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Old 10-24-2008, 08:43 AM   #21
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Old 10-24-2008, 09:22 AM   #22
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Quote:
Originally Posted by Orchidflower View Post
***If I pull all of our mutual funds out of the brokerage right now--and they all have gone down lots--will it be worth it? What will be the cost of doing this when we have all negative numbers on all 15 accounts (as in -26% or more on many)?
I am thinking of doing this, finding a CD with a high interest rate for a year and sitting it out.
Advice, please!!!
Suggest you stop visiting financial forums, and stop watching and listening to anything financial for the next year.

You are close to panic....which is what is sending the market down. Sell now and you lock in losses for good!

The way out is to average down to lower your cost base, but I fear you don't have the stomach for this market.
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I think you are right
Old 10-24-2008, 09:43 AM   #23
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I think you are right

Canadian Grunt, I think you make good sense and I believe in the long run you are right.......BUT what if 2008 is like 1929? Those who sold their positions in 1929 did indeed lock in their loss when the Dow closed 32% down that year. However if they stayed out of the market for 3 years after they missed the bloodbath of the 1930-1932 Bear Market that wiped out the "smart" money of the day. The DOW was down 89% in 1932 from it's high in 1929. That is historical fact.

What none of us can do is predict the future, we can only play the odds based on what we know and what we believe.

She may not have the stomach for this market, you give sound and wise advice. All of us must ultimately go with our gut feeling. If the market rallys those who sold will live with deep regret. If the market continues with a significant downward slide those who didn't sell will live with deep regret.

We all struggle with this situation. I guess it really does come down to tolerance for risk, and what one wants for asset allocation.
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Old 10-24-2008, 09:49 AM   #24
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I think it's a good day for me to get out Bernstein's Four Pillars of Investing.

That book is horrendously boring but it really drives home the point (over, and over, and over...). The average individual investor doesn't make money trying to time the market and is likely to end up buying high, selling low.
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Old 10-24-2008, 10:01 AM   #25
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Four Pillars of Investing, p. 90:

Quote:
There's yet another dimension to this problem that most small investors are completely unaware of: you only make money trading stocks when you know more than those on the other side of your trades. The problem is that you almost never know who those people are. If you could, you would find out that they have names like Fidelity, PIMCO, or Goldman Sachs. It's like a game of tennis in which the players on the other side of the net are invisible. The bad news is that most of the time, it's the Williams sisters.
He uses this in making his point that the most reliable way of obtaining a satisfying return is to index so that you own the whole market.
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Old 10-24-2008, 10:59 AM   #26
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Brokers love it though when you buy high and sell low.
On what certifiable basis do you say that?
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Old 10-24-2008, 11:21 AM   #27
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Very sound advice to all that gave theirs. And I think that is the correct thinking. Technically none of us have gained or lost ANYTHING, until we try to collect that money. So if you are in the market for 5,10,15 years + to go, then it would be foolish to touch any of that money now. As a matter of fact I just put a very large (at least for me) amount of money into a new taxible account with Vanguard. I am looking at the long term view... and trying hard not to sweat the daily stuff.... but I will be the first to admit... it is REALLY tough to do...
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Old 10-24-2008, 04:11 PM   #28
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If I was going to take money out which I'm not I would never lock it up in a CD for a year I 'd park it in a money market and wait for the tide to turn . Unfortunately you then usually miss a good rally but if it makes you less nervous go for it .If you decide to let your money ride stop watching CNN . This morning they had me panicked about today's market and it turned out to be nothing .
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