Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Well-disciplined, but...
Old 01-11-2007, 05:48 PM   #1
Thinks s/he gets paid by the post
redduck's Avatar
 
Join Date: Mar 2005
Location: yonder
Posts: 2,052
Well-disciplined, but...

It appears that people who contribute to this board are well-disciplined regarding their investment strategies. But, the question is: what kind of news event might cause you to pull out 25-50% (or more) of your investment in the market? Second part: what sort of news event might cause you to add much more to the market than you had planned?
__________________

__________________
Carpe cōleī
redduck is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Well-disciplined, but...
Old 01-11-2007, 06:50 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Apr 2006
Posts: 1,487
Re: Well-disciplined, but...

if we had a dramatic run-up, i'd rebalance. if we had a dramatic run-down, i'd rebalance. (actually, either wouldn't have to be very dramatic, as i tend to rebalance often, in small doses.)
__________________

__________________
d is offline   Reply With Quote
Re: Well-disciplined, but...
Old 01-11-2007, 07:34 PM   #3
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 2,398
Re: Well-disciplined, but...

I put money in when I have it.

I take money out when I need it.

The news doesn't affect my investment actions at all.

2Cor521
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Re: Well-disciplined, but...
Old 01-11-2007, 08:25 PM   #4
Moderator
bssc's Avatar
 
Join Date: Dec 2005
Posts: 9,923
Re: Well-disciplined, but...

If I saw that I won the lottery on the news, I would be adding to my portfolio but the only news that I make investment decisions on is individual company news such as a buyout or bankruptcy.
__________________
Angels danced on the day that you were born.
bssc is offline   Reply With Quote
Re: Well-disciplined, but...
Old 01-11-2007, 08:58 PM   #5
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: Well-disciplined, but...

Quote:
Originally Posted by redduck
It appears that people who contribute to this board are well-disciplined regarding their investment strategies. But, the question is: what kind of news event might cause you to pull out 25-50% (or more) of your investment in the market? Second part: what sort of news event might cause you to add much more to the market than you had planned?
Good question. (There's a similar thread at the diehard's forum.) People here often talk about buying stocks when they're "on sale."

A couple examples of historical stock "sales:"

If bond yields went up to, say, 15% (a la 1979) and corporate earnings were in the toilet, what would you do?

If the gov't was making bold socialistic moves and talking about taking over public companies for the good of the people (a la 1930's), what would you do?

I'm not sure I'd have the discipline to stay in stocks or the cojones to buy on dips.
__________________
wabmester is offline   Reply With Quote
Re: Well-disciplined, but...
Old 01-11-2007, 09:13 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,615
Re: Well-disciplined, but...

Let's see, stayed invested in 1987. Stayed fully invested since, including 2000, 2001, 2002.

But, how about this news item:

"FDA approves new NIH drug that makes you instantly 20 years younger, prevents cancer and heart disease, costs $500,000"
__________________
LOL! is offline   Reply With Quote
Re: Well-disciplined, but...
Old 01-11-2007, 09:15 PM   #7
Recycles dryer sheets
 
Join Date: Sep 2006
Posts: 174
Re: Well-disciplined, but...

Quote:
Originally Posted by redduck
But, the question is: what kind of news event might cause you to pull out 25-50% (or more) of your investment in the market? Second part: what sort of news event might cause you to add much more to the market than you had planned?
If you're suggesting that one could hear a news report of a catastrophe (or upcoming unfavorable market conditions) and then pull out in time avoid big losses from the resulting market response, or similarly to react to a news report of favorable market conditions in time to benefit from the subsequent runup, neither seems very realistic.
Both presuppose that you can act quickly enough to beneifit from a subsequent and predictable market reaction. By the time such things were reported, you'd be too late; the market would have reacted.

The questions also presuppose a rational market.

Quote:
Originally Posted by d
if we had a dramatic run-up, i'd rebalance. if we had a dramatic run-down, i'd rebalance.
Exactly. It's not so much reacting to news events in anticpation of market reaction, but rather having a plan (asset allocation) and reacting to market changes that have already occured, for whatever reason. So if the market reacts dramatically to a specific event about the same time you were poised to do some rebalancing or new accumlation anyway, there may be an immediate buying opportunity. I wouldn't keep money intended for the market out while waiting for such an opportunity, however.

I'm talking here about mutual funds, long term, and the market in general. Obvoiusly individual stocks may be a different game, one that I gave up on a while ago.
__________________
rockyj is offline   Reply With Quote
Re: Well-disciplined, but...
Old 01-11-2007, 09:41 PM   #8
Thinks s/he gets paid by the post
redduck's Avatar
 
Join Date: Mar 2005
Location: yonder
Posts: 2,052
Re: Well-disciplined, but...

Well, let's say it's that time of year-- actually the very day-- that you had planned to put your lump-sum amount into your retirement plan...and you hear that North Korea just nuked South Korea or that the world learns the avian flu is now rampant in some part of the world. Do you hold off or do you just put your money into the market as per always?
__________________
Carpe cōleī
redduck is online now   Reply With Quote
Re: Well-disciplined, but...
Old 01-11-2007, 09:50 PM   #9
Recycles dryer sheets
 
Join Date: Sep 2006
Posts: 174
Re: Well-disciplined, but...

Quote:
Originally Posted by redduck
Well, let's say it's that time of year-- actually the very day-- that you had planned to put your lump-sum amount into your retirement plan...and you hear that North Korea just nuked South Korea or that the world learns the avian flu is now rampant in some part of the world. Do you hold off or do you just put your money into the market as per always?
If I had long term money waitng to go into the market, and the market tanks due to the nuke. Yes, I'd put it in as always and be thankful for the dip. The kind of news that might make me change my asset allocation would be the kind that would lead me to shift into weapons, canned goods and bottled water. But by the time I heard that news, Wal-mart would be out of all of all that stuff anyway.
__________________
rockyj is offline   Reply With Quote
Re: Well-disciplined, but...
Old 01-11-2007, 09:51 PM   #10
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: Well-disciplined, but...

Quote:
Originally Posted by redduck
Well, let's say it's that time of year-- actually the very day-- that you had planned to put your lump-sum amount into your retirement plan...and you hear that North Korea just nuked South Korea or that the world learns the avian flu is now rampant in some part of the world. Do you hold off or do you just put your money into the market as per always?
I live for the kind of dramatic events that have no real lasting economic impact. The market always overreacts, and I always buy on those dips.
__________________
wabmester is offline   Reply With Quote
Re: Well-disciplined, but...
Old 01-12-2007, 06:58 AM   #11
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 182
Re: Well-disciplined, but...

Quote:
Originally Posted by redduck
Well, let's say it's that time of year-- actually the very day-- that you had planned to put your lump-sum amount into your retirement plan...and you hear that North Korea just nuked South Korea or that the world learns the avian flu is now rampant in some part of the world. Do you hold off or do you just put your money into the market as per always?
Since 9/11, we've seen any number of these events and they will certainly take the market down. It (so far) always comes back and more. The market seems to be getting even more imune to these events, but when it goes down, if you are watching, it's a great time to jump in. Of course, this is more of a short-term trading opportunity and difficult for most "investors" to do. Look at what happened when the Cirrus aircraft rammed into the building in NY a couple months ago. The market took a quick dip and then went right back up. I'm sure traders made alot of money.
__________________
lowflyer is offline   Reply With Quote
Re: Well-disciplined, but...
Old 01-12-2007, 07:01 AM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Well-disciplined, but...

Quote:
Originally Posted by wab
I live for the kind of dramatic events that have no real lasting economic impact. The market always overreacts, and I always buy on those dips.
Ditto. Plus as I get older and more experienced, I inceasingly have more confidence in my convictions.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: Well-disciplined, but...
Old 01-12-2007, 07:06 AM   #13
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,069
Re: Well-disciplined, but...

Quote:
Originally Posted by brewer12345
Ditto. Plus as I get older and more experienced, I inceasingly have more confidence in my convictions.
Better than growing more confident you will be convicted...

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Re: Well-disciplined, but...
Old 01-12-2007, 07:23 AM   #14
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,069
Re: Well-disciplined, but...

Quote:
Originally Posted by brewer12345
Ditto. Plus as I get older and more experienced, I inceasingly have more confidence in my convictions.
One more point. Your above statement is the precursor to what you will become as you continue to age. Today's "courage of your convictions" is tomorrow's "obstinate old f@rt".

(Let me save you a response: Yes, I am speaking from experience. )

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Re: Well-disciplined, but...
Old 01-12-2007, 07:34 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
Re: Well-disciplined, but...

Quote:
Originally Posted by REWahoo!
Today's "courage of your convictions" is tomorrow's "obstinate old f@rt".


WITH a Curmudgeon Certificate AND you get to remember it your way.

heh heh heh heh heh heh heh heh heh heh heh heh - no coffee yet.
__________________
unclemick is offline   Reply With Quote
Re: Well-disciplined, but...
Old 01-12-2007, 09:39 AM   #16
Thinks s/he gets paid by the post
 
Join Date: Dec 2003
Posts: 1,375
Re: Well-disciplined, but...

Quote:
Originally Posted by wab
Good question. (There's a similar thread at the diehard's forum.) People here often talk about buying stocks when they're "on sale."

A couple examples of historical stock "sales:"

If bond yields went up to, say, 15% (a la 1979) and corporate earnings were in the toilet, what would you do?

If the gov't was making bold socialistic moves and talking about taking over public companies for the good of the people (a la 1930's), what would you do?

I'm not sure I'd have the discipline to stay in stocks or the cojones to buy on dips.
Wab: I had two children and a homemaker wife in 1966.
By the time 1979 rolled around, nothing surprised me.

Stagflation produced high unemployment rates, and run-away inflation.

If you were able to hold a job and somehow keep up with inflation you were "successful". Stocks and Bonds were mostly off the radar screen
for all but the individuals that had an inheritence, or other special circumstances.

Early Retirement Boards would have been a blank page.

Hope you guys don't have to experience a period like this, because my children are about the same age bracket as most of the posters on this board (Age 40 and 37).

Meanwhile, enjoy the blessings of the the last 25 years, but be careful out there.

__________________
Jarhead* is offline   Reply With Quote
Re: Well-disciplined, but...
Old 01-12-2007, 12:41 PM   #17
Full time employment: Posting here.
 
Join Date: Sep 2004
Posts: 607
Re: Well-disciplined, but...

Quote:
Originally Posted by Jarhead*
Wab: I had two children and a homemaker wife in 1966.

Hope you guys don't have to experience a period like this, because my children are about the same age bracket as most of the posters on this board (Age 40 and 37).
Hmm, If you had 2 children in 1966, wouldn't they BOTH be at least 40 by now?
__________________
WanderALot is offline   Reply With Quote
Re: Well-disciplined, but...
Old 01-12-2007, 12:59 PM   #18
Thinks s/he gets paid by the post
 
Join Date: Dec 2003
Posts: 1,375
Re: Well-disciplined, but...

Quote:
Originally Posted by WanderALot
Hmm, If you had 2 children in 1966, wouldn't they BOTH be at least 40 by now?


My Wife reads this board occasionally when I post something. She already beat you to it. We were married in 1963, and our children came along a few years after 1966.

Give me a break, that was a long time ago.

__________________
Jarhead* is offline   Reply With Quote
Re: Well-disciplined, but...
Old 01-12-2007, 01:02 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Well-disciplined, but...

Quote:
Originally Posted by LOL!
"FDA approves new NIH drug that makes you instantly 20 years younger, prevents cancer and heart disease, costs $500,000"
Wait until Costco sells it for $75,000 with a free sample on a toothpick at lunchtime.

Hey Jarhead...as the 18 year old from missoula says, you get to remember it any way you want to. As long as I get to make you feel like an old fart by pointing out that I was two when you got married and just graduating high school in '79.

And are you enjoying this minnesota-like weather we're having?
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Well-disciplined, but...
Old 01-12-2007, 01:11 PM   #20
Full time employment: Posting here.
 
Join Date: Sep 2004
Posts: 607
Re: Well-disciplined, but...

Quote:
Originally Posted by El Guapo
Hey Jarhead...as the 18 year old from missoula says, you get to remember it any way you want to. As long as I get to make you feel like an old fart by pointing out that I was two when you got married and just graduating high school in '79.
Well, I think Justin, soupxcan and CoolDude weren't even born when you were graduating high school and I wasn't even 5.

__________________

__________________
WanderALot is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Should She Have Been Disciplined?? FinanceDude Other topics 32 02-15-2007 10:05 AM

 

 
All times are GMT -6. The time now is 09:15 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.