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How long will this shakeout last?
Old 06-12-2007, 10:14 AM   #1
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How long will this shakeout last?

For the first 5 months of '07 I was riding high on my returns...everything was up up up! But the last two weeks have been humbling, as volatility has returned to strike me down from the heights of hubris. So how long will we have to suffer these slings and arrows of the market's cruel horde? Do the soothsayers among you see continued malaise in 2H'07?
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Old 06-12-2007, 10:42 AM   #2
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For the first 5 months of '07 I was riding high on my returns...everything was up up up! But the last two weeks have been humbling, as volatility has returned to strike me down from the heights of hubris. So how long will we have to suffer these slings and arrows of the market's cruel horde? Do the soothsayers among you see continued malaise in 2H'07?
Some would say this is classic "sell in May and go away" theory.

Go back to same time last year, Market was about even for the year,
the end of the bull market, blah blah blah. Those that sold missed out
on about 25% gains.

IMWO (In my worthless opinion)
Market was hoping for a fed rate drop, finally realized it's not going to
happen, I expect frothiness for the next 4-5 months.
TJ
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Old 06-12-2007, 10:43 AM   #3
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Until people get "used" to treasuries >= 5.25%. In the meantime, investment houses have a lot of rejiggering to do of their portfolios.

But this is really small potatoes so far. Things like this happen all the time. You can't expect markets to run up indefinitely. Don't you remember the 3% "correction" in February?

Get used to volatility. It's around more often than not. Best to ignore it.

Audrey
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Old 06-12-2007, 11:14 AM   #4
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Weeks to months, I'd guess. Pick your spots and see if you can scoop up some cheap stuff while it lasts, but invest based on what you think will happen in the next few years to decades, not weeks or months.
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Old 06-12-2007, 11:22 AM   #5
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Weeks to months, I'd guess.
At this rate some of my shorts will qualify for long-term cap gains.

I don't know how much market fundamentals matter to the investing herd right now, but the psychology is probably driving things. It's going to take everyone another month or two, at a minimum, to get over their Fed fears. And hurricane season will be around for five months!
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Old 06-12-2007, 11:22 AM   #6
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Do the soothsayers among you see continued malaise in 2H'07?
nope, not too much more, I'm stilllll buying on the dip (mostly utilities and divi stocks--modestly), Life Equities is are Good, it's different this time, stop and smell the roses. Need I say more?

Seriously, everything of mine has been hit a little lately. I'm down approximatly 3%. I think we'll all have a good fall and winter. Everybody should have tested and back tested their asset allocation plan, follow it, and have confidence in it. If not, they're not doin stuff right.
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Old 06-12-2007, 11:35 AM   #7
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At this rate some of my shorts will qualify for long-term cap gains.
My understanding is that short sales are taxed as short term gains regardless of how long they are held. Again, my understanding is that's the case because you aren't holding the security -- you only actually hold it from the time you buy until you deliver to close the short sale.
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Old 06-12-2007, 02:19 PM   #8
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So how long will we have to suffer these slings and arrows of the market's cruel horde? Do the soothsayers among you see continued malaise in 2H'07?
Z-Z-Z-Z-Z-Z I don't even bother to look except when my annual review rolls around and I check to see if a rebalancing tweak is needed.

Stay the Course. Sleep well.
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Old 06-12-2007, 05:11 PM   #9
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On the plus side, I have mutual fund distributions at the end of the month...at least they will be reinvested at cheaper prices!
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Old 06-12-2007, 05:15 PM   #10
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I need to look around and see what I should be buying with the cash that had been sitting around in my account.
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Old 06-12-2007, 05:41 PM   #11
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It'll last until about 3 weeks before I close on the sale of my old house, whereupon it will fly up 30%...
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Old 06-12-2007, 06:47 PM   #12
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Caught the tail end of some guy last night on Nightly Business Report(PBS) saying the market was 20% UNDERvalued.

Now that's a sure fire kiss of death - I may have till pre season is over and regular NFL starts for my entertainment.

Hmmm - kayak break over the summer, then stocks and football in the fall.

Meanwhile for the 'real money' I have a prayer rug and compass so I can bow in the direction of Valley Forge and meditate on the noise of a Vanguard computer rebalancing as the market wiggles.

Which brings brings me to - I know from watching PBS the sounds they make in Nepal - but what is the sound of a Vanguard computer rebalancing a Target Retirement Fund??

heh heh heh - buy some stocks in October, maybe bet on a Saint's game, argue with my sister about the Pat's. Meanwhile take the summer off.
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Old 06-12-2007, 06:47 PM   #13
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It'll last until about 3 weeks before I close on the sale of my old house, whereupon it will fly up 30%...
Excellent news! Just be sure to let us all know when it is 4 weeks before the close, okay? (I confess, I dream of being a dirty market timer!)
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Old 06-12-2007, 06:54 PM   #14
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Yeah, I looked pretty smart when I sold off half my equities in my taxable account just before the 400 point drop. Then I was dumb again. Now i'm smart again.

Its all a matter of holding out for your acceptable level of intelligence.
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Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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Old 06-12-2007, 11:36 PM   #15
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Yeah, I looked pretty smart when I sold off half my equities in my taxable account just before the 400 point drop. Then I was dumb again. Now i'm smart again.

Its all a matter of holding out for your acceptable level of intelligence.
CFB.... I keep telling my BIL that just because you were 'right' does not mean you were 'smart'...

I had written the a bit longer... but lost it... so here is a short version....

There was a log shooting down river with an ant on top... he thought that he was driving....












Just having some fun...

I do think you are one of the 'smart' ones...
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Old 06-13-2007, 12:26 AM   #16
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You heard it here first!

The market will continue down until it levels off or starts to recover. If you make anything in the next 6 weeks, my MER for this advice is just 4.6%.
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Old 06-13-2007, 04:26 AM   #17
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Yeah, I looked pretty smart when I sold off half my equities in my taxable account just before the 400 point drop. Then I was dumb again. Now i'm smart again.

Its all a matter of holding out for your acceptable level of intelligence.

could we have a dirty lil market timer in our midst ha ha ha
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Old 06-13-2007, 08:49 AM   #18
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We're still DCA'ng net buyers, so I really don't care much.
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Old 06-13-2007, 09:36 AM   #19
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I still have 14 years until FIRE, so all I see is a buying opportunity!
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Old 06-13-2007, 10:15 AM   #20
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Was the ant's name Warren?
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