How About Just Sitting Tight (and Having a Cocktail)?

[NW-Bound]

A while back, I talked about how I compared Wellesley vs the S&P over a period from 1980 till now. Wellesley underperformed for 15+ years, then caught up with the S&P in 2012 or 2013. Then, it underperformed again until this correction when the S&P dove down to meet it.

But man, 15 years is a long time and few people have that patience. Investment ain't easy, if you want to get that last 1% of return.

 

[splitwdw]

Aw, you're so sweet! But really, I'm not all that stressed. Which is highly unusual for me, I guess our recent move burned out all my stress receptors.

I'm grateful that the correction occurred before we closed. I suppose by the time the sale proceeds are available to invest, the correction may have run it's course, oh well. {shrug}

Rosie, Just wait another "correction" will be along. Just keep your burned out stress receptors in the off position.
Yay, for the completed real estate transaction.

 

[hesperus]

I guess it depends if your trading or investing. For me, I don't trade in my main accounts, I invest. I have a fun money account for trading & speculation. I'm in this for the long term, so when I buy something I plan to hold it for a period of time. That said, I'm not averse to market timing. Some of the discounts on monday were incredible, especially if you caught part of that flash crash in the early morning.
If your allocations are on target, yeah I'd say sit tight, and have a cocktail as you suggested. If not, as in my situation, I still have work to do, and corrections are where I test my mettle. I put in $72K on monday to shore up underweight sectors, and I still have another $250K sitting in cash, that's designated for investments. I'm still thinking there's more downside to come, but again for the long term I think I caught some buys and am in good shape.
That being said, it was still very difficult to drop a large sum into the market while I simultaneously watched my portfolio drop by $100K that very day.

When I think of investing during times like this, I recall someone saying, "wealth is created in bear markets, you just don't see it yet"

Today, yeah, a cocktail sounds about right

 

[marko]

Can I get my cocktail if I don't sit tight? Jus' askin'

 

[Mo Money]

OP says: Nope.

 

[mickeyd]

Is anyone else just sitting tight?

Does that equate to stay the course? If so, yes.

 

[NW-Bound]

A lot of what I'm seeing on this board right now is a take-the-cash-out-of-mothballs-and-invest mentality.

Is anyone else just sitting tight?

Can I get my cocktail if I don't sit tight? Jus' askin'

OP says: Nope.

I did not sit tight. I bought. Not a lot, but a bit to be able to claim that I buy low.

I guess no cocktail for me either. Fine. I only drink straight spirit anyway. Will pour myself a shot tonight as a self pat on the back.

 

[petershk]

Nw: another thing is you can go heavily index and not believe efficient market (what I do).

Wrt Buffett... He advises a 90% S&P index and 10% short term bonds for most investors and hold that pretty much forever.

Not because he believes in EM but because it's "protection against ignorance."

So I think you either
A) spend a lot of time becoming a highly informed business owner/investor

Or

B) protect against ignorance and buy low cost index funds/etfs.

Case in point last week. If you are investor A you don't look at price as an indication of value... Company A's shares drop 15%... What do you care... You are confident you know what it's really worth and you buy and sell based on the market price relative to the value.

If you're investor B... You admit ignorance and just keep doing what you always do... Rebalance, buy as normal, etc.

The dangerous place is in the middle where you allow the short term market price to drive your long term investment decisions.

I wish I was A... But deep down I know I'm B. I get rattled by those movements so I have to make sure I dont make decisions while they happen.

Sent from my HTC One_M8 using Early Retirement Forum mobile app

 

[Sasset]

Staying the course as I did in 2008 - 2009. I am watching though as I plan to retire in early 2016

 

[NW-Bound]

I am not a conformist, so always want to be a bit of a contrarian. When people buy, I want to sell, or at least not buy the same stocks they do. When they sell, I want to buy but am limited by the cash I have.

So far so good. My style has not made me rich yet, but has not bankrupted me either. About beating the buy-hold indexers, some years I do, some I don't.