Is this rally for real?

[harley]

I am absolutely blown away by the gains in the market over the last few months. I know the market is irrational short term, but I can't imagine how people are assuming things are back on track. Insider selling, high unemployment, an incredibly weak dollar, and I even saw that there has been a drop in the personal saving rate! I try not to be a DMT, but it's awfully hard to be heading to the next DCA date while suspecting we're in for a significant drop. Damn TV anyway!

 

[simple girl]

We don't want to be DMTer's either, but we want to invest in a fund that has a $10K min investment. We've been sitting with it, ready to buy, for several weeks now. I'm torn between enjoying seeing our investments go up vs. wanting the market to dip (I know, hush) so we feel better about dropping in our $10K.

Typical investor I guess <sigh>. Shouldn't try to time the market!

 

[mf15]

Don't worry Mr. Market likes to inflict maximum pain.
It will suck in all who will go, then at some point the boy's will drop it like a rock.

Old Mike

 

[audreyh1]

Well as of today my retirement portfolio is only down 13.7% from its peak value in Oct 2007, whereas in March it was down 40% from peak. That seems like a pretty amazing recovery!

I was just thinking today that when I get to being only 10% down, I'm going to really celebrate, because that peak value was really a peak!

There!!! I just jinxed the rally for whoever is trying to get back in on a pull-back!

Audrey

 

[W2R]

In early 2008, I made a retirement plan based on what I thought would be the value of my portfolio. In late 2008, I revised that downwards as it looked like I would have no more than half. Now, it is back to essentially what I had originally planned. What a roller coaster we have been on!

I am glad (now) that we have experienced the recession, because I saw what it did to my portfolio and what my reactions were. I was able to hang tight and knowing that about myself is a huge relief.

If it happens again, I will just hang on for dear life like last time and hopefully make it through.

 

[FIREd]

There!!! I just jinxed the rally for whoever is trying to get back in on a pull-back!

Audrey

Thank goodness, I rebalanced this afternoon... (It's true...)

As for my own portfolio, my XIRR for the period spanning 10/9/2007-09/16/2009 is now positive (+2.3%) and my long term portfolio return has crept back up to an average of 5.5% annual since 01/2000 (when we started investing). It's still under the 8% average I used in my planning, but it sure beats the negative average annual return I had just a few months ago.

 

[Cool_Sparrow]

Thank goodness, I rebalanced this afternoon... (It's true...)

As for my own portfolio, my XIRR for the period spanning 10/9/2007-09/16/2009 is now positive (+2.3%) and my long term portfolio return has crept back up to an average of 5.5% annual since 01/2000 (when we started investing). It's still under the 8% average I used in my planning, but it sure beats the negative average annual return I had just a few months ago.

FIREdreamer, How do you calculated XIRR for such odd dates (fractional years)? Vanguard does not allow me to do it. Is there an easier method than plugging all cash flows into Excel and than using XIRR function? There are far too many transactions for me to do that.

 

[FIREd]

FIREdreamer, How do you calculated XIRR for such odd dates (fractional years)? Vanguard does not allow me to do it. Is there an easier method than plugging all cash flows into Excel and than using XIRR function? There are far too many transactions for me to do that.

Unfortunately, XIRR computation requires plugging in all cash flow transactions either in Excel or in a piece of software like Quicken. I am not aware of any alternative. When computing XIRR, it does not matter whether you are using whole years or fractional years, as long as you are looking at a period longer than one year. The XIRR function returns an average annual return. There is a simple formula that can help you convert the average annual return into a cumulative return which comes in handy when using fractional years.

 

[Gotadimple]

While W2R has just been counting the $$$, I will say in her place: Wheeee!!!

My investments are now worth more than I paid for them. It's taken an entire year, but I look very much like I did last September, before the big 'trip.'

-- Rita

 

[Meadbh]

Based on the euphoria index of the last page or so, the market will probably crash again next week. Keep a lid on it, everybody!

 

[W2R]

While W2R has just been counting the $$$, I will say in her place: Wheeee!!!

My investments are now worth more than I paid for them. It's taken an entire year, but I look very much like I did last September, before the big 'trip.'

-- Rita

100.3% here, not counting my contributions.

It is not Dow 14,000+ again, but still my soon-to-be ER has been snatched from the jaws of the bear, it seems. (Well, I thought that sounded good but really I would have retired anyway.)

My planned SWR comes to a much higher amount than it would have in March, but that is just an artifact of the recovery. Not too worried about it, though. It was kind of "by guess and by golly" in the first place.

 

[Bestwifeever]

100.3% here, not counting my contributions.

It is not Dow 14,000+ again, but still my soon-to-be ER has been snatched from the jaws of the bear, it seems. (Well, I thought that sounded good but really I would have retired anyway.)

My planned SWR comes to a much higher amount than it would have in March, but that is just an artifact of the recovery. Not too worried about it, though. It was kind of "by guess and by golly" in the first place.

Would you actually increase the amount of $$ you withdraw each year, or is your planned SWR going to be the same amount and hence a smaller percentage number? I'm laughing thinking of W2R trying to spend extra $$ to stay at the same SWR percentage number--new Wii games, perhaps landscaping, 14,400 count designer bed linens, refinishing the basement of that house in Mo. you're dreaming of, or just a Starbucks latte three times a day!

 

[W2R]

Would you actually increase the amount of $$ you withdraw each year, or is your planned SWR going to be the same amount and hence a smaller percentage number? I'm laughing thinking of W2R trying to spend extra $$ to stay at the same SWR percentage number--new Wii games, perhaps landscaping, 14,400 count designer bed linens, refinishing the basement of that house in Mo. you're dreaming of, or just a Starbucks latte three times a day!

That is exactly what I was thinking/wondering about! I'm not sure I can spend more. I had planned an SWR around 3.5% when the market was down. That would be more like 2.5% now, which is so low as to be ridiculous IMO. So, I am looking at 3% which would still give me a whole lot more than I am spending right now.

I already buy any Wii game that appeals to me. I just got My Sims Kingdom for $20 and it is fun. Still, I think that is the only Wii game I have bought this year, since I like the ones I have.

You know - - I have ONE set of bed linens that was the cheapest Wally World could provide. You know the type - - it takes Arnold Schwarzeneggar to pull that last corner of the bottom sheet on. I could at least upgrade them and buy two sets of high end sheets.

No Starbucks latte for me, though! I was really disappointed last Christmas when I got a "Secret Santa" starbucks card and tried one for the first time in 5-10 years. I think their Vente has shrunk, and I think I can make better coffee at home. Hey there's an idea! I could buy an expresso machine. Oh but wait - - I am already drinking half decaf and expresso would send me through the roof.

I don't have a basement yet, but I'm sure there will be some renovating and landscape work going on once we get there.

 

[Zathras]

Based on the euphoria index of the last page or so, the market will probably crash again next week. Keep a lid on it, everybody!

I would be surprised if we don't see a pull back soon.
However, as far as predictions of a crash, I think we need to wait for the S&P 740 prediction before we can make any more crash predictions.
As I recall, that one was a prediction of 740 sometime before the end of October

 

[FUEGO]

I would be surprised if we don't see a pull back soon.
However, as far as predictions of a crash, I think we need to wait for the S&P 740 prediction before we can make any more crash predictions.
As I recall, that one was a prediction of 740 sometime before the end of October

I'm eagerly awaiting that individual's fourth prediction. Maybe it will be more accurate than the last three. Or maybe we will still see 740 by October's end. Who knows?

As far as gut instincts, I would figure we could see a correction at some point since we have been on an upward tear for a while. This thing can't go to the sky forever.

 

[FUEGO]

I'm eagerly awaiting that individual's fourth prediction. Maybe it will be more accurate than the last three. Or maybe we will still see 740 by October's end. Who knows?

As far as gut instincts, I would figure we could see a correction at some point since we have been on an upward tear for a while. This thing can't go to the sky forever.

Guys, I just wanted to point out here that I was right back in September 2009. I called it. A sharp sudden correction. SP500 was up to 1150 and now it is below 1090. Stick around for some more hot stock tips.

Just ignore the fact that we are still up 2% from September 21 when I made the last post!

 

[TheSweetLife]

I'm eagerly awaiting that individual's fourth prediction. Maybe it will be more accurate than the last three. Or maybe we will still see 740 by October's end. Who knows?

As far as gut instincts, I would figure we could see a correction at some point since we have been on an upward tear for a while. This thing can't go to the sky forever.

Since you've been eagerly awaiting my 4th prediction (geez, you're actually keeping track), I don't want to let you down. My 740 never came to pass in the last half of 2009, but I believe this level will be reached in 2010. Actually, I believe 2010 will be pretty dire.

I think I've joked about looking at my crystal ball. I, obviously, do not claim to be an expert. However, based on the current economic conditions, I believe we will retest the previous 666 lows sometime this year. I only make these predictions for fun. Running Man stated in another thread that he's positioned himself with some long-term puts. I continue to be positioned with an inverse ETF for many of the same reasons stated so well by Running Man.

 

[REWahoo]

0 for 3 and still swinging for the basement.

I do admire your persistence...

 

[FUEGO]

0 for 3 and still swinging for the basement.

I do admire your persistence...

Swing batter batter swing.

Even a stopped clock is right 2 times a day (assuming no travel crossing time zones).

Here's some predictions:

Elvis will be found. He and Tupak will be found to have been living as platonic friends next to a wedding chapel in Vegas not far from where Tupak was "killed".

Man will land on the moon. For the first time.

 

[FUEGO]

Since you've been eagerly awaiting my 4th prediction (geez, you're actually keeping track), I don't want to let you down. My 740 never came to pass in the last half of 2009, but I believe this level will be reached in 2010. Actually, I believe 2010 will be pretty dire.

I think I've joked about looking at my crystal ball. I, obviously, do not claim to be an expert. However, based on the current economic conditions, I believe we will retest the previous 666 lows sometime this year. I only make these predictions for fun. Running Man stated in another thread that he's positioned himself with some long-term puts. I continue to be positioned with an inverse ETF for many of the same reasons stated so well by Running Man.

Ok, I've set a calendar reminder to respond to this thread on Jan 1, 2011. We'll see if the SP500 hits 666 before Jan 1, 2011. See you in 11 months!

 

[ziggy29]

Well, I'll be honest here -- when the Dow hit 10,000, history and sentiment suggested that it would be a good time to implement my planned "safer" rebalanced AA.

Before it all melted down I was at around 72/28 with a 70/30 target, and at the bottom last March it was more like 55/45.

Between a slight rebalance into equities in Feb. 2009 and the recovery, by late 2009 I was back to about 67/33. A little skittish about Dow 10000 (knowing how much trouble the Dow historically has keeping and holding a new digit ever since it went over 100 in the 1920s), I decided to take it down to just about 60/40. I intend for that to be my long-term allocation for a while; when I was fortunate enough to recover 2/3 of what I lost in the collapse I decided I didn't want to take the risk level of 70/30 any more.

No idea where we're headed from here, but in the shorter term the bias has clearly shifted to negative, being that most days have been down and more rallies have been met with selloffs. Who really knows, though...

 

[haha]

Since you've been eagerly awaiting my 4th prediction (geez, you're actually keeping track), I don't want to let you down. My 740 never came to pass in the last half of 2009, but I believe this level will be reached in 2010. Actually, I believe 2010 will be pretty dire.

Don't take the puishment to heart, SweetLife, it's just the way it is around here. There is no way to value equities, and retired or not, you should own a good slug of these issues of indeterminate value at all times.

Of course there are very careful books written about why this is very likely not true, especially for retired people or people nearing retirement. But these books are not on this boards approved reading list.

Ha

 

[FUEGO]

Don't take the puishment to heart, SweetLife, it's just the way it is around here. There is no way to value equities, and retired or not, you should own a good slug of these issues of indeterminate value at all times.

To be fair, TheSweetLife is making some incredible claims here, such as at least a 38% decline in the SP 500 in the next 11 months. Justification = vague statements like "based on the current economic conditions".

I mean TSL is batting 0 for 3. Then makes a claim predicting 38% declines. Incredible claims require incredible proof.

 

[ziggy29]

To be fair, TheSweetLife is making some incredible claims here, such as at least a 38% decline in the SP 500 in the next 11 months. Justification = vague statements like "based on the current economic conditions".

Well, all I'll say is that a few folks here were virtually pilloried for saying the same kind of things in the summer and fall of 2007 -- and the S&P went down by a lot *more* than 38%.

History says that "this time it's different" is *usually* wrong, but not always. Tread carefully when bear-baiting.

 

[haha]

To be fair, TheSweetLife is making some incredible claims here, such as at least a 38% decline in the SP 500 in the next 11 months.

True, he or she is out on very small limb and will likely fall to the the ground.

Responsible experts like, Shiller, Smithers or Hussman admit that any sort of precise predicting, as to timing or extent of moves is impossible. (Though Shiller and Smithers had pretty good timing with their strongly bearish books published in 2000. I don't know about Hussman at that time.)

What I remember is that some people who in fall of 2007 expressed nervousness and bearishness (unfortunately I was not one of these bears) got a lot of rotten tomatoes thrown at them. Yet they were correct, and even if they had not been, bearish opinions serve as a check to the natural bullishness that many of us feel.

If one is retired, and has no good sized entitlements, he is on a high wire without a net. Smithers feels that there have only been 2 times during the past century when it was clear that any stock market participant should consider selling- late 1999, and 1929. He also points out that this is only true with a long investment horizon. That is, no withdrawals for 20 or more years.

He feels that retirees need to be much quicker to pull the sell trigger when the market reaches even lesser levels of overvaluation.

I do realize that I have used a naughty word here, "overvaluation". I hope people will not be offended by this lapse from my otherwise perfectly PC record.

Ha