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Old 08-04-2007, 03:24 AM   #21
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markets are hovering just above the 200 day moving average lines. whole thing depends on the mortgage problems and how they will affect the economy. could be 1998 all over again where markets dropped 20% - 50% from the peak and still ended the year up. could be like 1987 where they dropped and didn't regain the losses until 1990 or so.

problem is that there is so much leverage that when these mortgage funds go belly up or they get a margin call people may have to sell other investments as well to come up with the cash
From Mauldin's latest newsletter:

"Pay attention to the numbers I highlight in red for January through June of 2008. The largest portion of mortgage resets is not until next year.



We have just seen $197 billion of mortgage resets so far this year. That is less than we will see in two months (February and March) of next year."
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Old 08-04-2007, 06:12 AM   #22
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there was another chart i saw that showed another uptick in resets in 2010 or 2011
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Old 08-04-2007, 07:28 AM   #23
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Good comments from everyone.


I am going to stick with my diversification and allocation strategy. Currently at about 70/28/2 Stock/Bond/Cash. My target is 60/30/10.

My primary concern is sticking with my ER time line/plans.
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Old 08-04-2007, 09:03 AM   #24
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Of course this topic is impossible to predict. Market valuations are not obscene if you ask me, just not real cheap. Personally, being in the accumulation phase, I wouldn't mind an extended period of real cheap assets.

If you are in the accumulation phase, turn off the TV and keep plugging away. If you are not, I like Ha's strategy of a little put insurance.
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Old 08-04-2007, 09:50 AM   #25
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Valuations have nearly nothing to do with short term market action.

Watch how people feel about it. If nervousness turns into fear, this will keep going until we have full capitulation.
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Old 08-04-2007, 01:57 PM   #26
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Watch how people feel about it. If nervousness turns into fear, this will keep going until we have full capitulation.[/quote]

What do you guys think full capitulation would be?
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Old 08-04-2007, 04:06 PM   #27
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I'm sure most of you received a similar email from your brokerage firm but if not, here is a link to the message I received. Basically just a reminder that market fluctuations are normal. I guess it does make sense for the long term but as an early retiree, you can't help but feel a little uneasy when the market heads south.

Fidelity Investments
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Old 08-04-2007, 04:56 PM   #28
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Just glad I did not retire 7/31/07.
Down 9% for the last month.
Still up 15% for the year.
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Old 08-04-2007, 05:11 PM   #29
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My guess is if you retired 7/31/07, and you did not have three or four years of you investments in cash short term assits, then you have not been reading this board long.

It seems like most if not all of those who have retired keep a cash fund so they will not have to sell into a down market.
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Old 08-04-2007, 07:06 PM   #30
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What do you guys think full capitulation would be?
When nobody wants to buy stocks anymore. And thinks its a very bad idea.
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Old 08-04-2007, 07:48 PM   #31
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Just glad I did not retire 7/31/07.
Down 9% for the last month.
Still up 15% for the year.
What's your new retirement date?

You cannot retire because the portfolio is down by 9% in a month or only up by 15% for the year?
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Old 08-04-2007, 08:27 PM   #32
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Still up 15% for the year.
What are you invested in? 15% pretty amazing.
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Old 08-05-2007, 04:37 AM   #33
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The market seems to be getting a bit volatile. This could be a harbinger of a top. I am not good at predictions. It might just be a short-term correction. I think Sept and Oct are historically bad months for the market. However, it would not surprise me if we have topped or are ready for a short bear in the next 18 - 30 months. It may not happen until after the election. The last bear market started in 2000 and ended in 2002 (I think) And one thing is for sure, there will be another Bear Market. Count on it. The actual things that trigger it can vary. Some of this will depend on interest rates and corporate profits. We need to keep in mind that aside from near term fear, the market is pricing in future expectations.

For now, corporate profits seem to be holding up.

Still, I am sticking with the basic allocation strategy and rebalancing is the key (IMHO).

I am like everyone else, I hate to see the market drop (for obvious reasons). But I have confidence in my approach.
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Old 08-05-2007, 05:40 AM   #34
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The market seems to be getting a bit volatile. This could be a harbinger of a top. I am not good at predictions. It might just be a short-term correction. I think Sept and Oct are historically bad months for the market. ...
Still, I am sticking with the basic allocation strategy and rebalancing is the key (IMHO).

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OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks in. The other are July, January, September, April, November, May, March, June, December, August, and February. Mark Twain from PuddnHead Wilson one of my favorite Twain books.
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Old 08-05-2007, 07:46 AM   #35
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You know, it was a hard decision and one that a person can second guess in retrospect but lives with nevertheless. About 3 days to a week before the first day of the drop, I moved some profits into money markets to attain a 50/50 mix. Perhaps it should have been more, perhaps not. Time will tell. I would not have been this conservative a few years ago but, with my husband's plan to retire in two years, I felt that caution was appropriate. Does anyone else see things like I do. The market will drop substantially and there are precious few to no sectors left to create the next bubble with. I have concluded that the "recovery" (rise back to previous levels) will be a lot slower this time as the top was more speculative than real value. Without something to use to bubble the economy, won't it tend to settle to a better but lower value? Also, don't we have a "China bubble" still looming and ready to pop? Will there be additional consequences to the economy due to the hidden and over-rated pieces of foreign bubbles? You see, I cannot imagine how anyone could consider the current problems to be just the summer/July slowdown/volatility. Reading some of these posts, I get the impression that many of the forum members would disagree with me but I really don't see why.
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Old 08-05-2007, 08:45 AM   #36
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I dunno. I am not very experienced in investing, but "just call me a cockeyed optimist" (as the song goes).

I just don't think this will be a substantial, long term drop, this time.

Now my disclaimer - - my opinion is based on absolutely nothing whatsoever other than gut feelings.
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Old 08-05-2007, 08:51 AM   #37
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OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks in. The other are July, January, September, April, November, May, March, June, December, August, and February. Mark Twain from PuddnHead Wilson one of my favorite Twain books.

Good point!
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Old 08-05-2007, 09:09 AM   #38
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The market seems to be getting a bit volatile. This could be a harbinger of a top. I am not good at predictions. It might just be a short-term correction. I think Sept and Oct are historically bad months for the market. However, it would not surprise me if we have topped or are ready for a short bear in the next 18 - 30 months. It may not happen until after the election. The last bear market started in 2000 and ended in 2002 (I think) And one thing is for sure, there will be another Bear Market. Count on it. The actual things that trigger it can vary. Some of this will depend on interest rates and corporate profits. We need to keep in mind that aside from near term fear, the market is pricing in future expectations.

For now, corporate profits seem to be holding up.

Still, I am sticking with the basic allocation strategy and rebalancing is the key (IMHO).

I am like everyone else, I hate to see the market drop (for obvious reasons). But I have confidence in my approach.
profits are a lagging indicator. back in late 2000 a lot of companies reported stellar profit growth only to see their stock savaged. the market is always 6-12 months ahead of the headlines
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Old 08-05-2007, 03:26 PM   #39
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profits are a lagging indicator. back in late 2000 a lot of companies reported stellar profit growth only to see their stock savaged. the market is always 6-12 months ahead of the headlines

Agreed. That is what I meant by the market is pricing in future expectations (in the previous statement about corp profits.)

But if corporate profits actually showed a lot of weakness now... the market would likely react even more violently (now) because reality turned out lower than expected. Plus, analyst would likely expect the next qtr to be somewhat similar.
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Old 08-06-2007, 12:13 PM   #40
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For accumulators, what's the verdict?

Cash out of any heavy finance/debt funds/stocks, take the loss (and not pay short term gains if less than a year in), and re-invest later at the bottom, or hold in savings (5%+) until the upswing?

Get half-way out of lowest performers, take any tax hits from <1 year investments, and move them to savings that get 5+%?

If >5 years to retirement, wait it out anyway? By 2010 this will be just a bad memory, right?

really it's a combined math game of optimized earnings, coupled with optimized time/effort of optimizing the earnings (calculating it, pulling the trigger, the tax implications, etc., all may factor in).

Personally since I'm not retiring in at least the next 3 years, I'd be inclined to ignore it, since I don't actively trade right now. If I were actively trading, I'd probably already have moved things around. I did invest an extra chunk in as things dipped, assuming better to buy low than wait until it climbs. But of course it's dipped even lower...

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