Is it just me, or are you also seeing...

[jIMOh]

I see it on internet boards like this- people bailing left and right. I work odd hours (1-10pm) so I don't interact with real people to know what the masses are doing.
My wife tells me about co-workers which are bailing.

We just keep buying and pray we stay employed long enough (another 18 years?) to be able to leave on our own terms.

 

[Dawg52]

Hey, there's always hope you will drink yourself to...uh, our recovery.

A slower process than the traditional bullet to the head, but a more pleasurable one.

 

[Urchina]

No clue. We are apparently the only people we know who both invest and are willing to talk about it. So the only "bailing" I've been hearing about is from this board.

Not calling anyone a wimp, of course.

 

[tangomonster]

No clue. We are apparently the only people we know who both invest and are willing to talk about it. So the only "bailing" I've been hearing about is from this board.

Not calling anyone a wimp, of course.

Urchina, I've mostly noticed the same thing---not finding people who invest AND want to talk about it. Do you think that most people just don't have enough investments to care? Or don't really follow what's going on (like some people who are clueless until they get a monthly/quarterly statement)? It can't be that old adage that money isn't a polite thing to talk about---in today's world, I thought just about anything was okay to discuss!

 

[unclemick]

Ooops! My bad.

At least I left myself a little wiggle room...

All righty old timer - what were you doing back in 02 the last little bottom - bailing or buying?

Hmmmmm?

heh heh heh -

 

[REWahoo]

All righty old timer - what were you doing back in 02 the last little bottom - bailing or buying?

Buying (not tech stocks, thank you) - with both my 401k contribution and my employer's....

 

[headingout]

I can't say more people are bailing, but I have noticed a disinterest in family/friends who are not experienced investors. I think they are just tired of hearing about the stock market and tired of bad news.

The temptation of bailing is (in the short term) to have a nest egg that doesn't go down week after week. I did sell a small position to harvest some losses, but 90% of my equities I've left alone. We have plenty of short and mid-term cash already, and I can't ER if I don't get market returns! Maybe there are opportunities elsewhere, but this is the game I know best. So I continue to buy every week or two, and trust this "buying opportunity of the century" bears fruit before I'm too old to enjoy it....

 

[Culture]

Personally I bought equities in 2001 & 2002 at the same rate as before the drop, and I am buying now, $120,000 in the past two weeks (rebalancing, not new money). However, I do not plan on buying more equities until I believe things are stable (i.e. past the bottom, and moving upward). I have another $200,000 I plan to invest then (rebalancing again). I am thinking things will become clear in the next 3-6 months. Generally, I figure things are stable when financial problems have not been front page fodder for a month or so.

I do now several people who have bailed 100% to cash, at least that is what they are telling me.

 

[Rustward]

. . . (like some people who are clueless until they get a monthly/quarterly statement)? . . .

It may be more lack of interest than cluelessness. Most of this financial stuff is intangible, and many people are not interested in things they cannot see, touch, feel, smell, etc. A smaller number of people are interested but refuse to talk about it. An even smaller number will "talk" about it here anonymously, and yet a much smaller group will show you their statements.

I suspect that many consider themselves novices at this, and therefore do not discuss it. Thanks to the posts on this board, I am aware that we are somewhere in the middle of the pack (at least we are not far outliers) and we have not screwed up in a major way. Little comfort in recent times, but it is nice to know that we are not alone. Thanks to those who post.

 

[FIREd]

I have noticed more people either throwing the towel or starting to doubt their strategy. I have seen it on various message boards but I have also seen friends and family members pulling the plug.

But with headlines like: "the death of buy and hold", "the death of dividend investing", "the lost decade", "the death of equities", etc... who can blame them?

I have to admit that if I didn't hang around this board, I'd probably be selling, not buying, right now.

 

[FIREd]

That is a good sign, but the problem for you guys is I'm still in the market. The market will do nothing as long as I'm holding. That's just the way it is. After all, I am the born loser. So anyone expecting to recoup their losses while I'm still alive, your SOL. Now, where is my nightly medicine?

Somebody takes the bottle away from Dawg... We'll see how long it takes for him to sell out without his nightly medecine...

 

[toofrugalformycat]

The few people I talk with about investing have not bailed yet, nor have I.
But my buying of equities to rebalance is at a, shall we say, timid pace.

 

[dessert]

But with headlines like: "the death of buy and hold", "the death of dividend investing", "the lost decade", "the death of equities", etc... who can blame them?

I have to admit that if I didn't hang around this board, I'd probably be selling, not buying, right now.

I often wonder how much inflluence that the TV news organizations have on this entire meltdown. If they can't find anything bad to report each day then they invent something. I remember a while back when the DOW went up 800 points the nightly news commentator had something bad to say about it. It just seems to me that all of the news organizations have quit reporting the news and started to just give their opinions about things instead. Ok, rant off!
Back on topic,,,I am also buying and staying in.

 

[Gone4Good]

I've mostly noticed the same thing---not finding people who invest AND want to talk about it. Do you think that most people just don't have enough investments to care? Or don't really follow what's going on (like some people who are clueless until they get a monthly/quarterly statement)? It can't be that old adage that money isn't a polite thing to talk about

That's funny. 10 years ago you couldn't shut them up about Rhythms Net Connections or some other great investment they tripled their money on. Three years ago you couldn't shut them up about the condo market. 6 months ago you couldn't shut them up about gold or oil.

Maybe it's me, but I'm enjoying the quiet.

 

[Bestwifeever]

That's funny. 10 years ago you couldn't shut them up about Rhythms Net Connections or some other great investment they tripled their money on. Three years ago you couldn't shut them up about the condo market. 6 months ago you couldn't shut them up about gold or oil.

Maybe it's me, but I'm enjoying the quiet.

So true!

When people ask me what's new, I sum it up with, Obama's the new president and the economy still sucks (not that these are related--the sucking would be still occurring no matter who was elected imho). Pretty much covers it all.

 

[Gardnr]

This is really good to hear! And it's not surprising. It's downright brutal to sit through this. And it's not hard to see that those who don't have a historical perspective, the knowledge of the statistics, and the kind of mutual support that we get here, would be bailing out. The emotions are very powerful.

One way I think of this situation that helps me stay calmer is this:

If I were to take all my money out of the market and it went down say 20% more, and then I was able somehow to magically reenter the market at exactly that level when it eventually goes through that point for the last time on the way up, I would earn money market rates on it during that time. But if I stayed in the market and earned the dividend rate I would be even or ahead since div rates (on a broad market porfolio) are at least what you'd get in a MM and much higher with a high(er) yielding type portfolio.

And of course it's not likely that somebody who bails out now would have the guts to get back in until it has risen substantially higher than their exit point, because they'll want to be sure that it's not just going to dive on them again. The volatility is what was killing them. So they'll undoubtedly lose out on some substantial part of the recovery.

And it's very unlikely that they would bail out and then be able to (i.e. have the guts to) get back in at some lower point thus enhancing their returns. And of course there's the problem with the possibility of bailing at the very bottom.

So if you're going to be invested at all why would you get out at this point? Unless you think the end of the world is indeed nigh, or at best that the market will be flat to down from here to eternity.

So, as long as you don't need to spend the money right now, why sell? (rhetorical)

Of course a bad strategy that left you short of cash equivalent money to live on at this point can't be fixed. You're left with the ugly prospect of having to sell at this untimely point. But that's not what we're talking about here, I'm sure. This is just about the emotions overwhelming people that perceive that permanent loss of large amounts of money.

But again, just from a selfish perspective, let them sell! We need it for a true bottom.

Anybody see any flaws in this thinking?

 

[aaronc879]

I see it on internet boards like this- people bailing left and right. I work odd hours (1-10pm) so I don't interact with real people to know what the masses are doing.
My wife tells me about co-workers which are bailing.

We just keep buying and pray we stay employed long enough (another 18 years?) to be able to leave on our own terms.

That would be my dream shift. You get to sleep in and still go to bed at a reasonable time and live a relativly "normal" life. I work 4:54p-5:00a

I have not sold a thing during the drop and, for better or worse, won't sell anything no matter what(except rebalancing). I have 15+ years to FIRE.

 

[Moemg]

The few people I talk with about investing have not bailed yet, nor have I.
But my buying of equities to rebalance is at a, shall we say, timid pace.

Me too !

 

[freebird5825]

...and hearing more people who had previously been committed to buying and holding, people who were committed to hang on to eventually get their losses back, throwing in the towel and surrendering?... I think many of them sense it will be a terrible long-term decision...but they just can't take it any more.

dh2b and i are using this as our new theme song...<get the music going>

For united we stand
Divided we fall
And if our backs should ever be against the wall
We'll be together...together...you and I...

full lyrics at http://upload-gdc.mtv.com/lyrics/sonny_cher/united_we_stand/19745546/lyrics.jhtml

he is a brand new investor as of June of this year. can you say Trial by Fire? poor guy. it is times like this that test a man's mettle.
he has said things like "i'll never be able to retire" and "i'm gonna lose it all". he has 10 yrs til retirement.
but between me and one of his cow*rkers, we keep him from panicking. he is staying the course. so am I.

 

[samclem]

According to this article, now may be the time to buy--at least for some people.

"Consider the top line in the chart nearby, which depicts the dividend/price ratio for NYSE stocks. Dividends are stable over time, so this ratio lets us compare stock prices at different points in time. Read it as an upside-down price chart. When prices rise, as in the boom of the 1990s, you can see the dividend yield decline, and vice versa. The lower line is the following seven-year return; it tells you how much total return, if you invested $1 on a given date, you would have made in seven years."

and

'If you're less leveraged, less affected by recessions, and have a longer horizon than the average, it makes sense to buy. If you're more leveraged, more affected by recession or have a shorter horizon, it might be the time to sell, even though you might be cashing out at the bottom. If you're about the same as everyone else, do nothing and relax. If you're wrong, at least you will have excellent company."

 

[Gardnr]

If you're wrong, at least you will have excellent company."

Yep, I take some solace in that statement as well. Misery loves company.

Interesting article. Thanks for the link.

Sure wish that div/price ratio was higher though. On second thought, I'll take what we've got. Now if I was 20 yrs younger....

It's funny (in a perverse way) remembering how div yields were being dismissed as irrelevant and passe' back in the late '90s.

 

[Helena]

The buy and hold philosophy
is an idea whose time as ended

 

[FIREd]

The buy and hold philosophy
is an idea whose time as ended

Prove it.

 

[harley]

Prove it.

I wish y'all would quit quoting her so my ignore list would work.

Personally I agree with Helena. Everybody sell your stocks tomorrow. I need to have the price driven down so my DCAing will be at an ever decreasing price. Then when I sit back and hold for 10 years the prices can double a couple of times instead of just once.

 

[Nords]

I see it on internet boards like this- people bailing left and right. I work odd hours (1-10pm) so I don't interact with real people to know what the masses are doing.
My wife tells me about co-workers which are bailing.

I have noticed more people either throwing the towel or starting to doubt their strategy. I have seen it on various message boards but I have also seen friends and family members pulling the plug.
But with headlines like: "the death of buy and hold", "the death of dividend investing", "the lost decade", "the death of equities", etc... who can blame them?

These are the same people who, a year after the recovery, will point out that they were buying with both hands, including trading options, precisely at the bottom of the market.

I wish y'all would quit quoting her so my ignore list would work.

We need two more sections in the Soapbox: "Stock market doom & gloom" and ""Stock market Pollyannas"... those sound much more diplomatic than "pounding on a one-key piano".