Get out now and beat the debt ceiling crash?

[Coolius]

I have some dry powder to put into the market; will wait for DOW 11,000 to do so. the way it's going, we'll see that level next week.

I intend to buy only commodities and O&G. Those have the best staying power. COP, CVX and STO are in my viewfinder. Single digit P/Es, a nd a definable future for their product. A reasonable dividend helps a lot while waiting for stock price recovery.

 

[bbbamI]

I adjusted my AA in May (sold some stocks) and felt pleased.

Now the question is will I feel pleased when I buy back in....

 

[DoraM]

And if by some twist of fate the Dow doesn't go that low - hey, it could happen - when will you get back in?

Maybe never? I think I could be happy at 100% TIPS even paying the taxes on the inflation portion each year. The stock market is rigged.

 

[ERD50]

RE: Getting back in at DOW 9000 (hasn't been that low for 2 years)

Maybe never? I think I could be happy at 100% TIPS even paying the taxes on the inflation portion each year. The stock market is rigged.

Go short then. You'll be rich in no time!

I've heard far too many times that options are 'rigged' - if you by a call, it will end up OTM by just a smidge time and time again. So I suggest they sell calls instead to get on the wagon with all the fat cats, but I guess they'd rather complain than get rich (which won't happen either).

-ERD50

 

[veremchuka]

Moved 5% of portfolio from fixed income into S&P 500 index on Friday and again today. Next buy point will be 1225 if that happens. It may go to 1200 or 1150, who knows but it will eventually go back up and it's not like I need that money any time soon. I see it as an opportunity even if it takes a year to pan out.

 

[Gone4Good]

The bigger issue may be that the 'soft economic patch' looks like it is becoming a bog. Europe continues full meltdown with Italy now starting to swoon. It's pretty clear, or should be, that austerity is a failure everywhere it was tried. And we just jumped on that bandwagon, with promises of more to come. Awesome.

 

[donheff]

The bigger issue may be that the 'soft economic patch' looks like it is becoming a bog. Europe continues full meltdown with Italy now starting to swoon. It's pretty clear, or should be, that austerity is a failure everywhere it was tried. And we just jumped on that bandwagon, with promises of more to come. Awesome.

Krugman was right last year when he predicted this.

 

[Gatordoc50]

I am buy and hold. If the S and P reaches 1050, i will buy more, otherwise just reinvesting dividends. I really think we are in for a trading range of 900 to 1400 for the next 25 years.

 

[novaman]

I was convinced of a big drop in Q4 2009, and missed out on a bunch of money.

I think this thread shows that it is impossible to make sense of things. conventional wisdom would say that once the debt ceiling was raised and the big borrowing continued, the market would roar back due to the money being injected back in. After all, isn't this exactly what happened when the stimulus bill was passed?

Well surprise! Yesterday the market drops 260+ points. Maybe things will start moving positive today but your guess is as good as mine.

 

[donheff]

I was convinced of a big drop in Q4 2009, and missed out on a bunch of money.

I think this thread shows that it is impossible to make sense of things. conventional wisdom would say that once the debt ceiling was raised and the big borrowing continued, the market would roar back due to the money being injected back in. After all, isn't this exactly what happened when the stimulus bill was passed?

Well surprise! Yesterday the market drops 260+ points. Maybe things will start moving positive today but your guess is as good as mine.

+1. The moves actually make sense. The market would probably have bounced back this week but - surprise - bad economic data derailed that. What is predictable is that surprises like that happen frequently thus timing gets thrown for a loop. I'm sitting tight on my AA which will call for a little equity buying if we go much lower.

 

[DoraM]

RE: Getting back in at DOW 9000 (hasn't been that low for 2 years)

Go short then. You'll be rich in no time!

I've heard far too many times that options are 'rigged' - if you by a call, it will end up OTM by just a smidge time and time again. So I suggest they sell calls instead to get on the wagon with all the fat cats, but I guess they'd rather complain than get rich (which won't happen either).

-ERD50

How are those covered calls working out for ya?

Getting closer to my buy in point...only 2600 points to go!

 

[ERD50]

How are those covered calls working out for ya?

Getting closer to my buy in point...only 2600 points to go!

Covered calls are working fine, doing just what the contract specifies. When the market drops, you gain the premium. So you're better off than holding stocks w/o the call.

Market goes up and down - what's that got to do with being 'rigged'?

-ERD50

 

[Gatordoc50]

Looks like we are headed for pre stimulus territory. S and P in the 700 range. Hold on to your hats!!!

 

[DoraM]

Looks like we are headed for pre stimulus territory. S and P in the 700 range. Hold on to your hats!!!

I am kind of worried about all of the pension funds if we get S&P500 in the 700 range again. Aren't most of them heavily invested in the stock market so they can get those guaranteed 8% returns they told the employees?

So even iif I manage to save a good portion of our 401K by market timing, I may end up losing it to taxes when the pensions need bailing out. A lose-lose situation...I am not happy.

 

[REWahoo]

Looks like we are headed for pre stimulus territory. S and P in the 700 range. Hold on to your hats!!!

Someone needs to start (and manage) a 'guess the bottom' thread...

Me, I don't know where or when we'll hit bottom and don't plan on worrying about it too much - at least not like the last time. My allocation (38% stocks) and cash bucket is much better positioned for a deep and protracted period of 'market unpleasantness' than in 2008. As long as SS checks keep coming

and Wellesley keeps paying dividends, I'm good for several years.

 

[ERD50]

I am kind of worried about all of the pension funds if we get S&P500 in the 700 range again. Aren't most of them heavily invested in the stock market so they can get those guaranteed 8% returns they told the employees?

I don't recall any 'guarantee' of 8% returns in my pension fund. Can you quote that language from your pension fund?

So even iif I manage to save a good portion of our 401K by market timing, I may end up losing it to taxes when the pensions need bailing out. A lose-lose situation...I am not happy.

And if you end up losing a good portion by market timing (you need to call both the in and out points reasonably well), you'll be really unhappy.

Good luck!

-ERD50

 

[TromboneAl]

The last time it felt to me like it really was "different this time" was in 2009. Here is a thread I started on 2/21/2009:

http://www.early-retirement.org/forums/f28/why-it-is-or-isnt-different-this-time-42647.html

And this is what the market has done since that day:

 

[Gatordoc50]

I am kind of worried about all of the pension funds if we get S&P500 in the 700 range again. Aren't most of them heavily invested in the stock market so they can get those guaranteed 8% returns they told the employees?

So even iif I manage to save a good portion of our 401K by market timing, I may end up losing it to taxes when the pensions need bailing out. A lose-lose situation...I am not happy.

We are getting a lesson in the mechanics of the free enterprise system. Defined benefit pension plans and guarantees have no place in it. Our leaders can baffle the American people, but they can't fool free market capitalism. It's a perfect economic system but not a compassionate one. It just doesn't care what people think they deserve.

 

[W2R]

Someone needs to start (and manage) a 'guess the bottom' thread...

Me, I don't know where or when we'll hit bottom and don't plan on worrying about it too much - at least not like the last time. My allocation (38% stocks) and cash bucket is much better positioned for a deep and protracted period of 'market unpleasantness' than in 2008. As long as SS checks keep coming

and Wellesley keeps paying dividends, I'm good for several years.

Ah, but what if runaway inflation occurs? There is ALWAYS something to worry about. Quick, run out and stock up on guns, ammo, and gold, and take to the woods.

I'll be fine too. Like you, I am much better positioned for another crash - - although my AA is about the same, I am old enough that claiming SS is always a possibility by now, and I have my teeny-weenie pension now, too. But more than any of that, I know that I have been though the 2008-2009 crash and survived it and my portfolio recovered. That knowledge is a tremendous asset.

 

[DoraM]

I don't recall any 'guarantee' of 8% returns in my pension fund. Can you quote that language from your pension fund?



And if you end up losing a good portion by market timing (you need to call both the in and out points reasonably well), you'll be really unhappy.

Good luck!

-ERD50

From:

The Public Pension Crisis - NYTimes.com

"Pension funds subsist on three revenue streams: contributions from employees; contributions from the employer; and investment earnings. But public employers have often contributed less than the actuarially determined share, in effect borrowing against retirement plans to avoid having to cut budgets or raise taxes.
They also assumed, conveniently enough, that they could count on high annual returns, typically 8 percent, on their investments. In the past, many funds did earn that much, but not lately. Thanks to high assumed returns, governments projected that they could afford to both ratchet up benefits and minimize contributions. What a lovely political algorithm: payoffs to powerful, unionized constituents at minimal cost."

 

[FIREd]

Stimulus? Bail outs? The folks in Washington say we are flat broke and that we need to cut spending.

Even the Swiss with their trading surpluses, low inflation, low unemployment and healthy public finances worry that the next few years are gonna be really bad. And that's what the politicians tell the public!

 

[REWahoo]

I am old enough that claiming SS is always a possibility by now, ...

I found that to be a very welcome 'safety net' back in 2008 when, the same month the market hit bottom, I applied to begin taking SS benefits. Can't help wondering how many folks who have been delaying will decide 'I've waited long enough' [-]should[/-] [-]if[/-] as the market continue its decline.

 

[W2R]

I found that to be a very welcome 'safety net' back in 2008 when, the same month the market hit bottom, I applied to begin taking SS benefits. Can't help wondering how many folks who have been delaying will decide 'I've waited long enough' [-]should[/-] [-]if[/-] as the market continue its decline.

I might be one of them! I always have that option, now that I am old enough for it, and I am glad about that.

Wow, down 370 points by now. Breathtaking. This reminds me of 2008, so much.

 

[RetirementColdHardTruth]

So much for market timing. Dow off 360 ish points. I am so glad I only put half my bonus in on Monday. Just changed the other half of my bonus to start going in daily for the next 10 days. Should be a wild ride. But we have seen this all before, today is nothing different.

 

[bbbamI]

Ahhhhh geezzzzzz....it's freak out time on the forum again.

Think I'm gonna make mahsef a frosty coffee drink...with a little whipped cream and chocolate sprinkles.