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Trend or just a microcosm of my friends/family....?
Old 02-10-2014, 02:57 PM   #1
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Trend or just a microcosm of my friends/family....?

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?
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Old 02-10-2014, 03:15 PM   #2
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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
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Old 02-10-2014, 03:22 PM   #3
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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.
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Old 02-10-2014, 04:01 PM   #4
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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..
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Old 02-10-2014, 04:03 PM   #5
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If you really want to get the facts, watch a few days worth of CNBC!
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Old 02-10-2014, 04:17 PM   #6
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Quote:
Originally Posted by rodi View Post
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%
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Old 02-10-2014, 04:28 PM   #7
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Quote:
Originally Posted by rodi View Post
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!
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Old 02-10-2014, 04:30 PM   #8
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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.
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Old 02-10-2014, 04:31 PM   #9
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That is really interesting. I can't remember the last time someone I know in real life even mentioned the stock market.
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Old 02-10-2014, 04:36 PM   #10
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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"
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Old 02-10-2014, 04:36 PM   #11
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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.
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Old 02-10-2014, 04:40 PM   #12
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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.
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Old 02-10-2014, 04:41 PM   #13
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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 .
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Old 02-10-2014, 05:10 PM   #14
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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?"
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Old 02-10-2014, 05:22 PM   #15
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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.
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Old 02-10-2014, 05:35 PM   #16
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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.
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Old 02-10-2014, 05:40 PM   #17
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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
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Old 02-10-2014, 06:01 PM   #18
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I don't know about anybody else, but I'm following LOL!'s Market Timing Newsletter on this site.
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Old 02-10-2014, 07:43 PM   #19
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... 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
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Old 02-10-2014, 07:52 PM   #20
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...
Maybe a bunch of novice investors just decided to get into stocks after last year's +30% run?

Tim
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