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

[wmc1000]

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!

 

[Rosie]

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.

 

[Big_Hitter]

could be an upturn by the end of the week...

 

[W2R]

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.

 

[nun]

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.

 

[marko]

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"

 

[youbet]

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.

 

[sengsational]

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.

 

[youbet]

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.

 

[sengsational]

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.

 

[heeyy_joe]

No worries, I'll wait it out.

 

[pb4uski]

I golfed today and just heard on the news on the way home that the Dow opened down about 1,000 and then bounced back. Not particularly unexpected. Perhaps too many people watched that CNBC special last night.

 

[Fermion]

If you are on the back nine now, the DOW has again fallen 600 points.

Might want to make it 27 holes if you can walk that much.

 

[Dawg52]

If you are on the back nine now, the DOW has again fallen 600 points.

Might want to make it 27 holes if you can walk that much.

Walk?

 

[Fermion]

Walk?

Come on, the only redeeming thing about golf is that you get to walk in what is generally a nicely landscaped area.

 

[Midpack]

There are more market timers and/or folks without the temperament to be in the market here than I thought, or they're more [-]panicky[/-] vocal?

 

[Fermion]

There are more market timers and/or folks without the temperament to be in the market here than I thought, or they're more [-]panicky[/-] vocal?

I haven't heard of anyone much who is selling. Everyone is buying the big dips or maybe doing a bit of opportunistic day trading. Only that one guy who sold everything and is sitting on 3 million cash

 

[RunningBum]

There are more market timers and/or folks without the temperament to be in the market here than I thought, or they're more [-]panicky[/-] vocal?

Really? I haven't been reading all the threads so maybe I'm missing them. I see some market timers looking to jump in, good for them. If you can make 5-10% in this swing, you can be pretty flat the rest of the year and still have a decent year. It's not my strategy, but some can make it work.

I don't think I've seen anyone bailing out of the market, which is what I would consider not having the temperament to be in the market.

I'm seeing a lot of people like me, commenting, but also watching and holding the course. To me, that's like commenting on the weather.

Which threads are you see people being [-]panicky[/-] vocal?

 

[Bestwifeever]

Yeah, I don't see anyone posting that they want out of the market.

In my case, we really weren't affected by the last crash or would be by this one (if it is a crash), but I still will worry about what happened a few years ago when people like my son-in-law were out of work for two years (and if going back to work was one's fall-back plan B if all hell broke loose, it might not have been an option), houses were foreclosed on, dividend stocks quit paying dividends, etc., etc. I think those are valid concerns at this stage, not that I expect them to happen, but they did before. Smarter people than I are posting here about how this little sell-off is more likely a blip and a correction, and I am certainly happy to read those sentiments!

Soon W2R will be reversing the whee, and we can all relax .

 

[hnzw_rui]

So much talk right now about buying low, when a low cannot be predicted. I totally respect the strategy of buying low and selling high, and using reserved cash to buy into the market after a plunge. I just think that I'm not one of those people.

For those like me who have a multi-year reserve of cash and bonds, I am not inclined to use that money to buy into the stock market at a time when I literally have to guess that the market is at or near a low. I will instead use that money and fixed income to ride out any storm.

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?

As I expect to be working for the next 25 years or so, this would have been a nice opportunity for me to invest more (90/10 AA) had I the spare cash. Alas, I've already got as much as I can spare auto-invested from the paycheck to the 457(b) and Roth IRA so whatever the market does, I'm on enforced DCA.

Had I been on the other side of the retirement fence, the only buying I'd do would be to rebalance the AA. I wouldn't be using cash reserves intended to counteract equity risk to buy even more equities.

Although to be honest, if it hadn't been for my co-worker who checks the markets daily, I wouldn't even know the state of the market right now.

 

[kgtest]

I would buy but I can't seem to get on the rollercoaster with it moving soo fast.

DCA for me as always.

I used my spare change to buy AAPL back at 125 . I kinda use AAPL stock as my short term emergency fund...I know its a terrible idea...good thing I don't have any emergencies right now...if I do Duct Tape will have to suffice. I buy AAPL, I sell AAPL, then I buy more AAPL, then I sell some more.

I do trade stocks, but only make less than 20 calls a year.

 

[Gatordoc50]

I bought some in my DD's Roth. Other than that, just going to rebalance in October.

 

[jazz4cash]

I am sitting tight and having a cocktail. I just retired at the beginning of the month so this market action feels personal, but I am comfortable with my current cash allocation. I am still not sure where and how I will manage short term expenses and I also need to write out a set of rules for rebalancing. In the past month I have sold off some winners and exchanged them for better opportunities. Fortunately the stocks I bought have held up well in the recent market action. I do see many more stocks trading at attractive levels but I am more comfortable to sit tight until I get my AA rebalance rules set up and validate actual expenses in retirement.

 

[unclemick]

My lust-o-meter is awakening. What with us well into preseason and my vision of a few good stocks coming into bargain buy range.

However real money(aka my retirement portfolio) is full auto in balanced index life cycle funds so those trusty Vanguard computers were/are re-balancing away while I 'hurry up and just stand there'.

heh heh heh - a few more thousand points down and I may have to do some stock market tailgating. Scrounge up some 'mad money' and buy a 'few good stocks'.

? Suggestions?

 

[tulak]

I can't resist a buying opportunity, so even though my rebalancing bands weren't out of whack, I put in buy orders for some of my allocations.

I'm still accumulating, so my situation is different than most here. I see very little downside buying now for funds I won't need for at least 5-10 years. I'd be quite content if markets would struggle for a prolonged period of time, but I'm skeptical that will happen.