Trend or just a microcosm of my friends/family....?

[rodi]

3 unrelated people have solicited my opinion on whether it's time to pull out of the stock market. All within the last week.

One was a brother in law.
One was a friend,
One was a coworker.

None of them know each other - they live in different cities, etc.

Obviously I gave them the advice to stay the course, selling would lock in their losses, you can't time the market, etc.... Not sure if they agreed.

So... Is it time to throw more money into the market since there appears to be some panic in the general population?

 

[Options]

Is this a rhetorical question? Are you being serious? I'd read a few books.

As always, the particularly brilliant Taylor Larimore (I recommend reading the thread from start to finish; he references market timing, listening to "experts", etc.):

Bogleheads • View topic - The Three Fund Portfolio

 

[Andre1969]

I think it might be time to rebalance a bit if your asset allocation has gotten too far out of whack. But I dunno if it's time to start pulling out.

I believe there's an old wive's tale that January's performance will predict that of the rest of the year. And January was a down month, so maybe that has people spooked? Plus, they're starting to talk on tv, and financial web pages, that we're overdue for a correction, so perhaps there is a bit of caution in the air.

As for me, I hit a new high on December 31. It actually went higher in early January, but then things dropped off a bit. But, once all my numbers come in for tonight, I have a feeling I'll be within 1% of that 12/31/13 high.

 

[rodi]

I'm staying the course... I was just surprised that in such a short time frame I had people seriously talking about pulling out altogether. I gave them the standard disclaimer that I can't tell them what to do with their money, but with my money, I was staying with my asset allocation plan.

I'm waiting for the doom/gloom/panic media responses if this is a growing trend..

 

[aja8888]

If you really want to get the facts, watch a few days worth of CNBC!

 

[SJ1_]

3 unrelated people have solicited my opinion on whether it's time to pull out of the stock market. All within the last week.

One was a brother in law.
One was a friend,
One was a coworker.

None of them know each other - they live in different cities, etc.

Obviously I gave them the advice to stay the course, selling would lock in their losses, you can't time the market, etc.... Not sure if they agreed.

So... Is it time to throw more money into the market since there appears to be some panic in the general population?

Wish I knew.
We rebalance and tend to do it more during a run up or run down, so we have
sold a lot the last few yrs.
We like to stay between 25%-35% equities and are currently at 25%

 

[splitwdw]

3 unrelated people have solicited my opinion on whether it's time to pull out of the stock market. All within the last week.

One was a brother in law.
One was a friend,
One was a coworker.

None of them know each other - they live in different cities, etc.

Obviously I gave them the advice to stay the course, selling would lock in their losses, you can't time the market, etc.... Not sure if they agreed.

So... Is it time to throw more money into the market since there appears to be some panic in the general population?

If these are retail investors then it's not a trend or microcosm. It's what most retail investors do when the market drops. PANIC and sell!

 

[Louis2]

I am not a market timer so I am only speaking rhetorically...

But no, I don't think such a quick mild pull back "spooks" the general public enough to justify pushing money toward stocks. Just from my personal observation, most people have a high percentage of their "stocks" in 401K and they don't manage them on a month to month basis.

Unfortunately, many of them DO manage on a annual or bi-annual basis and "chase the market" at the worst possible times.

 

[Bestwifeever]

That is really interesting. I can't remember the last time someone I know in real life even mentioned the stock market.

 

[Louis2]

That is really interesting. I can't remember the last time someone I know in real life even mentioned the stock market.

Good point. Rodi must be known in his circle as "the guy who knows the market"

 

[MasterBlaster]

What's the upside for you ?

The upside to giving family investing advice is that you might get a card at Christmas every year should you make them a few million or so.

The downside is people remembering for decades how you lost them money and never talking to you again.

Just give the standard JP Morgan line about the market and change the subject.

 

[rodi]

Good point. Rodi must be known in his circle as "the guy who knows the market"

I am known as the gal who's obsessed with growing my nest egg to retire among my friends/family. But most of them know I don't do market timing, individual stocks, etc...


And I make sure not to tell people what they should do with their money - emphasizing this. I tell them what I do (maintain asset allocation), and they are free to do what they wish.

 

[robnplunder]

What's the upside for you ?


The downside is people remembering for decades how you lost them money and never talking to you again.

.... which is why I stay away from giving any finance advices. The only advice I give is to contribute maximum mount to 401k. Even that isn't followed .

 

[easysurfer]

I rebalanced on 1/2/14 and don't plan on any rebalancing of any sort until 1/2/15. It feels nice to not have to ask "are we there yet?"

 

[calmloki]

Data point: after staying out of the market (no 30% gain for us!) and having cash sit in a Vanguard MM account all last year we started buying back in in mid January this year. Won't say that portends well for the market.

 

[Walt34]

Interesting discussion even bearing in mind this is (financially) a very unusual group. I've always had a side interest in psychology spurred by some of the foolish things that otherwise apparently normally intelligent people do. While everyone has had a "What was I thinking?" event, I'm talking about consistently foolish behavior.

Like the retired math teacher we are slightly acquainted with who is $500k+ in debt.

So I just put several books on my Amazon "wish list" that deal with finances and emotions, like Your Money and Your Brain and some others like that.

 

[Major Tom]

Data point: after staying out of the market (no 30% gain for us!) and having cash sit in a Vanguard MM account all last year we started buying back in in mid January this year.

Looks like we're all screwed then

 

[LOL!]

I don't know about anybody else, but I'm following LOL!'s Market Timing Newsletter on this site.

 

[timwalsh300]

... panic in the general population...

Over the past couple weeks, I've seen numerous threads here and in other places (e.g. bogleheads) about stock market losses. I keep thinking, "Oh gosh, what happened?" and I go look for a chart of the S&P 500... and I see that the index declined by 5%.

What's the big deal? In 2013 we saw at least three declines of a similar magnitude (May-June, August, and September-October). I don't remember those getting any special attention.

Maybe a bunch of novice investors just decided to get into stocks after last year's +30% run?

Tim

 

[calmloki]

...
Maybe a bunch of novice investors just decided to get into stocks after last year's +30% run?

Tim

No doubt, that's me. no vice.

 

[Turboslacker]

Interesting discussion even bearing in mind this is (financially) a very unusual group. I've always had a side interest in psychology spurred by some of the foolish things that otherwise apparently normally intelligent people do. While everyone has had a "What was I thinking?" event, I'm talking about consistently foolish behavior.

Like the retired math teacher we are slightly acquainted with who is $500k+ in debt.

So I just put several books on my Amazon "wish list" that deal with finances and emotions, like Your Money and Your Brain and some others like that.

Nice. I too like the psych angle re stock market.

 

[Turboslacker]

I don't know about anybody else, but I'm following LOL!'s Market Timing Newsletter on this site.

Oh hell ya...genius stuff for sure.

 

[ripper1]

Data point: after staying out of the market (no 30% gain for us!) and having cash sit in a Vanguard MM account all last year we started buying back in in mid January this year. Won't say that portends well for the market.

Oh oh, time for most of us to get out now!

 

[ERD50]

...

Obviously I gave them the advice to stay the course, selling would lock in their losses, you can't time the market, etc.... Not sure if they agreed.

So... Is it time to throw more money into the market since there appears to be some panic in the general population?

Did you really mean to say this? This infers they jumped into the market in the past few months. How else could they have losses? IF they are jumping in at highs, and then asking what to do at the first tiny pullback, I think the need education, not advice (I realize you are trying to avoid giving them 'advice').

While I don't feel confident in my market timing abilities, it seems as likely as not that this could be a good time to lighten up (enough weasel words there? Like a 50-50 chance of rain? ). Not because of some recent down days, but because we have had a big run up the past two years.

But then again, maybe not.

-ERD50

 

[splitwdw]

That is really interesting. I can't remember the last time someone I know in real life even mentioned the stock market.

I talk to friends and family members that invest in the stock market about stocks all the time. Guess we're odd and into pain.