Little faith in the market now

[mark500]

Recently, I have lost a lot of faith in the market. Not related to the stock market losses per se. I knew the market could drop 45% at some point and had planned by portfolio to withstand a severe bear market, with a tolerable hair cut.
It seems, as Jack Bogle has said, that too many "speculators" exist. Bear raids, CDSwaps, ramping, wash sales. Hedge funds, lightly regulated investment partnerships, operate with little oversight. Intellectually weak legislators corrupted by lobbyists. Lack of the uptick rule. I don't really even understand half of it really. Are big institutions manipulating the illiquid muni market? All these Wall street "experts" were mostly overpaid morons with trumped up pedigrees. I am happy that Thain did not get his $10 million dollar bonus...nothing personal.
Maybe this is a good sign. If my emotional side is capitulating, maybe we are at the bottom.

 

[Rich_by_the_Bay]

I think I'd feel better with a series of gradual .3% or .5% daily gains, then a few slightly down days, basically the normal fluctuations rather than that what we have now. A 4% daily rise, a 5% loss, a 3% rise, whatever. My Vg REIT was down 14% today - may be up 12% tomorrow. Chaos.

This is not a market I trust either.

 

[unclemick]

Yep - right now 21-7, the Bears are stomping the banana poop out of my Saints and it's cold in Chicago. Gonna be perhaps a long winter.

BUT! - pssst Wellesley = 5.78% SEC yield.

Hang in there.

Maybe not the Saints - at least not this year but long term:

'God Looks After Drunkards, Fools And The United States of America.'

heh heh heh - wait next season - you'll see.

 

[FIREd]

You are not the only one losing faith in the market:

Mutual fund investments fall $2.8 billion - Dec. 11, 2008

Money is flowing out of stock AND most bond funds. People would rather put their money in treasuries paying no interest. It blows my mind.

 

[aaronc879]

Even though I still have no faith in the current market i'm still going to put all of my Roth contribution into VGTSX on Jan 2nd. I guess i'm just stubborn but i'll be doing that every year whether it's up 15% or down 47% like this year.

 

[Bestwifeever]

Hang in there--tomorrow could be a bumpy day on Wall Street based on tonight's emergency meetings over the automakers' bailout:

Auto bailout talks collapse over union wages - Yahoo! News

Republicans left a closed-door meeting where they balked at giving the automakers federal aid unless their powerful union agreed to slash wages next year to bring them into line with those of Japanese carmakers. Republican Sen. George V. Voinovich of Ohio, a strong bailout supporter, said the UAW was willing to make the cuts — but not until 2011.... The bill was virtually certain to fail to reach the 60-vote threshold it would need to clear to advance.
Senate Majority Leader Harry Reid called the bill's collapse "a loss for the country," adding "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight."

 

[Zathras]

I hope it is bumpy, my fear is it will be smooth and steep and in just one direction:|
However, in the long run, I think chapter 11 will be better for GM, than this bail out would have been.

 

[Architect]

"If my emotional side is capitulating, maybe we are at the bottom."

Don't succumb to solipsism, markets don't care what you think.

I think your emotions are perfectly reasonable.

 

[Notmuchlonger]

Few years from now it will go up again. Your time horizon may vary.

 

[73ss454]

Tomorrow or should I say today looks ugly with futures down over 300 pts. This crap is getting old.

 

[Nords]

It seems, as Jack Bogle has said, that too many "speculators" exist. Bear raids, CDSwaps, ramping, wash sales. Hedge funds, lightly regulated investment partnerships, operate with little oversight. Intellectually weak legislators corrupted by lobbyists. Lack of the uptick rule. I don't really even understand half of it really. Are big institutions manipulating the illiquid muni market? All these Wall street "experts" were mostly overpaid morons with trumped up pedigrees. I am happy that Thain did not get his $10 million dollar bonus...nothing personal.

Apparently people only began objecting to these issues when the market stopped going up...

 

[ladelfina]

How true!

 

[REWahoo]

This crap is getting old.

Look on the bright side - so are you. Less time for you to have to worry about market gyrations.

 

[Midpack]

I hope it is bumpy, my fear is it will be smooth and steep and in just one direction:|
However, in the long run, I think chapter 11 will be better for GM, than this bail out would have been.

I don't disagree, but the $64K question is will people buy cars from GM in Chpt 11. The polls I've seen suggest 80% will not, so GM would go straight to Chpt 7 no? If GM could go bankrupt without taking down Ford, I'd be for it, but I'm not sure what would happen. Frankly, I think the Corker approach will ultimately be the only way to save the D3, and that might not even work.

 

[MichaelB]

Apparently people only began objecting to these issues when the market stopped going up...

Hey, come on now, Nords. When the market was going up we were all genius investors.

 

[Dawg52]

Look on the bright side - so are you. Less time for you to have to worry about market gyrations.

Yeah but someone tell me this........ Why in the heck was I in the market in the first place? I had enough money to take me to promised land. Frig, now I have to worry about it I still do and will the market come back? What an idiot.

 

[REWahoo]

Yeah but someone tell me this........ Why in the heck was I in the market in the first place?

...What an idiot.

When you start replying to yourself online - in the same post - it might be time to seek some professional help. Unclemick will be along shortly to counsel you.

 

[Notmuchlonger]

Hey, come on now, Nords. When the market was going up we were all genius investors.

One thing Ive noticed on the various message boards. You don't see that beauty of a question.

"Why not 100% stocks guys!"

 

[Rich_by_the_Bay]

This thread reminds me of how I (and I presume a lot of you) used to shake my head at my post-depression parents and their friends who feared investing and had the under-the-mattress mentality.

While I haven't succumbed to that just yet, I certainly have a better understanding of why they felt as they did. It would take quite a few years to calm the minds of those who went through that period, and I suspect the same will apply to the Crash of 2008.

 

[BUM]

Whats left to say? In this market you buy, or wait, or buy and wait.

 

[Spanky]

"Why not 100% stocks guys!"

Answer: do not have the stomach for the volatility.

 

[Dawg52]

When you start replying to yourself online - in the same post - it might be time to seek some professional help. Unclemick will be along shortly to counsel you.

He pulls for the Saints. Enough said.

 

[lazygood4nothinbum]

a system based upon faith & confidence, huh? how odd that the more i study spirituality, the more i can demystify it, but the more i study finance, the more mystical it becomes.

pssst: this is just a crapshoot.

 

[unclemick]

He pulls for the Saints. Enough said.

Hey - at least they made the second half look better - before they lost in overtime. Barring miracles - it's wait til next year time again.

So next week - it's outta here - found some friends to visit south of Tucson and bum around with over over the Holidays - at least til we tire of Arizona - possibly a short stint into Mexico.

Technically speaking - that makes me a pessimist since we're spending SWR money in old age - instead of honking expenses down really cheap to buy more stocks - even though they're on sale.

heh heh heh - plus not getting any younger. .

 

[Nords]

One thing Ive noticed on the various message boards. You don't see that beauty of a question.
"Why not 100% stocks guys!"

Well, above 92% stocks we wouldn't have two years' SWR for living expenses to ride out Spanky's breathaking volatility. Hypothetically, by the time we'd have to touch any of these shares, our kid would be in college and we'd be in our 50s and a bunch of other things would probably have changed in our lives & families that would make this market crisis pale by comparison. But right now we have time every day to focus on the market so that's what we do to ourselves.

As for upward volatility-- again nobody complains about that, either.

Nice thing about this market is that the (remaining) companies who played good defense for the last few years really shine now. Makes it a lot easier to figure out who's been finagling their financial reports and who's been talking to bankruptcy lawyers.

I don't know how I feel about paper losses. When we had paper gains, I wouldn't have spent the money anyway and its stewardship would have become an issue. I'm pretty sure that I would've invested it with less analysis and much less wisely than I am now. Even now spouse and I are struggling to determine the difference between "take some off the table" and "stay diversified". Taking dividends in cash and reinvesting them more judiciously seems to be a good compromise.

So as Rich says, these types of markets teach a very painful lesson that's better learned while we're young(er). Imagine if we were having this discussion 30 years from now with Dawg84...