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started value averaging back in
Old 01-19-2008, 06:13 AM   #1
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started value averaging back in

started the scarey process of buying back in and adding to my existing funds. they all dropped so nicely it was very easy to decide how much to committ at this point. i just brought each one back to the amounts i started with this year.

no way ill catch the bottom in this mess but even if we are 15 to 20% from the bottom id rather get in early then have the market take off without me . ill continue to add money every 5% drop from this point.

with my luck though it will turn before i have everything back in but heck id rather risk a bit of gain then not have cash to take advantage of more drops.

as expected my actively managed funds didnt drop as much as my index mix. i run 2 seperate growth portfolios. one active and one etf . i tend to favor the active mix. not onlythru the years has it performed better but in times the markets down the index funds stand no chance of dropping less or making money. at least my active stand a small chance of catching the right sectors. but none the less my latest strategy is to run both.
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Old 01-19-2008, 06:50 AM   #2
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That's definitely scary, though probably the right thing to do. I have been holding off on investing though pretty soon I'm just going to have to bravely step forth.
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Old 01-19-2008, 06:56 AM   #3
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Yep, DCA is the way to go. I can't tell you how many times I have tried to call a bottom or top to miss it completely. Then there are the 'genius' (read lucky as h*ll) times when I look as good as the seer from Omaha. The moral to the story is DCA for new funds, as far as I'm concerned.
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Old 01-19-2008, 07:03 AM   #4
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Yep, DCA is the way to go. I can't tell you how many times I have tried to call a bottom or top to miss it completely. Then there are the 'genius' (read lucky as h*ll) times when I look as good as the seer from Omaha. The moral to the story is DCA for new funds, as far as I'm concerned.
That's what I was thinking of doing, though I'm not sure how long to spread out my DCA over. Maybe even a year or two. But I've got to start putting something in eventually. So, maybe 1/10th each month for a while, and then if things are still going downwards by next summer then shift to 1/20th. Or, if things start improving then speed it up.
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Old 01-19-2008, 07:48 AM   #5
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I am nibbling. Averaging in to get back to my target allocation mix. Didn't sell stocks as some probably did, just reallocating. If/when the market gets back to 14,000 plus, I will reallocate again to bring my stock allocation back down. Think I have awhile before I have to do step two.
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Old 01-19-2008, 07:58 AM   #6
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IMO, waiting at times feels good, because you did not make any (obvious) mistake (yet). However, if you believe the anecdotes about being behind if you miss the last x biggest up days (and I do) then if you are not in the market, you don't get to participate in those upswings. Those upswings are what account for the positive gains yty.
I do know (from a humongous amount of experience) that it feels like sh*t to be fully invested in a down market (like right now for example ), but 5 years from now, I'll be laughing (I hope), sitting on the beach (insert your own diversion) and drinking that umbrella drink, thinking how great my portfolio looks and am I glad I didn't bail in Jan 2008. I remember 2000 vividly... but in 2000, I also remembered the other downturns that I rode out.
Long story short ... I am one of 'real' believers in buy and hold with the correct Asset Allocation. I am sleeping fine, I am 60/40. I have my income buckets that I am living off of. I hope I can replenish them when i get to the 4 year mark from my portfolio. If not and the trough turns into a flat desert, then I will cut back a bit ... but I will cross that bridge when I get there (institute plan B ).
Hope this helps. My (obtuse) advice here is to DCA, with whatever percentage you feel comfortable. I promise you all of your money will not get in at the bottom, nor at the top. In 5 -10 years it won't make a difference. Doing nothing is sometimes the worst thing. Anaylsis paralysis is what we called it when I was 'employed'
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Old 01-19-2008, 08:04 AM   #7
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'tis the start of the New Year so I'm back to contributing 20% of salary towards both 401 and 401(k) additional for over 50. I always put in the max allowed at the start of year until I hit the max allowed. I used to spread it out over the year but once I could afford it I decided to just max out asap every year as you never know when that job may disappear.

So, this year I guess I'll be 'timing' it right with the market falling so fast.
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Old 01-19-2008, 08:07 AM   #8
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Good conversation - it is easy to talk about investing in down markets when the markets are up. Nice to see those with the courage to act and follow through. I have just a little cash and will get in over a few months.
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Old 01-19-2008, 08:14 AM   #9
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Yup, I aimed my future 403b/457 contributions to stocks after a couple of years of building up my fixed investments.

Heard Ben Stein say yesterday that the average duration of a recession is 10-11 months, with most lasting under 2 years. We'll see. I'm more or less ignoring it otherwise.
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Old 01-19-2008, 08:14 AM   #10
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I just checked my AA and it is still very close to my target so I won't be re-balancing yet
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Old 01-19-2008, 08:21 AM   #11
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Both of my kids (30ish) have started DCAing small amounts on a weekly basis. They both have a lot of dry powder in MM and plan to continue until the MM gets down to their "comfort level". Good move in my opinion...both earn good money and have a long time horizon.
I'm sitting on my hands for now.
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Old 01-19-2008, 08:24 AM   #12
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That's what I was thinking of doing, though I'm not sure how long to spread out my DCA over. Maybe even a year or two. But I've got to start putting something in eventually. So, maybe 1/10th each month for a while, and then if things are still going downwards by next summer then shift to 1/20th. Or, if things start improving then speed it up.

i figured 20% right now and 20 % each time the market drops another 5%. i may miss the bottom by 15% or so but at least i got a whole lot more shares now vs buy and hold. i was very lucky and lightned up in november from 60% to 30% equity. i hate to blow it by not getting in before it turns.

its not ofton i luck out and have a pile of cash and a market thats down 20% from the high.
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Old 01-19-2008, 08:26 AM   #13
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I'm more or less ignoring it otherwise.
Good for you. I'm seeking to obtain that same level of self-discipline from the other side of the river. I will confess that it is a tiny bit more difficult to achieve when you view the situation from over here.
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Old 01-19-2008, 08:28 AM   #14
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its funny how are minds work, im just as uncomfortable not being fully in as i was when i was fully in and thought we might fall. theres never a relaxing time with this crap ha ha ha
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Old 01-19-2008, 08:33 AM   #15
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'tis the start of the New Year so I'm back to contributing 20% of salary towards both 401 and 401(k) additional for over 50. I always put in the max allowed at the start of year until I hit the max allowed. I used to spread it out over the year but once I could afford it I decided to just max out asap every year as you never know when that job may disappear.

So, this year I guess I'll be 'timing' it right with the market falling so fast.
You do have to be aware that if you have a company match, you may be missing out on some of it if you front end load your contribution. It could be costing you some 'free money'. Just an observation.
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Old 01-19-2008, 08:36 AM   #16
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Since I have substantial loot in bond index funds, I considered buying more of the VG total stock market index the day the market drops to 11500. Then I remembered that I am not smart enough to time the market. Ignore it, I say. Stay the course and all that rot.
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Old 01-19-2008, 08:37 AM   #17
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Good for you. I'm seeking to obtain that same level of self-discipline from the other side of the river. I will confess that it is a tiny bit more difficult to achieve when you view the situation from over here.
Yes, I can see that. I was talking at my wife about this over a bottle of zinfandel last night (I was talking, she was ignoring me; wine causes that reversal in our usual dynamic). I'm kind of surprised at my own aplomb.

I hate to say this at the risk of igniting an ambush, but I think it's because of my buckets of money plan. While it's only partially implemented due to my still working (less cash, more bonds, but same stock:bond allocation overall as I'll have for FIRE).

6-7 years of expenses designated to self-annuitize, with another 6-7 in fixed backing it up 6-7 years down the road is pretty comforting. But this may be all talk compared to how I feel when the rubber meets the road.

Going to the Tampa RV show (nation's biggest) today. Nice to have an exit strategy .
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Old 01-19-2008, 08:44 AM   #18
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i use ray lucias bucket plan too but still look to sweeten the growth bucket by adding to it in a drop like this. we haven had a drop like this in many many years
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Old 01-19-2008, 08:46 AM   #19
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Yes, I can see that. I was talking at my wife about this over a bottle of zinfandel last night (I was talking, she was ignoring me; wine causes that reversal in our usual dynamic). I'm kind of surprised at my own aplomb.

I hate to say this at the risk of igniting an ambush, but I think it's because of my buckets of money plan. While it's only partially implemented due to my still working (less cash, more bonds, but same stock:bond allocation overall as I'll have for FIRE).

6-7 years of expenses designated to self-annuitize, with another 6-7 in fixed backing it up 6-7 years down the road is pretty comforting. But this may be all talk compared to how I feel when the rubber meets the road.

Going to the Tampa RV show (nation's biggest) today. Nice to have an exit strategy .
Nope, I thnk you are comfortable because your plan is 'w*rking' so to speak. You see where your income will come from, what the 'feeder' program is, ...etc. That is precisely why I can sleep while everyone else seems to be heading for the exits these days.

I hate being in this downturn, because it is natural not to want to see your funds decline in value. On the other hand, now that I am in retirement and am going through this downturn, it validates my plan. This actually gives me a higher degree of confidence for the future.

I hope this helps others in their planning.
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Old 01-19-2008, 08:51 AM   #20
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I hate to say this at the risk of igniting an ambush, but I think it's because of my buckets of money plan. While it's only partially implemented due to my still working (less cash, more bonds, but same stock:bond allocation overall as I'll have for FIRE).

6-7 years of expenses designated to self-annuitize, with another 6-7 in fixed backing it up 6-7 years down the road is pretty comforting. But this may be all talk compared to how I feel when the rubber meets the road.

.
Similar here. Still hard to watch my stocks poo poo.
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