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For the first time ever I sold all my stocks
Old 05-09-2020, 05:14 PM   #1
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For the first time ever I sold all my stocks

I am in my late 60s and I have been buying mutual funds for almost 40 years. I have had a stock fund/bond fund allocation that I have stayed with through thick and thin--through all the recessions, through 9/11, etc. But today I sold all my equities and moved the money to a money market fund for now (it was all in my IRA so no tax consequences). I have never been a market timer but there is something about the market now that just does not seem right to me. I recouped all most all my losses from March and April and just got out. I don't see anything good to come in the near future and at my age I just decided to not take any more risks.

I will decide what to do with all the money market funds in the near future--CDs? Bonds? Treasuries? but I just don't think stocks are the right place for me to be now.
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Old 05-09-2020, 05:35 PM   #2
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Old 05-09-2020, 05:51 PM   #3
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I’ve considered same, and have avoided as I’d have taxable capital gains. But with likely tax increases down the road, maybe I should move sooner rather than later.

A slow erosion of purchasing power sitting in cash equivalents sounds better than a quick removal of 25%+ of value thru crazy market gyrations.
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Old 05-09-2020, 05:57 PM   #4
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Originally Posted by harllee View Post
I am in my late 60s and I have been buying mutual funds for almost 40 years. I have had a stock fund/bond fund allocation that I have stayed with through thick and thin--through all the recessions, through 9/11, etc. But today I sold all my equities and moved the money to a money market fund for now (it was all in my IRA so no tax consequences). I have never been a market timer but there is something about the market now that just does not seem right to me. I recouped all most all my losses from March and April and just got out. I don't see anything good to come in the near future and at my age I just decided to not take any more risks.

I will decide what to do with all the money market funds in the near future--CDs? Bonds? Treasuries? but I just don't think stocks are the right place for me to be now.
I bet you feel much better. I've considered this also. I just don't think I need to be in stocks for awhile but something is holding me back. I probably have 10 yrs in expenses in munis and CDs.

MM fund rates are miserable. I'd pile into some CDs which are just a bit less miserable
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Old 05-09-2020, 05:58 PM   #5
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The war on savers is in full swing, so playing defense against inflation is challenging. You can look at money markets, but rates are pretty low. I have some money in FLRN, a floating rate corporate bond fund. Bank accounts and CDs in internet banks are usually a good bet. Other than that, I have taken to stalking the corporate, muni and brokered CD markets for very short term (3 to 4 months tops) paper from issuers that look OK to me.
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Old 05-09-2020, 06:01 PM   #6
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Today is Saturday, May 9. How were you able to sell everything today?

I can see you placing an order, but if so, it hasn't happened yet. It will be interesting to see what happens on Monday.
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US Equity Market More Overvalued In May Than February 2020
Old 05-09-2020, 06:11 PM   #7
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US Equity Market More Overvalued In May Than February 2020

https://www.multpl.com/shiller-pe

Shiller PE May 8 2020.png

Earnings collapsing, Economy collapsing, prices rising.

Go Figure.
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Old 05-09-2020, 06:12 PM   #8
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Today is Saturday, May 9. How were you able to sell everything today?

I can see you placing an order, but if so, it hasn't happened yet. It will be interesting to see what happens on Monday.
OP here--you are correct, I placed the order today so it will be executed on Monday at whatever happens then.
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Old 05-09-2020, 07:17 PM   #9
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A lack of a long term plan leads to emotional decisions like these.

You now have to make at least one more correct decision or stay in cash the rest of your life.

I see more and more evidence on this board of people who do not have a strategy first investment plan.

Based on prior year posts made it seem like almost everyone on here had one.

Maybe this year is the great shakeout.

Reminds me of the Mike Tyson quote. Everyone has a plan until they get punched in the face.
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Old 05-09-2020, 07:29 PM   #10
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A lack of a long term plan leads to emotional decisions like these.

Congratulations, you now have to make at least one more correct decision or stay in cash the rest of your life.
Op here--I have had a long term plan for 40 years that I have closely followed until now.. But I have never seen an economic situation like we are in now and so decided that my long term plan was no longer working for me. Maybe it was an emotional decision but I think I will sleep much better tonight. Maybe I will stay cash/bonds/ CDs the rest of my life, that might be the best for me at my age (almost 70). But I will probably not. Some day there may be a vaccine or an antiviral and I will get back in the market. Or maybe some day our government will do a better job in managing things and I will get back into the market. We shall see.
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Old 05-09-2020, 07:33 PM   #11
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Originally Posted by harllee View Post
Op here--I have had a long term plan for 40 years that I have closely followed until now.. But I have never seen an economic situation like we are in now and so decided that my long term plan was no longer working for me. Maybe it was an emotional decision but I think I will sleep much better tonight. Maybe I will stay cash/bonds/ CDs the rest of my life, that might be the best for me at my age (almost 70). But I will probably not. Some day there may be a vaccine or an antiviral and I will get back in the market. Or maybe some day our government will do a better job in managing things and I will get back into the market. We shall see.
I wish you the best.

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Old 05-09-2020, 07:37 PM   #12
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At nearly 70, I believe I would do the same thing, and stay out.

At 55, I still need some gains.
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Old 05-09-2020, 07:41 PM   #13
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I think you made a reasonable decision given your age and the uncertainty of the market. My only concern is it might be better to wait until you see how the market is doing on Monday before making the final decision. It’s always good to sell on an up day if you can.
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Old 05-09-2020, 07:45 PM   #14
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There is some kind of freakish disconnect going on.
2019 peak earnings were 140 a share for s&p 500. Right?
So right now it’s trading at over 20x past peak earnings and a much bigger multiple for 2020 and almost certainly 2021 earnings.
If we are lucky we can get back to the previous level in 2022.

To me, it reeks of being overpriced, especially given the huge amount of uncertain stuff. Estimate are unemployment stays above 9% thru 2021 at this point (cbo).

I agree on equities for the long term. Always have (along with real estate).

But something is wrong, and when something is wrong like this it is time to dial down risk.
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Old 05-09-2020, 07:48 PM   #15
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There is some kind of freakish disconnect going on.
2019 peak earnings were 140 a share for s&p 500. Right?
So right now it’s trading at over 20x past peak earnings and a much bigger multiple for 2020 and almost certainly 2021 earnings.
If we are lucky we can get back to the previous level in 2022.

To me, it reeks of being overpriced, especially given the huge amount of uncertain stuff. Estimate are unemployment stays above 9% thru 2021 at this point (cbo).

I agree on equities for the long term. Always have (along with real estate).

But something is wrong, and when something is wrong like this it is time to dial down risk.
OP here--I agree. In my opinion something is really wrong with the stock market. It is like there is a disconnect with reality.
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Old 05-09-2020, 07:52 PM   #16
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For a nearly 70 year old, the risk should have been dialed back a while ago. Equities, in a small position, should have been the inflation hedge at best or the OP should have been in laddered bonds, CDs, etc.
To be forced to “go to cash” at this point is not a plan. Its an oh sh*t moment.

They may be fine, but this should be a lesson to others on here.
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Old 05-09-2020, 08:00 PM   #17
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For a nearly 70 year old, the risk should have been dialed back a while ago. Equities, in a small position, should have been the inflation hedge at best or the OP should have been in laddered bonds, CDs, etc.
To be forced to “go to cash” at this point is not a plan. Its an oh sh*t moment.

They may be fine, but this should be a lesson to others on here.
Op here--I was only 40% in equities so I had dialed it back a while ago. So it is only 40% of my portfolio that I sold today. I already have bonds, CDs etc for my other 60%. So not such a major change for me but still it is the first time I have gotten totally out of equities. Feels sort of freeing.
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Old 05-09-2020, 08:06 PM   #18
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Op here--I have had a long term plan for 40 years that I have closely followed until now.. But I have never seen an economic situation like we are in now and so decided that my long term plan was no longer working for me. Maybe it was an emotional decision but I think I will sleep much better tonight. Maybe I will stay cash/bonds/ CDs the rest of my life, that might be the best for me at my age (almost 70). But I will probably not. Some day there may be a vaccine or an antiviral and I will get back in the market. Or maybe some day our government will do a better job in managing things and I will get back into the market. We shall see.
I'm almost 77 with a handicapped and very ill wife. We are now at 11% equities and that maybe going to zero very soon. We have enough, and will take our chances with fixed income products even if they may have difficulty staying even with inflation (if anyone can figure out what inflation really is these days).
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Old 05-09-2020, 08:08 PM   #19
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Op here--I was only 40% in equities so I had dialed it back a while ago. So it is only 40% of my portfolio that I sold today. I already have bonds, CDs etc for my other 60%. So not such a major change for me but still it is the first time I have gotten totally out of equities. Feels sort of freeing.
Discovering your risk tolerance.
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Old 05-09-2020, 08:21 PM   #20
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Quote:
Originally Posted by COcheesehead View Post
A lack of a long term plan leads to emotional decisions like these.

You now have to make at least one more correct decision or stay in cash the rest of your life.

I see more and more evidence on this board of people who do not have a strategy first investment plan.

Based on prior year posts made it seem like almost everyone on here had one.

Maybe this year is the great shakeout.

Reminds me of the Mike Tyson quote. Everyone has a plan until they get punched in the face.
Boy, you sure do know everything.
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