For those who are waiting to get back into the market...

[mistermike40]

... how much longer are you planning to wait? Until after the midterms, or Ukraine is resolved, or the supply chain is corrected?

Here's my take: eventually, the SP500 will go back to its January 2022 high. It might be later this year, or next year, or 2024/2025... but it will get there. And looking at where the SP500 is right now, that will represent a 32% net gain (from today).

I realize the market will almost definitely go down further, but you're never going to time it at its absolute lowest... and I'll take a 32% ROI any day.

Any thoughts on this? I'm not going to pull the trigger today but I think I'm getting pretty close.

 

[stepford]

Not really planning to get back in cause I never got out.

 

[npage]

What's your timeline need for the money and end goal is what I would ask myself? I pulled the plug a year ago, wife still working. Watching what is happening has been very stressful despite not needing portfolio for withdrawals.

I am slowly DCA'ing extra cash now but it hurts to keep watching even those go down given how brutal the rest is down. Of course in hindsight would have pulled it all out 12/31/2022 and probably average 10% back in a month for next 10 months. But that is fantasy land.

 

[daylatedollarshort]

I will probably start dollar cost averaging stocks at a 40% drop.

 

[Helen]

We are 5 years away from 70. We will start collecting SS and will need to pull very little from stocks at that point. I am going to put some of my more conservative investments into stock index ETFs.

I keep looking at the chart of the stock market and see the rapid rise over the last decade or so. Now the punchbowl has been taken away and it looks like we have barely touched the froth.

I am going to wait a bit longer before I start moving money in.

 

[Car-Guy]

So if it takes the SP two or even three years to get back to it's recent high, and there is 8 to 10% inflation for each year until it gets there, is it really back?


Asking for a friend. NNTR

 

[NW-Bound]

Not really planning to get back in cause I never got out.

+1

I watch the market to decide when to buy more, or to shift to different sectors.

 

[Animorph]

Monday I shifted from 75% stocks/ 25% bonds to 80%/20% since the market was down over 20%. I'll shift another 5 percentage points at 25%, 30%, 35%, and 40% down if that becomes a possibility. I'll return to my normal 75/25 after a full recovery.

I've done something similar with individual stocks, though looking for something more like 50% dips.

This lets you capture a little bit of the dip without knowing the timing or depth of the dip. I don't go below 75% stocks, so I'm never sitting out and waiting to return.

 

[HarryHawk]

... ....

I realize the market will almost definitely go down further, but you're never going to time it at its absolute lowest... and I'll take a 32% ROI any day.

Any thoughts on this? I'm not going to pull the trigger today but I think I'm getting pretty close.

If you feel that the market will almost definitely go down further, why not wait at least until you feel the market may go up or it may go down.

 

[NW-Bound]

Monday I shifted from 75% stocks/ 25% bonds to 80%/20% since the market was down over 20%. I'll shift another 5 percentage points at 25%, 30%, 35%, and 40% down if that becomes a possibility. I'll return to my normal 75/25 after a full recovery.

I've done something similar with individual stocks, though looking for something more like 50% dips.

This lets you capture a little bit of the dip without knowing the timing or depth of the dip. I don't go below 75% stocks, so I'm never sitting out and waiting to return.

While I do not do Tactical Allocation in a rigid manner like you do, I agree with the approach.

There's never a need to go all in or all out. You only do that when you are cockily sure that the market goes up or goes down immediately from here.

It's more about probabilities. The more stocks go down, the higher the chance they have bottomed out. And if they don't go down as much as 50% and bounce back before they get there, it's OK with me too. I am never out of the market.

 

[Earl E Retyre]

I have been buying more ETF and whenever the market drops 4% from my previous buy, I buy more. Once the market is 30% below its high, I will increase my purchase amount. Once it is 40% from its high, I will go all in with my remaining dry powder. If it never reaches 40% below the high, I am ok with that too.

 

[matjung]

Nobody is ringing the bell - go in
When I am looking at some European stock market indices I like to wait for a real crash. Like going down 50% compared with all time high.
Some stocks managed to drop by 50% or more. The indices did not crash down yet.
Just by thinking at Ukraine, rising interest rates, rising energy costs - I expect a proper crash to happen.
For the moment I am going long in Puts while watching stocks going down.
The economies itself seem to do okay. I did not see many profit warnings yet.

 

[aja8888]

So if it takes the SP two or even three years to get back to it's recent high, and there is 8 to 10% inflation for each year until it gets there, is it really back?


Asking for a friend. NNTR

Realize unless you or us, in general, are not part of the 0.01% and/or the billionaire ($,$$$,$$$,$$$,$$$) club, we are screwed.

And just be glad it's only going to take a two or three years to get back.....or are we going to end up like Japan did (actually still is)?

 

[Magus]

Realize unless you or us, in general, are not part of the 0.01% and/or the billionaire ($,$$$,$$$,$$$,$$$) club, we are screwed.

And just be glad it's only going to take a two or three years to get back.....or are we going to end up like Japan did (actually still is)?

Yeah I’ve been worried about a Japan scenario here for a long time, less so here than in 2008-09 since the issue is inflation and japans was deflation although if the fed goes too far…

 

[Unpaintedhuffhines]

I’ve never been into timing the market. It’s really hard to be right once, but timing means you have to be right twice. Hard to do that.

 

[mistermike40]

I'm not into trying to time the market, at all. However things came to a head in January, decided to go 10/90 AA. Right now I don't need to dip into my nest egg for anything, but with inflation who knows what the future holds? I know I slept better at night with that AA.

Now, I see it as an opportunity. Again I'm not trying to "time" the market... I have no idea how low it will go, though I don't see it decreasing 50% from where it is now (but I doubt Japan saw their crash either). I'll be happy with these (eventual) gains.

And no, I haven't moved anything yet but might tomorrow. We'll see.

 

[Chuckanut]

In my mind the fall to about 20% is just a bigger than usual market correction.
Drops below that get interesting. I will not bet my retirement on being right, but I may nibble a bit at -25% and lower.

This will be doing the DCA dance with the Bear. Only the Bear can do a lot worse than stepping you your toes.

 

[razztazz]

Whenever I've been out I didn't wait for this or that event as a "go" signal. If it's the stock market you're concerned with, the stock market will give you whatever signal you need.

What makes you think it will see the Jan 2022 high by 2025? How long did it take to see the 1929 high? or the 1973 high? or the 2000/2008 high?

What's the big deal with or the necessity to buy at the absolute bottom anyway? Nobody needs to do that. You just to get a better deal not the best conceivable deal.
I see nothing out there or on the horizon that would make me want to own stocks today. But I know I will not just wake up some day and say: What? the SP500 is at 5760? How did that happen?

If you feel that the market will almost definitely go down further, why not wait at least until you feel the market may go up or it may go down.

This

 

[Dawg52]

When the Dow gets back to 6,469.95 I’m all in.

 

[GenXguy]

I moved 20% out of my work retirement stable value fund (fixed interest) into index funds, first 10% when the S&P was down about 15% and then another 10% when it was down about 21%. The fixed interest fund had been paying 3%, which was above inflation, which is why I had quite a bit in there, but they lowered it to 1.36% over a year ago, and inflation went up as well, so I'm trying to migrate funds back to stocks on these dips.

 

[jollystomper]

I am thinking about putting more into the market now, but it would be for my heirs.

 

[Chuckanut]

As far as returning to the market's 2022 high are we talking in real terms?

If so keep this in mind, after the Bear market of the 70s and 80s and the double digit inflation that also marred those years, it took well over a decade for the US market to break even in real terms.

The above is one point from history. It is not a prediction.

 

[mistermike40]

Whenever I've been out I didn't wait for this or that event as a "go" signal. If it's the stock market you're concerned with, the stock market will give you whatever signal you need.

What makes you think it will see the Jan 2022 high by 2025? How long did it take to see the 1929 high? or the 1973 high? or the 2000/2008 high?

What's the big deal with or the necessity to buy at the absolute bottom anyway? Nobody needs to do that. You just to get a better deal not the best conceivable deal.
I see nothing out there or on the horizon that would make me want to own stocks today. But I know I will not just wake up some day and say: What? the SP500 is at 5760? How did that happen?


This

?

Wow, you seem pretty worked up about my post! Sorry if it upset you in some way.

First, I *don't* know if it will go back to its previous high by 2025... I was using that as an example, trying to illustrate I'm willing to wait a long time. I still see it as an opportunity now. And, even if it only recovers a portion of its loss, that still would result in a gain for me... right?

Second, there is no "necessity to buy at the absolute bottom". I mentioned this a couple times already.

Third, you referenced another post... about why I'm not waiting if I think the market is going to decline further. I answered that as well.

To recap... I'm not trying to time the market, or get in on the absolute ground floor. I got out for a bit because I wasn't comfortable with what I was seeing, and now I see a chance to make a profit (even though my original intent was simply asset protection).

 

[mistermike40]

As far as returning to the market's 2022 high are we talking in real terms?

If so keep this in mind, after the Bear market of the 70s and 80s and the double digit inflation that also marred those years, it took well over a decade for the US market to break even in real terms.

The above is one point from history. It is not a prediction.

I'm not sure I get your point, or maybe you don't get mine? Let me ask a question...

What if you had some cash in 1974/75 (or whenever the early 70's crash was at a low point). Wouldn't you have been better off to invest your money at that point, even if the market wouldn't fully recover for well over a decade later (as opposed to letting it sit for that same decade as the market increased)?

 

[GenXguy]

As far as returning to the market's 2022 high are we talking in real terms?

If so keep this in mind, after the Bear market of the 70s and 80s and the double digit inflation that also marred those years, it took well over a decade for the US market to break even in real terms.

The above is one point from history. It is not a prediction.

Here are some past time frames where it took well over a decade for the S&P 500 to recover when factoring in inflation and dividends reinvested.

1999-2012 S&P 500 had a negative real return (inflation adjusted with dividends) over 13 years

Jan 1966 - Jan 1982, -1.4% per year or -20% cumulative, with dividends, inflation adjusted. 16 years with negative real return.

Sept 1929 - Sept 1947, -.1% per year or -2% cumulative, with dividends, inflation adjusted. 18 years with negative real return.

Jan 1906 - Jan 1921, -1.9% per year or -25% cumulative, with dividends, inflation adjusted. 15 years with negative real return.