Thoughts on investing in current market climate

[Patrick]

Quote:

Originally Posted by Art G Ayep.

K, well there's still $5 to go before that. So jump in. It's up almost 2% today already.

[Patrick]

Quote:

Originally Posted by innova Lots of laughs today people Recall in the early 1990s how bad things were, with many of the pundits at the time saying the market was overvalued, due for a huge correction, we should be all in cash, etc. What happened? The biggest bull run of the century.

Recall the late 1990s tech bubble when the NASDAQ hit an alltime high and everyone thought it would keep going up?

What happened? A huge crash that it still hasn't recovered from.

[al_bundy]

Quote:

Originally Posted by Art G Looks to me like QID hits resistance around $60.64. JMO.

it's going to the moon baby, to the moon

edit, that's what i get for being too greedy and trying to get in at $53.50 yesterday. broke down and finally bought it today.

woot to etrade for giving me a $.05 discount off the Yahoo streaming quote price

[al_bundy]

ha ha

gasparino strikes again

[Patrick]

Quote:

Originally Posted by al_bundy ha ha gasparino strikes again

who dat?

[al_bundy]

forgot his first name, but he is a business reporter for the NY Times. writes good stuff and he's been doing work for CNBC lately.

week or two ago on a friday afternoon he reported that ambac is close to a bailout. caused the market to rally. around 3:30 today he said the bailout negotiations were progressing well

[Razor]

Quote:

Originally Posted by Patrick Recall the late 1990s tech bubble when the NASDAQ hit an alltime high and everyone thought it would keep going up? What happened? A huge crash that it still hasn't recovered from.

Sometimes it's better to ignore things that don't support the theory that the market always goes up.

[Gazingus]

My sheet is red-getting- redder, but I'm only concentrating on number of shares. All Motley Fool-recommended equities in Stock Advisor and Global Gains. I'm putting every nickel I can find into the biggest losers I have. I can't help it, I'm a bull market baby and I think it's a big sale!

[unclemick]

1966-1969. Read 'The Battle For Investment Survival'(Loeb), Dean Witter Broker.

My stock picking/trading got me a Penthouse apartment, a new rag top sports car, a few dirty Blonds. Then I lost the knack.

Luckily I escaped marriage - and the one two punch of Ben Graham's 4th ed(1973?) and Bogle's 500Index(1976?) came later.

I never got married but I did have the same girlfriend for 29 yrs and I do putz 'with a few good stocks' from time to time.

BTW - TR2015 is too new for a track record but Vanguard's portfolio predictor(based on historical data) estimates slightly over 9%.

heh heh heh - have fun I do - but my serious money is Target Retirement - after forty years of practice. Hope springs eternal every generation. Google up Bernstein's 15 Stock Diversification Myth if you wish to SWAG your odds - if you know when to hold em and when to fold em - you 'may' win - the odds are against you - but better than most lotteries!

[accountingsucks]

I have 20 years of saving before retiring, so like others I see this as a buying opportunity. Having said that, I do worry that what happened in Japan could happen over in North America (20 years with virtually no stock growth). I don't think that is likely at all, but it's something I do think about.

[haha]

Quote:

Originally Posted by accountingsucks I have 20 years of saving before retiring, so like others I see this as a buying opportunity. Having said that, I do worry that what happened in Japan could happen over in North America (20 years with virtually no stock growth). I don't think that is likely at all, but it's something I do think about.

It is really much worse than that. Year-end 1989 the Nikkei 225 closed just shy of 40,000. It closed today just shy of 13,000. So after 19 years, that index is still down by 2/3 from its high. And dividends have been negligible, so total return is not much better.

Ha

[RockOn]

Quote:

Originally Posted by haha It is really much worse than that. Year-end 1989 the Nikkei 225 closed just shy of 40,000. It closed today just shy of 13,000. So after 19 years, that index is still down by 2/3 from its high. And dividends have been negligible, so total return is not much better. Ha

You have missed 18 years of inflations impact. They have to buy oil and food too. I know they did have some deflation.

[FIREd]

Well I did some buying today, small caps, large caps and emerging markets. My ESPP plan also purchased new company shares for me last friday at a very attractive price.

[W2R]

Quote:

Originally Posted by FIREdreamer Well I did some buying today, small caps, large caps and emerging markets. My ESPP plan also purchased new company shares for me last friday at a very attractive price.

Excellent!! That was very smart. Have fun following them on their way back up. Sounds like you got some winners.

[Patrick]

Quote:

Originally Posted by Want2retire Excellent!! That was very smart. Have fun following them on their way back up. Sounds like you got some winners.

Not to be argumentative, but how do you they're going back up? :confused:

[FIREd]

Quote:

Originally Posted by Want2retire Excellent!! That was very smart. Have fun following them on their way back up. Sounds like you got some winners.

I guess only time will tell whether it was smart or not!

[W2R]

Quote:

Originally Posted by Patrick Not to be argumentative, but how do you they're going back up? :confused:

What goes down, must come up... (?) I dunno. It would be quite a bold statement to assert that the market would NEVER go back up, especially since the market went down sharply right before Firedreamer bought in. Notice I didn't give a timeframe. But if I was Firedreamer, I'd be looking forward to watching what happens (not dreading it).

The real answer: I'm a closet Dirty Market Timer, even though I don't let myself act on that except with the 1%-2% that I set aside for playing.

[FIREd]

Want2Retire,

I am indeed looking forward to watching what happens with my purchases. I managed to make a little bit of money on my January and February purchases and that alone makes me happy given the current market conditions.

But talking about the japanese market since 1989, it makes me wonder where do you invest your money if you are Japanese? Nineteen years later, the stock market is still way down (and by now I assume people must have lost faith in the stock market), housing prices are still way down and interest rates are still close to zero, so you know you're not earning a lot of interests on those savings accounts... So were would you put your money if the same happened here? Do you load up on long term bonds before interest rates take the big plunge (if you are lucky enough to see it coming)?

[innova]

Quote:

Nineteen years later, the stock market is still way down (and by now I assume people must have lost faith in the stock market)

Please examine the following:
^N225: Basic Chart for NIKKEI 225 - Yahoo! Finance

What you are saying is an oft-repeated fallacy. Same thing about how the US stock returns have gone nowhere in 10 years.. or have they?

Suppose you were a long-term buy and hold investor who didn't alter their DCA plan despite the wildly bouncing charts. Then what? Surely at least the last 5 years weren't so bad:

Quote:

^N225: Basic Chart for NIKKEI 225 - Yahoo! Finance

I realize I haven't accounted for dividend reinvestment here, you'll have to forgive me.

[FIREd]

innova,

I have looked at the charts, and what I am saying is look, the Nikkei was at 10,000 in 1984, even if it had never climbed to 40,000 by 1989, it has gone up barely 30% over a period of 24 years. Sure the past 5 years have been good, though I suspect that if you had DCAed into the market, as you suggest, throughout the 1990's and early 2000's the losses you incurred during these early years (when the Nikkei ranged from 15,000 to 40,000) probably more than offset the gains of the past 5 years. But at any rate, after 24 years of annual returns averaging 1.1% (even when neglecting the psychological impact of the market going from 40,000 to 7600 over 14 years), I might have decided that the stock market was not a good place to invest my money. I am patient but 24 years is a very long time. I would want to find another more lucrative investment.

Not counting dividends and assuming you DCAed into a Nikkei index fund from 1984 to 2008, today you would have (approximately):
made money on your 1984-1986 contributions
lost money on your 1986-2000 contributions (ouch!)
made money on your 2000-2005 contributions
lost money on your 2005-2008 contributions.

So it does not look good for the long-term buy and hold investor who DCAed through the all ordeal.