A Dip or a Blip?

Gotta include error bars

Tomorrow? up 5 points, +/- 500. Daily variability is awfully high to guess with greater precision.

One month? This is a hunch rather than an expectation, but I'd guess it will be down 100 points, +/- 1000. Just a feeling. Sell in May.

One year? Up 500, +/- 2000. GDP growth has been too low for too long to remain suppressed. I don't believe the US has the constraints that have afflicted Japan for the past two decades. For one thing, we don't have to crowd a third of our population into a single gigantic city.

Five years? Up by 15,000 points, +/- 20,000. That's 6% per year compounded, with a sensible allowance for the spread. According to the life expectancy tables I have something like a 5.5% chance of expiring during those five years, so I have every intention of being more concerned with my health than the market. May everyone on this board arrive there safely with me!
 
OldShooter said:
2,000 point drop I'm thinking seriously about buying. >3,000 point drop I am definitely a buyer.
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This. Very much this You have to remember that the market has had a pretty remarkable run since the 2009 bottom (it has roughly tripled in 8+ years). Frankly we are overdue for a significant correction. But I have no idea when or how much. All I know is that my AA keeps some "dry powder" in reserve in order to buy low.
 
imoldernu said:
... https://www.seeitmarket.com/is-the-vix-screaming-lower-lows-ahead-for-stocks-14871/

Any thoughts on this?
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That kind of stuff (technical analysis) is complete bunk.

@imoldernu, with respect you need to stop worrying about this stuff. The market is going to do whatever it decides to do. When it does that, some of the chattering monkeys will look like geniuses. Next time it does something, there will be other monkeys that look like geniuses. But they all will still be ignorant monkeys.

Pick an AA that will work for your age and risk tolerance, sit back and enjoy the ride. If you want to look while the market it up, enjoy the view. When the market is down, stop looking.
 
imoldernu said:
My portfolio is teeny... not a big thing, but I'd love to hear from my more financially savvy friends, how they see the future of the market... For simplicity, the DJIA.
Not the reason, and no politics, but just your personal thinking about the future.
Tomorrow... One Month... One Year... Five years.

As I type... DJIA -$279.

And... maybe one more thing...
What, if anything would cause you to make a change in your current basic plan... ie. how big a dip? %?
Click to expand...


The stock market has been overvalued for a while, but its not evenly distributed. If you take like the top 10 stocks in the S&P or just the FANG stocks, they are in a bubble maybe even worse than 1999/2007. Outside of that you can still find companies that are reasonable, some even cheap.

My guess is all the QE will have unintended consequences that leave us worse off than before. That seems to be the re-occurring theme with the central banks and their bankster pals.

I am mostly in high credit quality municipal bond CEFs. I made that change a couple of months ago when there was a nice discount, due to naive expectations for tax cuts and infrastructure spending. I didn't and still don't believe anything can get done, as the gov is too dysfunctional. So I banked my gains from the last few years.

New money is still being aggressively invested... so I won't feel left out.

I think that the developed world is going to be stuck in low growth for many years/decades due to demographics and job destroying technology. I don't see wage growth happening. So while some things may increase in cost (like our worst-in-the-entire-developed-world healthcare system) I do not see broad inflation happening.

One thing that might happen is the dollar loses its reserve currency status. So I plan to do a better job spreading my investments out globally. I may even buy some gold.
 
I will add that I'm really enjoying all these highly leveraged ETF and ETN options...

Larry Swedroe over at Boggleheads has been using an asset allocation of 70% or 80% high credit quality bonds with 20%-30% in small cap value plus small cap intl/emerging markets, for many years.

I guess I have my own Frankenstein interpretation going with 80%+ high credit muni CEFs coupled with 2xlevered Mortgage REIT, MLPs, BDCs, etc. lol

Oh if we do get substantial pull back again, next time I am buying 3xlevered S&P 500 ETF for as long as QE lasts (and I will always buy the dip).

 
Wow. (not? :nonono:)

Today the stock market dropped.
Also today my annual homeowner's insurance payment cleared the bank, lowering the amount I had in the bank. Plus I hit the ATM for some $$$.

The sum of my portfolio+bank accounts went down less than half a percent. Oh the humanity! :rolleyes:

I'm sleepy. Wake me up when it's over.
6978-albums71-picture641.gif


It's late May. This happens in late May a lot.
 
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In a sea of red on the Fidelity webpage, I noticed a single green line. Brown and Forman went up 3.61 percent today. Must be a lot of booze being consumed in Washington DC and on Wall Street these days.

It's a good thing for W2R that she did not reveal the names of her favorite restaurants. A lot of people are going to blame her recent comments if this turns into a significant correction... Maybe we can also blame FUEGO, who published a post on his blog this morning about how much his net worth has risen since his early retirement.
 
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I used to worry about what is going to happen on days like this. I still do, but not near as much as I used to. I finally figured out nobody knows nothing. Just keep investing and hope the market goes up over time. In the past it has.
 
dvalley said:
I just checked VTSAX and VFINX which are showing -0.05% change today when the major indexes are showing -1.xx%

Price as of 05/16/2017 $60.06
Change –$0.03 –0.05%
Click to expand...

FWIW the Closing Price today 5/17: VTSAX 58.94 -1.86% , VFINX -1.79% these funds sometimes take awhile to price the NAV after the 4 o'clock close.

Anyhow we'll just have to see how it works out. With my relatively conservative/moderate AA I'll still sleep well.
 
Another Reader said:
It's a good thing for W2R that she did not reveal the names of her favorite restaurants. A lot of people are going to blame her recent comments if this turns into a significant correction...
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Hey, you ingrates should be happy, it's a buying opportunity. Blue light special on stocks! :2funny: :D Just kidding.
 
ESRwannabe said:
...
Oh if we do get substantial pull back again, next time I am buying 3xlevered S&P 500 ETF for as long as QE lasts (and I will always buy the dip).

Click to expand...
:2funny: :D BTFDYI!
 
The DJIA is definitely going up! Unless it goes down. Or sideways for a while.
 
Between unpatriotic Boomers who are not spending enough and avocado munching Millennials who are wasting their money, the market is doomed.
 
I'm almost always wrong, but to answer Imoldernu, I predict up a bit tomorrow, down for the week. Up for the month, up for the year. 5 years out over 30,000.

On a personal level, I'm too heavy in cash and have been waiting for a correction+ to get more into the market, but we haven't had one for a long time.

If you go back and look at the comments on this board from the 2007-08 crash, it was a pretty sobering time for many posters. Some questioned their retirement decisions and worried a lot about the market. Hard to know what to do and when. I pulled some out early and held on to it, earning about 4%-5%. It was mistake in hindsight, but I sleep well.

Now that I'm retired, I'm more into capital preservation mode. But will move more into stocks with a major downturn. Been retired about 17 months and haven't touched my retirement funds - hope to delay touching them for a few more years.
 
I really don't worry about this stuff. I made a lotta dough in the market and I'm still making a lotta dough in the market.

If you fear the market, buy CD's.
 
At one point last year we had some cash from a real estate transaction. I kept 5 years living expenses back just cause I could not answer this question.
 
I don't know what will happen in the markets in the next few hours, days, months, years. But the impact on my investment strategy is as follows: I hold a nominal 50/50 asset allocation as I have since ER 15 years ago (currently 67 years old) with a wide 10% rebalance band. This has served me well. As things approach the bumpers I start paying attention and planning what to do. Yesterday my AA was 53/47. Today it's 52.7/47.3. Still quite a ways from the bumpers. Net result? Naps continue.
 
imoldernu said:
My portfolio is teeny... not a big thing, but I'd love to hear from my more financially savvy friends, how they see the future of the market... For simplicity, the DJIA.
Not the reason, and no politics, but just your personal thinking about the future.
Tomorrow... One Month... One Year... Five years.

As I type... DJIA -$279.

And... maybe one more thing...
What, if anything would cause you to make a change in your current basic plan... ie. how big a dip? %?
Click to expand...

Tomorrow-132.79
One month -466.93
One year -3422.75
Five years +12.70.

I set a low bar, and hope to be pleasantly surprised.
 
ejman said:
I don't know what will happen in the markets in the next few hours, days, months, years. But the impact on my investment strategy is as follows: I hold a nominal 50/50 asset allocation as I have since ER 15 years ago (currently 67 years old) with a wide 10% rebalance band. This has served me well. As things approach the bumpers I start paying attention and planning what to do. Yesterday my AA was 53/47. Today it's 52.7/47.3. Still quite a ways from the bumpers. Net result? Naps continue.
Click to expand...



Did you have those 10% bands in 2009 when things were sharply dropping? I hold 50/50 with 5% bands that I was thinking of increasing. What was 2009 like for you and rebalancing? Sounds like we both quit work 52ish. I hope if and when I make it to 67 I can say I have been well served too.
 
I won't try to predict the future. But yesterday's action closed the SP500 below the 50-day moving average. In and of itself, that calls for nothing except increased vigilance. But you can almost feel a subtle difference in the air.

Seeking Alpha ran a good article comparing the current events to some of the prior scandals like Watergate and Iran-Contra. The scandals were not the trigger.....but the coverup was impactful. I'll leave it to the interested students to google it.

To ignore street signs is to perhaps miss one's destination.
 
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