Clearly the time for a Market pull-back

[EllisWyatt]

With the recent run-up in the market, I am within <2% of my "belt and suspenders" RE goal.

Based on my ego-centric perception of the universe and the strong belief in the wicked sense of humor of the stock deities, I am convinced that there's going to be a strong pullback in the equities market - just a "heads up" to the rest of you out there.

 

[Animorph]

This week's -2% doesn't count?

 

[EllisWyatt]

Not at all - that still leaves me within shouting distance. I'm expecting a "ha ha, gotcha! - you've got another 2 years" type event (15-20%??).

 

[EllisWyatt]

Fortunatley, I have a plan if the spit hits the fan, and the market DOES meltdown....

I will go "Shucks" (or something similar to that), rebalance to maintain my AA, then go have a bourbon.

And sleep well at night.

 

[Andre1969]

I hit a new high on April 11. Once I tallied up everything early this morning before the opening bell, I'm down about 2.9%. Still up something like 5.5% for the year though.

My guess is there will be a slip coming up soon, with the old "Sell in May and Go Away" cliche soon upon us. And, IIRC, the market did peak out sometime in April each of the past three years.

Looking back at my old records, I hit a new high on 4/23/10 and 4/29/11. Starting in late 2011, I changed my spreadsheet, simply recording values on the last day of the month, rather than saving peaks and valleys, so I don't know exactly what day in April 2012 I hit another peak. I think I read somewhere that the market peaked on April 2 and then started to cool a bit. I still ended April slightly higher than March, simply because of additional investments.

So, if this pattern keeps repeating itself, I could see a drop off coming up soon.

FWIW, in 2010 it wasn't until October that I surpassed that 4/23/10 peak.
In 2011, I went a touch higher in May, and again in July, mostly because of continued investing, but then I fell hard in August and wouldn't hit a new high until January 2012.
In 2012, after that April peak, I fell about 5% in May. Was back into all-time high territory by July, thanks to additional investments. August 2012 was even better, and even without additional investing, would still have been a new peak.

 

[EllisWyatt]

Similar experience - hit my "belt without suspenders" number 3 times, so I fully expect to go through the same process again. Only difference will be that I plan on pulling the plug the first time I hit the Belt and suspender number regardles of whether it's early of late in the rally....

 

[2B]

It's not unusual for the S&P500 to fall 20+% every 3 to 5 years. The nominal 50% fall in 2008 has happened several times in my lifetime. It's always come back but that doesn't mean it will the next time.

Any retirement financial plan needs to have options and contingencies or it isn't much of a plan.

 

[heeyy_joe]

So far this "correction" has hit my portfolio for 7/10ths of a percent. And my allocation is 50% common stocks.

 

[bUU]

I'm rather hoping that this is a short-lived decline, and that the broader correction waits until after I re-balance at the end of the May.

 

[jollystomper]

With the recent run-up in the market, I am within <2% of my "belt and suspenders" RE goal.

Based on my ego-centric perception of the universe and the strong belief in the wicked sense of humor of the stock deities, I am convinced that there's going to be a strong pullback in the equities market - just a "heads up" to the rest of you out there.

Too late, at the end of last week I was over my retirement savings goal... so I knew there will be a pullback to move me back away from that goal and keep me away for a while. But I enjoyed those days while I could.

 

[ERhoosier]

It's not unusual for the S&P500 to fall 20+% every 3 to 5 years. The nominal 50% fall in 2008 has happened several times in my lifetime. It's always come back but that doesn't mean it will the next time.

Any retirement financial plan needs to have options and contingencies or it isn't much of a plan.

+1

There's always the nagging worry that the next major correction may take US market the way of the 1989 Nikkei

 

[RAE]

I'm rather hoping that this is a short-lived decline, and that the broader correction waits until after I re-balance at the end of the May.

Me too. I have a significant (for me) chunk of $$ in an aggressive fund that, for a variety of reasons, I cannot access until around mid-late May, at the earliest (can't switch funds, can't redeem it either). Knowing my luck, the market will tank before that, and I will have to just ride it down, down, down. Talk about frustration..........

 

[mickeyd]

I am convinced that there's going to be a strong pullback in the equities market - just a "heads up" to the rest of you out there.

My market timing machine is currently malfunctioning. Thanks for the freebe.

 

[Spanky]

The market is still strong despite worries of the the jobs market, the economy, China, Europe, and North Korea. As the Fed continues to pump reserves into the banking system while major central banks build liquidity, the market should stay put. However, should they end the quantitative easing abruptly, interest rate may rise. A sharp rise in interest rate may hurt the bond market (especially government bonds) and possibly the stock market. In the interim, let's enjoy the roller coaster ride.

 

[growing_older]

As usual, we are either due a significant pullback or a logic defying climb a wall of worry. Those who guess right will be more convinced of their market timing skills. Those who guess wrong will remember their doubts and be convinced that next time they will know better, so have greater confidence in their future market timing ability. Either way, there will be endless coverage and plenty of advisers with recommendations all over the map.

 

[kcowan]

Since the S&P got decoupled from the economy, don't you think the actions of The Fed are more likely to cause a correction, if any? As long as The Fed continues to blow up the bubble, good times will continue to prevail.

Add in some housing recovery and the good times roll..

 

[RobLJ]

I hit a new high on April 11. Once I tallied up everything early this morning before the opening bell, I'm down about 2.9%. Still up something like 5.5% for the year though.

My guess is there will be a slip coming up soon, with the old "Sell in May and Go Away" cliche soon upon us. And, IIRC, the market did peak out sometime in April each of the past three years.

Looking back at my old records, I hit a new high on 4/23/10 and 4/29/11. Starting in late 2011, I changed my spreadsheet, simply recording values on the last day of the month, rather than saving peaks and valleys, so I don't know exactly what day in April 2012 I hit another peak. I think I read somewhere that the market peaked on April 2 and then started to cool a bit. I still ended April slightly higher than March, simply because of additional investments.

So, if this pattern keeps repeating itself, I could see a drop off coming up soon.

We're still contributing big since we're kept expenditures to about what we spent while the boys were in college (save for a a big trip per year) and saving the tuition/board costs. So the recovery period has been about 2-3 months. Were I fully retired with no income, I might be disturbed by the late spring/summer behavior of the S&P. Hard to know, but as the poster below you indicates, this kind of volatility has to be part of the original planning to FIRE.

 

[dessert]

Since the S&P got decoupled from the economy, don't you think the actions of The Fed are more likely to cause a correction, if any?

Kcowan could you expound on this for me? I have been noticing how the S&P no longer mirrors the Dow on a daily basis and I have been wondering what had changed?

 

[kcowan]

Kcowan could you expound on this for me? I have been noticing how the S&P no longer mirrors the Dow on a daily basis and I have been wondering what had changed?

Certainly the S&P is the best indicator of business performance. But it has benefitted from the pumping up of the credit bubble with QE and will now face the downturn from the effects of sequester. We have all seen the mitigation that is resulting in a soft landing but there will still be a landing.

Even within the current performance, the traditional engines of growth are underperforming. Just be cautious going forward...

 

[marko]

My take is that a correction is due, however it should be short in duration...weeks.

Companies remain flush with cash, fundamentals are strong in general, overall sentiment is that stocks are still cheap, lots of $$ on the sidelines; a correction would be a good time for many to jump back in.

JMHO, but what do I know...

 

[CH]

...I am convinced that there's going to be a strong pullback in the equities market - just a "heads up" to the rest of you out there.

So how's that position working out for you?

 

[timo2]

My take is that a correction is due, however it should be short in duration...weeks.

Companies remain flush with cash, fundamentals are strong in general, overall sentiment is that stocks are still cheap, lots of $$ on the sidelines; a correction would be a good time for many to jump back in.

JMHO, but what do I know...

+1, If a downturn never happens, I'm still happy with my current equity distribution. My guiding principle for investing is from a Joe Kennedy quote: "Only a fool holds out for the top dollar." [of course Joe Kennedy could afford to say that!]

 

[rjohnla]

Yes, I agree (shorted in 2000), got out of real estate before bubble burst now due to QE infinty another market bubble in stocks. (Insiders have sold. Individual investors: if you think prices are low now (new bull) wait & you'll see how much lower they can go.) No inflation with 0% IR, it's deflation and has been for some time; depression on it's way. Cash is king then, watch out for custodial risk, e.g., bank should be at least A rated. Shorted Euro against $, ready to short markets. p.s. I do get some help with analysis, but final decision is always with me / you.

 

[CH]

I am buy & hold, not a market timer like some of you guys. That said, professional traders have a saying: "Don't fight the Fed." There is still a lot left in the punch bowl, so I don't expect there is going to be a major market sell off any time soon. Fed doesn't have much room to raise the rates and still have the gov't be able to finance the massive federal deficit. The federal deficit and associated deficit spending is the biggest problem facing our country.

 

[haha]

I'm astonished at how many experts there are here. And I thought this was a buy and hold index crowd.

Ha