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Old 03-30-2020, 05:56 AM   #81
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+1 to a lot of the above. I am bullish on equities in the long run and still am but this one does seem different and I'm thinking that the economic disruption and resulting recession will be really bad..
I always try to remember little nuggets from various conversations and events. So many people 'assume' one sold or changed AA because they had the wrong AA to begin with, not enough cash, etc.

Sometimes its just as simple as people see an opty to sell high and buy back in low.

I remember back in 2008/2009 I left that time thinking there were so many opportunities to make money on the decline. I took some, but I wish I took more of those opportunities.

My brother commented that following this market down and taking the opty to profit from it is like shooting fish in a barrel.

Pay attention to what people DO not what they SAY. All our leaders (business and political) say we will be back to normal soon, but what are they DOING?
-- Hunkering down and conserving cash
-- Massive unprecedented stimulus
...etc

The market looks forward as we all know, so we can't wait for everything to return to normal. It will be late to get back in then (but I doubt we will be at pre-corona valuations).... But we can look for extreme value in the market during the decline whether we buy the whole market at a low CAPE or other ratio....or we buy individual stocks that have good prospects but are totally pummeled by the overall market decline.

This is not a time to "set it and forget it"!!!
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Old 03-30-2020, 06:19 AM   #82
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I am amazed at human nature and emotions. I see some of the intelligent people that talked the talk of staying invested through hard times now going to cash and CDs. I understand it is a personal decision, but should not be guided by emotions. The facts are that this is bad. The outlook is for a recovery to occur over the next 18 months from many financial and government sources.
I wish good luck to those for timing it right to get back in at an opportune time.
You are also welcome to say "I told you so" if the markets never come back.

VW
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Old 03-30-2020, 06:34 AM   #83
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I am amazed at human nature and emotions. I see some of the intelligent people that talked the talk of staying invested through hard times now going to cash and CDs. I understand it is a personal decision, but should not be guided by emotions. The facts are that this is bad. The outlook is for a recovery to occur over the next 18 months from many financial and government sources.
I wish good luck to those for timing it right to get back in at an opportune time.
You are also welcome to say "I told you so" if the markets never come back.

VW
Assuming you were able to get out beforehand, it's not terribly hard to time getting back in correctly, unless you get out at the bottom of course. Just get back partially at down another 5%, then more at down 10%. Use whatever bands you like. The problem is that we tend to want to hit the bottom, miss it, and then keep waiting for a pullback etc. If it jumps above where you sold get back in 100%. Not foolproof but not that difficult.

Even if you gain 5-10% you're ahead.

Of course as they say it's simple, but not easy. I'm sure you could get whipsawed in some cases.
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Old 03-30-2020, 06:52 AM   #84
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Assuming you were able to get out beforehand, it's not terribly hard to time getting back in correctly, unless you get out at the bottom of course. Just get back partially at down another 5%, then more at down 10%. Use whatever bands you like. The problem is that we tend to want to hit the bottom, miss it, and then keep waiting for a pullback etc. If it jumps above where you sold get back in 100%. Not foolproof but not that difficult.

Even if you gain 5-10% you're ahead.

Of course as they say it's simple, but not easy. I'm sure you could get whipsawed in some cases.
It can be very hard to get back in if you use the same emotions that made you get out to time getting back in. If you had a plan the first time(and didn't follow it), what makes you think you will follow a plan the second time?
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Old 03-30-2020, 06:57 AM   #85
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Originally Posted by VanWinkle View Post
I am amazed at human nature and emotions. I see some of the intelligent people that talked the talk of staying invested through hard times now going to cash and CDs. I understand it is a personal decision, but should not be guided by emotions. The facts are that this is bad. The outlook is for a recovery to occur over the next 18 months from many financial and government sources.
I wish good luck to those for timing it right to get back in at an opportune time.
You are also welcome to say "I told you so" if the markets never come back.

VW
Please don't patronize people with your "emotional" comments.

I fully believe the markets will come back. I also think that it will be at least late 2021 or 2022 before they get back to pre-corona levels. Why? Even under a rosy scenario of fewer deaths, return to full employment in June, etc. The economic financial hangover simply can't be cured in less than a year. And thats an optimistic scenario. it will take time for individuals to make up lost income, businesses to pay off emergency loans, consumers to resume spend. The S&P was at 24X PE pre-corona. I don't see earnings coming back that quickly.

Keep in mind financial and gov't sources have to present an optimistic scenario in order not to make the problem worse. It is only the outliers in government and business leadership who are pessimistic (and they get sidelined or shunned).

For folks who don't need the money, and don't mind holding unrealized losses (or unrealized less gains), by all means go for it. The markets will recover at some point. Could be 2 years, could be 15.

But don't lump those of us who made a conscious choice to recognize what was (and is) going on, and stepped back fully intending to get back in at a lower price point as some type of emotional (hence in your view weak) cases. Many of us are just following an intentional path to end up with a larger nut than we would if we just watched this all happen.

As for myself, the only way I will be worse off if I had not stepped back temporarily, is if the S&P somehow manages to get over 3,000 by early May (and stays there). If that happens (which I would give about a 1% chance), I will be about 3% worse off than if I had not stepped back. I view this as the cost of "insurance". Which for me was a combo of stepping back AA and buying SPY puts.

I invested aggressively in 2008 / 2009 / 2010 when I saw value. This crises will allow investors who have dry powder the ability to make great investments as well.
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Old 03-30-2020, 07:03 AM   #86
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It can be very hard to get back in if you use the same emotions that made you get out to time getting back in. If you had a plan the first time(and didn't follow it), what makes you think you will follow a plan the second time?
^ This.

I've posted this "Investor Psychology" graph a number of times in jest. As Mark Twain said, "Humor is the good natured side of a truth."
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File Type: gif investor-psychology-illustrated.gif (65.3 KB, 31 views)
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Old 03-30-2020, 07:19 AM   #87
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Originally Posted by BeachOrCity View Post
Please don't patronize people with your "emotional" comments.

I fully believe the markets will come back. I also think that it will be at least late 2021 or 2022 before they get back to pre-corona levels. Why? Even under a rosy scenario of fewer deaths, return to full employment in June, etc. The economic financial hangover simply can't be cured in less than a year. And thats an optimistic scenario. it will take time for individuals to make up lost income, businesses to pay off emergency loans, consumers to resume spend. The S&P was at 24X PE pre-corona. I don't see earnings coming back that quickly.

Keep in mind financial and gov't sources have to present an optimistic scenario in order not to make the problem worse. It is only the outliers in government and business leadership who are pessimistic (and they get sidelined or shunned).

For folks who don't need the money, and don't mind holding unrealized losses (or unrealized less gains), by all means go for it. The markets will recover at some point. Could be 2 years, could be 15.

But don't lump those of us who made a conscious choice to recognize what was (and is) going on, and stepped back fully intending to get back in at a lower price point as some type of emotional (hence in your view weak) cases. Many of us are just following an intentional path to end up with a larger nut than we would if we just watched this all happen.

As for myself, the only way I will be worse off if I had not stepped back temporarily, is if the S&P somehow manages to get over 3,000 by early May (and stays there). If that happens (which I would give about a 1% chance), I will be about 3% worse off than if I had not stepped back. I view this as the cost of "insurance". Which for me was a combo of stepping back AA and buying SPY puts.

I invested aggressively in 2008 / 2009 / 2010 when I saw value. This crises will allow investors who have dry powder the ability to make great investments as well.
My apologies, I did not think that it was a weakness, just being human.
You are probably right, it is different this time.

Like I said, it is a personal decision, I am just giving you my insight on my own decision to stay invested.

Best wishes,

VW
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Old 03-30-2020, 07:25 AM   #88
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It can be very hard to get back in if you use the same emotions that made you get out to time getting back in. If you had a plan the first time(and didn't follow it), what makes you think you will follow a plan the second time?
I'm assuming emotions didn't get that person out. Good planning maybe?
I'm referring to people that try to time these things.

I agree that if emotions, ie fear, made you sell then it's very difficult.
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Old 03-30-2020, 07:31 AM   #89
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I'm assuming emotions didn't get that person out. Good planning maybe?
I'm referring to people that try to time these things.
You may have a point! If the plan was to get out at a certain time, and buy back at a certain time, the person is following a non-emotional plan. I wish I could plan that well. Maybe it is a shortfall in my own ability.

Best to you,

VW
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Old 03-30-2020, 07:48 AM   #90
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I'm staying the course. I have no better insight on the market now then I did at the start of the drop, or last year. It could be that I am missing an opportunity to get out while the market is still going to drop more, but I don't want to get out only to find it moving back up from here and wondering at which point to give up and get back in. So I'll hold. I've got plenty of cash to ride this out without having to sell anything for living expenses.

Someone mentioned hanging on while they still have a gain but selling at the point they would start losing money. Problem is, the market doesn't care what I bought it at, and neither should I (IMO). The only time I pay attention to my purchase price is taking the opportunity to harvest losses, but I exchange that for a fund that keeps me in the market but different enough to avoid a wash sale.

Everyone has to do what they think is best. I'm a little surprised at the sellers because I thought the general forum mentality was to buy and hold, staying the course even during drops. But I know there are exceptions, and I don't know who was in the buy-and-hold camp, and who wasn't.
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Old 03-30-2020, 07:52 AM   #91
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One reason to look is to see if you can do any tax loss harvesting.
I have only "spending money" in after tax, so no TLH possible. I even finally don't have any carry forward losses any more (chipping away at those for so long I can't remember). Probably long enough that when I lost it, $3,000 was really worth something
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Old 03-30-2020, 08:06 AM   #92
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I have only "spending money" in after tax, so no TLH possible. I even finally don't have any carry forward losses any more (chipping away at those for so long I can't remember). Probably long enough that when I lost it, $3,000 was really worth something
Not sure I understand. Even it's just "spending money", you can sell losers rather than winners for that, if you have any.

This was going to be my last year to carry forward past capital losses. That $3000 was worth a lot to me in 2019, as it kept me just under 400%FPL for the ACA subsidy. Now I've got another big capital loss to cancel out future recognized gains or carry forward to future years. It will give me a lot more flexibility to stay under 400%FPL.
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Old 03-30-2020, 08:23 AM   #93
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Interesting post over at Bogleheads on "It's not different this time".

A special post by nedsaid that is priceless.

https://www.bogleheads.org/forum/vie...?f=10&t=308970
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Old 03-30-2020, 08:45 AM   #94
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Yes, this one is very different in that the government is intentionally shutting down the economy for the greater good of saving a lot of lives. I suspect the view is that an unchecked virus would kill even more people and still leave us with a poor economy.

What I would like to see now is some insight on two fronts:

1. What do we look for as a sign that CV19 is finally being controlled and the end is in sight? In military terms, what is their 'exit' plan in regards to sheltering, testing, etc.?

2. What will the government do to further economic growth when this mess is over or near over? What do they think will be needed? And, no, pointing their crooked little fingers at the other side and telling us it is all their fault, does not count as a plan.
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Old 03-30-2020, 09:34 AM   #95
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In my head I have my portfolio compartmentalized, and know I’m not going to be drawing on 50% or more of it for another decade+, and feel like I have plenty of time to wait it out.

Of course by far most of our investments are in taxable accounts, so the tax consequences of selling would have been huge. That would stay my hand anyway.

But generally what would I do with it? It would just sit there untouched. I guess I’m OK with it doing a rollercoaster ride untouched. Although as opportunities arrive, I’m doing some tax loss harvesting and rebuying in same category.
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Old 03-30-2020, 09:37 AM   #96
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Not sure I understand. Even it's just "spending money", you can sell losers rather than winners for that, if you have any.
Maybe he means the spending money is in bank accounts thus no capital losses to realize.
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Old 03-30-2020, 10:02 AM   #97
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I should start by saying that I am no investing guru.

Anyway I am staying the course (except to rebalance as specified in my home-made written financial plan).

I did that in 2008-2009, and it worked out well. Also it was a great test of my asset allocation, just before my 2009 retirement.
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Old 04-04-2020, 02:25 PM   #98
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I feel so stupid for missing this, especially since most people here saw it coming. And doubly stupid for not knowing whether I should get out now before or stick with what I've got.
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Old 04-04-2020, 02:34 PM   #99
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I don't think most people here saw this coming!! This is more than anyone could have thought up in advance. If they did see it coming, it was one of 25 they saw coming in the last 10 years.
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Old 04-04-2020, 03:30 PM   #100
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One reason to look is to see if you can do any tax loss harvesting.
I don't have to look to know that I could do it. Problem is, I can't sell anything without logging in and seeing the balance!
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