Is You In or Is You Out

[W2R]

I saw the market drop in real time, and of course nobody likes seeing something like that happen so rapidly.

Still, my portfolio is bigger than it was in February. Even if the market had not recovered yesterday afternoon my portfolio would be pretty close to its February values, despite the fact that I am also living off of withdrawals from it.

What I plan to do is to rebalance, if and when I need to do so. Right now, my planned AA is 45:55 and actually today it is less than 1% off (44.3:55.7). That is not enough to trigger a rebalance.

Other than rebalancing? I don't plan to do a thing, other than watch the show and hang on for the ride. In other words, exactly what I did in 2008-2009. Been there, done that, got the t-shirt.

 

[Texas Proud]

I saw the market drop in real time, and of course nobody likes seeing something like that happen so rapidly.

Still, my portfolio is bigger than it was in February. Even if the market had not recovered yesterday afternoon my portfolio would be pretty close to its February values, despite the fact that I am also living off of withdrawals from it.

What I plan to do is to rebalance, if and when I need to do so. Right now, my planned AA is 45:55 and actually today it is less than 1% off (44.3:55.7). That is not enough to trigger a rebalance.

Other than rebalancing? I don't plan to do a thing, other than watch the show and hang on for the ride. In other words, exactly what I did in 2008-2009. Been there, done that, got the t-shirt.

Do you really have the T-shirt If so, I want to see pics

 

[FIREd]

Are you comparing the stock market with a casino? Oh, surely not!

Peter

Actually I would trust a casino more than the market. When you walk into a casino, you know what your odds of winning are. Those odds can be mathematically determined in fact. The house rules are also clearly posted so you know what you are up against. On Wall Street, no one can tell you what your odds of winning are and the rules keep changing on you every 2 weeks... When I lose money at the casino, well I know that it was the most likely outcome. That's why I don't play at the casino.

 

[Nords]

Basically, I have been just taking advatage of the chaos to switch around some holdings.
The economy seems to be rebounding nicely as evinced by the jobs report, so this looks like a temporary panic/correction that is an opportunity to reshift some stuff.

Yep. A bunch of our call options expire next month, too, so hopefully this volatility will persist until after we've sold some more. Nothing like a "flat" market with a high VIX.

At the same time we're beginning to struggle with balancing the concepts of "stewardship" vs "loss aversion". At some point the research, decision-making, tracking, and rebalancing all become just another job. If you don't need the profits, then why risk the capital?

 

[novaman]

I've been on the sidelines since September. The Feds can only keep propping the market up for so long, then its gonna get ugly.

 

[Achiever51]

Lived through 1987....2000...2007....yesterday.
Still here; not changing course. That doesn't mean that I like what's happening, but I know that what goes down, comes up...eventually.

 

[easysurfer]

Am I in our out? I'm always in and out. That is, according to my targeted allocations.

When I added up my allocations last time (end of each quarter), it was within 5% of my target. I usually only allocate once a year, but if it gets too out of whack before then, maybe I'll reallocate sooner.

The $64,000 question is what caused the falling off the cliff yesterday? Was it a fat finger, or a tech glitch or what else?

Other than that, I see the jolt like a sudden storm or blizzard. My approach is to just hunker down, wait for it to pass, then go from there. Though I see during a storm or blizzard it is tempting to go exploring a bit to feel the elements.

 

[haha]

I think one thing stands out- the environment of investing that most of us grew up with is gone, at least temporarily. I mean the S&P has gone nowhere since 2000, and it's not like we have had high dividends in the interim. Likewise safe fixed assets pretty much stink, though at times over the past decade some of these have offered outstanding opportunities.

So about that "what goes down must come up", true I suppose given a reasonable height before the fall, and given plenty of time. But it is not going to be easy for a while, maybe a very long while. Most of us like the upward volatility, it's the down stuff that bothers us. The cure for this is buy only high beta stocks on the way up, that become low betastocks on the way down.

Out markets are behaving more like what was once mostly associated with Hong Kong.

Ha

 

[W2R]

Do you really have the T-shirt If so, I want to see pics

What, you didn't get one? I'm sure it is coming in the mail.

Lived through 1987....2000...2007....yesterday.
Still here; not changing course. That doesn't mean that I like what's happening, but I know that what goes down, comes up...eventually.

+1 Exactly! Though as Ha implies (I think?) the market of the 1990's is over and times have changed. I guess we have all known that for a while.

 

[Achiever51]

...

So about that "what goes down must come up", true I suppose given a reasonable height before the fall, and given plenty of time. But it is not going to be easy for a while, maybe a very long while. Most of us like the upward volatility, it's the down stuff that bothers us. The cure for this is buy only high beta stocks on the way up, that become low betastocks on the way down.

...

Ha

Absolutely agree. But since my portfolio is invested for the long term, I'm still in. Now as for short term cash needs, sure wish there were better alternatives than MM funds or low interest rate CDs.

 

[Westernskies]

"Is you in or is you out?"

Don't ask, don't tell.

 

[FIREd]

I think one thing stands out- the environment of investing that most of us grew up with is gone, at least temporarily. I mean the S&P has gone nowhere since 2000, and it's not like we have had high dividends in the interim. Likewise safe fixed assets pretty much stink, though at times over the past decade some of these have offered outstanding opportunities.

So about that "what goes down must come up", true I suppose given a reasonable height before the fall, and given plenty of time. But it is not going to be easy for a while, maybe a very long while. Most of us like the upward volatility, it's the down stuff that bothers us. The cure for this is buy only high beta stocks on the way up, that become low betastocks on the way down.

Out markets are behaving more like what was once mostly associated with Hong Kong.

Ha

I am reading a book called "a history of interest rates" right now, and it fascinates me that from antiquity to the later part of the 20th century, the 2 pillars of a personal investment portfolio were real estate and short term fixed income investments. I think our forefathers would look at our engouement for the stock market as madness.

 

[ziggy29]

I am reading a book called "a history of interest rates" right now, and it fascinates me that from antiquity to the later part of the 20th century, the 2 pillars of a personal investment portfolio were real estate and short term fixed income. I think our forefathers would look at our engouement for the stock market as madness.

Not surprising, given that the concept of a healthy "retirement" as an expected middle class life stage is largely an invention of the same time frame, and given that retirement investing is one of the most common reasons for "ordinary" folks to be in stocks and stock fund at all. And there's no way pension funds provided retirement for so many decades without significant allocation to stocks, either.

Most of us can't fund 30+ years of retirement on a portfolio primarily invested in fixed income for decades. So stock investment for the masses is very much a rather recent thing tied to retirements.

Then again, I've been saying for years that retirement as a middle class expectation is starting to fade out. It will still be possible for those who sacrifice short-term gratification, but I think there are many economic and demographic factors which suggest the golden age of middle class retirement is quickly coming to a conclusion.

 

[brewer12345]

I think one thing stands out- the environment of investing that most of us grew up with is gone, at least temporarily. I mean the S&P has gone nowhere since 2000, and it's not like we have had high dividends in the interim. Likewise safe fixed assets pretty much stink, though at times over the past decade some of these have offered outstanding opportunities.

So about that "what goes down must come up", true I suppose given a reasonable height before the fall, and given plenty of time. But it is not going to be easy for a while, maybe a very long while. Most of us like the upward volatility, it's the down stuff that bothers us. The cure for this is buy only high beta stocks on the way up, that become low betastocks on the way down.

Out markets are behaving more like what was once mostly associated with Hong Kong.

Ha

Speak for yourself, Ha. I started investing around 1998/1999, so this environment is all I have ever known, at least from personal experience. If you baby boomers quit pissing in the punchbowl it would be great to get some of that calm equity market that generally goes up and doesn't crash every 3 or 4 years.

 

[unclemick]

Speak for yourself, Ha. I started investing around 1998/1999, so this environment is all I have ever known, at least from personal experience. If you baby boomers quit pissing in the punchbowl it would be great to get some of that calm equity market that generally goes up and doesn't crash every 3 or 4 years.

1966.

So now that the Saints finally won a Superbowl am I supposed to get excited about something or what.

heh heh heh - 17th year of ER. Full auto Target Retirement 2015 - PLUS a few good stocks for the hormones. and football is in the fall. .

I do get excited when I watch though - but I missed this little dip.

 

[Danny]

I have an inee...but I digress.

You feel comfortable with your AA...you are going to France...life is good.

Have a wonderful time.

Merci!

I'll feel comfortable as soon as I find where my and my stocks bottoms are

 

[JBmadera]

I'm and actually moving about 3% of my cash into equities to get back to my target AA.

time to hold on to your martini's!

 

[sailwc]

i would agree, the market will not be smooth sailing for quite some time and guarding against some major catastrophie, you will be okay in the long run.

 

[ESRwannabe]

I'm fairly comfortable with my holdings and at the moment I'm thinking long term picture. If Bernanke, Geitner and Obama have a Rose Garden Moment with shaky voices I would reconsider.

Know too well from experience that it's hard to time ins and outs

Still if you get enough uncertainity thrown at you you start to wonder.

I'm thinking of riding this out. Go to France on Tues for 2 weeks and not think about finance.


What's the thinking on the forum?

The "great recession" has made me much more comfortable with holding stocks. I found a "strategy" that works for me and I have no problem holding a high amount of stocks. I'm around 90/10 right now.

I primarily stick to broad market indexes and only buy when the dividend yield meets my minimum of 2% based on the previous year's payouts and the current share price. In 11 years or so when I plan to ESR, I'm planning on only spending the dividends, whatever they happen to be. I'll be around 45 then.

Ideally I will be making 3% or more dividend yield based off of my average cost basis. That should be plenty. I'll keep working part-time and have a few years expenses in cash to offset the dividend fluctuations. When I get into my 60s I will have some pension money and social security coming in. I'll also be able to access my roth ira and 401k. So, at that point I may fully retire.

I have no fear of my investments becoming worthless. I own thousands of stocks from countries all over the globe.

 

[jimnjana]

1966.

So now that the Saints finally won a Superbowl am I supposed to get excited about something or what.

heh heh heh - 17th year of ER. Full auto Target Retirement 2015 - PLUS a few good stocks for the hormones. and football is in the fall. .

I do get excited when I watch though - but I missed this little dip.

I think I am heading to your route of a target retirement fund and a few stocks. The last year or so I've been spending way too much time trading with nothing more to show for it than what I could have achieved in more passive investments. The time commitment for due diligence and market watching is like having a job...so Vanguard here I come...

 

[freebird5825]

I was unpacking and getting some household things caught up after 2 weeks out of town, so I missed it all. I heard about it secondhand from a friend. His stocks took a real bath but he's not panicking. Yet. He's preparing to do some minor buy moves.
I'm still wearing my chicken feather suit and sticking to my 40/60 AA, well diversified via a cornucopia of mutual funds. Things migrated a little bit but I'm not worried. Yet. I'm sticking with my usual DCA plan.
I'm IN.

 

[Meadbh]

Are you comparing the stock market with a casino? Oh, surely not!

Peter

I am. To celebrate, last night I did something I have never done...I went to a casino with $40 and played poker for 2 hours. I lost it all, of course, but at least I could see where it was going!



Market wise, by coincidence I have more cash than usual right now, my real estate is producing income and my gold and silver are healthy.

Life is good.

 

[utrecht]

I'm up 3.3% for the year.On track for an decent year. I try not to think about where I was 2 weeks ago and go with the flow. I feel fine.

 

[CyclingInvestor]

Still 100% equities, all individual large/mid cap stocks with long histories of rising earnings and dividends and stable outlooks for the future (51, retired 3+ years).

I see the situation as pretty smooth. Company earnings rising at a decent clip. KO, ABT, JNJ and PG have raised their dividends as expected this year, by an average of about 9%. The flopping around of market prices (blamed on the latest crisis of the moment) is of little concern.

While I do move my $$ around from stocks I consider over-valued or non-analyzable to other stocks at lesser valuations, I have maintained a near 100% equity position for quite a few years now

 

[haha]

I think I am heading to your route of a target retirement fund and a few stocks. The last year or so I've been spending way too much time trading with nothing more to show for it than what I could have achieved in more passive investments. The time commitment for due diligence and market watching is like having a job...so Vanguard here I come...

I hear where you are coming from. However, I would like to point out that comparing an active strategy based investment program to passive indexing in a very strong up-market gives too much credit to the indexing.

Ha