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Deja vu all over again?
Old 03-07-2013, 02:20 PM   #1
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Deja vu all over again?

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While past performance is no guarantee of future results, there’s something downright eerie about the five-year patterns of the S&P 500 Index...
S&P 500 chart appears to repeat history
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Old 03-07-2013, 03:04 PM   #2
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So we need to sell off equities next year to avoid the correction. Thanks!





jk (in case)
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Old 03-07-2013, 03:42 PM   #3
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So we need to sell off equities next year to avoid the correction. Thanks!





jk (in case)
No, but it may be time to rebalance. I'm getting closer to my rebalance bands but having mental trauma pondering the prospect of buying bonds/FI right now. I can reduce the possiibility of a big loss in equities by locking in a sure loss (after inflation & taxes) in bonds. It just takes some of the joy out of the highest point ever in our portfolio.
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Old 03-07-2013, 04:12 PM   #4
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I look at the recent record marks as confirmation. Confirmation that once again, following the markets, and do not panic when chips are down is a working strategy
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Old 03-07-2013, 08:37 PM   #5
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Wow - that IS eerie. I have 5 years of expenses in cash so I'll be able to wait out the next cycle also. However, If we have another correction like 2008 I may go all in with that money.
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Old 03-08-2013, 06:19 AM   #6
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No, but it may be time to rebalance.
Before the dive? Otherwise, rebalancing will be automatic.
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Old 03-08-2013, 12:58 PM   #7
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Just for grits & shins, what happens if you overlay the S&P after the 87 crash?

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In his book, Stocks for the Long Run, Jeremy Siegel states that any time the U.S. stock market collapses by 50% or more, it rallies and then averages 20% a year over the next five years.
Forget the "January Effect"... Use The "Siegel Indicator" Instead
It didn't hold strictly true for 2012, but it may be that it takes 5 years for the market to recover from a drop of 50% or more(?)

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Old 03-08-2013, 01:38 PM   #8
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I'm just wondering why Gold is still over $800 an ounce. I blame the Discovery channel.
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Old 03-08-2013, 02:24 PM   #9
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5 years does not a trend make. But, I suspect if the market dives later on it will be because the war on savers is over Fed has raised rates. In that case we will rebalance and buy bonds cheaper than they are today and at higher interest rates.

Of course, one could follow Dr. Pfau's idea and buy a few SPIA's rather than bonds. That would help a person ride out a down market. He seems to think a Stock/SPIA combo does better than a Stock/Bond combo. Still, I would wait a while to buy the SPIA due to low rates. No EZ answers here.
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Old 03-08-2013, 03:24 PM   #10
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No, but it may be time to rebalance. I'm getting closer to my rebalance bands but having mental trauma pondering the prospect of buying bonds/FI right now. I can reduce the possiibility of a big loss in equities by locking in a sure loss (after inflation & taxes) in bonds. It just takes some of the joy out of the highest point ever in our portfolio.
I rebalanced, but invested in short-term bonds rather than bonds. However, after doing that over the last year or so since I retired my liquidity bucket is as full as I care to have it.

Like you, long bonds interest rate risk still scare me.
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Old 03-08-2013, 04:32 PM   #11
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I am firmly in the do nothing mode. Let it ride.
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