50% of the U.S. population who lived on farms the Depression began ten years earlier with the dramatic fall of commodity prices when demand from Europe dried up at the end of WWI."
Archie Bunker
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Re: Is the worst of the bear market behind us?

Post by Archie Bunker »

That is a great story andypanda. Thank you for posting it✔️
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arcticpineapplecorp.
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Re: Is the worst of the bear market behind us?

Post by arcticpineapplecorp. »

ebeb wrote: Tue Dec 06, 2022 12:55 am
arcticpineapplecorp. wrote: Mon Dec 05, 2022 5:41 pm
what do you think about all of that?
@arcticpineapplecorp, I probably owe you few hundred grands for your expert advice three years back! At that time you had clearly shown that bonds were unaffected by the turmoil of 2008 and I was really convinced and put bunch of money in BND. Unfortunately the equation didn't hold for 2022 as both stocks and bonds went down in tandem. This time I may need to take your advice with a pinch of salt :o

viewtopic.php?p=4864588#p4864588

Also my dry powder got created by selling equities around the time of this thread towards end of 2021 so I was somewhat lucky that time viewtopic.php?p=6245895
I just hope my luck doesn't run out this time around. But I plan to read each of those cbsnews.com articles you posted when I get a little time and thanks for all the info! Will be good to re-visit this thread after say 3-5 years to see how the market went from here and if dumping into VOO made sense or not.
One of the two links you provided above from last year (about overweighting to Bonds) my response went something like this:
ebeb wrote: Sun Sep 26, 2021 6:30 pm
arcticpineapplecorp. wrote: Sun Sep 26, 2021 6:17 pm
If not, that's why you're asking us questions instead of consulting your IPS.
You are right, I just figured out about my AA a year or two back, the IPS is still way over my head. Maybe will get to it some day in the future. :confused
So do you have an IPS yet? If not, why?

The beautiful thing is that when you simplify and realize the best way to invest in stocks and bonds is in total indexes, you take back all your time you used to spent on fundamental analysis, technical analysis, market timing, etc. That time you regain, should then be used to determine your asset allocation and write up your IPS. If you hold a three fund portfolio, the only question left is how much to allocate to each. Simple.

If you haven't, you'll keep switching everytime stocks, bonds, whatever go down. You have to work on your IPS and determining your asset allocation because once you do, all there is left to do is just buy and hold according to your IPS (unless your IPS is telling you to trade frequently :oops: )

"Maybe" is a hedge word. You either will figure out your asset allocation and IPS or you won't. There is no maybe. And based on your post from last year, now is the future. The best time to have written up your IPS is in your past. The next best time is today. Get it done. Thank me later.

(I also see now you asked me a question I didn't answer on the other post "Invest in cash in conservative manner in next recession" so I'll go respond to that post in a moment.
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gavinsiu
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Re: Is the worst of the bear market behind us?

Post by gavinsiu »

There is no way to know. In the 1929 stock market crash, the asset went lower until bottoming out in 1932. Is this the case here, who knows. If you are young and contributing to the 401K and have little assets in your name, then this fall is good since you will be be buying more shares cheap. If you are near retirement, this would be bad since you might not have time to recover.
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LilyFleur
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Re: Is the worst of the bear market behind us?

Post by LilyFleur »

nisiprius wrote: Mon Dec 05, 2022 10:45 am Image

See also: The bear market is over, posted 9/4/2008.

Image

We all get hunches. The amount by which the stock market has fallen is not a good predictor of what will happen next. What looks smooth on a small chart in hindsight is not smooth when you are in it. The deepest plunges are punctuated by convincing upturns, and the solidest recoveries are punctuated by terrifying downdrafts (as in 2010). Every downward movement has smaller upward movements within it, and those in turn have smaller downward movements within them

John C. Bogle said, "Time is your friend. Impulse is your enemy."
I think this is why the term "dry powder" annoys me. It feels impulsive and explosive.
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Re: Is the worst of the bear market behind us?

Post by Grt2bOutdoors »

billaster wrote: Mon Dec 05, 2022 4:14 pm
ivgrivchuck wrote: Mon Dec 05, 2022 11:22 am - FED wants the inflation to moderate. It hasn't.
- FED wants the labor market to soften. It hasn't.
- FED wants the house prices to moderate. They haven't.
The Fed's own data shows all three of these statements to be false. They have moderated. Whether they have moderated to your satisfaction only you can decide.
The November beige book doesn’t not show a slowing labor market, except for two of the twelve districts. Labor market is still tight unless of course you work for a FAANG (as of now).
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JasonHutt
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Re: Is the worst of the bear market behind us?

Post by JasonHutt »

nisiprius wrote: Mon Dec 05, 2022 10:45 am Image

See also: The bear market is over, posted 9/4/2008.

Image

We all get hunches. The amount by which the stock market has fallen is not a good predictor of what will happen next. What looks smooth on a small chart in hindsight is not smooth when you are in it. The deepest plunges are punctuated by convincing upturns, and the solidest recoveries are punctuated by terrifying downdrafts (as in 2010). Every downward movement has smaller upward movements within it, and those in turn have smaller downward movements within them

John C. Bogle said, "Time is your friend. Impulse is your enemy."
I just guffawed. I don't usually do that, certainly not on BHs.
billaster
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Re: Is the worst of the bear market behind us?

Post by billaster »

Grt2bOutdoors wrote: Wed Dec 07, 2022 5:39 pm
billaster wrote: Mon Dec 05, 2022 4:14 pm
ivgrivchuck wrote: Mon Dec 05, 2022 11:22 am - FED wants the inflation to moderate. It hasn't.
- FED wants the labor market to soften. It hasn't.
- FED wants the house prices to moderate. They haven't.
The Fed's own data shows all three of these statements to be false. They have moderated. Whether they have moderated to your satisfaction only you can decide.
The November beige book doesn’t not show a slowing labor market, except for two of the twelve districts. Labor market is still tight unless of course you work for a FAANG (as of now).
The claim above was that there was no moderation. Here is the labor summary from the November Beige Book that you cite:
Employment grew modestly in most districts, but two Districts reported flat headcounts and labor demand weakened overall. Hiring and retention difficulties eased further, although labor markets were still described as tight. Scattered layoffs were reported in the technology, finance, and real estate sectors. However, some contacts expressed a reluctance to shed workers in light of hiring difficulties, even though their labor needs were diminishing. Wages increased at a moderate pace on average, but a few Districts experienced at least some relaxation of wage pressures. Opinions about the outlook pointed to stable or slowing employment growth and at least modest further wage growth moving forward.
They use the word "modest or moderate" three times in addition to "weakened, eased, and relaxation". They end with "opinions about the outlook pointed to stable or slowing employment growth and at least modest further wage growth moving forward."
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SmileyFace
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Re: Is the worst of the bear market behind us?

Post by SmileyFace »

ebeb wrote: Mon Dec 05, 2022 10:31 am I am getting a feeling that the worst of the 2022 bear market is if not behind us, probably it may not drop a whole lot from here. Stocks as well as Bonds seem to be on the upswing since last month. Trying to gauge the sentiment of the Bogleheads as I have a bunch of dry powder that I am thinking of dumping over few months into VOO. Thoughts? :D
Did someone hack your account and change your signature? 8-)
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The question and signature don't correlate.
Dry Powder is "time out of the market" you realize?

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raveon
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Re: Is the worst of the bear market behind us?

Post by raveon »

Definitely over. I'm willing to bet your money on it.
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Lawrence of Suburbia
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Re: Is the worst of the bear market behind us?

Post by Lawrence of Suburbia »

I've sort of steeled myself to more decline in the markets, as long as the Fed continues on with hiking interest rates. Hoping that bonds will now act to slow the descent of my own portfolio. :happy Also have a cash cushion.
ebeb wrote: Wed Dec 07, 2022 3:16 am
invest2bfree wrote: Tue Dec 06, 2022 10:20 am Jack has a excellent video on this-

09 Jack Bogle on Asset Allocation and Market Collapse (2014)

https://youtu.be/k6ra5POdsYg
Thanks for the video. As opposed to those bogleheads who state that best to stick to your fixed asset allocation, unless I am hearing it wrong, even the venerable Jack Bogle seems to advocate a tactical Asset Allocation strategy. He says in the video if you think the market is substantially out of line take your 65:35 AA to 50:50 AA. As a matter of fact I did change my AA from 70:30 down to 55:45 in earlier part of 2022 and now slowly moving back higher 60:40 AA and more over time :)
I think that approach is perfectly reasonable. It's not market timing, because you're (hopefully) still 100% in the market(s). But from a behavioral standpoint, you can sleep better at night; then, when things appear headed back to normality switch to a more aggressive stance. The good news is, the performance difference between a 70/30 and a 50/50, or a 60/40 or 40/60, in the short run, isn't critical. This is more applicable to someone accumulating rather than retired, I should think; I like Mr. Bogle's 50/50 for a retired person. It's 'agnostic' -- makes no assumptions about stocks vs. bonds at any given point in time.
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whodidntante
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Re: Is the worst of the bear market behind us?

Post by whodidntante »

Top confirmed 👍
stocknoob4111
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Re: Is the worst of the bear market behind us?

Post by stocknoob4111 »

We're in the 1st inning... the effect of high rates have not even hit the economy yet, wait till housing really cracks... my speculation is that it will be a 3 year down cycle to the bottom so agree with the other poster mid to late 2024 sometime

What's a bit different from the 2000 cycle is we have the supply side inflation problem and it's unclear if higher rates is going to cure it... if inflation is caused by inelastic demand then Fed raising rates is simply going to cause stagflation
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CyclingDuo
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Re: Is the worst of the bear market behind us?

Post by CyclingDuo »

ebeb wrote: Mon Dec 05, 2022 10:31 am I am getting a feeling that the worst of the 2022 bear market is if not behind us, probably it may not drop a whole lot from here. Stocks as well as Bonds seem to be on the upswing since last month. Trying to gauge the sentiment of the Bogleheads as I have a bunch of dry powder that I am thinking of dumping over few months into VOO. Thoughts? :D
When? Who knows?

Mikey says...

...a prominent Wall Street analyst who says the current bear market could come to an end sometime around St. Patrick’s Day.

In an interview with Bloomberg Television, Mike Wilson, the Equity Strategist and Chief Investment Officer for Morgan Stanley predicted that the bear market in U.S. stocks could come to a conclusion early in 2023. Investors are taking note because Wilson, who’s typically skeptical about the market, is listed as No. 1 on Institutional Investor’s recent ranking of portfolio strategists.

“We think ultimately the bear market will be over probably sometime in the first quarter,” Wilson said on the broadcast.

https://finance.yahoo.com/news/top-morg ... 38502.html

Well, there you have it. Sometime between now and March 17th - St. Patrick's Day, or by the end of March.

Now that we know that...

When's the next bull market over? Any predictions?

CyclingDuo
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ebeb
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Re: Is the worst of the bear market behind us?

Post by ebeb »

So far equity market seems to be holding up well from the Sep 2022 lows and I have upped my AA from 55:45 to 65:35. Now I am thinking whether to up it further to 75:25 or stay put. The dark clouds of recession seem to be hanging over the horizon along with further fed rate rise concern. So what does the cognoscenti think about the future course of the market :D
80% VOO | 20% BND+TBILL+CASH | Don't believe Nobody because Nobody knows nothin' - Anon
sailaway
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Re: Is the worst of the bear market behind us?

Post by sailaway »

ebeb wrote: Sat Jan 28, 2023 6:09 pm So far equity market seems to be holding up well from the Sep 2022 lows and I have upped my AA from 55:45 to 65:35. Now I am thinking whether to up it further to 75:25 or stay put. The dark clouds of recession seem to be hanging over the horizon along with further fed rate rise concern. So what does the cognoscenti think about the future course of the market :D
Are you saying your plan is to always buy high?
Exchme
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Re: Is the worst of the bear market behind us?

Post by Exchme »

ebeb wrote: Sat Jan 28, 2023 6:09 pm So far equity market seems to be holding up well from the Sep 2022 lows and I have upped my AA from 55:45 to 65:35. Now I am thinking whether to up it further to 75:25 or stay put. The dark clouds of recession seem to be hanging over the horizon along with further fed rate rise concern. So what does the cognoscenti think about the future course of the market :D
Who knows? Remember how Lucy would pull the ball away from Charlie Brown again and again just as he was trying to kick it even though she promised not to? That's what bear markets do - they tease you over and over again. They when you finally give up and believe it'll never come back, the bottom actually holds.

That's why Bogleheads counsel you to set your allocation and stick with it. It isn't because we're too dumb to guess right, it's because we know no one can reliably outguess everyone else, so we're smart enough not to try.

Good luck to you, but don't be surprised if you eventually end up being your portfolio's worst enemy.
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windaar
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Re: Is the worst of the bear market behind us?

Post by windaar »

sailaway wrote: Sat Jan 28, 2023 6:12 pm
ebeb wrote: Sat Jan 28, 2023 6:09 pm So far equity market seems to be holding up well from the Sep 2022 lows and I have upped my AA from 55:45 to 65:35. Now I am thinking whether to up it further to 75:25 or stay put. The dark clouds of recession seem to be hanging over the horizon along with further fed rate rise concern. So what does the cognoscenti think about the future course of the market :D
Are you saying your plan is to always buy high?
Sounds like my pals at work who are always talking about their timing plans. When markets swoon they pull out; when markets go up the're all in.
Nobody knows nothing.
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retired@50
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Re: Is the worst of the bear market behind us?

Post by retired@50 »

windaar wrote: Sat Jan 28, 2023 7:21 pm
sailaway wrote: Sat Jan 28, 2023 6:12 pm
ebeb wrote: Sat Jan 28, 2023 6:09 pm So far equity market seems to be holding up well from the Sep 2022 lows and I have upped my AA from 55:45 to 65:35. Now I am thinking whether to up it further to 75:25 or stay put. The dark clouds of recession seem to be hanging over the horizon along with further fed rate rise concern. So what does the cognoscenti think about the future course of the market :D
Are you saying your plan is to always buy high?
Sounds like my pals at work who are always talking about their timing plans. When markets swoon they pull out; when markets go up the're all in.
Share this link with your pals at work. George Costanza - and the opposite of what you should do.

https://www.youtube.com/watch?v=rag0Z1nTJOc

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Firemenot
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Re: Is the worst of the bear market behind us?

Post by Firemenot »

I vote yes. Third year of first presidential term is historically one of best periods. Hasn’t been a negative one since 1930s.

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