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View Poll Results: How do you feel about stocks given the past 3 years
Better (always comes back) 61 83.56%
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Old 12-30-2010, 07:05 PM   #21
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Originally Posted by traineeinvestor View Post
Likewise, it has not changed my views on the market - bear markets/crashes are buying opportunities. I'm old enough to have lived through the 1987 crash, the Asian crisis (1997 -2003), the tech bubble bursting (2000), SARS (2003) and the Great Financial Crisis (2007-8). All of these presented wonderful buying opportunities (although I successfully mismanaged some of them).

If another crash happens again, I hope I will have the discipline to take advantage of it rather than panic and sell out.

However, I do recognise the potential for a very long term decline in equity markets (e.g. Japan) and do not automatically assume that every decline will be followed by a recovery within a similar time period to what we experienced over the last few years. Our local Hang Seng Index is still well below it's pre-crisis levels in absolute terms and is also below its long term trailing and forecast earnings multiples.
How can you take advantage of it? I you mean buying at the bottom one never knows when it is going to stop, and if you were invested before, then all of your funds are in the market when it dropped, right?

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Old 12-30-2010, 07:30 PM   #22
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No change. I now know stocks can fall 50%, before it was just an intellectual exercise. I am at ~74% equities and will continue to dial down as I approach retirement.


At 54% of FIRE target
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Old 12-30-2010, 08:31 PM   #23
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I'm really not afraid of what the stock market is doing. I think it will be higher in a year than it is now. Meanwhile my investment portfolio keeps growing so I must be doing something right... for me.

I hung on - perhaps too long - while the market went down. By the time I regretted that, I felt it was too late to sell out. I was a couple of years from planned retirement. So I rode it out... sigh.

As the market moved up, I came up with some cash and made some investments, took some risk and made out very well over all.

I was not happy with how the mutual funds recovered and have now sold almost all. I inherited some bond funds that are yielding 6%+ so I'm hanging onto them for now. The stock funds have been replaced with dividend paying stocks. So far it's working.

I'm not really worried about the stock market. I like having individual stocks and managing them myself with my broker doing some background checking for me. I also like buying bonds on the secondary market, that are investment grade but just barely - so they sell at a big discount. So far I haven't gotten burned. I only buy bonds that are maturing in 1 - 5 years.

So far I am not comfortable with options - I just can't get my head around them despite trying - so I don't invest that way. I'm in a buy and hold and collect the dividends mode.

I am definitely someone who isn't afraid of risk, as long as it's a calculated risk. For a while I was day trading tech stocks and some other stocks (before the crash) but after being VERY burned a couple of times, I felt that I had learned a lot and moved on......

I treat investing as a learning experience. I enjoy it. I know a lot of people don't but I do. I don't worry about asset allocation. I am careful to stay diversified in terms of industry or sector. I just bought BMY and T today because they represented some areas I didn't own (or not much of). They pay dividends and I think they'll rise over the next year. If they go down past some point I'll know when I see it - I'll sell them and move on.

So - that's what I think of stocks!
Retired July 2, 2010 at 62. My only regret is that I couldn't do it sooner.
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Old 12-30-2010, 08:37 PM   #24
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No change - sticking with my AA plan which now has me at 35% equities.

I've only been saving and tracking the returns since '95 and everything I had read said there would be big swings, but living through them is a real test of your faith in the wisdom that history sort of repeats itself, but not in a predicable way (at least not to this poor mind).

As for my personal situation, the first 5 years were very positive returns, then 3 years of losses, followed by 5 years of gains followed by the single worst loss I've had and now 2 years of very good gains.

I'm pleased to be at only 35% equities these days (retired) with a big enough cushion to ride out losing streaks and still believe in the long term future for equities.
Retired in Jan, 2010 at 55
Now it's adventure before dementia
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Old 12-30-2010, 11:56 PM   #25
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Over the last several years I wish I had been in the accumulation rather than the withdrawal stage of life.

When the dip occurred I halted withdrawals. At the present withdrawals are limited to what is needed to cover taxes.
Pigs get fat, hogs get slaughtered. That's my story and I am sticking to it.
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Old 12-31-2010, 12:52 AM   #26
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Originally Posted by inquisitive View Post
How can you take advantage of it? I you mean buying at the bottom one never knows when it is going to stop, and if you were invested before, then all of your funds are in the market when it dropped, right?
I agree that no one can pick either the market top or the market bottom with any great degree of certainty, but when valuations start looking stretched I either reduce exposure to equties or stop buying new ones (or both). When they look cheaper (below long term averages), I do the reverse. Of course prices can always go lower (higher), but if my time horizon is long enough, then I can be confident that I can ride out any further downturn.

At the moment, I'm still accumulating assets. Once I retire, I will still be able to take advantage of price declines by selling bonds and/or spending some of the 2-3 years (?) cash set aside for near term living costs. If I'm feeling really ambitious, I could even take out a mortgage against one of my properties to generate some cash for new investments (although I suspect my wife may have more than a few words to say about that).

And yes, I accept that this may be viewed as aggressive and risky for a retiree. If things go really wrong, there is always the possibilty of getting job.
Budgeting is a skill practised by people who are bad at politics.
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Old 12-31-2010, 04:49 AM   #27
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Every time we have a market calamity... or even a bear market, it gets my attention.

In the past, I have always had confidence that the stock market would recover and I still do... it will go up and down. But up till now I have only been accumulating and could ride it out.

I still have confidence in the stock market (as a viable investment)... but something has changed? Me... I am getting ready to enter the distribution phase.

I will take some risk. But if you have read my posts.... you can see my risk tolerance stated in most of them. I want to create a guaranteed income that will cover our basic needs (through thick and thin). That will be done with SSx2 + Pension + SPIA (likely a ladder).

Most of our assets will be invested in mutual funds using a 50/50 allocation (for now).

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