For the first time ever I sold all my stocks

[PatrickA5]

I have enjoyed reading all of the replies to this post... I am about 50-50 AA, and have not changed that during this crisis. I did buy CVX at 59, and plan to sell those when it reaches 100 or so.

My only comment about this thread, which several people noted, is this. If you sell stocks, and *ever* plan to get back in, how do you know when? Even if you acknowledge that you do *not* want to try and time the market, you are really forced to... aren’t you?

It's very simple. You get back in when you're COMFORTABLE being in the market.

Unlikely that will be at the lows. Very likely you might missed out on some gains. No big deal. I'd rather miss out on some gains than have my life savings take a big drop at the beginning of my retirement. We have no pensions to fall back on and our retirement savings aren't so large that we don't need to preserve what we've got.

I'm going to give it a few months and see if it really seems that the economy is back on track. Yes, by then the market will "probably" be higher. I'm not concerned about that at all. Call it "market timing" if you want. Doesn't bother me.

 

[Sunset]

I have enjoyed reading all of the replies to this post... I am about 50-50 AA, and have not changed that during this crisis. I did buy CVX at 59, and plan to sell those when it reaches 100 or so.

My only comment about this thread, which several people noted, is this. If you sell stocks, and *ever* plan to get back in, how do you know when? Even if you acknowledge that you do *not* want to try and time the market, you are really forced to... aren’t you?

I find it's hard to watch the market each day, and grab those buys/sells on the dip/spike.

One easy way for me, is to set a limit buy on a stock, at whatever price I feel would be good to buy back in at.
It does not have to be 1 set price either.
So often I set price good until cancelled or good for 60 days at:

• -10% for 100 shares of X.
• -15% for 100 shares of X.
• -20% for 100 shares of X.

Often the lower priced better deal simply expire. But whatever I get I'm happy with.

 

[Lsbcal]

...
My only comment about this thread, which several people noted, is this. If you sell stocks, and *ever* plan to get back in, how do you know when? Even if you acknowledge that you do *not* want to try and time the market, you are really forced to... aren’t you?

This continues to be a very popular question and deserves an answer by the person doing the market timing. And yes, it is market timing. If one exits the market one should do so with a plan to enter. Yes, you should have a plan. No, you do not have to offer it up here for a critique.

FWIW, I do have an exit and entry plan.

 

[USGrant1962]

So I was a DMT today. On this rebound I dumped my small/mid-cap index fund in my 401(k) and put it in U.S. bond index for now. This was about 10% of my portfolio. Plan is to ride through second quarter earnings and then rebalance back to my target AA, but probably skip the SMID sector tilt and go to total stock market. I'm still ~40% equities, far from selling out.

 

[youbet]

Of the folks who are inclined to go to zero equity exposure (already have or shortly will), there seem to be two broad categories:

1. Those that are done with equities forever.

2. Those that see a market timing opportunity. They're very confident they can buy back in at a lower price than existed when they got out.

I admit, #2 is tempting for me personally. I like to trade. I have to make an effort to have market timing be a minimal part of my FIRE portfolio management. It seems logical that the pandemic will eventually cause some sort of "crash" or at least a significant pullback. Tempting, tempting........

But the bulk of my equities (mostly TSM MF's) are in taxable accounts and have substantial, taxable LTCG's. And the time frame for much of the equity allocation is out 15 years when my son can use it to accelerate his FIRE, time enough to likely "ride out" even a major catastrophe in the markets.

So....... even if market timing seems like a slam dunk in today's pandemic world, there are circumstances to consider. Still, it is soooo much fun to market time! It's going to be tough to hang onto my current "steady as she goes" outlook!

72 yrs old. 52/36/12 this morning.

 

[Aerides]

Of the folks who are inclined to go to zero equity exposure (already have or shortly will), there seem to be two broad categories:

1. Those that are done with equities forever.

2. Those that see a market timing opportunity. They're very confident they can buy back in at a lower price than existed when they got out.

I'm more #3:
Those who would rather get out now - for whatever reason - and will get back in later. No matter if they are confident about it being lower or higher later or not. At some point once the storm has passed they will DCA back in.

Like others have mentioned, if I end up missing the start of the next bull run, so be it. I didn't pull money out with the expectation that I can make gains later. But I will get back in, I just needed a lower risk allocation...for now.

 

[Markola]

Sorry, I’m finding that Suicide Squad image disturbing, so am hoping this calming one appears instead in my app’s several feeds.

 

[brewer12345]

I'm more #3:
Those who would rather get out now - for whatever reason - and will get back in later. No matter if they are confident about it being lower or higher later or not. At some point once the storm has passed they will DCA back in.

Like others have mentioned, if I end up missing the start of the next bull run, so be it. I didn't pull money out with the expectation that I can make gains later. But I will get back in, I just needed a lower risk allocation...for now.

That largely describes me. I am a risk manager, first and foremost. Getting out of an overvalued market in highly uncertain circumstances is job one for me. When risks are lower or at least priced in, I will be getting back in.

 

[youbet]

Aerides:

Would this fit you as a #3 then?

3. Those whose risk tolerance has been exceeded by pandemic-based threats to the markets and are more comfortable sitting on the bench for the time being. They'll return sometime in the future.

 

[tulak]

Add me to #3. I’m still in at 50/50, but was 72/28 at the beginning of the year.

Like others here, I don’t think this market makes sense. I’m ok with overvalued, but not with record unemployment and bankruptcies looming on the horizon.

I know when I’ll ramp up equities. My time horizon is long and even if I lose out on a bit of gain right now, that’s ok with me.

 

[targatom2019]

This continues to be a very popular question and deserves an answer by the person doing the market timing. And yes, it is market timing. If one exits the market one should do so with a plan to enter. Yes, you should have a plan. No, you do not have to offer it up here for a critique.

FWIW, I do have an exit and entry plan.

are you doing it with just a portion of your portfolio ? As for me, no way I could jump in and out with 2 comma portfolio but comfortable with about 10%.

 

[corn18]

Be cautious of what you bail out to. Bonds are more expensive than equities right now.

 

[Vincenzo Corleone]

I have enjoyed reading all of the replies to this post... I am about 50-50 AA, and have not changed that during this crisis. I did buy CVX at 59, and plan to sell those when it reaches 100 or so.

My only comment about this thread, which several people noted, is this. If you sell stocks, and *ever* plan to get back in, how do you know when? Even if you acknowledge that you do *not* want to try and time the market, you are really forced to... aren’t you?

I'm going to get back in when the Fed stops manipulating the market to the extent they are, and when either a vaccine for Covid becomes available or when herd immunity is reached. If I miss out on some gains in the meantime, so be it. I'm OK with that possibility. Call it whatever you want.

 

[PatrickA5]

Aerides:

Would this fit you as a #3 then?

3. Those whose risk tolerance has been exceeded by pandemic-based threats to the markets and are more comfortable sitting on the bench for the time being. They'll return sometime in the future.

I've been #3 since early March.

Can't afford a major SORR event at the exact time we'll start drawing down our retirement accounts. DW will likely lose her oil related job soon, so we'll be down to retirement accounts (and maybe SS).

If the economy appears to have corrected this year or next, I'll probably dabble back into the market - probably never going above 30%. Fine with me if it's higher than it is now. Even finer if it's lower.

 

[Lsbcal]

are you doing it with just a portion of your portfolio ? As for me, no way I could jump in and out with 2 comma portfolio but comfortable with about 10%.

There are those on this forum who need to have their biases confirmed and will attack if this is not done. So I'll pass on answering on specifics. But what I have sold I moved to short term Treasuries (VFIRX) for a high level of safety.

 

[Dtail]

I'm going to get back in when the Fed stops manipulating the market to the extent they are, and when either a vaccine for Covid becomes available or when herd immunity is reached. If I miss out on some gains in the meantime, so be it. I'm OK with that possibility. Call it whatever you want.

Bolded by me
Well that is the 64k question that in my opinion that is #1 of all the factors, although it is not the only piece of the pie.

That could change possibly if Main Street puts up enough resistance to Wall Street if we reach a new high, or if the Admin changes in the fall.

 

[COcheesehead]

Bolded by me
Well that is the 64k question that in my opinion that is #1 of all the factors, although it is not the only piece of the pie.

That could change possibly if Main Street puts up enough resistance to Wall Street if we reach a new high, or if the Admin changes in the fall.

Listening to Mnuchin this morning, it sounds like they have more stimulus ready to roll based on the outcome of the reopening. He specifically mentioned municipalities and restaurants.

So their intervention could last a long time.

 

[Dtail]

Listening to Mnuchin this morning, it sounds like they have more stimulus ready to roll based on the outcome of the reopening. He specifically mentioned municipalities and restaurants.

So their intervention could last a long time.

Real question.
So do you think in the future that all bear markets will be short lived and responded to with unlimited stimulus?
In other words, there would be an understanding that he debt is too high to ever really pay down and thus this will be the response ongoing, not to mention effectively have continuous low rates.

 

[COcheesehead]

Real question.
So do you think in the future that all bear markets will be short lived and responded to with unlimited stimulus?
In other words, there would be an understanding that he debt is too high to ever really pay down and thus this will be the response ongoing, not to mention effectively have continuous low rates.

Hadn't really thought about it.

Over my adult life I have only seen intervention twice and those times were pretty bad.

I will say if people wait for an all clear sign, good luck. Just think about what happened since 2009. Was it ever really safe? One mini crisis after another, elections, trade wars, taper tantrums....

Risk is rewarded. No risk, no reward.

 

[Sunset]

There are those on this forum who need to have their biases confirmed and will attack if this is not done. So I'll pass on answering on specifics. But what I have sold I moved to short term Treasuries (VFIRX) for a high level of safety.

For income (ha ha ha) and safety, I'm moving to VGSH with the cash (an ETF, as this account not in Vanguard).

 

[pb4uski]

I'm going to get back in when the Fed stops manipulating the market to the extent they are, and when either a vaccine for Covid becomes available or when herd immunity is reached. If I miss out on some gains in the meantime, so be it. I'm OK with that possibility. Call it whatever you want.

Bolded by me
Well that is the 64k question that in my opinion that is #1 of all the factors, although it is not the only piece of the pie.

That could change possibly if Main Street puts up enough resistance to Wall Street if we reach a new high, or if the Admin changes in the fall.

Listening to Mnuchin this morning, it sounds like they have more stimulus ready to roll based on the outcome of the reopening. He specifically mentioned municipalities and restaurants.

So their intervention could last a long time.

The Fed and the Feds are two entirely different things. The former is monetary policy and the latter is fiscal policy.

 

[COcheesehead]

The Fed and the Feds are two entirely different things. The former is monetary policy and the latter is fiscal policy.

Tomato tomatoe its intervention and not free market.

 

[Aerides]

Aerides:

Would this fit you as a #3 then?

3. Those whose risk tolerance has been exceeded by pandemic-based threats to the markets and are more comfortable sitting on the bench for the time being. They'll return sometime in the future.

close enough.

 

[clobber]

how do you know when? Even if you acknowledge that you do *not* want to try and time the market, you are really forced to... aren’t you?

One small piece of some strategy could be to look at the VIX (fear index). It usually hovers between something like 12 and 20 during "normal" times. For example, over the past 10 years it has rarely gone above 20 and it was a long bull market. Would you miss some gains because you did not get in earlier and people were still scared? Probably, but so what.

 

[COcheesehead]

One small piece of some strategy could be to look at the VIX (fear index). It usually hovers between something like 12 and 20 during "normal" times. For example, over the past 10 years it has rarely gone above 20 and it was a long bull market. Would you miss some gains because you did not get in earlier and people were still scared? Probably, but so what.

The VIX is interesting and I watch it. It rarely goes above 30-35 in bad times. It hit 59 in 2008. In the last two months, it hit 82. Think about that. That's crazy.

Today it sits at 27 after a steep drop back from those highs. Still high ish, but nowhere close to where it was.