marko
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Mar 16, 2011
- Messages
- 8,513
(hey, just "buy and hold - that'll work out GREAAAAAT!" -
Has worked for me for the past 45 years. YMMV
(hey, just "buy and hold - that'll work out GREAAAAAT!" -
It is not clear to me that the price on the last trading day of 2021 is relevant to your decision now. Stocks don't care what you paid for them. At this point, the decision is whether you think it will drop further or not. If you are really convinced we'll see a 50% drop, then sell now and buy back when we do.
To me the idea that we're about to see anything near a 50% collapse is unrealistic.
Has worked for me for the past 45 years. YMMV
I have never come out ahead by trying to time the market.
Can anyone save us from the impending death cross of the 50 and 200 day moving averages?
https://www.investopedia.com/terms/d/deathcross.asp
I don't know if any of you go grocery shopping. I just got back from a shopping trip. I would say about a third of the shelves/freezer space was empty. No frozen french fries, no coffee creamer, no frozen chicken, etc, etc. Heard on the radio that the price of fertilizer is up 300%.
It is hard for me to convince myself that our economy is healthy. I have never seen anything like this in my 70 years on earth. It seems to me that there is some probability that stuff is going to get real. Hope I'm wrong, I am old and crotchety after all.
Me either, but there's a difference in timing vs prudent risk management.
For instance - I "should" have sold a good chunk of equities last year when the S&P was in the 4,700s. Locked in some very good gains that happened across two pretty abnormal years in the market. But, nope! Got greedy. Fell prey to the "just buy and hold forever" mindset. Big mistake on my part.
Going forward, I intend to be a lot more active in capturing gains when it's obvious that things are over-inflated (like it was mid-late last year..super obvious), and buying when it's obvious panic has caused prices to drop way more than is reasonably justified.
With headlines screaming about worse inflation in 40 years, impending war, rising energy prices, inevitable recession etc... I look back at how something like Wellington performed the last time these very same things were headlines.
But I'm sure this time it's different, right?
I will likely sell what I need to fund 2023 at the end of this year regardless of the state of the market. If the market is down I might be able to sell more than I need to fund 2023 while not exceeding my desired MAGI (my cost basis is very low so proceeds are gains at this point); if I can do so, I will sell even more and step up the basis to max out MAGI.
If the market seriously CRASHES right before I plan to sell, I might use my HELOC to float my expenses month to month in 2023 until it came back some (would still harvest the "losses" which would actually be a step up in basis with a capital gain shown so no wash-sale concerns and immediately reinvest so I have no time out of the market until recovery).
Or I'd go back to work.... HA just kidding!
Lastly, while I'm not an expert on the level of computerized trading and use of TA way back in 73 and 74, I did work in IT my entire career and can pretty confidently say markets were not trading on TA and algorithms to any great extent in that timeframe as they are now.
Aside from that...
Interesting that to this investor your description of your prudent risk management strategy sounds exactly like my definition of market timing.
We'd like to replace my wife's car, and I noticed today that our nearest Honda dealer is starting to have inventory of Civics and Accords again.The local car dealerships finally have cars on their lots as they are slowly able to build back up inventory..a few cars at a time.
This should be an interesting thread to re-visit 6, 12 and 24 months from now.
For me, while I always want to maximize my portfolio's value, my main interest at this point in life is what dividends I'm paid. My portfolio value goes up and down but as I've successfully lived on dividends for the past 20 years (and have maybe 20 years at best to go) I'll leave to the day-traders on how the market handles volatility .
Whew. Closed literally a couple of dollars above the critically important level of January lows. We live to see another day before things risk going totally kablooey.
What makes the January lows critically important?
As I understand it (not being a TA expert by any means myself), a failure of the Jan lows opens up 4,222 or so as the next critical test level before we head to high 3,600 - 3,700s.
Worse, 4,222 is roughly the bottom line of the rightmost shoulder on a Head and Shoulders pattern, which short of a "death cross" is one of the worst possible sell signals there is...