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Rough day on the street today
Old 06-01-2011, 08:43 PM   #1
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Rough day on the street today

I've tried to remain optimistic and shrug it off, but do have some concerns.
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But for now, signs of a more sluggish stage of the economy are spreading. The Dow Jones industrial average plunged nearly 280 points, or 2.2 percent, wiping out more than one-fourth of the year's gains. The Dow's plunge followed news that:
- U.S. manufacturing output expanded in May at the slowest pace in 20 months.
- The payroll firm ADP said private employers added a net total of just 38,000 jobs in May, the lowest figure since September and down sharply from April's 177,000.
- Auto sales tumbled last month after surging earlier in the year.
- Construction spending remained scarcely above its lowest level in more than a decade.
http://www.wtop.com/?nid=628&sid=1658373

What say you? Routine "correction" or a sign of difficult days ahead? Or perhaps some buying opportunities on the horizon?
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Old 06-01-2011, 09:01 PM   #2
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Ya gotta be in it to win it. Relax!
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Old 06-01-2011, 09:08 PM   #3
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The optimist in me says:

1. the US economy is still expanding - just a bit slower than people expected

2. the US economy is still a net creator of jobs - just not as many as people were expecting

3. buying fewer cars implies a higher savings rate

4. the time when interest rates will start rising again will be delayed

Of course, it doesn't help when I consider how far my portfolio has fallen in the last 6-8 weeks or the increased probability that the USD will remain weak.
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Old 06-01-2011, 09:08 PM   #4
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After panic sales of 2009, I don't follow day to day market. I only check every 6 months to see how I'm doing and daydream about ER.
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Old 06-01-2011, 09:12 PM   #5
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For the record, I don't know diddly.

I did rebalance the first week of May even though I was only 4% off my AA. My stocks had gone to 39% of my portfolio...I try to keep it at 35%.

So for now, I guess I'll sit on the patio, have some lemonade and see what happens.
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Old 06-01-2011, 09:21 PM   #6
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Your headline confused me. I thought you were having some friction in the hood.

Glad to hear it ws only Wall Street.

Ha
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Old 06-01-2011, 09:27 PM   #7
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Despite not-so-sunny economic forecast, many optimists still think it's better to stay in the market.
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Old 06-01-2011, 09:30 PM   #8
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This is the 6th anniversary of my retirement. I'm too busy enjoying myself to waste much time worrying about which way the wind is blowing on Wall Street. I'll let the folks at Vanguard rebalance my Wellesley and Wellington funds whenever the need arises - meanwhile party on! I'll watch those quarterly dividend and monthly SS checks roll in.
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Old 06-01-2011, 09:30 PM   #9
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Quote:
Originally Posted by Purron View Post
I've tried to remain optimistic and shrug it off, but do have some concerns.
What say you? Routine "correction" or a sign of difficult days ahead? Or perhaps some buying opportunities on the horizon?
Did any corporations announce dividend cuts today? Didn't think so.

I'm watching the share price of the international value ETF (EFV). When it gets below its long-term average then I'll start putting in some limit purchase orders. No rush.
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Old 06-01-2011, 10:05 PM   #10
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I guess I missed W2R saying "whee"!!!!!!!!
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Old 06-01-2011, 10:10 PM   #11
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I was happy for the pullback, I have been convinced we will pull back about 1000 points from the YTD high by the end of the year.........which means buying opps when the dips occur, as I did a lot of buying today for clients and myself.......
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Old 06-01-2011, 10:16 PM   #12
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What say you?
The sky is falling and we're all gonna die

but the flowers are doing great!
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Old 06-01-2011, 10:49 PM   #13
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Markets go up, markets go down. A wise man said that years ago.

There is just a ton of bad news out there and it is June, the 2nd worst month of the year. I think today was an over reaction but I wouldn't be surprised if it goes down at least 5% and maybe 10%. Tomorrow we'll be up and up another 100 on the Dow and we're back to where we were on Monday.

BTW, 10% or more is a correction, so far these are just pull backs. We have been range bound for months and things usually cool off or go down in the summer. It's a rebalancing opportunity when that happens. Not too concerned, I learned when you are then your AA is too high in equities.
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Old 06-01-2011, 11:23 PM   #14
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Yeah, after 2008-2009 I guess I just don't have the energy left to worry about it. If it does crash again, well, we all know we can handle anything 'cause we just did not so long ago, right?

I don't have as much cash set aside to buy low this time if there is a crash, but maybe I could come up with a little.
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Old 06-01-2011, 11:31 PM   #15
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Quote:
Originally Posted by REWahoo View Post
This is the 6th anniversary of my retirement. I'm too busy enjoying myself to waste much time worrying about which way the wind is blowing on Wall Street. I'll let the folks at Vanguard rebalance my Wellesley and Wellington funds whenever the need arises - meanwhile party on! I'll watch those quarterly dividend and monthly SS checks roll in.
Congratulations on your 6th! Dividends are nice, I agree.
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Old 06-02-2011, 12:11 AM   #16
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Yeah, after 2008-2009 I guess I just don't have the energy left to worry about it. If it does crash again, well, we all know we can handle anything 'cause we just did not so long ago, right?
Yeah, that's about right. I think of it as being immunized against doing something stupid.

"Huh. The portfolio dropped $30,000 today. Anyway, the pizza dough is ready. What do you want on yours?"
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Old 06-02-2011, 02:03 AM   #17
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Yeah, that's about right. I think of it as being immunized against doing something stupid.

"Huh. The portfolio dropped $30,000 today. Anyway, the pizza dough is ready. What do you want on yours?"
That sounds about right!
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Old 06-02-2011, 07:11 AM   #18
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- jobs numbers are consistent with the modest increase in unemployment claims we have seen in the past month or so. Is it a blip? Time will tell. I think it is a blip.

- construction spending has been in the toilet for a long time. I just listed my house for less than I paid in 2002 and that is with substantial upgrades in the meantime. I am not holding my breath for a surge in construction spending.

- auto sales were mostly lower due to the effects of the Japanese tsunami/quake. The domestic makes had a pretty decent month and were able to stick price increases in the mix to boot.

I think we are seeing the effects of a one-two punch of the Japanese disaster and a commodity price spike. Both are likely to prove transitory, IMO, so I think we go through a softer patch and then keep chugging along.
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Old 06-02-2011, 07:19 AM   #19
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I haven't added up my losses yet for yesterday, but I'm gonna take a rough guess and say maybe $12,000? I'm not too concerned about it. I've learned to look more at the percentages, rather than the actual numbers. Besides, it'll come back!

I did take advantage of yesterday's drop and do a slight rebalance in my old 401k from my Boeing days. The bond fund had crept up a bit and the stock fund took a bit of a dive, so I swapped some funds over into the stock fund.

If it drops again today, I might switch a little more over.
**Edit: just added up the numbers. I "lost" $11,358. No big deal, in the overall scheme of things.
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Old 06-02-2011, 07:36 AM   #20
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I stand by my comments from April 24 . . .

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I don't consult the calendar, or the stars, when making investment decisions. But I do think we have an extended market and an economic slow down looming (largely due to the fiscal drag of expiring stimulus and budget cuts combined with the shock of a 35% yearly increase in gasoline prices). I don't think we're heading for recession, but we could easily see a repeat of last Spring when the economy also hit a soft patch and the S&P declined 15% or so.
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