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Old 06-20-2013, 06:35 PM   #21
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It is interesting that the market is selling off as if Bernanke said something shocking. I thought most expected a winding down of fed bond purchases in the near future.

Probably time for a 10% correction or so. Can't go straight up forever. Might nibble at a couple of dividend stocks if a 10% hit does indeed happen.
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Old 06-20-2013, 06:44 PM   #22
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It is interesting that the market is selling off as if Bernanke said something shocking. I thought most expected a winding down of fed bond purchases in the near future.
Yes, it's like people were looking for an excuse to sell. Bernanke probably could have sung 'the rain in spain' and people would have sold.
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Old 06-20-2013, 06:46 PM   #23
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Might be a slightly lazy question....when you buy some more shares of something like Vanguard Total Stock.....where does in lock the price in? If I did it now...would it lock in a todays price, or in 3 days or so when the switch from money market to that fund is finalized? I was thinking about moving some cash to stocks as well. Although I am thinking it will go up a bit tomorrow.....if it doesn't, then I really want to buy.
For mutual funds the price will be the NAV as of the end of the day (which is generally 4pm ET) so if you put your transaction in before 4pm you'll get today's NAV after 4pm and you'll get tomorrow's NAV.

For ETF's you'll get the execution price and it settles later.
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Old 06-20-2013, 06:55 PM   #24
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[QUOTE=Dawg52;1331451]It is interesting that the market is selling off as if Bernanke said something shocking. I thought most expected a winding down of fed bond purchases in the near future.

[QUOTE]

Isn't the saying "buy on the rumor, sell on the confirmation" ? seems to be exactly what's happening
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Old 06-20-2013, 07:45 PM   #25
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It is interesting that the market is selling off as if Bernanke said something shocking. I thought most expected a winding down of fed bond purchases in the near future.
It's amazing to watch. The media is not even reporting what he said correctly. There was nothing new. He didn't say tapering was going to start anytime soon. He said IF the thresholds are met, then they would re evaluate and may taper if condition warranted. Which is what he has been sating for some time, 6.5% unemployment AND 2.5% inflation.
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Old 06-20-2013, 07:47 PM   #26
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I was expecting a pull back. Seeing it happen proves to me (once again) that I am not ready to ER. I could probably pull it off financially, but if I can't sleep at night its not worth it.
I thought you had run your numbers based upon as much as even a 20% drop? If so, then why would a 5% drop make you unable to sleep?

I don't like the drop, but it doesn't panic me and I don't really expect a 20% drop right now.

I'm not really planning on changing anything. Our overall net worth is still higher today than it was at the start of the year even though we have taken some portfolio withdrawals this year. Also, right before the May high I sold some of our after tax portfolio to pay for a car which turned out to be good timing (not that I was expecting it to be good timing...it just worked out that way).

I also thought it was kind of absurd for the market to react so strongly to Bernanke's statements which I also didn't find alarming.
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Old 06-20-2013, 07:53 PM   #27
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Yes, this market is so horrible!

Look at the 3m, 6m or 1y charts and you'll feel better.

VTI Technical Analysis | Vanguard Total Stock Market ETF Stock - Yahoo! Finance

Time to get a bit of perspective folks!
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Old 06-20-2013, 07:55 PM   #28
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.....I also thought it was kind of absurd for the market to react so strongly to Bernanke's statements which I also didn't find alarming.
+1, but that is what the market does.
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Old 06-20-2013, 08:02 PM   #29
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But....if you are in a large store and 6 people suddenly start sprinting for the door in a panic......you have a tendency to want to follow them just in case they know something you don't..... It doesn't have to make sense.....but some people (350+ Dow points worth of them) will start running. I have enough cash to get me through the next 3-5 years.
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Old 06-20-2013, 08:17 PM   #30
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I will start getting interested in the general market after a 10% drop from the highs or specific stocks if they hit what I consider to be attractive entry points. Until then, snooze fest.

Tomorrow is so-called "quadruple witching" so I expect a lot of meaningless volatility.
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Old 06-20-2013, 08:17 PM   #31
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....Also, right before the May high I sold some of our after tax portfolio to pay for a car which turned out to be good timing (not that I was expecting it to be good timing...it just worked out that way).

I also thought it was kind of absurd for the marke....
[thread jacking on]: is this what you ended up doing after the discussion here: Should I sell my car?

What did you end up finding?

[/thread jacking off]

We're hanging on and making no changes. We kept a chunk of cash for at least three years so will shut our eyes to the market swing as much as we can.
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Old 06-20-2013, 08:25 PM   #32
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Hmmmm...I could make a dirty comment about part of that last post....
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Old 06-20-2013, 08:28 PM   #33
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I don't think buying a little more of something on sale is market timing. Closing out a positon entirely on a well reasoned AA due to a drop is.

Historically I have always bought on dips. Didn't care really if it was the bottom or not. I was a devoted advocate of DCA. I would just put a little more in the envelope if the trend was down. Served me very well.

What is hard mentally now that I am close to pulling the trigger on ER (2014 hopefully) is sitting on the sidelines preserving enough cash for multiple years of living expenses. I want to jump on this and am bitting my tongue! I am finding preservation mode vs accumulation mode is a very strange change....
I try to keep the cash for spending, up to however many years you target. However, if the market goes down more than 20%, that is the time to consider reinvesting some of that cash. Do the math. Even adding 10% of your AA back into the portfolio and picking up an extra 5% with it before you need to spend it, it'll only grow to 10.5% of your portfolio. An extra 0.5% for what is really quite a bit of risk. Make that 2% and it's a little better. But still, a lot of work and worry for just to make up what the market lost just today.
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Old 06-20-2013, 08:28 PM   #34
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I raised some cash the last two weeks selling some winners and lightening up on some bond etf's in case Uncle Ben dropped the hammer. I'm going to sit on the cash for a while to see where things shake out then will probably start nibbling at a few things on my "want to own" list. I think we could fall another 4-5% before things settle down.

You want to buy when everyone else is selling! Question is when.
I did the same. I expected a market pullback after the Fed announcement, as things have gotten way out of hand with this QE stuff. Of course Ben was going to say that QE must be tapered off at some point, and it was not hard to guess that the market was going to react negatively to that. My tendency at this point is to stay away (mostly) until the Fall, and then start buying back in a little bit at a time. Sure, it's market timing, but I've done well over the first 5-6 months of the year, so I'm content to park mostly in cash for a while and wait this out.
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Old 06-20-2013, 08:34 PM   #35
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Thanks for your kind encouragement. I am typing this post from 36,000 feet in the air. A first for me. Connecting via wifi. I love technology ! :-)

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Good job. One nice feature about Wellesley is it rebalances automatically, so as equities fall, more are purchased at a lower price. This is an excellent conservative fund and over long periods should do a superior job of maintaining purchasing power compared with typical fixed income options.
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Old 06-20-2013, 08:48 PM   #36
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[thread jacking on]: is this what you ended up doing after the discussion here: Should I sell my car?

What did you end up finding?

[/thread jacking off]
No... we had had a loan that we took out when we didn't have after tax money available and didn't want to take out tax deferred money because we were in a higher tax bracket than we would this year. This year, however, we had some after tax money investments available and sold in May shortly before the height of the market (yay!). We still own the car in the above thread and I'm keeping an eye out for vehicles on sale since I only want to sell it if I find something really ideal.

Anyway...back to the regularly scheduling programming...
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Old 06-20-2013, 09:00 PM   #37
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The yield on the S and P 500 is only at 2 %. It has a long way to fall to reach its mean of 4.5. Rising rates should correct both stock and bond prices which have been artificially propped. Wouldn't it be nice if portfolio values remained the same and yields returned to norm? lol
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Old 06-20-2013, 09:24 PM   #38
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I thought you had run your numbers based upon as much as even a 20% drop? If so, then why would a 5% drop make you unable to sleep?.
I was using a 10% drop; 20% left me potentially broke at 79 which is much too young. I was unable to sleep when the market wasn't even dropping yet. Just not emotionally ready. I will probably keep working. Worst thing that happens is that I "wasted" a couple of good years to be able to spend more money on travel later on.
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Old 06-20-2013, 09:41 PM   #39
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I will start getting interested in the general market after a 10% drop from the highs or specific stocks if they hit what I consider to be attractive entry points. Until then, snooze fest.

Tomorrow is so-called "quadruple witching" so I expect a lot of meaningless volatility.
+1. Actually, I am hoping for more of a drop. Looking for good buying opportunities.
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Old 06-20-2013, 09:45 PM   #40
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It's just noise, right?
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