What would you buy if another 2008 happened?

[Walt34]

Vanguard total US stock market.

 

[Chuckanut]

I would re-balance to my preferred AA. Trying to figure out the future of the market is a fools' game. At least a fool's game for me.

 

[Bestwifeever]

Powerball tickets

 

[Chuckanut]

+1

If this were a real crash or buying opportunity, people would be talking about the end of days and looking for a place to throw up, not discuss what to buy.

+1

I remember reading an article by a psychologist on market timing. He said something to the effect that "the time to buy is when your fingers are shaking so badly as you dial your broker, that you can barely make the call."

Pre-internet days, of course, but you get the point.

And then there are the likes of John Templeton:

In 1939, with Hitler\'s Germany ravaging Europe, John Templeton bought $100 of every stock trading below $1 on the New York and American stock exchanges. Templeton\'s trade got him a junk pile of some 104 companies, 34 of which were bankrupt, for a total investment of roughly $10,400. Four years later he sold these stocks for more than $40,000!

 

[Dawg52]

What would you buy if another 2008 happened?


More booze than normal.

 

[sengsational]

When I saw the title of the tread, I though it was asking about if you knew this was the start of another 2008 and you wanted to protect yourself from it, what would you do. Seems like the answers were about actions taken after any damage was done.

If I thought this was the start of another 2008, I'd not be so foolish to think that bonds would be any safer than stocks because both asset classes got clobbered. Depending on how certain I was about if another 2008 was in the offing, I'd increase my cash position so I'd have more money to pick-up bargains.

 

[DrRoy]

I would rebalance a little, but mostly just ride it out. You have no way to know where the bottom is, and I would not want to reduce the income side of the portfolio.

 

[Car-Guy]

I don't think we're heading into another 2008 market but we did "officially" (by definition) enter correction territory on the DOW today.

 

[Alan]

In 2008 we were still working and maxing out on contributions to 401k's which I directed to the funds needed to maintain our AA.

When it happens again I'll be rebalancing to our target AA. I did put in an order last night, which should execute after close of business today to move money from my IRA to Roth. Taxes will be the same but a larger % of the IRA will be converted. It is Wellesley to Wellesley and this is about as close as I ever get to market timing. (I did the same last year during a market dip). The Roth is now substantially bigger than the tIRA so I feel like I'm on the downward slope now but still have a few years of conversions to come.

 

[NW-Bound]

If and when it gets there (down 30 to 40% from recent high), I will look to buy 3 to 5 sectors that got hit the hardest. One would do well just buying the S&P, but picking the most downtrodden sectors seems the right way for bottom fishing.

Additionally, if the market drops that bad, my put options will become in-the-money and get exercised, and I am made to buy the stocks/ETFs by default. I have put options out for Berkshire, the S&P, an energy ETF, and biotech.

After all those options, I still have cash to deploy. But no point in thinking about bottom fishing yet. If and when the time comes, I will look to see what I want to do.

 

[eta2020]

VTI
Something simple that even simple man as me can understand.
Of course this answer assumes that I can not see a future and cherry pick some individual stock......

 

[NW-Bound]

I'm feeling a lot better. With all the threads talking about 2016 bear markets, 2008 repeats, etc., I think we're much less likely to actually experience one this year.

+1

If this were a real crash or buying opportunity, people would be talking about the end of days and looking for a place to throw up, not discuss what to buy.

Don't worry if so many posters still talk about buying. The day is still young. If the market drops to 1/2 as it did in early 2009, there will not be so many posts about buy, buy, buy... I can guarantee it. People will be too scared, and the talk will be about drawing early SS or buying annuities. In the past couple of years, there were so many posts about delaying SS to 70. That could have served as a contrarian signal.

 

[eta2020]

Don't worry if so many posters still talk about buying. The day is still young. If the market drops to 1/2 as it did in early 2009, there will not be so many posts about buy, buy, buy... I can guarantee it. People will be too scared, and the talk will be about drawing early SS or buying annuities. In the past couple of years, there were so many posts about delaying SS to 70. That could have served as a contrarian signal.

I would talk with my wife about working few more years (passed planned departure) Which is what I did in 2008.

 

[jim584672]

If 2008 happens again I think it is game over. It won't matter what you are invested in.

 

[NW-Bound]

I would talk with my wife about working few more years (passed planned departure) Which is what I did in 2008.

I would too. But for me, that is now water under the bridge. I will have to cope, using whatever I have on hand, plus the early SS.

 

[eta2020]

But you owned VIG ETF or KO, PEP, MO, PM and you counted on dividend yield you got a income bump in 2008 and 2009.

That is exactly why I very often recommend VIG and SCHD. I would expect no decline in dividend from those 2 ETFs which VIG actually demonstrated in 2008.

 

[ejman]

I would too. But for me, that is now water under the bridge. I will have to cope, using whatever I have on hand, plus the early SS.

With that RV up in the mountains sounds to me like you got everything covered. Maybe blowing up volcanoes and Rewahoo's asteroid excluded...

 

[hnzw_rui]

Don't worry if so many posters still talk about buying. The day is still young. If the market drops to 1/2 as it did in early 2009, there will not be so many posts about buy, buy, buy... I can guarantee it. People will be too scared, and the talk will be about drawing early SS or buying annuities. In the past couple of years, there were so many posts about delaying SS to 70. That could have served as a contrarian signal.

Currently still working with 25 years to retirement so I'll probably still be buying.

 

[M Paquette]

If the market goes down to that level or somewhere near it, would you invest more money in the stock market? Would you even take some money out of your cash reserves and buy more equity? What would you buy?

Tax loss harvest, and rebalance as needed, just like last time.

 

[NW-Bound]

With that RV up in the mountains sounds to me like you got everything covered. Maybe blowing up volcanoes and Rewahoo's asteroid excluded...

Yes, that humble class C will shelter me from the rain and the cold. And with gasoline as cheap as it is now and still getting cheaper, travel will be affordable.

Me worry?

 

[Jpg1717]

Buy total market index or S&P 500 index.Those two indexes are almost guaranteed to always eventually go back up. An individual stock is not guaranteed to go back up, and could possibly go down to zero.Remember that some tech stocks almost went to zero in 2000-2002, and never came back ! Although the very large indexes will go back up if you never sell.Please don't panic and sell , because then you are converting a paper loss into a real loss. Stay safe everyone, keep informed, educate yourself, and good luck.

 

[pb4uski]

If it goes down to 2008 levels, I'd be out of surplus cash long before it hit those numbers. I have bought stocks every day (all in the Dow 30) so far this year. I have a lot of spare cash just waiting for bigger dips. The bigger the drops, the more I seem to buy. So by the time it got to 2008 levels I'd be out of my surplus that I've set aside for buying opportunities. Of course if I really thought we'd see those levels again, I'd wait.

+1 I rolled my employer DC plan into my Vanguard IRA in December. The DC plan sold an S&P 500 fund on November 30 and they sent me a check. I turned around the check the same day and it came available in my IRA on December 11. I've made purchases on some down days since then and especially the last week. I figure that I have 5% more shares now than if I had left it in the DC plan, but that cash is almost tapped out.

The big mistake that I made in 2008 was standing pat with what I had. My asset allocation was literally SCREAMING at me to sell bonds and buy stocks and I was too chicken to do so.

 

[OrcasIslandBound]

I won't buy any stocks until the Schiller cape ratio gets down to at least it's long term avg of 16. Right now it is about 25. I would be planning on early SS most likely.

Sent from my Nexus 4 using Early Retirement Forum mobile app

 

[donheff]

Argh. Another situation where risking some strategic market timing is tempting. Unfortunately, picking the best time to jump is always a problem. Will China keep falling for a while before they lock up their market? Or will it bounce back today before I can jump?

 

[pb4uski]

I won't buy any stocks until the Schiller cape ratio gets down to at least it's long term avg of 16. Right now it is about 25. I would be planning on early SS most likely.

Sent from my Nexus 4 using Early Retirement Forum mobile app

Unless you are rich and don't need stocks then that is a silly strategy. Since 1991 (25 years ago) the ratio has only been lower than 16 once (2009).

Shiller PE Ratio by Year