Market correction anxiety

[jazz4cash]

Question...
Today, half hour before opening bell... Dow up after disappointing jobs report...(Oct 250K, Nov expected 200K.. Nov. actual 153K.

Until the jobs report came out, the DJ futures showed a drop of $125. when the disappointing jobs report came out, the futures suddenly rose to a positive DJ.

I just don't understand.

I think the weak jobs report reduces the likelihood of a Fed rate hike in Dec and the market likes that.

 

[street]

^ that makes a lot of sense.

 

[Dtail]

I think the weak jobs report reduces the likelihood of a Fed rate hike in Dec and the market likes that.

Or possibly the number of rate hikes in 2019. Yeah bad news means gains lately in this market with fears of inflation always in the background.

 

[jazz4cash]

You are down 75%

Please tell us specifics if you have not already performed ritual suicide.

Fidelity actually updates the numbers at 5:30pm EST daily.

I don't know about the 5:30 update. My non-workplace accounts are generally real-time. My workplace savings do not update till around 10:30 pm. Some of these are a day behind (e.g. international mutual funds). One of my pet peeves with Fidelity is the lack of time stamps for some of the balances. Not really a big deal but I do check everyday.

When I logged in on Thursday, my two 401k accounts were not listed and the balance did not include those accounts....or maybe I'm not clever enough to "find" them and they are hiding along with the elusive "performance" tab. I actually first noticed this on the mobile app but the full website balances are the same. If I go over to the netbenefits side, all the accounts are there and the balances look correct. I'm down about 1%.

 

[Dtail]

I don't know about the 5:30 update. My non-workplace accounts are generally real-time. My workplace savings do not update till around 10:30 pm. Some of these are a day behind (e.g. international mutual funds). One of my pet peeves with Fidelity is the lack of time stamps for some of the balances. Not really a big deal but I do check everyday.

When I logged in on Thursday, my two 401k accounts were not listed and the balance did not include those accounts....or maybe I'm not clever enough to "find" them and they are hiding along with the elusive "performance" tab. I actually first noticed this on the mobile app but the full website balances are the same. If I go over to the netbenefits side, all the accounts are there and the balances look correct. I'm down about 1%.

Interesting. I check everyday too and my accounts (not in the workplace anymore) do not update at 4pm for example.
Would love to hear from other Fidelity users.
Cocheesehead/Dr Roy?

 

[imoldernu]

I think the weak jobs report reduces the likelihood of a Fed rate hike in Dec and the market likes that.

Yes... thanks... that makes sense.

 

[marko]

Not to get too literal but "correction" implies that things weren't where they should have been in the first place.

So now, we're correcting that imbalance and back to where things should have been all along, no?

 

[frayne]

Not to get too literal but "correction" implies that things weren't where they should have been in the first place.

So now, we're correcting that imbalance and back to where things should have been all along, no?

Good point !

 

[OldShooter]

... I just don't understand.

Really there's nothing to understand except that the markets are basically a random walk with a slight upward bias.

I tell my adult ed investing class that this evening I could write three very plausible explanations for tomorrow's market action, One for up. One for down. One for sideways. "Investors reacted positively to ... " "Investors reacted negatively to ..." "Investors largely ignored ... " and the following text might be "jobs report," "OPEC meetings," "Federal Reserve comments," etc. You get the idea.

Absent some major news event, tomorrow I could just pick the one that fits and send it to my editor. I could probably save the other two for the day after tomorrow, so I would only have to write one new story.

Nobody knows what causes market action, but there are always many plausible and unverifiable explanations. Humans seek explantions; that's how Zeus came to be. To explain thunderstorms.

 

[Amethyst]

Days like these are why my Dad applauded when I took a job with a pension, all those years ago, even though it didn't pay that well.

 

[kgtest]

Really there's nothing to understand except that the markets are basically a random walk with a slight upward bias.

I tell my adult ed investing class that this evening I could write three very plausible explanations for tomorrow's market action, On for up. One for down. One for sideways. "Investors reacted positively to ... " "Investors reacted negatively to ..." "Investors largely ignored ... " and the following text might be "jobs report," "OPEC meetings," "Federal Reserve comments," etc. You get the idea.

Absent some major news event, tomorrow I could just pick the one that fits and send it to my editor. I could probably save the other two for the day after tomorrow, so I would only have to write one new story.

Nobody knows what causes market action, but there are always many plausible and unverifiable explanations. Humans seek explantions; that's how Zeus came to be. To explain thunderstorms.

Exactly. My neighbor just yanked 4grand to expunge some past record. I know about 1000 better things I would do before I pulled money to pay for that. Looks like the gamblers are leaving the tables and machines. They will come back for more later.

 

[audreyh1]

Not to get too literal but "correction" implies that things weren't where they should have been in the first place.

So now, we're correcting that imbalance and back to where things should have been all along, no?

Probably not.

And correction has a specific meaning for market indexes. It means down at least 10% from a recent high. A bear market (20%)may or may not develop.

 

[Scuba]

Just remember - be fearful when others are greedy, and greedy when others are fearful. Said another way - buy low, sell high.

I’m not buying yet but I’ll be doing my rebalancing and tax harvesting before year end. Volatility is a normal part of the market ... while it may seem scary, this has happened dozens of times before and will happen dozens of times in the future.

I think the recovery chart posted re the Dow is misleading as it implied recovery times of 5-20+ years. When looking at S&P 500, recovery times are MUCH faster:
https://blog.wealthfront.com/stock-market-corrections-not-as-scary-as-you-think/

Now back to my Christmas shopping!

 

[jazz4cash]

Or possibly the number of rate hikes in 2019. Yeah bad news means gains lately in this market with fears of inflation always in the background.

Yes. This. One of the Fed Governors commentary after release of the jobs report cited that near-term hikes were appropriate, but future hikes would be dependent on onger term rates would be dependent on how the outlook changes (tailwinds fading, cross currents, blah, blah, blah).

 

[Clone]

I think the recovery chart posted re the Dow is misleading as it implied recovery times of 5-20+ years. When looking at S&P 500, recovery times are MUCH faster:

One other observation regarding recovery times-


Most of the times these charts measure how long it takes to return to the previous market peak. Looking at the current market, we have seen a run-up that was looking exponential. Most folks are not too upset about this year being a wash, because the last several years have been terrific! If you look at the charts, many of those times of 'recovery' have a number of years of relatively flat markets. Look at the 60s on the presented chart- it claims a 16 year recovery time, but I struggle to identify when the market truly crashed.

Folks that have been counting on market returns like what we have seen from 2009 to 2017 (coupled with very low inflation) will have some heartburn if we go into a market drop followed by flat returns for 5+ years.

The college kids are posting lots of memes about going into finals week. This one seems to be relevant to many of us that watch the market closely.

 

[NYEXPAT]

Funny scene but I have already forgotten the show and I only watched it a few weeks ago!

 

[flintnational]

Remain calm all is well.

In times like these, I am comforted by this video clip.

video

 

[RAE]

Folks that have been counting on market returns like what we have seen from 2009 to 2017 (coupled with very low inflation) will have some heartburn if we go into a market drop followed by flat returns for 5+ years.

Anyone who expected market returns like we've seen over the last 8 years to continue for the foreseeable future, does not understand equity markets very well. I think we could easily have a significant market drop followed by flat returns for 5+ years - I've actually been expecting something like that to happen, for a lot of reasons.

 

[pb4uski]

Dow Oct 30 = 26,816
Dow Nov 23 = 24,259
That's what I mean when I said turned bad so quickly

You can play with numbers like "6.4% higher than it's 52 week low" but the fact is most people average in over many months this year, and have bought many shares when they were very high, so they are behind.

Investing in equities is not for me, I am only 5% in the market after many years of investing.
The markets are now way unstable for me, but good luck to you my friend

24,259/26,816 = 90.5%... a 10% drop... that is what we call a correction. But you are right, your risk tolerance is such that investing in equities is not for you.... so why are you posting on this thread?

 

[RAE]

24,259/26,816 = 90.5%... a 10% drop... that is what we call a correction. But you are right, your risk tolerance is such that investing in equities is not for you.... so why are you posting on this thread?

Personally, I like to read a diversity of opinions on whatever topic is being discussed on the forum. Sometimes, in my opinion, there is a little too much "groupthink" on certain topics, which I think probably discourages participation by those who hold different views. I don't have a large position in equities right now either, but I'm still interested in hearing the views of others on the markets, whether they are currently invested in equities or not.

 

[pb4uski]

Fair point... I generally just don't participate in threads that are areas that i have no experience in... like for example, investing in individual stocks... I don't do it but I don't discourage others from doing it if they wish to.

 

[DEC-1982]

This too shall pass......

These were the very wise words I heard from my boss some 20 years ago.

 

[jjflyman]

24,259/26,816 = 90.5%... a 10% drop... that is what we call a correction. But you are right, your risk tolerance is such that investing in equities is not for you.... so why are you posting on this thread?

I still have 70K or so in the market, so I still follow it. It is interesting to read some of the posts saying how this is "normal" and how they have been "expecting" this type of market volatility.

This is probably what people kept telling each other in the fall of 2008 too.
Like many of you, I have been in the markets for 40 years, and while I am no expert, I can honestly say I have only seen this kind of market a couple times, and it did not end well. This is not a normal market.

Like another poster said, if you only want people of like mind posting in the threads, you get group think, and people comforting each other all the way down that it will be fine and it is normal.

My original post was simply to point out that nobody really saw this coming, and if they did they would have sold everything in September instead of riding this out saying things like it is "normal" and "expect it to last 5 years".

Nobody likes losing money, regardless if they have 50K or 500K in the markets.
I wish you good luck my friend

 

[pb4uski]

Same to you. Those bad markets of the past that you refer to, including 2008, recovered fine... as a long term investor with a long time horizon I'm not sweating it. Going up and down is just what markets do, but the long term trend is upward.

 

[NW-Bound]

A 5 percent drop over 2 days is far from rare.
Here's top 20 one day drops. All over 5%

https://en.wikipedia.org/wiki/List_of_largest_daily_changes_in_the_Dow_Jones_Industrial_Average

Thanks for reminding me of even more violent swings then the present, some I have lived through.

People do have a very short memory. After a few years of nice nice weather, they forget all about snowstorms, hurricanes, and tornadoes, and act surprised when a disturbance hits.