Looks like the Party is over

[REWahoo]

The name that should not be spoken aloud!!!!!!

Yes!

And the correct spelling of that name on the forum is "Wh**".

 

[Lsbcal]

So, the Saudi's has orchestrated a drop in Oil to a 10 year low, China's false economy is finally coming home to roost and Japan and the Eurozone have stagnant growth. The FED is finally raising rates and I would be surprised if they don't raise another 50 to 75 bps in 2016, despite the bad global economy. They might spread it out more but I don't think they will stop or reverse. These conditions will put tremendous pressure on the US economy and might drive into a recession. As such, the US stock market has made a correction of over 10% from it's 52 week high and with it being overvalued even at Friday's close coupled with the aforementioned headwinds history points to a further adjustment that could see this market drop another 10 to 20%. Lastly, RBS says sell everything and other Doomer's are jumping on the bandwagon.
...

The OP is an excellent contrary indicator.

Like REWahoo, I choose to do nothing.

 

[Fedup]

I did get out in 2008 after an 8% drop and then got back when the DJ was 10,000/11000. I slept better for sure. But I wasn't smart enough to buy when the Dow was 6,000.
But real estate was a much larger investment and I didn't worry about bank run either. I couldn't time the market because of illiquidity.


Sent from my iPad using Early Retirement Forum

 

[Ian S]

I see it as an opportunity to once again practice doing what I do best - nothing.

Yup. I didn't panic and sell in 1987, nor in 2000, nor in 2008 and have no intention of doing so now. Unlike my situation in 1987, I always have some cash available to pick up top notch dividend paying companies on the cheap. That's what I intend to do now. To be a good market timer, you have to know not only when to sell but also when to get back in. That's extraordinarily hard to do with any consistency.

 

[ERD50]

Some data:

Here's What Usually Happens to Markets After the S&P 500 Drops 5 Percent in a Week - Bloomberg Business

As Bespoke Investment Group points out, a weekly drop of more than 5 percent has only happened 28 other times since 1980.

If you're trying to decide what to do this week, maybe Bespoke's chart will help. It gives you a look at what happened in the S&P 500 in the weeks following a 5 percent decline. On average, the market is relatively flat the next week, up 1.65 percent over the next four weeks, and up close to 5 percent over the next 12 weeks. Also important to note is that 60 percent of the time, the index moves higher the following week.

-ERD50

 

[Willers]

Yea...such moods happened and will happen again.

Still S&P graph looks pretty good over that last 120 years even with all the drops. Collect dividends and do nothing.

Party is over for people without long term view.

+1

I'll be the first to admit that this hasn't been fun for me since I just put in my RE notice, but I was recently reminded by a friend that I talked about planning for a 45 year retirement so it shouldn't make much difference. I'm doing my best to remind myself of that.

 

[Balance]

Ha! not trying to stir up panic on this board, but wanted a broad sector of opinions from a contrarian view. Clearly, I got some and with over 75 people viewing I would say that others are curious as well. Panic, No, but certainly others like I are looking for real time data vs. media BS.

That said, I will leave you all with this

[FONT=&quot]Before I semi-retired and the market was down, I was piling in with savings and catching the rise. I was diverse in my investments, Equities, Real Estate (both home and commercial) and bonds. However, I am [/FONT][FONT=&quot]semi-retired and [/FONT][FONT=&quot]have two very wealthy friends both in the late 60's, one who has a plant in China building cheap **** for all the world to buy (He has been going there for over 15 years) and the other who on a bad day is worth 250 million (self made, most of it in the RE market). They told me last year that macro economically things were not looking good (Deflation) going forward, so I figured I should take some chips off the table and I lightened up into cash. I asked them in the last week, what do you see/know and they said, the same thing. It's going to get worse before it gets better and with no political visibility (pre-election without the incumbent running) 2016 will be a lost year. Are they right? Only if they have a working crystal ball, but they do have access to real-time in the trenches information that I would trust more than most pundits in the financial media.
[/FONT]
[FONT=&quot]
[/FONT]
[FONT=&quot]So, I agree with those who are still in the OMY or TMY modes to stay the course and keep buying in. But in my case, selling is just an asset allocation adjustment for a deflationary environment.
[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot][/FONT]
[FONT=&quot]Anyway, It's a nice day today, I am going out on my boat. Talk about an asset with deflation or is it devaluation. LOL
[/FONT]

 

[NW-Bound]

I did not lighten up as much as Sengsational, but am currently at 60% stock AA compared to the 70% in mid 2015 (I had gone as high as 80%). Of course now I wish I had gone even lower. But that's OK. I am waiting to buy low, and drive the stock AA back up higher. Bring on the bear market. This is exciting. I will be well rested and ready for the next party to start.

 

[RAE]

The problem with relying on 130 years of history is that our current situation has never happened before in history. Years of ZIRP, a massive Fed balance sheet, worldwide QE with negative rates in other countries. This is actually a live experiment, and we don't know how it all ends.

+1. I feel the same way.

 

[audreyh1]

The party is over forever?

Moves, up and down, are temporary.

Yeah, I know, they don't seem so temporary if they last a year or two.

 

[GTFan]

There's a market-timing sucker born every minute, reacting because their BFF 'guru' says get in or out.

Just stay the course.

 

[Rickt]

So, the Saudi's has orchestrated a drop in Oil to a 10 year low, China's false economy is finally coming home to roost and Japan and the Eurozone have stagnant growth. The FED is finally raising rates and I would be surprised if they don't raise another 50 to 75 bps in 2016, despite the bad global economy. They might spread it out more but I don't think they will stop or reverse. These conditions will put tremendous pressure on the US economy and might drive into a recession. As such, the US stock market has made a correction of over 10% from it's 52 week high and with it being overvalued even at Friday's close coupled with the aforementioned headwinds history points to a further adjustment that could see this market drop another 10 to 20%. Lastly, RBS says sell everything and other Doomer's are jumping on the bandwagon.

So, looking back at 2007 thru 2009, the market corrected over 50% and it took over 5 years for it to get back those losses. I know everyone says you can't time the market but if you are in the early stages of retirement you have to think about capital preservation so you can catch the future upswing.

Here's what Ben Wright of "The Telegraph" (UK) (http://www.telegraph.co.uk/finance/markets/12102567/The-market-mayhem-isnt-all-doom-and-gloom.html) writes :
Short-term volatility in the markets is a big concern for those who need to get their hands on their cash soon. But what the markets did yesterday or will do tomorrow (or next week, or next month, or next year) will have little bearing on investments laid down to pay for a pension in 10, 20 or 30 years’ time.

I'm not smart enough to figure things out but staying the course and plan to ER in 2016.
Cheers!

 

[Walt34]

Here, this should help answer the question:

Amazon.com: Amlong Crystal Clear Crystal Ball 110mm (4.2 in.) Including Wooden Stand: Home & Kitchen

 

[eta2020]

Cramer knows what to do.
On 13th Cramer: Market oversold—start picking these stocks
On 15th Jim Cramer: Don't bother buying. It's capital preservation time

That is because he is a Pro.

 

[Mulligan]

Cramer knows what to do.
On 13th Cramer: Market oversold—start picking these stocks
On 15th Jim Cramer: Don't bother buying. It's capital preservation time

That is because he is a Pro.

I know he has to be an intelligent guy, BUT... Yes, my head spins watching the entertainment show... It treats each days advise, like he never said anything the day before... Or emphasizes what he says he said last week, but was opposite of the day before.. His selective memory is better than mine!


Sent from my iPad using Tapatalk

 

[ls99]

What party, I did not know about the party. Dang missed out on all that revelling.

I think I'll keep my scheduled looking at my totals in May.

 

[Major Tom]

Party is over for people without long term view.

My feelings exactly - and the nice thing about being a bit older is that time seems to go faster. A down year, or two, or even more, doesn't seem like as big a deal as it would have when we were younger. Besides, most of us have a few years' worth of living expenses in cash or cash-equivalents and those who don't, recognize that even if you have to sell equities in a down market, you are only selling a very small percentage of your portfolio anyway, which won't make a big difference over the long term.

 

[NW-Bound]

Selling? I will be buying.

And any party will have to end before the next one starts. One should think of this bear market as an entr'acte. And a chance to buy low. Wouldn't the lower, the better it is to buy?

PS. OK, I am done with my lunch break now. Am contemplating taking a siesta before heading upstairs to continue that DIY flooring project. See y'all later.

 

[papadad111]

Hey. We're 2 weeks closer to the next party. Pass the punch bowl. I have a bottle to pour in !!

 

[papadad111]

PS. There is a ton of wisdom on this board from older and wiser and successful individuals.

 

[steelyman]

PS. There is a ton of wisdom on this board from older and wiser and successful individuals.

But... two tons from older individuals?

 

[Gumby]

I'll follow Mark Cuban's lead.

"While all the selling seems to be based on China and the price of oil, I really don't know what the long term implications for our stock market is. So I follow the number one rule of investing. When you don't know what to do. Do nothing."

http://www.cnbc.com/2016/01/07/dont...rket-sell-off-mark-cuban-says-do-nothing.html

 

[aim-high]

If you've been retired for several years this drop is nothing to be concerned about and you simply stay the course. However, we all know about the studies of sequence of return risk. For those who retired in December, I think it's the hardest.

 

[pb4uski]

I'll be rebalancing... selling bonds and buying stocks.

 

[CaliforniaMan]

The problem with relying on 130 years of history is that our current situation has never happened before in history. Years of ZIRP, a massive Fed balance sheet, worldwide QE with negative rates in other countries. This is actually a live experiment, and we don't know how it all ends.

I remember having this same conversation with a friend back in the 70's, yes it was different then, and it is different now. I have heard exactly the same argument in every market decline since. Of course every time is different, but the laws of supply and demand, and the emotions of greed and fear never change.
We have problems, when have we not? Some industries decline and go out of favor, new ones emerge. But looking at the past 130 years, we have certainly been in much much worse situations.
And speaking of the 70s, we should now be running out of oil, rather than a worldwide obesity problem we should be having famines, with commodity prices through the roof. Not a joke, people were seriously certain of this and very fearful.
We now have different problems, but still the fear. Amazing how human nature never changes.