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Old 07-11-2008, 02:58 PM   #61
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I love it. Six weeks ago I started all this by posting that I was up slightly for the year. This whole "collapse" started in late May. I'm down about 8% for the year with my 40 bond/60 equity mix. My cash represents about 7 years of living expenses at my "midpoint life style" case. I'm not happy about it but I can't see any reason to panic but many are.

Is there any NEW information out there about anything? Pundits continue to wring their hands. Israel and the US still don't like Iran and visa versa. That means oil could go higher (if not lower). Analysts continue to downgrade financials due to the credit crisis but there has just been noise for at least 3 months.

In the midst of all this, company earnings continue to look pretty good against earlier projections. If you're not in a few isolated locations, housing prices are holding up pretty well. Unemployment is relatively low at 5%. The US govt ran a budget surplus last month. The trade deficit is down and exports are rising. People are standing in line to spend money on video games and fancy cell phones so the consumer can't be tapped out.

Please panic. Do it for the good of the country.
I'm with you--I frankly don't see the armageddon scenario playing out. Unemployment claims are running below that of the 2001 recession, forward PE ratios are reasonable, and companies are hitting their (slightly reduced) quarterly earnings forecasts. This environment seems to be the result fear of the unknown.

I think I am very much in the minority in thinking that the market can snap back relatively quickly and that we could be seeing all-time nominal highs in 2009/2010. That would make this a great time to be buying equities. But, what do I know.
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Old 07-11-2008, 03:07 PM   #62
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That would make this a great time to be buying equities. But, what do I know.
I'd say (based upon my personal investment history) that you're pertty smart ....

But hey, what do I know?

- Ron
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Old 07-11-2008, 03:17 PM   #63
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I'd say (based upon my personal investment history) that you're pertty smart ....

But hey, what do I know?

- Ron
I don't know--all my colleagues tell me I am nuts for continuing to invest in this environment. Of course they were wildly bullish when the market was hitting new highs, so I see there extreme bearishness as a bullish sign.
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Old 07-11-2008, 03:27 PM   #64
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I don't know--all my colleagues tell me I am nuts for continuing to invest in this environment.
Before I retired, I constantly heard from the "financial experts" I wor*ed with of what/how I should invest my money.

Well, guess what. They are still wor*ing. I retired early last year (age 59 - not that early, but certainly earlier than my "estimate" of age 62 to 66).

It's your money (and your life). If you make a mistake, your "colleagues" will not help you out. If you don't err (and things work out well), they won't admit your "success".

So it all comes down to what you think - what you want to do. In fact, I don't expect you to follow my "advice" (but hey, give it some consideration - I took the time to respond! )...

- Ron
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Old 07-11-2008, 03:35 PM   #65
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Before I retired, I constantly heard from the "financial experts" I wor*ed with of what/how I should invest my money.

Well, guess what. They are still wor*ing. I retired early last year (age 59 - not that early, but certainly earlier than my "estimate" of age 62 to 66).

It's your money (and your life). If you make a mistake, your "colleagues" will not help you out. If you don't err (and things work out well), they won't admit your "success".

So it all comes down to what you think - what you want to do. In fact, I don't expect you to follow my "advice" (but hey, give it some consideration - I took the time to respond! )...

- Ron
Ron,
Congratulations on your success and thanks for the advice. I have learned over the years to tune the naysayers and doomsdayers out, but there sure are a lot of them.

Deep down, I know you need to take risk to be rewarded and also that there are no guarantees. I know also that you need to earn your equity premium by having the crap scared out of you occassionally. Without the fear, equityholders would earn t-bill returns.
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Old 07-11-2008, 03:37 PM   #66
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What you guys bitching about? GE, KO, NM, all finished up today. STON finished flat. Let the dividends come to papa! Life is good.
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Old 07-11-2008, 03:46 PM   #67
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Can I ask how your investments have fared year to date? To me it sounds like your 50/50 is pretty conservative so I hope you haven't lost too much ground overall.
Bestwife, we have lost ten percent out of our combined portfolio.

And now that I've written that, I'm able to put it a bit more in perspective. ten per cent is not the end of the world. I can handle ten percent.

It's more the worry of ten percent more next week (or next trading day! ) and then ten percent the next and then ten percent the next.....and not recouping for several years....

All of you have given me some food for thought and I will definitely be less vulnerable to my broker's fast talk when I meet with him on Wednesday.....
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Old 07-11-2008, 05:57 PM   #68
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I was raised with the notion that that buy high and sell low was not the way to go.. Remember, the broker(age) gets paid every time you trade...

FWIW, I would change reps, not necessarily your portfolio. Telling you to hide under the bed for two years isn't the answer.
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Old 07-11-2008, 07:22 PM   #69
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This "down market" is a tremendous opportunity. Sure, things could go terribly wrong next week, but I will again buy more. Each big down-tick causes me to buy, I can't help it, I know that one day soon greed will return. When greed returns (with a vengeance) I will sell equities and buy bonds, buy low and sell high, and re-balance as necessary. You must be contrary, especially in a down market, or you will miss that huge up-draft.

Yep, it *is* different this time, there is a greater opportunity than the last time...don't miss it.
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Old 07-11-2008, 07:34 PM   #70
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This "down market" is a tremendous opportunity. Sure, things could go terribly wrong next week, but I will again buy more.
What a great "blue light special"!!!

I just bought more Wellesley (VWIAX), Total Stock Market Index (VTSAX), and FTSE All-World Ex-US (VFWIX).

I bought with funds from my VMMXX (Prime Money Market) account at 8:05 Eastern Time. I don't know if I got today's closing rate, though, since I bought at 8:05 PM Eastern Time. That might be too late. (?)

But then, the market might plunge more on Monday so it could be a good day for buying, too.
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Old 07-11-2008, 08:31 PM   #71
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I have zero debt... nada... even my real estate is paid off.
I have 100% company paid health and dental and a glorified
hobby [self employment from home] that brings in enough
income to cover everyday expenses. I am blessed
Even if you are ALL cash, you are not 100% protected:
Scenario - financial system gets much worse, fed balance sheet used up, forced to make good on assets to keep system alive. Results -> possible extreme ramp up in inflation, devaluation of US currency.
Scenario - financial system gets much worse, fed lets institutions fail. Result -> breaking of the buck on various "safe" money market funds, deflation as counter party causes an un-leveraging of assets.
Scenario - ...

My point isn't to scare, just to say whatever you do has risks, including staying out of the market. Me? I try to sleep ok at night by being conservative with my allocations, including over 20% in cash and easily converted fixed instruments (CD's, iBonds, relatively short term Treasury Notes), and another healthy chunk in longer term fixed instruments (with a big part of that inflation adjusted). The rest - in equities.
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Old 07-11-2008, 08:39 PM   #72
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I was going to buy more equities this past monday...but I got greedy and decided to hold off...good thing, the market is lower and so are my target stocks....gotta love those blue light specials, gonna target monday's opening.

...and yep Dawg, let those dividends come to papa!

R
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Old 07-11-2008, 08:39 PM   #73
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What a great "blue light special"!!!

I just bought more Wellesley (VWIAX), Total Stock Market Index (VTSAX), and FTSE All-World Ex-US (VFWIX).

I bought with funds from my VMMXX (Prime Money Market) account at 8:05 Eastern Time. I don't know if I got today's closing rate, though, since I bought at 8:05 PM Eastern Time. That might be too late. (?)

But then, the market might plunge more on Monday so it could be a good day for buying, too.

Good for you; I've been buying also. In fact, the more outrageous the predictions, the more I know I should buy. I made the mistake of tuning into CNBC this afternoon and was treated to predictions of stagflation, deflation, and US government bonds losing their triple-A ratings.

I'll probably be a buyer again Monday.
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Old 07-11-2008, 08:52 PM   #74
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My point isn't to scare, just to say whatever you do has risks...



As you say, nothing human is secure.

Fear only God - God is in control.
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Old 07-11-2008, 09:04 PM   #75
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Well we are on page 4 of this thread so probably nobody cares what I say, so I'll just talk to myself. I keep going back to the FIRECalc spreadsheet I produced for our situation. It shows some years that were MANY TIMES worse then the current situation (we're down about 8% with spending and portfolio losses this year). We are not yet in a great depression, a World War, or a great inflation.

The great thing about the FIRECalc spreadsheet is it gives you a sense of perspective. Each cell is ONE FULL YEAR OF ANXIETY. If this is a crisis it will probably take many years to play out -- several cells of data. There will be plenty of time to make portfolio adjustments along the way. There is absolutely no way to time this thing in the short term although if you try you may be lucky. The portfolio changes I've made this year have probably hurt more then helped. For instance, I had planned to sell my only stock (Johnson & Johnson bought in 1994) and diversify more. I was going to sell 1/4 every half year starting July 1. So JNJ has decided to start doing better then the market and luckily (so far) I held off selling it. I sold my 10yr TIPS in late January and they kept going up and I regretted it. Today they are below my sell price, but what I bought to replace them probably didn't do better, oh well.
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Old 07-11-2008, 09:09 PM   #76
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What a great "blue light special"!!!

I just bought more Wellesley (VWIAX), Total Stock Market Index (VTSAX), and FTSE All-World Ex-US (VFWIX).

I bought with funds from my VMMXX (Prime Money Market) account at 8:05 Eastern Time. I don't know if I got today's closing rate, though, since I bought at 8:05 PM Eastern Time. That might be too late. (?)

But then, the market might plunge more on Monday so it could be a good day for buying, too.
You will get the price as of Monday's close on your new purchases. To get the day's prices you have to buy before the market closes on that day (usually 4:00 pm ET).

I sold 1/3 of my bear market fund on Monday and used the proceeds to buy more VTSMX (total stock market index) and VGTSX (total Int'l stock index) today. I also used new money to buy more VEIEX (emerging markets) and NAESX (small cap index) today.
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Old 07-11-2008, 09:38 PM   #77
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You will get the price as of Monday's close on your new purchases. To get the day's prices you have to buy before the market closes on that day (usually 4:00 pm ET).

I sold 1/3 of my bear market fund on Monday and used the proceeds to buy more VTSMX (total stock market index) and VGTSX (total Int'l stock index) today. I also used new money to buy more VEIEX (emerging markets) and NAESX (small cap index) today.
Thanks! I thought that might be the case but wasn't sure. Guess I can hope that Monday's market sags a bit more.

Sounds like you made some nice purchases.
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Bad News -- The Carnage to Continue
Old 07-12-2008, 06:58 AM   #78
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Bad News -- The Carnage to Continue

I hate to bring up one of my "can't miss" indicators but one of the radio financial guys said Friday that he sees a major market turnaround. There are several I hear at various times and in the last month they all became hyper-bears (since the market was already dropping). They are always wrong in predicting what will happen and merrily switch sides when the market turns. They then spend lots of air time telling how they were ahead of the curve on this move and made lots of money for their clients. This guy going bullish doesn't bode well for the future although I don't think they other ones have switched back to bullish. Maybe a blind hog can find an acorn once in awhile.
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Old 07-12-2008, 07:34 AM   #79
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In every market, there will be very convincing articles/broadcasts advocating selling and others just as convincing it's a good time to buy. And most of them are driven first by getting your attention, the content is secondary even if sincere. I'm staying the course, same as I have done since I began investing in late 1987, and my net worth is twice what I ever thought it would be even with the recent decline. YMMV...
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Old 07-12-2008, 08:19 AM   #80
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There are several I hear at various times and in the last month they all became hyper-bears (since the market was already dropping). They are always wrong in predicting what will happen and merrily switch sides when the market turns. They then spend lots of air time telling how they were ahead of the curve on this move and made lots of money for their clients.
Sounds like Cramer.
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