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How are people handling the recent down market?
Old 08-09-2011, 09:17 AM   #1
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How are people handling the recent down market?

I am wondering how people might be making use of this down market we have seen over the past few weeks.

Personally, I used it to do a bit of rebalancing. I am under my 50% stock ratio and have been for most of the year. So, I moved 1% of my investment dollars from short-term securities to international stocks. If things stay down and/or go down further, I may move another 1% this week. Slow and easy, no rush, not going to bet the farm.
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Old 08-09-2011, 09:27 AM   #2
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I haven't had to sell any stock funds to reduce my equity exposure, it was all done for me.
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Old 08-09-2011, 09:36 AM   #3
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A lot better with a 55/45 AA than with 70/30 three years ago. I used the recovery as a chance to reset my AA closer to what I discovered was my true comfort zone. I thought I was OK with 70/30 but a market that dropped almost 50% showed me otherwise.
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Old 08-09-2011, 09:49 AM   #4
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I haven't been persuaded about this rebalance thing, so I don't do that. But I do understand buy low/sell high, and if I can find the funds, when the market goes down, I buy. So now, I'm buying.
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Old 08-09-2011, 09:59 AM   #5
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Bought some stocks this morning....
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Old 08-09-2011, 10:02 AM   #6
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My daughter is freaking out. I told her someone like you should be happy it goes down once and a while. I told her stocks are on sale and if anything she should increase her deferrals.
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Old 08-09-2011, 10:06 AM   #7
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And here I thought the topic was going to be how we were handling the down market psychologically! I'm sleeping well and not upset about it yet. This is because I'm not yet sure this drop won't reverse in a few days. Seems like today, by 10 AM, the Dow has already regained 175 points. As in my LBYM thread, I am waiting and not spending much, but not distressed.

As far as buying and selling is concerned - - -

My equity allocation is down 2.5% from my planned allocation. So, I'm starting to think about maybe rebalancing if the market goes much further down and stays down. Right now the volatility is breathtaking. Haven't pulled the trigger yet.
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Old 08-09-2011, 10:09 AM   #8
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I hear you. I may do some nibbling by the end of the day.
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Old 08-09-2011, 10:19 AM   #9
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Taking the opportunity to do some re-balancing, and speeding up some planned 529 contributions. But otherwise, mostly sitting tight.
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Old 08-09-2011, 10:26 AM   #10
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I moved 7% of my portfolio from bonds to equities at COB yesterday (about 70% US and 30% international). First time I market timed.
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Old 08-09-2011, 10:27 AM   #11
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And here I thought the topic was going to be how we were handling the down market psychologically! I'm sleeping well and not upset about it yet.
Since my pension income is sufficient for my needs, and my investments are quite modest, there's no reason for me to be especially concerned at losing a little. I'm hoping (for my own sake, not the country's) that the market continues down for a while, until I've had a chance to invest some cash I've been holding. Naturally I want the market to come back, eventually, but there's no hurry.
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Old 08-09-2011, 10:28 AM   #12
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A lot better with a 55/45 AA than with 70/30 three years ago. I used the recovery as a chance to reset my AA closer to what I discovered was my true comfort zone. I thought I was OK with 70/30 but a market that dropped almost 50% showed me otherwise.
+1

As hard as it can be some days, I'm buying. Looking long term and standing my ground with a conservative AA.
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Old 08-09-2011, 10:34 AM   #13
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I will admit I am watching the market more closely than usual.
I do have a little bit of dry powder on hand...$10K in a TE money market fund for emergency purposes, and almost $10K built up in a credit union savings account. I am concentrationg on building up a better cash position and really should stick to that goal.
It is VERY tempting to do some equity bargain buying, but I am not going to burn that powder right now.
I will have some unexpected cash (HK tender offer) going into my sweep account in the next few weeks, so when that happens, maybe I will add that to some existing equity mutual funds (VHDYX or VTSAX). TBD.
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Old 08-09-2011, 10:40 AM   #14
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I do not think we will see any more -500 or -600 days after this - probably more like a few -100 days and a period of stabilization as people begin to realize that they dumped in panic.

I think we will putter around the 10,800 - 11,500 range for the rest of the year.

I bought a few hundred shares of CVX and looking to buy a couple hundred of O, if things start going down again from here ( which i think is likely ).
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Old 08-09-2011, 10:46 AM   #15
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Buy Buy BUY! I will keep dropping $1k in each day until I run out of money. I think today is just a temporary bounce. Tomorrow selling should continue. Panic is yet to set in with the general population. They are only just knowing what is going on today. As panic sets in we can get more and more. This worked well during the last crash, I don't see why it won't work this time.

Ask yourself the question: Are stocks worth less today than they were 2 weeks ago? I think we can all say that they are not worth less today (well other than the selling price). This too shall pass.

No storm can last forever. "Lao Tzu Tao Te Ching"
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Old 08-09-2011, 10:54 AM   #16
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Still within 5% band of 60/40 so no actions.

This is the first time since taking over our investments that the market has been a roller coaster.

It's been interesting to watch the daily ups and downs and to really grasp what it can mean to a return if one 'pulls out' of the market only to have it rally unexpectedly the next day.
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Old 08-09-2011, 11:16 AM   #17
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No storm can last forever. "Lao Tzu Tao Te Ching"
The hard part is being sure we we are approaching suitably close to forever.

Ha
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Old 08-09-2011, 11:28 AM   #18
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I moved 7% of my portfolio from bonds to equities at COB yesterday (about 70% US and 30% international). First time I market timed.
Uh oh. You are going to be hooked now. If the intraday trend continues, then tonight you will calculate how much you gained from your trade, and the next stop will be:

Day Trading.
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Old 08-09-2011, 11:35 AM   #19
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Uh oh. You are going to be hooked now. If the intraday trend continues, then tonight you will calculate how much you gained from your trade, and the next stop will be:

Day Trading.
Hard to day trade in index funds. And I suspect we will be jumping up and down for weeks or months until a recovery trend develops.
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Old 08-09-2011, 11:43 AM   #20
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Since I am interested in dividends more than anything, the NAV doesn't matter very much.
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