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Old 04-29-2020, 08:28 PM   #61
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I have made some in junk bonds, about 6%, in the last 30 days. I really made some, about 25%, in small cap growth.

The trend is your friend.
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Old 05-01-2020, 10:04 PM   #62
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Simply Put....

It's Time IN the Market.
NOT Timing the Market.

If one has to dodge in and out of the market because they are scared, your asset allocation is all wrong and you must look yourself in the mirror and decide what's right.

I have a time frame that I decided on back in 1987 during Black Monday.
I doubled down on my investments into the market during the 2008-2009 crash and have stayed the course.

I retired in 2012 and am still heavily into stocks (TSP C, S, I Funds) and have seen a 32% drop. It's still double what I had when I retired in 2012, and I haven't added a penny since 2012.

I'll decide in another 3-5 years on what to do (I just turned 65 last month).

My Crystal Ball is in the shop, along with everyone else's.
Find your comfort level and Asset Allocation and decide at that point in your life. It's hard to move from phase 1 and 2, to phase 3 (Safety) where one is satisfied to get 3% and be done.

We have an old saying...."If you've Won the game, QUIT PLAYING"
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Old 05-01-2020, 11:49 PM   #63
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I have no idea what the milestones should be, but I'm sitting on 3X my normal cash, so for every 5% down, I plan to put 2-3% of cash to work.
Normally, I have rebalanced with a 5-8% band but my part-time online gig runs out and I have 4.5 years to full SS age, so I see the next 4 years as the big risk in terms of adverse returns, so I've reduced from 58% to 48% stock funds over the last 2.5 years, scraping gains as the S&P went up.
3rd week of February I sold another slice, then when the quick drop over the cliff brought me down to almost 40%, I bought 3.5%, then sold a bit last Friday.

I don't want to go below 40%, so I'll be buying back in increments.
Most of this is like Brewer and others, I suspect the market as considerably overvalued; on the other hand is the massive Fed backstop. I'm not sure the market is pricing in a continued wave as we reopen or a bad Fall wave, as in the Spanish flu; I have no idea whether the 1918 is a template for this one, and perhaps we will get a vaccine in a year.

Over the next year (perhaps 2) I don't think the consumer/business investment is going to rip for a V shaped recovery; if we're lucky U shaped perhaps. But that's just a guess. Anyway cash will get me at minimum to 2024 and SS before I have to sell stock to fund expenses, then I can increase the stock allocation to 55-60% from 2024-2028 when DW claims.
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Old 05-02-2020, 10:06 AM   #64
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Originally Posted by atmsmshr View Post
Thanks brewer12345! Sounds sorta like Greek and Italian bonds during 2012. Since I do not have the abilities to pick through this kind of wreckage, may make a small wager on a junk index. 1500 bp seems like a real panic point for a market.
Newb question: Is 1500bps the spread between short and long duration junk or spread between same duration junk and treasuries? Thanks!
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Old 05-02-2020, 10:25 AM   #65
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Originally Posted by walkinwood View Post
What are the market indicators that you'll use to decide when to jump in?
As they say, Time in the Market is more important than Timing the Market.

I never jumped out, so there's no need to jump back in. I'm 3-4 years from retiring and have a 50/50 investment asset allocation. My investments dropped 15-20% or so at the lowest point, but they've already been edging up again. It's no fun watching it go down, but it's exciting to see it go up again. Still, I expect it will go up and down quite a bit over the next year or two.

I did transfer $10K from my taxable investments just as COVID was starting to have an impact so we could have more cash on hand if things went south. So far though, we haven't had any financial issues to worry about. If anything, we've spent more since we've been at home.

I've already maxed out our contribution limits for the year in our retirement accounts. If we have any extra cash on hand I might invest it in our taxable account, but I don't really pay attention to the current market state when doing so.
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Old 05-02-2020, 10:49 AM   #66
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Originally Posted by acronymous View Post
Newb question: Is 1500bps the spread between short and long duration junk or spread between same duration junk and treasuries? Thanks!
Spreads are usually quoted relative to Treasuries. Here is an example:

I'm not sure what the exact as-of date is for this chart. I got it in a briefing a week or two ago, so it is definitely not April EOM.
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Old 05-02-2020, 06:56 PM   #67
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For me, the question is: Do these companies pay dividends?

If they do, I stay with them, even if they fall temporarily.
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Old 05-03-2020, 01:44 AM   #68
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"@WarrenBuffet on
Why he's not buying stocks in size: sensitivity to tail events and the '08 reminder "we don't see all the problems the first day."
On whether others should buy now: Only if you expect to hold for a long time and are financially and psychologically ready to do so"
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