What would you buy if market went down 20%?

[easysurfer]

I haven't been following the recent ups and downs that closely. Probably the best approach as I'll just re-balance when appropriate to avoid any knee-jerk reactions to the news of the day.

 

[Dawg52]

I have been trying to buy both Chevron CVX and Southern Company So for months so that would 20% would make them good deals.

Those are two I own. I already have a lot of CVX, but might add a little more if it dropped by 20%. Only have a modest position in SO and would like to add to it.

 

[Tyro]

I wrote puts on Tesla at 80 so if the market pulls back 20% I'll probably own that stock.

I do like the company long term but if the stock climbs another 5%, I will most
likely short it. I do think you will be able to buy it at much lower prices.

Considering what they're trying to do in NYS, that may happen regardless of the market in general.

Tesla Falls On NY Ban Worries - Stocks To Watch - Barrons.com

Tyro

 

[NW Landlady]

I currently have a large amount of cash that I am trying to DCA into mutual funds...so I time it a little -- when Bernacke burps & Mr. Market drops, I just buy more of my existing mutual funds....then wait another month to do it again....

 

[freebird5825]

I just placed an order for 75 more shares of BHP. It should process first thing Monday morning. I've been doing some gradual purchasing of this stock over the last 2 years. My portfolio needs a little more international exposure.

Other than that, no other transactions are planned.

 

[Surewhitey]

DW bought some MCD on Thursday...

 

[Lakewood90712]

I picked up a couple of things yesterday, but not much. I have some reserves and if (when?) the market goes down a lot, I'm thinking of buying more..

What would *you* buy if the market went down by, say 20%?

More of what I now have, Big Oil ( cvx , xom, Big Pharma. ( j and J , mrk, pfe ) and would add utility stocks. Might also look a some others in pharma, and consider some commd. futures, 5+ years out.

Early 50's, still working for just one more year .

Unlike most , I buy the equity itself , not mutual funds. I only buy what I intend to keep till death , barring a melt down in an individual co. My 457 plan allows equities thru schwab , as the custodian.

 

[ejman]

I only rebalance when my equity allocation goes outside my "allowed band" of 45 - 55%. Since both stocks and bonds have had a bout of indigestion lately I'm still basically unchanged since my last rebalance in early May. I suppose if both stocks and bonds keep dropping in lockstep I'll just go back to sleep until something more significant happens. So in answer to the OP's question, if stocks drop 20% and bonds also drop 20% I guess, I'll awake from my slumber and do nothing...

 

[HFWR]

Some bourbon...

 

[nun]

I time the market going in, but I don't time the market getting out. Ever. I try to buy on bargain prices and once I buy, I keep them. I "stay the course." I will eventually have to start selling when I retire, but, no I haven't sold anything at all since the beginning of time (except for about 5K that I call "Casino money" but even that has been staying in since I bought AMZN and WFMI with it back in 2007)).

So you've never rebalanced between asset classes? If there was a 20% market fall I'd rebalance my AA.

 

[ERD50]

Some bourbon...

That works when the market is UP 20% too!


-ER50

 

[scrabbler1]

I only rebalance when my equity allocation goes outside my "allowed band" of 45 - 55%. Since both stocks and bonds have had a bout of indigestion lately I'm still basically unchanged since my last rebalance in early May. I suppose if both stocks and bonds keep dropping in lockstep I'll just go back to sleep until something more significant happens. So in answer to the OP's question, if stocks drop 20% and bonds also drop 20% I guess, I'll awake from my slumber and do nothing...

This pretty much describes my plan. I have a slightly narrow band than you do but the idea is the same. I did make one separate adjustment to my AA to reflect my aging - going from 55/45 to 50/50 in my TIRA, the account I do most of my rebalancing. I have different criteria and a different AA in my taxable accounts, so I need to have a much bigger swing to start moving money around there (because my taxable accounts generate the income I need to cover my expenses in ER).

Slumbering just like you.....

 

[ERD50]

So you've never rebalanced between asset classes? If there was a 20% market fall I'd rebalance my AA.

I think rebalancing makes sense to provide some guidance and keep a level head when facing volatility. But...

I also think that studies show it doesn't make much difference. You end up selling on the way up on an extended bull, missing some gains. It would be interesting to be able to run FIRECALC w/o rebalancing.

-ERD50

 

[Midpack]

Stocks closed near their highs Thursday, rallying for a third-straight session, lifted by a string of upbeat economic reports and following several speeches from Federal Reserve policymakers suggesting the central bank has time before it starts reducing its bond-buying.

Stay tuned...

 

[FIREd]

Added to my CLX, APPL, SO, PM, KO, MCD, RDS.B, and O positions on Monday. Added to my VFWAX position on Friday. Added to my munis today. Still about 10% in cash just in case there is more buying to be done.

 

[obgyn65]

I would stay the course.

What would *you* buy if the market went down by, say 20%?

 

[Mulligan]

I would stay the course.

I would too, but probably for a different reason. I would think at 20%, I will let it drop a little more then buy. Then it would head back up and I would miss the dip. That is why I just DCA every month. I am already 0-2 on the past 2 years concerning my lump sum Roth contribution. The past few Januarys I had this great idea to wait for a small market pullback and then buy. Ya, that worked out real well. Had to throw in the towel around April 1st the past 2 years because I was running out of time to contribute and the pull back never came.

 

[steelyman]

I'd buy a Rickenbacker bass.