The only difference between a "sold loss" and a "paper loss" are the tax consequences. I don't feel that's a good reason to keep riding the market down.
what will happen Monday?
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The only difference between a "sold loss" and a "paper loss" are the tax consequences. I don't feel that's a good reason to keep riding the market down.
If you have a market going down, wouldn't you rather sell and then buy in at a much lower level? I just don't get the logic of riding a down market down even further....doesn't make a whole lot of sense to me.
GregLee
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Well, sure, if you know it's going to go down, it would be irrational not to sell. But you never know what it's going to do. Suppose you sell but then it goes up instead of down. Then you sold low, and if you buy back in later, you'll buy when it's higher. Uh-oh. Sell low, buy high? That's a losing strategy.
easysurfer
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My approach is to follow the indexes (total stock, total international, total bonds) and maybe reallocate as often as each quarter if my allocations drift more than 5% of my target. To change course is to ignore my own approach which really is no system at all.
Also, there's no guarantee that the market won't jump 700 points the next week. Who really knows what direction day by day the direction of the market?
I'm following the market..going along for the bumpy ride
easysurfer
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Belt tightened, tylonol ready, alka seltzer by my side, but I'm holding on and riding this out.
I'm really not worried and even purposely peeked at my portfolio last night to see how much it dropped (nearly 10% in the last week) because I know that during the upswing (whenever that will be) it's go up very quickly too. I'm optimistic. It'll balance out and then some, if you wait it out. We've been through this roller coaster type ride before.
OP
OP
donheff
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You said he has millions. If so, and if he kept it in a balanced AA (which you say he might mot have) it is a paper loss. As to that last bust, if you stood pat you did fine.
Heck, this dip was more than predictable. Everybody has been speculating about it for months. We had a thread on the possible impact of a debt ceiling clash at the beginning of the year. What isn't predictable is when it will bottom out.
OP
OP
donheff
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DOW futures are +140. Still sticking with -600?
Well, the risk of losing even more money to me is much worse than the risk of losing out on potential future gains, especially if someone like me, is retired and living off of their savings. Now if you have a long term goal with your money, yeah, you can ride out the ups and downs of the market to your heart's content.
One financial adviser I follow asks the following question: What do you think the odds of having another bear market in the future is? Most people would answer that question with 100% chance. So if there's a 100% chance of another bear market, why would anyone stay in the market all of the time?
REWahoo
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Maybe because there is a 100% chance you don't know the 'right' time to get out and get back in?
Well, I can tell that the "buy and hold no matter what" sentiment dominates this forum. Interesting.
teejayevans
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Your assuming you can call the bottom, bad assumption.
Personally I've been on the sideline for a while and put a chunk back in yesterday, the "Buy when there is blood on the streets" philosophy seems to have worked well for me in the past.
TJ
REWahoo
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It took you four years on this forum to figure that out?
teejayevans
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It's buy, hold and REBALANCE" The last part kinda of forces you to sell high and buy low.
TJ
teejayevans
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Because the chances of there being a bull market in the future is also 100% and the stock market goes up 66% of the time, the odds favor the bull over the long run.
TJ
HFWR
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No one is making anyone invest in any manner...
I choose to use index funds/ETFs, allocate according to a SWAG based on my alleged risk tolerance and need for growth, then rebalance within fairly wide bands. This will hopefully keep me from doing something too stupid, whether the market is in "Wheee" mode, or "oh, shite" mode...
I choose to use index funds/ETFs, allocate according to a SWAG based on my alleged risk tolerance and need for growth, then rebalance within fairly wide bands. This will hopefully keep me from doing something too stupid, whether the market is in "Wheee" mode, or "oh, shite" mode...
Since markets can't be timed, with 100% chance of a bear market why would you be in the market at all?[/QUOTE]
And therein lies the myth...that markets can't be timed. I agree nobody knows exactly what is going to happen from one day to the next, but if everything in the economy is tanking, I seriously doubt the market is heading for new highs. So you have some idea that the market will either be flat or headed lower. You can buy and sell on long term swings in the market.
ERD50
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I agree with the other responses. What would really be interesting, is if you could provide us a documented, proven alternative to B&H with re-balancing.
It isn't 'sentiment' - show me a clearly better way, and I'll drop B&H/ReBal in a second. You act like we chose this path because our head is in the sand - it's just the opposite, many of us chose this because we looked at alternatives, and don't see one we can rely on. In the case of market timing, how can you rely on any 'system' to not only get you out at the right time, but get you back in. IF that was so easy, where are the 'market timing' mutual funds that consistently outperform the market - should be easy to buy one.
Avoid the stock market? Load that into FIRECALC and see how you do.
But please, please, please - show us the way.
-ERD50
It took you four years on this forum to figure that out?
The Dow closed lower yesterday than it was back in 1999. How is buy, hold and rebalancing working for you?
REWahoo
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Sure you can.
But can you do it successfully and consistently over the long term? If so, you should be filthy rich and not hanging around a joint like this giving free advice to us unwashed BHR types!
HFWR
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But is this actually the state of the economy, or just the version some in the media/government/black helicopters want you to believe?
I see economic data as a mixed bag. GDP slowing, but just as likely due to Europe troubles, Arab spring, Japanese earthquake, political grandstanding, etc., than everything going to heck. Plus, the histrionics on both sides of the spectrum, trying to scare the bejeesus out of everyone, so they'll blame the "other" side.
Latest employment data was better than expected, corporate profits are high, lots of strong balance sheets, P/E reasonable. Lots of headwinds still, but it's far from certain, in my mind, that we're swirling down the toilet...
As always, YMMV...
Sure you can.
But can you do it successfully and consistently over the long term? If so, you should be filthy rich and not hanging around a joint like this giving free advice to us unwashed BHR types!
My main goal is not to get filthy rich but to preserve what I already have while trying to participate in SOME of the market gains. Buy, hold AND SELL helps me in that goal.
And I see many buy and hold types around here and they don't seem to be filthy rich either.
I'm amazed how people defend this approach to the bitter end. There ARE alternatives.
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