Wow! Re the market, from today's NYTimes, business section

[ejman]

Since I seem to have an uncanny ability to control the stock market by virtue of my actions i.e. I sell it goes up, I buy it goes down I try to keep the market confused by maintaining a 50/50 equities bonds allocation

[jkern]

I would love to be in all cash when the market goes down and all equities when the market goes up. I just haven't been able to figure out what the market will do in the future.

[mystang52]

I'll echo the general theme of the responses here. I'm 50-50 and quite content. I'd go dizzy-crazy if I read and heeded all of these supposed experts. Life is a lot easier ignoring them (and, I do not think that is a head-in-the-sand attitude).

[enginerd]

Quote:

Originally Posted by ziggy29 Economists have predicted 10 of the last 3 recessions.

Sounds like good advice...they must be correct in 333% of their predictions.

[harley]

Quote:

Originally Posted by OrcasIslandBound Despite the obvious seemingly bad idea, for many members of this forum, to follow such advice, I have a coworker who did follow this advice and is all in cash. He is my boss. A very intelligent man otherwise. He followed this advice during the great recession in 2008 and has been in all cash ever since. He probably out earns me by at least 2X but, judging by what he has told me, he has a lot less saved for retirement then my family does.

That's the hard part, all right. I managed to go largely to cash in 2007 just before the crash, although it was the result of a major financial transaction vs. a planned escape from the market. But still, I was sitting at about 35% cash when the markets dropped, so I figured I'd be smart and just wait it out. But deciding to get back in at all, much less when, was so difficult that I missed a large part of the market gains before I decided to DCA back in. And the result of the DCA is that I paid more to get back in than I would have by just lump summing back. Hopefully I've learned my lesson, but we'll see what the future holds.

[DrRoy]

You can't go by what any one person says, and the more people who are saying the same thing, the more likely they will be saying it at the wrong time.

[haha]

Quote:

Originally Posted by harley Hopefully I've learned my lesson, but we'll see what the future holds.

You have certainly learned a lesson, but one that pertains only to that time with those conditions.

In my opinion it is not and cannot be a generic lesson, because the world is always changing, and we soon get old and die.

Ha

[NW-Bound]

Quote:

Originally Posted by harley That's the hard part, all right. I managed to go largely to cash in 2007 just before the crash, although it was the result of a major financial transaction vs. a planned escape from the market. But still, I was sitting at about 35% cash when the markets dropped, so I figured I'd be smart and just wait it out. But deciding to get back in at all, much less when, was so difficult that I missed a large part of the market gains before I decided to DCA back in. And the result of the DCA is that I paid more to get back in than I would have by just lump summing back. Hopefully I've learned my lesson, but we'll see what the future holds.

Of course, if you bought in at the bottom you would do well, same as the rest of us who should have gone on margin or take a 2nd home mortgage to throw into the market when it hit bottom in March 2009.

The question is whether you bought in at a lower price than when you sold in 2007. If true, I would be happy with that.

[Mulligan]

I have been married to electrical utilities for the better part of 2 years, and it has been a great marriage..... The prices have stayed firm and the 6% plus yield has been nice. But like an 80 year old rich man, I would dump my old lady for a new model with fewer years if the price is right. I just need 20% down more to justify trading her in!


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[LitGal]

Quote:

Originally Posted by W2R Yes, S&P500 earnings could be down. So what else is new? It's either up, or it is down. Sort of like a rollercoaster sometimes. Yes, there is a possibility of a recession in 2017. There also has been a possibility of a recession in every year. There is also a possibility of no recession. Nothing that he said persuades me to bail on the stock market and go to all cash, and I'm pretty risk averse.

+1

[harley]

Quote:

Originally Posted by haha You have certainly learned a lesson, but one that pertains only to that time with those conditions. In my opinion it is not and cannot be a generic lesson, because the world is always changing, and we soon get old and die. Ha

I can always count on my friends to cheer me up.

Quote:

Originally Posted by NW-Bound Of course, if you bought in at the bottom you would do well, same as the rest of us who should have gone on margin or take a 2nd home mortgage to throw into the market when it hit bottom in March 2009. The question is whether you bought in at a lower price than when you sold in 2007. If true, I would be happy with that.

Overall I probably came up a bit short of breaking even. I was approaching the 2007 sale price when I started DCAing back in. As I said (sort of), live and learn.

[NW-Bound]

In my market timing endeavor, if I bought back at a lower price than what I sold at, and as it was rarely at the exact bottom, I might still lose money. But if I lost less than if I had done nothing, I would be happy.

And just as importantly, I would be able to thumb my nose at the buy-and-holders.

[GTFan]

Quote:

Originally Posted by OrcasIslandBound Despite the obvious seemingly bad idea, for many members of this forum, to follow such advice, I have a coworker who did follow this advice and is all in cash. He is my boss. A very intelligent man otherwise. He followed this advice during the great recession in 2008 and has been in all cash ever since. He probably out earns me by at least 2X but, judging by what he has told me, he has a lot less saved for retirement then my family does.

That is exactly why I was able to retire a little over a year ago and one of my fellow coworkers that I thought was financially very savvy could not. He went all-cash (with stable fund/GIC only in 401k) after 2008 and never had the recovery that we did that enabled ER.

This stuff is all entertaining noise IMO.

[DrRoy]

I am not enjoying the current market, and 2008-9 was really tough on me, but I knew intellectually that I had to stay on the roller coaster and did. I am up 2.5 X from then, and also up 50% from the 2007 peak level. Hang in there people.

[W2R]

Quote:

Originally Posted by DrRoy I am not enjoying the current market, and 2008-9 was really tough on me, but I knew intellectually that I had to stay on the roller coaster and did. I am up 2.5 X from then, and also up 50% from the 2007 peak level. Hang in there people.

Good thinking! Yes, staying firm through these roller coasters always seems to work out best.

Another thing that has been helping me to take this in stride, is to look back at my monthly records of my portfolio value. My portfolio was its present size in 2013 despite the fact that have been spending it to live on and despite the fact that I sold much of it to buy my dream home in cash last summer. In 2013 I was thrilled with its size, and despite recent drops I should be no less thrilled with it now.

I try not to let market gyrations such as 2008-2009 be tough on me at all. I do watch them in a sort of frozen fascination, and may sputter and vent a bit on the forum about what is happening, but there is no point in suffering needlessly from angst or panic since neither will help.

[imoldernu]

Quote:

Originally Posted by imoldernu Interesting week coming up... China FX reserve numbers on Sunday Feb 7, Markets closed for Chinese Lunar New Year all next week. Possible moment of truth. Serious event... US markets left to balance change, and nervous time for asset managers, until China comes back on-line. Monday morning could be interesting... or not.

Yeah... or maybe.

Been watching the pundits today... trying to explain the market drop.

If the explanation was easy... but it's not. I'm coming back to the China FX Reserves, and the continued drop. There is no simple one paragraph explanation to help understand how this all works. Definitive studies that show how the tentacles of the eventual Chinese devaluation go to many pages, and the listing of affected financial entities range from the IMF, to the derivatives market, to banks and housing and to our personal financial security.
The drop in the reserves was relatively minor and should have been balanced by the internal Chinese markets. Because of the weeklong holiday, the uncertainty about balancing the devaluation reached into world markets.

The Chinese citizen does not have the kind of safety nets available to US citizens... Social Security, Pensions and health support as in medicaid etc., so the safety net is in savings. This is where the problem begins. With the government managing the financial system, mistakes can be catastrophic. It's this nibbling at the problem that is causing some of the domino effect in the world markets. When China freezes the personal savings of its' citizens, we'll see more world market changes.

And so, while we're seeing the market drop on oil prices and supply and demand... and while this looks to be the driving force in the markets, the switch to bonds reflects a wider concern.

Then... where is the gold? who owns it? who is amassing physical gold? what country owes what other country? how much is loaned or owed in bonds? What country, what banks have safe liquid assets? How much in unfunded liabilities? Is debt percented to GDP a real number?

The experts are talking value unwind, rebalancing and capitulation.
Maybe... maybe not!

...and so ends this conspiratorial exercise. YMMV

[unclemick]

Well that durn Mr Market better shape up and turn around cause the DW has the next tranch of RMD spent - adding an upstairs bathroom in the old 1922 Craftsman bungalow.

heh heh heh - she really does believe you can't take it with you. Me even if I can't pick the right football teams - perhaps a few good stocks? You know during the off season.

[David1961]

Wonder if he will be able to predict the exact day when the market will rebound?

[DrRoy]

For the last year and a half, due to the decline in prices for oil and commodities, the market segments of energy, materials, and emerging markets have led the way down, falling far more that the S&P 500. Since mid January, S&P has remained weak, but those 3 weak sectors have outperformed and actually risen. Think it means anything?

[sengsational]

I hope it means that those 3 weak sectors will attract some "momentum" buyers. I'd like to see my investment in those pay off, because it's been a sad ride for a while. But you know what they say, have a balanced asset allocation means you always have something to complain about.