Going to 100% stocks

[Gone4Good]

Analysis of Secular Bear Markets and Secular Bull Markets since 1900.

Even if past is prologue, which it isn't, go back and calculate returns starting 10 years after those historic peaks, which is where we are today.

Quick and dirty using Shiller's data says total returns (including dividends) were about 9% from the period from 1939-1949 and about the same (9%)
from 1976-1982.

Oh, and if the idea is that it is going to take another 6 or 7 years to get back to the 2000 peak (making for a 16-17 year "secular bear" using the definition in the referenced link) than that would mean 7% average annual total returns for the SPX over that time frame (from 1100 to 1500 plus dividends). Not huge returns by historic perspectives, but a whole lot better than cash.

I guess I'm not seeing a reason to run for the hills in this data set.

 

[ERD50]

Analysis of Secular Bear Markets and Secular Bull Markets since 1900.

So we have three previous 'secular bear markets' to study. That's not much data at all, and each data point existed in its own 'environment'.

I honestly don't think we can draw much from how those markets acted to tell us how this market might act. Maintaining my AA. Sleeping well.

-ERD50

 

[BTravlin]

If the market is truly forward looking by 6 to 9 months then I don't think we're going to see any breakout to the upside for at least another 6 months from now.

55/35/10 and content for now.

 

[samclem]

"Secular bear market"
"200 day moving average" (not 198 day or 215 day-stick with 200 day!)
"Elliot Wave"
"Bollinger Band"
"Head and Shoulders pattern"

It seems clear that giving a name to a thing and even providing a precise-sounding definition does not mean that thing is a useful construct.

See "phlogiston chemists"

 

[freebird5825]

40/60 and sleeping well.

 

[Gone4Good]

Ohh, ohh, ohh. I forgot the best part. After "suffering" mid/high-single digit returns for the remainder of the 'secular bear', then we get to enjoy the double digit returns from the 'secular bull' that is apparently baked in the cake for 2016-2032.

Assuming a middling 15% annual return for this next secular bull, then Dow 131,000 is a lock for 2032.

BUY STOCKS!!!!!

Weeeeeeeeeeeeeee!!!!

 

[dex]

"Secular bear market"
"200 day moving average" (not 198 day or 215 day-stick with 200 day!)
"Elliot Wave"
"Bollinger Band"
"Head and Shoulders pattern"

It seems clear that giving a name to a thing and even providing a precise-sounding definition does not mean that thing is a useful construct.

See "phlogiston chemists"

Don't forget asset allocation and rebalancing of the same.

See "Market Timer" ('the lowest form of human life' as described by some)

 

[BigNick]

"Secular bear market"
"200 day moving average" (not 198 day or 215 day-stick with 200 day!)
"Elliot Wave"
"Bollinger Band"
"Head and Shoulders pattern"

It seems clear that giving a name to a thing and even providing a precise-sounding definition does not mean that thing is a useful construct.

See "phlogiston chemists"

This is what Taleb calls the "narrative fallacy". He has a strong point.

 

[samclem]

This is what Taleb calls the "narrative fallacy". He has a strong point.

I am so tired of Taleb stealing my concepts!

Just a minute. Taleb says that giving a name and a definition to a thing doesn't mean it is a useful thing or a valid idea--and then he gives this very idea a name? I'm seeing a hall of mirrors here!

 

[clifp]

Still 85/15 but I am not sleeping particularly well. The economy is still too sucky for I think anybody to be to really sanguine about their investments. Since cash is at 0% and bonds @3% you need to have a very low SWR or a very high pension to feel over confident.

 

[audreyh1]

Let's not forget this is a secular bear market.

The 1100 area is one place to watch, on a closing basis (it isn't a magical number - don't think if it closes above 1100 we are in a new bull market; just an area of resistance to watch). My guess is that people don't want to be long into the 3 day weekend so the S&P won't close above 1100.

Secular bear markets still have strong rallies.

And the S&P500 did manage to close above 1100 after all.

Audrey

 

[Spanky]

We are still comfortable with 35/45/20 equity/fix-income/cash.

 

[Emeritus]

This is a definition based on a theory - which everyone does not necessarily believe, thus the reason for my comment.

Actually its based on a hypothesis, nothing so grand as a theory.

 

[traineeinvestor]

We'll be in a "secular bear market" until we go up 50% in a year and then suddenly we'll be in a "secular bull market" in which people will be excited about buying stocks at 50% higher prices than they are today.

Frankly, I'm going to stick with buying them now while no one else seems to want them.

+1

I'm much happier buying while there is so much pessimisim around. While real estate remains our biggest asset class, I putting a lot of our savings into the stock market.

I seem to sleep easier with my money exposed to market volatility than I do with it sitting in a bank earning zip and being steadily eroded through inflation. Perhaps I need a new therapist.

 

[almost there]

I am happy earning next to zip. (401K & Roth IRA)
Just have zero faith & dont buy much of what the media or the Gov. is spewing.
I have no problem missing a few % if things go up.
But cant fathom another 20%, 30% drop this late in the game.

1st time in 25 yrs I am 100% out of the market.
Not as hard as I thought it would be over the past 8 months.
Am actually up for the year as I max both out every month.

 

[NW Landlady]

Oh Cr*P! Why didn't somebody tell me?
0.1% stock/1.4%cash/1.7%bonds/96.8% RE
Guess I missed the memo.....

 

[kcowan]

Yeah, I'd wait till there is a full recovery and then jump in.

What? Wait 5 to 7 years?

 

[73ss454]

Maybe longer!

 

[Purron]

Oh Cr*P! Why didn't somebody tell me?
0.1% stock/1.4%cash/1.7%bonds/96.8% RE
Guess I missed the memo.....

I'm glad you've joined the forum. You know a lot about RE and are so willing to share what you've learned. I appreciate that

 

[dex]

Secular bear markets still have strong rallies.

And the S&P500 did manage to close above 1100 after all.

Audrey

I know you are timing the market so look at the update of the first chart I posted. I didn't change the line; just updated it for Friday's info.
Let's see if the down trend line holds.

 

[73ss454]

Dex, I don't think Audrey is timing the market. Selling and sitting on the sidelines is timing the market, no?

 

[harley]

Don't start that again.

 

[REWahoo]

Let me sum it up:

"Is"
"Is not"
"Is"
"Is not"
"Is"
"Is not"
"Is"
"Is not"
"Is"
"Is not"
"Is"
"Is not"
...

 

[dex]

Dex, I don't think Audrey is timing the market. Selling and sitting on the sidelines is timing the market, no?

...

Let me sum it up:

"Is"
"Is not"
"Is"
"Is not"
"Is"
"Is not"
"Is"
"Is not"
"Is"
"Is not"
"Is"
"Is not"
...

 

[audreyh1]

I don't follow charts. You had expressed strong doubt that the S&P500 could close above 1100 on Friday.

Audrey