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Old 04-04-2020, 11:27 AM   #81
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I have always felt that the tiger in the bushes for retirement is inflation. That is one of the reasons that I have used for planning to delay SS to 70. I do not know how well the market is correlated to inflation (if at all). I believe we personally will be OK. What was a very comfortable retirement for some could become a bit snug if we embark on a few years of high inflation. I think the market will retest the lows, and am surprised that it has held up as well as it has this past few weeks.
+1 to the bolded above.

For me, I have reflected on the pain of the last two months and considered how much worse it can get and thought: "Well this sucks, but I can see how our plan will get us through."

OTOH, I can imagine inflation only even as bad as the 70s and come up with even more dire scenarios. I have posted this before, but I remember as a child seeing the palpable fear in my middle-class parents eyes as we watched to nightly news. They were genuinely concerned that their two salaries weren't going to be able to keep up with the runaway prices they were seeing. I also remember my father telling me how thankful he was for his VA mortgage.
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Old 04-05-2020, 07:04 PM   #82
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Dow future is up 600+ point tomorrow
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Old 04-05-2020, 07:13 PM   #83
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Dow future is up 600+ point tomorrow
Oil prices down 9% today on postponement of the OPEC meeting Monday......Woops!
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Old 04-05-2020, 09:07 PM   #84
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For the first time in my investing life I need to figure out when the bottom will occur to reinvest. At 67 years old I didn't want to watch my nest egg slide so at DJIA 25864 on March 3rd I took out 80% of our stock position which was 13% off the highs (now it's 30% off). I had wanted to do it the week before but my wife pushed back.

So I never before sold in a correction and I asked a good buddy who is a very successful trader what I should look for, there's so much noise and conflicting opinions on CNBC, etc. and he said don't even look for the bottom until around 15000 at least, which shocked me. I had no idea it could get so low but feel vindicated having parked it all in cash at 25864. One tip he gave me is explaining how bottoms are "tested", there will be some bounces. I want to dollar cost average the money back in but what I don't know, and will appreciate advice, is should the DCA be over days, weeks or months? If a vaccine is announced and starting to be distributed in the US, could it be V shaped and go way up in just a few days?

Also...I was at Hurricane Katrina the day after the levees broke, worked 9 days as a cameraman on a network TV news crew. There was no law and order, no electricity, no cell phones, no cops, the gangs had broken into the gun stores, I went on several SWAT Team raids. Some of my local crew members were packing but the take away was, when people are desperate, hungry and especially if they are criminals to begin with, you need protection, especially if you have teenage daughters. Before they'll need/want to break into your home they will loot the stores, which I have witnessed in every other disaster, looting comes first. When the stores become bare then watch out. I don't think it will get to that as long as the grocery supply chain stays intact except perhaps in the most economically depressed areas.

So in sum, when a bottom is agreed on, in an unprecedented situation like this where we can't consult past models, how would you DCA in the cash on the sidelines? I have a feeling it could jump immediately and then continue to rise over a few months.

Thank you for your advice.
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Old 04-05-2020, 09:36 PM   #85
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Let's see:

- Large and increasing number of unemployed? Check.
- Police forces losing more and more officers to the virus/sick-outs? Check.
- General attitude of willingness to ignore theft and similar offences in large cities? Check
- Lots of people (including the bad ones) with too much time on their hands? Check.

Looks like we have all the ingredients for a crime spike.
Gun and ammo sales to law abiding citizens up-Check
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Old 04-05-2020, 09:52 PM   #86
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So in sum, when a bottom is agreed on, in an unprecedented situation like this where we can't consult past models, how would you DCA in the cash on the sidelines? I have a feeling it could jump immediately and then continue to rise over a few months.

Ah, the "When do I get back in?" question, AKA "The Market Timers Lament."

Kidding aside, good luck in figuring this one out.
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Old 04-05-2020, 10:33 PM   #87
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Originally Posted by Cheesehead View Post
For the first time in my investing life I need to figure out when the bottom will occur to reinvest. At 67 years old I didn't want to watch my nest egg slide so at DJIA 25864 on March 3rd I took out 80% of our stock position which was 13% off the highs (now it's 30% off). I had wanted to do it the week before but my wife pushed back.

So I never before sold in a correction and I asked a good buddy who is a very successful trader what I should look for, there's so much noise and conflicting opinions on CNBC, etc. and he said don't even look for the bottom until around 15000 at least, which shocked me. I had no idea it could get so low but feel vindicated having parked it all in cash at 25864. One tip he gave me is explaining how bottoms are "tested", there will be some bounces. I want to dollar cost average the money back in but what I don't know, and will appreciate advice, is should the DCA be over days, weeks or months? If a vaccine is announced and starting to be distributed in the US, could it be V shaped and go way up in just a few days?

Also...I was at Hurricane Katrina the day after the levees broke, worked 9 days as a cameraman on a network TV news crew. There was no law and order, no electricity, no cell phones, no cops, the gangs had broken into the gun stores, I went on several SWAT Team raids. Some of my local crew members were packing but the take away was, when people are desperate, hungry and especially if they are criminals to begin with, you need protection, especially if you have teenage daughters. Before they'll need/want to break into your home they will loot the stores, which I have witnessed in every other disaster, looting comes first. When the stores become bare then watch out. I don't think it will get to that as long as the grocery supply chain stays intact except perhaps in the most economically depressed areas.

So in sum, when a bottom is agreed on, in an unprecedented situation like this where we can't consult past models, how would you DCA in the cash on the sidelines? I have a feeling it could jump immediately and then continue to rise over a few months.

Thank you for your advice.


If I were you, I’d declare victory and get back in now but with a more conservative AA that let’s you sleep at night so that you won’t ever touch it again. Good luck.
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Old 04-06-2020, 05:35 AM   #88
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Cheesehead, if you think the pandemic is going to reduce the US to New Orleans following Katrina you should sit tight for the long haul, On the other hand, so far crime is down, the food supply chain is holding up, and police are minutes away on empty roads. If that holds up maybe we will bounce back when the market judges we are at a peak of the virus and are will get back to work soon. The problem is there is no way to know for sure what is going to happen. I live in close proximity to neighborhoods the doom and gloom folks think are going to rise up in anarchy. It didn't happen during the crack epidemic, it didn't in the housing crisis, and I don't expect it to happen now. If we run out of food all bets are off.
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Old 04-06-2020, 07:00 AM   #89
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Listen to corporate business leaders who have a track record of managing their business. This is from Jamie Dimon of JP Morgan Chase (one of the handful of non-zombie banks from the 2008/2009 era).

"JAMIE DIMON WARNS: We’re getting a ‘bad recession’ plus ‘financial stress’ like the 2008 crisis"

"In his annual shareholders letter, Dimon also warned that the bank may have to consider suspending its dividend if the economy reaches “extremely adverse” conditions."


https://www.cnbc.com/2020/04/06/jami...-stronger.html
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Old 04-06-2020, 07:51 AM   #90
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Gun and ammo sales to law abiding citizens up-Check
This has surprised me a little bit. I figured supply would outpace demand, causing prices to drop, as suddenly unemployed folks with hefty arsenals start unwinding those assets for needed cash. That just doesn’t seem to be the case, at least not for the items I’m looking for.
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Old 04-06-2020, 12:45 PM   #91
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I have been mostly out of the market since 2018 with the plan to come back in at what I consider “fair value.” I didn’t buy at Dow 18,000 and in my gut I don’t think it was the low. Investors still strike me as too excited to jump back in. My belief is that sustainable bottoms happen when you pretty much can’t find anyone who thinks the low has been set. Time will tell. If I’m wrong, I still think this’ll be a flat decade from current price levels.
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Old 04-06-2020, 01:02 PM   #92
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For the first time in my investing life I need to figure out when the bottom will occur to reinvest. At 67 years old I didn't want to watch my nest egg slide so at DJIA 25864 on March 3rd I took out 80% of our stock position which was 13% off the highs (now it's 30% off). I had wanted to do it the week before but my wife pushed back.

So I never before sold in a correction and I asked a good buddy who is a very successful trader what I should look for, there's so much noise and conflicting opinions on CNBC, etc. and he said don't even look for the bottom until around 15000 at least, which shocked me. I had no idea it could get so low but feel vindicated having parked it all in cash at 25864. One tip he gave me is explaining how bottoms are "tested", there will be some bounces. I want to dollar cost average the money back in but what I don't know, and will appreciate advice, is should the DCA be over days, weeks or months? If a vaccine is announced and starting to be distributed in the US, could it be V shaped and go way up in just a few days?

Also...I was at Hurricane Katrina the day after the levees broke, worked 9 days as a cameraman on a network TV news crew. There was no law and order, no electricity, no cell phones, no cops, the gangs had broken into the gun stores, I went on several SWAT Team raids. Some of my local crew members were packing but the take away was, when people are desperate, hungry and especially if they are criminals to begin with, you need protection, especially if you have teenage daughters. Before they'll need/want to break into your home they will loot the stores, which I have witnessed in every other disaster, looting comes first. When the stores become bare then watch out. I don't think it will get to that as long as the grocery supply chain stays intact except perhaps in the most economically depressed areas.

So in sum, when a bottom is agreed on, in an unprecedented situation like this where we can't consult past models, how would you DCA in the cash on the sidelines? I have a feeling it could jump immediately and then continue to rise over a few months.

Thank you for your advice.
Hey Cheesehead, I'm in your position but I am a bit older (76 1/2), and have been moving to cash from my portfolio since last year, and now at 90% cash. I am waiting for a time to start feeding back into SCHB a chunk at a time. NO WAY am I going to risk more than 20% of the nestegg to equities at this point as I feel the real "hurt" has not been priced into the market yet. The current 90% is in a big CD ladder and municipal bonds (fund). There is also 3 years of working capital in cash to cover day to day expenses beyond SS income. (No pensions here, no debt either)

Now I don't know when this future "hurt" will show up, but with new high unemployment, lost business revenues (and profits), people's spending attitude changes, etc, it may make sense to wait and see for another quarter before committing more to equities. Remember, it's widely known that the current administration wants to keep the "bubble" inflated until after the elections in November, and that bubble has lost some serious air right now.

We may have 10 years less to live, and with DW's ailments, she may have much less. We are taking the rest of this "trip" a bit on the conservative side as we want to leave a bit behind for the kids.

I hope this helps your thought process.
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Old 04-06-2020, 01:07 PM   #93
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Good bye DOW 18,000.
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Old 04-06-2020, 02:09 PM   #94
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Hey Cheesehead, I'm in your position but I am a bit older (76 1/2), and have been moving to cash from my portfolio since last year, and now at 90% cash. I am waiting for a time to start feeding back into SCHB a chunk at a time. NO WAY am I going to risk more than 20% of the nestegg to equities at this point as I feel the real "hurt" has not been priced into the market yet. The current 90% is in a big CD ladder and municipal bonds (fund). There is also 3 years of working capital in cash to cover day to day expenses beyond SS income. (No pensions here, no debt either)

Now I don't know when this future "hurt" will show up, but with new high unemployment, lost business revenues (and profits), people's spending attitude changes, etc, it may make sense to wait and see for another quarter before committing more to equities. Remember, it's widely known that the current administration wants to keep the "bubble" inflated until after the elections in November, and that bubble has lost some serious air right now.

We may have 10 years less to live, and with DW's ailments, she may have much less. We are taking the rest of this "trip" a bit on the conservative side as we want to leave a bit behind for the kids.

I hope this helps your thought process.
Bolded by me - Been saying this in various ways in other posts. If this turns out to be the case, then can one say if there is another low breach, that it won't happen until Nov and even will it then depending on the election results.
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Old 04-06-2020, 02:26 PM   #95
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Good bye DOW 18,000.

Not so fast...
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Old 04-06-2020, 02:45 PM   #96
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Originally Posted by Cheesehead View Post
For the first time in my investing life I need to figure out when the bottom will occur to reinvest. At 67 years old I didn't want to watch my nest egg slide so at DJIA 25864 on March 3rd I took out 80% of our stock position which was 13% off the highs (now it's 30% off). I had wanted to do it the week before but my wife pushed back.

So I never before sold in a correction and I asked a good buddy who is a very successful trader what I should look for, there's so much noise and conflicting opinions on CNBC, etc. and he said don't even look for the bottom until around 15000 at least, which shocked me. I had no idea it could get so low but feel vindicated having parked it all in cash at 25864. One tip he gave me is explaining how bottoms are "tested", there will be some bounces. I want to dollar cost average the money back in but what I don't know, and will appreciate advice, is should the DCA be over days, weeks or months? If a vaccine is announced and starting to be distributed in the US, could it be V shaped and go way up in just a few days?

Also...I was at Hurricane Katrina the day after the levees broke, worked 9 days as a cameraman on a network TV news crew. There was no law and order, no electricity, no cell phones, no cops, the gangs had broken into the gun stores, I went on several SWAT Team raids. Some of my local crew members were packing but the take away was, when people are desperate, hungry and especially if they are criminals to begin with, you need protection, especially if you have teenage daughters. Before they'll need/want to break into your home they will loot the stores, which I have witnessed in every other disaster, looting comes first. When the stores become bare then watch out. I don't think it will get to that as long as the grocery supply chain stays intact except perhaps in the most economically depressed areas.

So in sum, when a bottom is agreed on, in an unprecedented situation like this where we can't consult past models, how would you DCA in the cash on the sidelines? I have a feeling it could jump immediately and then continue to rise over a few months.

Thank you for your advice.
When "a bottom is agreed on," will somebody kindly let me know?

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Old 04-06-2020, 02:48 PM   #97
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Old 04-06-2020, 02:53 PM   #98
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When "a bottom is agreed on," will somebody kindly let me know?
History says that agreement won't come until a few months after it happens - too late to be of much use to those hoping to "get in at the bottom."

But since this time is different, we may know the bottom immediately - especially if it is around 0.
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Old 04-06-2020, 02:54 PM   #99
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Tops and bottoms in the stock market do not announce themselves. Only in hindsight can we recognize them for what they were. But many investors still try . My approach has been to not try and guess where the bottom is or was or will be, but instead to just buy when I think there is value. Every investor will have to determine what value is for them.
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Old 04-06-2020, 05:26 PM   #100
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... My approach has been to not try and guess where the bottom is or was or will be, but instead to just buy when I think there is value. Every investor will have to determine what value is for them.
+1

With the market down only about 20% from its top, it's hardly a bargain considering that it was overvalued then, and the economy is going to take a big hit with many industries in tatters.

I am still more than 50% in stock, and feel no impetus to buy more.
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