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Importance of sticking to a plan
Old 12-09-2023, 09:05 PM   #1
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Importance of sticking to a plan

In early October the Middle East was shook loose.

I told DW that "the DJ and S&P be down 20% this week and gasoline would be $5 bucks a gallon in the next two weeks"

I didn't do a thing and watched myself be wrong. Saved me a lot of money.
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Old 12-09-2023, 09:11 PM   #2
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In early October the Middle East was shook loose.

I told DW that "the DJ and S&P be down 20% this week and gasoline would be $5 bucks a gallon in the next two weeks"

I didn't do a thing and watched myself be wrong. Saved me a lot of money.
Good decision!

I have noticed much the same, every time I am tempted to market time. Never have done so, thank goodness, because every time it turns out that I was wrong. Luckily it doesn't cost a penny to be wrong if I do nothing.
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Old 12-09-2023, 09:21 PM   #3
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Old 12-09-2023, 09:26 PM   #4
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Large scale events can cause predictable market changes. That event was too small for me to feel confident about future market moves.
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Old 12-09-2023, 09:31 PM   #5
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Good decision!

I have noticed much the same, every time I am tempted to market time. Never have done so, thank goodness, because every time it turns out that I was wrong. Luckily it doesn't cost a penny to be wrong if I do nothing.
Sure wish I could say that.
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Old 12-09-2023, 10:13 PM   #6
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"Stay the course"......the storm will always pass.
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Old 12-09-2023, 10:15 PM   #7
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When fear is high, it’s time to buy.
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Old 12-09-2023, 10:53 PM   #8
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Here is an interesting article from Investopedia regarding markets and war, with historical numbers and examples of changes to the S&P 500 during times of conflict:

https://www.investopedia.com/solving...puzzle-4780889

The too-long-to-read summary:
Quote:
Though war and defense spending can amount to a sizable portion of the U.S. GDP, wars often have little sustained impact on stock markets or economic growth at home.

Markets largely have ignored recent conflicts related to the Middle East and Iran.

A broader regional war, however, may have a more severe impact, especially on oil and other commodity prices.

Still, stock markets have often quickly recovered to pre-invasion levels only a matter of days or weeks after armed conflicts or standoffs begin.
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Old 12-10-2023, 06:43 AM   #9
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Everybody should have one of these: https://www.bogleheads.org/wiki/Inve...licy_statement

Mine does not state "ignore geopolitical events" because that is a given.
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Old 12-10-2023, 06:51 AM   #10
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As Buffet says: "The stock market is a device for transferring money from the impatient to the patient. I think about this quote every time I think I know something and should make a move. It stops me from doing something foolish,.

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Old 12-10-2023, 06:59 AM   #11
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Remember 1987 Black Monday, 2000 Y2K/Dotcom Bubble, 2008 Financial Crisis, 2020 Covid, wars in Kuwait, Afghanistan, Iraq, Ukraine and whatever other catastrophes you can think of. Now look at the market trend, those events were all trivial in the LONG TERM. Buy & hold looks pretty good - and that is what I have done since 1987, like MANY others here...
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Old 12-10-2023, 09:07 AM   #12
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Remember 1987 Black Monday, 2000 Y2K/Dotcom Bubble, 2008 Financial Crisis, 2020 Covid, wars in Kuwait, Afghanistan, Iraq, Ukraine and whatever other catastrophes you can think of. Now look at the market trend, those events were all trivial in the LONG TERM. Buy & hold looks pretty good - and that is what I have done since 1987...
This is my #1 memory "chip" on market timing. My wife was in the investing business at the time (buy side). It was wild but with no internet and no real time valuations it wasn't like you could do anything about it. We mainly focused on making sure we didn't get hit by falling investment analysts on the way to Chinatown in Boston for dinner.
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Old 12-10-2023, 09:34 AM   #13
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I completely agree with the buy-and-hold view on these things.

That said, I don't think we have seen an intense, wide regional conflict that has significant, negative impacts for a sustained period of time. A war that made the Strait of Hormuz impassable for five years may be a completely different animal, particularly for folks living on the nest egg rather than building it. China v Taiwan would be an even bigger dislocation due to the supply chain impacts.

When we cut off Russia over Ukraine, we cut off their exports oil, gas, vodka, caviar, and not much else. The world has lots of substitutes for all four and could flex pretty easily. The current Israel/Gaza situation is tragic beyond measure but economically irrelevant.

A massive dislocation of oil from the entire middle east would be different. Similarly the collapse of Chinese (and perhaps regional) supply chains.

Over the long-long arc all wars end and the markets would be fine. But those could go 5-10 years and represent economic (and human) catastrophies that very few of us have experience with.
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Old 12-10-2023, 11:00 AM   #14
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An acquaintance of mine sold his US stock index funds in the later half of 2022 because “rising interest rates, even if they leveled off would keep the market down throughout 2023.” So far the SP500 is up 20% this years.

No doubt this acquaintance will soon be on TV saying “The stock market of 2022 wiped out my savings and ruined my retirement.”
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Old 12-10-2023, 11:22 AM   #15
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Historically, 5% on the 10 year Treasury has been the inflection point for stocks. Higher than that and stocks wallow. That rate got close to 5% this year but then pulled back.
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Old 12-10-2023, 11:33 AM   #16
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Originally Posted by VanWinkle View Post
As Buffet says: "The stock market is a device for transferring money from the impatient to the patient. ...
Another:

Buffett: "Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell." ... "Lethargy, bordering on sloth should remain the cornerstone of an investment style."
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Old 12-10-2023, 03:39 PM   #17
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It appears that once the news hits the public air waves, it is too late for everyday people to have an advantage.
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Old 12-10-2023, 04:39 PM   #18
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It appears that once the news hits the public air waves, it is too late for everyday people to have an advantage.
Well, there IS no advantage to be had, you see.
So it's not a simple matter of being fast to react, not at all...
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Old 12-10-2023, 05:46 PM   #19
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Everybody should have one of these: https://www.bogleheads.org/wiki/Inve...licy_statement

Mine does not state "ignore geopolitical events" because that is a given.
Seems too much like work.
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Old 12-10-2023, 06:01 PM   #20
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Seems too much like work.
+1

I'm too lazy to do much trading and those rare times where I did, it sometimes didn't work out well, so no encouragement to keep trying.

I've failed at trading and got rich..
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