October 10th Market Plunge

[Archman]

As of 10-19, I lost over $10000 in two weeks. But, only a paper loss. On Monday, 10-22, I bought more equities. Darn, I should have waited till today, 10-24.

 

[Free bird]

How could anyone not know a real correction was coming? I mean really? This fruit is mushy ripe. 10 years of up. Without so much as a hiccup. Punch bowl is getting watered down.

 

[Free bird]

Playing the bounce now.

 

[COcheesehead]

As of 10-19, I lost over $10000 in two weeks. But, only a paper loss. On Monday, 10-22, I bought more equities. Darn, I should have waited till today, 10-24.

Don't feel too bad, I am down over 6 figures. Now comes the time to think long term and not to panic.

 

[HadEnuff]

When we had the bump in late January-early February 2018 I did some soul searching and decided I was not comfortable with my AA. It wasn't predicated on a belief that the market was about to crash, but after assessing my needs, and what would happen if the market continued to climb, or stay put, or fall back, I found an AA that seemed to better suit my situation, and my personal risk tolerance.

i guess I hit the sweet spot, because this isn't bothering me.

Do you mind sharing what your AA was and how you have it invested now?

Sorry to take so long to reply, I wasn't paying attention..
Sure.
My AA had been 40-50-10 (stocks-bonds-cash), and I re-allocated something like 20-55-25.. after February there was a good run-up, so my allocation had moved a bit, and I didn't re-allocate, so what I gained in the stock portion has pretty much gone back to where it was when I re-allocated. The S&P is almost exactly where it was when I changed it.

I'm 65, and my budget allows me to live my life nicely at about 3% WR, so I just don't feel I need to be more exposed than I am. However, if there is a significant pull back, I will likely bump that stock back up to 40% or so.

 

[easysurfer]

As of 10-19, I lost over $10000 in two weeks. But, only a paper loss. On Monday, 10-22, I bought more equities. Darn, I should have waited till today, 10-24.

Yes. Just a paper loss until you sell.

I'm waiting for the big one. A nice, good correction to separate the true buy and hold investors vs the ones that call themselves buy and hold investors until the times get tough .

 

[tominboise]

I am down $130k (on paper) on our portfolio, but still up nicely if you look back at the 2 year or longer returns. I am about even for the year, actually, with respect to value. I have sold almost nothing this year and continue to buy as programmed.

If I had future vision and would have used it to move all my equities into bonds or cash a month ago, my tax bill this year would have eaten a big bunch of the value I would have locked in, so riding it out and making a few strategic moves is my plan at this point. I am about 60/30/10 allocated (stocks/bonds/cash & short term).

Oh, and i am still working.....My plan was to get out when I hit 60 or $3mil, whichever came first. I am at 58 and $2.6mil, so it's getting close.

 

[NW-Bound]

How could anyone not know a real correction was coming? I mean really? This fruit is mushy ripe. 10 years of up. Without so much as a hiccup. Punch bowl is getting watered down.

What ya mean 10 years of up?

On 5/18/2015, the S&P was at 2126. On 2/8/2016, the S&P was at 1865, a drop of 12% after 9 months of bouncing around.

I remember that in early 2016, the global economy slowed down such that the demand for oil dropped. Gasoline in the US was down to a bit more than $1/gal. It was so wrong when gasoline cost just a bit more than bottled water, and I am not talking about Perrier or Evian either.

 

[Free bird]

Your right we have along way to go on this correction. One 12% correction in 10 years is easily forgotten.

 

[NW-Bound]

No, not just one correction in 10 years. There were more than the one above.

On 4/19/2010, the S&P was at 1217. On 6/28/2010, it was at 1023, or 16% lower.

On 4/25/2011, the S&P was at 1364. On 8/15/2011, it was at 1124, or 17.6% lower.

On 3/26/2012, the S&P was 1408. On 5/29/2012, it was at 1278, or almost 10% lower.

And just earlier this year, the S&P was at 2873 on 1/26/2018. It was at 2581 on 2/8/2018, or 10% lower.

So, I counted at least 5 during this long bull run.

 

[Free bird]

So just another routine day at the office. Maybe it was those two bear markets in 7 years that conditioned me to think were over due for a 50%+ correction.

 

[NW-Bound]

Well, we have not had a real bear market yet, which is defined as a 20% decline.

Could this current drop develop into one? Yes, or no?

Place your bet now, heh heh heh...

 

[Free bird]

10 years without a proper finacial enema just seems wrong.

 

[NW-Bound]

You may get your wish yet.

I am hoping for a rebound, so I can sell some and reduce my stock AA. Threatened to do that often this year, but kept trying to hold out for a bit more gain. Greed.

 

[Free bird]

I mean it just serms like you should get punished for taking risk at some point. Isn't that the way it works?

 

[NW-Bound]

No pain no gain.

But how can anyone be faulted for trying to minimize the pain?

 

[Free bird]

Its not my wish. I don't think I said I wished carnage would happen. Were 6 months away from setting a new expansion record. So who knows.

 

[NW-Bound]

Maybe people subconsciously want it to happen, the bear market that is, and for the market to find a bottom then to slowly climb out of it.

Once they have resigned to a lower value of their stash and see it stabilized there, it frees their mind to resume what other activities they usually do, like planning vacation, or looking for something to blow some dough on, even if the amount blown is going to be less than what they used to do.

 

[Free bird]

I get uncomfortable when I'm comfortable.

 

[Free bird]

It just seems like were due for a wreck of some sort.

 

[Free bird]

If earnings keep going up the stock market will go up. Rates going up is probably whats eating Gilbert Grape. Have the rate police already overplayed their hand?

 

[NW-Bound]

The earnings probably will continue to go up, until we have a recession which nobody expects now.

However, the rate of increase of earnings will not be as high as it has been due to the corporate tax cut. That may be enough to cause the stock price to drop, or stay stagnant.

And the risk of a recession which we have not had for a while will be enough to cause people to sell too.

 

[NW-Bound]

There was another 12% correction Dec 2015 to Feb 2016 or thereabouts.

See my post #158.

PS. That one dragged on a lot longer than the other ones, which recovered in a couple of months. That caused some worrying that it could be a recession.

 

[audreyh1]

See my post #158.

Yeah found it already

 

[CaptTom]

Maybe people subconsciously want it to happen, the bear market that is, and for the market to find a bottom then to slowly climb out of it.

Funny you should mention that. That's how I've felt for a while now. Let's get it over with!