Get out now and beat the debt ceiling crash?

[ScaredtoQuit]

Over the years, I've learned the hard way that it's really hard to time the market. As a result, I do have the discipline to stay put when things start getting volatile. However, I can't help thinking that the ongoing battle over the debt ceiling offers a unique opportunity to earn some extra trading profits. It's a slam dunk that some time over the next four weeks, the market is going to crash because of the contention in Washington. So my thoughts are... get out now and jump back in during the crash

Thoughts anyone??

 

[REWahoo]

Over the years, I've learned the hard way that it's really hard to time the market....

It's a slam dunk that some time over the next four weeks, the market is going to crash because of the contention in Washington...

Thoughts anyone??

The two statements above don't appear to be compatible.

Often it is you, not the markets, who get "slam dunked".

 

[W2R]

Over the years, I've learned the hard way that it's really hard to time the market. As a result, I do have the discipline to stay put when things start getting volatile. However, I can't help thinking that the ongoing battle over the debt ceiling offers a unique opportunity to earn some extra trading profits. It's a slam dunk that some time over the next four weeks, the market is going to crash because of the contention in Washington. So my thoughts are... get out now and jump back in during the crash

Thoughts anyone??

Like you, I can't seem to time the market successfully. My asset allocation is comfortable enough that I did not sell during 2008-2009, so I am pretty sure I can hang on through anything.

I was sure that gas would cost $5.00/gallon during June. Instead, it is down to $3.25.

My thoughts are that I'd better sit tight and wait this out - - and not jump out right now.

 

[ERD50]

It's a slam dunk that some time over the next four weeks, the market is going to crash because of the contention in Washington.

If it was a slam dunk, it would already be factored into the price today. No way to profit from it at this point.

Over the years, I've learned the hard way that it's really hard to time the market....

Thoughts anyone??

Are you sure you learned this? You might need to pay some more 'tuition'.


-ERD50

 

[73ss454]

So you are sure the market will crash within the next 4 weeks. Amazing, how did you get this information?

 

[LOL!]

I'm gonna guess that your definition of a crash is different from mine. What are you expecting ... maybe a 2% drop or perhaps a 5% drop to get us back to where we were 5 days ago?

 

[Animorph]

I'm gonna guess that your definition of a crash is different from mine. What are you expecting ... maybe a 2% drop or perhaps a 5% drop to get us back to where we were 5 days ago?

That's a key. How much do you think it'll go down? And then, how much are you willing to bet? And last, how close can you hit the peak (which was a while past most likely) and trough? A 10% drop and a bet of 10% of your portfolio and you can make 1.1% extra if everything works out OK. Is that worth it?

 

[ScaredtoQuit]

I'm taking heat now and I know I deserve it. Intellectually, I really do know that timing is a no- no and I haven't succumbed to it for more than a decade. (Of course I also knew that timing was a no-no when I was doing it 15 years ago.)

But cashing out now strikes me as a reasonable thing to do at the moment. With all of the enmity between Democrats and Republicans these days, doesn't it seem likely that sooner or later the market is going to react to the possibility of a default? I mean isn't it obvious to everyone?? Don't you guys hear what the opposing sides are saying about each other on MSNBC and CNBC? Really, these guys are in servious opposition to each other.

 

[brewer12345]

Time for the standard grandma drill: everyone into the cellar.

 

[ERD50]

With all of the enmity between Democrats and Republicans these days, ...

How is that different from other days? Oh, I know, they don't shoot each other these days:

The Burr–Hamilton duel was a duel between two prominent American politicians, the former Secretary of the Treasury Alexander Hamilton and sitting Vice President Aaron Burr, on July 11, 1804.[1] At Weehawken in New Jersey, Burr shot and mortally wounded Hamilton.

-ERD50

 

[ScaredtoQuit]

What's different is that not passing the debt ceiling is the financial equivalent to a nuclear bomb. This standoff is far more polarizing than the one that took place at any time in the past.

Am I weird or am I the only one a little wary about what will happen to equities?

 

[REWahoo]

I mean isn't it obvious to everyone??

Markets don't always do what you expect them to do, especially when "it's obvious to everyone".

Don't you guys hear what the opposing sides are saying about each other on MSNBC and CNBC?

Pretty much the same thing they've been saying about each other for the past 100+ years.

Consider this for a second - and yes, I know a 'slam dunk' crash is coming and this won't actually happen. But what will the market do if a last-minute deal is forged (never happen of course) and disaster is averted (yes, I know we're doomed)? Could a huge "relief rally" follow (even though it won't)? Where do you want to be in that (never-in-a-million-years) situation, in or out of the market?

Just askin'...

 

[TromboneAl]

I was certain that Y2K would cause a stock market crash. Even if computers didn't stop working, I was sure that people would worry that they would, and pull their money out of the market.

 

[HatePayingTaxes]

I read an article in Kiplingers some months back and it said, at the beg of 2011, if you knew everything that will happen in 2011, would you still invest or cash out? We had middle east unrest, gas price spiking, Japan earthquake, etc etc can't remember all, but market was still up 7%-10%.

All I'm saying is market's unpredictable and the best course of action is to have a comfortable AA and stay course. Of course you can have some play money but that shouldn't account for majority of your portfolio.

 

[HFWR]

Time for the standard grandma drill: everyone into the cellar.

That's where they kept the 'shine...

I'm standing pat, but if the market takes a big dump, I might up my stock allocation. Not that I'm a DMT or anything.

 

[clifp]

I have to agree somewhat with Scared. The market seems to completely discount the possibility the debt ceiling situation doesn't get resolved.

I'd also say that if you were doing rebalancing, July 1 is probably not the worse date to do it...(I am assuming that most people allocation of equities has increased in the last 6 or 12 months.) See this isn't dirty market timing just prudent rebalancing and has nothing to do with a week of big gains in the market

 

[REWahoo]

Time for the standard grandma drill: everyone into the cellar.

Yep, that clean mountain air enables you to see things much better. That's why they built those NORAD bunkers in Cheyenne Mountain...

 

[REWahoo]

I'm standing pat, but if the market takes a big dump, I might [-]up my stock allocation[/-] rebalance.

Now you can accomplish the same thing and stay clean...

 

[73ss454]

I'm taking heat now and I know I deserve it. Intellectually, I really do know that timing is a no- no and I haven't succumbed to it for more than a decade. (Of course I also knew that timing was a no-no when I was doing it 15 years ago.)

But cashing out now strikes me as a reasonable thing to do at the moment. With all of the enmity between Democrats and Republicans these days, doesn't it seem likely that sooner or later the market is going to react to the possibility of a default? I mean isn't it obvious to everyone?? Don't you guys hear what the opposing sides are saying about each other on MSNBC and CNBC? Really, these guys are in servious opposition to each other.

Can you point out a time when the Dem and Reps got along famously? It's the same thing over and over.

 

[ScaredtoQuit]

Democrats and Republicans seemed to get along much better during the 70's and even the 80's. Looking back at the 70's, there really didn't seem to be that much of difference between the two parties... for example, affirmative action was spearheaded during the Nixon administration... there was no significant difference in the taxation policies of the two parties... both parties pursued moderate agendas with not that much difference in ideaology.

In the 80's, things seemed to drift apart a bit but at least everyone was still cordial and compromises were possible. Ted Kennedy was good friends with Orin Hatch and there were many other friendships across the aisles. Tip O'Neill worked right alongside Ronald Reagan and developed many compromises.

Flash forward to today and members of the two parties won't even say hello to each other in the hall. It may seem like there haven't been any changes in the way the two parties work with each other, but party enmity hasn't been this bad since the duel between Hamilton and Burr!

 

[REWahoo]

Flash forward to today and members of the two parties won't even say hello to each other in the hall. It may seem like there haven't been any changes in the way the two parties work with each other, but party enmity hasn't been this bad since the duel between Hamilton and Burr!

I think you should either sell or turn off your TV and get on with your life. The nice thing about the second option is you don't have to fret about when to buy...

 

[grumpy]

The Senators, congressmen and the executive branch folks who are trying to reach a compromise on the debt ceiling (according to their financial disclosure forms) have most of their net worth tied up in the market, just like we do. If you have inside information that they are liquidating everything because THEY don't think the problem will get solved, then let us all know so we can get out too.

Otherwise I will trust my asset allocation and the fact that I don't need any of my investments to maintain my lifestyle.

 

[chinaco]

If you are really worried do some hedging.

Options are available... you can write 'em too!

 

[ziggy29]

Can you point out a time when the Dem and Reps got along famously? It's the same thing over and over.

There have always been significant philosophical differences, sometimes rather pronounced. These days the rancor isn't only over the issues; it's become personal.

Long time members of the Senate from both parties have often remarked how much worse it is now than it was, say, 30-40 years ago. It used to be that you could debate each other all day -- sometimes heatedly -- and at the end of the day, go out for a couple drinks together, drop the shop talk and enjoy each other's company.

These days disagreement on the issues is much more likely to boil over into personal hatred. When it becomes personal, you will do whatever it takes to prevent your "enemies" from claiming any credit or getting a "win." Personal vendettas are preserved over pursuit of the national interest, IMO. Anything that's even remotely a concession to the people you hate becomes a non-starter. (Hence the increasing trend of both sides insisting some things are "off the table" as a precondition to negotiations.)

The 24/7 media have a vested interest, IMO, in turning political debate into Jerry Springer. It's good for ratings. And the politicians are giving us what they think we want, apparently -- we want "our team" to not only win legislatively, but to personally ruin the "other guys."

Having said that, even these days both parties usually wind up figuring out a way to work together when it **really** hits the fan. It just feels like their unwillingness to work together at other times is leading us down that road more often.

 

[ERD50]

Democrats and Republicans seemed to get along much better during the 70's and even the 80's. ...

Long time members of the Senate from both parties have often remarked how much worse it is now than it was, say, 30-40 years ago. ....

I sense a boat-load of revisionist, looking through rose-colored glasses, history here. If I get motivated later, I might try to google up some infamous quotes from the 'genteel' times of 30-40 years ago.

Maybe those long time members of the Senate recall the days when you could have an affair (FDR, JFK) and the press (a bunch of 'good old boys') would not report it. It's so much 'worse' now!


-ERD50