Anyone else having panic attacks about the market?

[Spanky]

I am 40/60 (equity/fixed income) now, thinking about moving to 60/40. Thus, the current market condition may be a catalyst.

[yakers]

Most of the responses on this thread indicate a difference between those who are retired and those still working. I am still working, probably another 8 to 16 months. So I am still in the accumulation phase and so a market decline is a buying opportunity. For those who are living off their nest egg (I will have a real COLAd pension) I would expect some distress. And, yes, buy & hold is good and time in the market is good. And if the market resolves quickly all will be well. So I am glad that NYL and others can come to a place like this and express their worries and receive good advice.

[Sam]

Quote:

Originally Posted by Spanky I am 40/60 (equity/fixed income) now, thinking about moving to 60/40. Thus, the current market condition may be a catalyst.

Perfect timing.

[haha]

Quote:

Originally Posted by yakers So I am glad that NYL and others can come to a place like this and express their worries and receive good advice.

Well, it's advice anyway.

Ha

[youbet]

Just wondering.....

For all you folks ready to purchase bargains, how much cash are you holding? Are your bargain purchases relatively small percentages compared to your total net worth and driven primarily by current savings levels? Or do you keep a high percentage of cash, beyond your emergency fund, as dry powder waiting for this kind of "opportunity?"

It always seems a little strange that so many seem to have huge amounts of cash available to purchase equities during corrections, but few comment on carrying huge amounts of cash through equity high return years. That is, lots of comments about buying bargains now. Few comments about holding huge cash positions earning 5% - 6% during a year the equity markets earned several times that.

[justin]

Quote:

Originally Posted by youbet Just wondering..... For all you folks ready to purchase bargains, how much cash are you holding?

Zero. But I have an income stream from working that gets pumped into the market each month at a rate of $5000/month approximately. A few years of down markets would allow me to buy in at some attractive prices.

[Running_Man]

Quote:

Originally Posted by Zathras NYL, I do understand where you are comming from. What is realistically the worse doomsday scenario? Perhaps it is a repeat of the great depresion? Even that shouldn't cause you any fear as you have plenty of time on your side. The speed which the market is moving can be scary. However, buying low is as important as selling high (as someone mentioned earlier). So if you can buy now, that is the best thing to do. The last thing you want to do is buy high and sell low. Selling now would be selling low. The only reason I would panick is if you had your entire portfolio in one stock. And even then, this would be a good time to diversify 8)

Selling 5% off an all time high would not be selling low. Looking at the chart of Bank of America I do not see how this is the lowest or cheapest in years - it is nearly an all-time high.

http://finance.yahoo.com/charts#char...urce=undefined

[lswswein]

Quote:

Originally Posted by youbet Just wondering..... For all you folks ready to purchase bargains, how much cash are you holding? Are your bargain purchases relatively small percentages compared to your total net worth and driven primarily by current savings levels? Or do you keep a high percentage of cash, beyond your emergency fund, as dry powder waiting for this kind of "opportunity?" It always seems a little strange that so many seem to have huge amounts of cash available to purchase equities during corrections, but few comment on carrying huge amounts of cash through equity high return years. That is, lots of comments about buying bargains now. Few comments about holding huge cash positions earning 5% - 6% during a year the equity markets earned several times that.

As far as I am concerned, I am moving from Short Term Bond Index to Equities. I hold between 15-20% in STBonds and Tips combined. Every 10%+ drop in equities I moved a maximum of 5% bonds into equities. Also I am working so making monthly contributions.

-h

[brewer12345]

I didn't like what I saw earlier in the year, so I held cash and slowly bought stuff. I also hold a big slug of ISM and OSM that I will liquidate and deploy if stuff gets cheap enough. I also buy longer dated, out of the money call options in size when volatile stuff gets smacked down hard and still has decent fundamentals.

[d]

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Originally Posted by Laurence Big tax return = putting $4,000 into the market in the next few weeks. The only problem is the IRA needs to be funded by April 15 and the bleeding might not be done by then! I know, $4k is nothing for some of you big fish, but it's almost 4% of my portfolio!

... put it in an IRA MM now, then switch whenever you want, to wherever you want.

[JustCurious]

Quote:

Originally Posted by justin Zero. But I have an income stream from working that gets pumped into the market each month at a rate of $5000/month approximately. A few years of down markets would allow me to buy in at some attractive prices.

My answer is the same (but the numbers are a bit smaller )

[eridanus]

Quote:

Originally Posted by youbet Just wondering..... For all you folks ready to purchase bargains, how much cash are you holding? Are your bargain purchases relatively small percentages compared to your total net worth and driven primarily by current savings levels? Or do you keep a high percentage of cash, beyond your emergency fund, as dry powder waiting for this kind of "opportunity?"

I've been saving up to purchase another fund in my 401k, so I have some cash ready in my account. It's also tax season, when I pull out all the stops to put in the maximum self-employed contribution.

[FinanceDude]

Quote:

Originally Posted by TromboneAl Unfortunately, the planner will probably hold your hands, look into your eyes and say "It's time to get you into some whole life insurance and put some annuities in your IRA."

Sounds like personal experience...........

[donheff]

It is interesting to read all of these buy now calls. If you are a timer (and some of my best friends are) I guess it seems like an opportunity. But we could have another 5% drop - or 10%. And, maybe the bears are right and we will have a prolonged down market. I am keeping a few years cash for expenses in a bear and I would be reluctant to use it to speculate on this adjustment. If my bonds were already at the allocation I am moving toward and shifted due to this change I would certainly look for a good point to re-balance into equities, but even with that, do you just speculate that this is a good time for that or do you stay on a fixed schedule?

[teejayevans]

Vanguard founder John Bogle was on NPR last night, he laughed at the
thought of chasing the market, his comment; it's just noise. He seem to
have a lot of integrity, something lacking in many of today's overprice
CEOs
Tom

[Zoocat]

Quote:

Originally Posted by TromboneAl Right, it will seem much worse if you run out of pot.

LOL! Lucky I have a birthday party for my son planned for tonight and a marguerita fueled restaurant dinner party planned for tomorrow! No one will be talking about the stock market, that's for certain.

Don't be disheartened by this dip. Take a look at the one year market chart, which is what I did this morning. It will give you perspective on the short term. So what if you lose a year's gain? This market could do anything next year. I only wish I hadn't made that IRA to ROTH conversion so I would have more cash to invest if this market keeps going down.

[d]

Quote:

Originally Posted by youbet For all you folks ready to purchase bargains, how much cash are you holding? Are your bargain purchases relatively small percentages compared to your total net worth and driven primarily by current savings levels? Or do you keep a high percentage of cash, beyond your emergency fund, as dry powder waiting for this kind of "opportunity?"

i do tend to hold a fair amount of cash ... currently about 5.5% of my portfolio (excluding "emergency" cash) ... and my "emergency" cash is padded ... and the remainder of my non-equity % is largely "available" as well. the "trick" is to rebalance, but not use-up the cash before the botton.

if you hold X% in equities, and plan to have sufficient cash on hand to rebalance after a Y% correction,
% cash needed = Y%(X%)(1-X%)
so with a 4.5% holding you would be able to rebalance to a 65% equity position after a 20% correction.

i've long felt that cash is an undervalued asset, so don't mind having a fair amount in MM, short-term funds, etc. (the "sleep factor" can't be beat!)

[dex]

Quote:

Originally Posted by d i've long felt that cash is an undervalued asset, so don't mind having a fair amount in MM, short-term funds, etc. (the "sleep factor" can't be beat!)

I agree - 4 week treasury bills are paying 5.22% and state tax free!

[Bikerdude]

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Originally Posted by REWahoo! Yes you are...if you don't take a long-term view of equity markets. Unless you are willing to ride the roller coaster both up and down, you shouldn't be on it.

I would seriously examine your tolerance for risk. You sound like the classic "buy high, sell low" investor. I would add lots of fixed income to your portfolio. The current market volatility is NOTHING. If you think it is... YOU will sell at the bottom.

My apologies if this observation has been posted before I didn't read every post. :P

[jazz4cash]

Quote:

Originally Posted by Bikerdude I would seriously examine your tolerance for risk. You sound like the classic "buy high, sell low" investor. I would add lots of fixed income to your portfolio. The current market volatility is NOTHING. If you think it is... YOU will sell at the bottom. My apologies if this observation has been posted before I didn't read every post. :P

well put bikerdude....I agree 100% Not everyone has the risk tolerance. There's not much benefit in being "correct" in the long run if you're losing sleep in the meantime. Stress and anguish are not healthy. Returns on cash right now are decent. That said, I agree with the general sentiment to hang on for the ride.