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Old 08-24-2015, 10:20 AM   #41
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Little early for a cocktail, but I'll be sitting tight. Off to buy four new tires today so if you follow that market predictor, consider that my tip of the day.

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Old 08-24-2015, 10:24 AM   #42
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The sudden market drop is the reason we retirees keep an emergency fund or cash equivalents--so we're not forced to sell when stock prices are down.

It's a shame we're getting a net zero income off that cash, however.
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Old 08-24-2015, 10:27 AM   #43
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Two Words:

"Balanced Fund"

Automatically buys low and sells high.

Certainly helps to ward of feelings of anxiety that can be provoked by days like today.

-gauss
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Old 08-24-2015, 10:30 AM   #44
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Sitting tight: - - Nah, my plan for today was to invest half the money I got last Thursday afternoon from selling my house. I will DCA the rest over the next few months. So in accordance with my plan, I invested already this morning.

At least, I think I did. Vanguard said there might be a delay because the money has not cleared the bank (despite the fact that both my Vanguard balance and my bank balance agreed earlier this morning that the money is at Vanguard). Then Vanguard seemed to crash temporarily and I couldn't even get back in for a few minutes, which was unnerving.

Having a cocktail: - - Isn't it a little early for that? I don't drink, so I am enjoying the unusual third cup of coffee instead while I watch the market tumble. Extra creamer, please!
W2R, a famous crooner once said, "I feel sorry for people who don't drink, because when they wake up in the morning, that is the best they are going to feel all day. LOL....Just kidding gal. Congrats on selling your home and having the nerve to invest today. We've all seen this movie before.
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Old 08-24-2015, 10:30 AM   #45
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Sitting tight here. With 4 years of living expenses in cash/short term bonds I don't plan to do anything other than wait it out. If my stock allocation drops to 45% from my current 50% I would rebalance.
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Old 08-24-2015, 10:34 AM   #46
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I want to be about a 60/40 stock/bond mix for the long term. We are about 50/36/14 stock/bond/cash now so I am looking to do some buying.


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Old 08-24-2015, 10:36 AM   #47
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However, if you are recently retired, didn't build in enough of a fixed income/cash cushion and have to sell into a prolonged downturn it could be nasty.
Just for the sake of playing devil's advocate, selling into a prolonged downturn may feel nasty but in reality, probably isn't. If you're selling on a reasonably regular basis then over time, more of those transactions will be during a bull market than a bear market. In effect, you're DCA'ing out of the market.

However, especially for a first-timer, it would probably feel quite nasty (I'm merely arguing that it actually isn't).
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Old 08-24-2015, 10:43 AM   #48
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GRRR Gilead was $85 this morning and now is $103 Same thing with Apple. If I had only gotten up earlier, had some coffee and been ready to buy. Two great stocks that went on a black Friday door buster sale and I was not one of the first 100 in line.
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Old 08-24-2015, 10:56 AM   #49
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I was going to move more to Roth, but went sailing instead. I did buy a bag of ice
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Old 08-24-2015, 10:57 AM   #50
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I'm sitting tight. Can't change your game plan after a bad play.
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Old 08-24-2015, 11:03 AM   #51
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Sitting tight and continuing to throw in another grand every other week into my S&P mutual fund. Have a minimum of 2 years cash in my online savings account so it is making money when the markets sour!
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Old 08-24-2015, 11:21 AM   #52
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I'm in a similar situation as W2R & a few others here, the sale of my home is expected to close late this week. I was originally planning to invest 1/4 of the proceeds right away and DCA the rest over the next 8 mos, but now that we're in the downturn I might accelerate that plan a bit. We'll see what transpires.
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Old 08-24-2015, 11:26 AM   #53
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could be an upturn by the end of the week...
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Old 08-24-2015, 11:33 AM   #54
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I'm in a similar situation as W2R & a few others here, the sale of my home is expected to close late this week. I was originally planning to invest 1/4 of the proceeds right away and DCA the rest over the next 8 mos, but now that we're in the downturn I might accelerate that plan a bit. We'll see what transpires.
I can't imagine the stress you must be under! My sympathies. Real estate is stressful enough on its own, without having to worry about a highly volatile market too.
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Old 08-24-2015, 11:56 AM   #55
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If people follow the pretty simple principles of the Bogleheads this correction should hold no fears. Personally I have enough in savings and rental income for the next year at which point my pension begins. So my plan to never have to sell anything in retirement is working out and the level of the stock market has no effect on my income.

Those that have retired into this market without a good cash cushion and have to sell at a loss to provide income will be the hardest hit.
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Old 08-24-2015, 11:59 AM   #56
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Interesting comments from people I work with. Stocks going down means time to sell.
Typical herd mentality.
These must be the same people who won't buy new jeans when there's a big sale going on!

Better yet, "Naw...I'll wait till real estate prices go way down before I sell my house"
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Old 08-24-2015, 12:28 PM   #57
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There is a lot of space between the extremes of "sit tight and do absolutely nothing" and "buy! buy! buy!"

I've purchased some positions in sectors that I've been interested in and following for a while and that entered my "buy range" the last few days. And I'm continuing to shop.
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Old 08-24-2015, 12:35 PM   #58
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As of Friday, only one asset class was nearing (but didn't cross) the AA action band, so I put in a limit order for it. It didn't execute (never went low enough), so I guess despite my best efforts, I'm sitting tight.
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Old 08-24-2015, 12:43 PM   #59
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Just for the sake of playing devil's advocate, selling into a prolonged downturn may feel nasty but in reality, probably isn't. If you're selling on a reasonably regular basis then over time, more of those transactions will be during a bull market than a bear market. In effect, you're DCA'ing out of the market.

However, especially for a first-timer, it would probably feel quite nasty (I'm merely arguing that it actually isn't).
+1

Over the long haul, I've always regretted holding much cash. This has been especially true the past few years. For example, if you put the money for a kid's college education into a S and P 500 index fund five years ago and had to sell today, despite the "correction," you'd be far, far ahead as compared to having put the money into CD's. Historically, it generally costs a lot to hold cash.......

Folks watch an equity investment double over the years and then for some reason feel bad if it drops a few percent before they sell at the end of the holding period. They can only think of the drop from the peak and not the gain from the beginning.

That's not to say that there aren't times and reasons to hold cash. But it does seem like folks overstate the pain of selling in a down market when the gains from the initial investment point are still significant.
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Old 08-24-2015, 12:49 PM   #60
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But yes, I agree, folks watch an equity investment double over the years and then for some reason feel bad if it drops a few percent before they sell at the end of the holding period. They can only think of the drop from the peak and not the gain from the beginning.
That's one reason why I do an IRR on the span of each investment. If you rebalance out of winners occasionally, the IRR looks even better. I only do the IRR's once a quarter because the way I do it is sort of a PITA, but it serves to remind me that it's the long term that matters.
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