2015 stock market

[Terryjm51]

Just wondering what the rooms thought of how the market has been reacting ?
Are you moving in or out or holding

Fear of a correction, I not sure what to think. I am holding firm and still buying bi monthly . Thought has crossed my mind to move to cash



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[unclemick]

Investing since 1966 I finally figured out it doesn't even pay to look anymore - full auto with those trusty non emotional computers doing my asset allocation/rebalancing via Target Retirement aka a life cycle fund.

heh heh heh - ok ok so I watch the Saints in season and have a few good stocks. Hope springs a turtle. It does help keep the male hormones more manageable.

 

[samclem]

Nobody knows what will happen next.

But we do know that over the last 30 years, people investing in equities have have underperformed broad equity indexes by about 4% per year. That's because the get scared and because they get greedy. On average, they'd do much better to just stick with their fixed allocation and ride things out.

 

[gcgang]

I'm never sure what the market is going to do. All I can do is try to figure out what is best for my situation. Yours is probably different.

If you are 10+ years away from retirement, if I were you, I'd just keep on plowing the money in to stocks, even knowing there is likely to be big downturns.

For me, I've been retired 2+ years, I've got way more money now than when I retired, I'm not going to be earning more, I don't need to increase my spending, so I've been reducing equities resulting in the lowest exposure to equities I've ever had, and the most cash ever. Not because the market is so overvalued, but because I don't need to take as much risk to be able to achieve my goals.

If the market takes a tumble, I'm in a good position to add to stock holdings. If it keeps going up, I will be able to continue to live very comfortably.






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[wingfooted]

100% equities and sleeping at night. Overweight AAPL and energy names and short out of the money calls on same. Up 20.5% YTD measured on time weighted return inclusive of dividends, margin interest and brokerage fees but exclusive of deposits / withdrawals.

Lots of liquidity sloshing about, interest rates are low and any dip has proved to be a buying opportunity thus far.

 

[jebmke]

Mostly re-balancing back to my target equity when I get above the band. I'm sure we will see a drop, just don't know when or how much. 30-40% would not be unusual; 40-50% could happen.

 

[RonBoyd]

Five Bedrock Principles for Investors

See particularly #2:

The biggest risk investors face isn’t a recession, a bear market, the Federal Reserve or their least favorite political party.

It is their own emotions and biases, and the destructive behaviors they cause.

 

[REWahoo]

See particularly #2:

+1

 

[Jsailor]

Approx half of my invested funds are invested directly in high dividend (avg. about 5%) paying stocks and preferreds.

This is how I look at it..... While my dollar amount invested value has gone down this month, the dividend amount remains the same (and consequently the yield goes up). The result is, I am not selling and continuing to buy thru the dividend reinvestment plans.

The rest of my invested funds are in Target Funds and they are doing fine. So, I am hands off (for now).






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[Spanky]

100% equities and sleeping at night. Overweight AAPL and energy names and short out of the money calls on same. Up 20.5% YTD measured on time weighted return inclusive of dividends, margin interest and brokerage fees but exclusive of deposits / withdrawals.

Lots of liquidity sloshing about, interest rates are low and any dip has proved to be a buying opportunity thus far.

I would sleep well too with that kind of return.

 

[Mulligan]

Nobody knows what will happen next.

But we do know that over the last 30 years, people investing in equities have have underperformed broad equity indexes by about 4% per year. That's because the get scared and because they get greedy. On average, they'd do much better to just stick with their fixed allocation and ride things out.

Appears you are writing about me. Though I own a lot of preferred stocks, my "common stocks" are all in the 2 basic Vanguard Total and International. Knowing I will get market average is all I need to know and I rarely check movement of the funds. If I had individual issues I would check daily, antsy about any "news" and buy and sell at wrong times.


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[FiveDriver]

I am in the Market at my ideal Asset Allocation. In keeping with my Engineering background, I do like to keep an eye on the Chart of the SP500 with a 50-day Moving Average and a 200-day MA overlay. The SP500 just crossed under the 50-day MA this week. While that in itself doesn't signal a panic Selloff, it does bear increased attention. If it next crosses under the 200-day MA (currently at 2042) then I think I'll take some profit off the table. My entry points on this current runup are so low that I'm not worried about a minor correction. I would however, like to avoid a major selloff like I did in 2000 and in 2008.

 

[W2R]

I am no investment guru, but honestly I don't see anything but the usual summer doldrums. Doesn't this happen more often than not, during the summer? Seems to me it does, anyway, IIRC.

That said, I took some money out of the market in May to pay for my dream house in cash at the end of this month. At the time, I wasn't exactly sure when closing on the house would be so it wasn't exactly market timing - - but the timing did turn out to be slightly fortuitous.

 

[pb4uski]

Just wondering what the rooms thought of how the market has been reacting ?
Are you moving in or out or holding

Fear of a correction, I not sure what to think. I am holding firm and still buying bi monthly . Thought has crossed my mind to move to cash....

Even after this week my equities have generated an 11.3% annualized return YTD, 5.6% for the last 12 months and 6.8% for last year. I think a correction is possible but am ahead of the game YTD so it would just be clawing back some paper gains. I'm staying pat.

Besides, if you go to cash now, how will you know when to get back in?

 

[Car-Guy]

I'm now at the point in life where I'm convinced that my DW and I will not outlive our money even if we just took our cash and buried it in a 55 gallon drum. (unless there is a total economic collapse in the next 20 years or unless I invest in "something" and lose it) Most of our money is in fixed interest (better than a 55 gallon drum, I guess) and honestly we don't need that.

I still dabble in the market with some extra cash but it's just for the fun of it now.

 

[Mulligan]

I'm now at the point in life where I'm convinced that my DW and I will not outlive our money even if we just took our cash and buried it in a 55 gallon drum. (unless there is a total economic collapse in the next 20 years or unless I invest in "something" and lose it) Most of our money is in fixed interest (better than a 55 gallon drum, I guess) and honestly we don't need that.

I still dabble in the market with some extra cash but it's just for the fun of it now.

I can think of many worse things a person in your situation could do with their money and few smarter. Though I bet if dtbach's annuity salesman friend (different thread) could get ahold of you he would not hold my same viewpoint.


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[Car-Guy]

Before I retired, and for a short time afterwards, I did consider putting some of my money in immediate annuities but after doing a lot of reading, including this forum, I decided against them. I can understand the appeal of annuities, and it may be right for some people in certain situations, but they are not for me.

 

[Terryjm51]

P4b
Thanks yes I agree if your in cash when do get back in. There's a gentleman at work that has been in cash for 1 1/2 he still in fear and has missed some very good gains.
I was looking to see what you experts have done and do!
I learn something every time I open this app


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[pb4uski]

I think most of us just rebalance occasionally. That's all there is to it. Over the long run you tend to sell high and buy low. Nothing wrong with that.

 

[mathjak107]

actually looking at the 30 year cycles of every worst time frame that kitces studiied rebalancing hurt not helped the returns with this 60/40 mix .

but not rebalancing would have created a rising glide path for stocks raising allocations. .

15 year returns were no better.

-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
30 year

1907 stocks returned 7.77% -- bonds 4.250-- rebalanced portfolio 7.02- - inflation 1.64--

1929 stocks 8.19% - - bonds 1.74%-- rebalanced portfolio 6.28-- inflation 1.69--

1937 stocks 10.12 - - bonds 2.13 - rebalanced portfolio -- 7.24 inflation-- 2.82

1966 stocks 10.23 - -bonds 7.85 -- rebalanced portfolio 9.56- - inflation 5.38

for comparison the 140 year average's were:

stocks 8.39--bonds 2.85%--rebalanced portfolio 6.17% inflation 2.23%
-------------------------------------------------------------------------------------------------------------------------------------------------------

15 year
1907--- stocks minus 1.47%---- bonds minus .39%-- rebalanced minus .70% ---inflation 1.64%

1929---stocks 1.07%---bonds 1.79%---rebalanced 2.29%--inflation 1.69%

1937---stocks -- 3.45%---bonds minus 3.07%-- rebalanced 1.23%--inflation 2.82%

1966-stocks minus .13%--bonds 1.08%--rebalanced .64%-- inflation 5.38%

 

[NW-Bound]

So, going 100% equities rules supreme for someone in a 30-year accumulation mode. I wish I knew this back when I started working. And I started making good money in 1980, the beginning of a historic market boom. Sigh....

But how does it look for someone in withdrawal phase?

 

[rayinpenn]

A week or two ago I reduced my position in my companies stock (huge bank) to a modest holding. It's been doing great and I sold at a nice number. I put it all in s & p index funds, and large cap international and domestic. Do I expect a correction? sure. When? I have no idea. I hated selling it but too much money in any firm can be a real bad idea. My friend worked at bear sterns and told me about his many older colleagues that were wiped out. College and retirement funds gone. Enron, bear sterns, Barron's bank, Citicorp. The list is endless.

My plan: I keep 5 years spending in cash like instruments - I figure if there is a correction I can continue to expect some dividends plus with the 4 years and ssi I should be good for quite a while. More if we are careful and we are always careful. I generally favor dividend stocks - there is nothing as calming as a nice dividend. Oh and I could sell the 'estate' and rent another 5 years there....

I don't try to time the market it usually just means you end up missing the run up on the other side. It also would require too much intervention on my side- I prefer 'set it and forget it investing' = buy diverse low cost mutual or et funds or solid long term dividend payers and let time do its magic. Let others stare at the ticker (watch the evening business report or Google your prices endlessly) life is way too short for that.


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[folivier]

You did good to diversify. Back in the Enron days the megacorp that owned my company was chasing Enron. Our CEO remarked once that he wanted to beat Enron at their own game. I looked over at a co worker and told him that was really bad. This was before everyone knew about the illegal stuff going on at Enron. Our company stock was splitting every few months and every time they would give each of us a $50 bill. Most everyone had all of their 401k invested in company stock. I preached against it but everyone thought I was nuts. One manager was constantly bragging how he had $900k in his 401k and as soon as it hits $1M he was outa there. When Enron collapsed it took us down with them. Stock went from over $70 to below $1. Of course most everyone dumped their stock including that manager. I bought more in an IRA. Again I was NUTS! But a few months later I was ahead of the game as our stock reached my break even point.
Oh and I ran into that manager last year. He's still working.

 

[pb4uski]

....I wish I knew this back when I started working. And I started making good money in 1980, the beginning of a historic market boom. Sigh....

I guess that you didn't subscribe to Money magazine back in those days?

 

[NW-Bound]

No. But I did belong to several IEEE societies and got their transactions and proceedings.