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-   -   Missing the days of Dow 7000? (http://www.early-retirement.org/forums/f28/missing-the-days-of-dow-7000-a-45741.html)

FUEGO 08-12-2009 02:35 PM

Missing the days of Dow 7000?
 
This thread may be more appropriate in the Young Dreamers forum, but is anyone missing the times earlier this year when the Dow was hovering around in the range between 7000 to 8000? Those were scary times for sure, and I figured there was a small chance the world just might end soon. But what good times for buying in, DCA'ing, and rebalancing.

In the face of fear, I also knew that those days would probably be some of the best investing opportunities of my lifetime. I was sort of hoping we would see the Dow (and the broader US and international markets) float along in a malaise in the 7000-8000-9000 range for a number of years before staging any kind of real rally. A prolonged period of buying in cheap would quickly reduce my projected FIRE date. Maybe we still are floating along in Dow 7000-9000 territory, just experiencing a brief breakout before a renewed crash (as some have suggested here).

I know this will probably send me to FIRE hell for saying such blasphemous things, especially since many of you already FIRE'ds are waiting for your portfolios to rebound. :) But I'm sitting here with the highest portfolio values I have ever seen and wishing I could buy more investments at 30-50% less than today's valuations that we saw in November 2008 and Feb-Apr 2009.

However I still think I will be looking back on Dow 9400 after a number of years and thinking how cheap the market is at this point.

Sarah in SC 08-12-2009 02:59 PM

Ditto what he said.
I'd also like to say that times like these remind us young dreamers of the importance of a regular investing program (like DCA and salary deferrals).
Go Team! :) FIRE hell, I like it.

tuixiu 08-12-2009 03:12 PM

Ditto again.

I figured as long as I could stay employed in the recession (and thus maintain the income stream for heavy investing) it would be just dandy if we bounced along at Dow 7k for at least another four years.

haha 08-12-2009 03:17 PM

I think you guys may have just rung a bell.

Ha

NW-Bound 08-12-2009 03:18 PM

Yeah! I was thinking about mortgaging my houses again and to go on margin to boot, and was too slow to pull the trigger. :laugh:

Sure, I would have done it but I was too busy being scared.

Be patient. We will have plenty of chances, I am afraid. If you think the market can only go up from here, you can look for sectors that have not participated in the recent rally, and have underperformed the indices.

There is always a way to make money no matter what the market. I wish I knew, and if I did I wouldn't tell. ;)

Dawg52 08-12-2009 03:22 PM

Missing the days of Dow 7000?
 
Yeah, I don't use my head banging smiley nearly as much anymore. :banghead:

FIREd 08-12-2009 03:24 PM

When the DOW dipped below 7,000 I had mixed feelings of fear and exhilaration. In other words, it was kinda exciting! I had fun watching my average cost basis go lower while boosting my dividend income. Of course, nowadays it's also fun to watch my portfolio reach higher highs almost each week...

Perhaps the days of DOW 7,000 are not quite behind us yet. I am building my cash reserves back up just in case we give it another go in the fall...

Poundkey 08-12-2009 03:44 PM

Both my kids are VG investors, but don't follow the markets closely. I remember sending many e-mails over a several month period suggesting they move cash from MM to particular funds. These were small but frequent transactions. So far they're pretty happy with the way things have worked out. Other than that "flurry" of buying, they mostly just DCA when their MM starts getting top heavy. Both are saving pretty high percentages of income so they may be members here someday.

FUEGO 08-12-2009 04:00 PM

Quote:

Originally Posted by haha (Post 844503)
I think you guys may have just rung a bell.

Eerie. 3:35, the time of my OP, the market seemed to start diving. Maybe all it will take is a few more threads like this and I can have my Dow 7000 back! ;) :hide:

NW-Bound 08-12-2009 04:05 PM

Look who is shorting now. ;)

No, you aren't? Gosh, I thought you were a bona fide DMT. ;D

unclemick 08-12-2009 04:06 PM

Quote:

Originally Posted by haha (Post 844503)
I think you guys may have just rung a bell.

Ha

Hmmm - I have mixed feelings. 1973-1982 and the death of equities I was still working/accumulating but not thinking 'what a bargin I was getting'.

This time around - I'm semi ?? grateful I'm full auto(Target Retirement 2015 as of jan 2006) except for a few stocks to keep the hormones happy.

I wasn't required to think brilliantly/act/rebalance/etc.

At least that's my thinking right now.

heh heh heh - still frozen in the headlights on those Norwegian widow financials - and happier about the utes, oils, telephone and foods. ???.

W2R 08-12-2009 04:06 PM

Quote:

Originally Posted by Dawg52 (Post 844507)
Yeah, I don't use my head banging smiley nearly as much anymore. :banghead:

I don't miss the days of Dow 7000 AT ALL. :nonono:

FUEGO 08-12-2009 04:11 PM

Quote:

Originally Posted by Sarah in SC (Post 844495)
Ditto what he said.
I'd also like to say that times like these remind us young dreamers of the importance of a regular investing program (like DCA and salary deferrals).
Go Team! :) FIRE hell, I like it.

All of my close friends in their 20's and 30's that view their portfolios as retirement funds "kept the faith" and continued DCA'ing in. Some older associates in their 40's-60's panicked and stopped contributing or sold most/all their equities. The latter group apparently were not comfortable with their asset allocation ;) (but then again I haven't preached to them).

Yeah, I don't think I would have done as well if I tried to time things with a bunch of money. I don't think I would have had the cojones to plop a big chunk of cash in at Dow 6,500. Or to keep from plunking it in at 10k, 9k, 8k on the way down...

Luckily we invested a bunch in March what with the tax refunds, a big bonus, a big profit sharing match, lump sum 401k match, and an unexpected early repayment on a loan we made. It was just going along with our policy of "invest small lump sums immediately" plus the market seemed stupid cheap.


Quote:

Originally Posted by FIREdreamer (Post 844508)
When the DOW dipped below 7,000 I had mixed feelings of fear and exhilaration. In other words, it was kinda exciting! I had fun watching my average cost basis go lower while boosting my dividend income. Of course, nowadays it's also fun to watch my portfolio reach higher highs almost each week...

Perhaps the days of DOW 7,000 are not quite behind us yet. I am building my cash reserves back up just in case we give it another go in the fall...

It definitely feels good to not see half your portfolio vaporize, and watch 3-5-10% drops in one day. Those dow 7000 days may not have left us for good. Time will tell. The economy certainly seems to be rebounding or at least getting worse at a much slower rate. But there remains a lot of hurdles to overcome on the road to recovery. That explains why the markets are still off significantly from highs of a couple years ago.

FUEGO 08-12-2009 04:29 PM

Quote:

Originally Posted by NW-Bound (Post 844522)
Look who is shorting now. ;)

No, you aren't? Gosh, I thought you were a bona fide DMT. ;D

If recognizing that buying stuff when the dow is at 7000 is a better value proposition than buying stuff when the dow is at 14,000 makes me a DMT, then call me a DMT! :)

NW-Bound 08-12-2009 04:39 PM

But Dow at 7000 would not be as good as Dow at 3000 or whatever low some people said it was headed, so I was still waiting, clutching my hoard of cash. ;D

Heh heh heh... It only works in hindsight. That's why I like the stock market so much compared to going to Las Vegas. Why fool around with these video games if one has a portfolio at stakes? Heh heh heh...

Still "hold hold hold"...

CCdaCE 08-12-2009 05:04 PM

Yes. Still wishing the market stayed low while the economy recovered. If that's even possible. Er, maybe that's what it's doing. Still?

I pushed "all-in", with our tax return as well, into a new Roth for the wife. I wish I had had a bigger stack, but, gotta maintain that emergency fund, too, as tempting as it would be to "double down" using that money too. Gambling? Investing? Pffft. Such a fine line when despair is saturating the air around you in a free fall market like March.

-CC

Westernskies 08-12-2009 05:11 PM

I might have actually been lucky this time.:) January-March I deferred 100% of my salary to my 401K, until I maxed it out at 22K- that got my 22K in the market at the very bottom- not nearly enough to offset the 200K I lost when the Dow went from 14000 to 7000, but, it was probably the best I could do under the circumstances with a defective crystal ball. :frown:

FUEGO 08-12-2009 05:26 PM

Quote:

Originally Posted by NW-Bound (Post 844534)
But Dow at 7000 would not be as good as Dow at 3000 or whatever low some people said it was headed, so I was still waiting, clutching my hoard of cash. ;D

Heh heh heh... It only works in hindsight. That's why I like the stock market so much compared to going to Las Vegas. Why fool around with these video games if one has a portfolio at stakes? Heh heh heh...

Oh, I thought I sent you a PM back in March saying anything under 7000 was golden? Guess I never hit "send"? Ooops, my bad! ;D

It is sorta like vegas. But I think of investing with Dow at 7000 like playing at the tables with a matchplay coupon or getting comped promo chips where you get $50 in chips for $30 cash buy in. Not a guaranteed win (as I determined on the last trip to Vegas :( ), but the odds are stacked heavy in your favor on average.

I personally place my bets on the market since I think the edge is in favor of the buy and hold investors instead of the house.

FIREd 08-12-2009 05:43 PM

Quote:

Originally Posted by FUEGO (Post 844526)
Luckily we invested a bunch in March what with the tax refunds, a big bonus, a big profit sharing match, lump sum 401k match, and an unexpected early repayment on a loan we made. It was just going along with our policy of "invest small lump sums immediately" plus the market seemed stupid cheap.


We did the same. Between 03/01 and 03/20, we got a big bonus, a tax refund and a big raise (lucky timing). It all went to equities as did almost all other regular contributions between October 2008 and June 2009 (I have turned more cautious in the past month and rebalanced into bonds last week).

NW-Bound 08-12-2009 05:57 PM

Quote:

Originally Posted by FUEGO (Post 844546)
I personally place my bets on the market since I think the edge is in favor of the buy and hold investors instead of the house.

Seriously, the last 10 years weren't kind to "buy and hold" investors. Even at this point, the Dow is still below its average over the last 10 years. So, if a newcomer DCA'ed into the market in the last 10 years, he would still be underwater unless he sold some, er balanced some out of equity at Dow 14000.

In my view, the people who made out are the ones who "goosed" their rebalancing strategy with a bit of fundamental analysis of the economy. I did go down from 80% equity to around 40%, else would get hurt even worse. Of course my timing was not perfect, and I did not get out all at once. I owned many individual stocks, and optimistically thought that my babies would be so strong to prevail against the global meltdown. Nope, it was a tsunami that sunk all ships. Hence I sold them late. I shudder to think what would happen if I rode them all the way down. I was able to buy them back much cheaper, even if I missed the bottom. :) My babies are climbing out of their holes. Climb, baby, climb.

Anyway, stock AA is at 65% now. Still holding. I am not "rebalancing" yet. Still 17% below my high in Oct 07, but it is improving.


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