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

[GenXguy]

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)?

So, all you have to do is invest when the market is at its low point. But how do you know you're at that point at the time??

 

[38Chevy454]

My opinion is that the market is still going to drop more. Market has not hit the capitulation point yet. That will be close to the bottom.

My recommendation is stay in cash until the capitulation occurs. Then as they say in Vegas, go all in.

 

[Dtail]

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.

And thus 3 of the above time periods were the 4% WR failures in Firecalc.

 

[jollystomper]

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 do not disagree with this, it is tough to predict. I do take a different view for my situation, that does not apply to everyone: I do not need to market to return all the way to the 2022 high. At that high my gains were still paper gains. As long as the market keeps me at a level that supports my SWR even if my investments decline, any gains above that are gravy. This is not the view for everyone. It depends on when you retired, how the market performed before this current downturn, and if you did anything to leverage what you had at the market highs that now puts you in trouble.

So while I would be jumping with joy when that past high is reached, I can be patient . I will quote Koolau again, YMMV .

 

[razztazz]

?

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

Not at all. Sorry I came across that way

 

[COcheesehead]

I follow the Traders Almanac. They are actually pretty good with stats over the history of the market and overlay them on top of things like presidential cycles, election years, etc. They issued a market sell in early April, which was a pretty decent call. They are now sticking their neck out with calling a bottom late October of this year, about 11% below where we are today.

 

[aja8888]

I follow the Traders Almanac. They are actually pretty good with stats over the history of the market and overlay them on top of things like presidential cycles, election years, etc. They issued a market sell in early April, which was a pretty decent call. They are now sticking their neck out with calling a bottom late October of this year, about 11% below where we are today.

Yes, that would be just before the mid-term elections! Perfect timing!

 

[copyright1997reloaded]

I wouldn't be surprised to see a rally tomorrow, I wouldn't be surprised to see more down tomorrow given the long weekend and fear of holding positions over the weekend. We are overdue for another bounce attempt but who knows.

A bit longer term, I'm thinking that Mr. Market wants to test the pre-Covid breakout level around the SPX 3350. Not long ago that seemed far far away, but now that's only another 9.5% down.

That level will wipe out all of the gains from before the Rona to now and would represent a 43% drop peak to trough. In a weird way it would make sense to "undo" the bust/boom stim from the pandemic response.

I am buying and selling just about every day, but would likely leg in some decent coin if we go that far down. Right now I am about 50% equities, 43% cash, 7% PM/commodities.

 

[plex]

I'll bite. I've gone a step further than just sitting out, I pulled all my non-taxable gains in January and invested them in inverse funds of the sectors I expected to get hit particularly hard. Honestly don't recommend it for people 50+ who may not have another optimal opening to go back to the grind if they have the worst case scenario happen.

In 2008 I was able to get the start and end dates of that recession correct within a month, the problem was I only had a fairly small Roth, which I have grown since then by about 5x with simple indexing. I think I got the start date of this one correct as well. As for the end date, it will be sometime fairly soon after unemployment is over 8% and housing prices across the country start to tumble heavily, until then, not all the macroeconomic shoes will have dropped, and expecting the market to truly bounce back, or inflation to go down to something normal until then, is simply way too optimistic. If I had to guess a time, it will be in early/mid 2023, when the baseline effect takes hold, and the dominos that inevitably must fall, will have fallen enough.

 

[milford]

The market is going to keep dropping as long as inflation is not under control, the Fed is hawkish, and energy prices are still high. However, I am still DCA in, but I am only tiptoeing in and will conserve most of my dry powder until I see some reversal of the above conditions.

 

[W2R]

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

+1

 

[Out of Steam]

I've been keeping a fairly low stock allocation since 2020, but don't want that percentage to fall further. Plan to do a second rebalancing (a small buy of index funds) in the next few days.

 

[purplesky]

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.

The market is on sale now so if you have some powder you should use it.

I bought 10 shares of VTI at $182 today and I will admit I am a market timer. lol

You are also trying to time the market. No big deal. We are in a Bear market.

I predict VTI will go to $150 or lower during the recession but that's using my market timing crystal ball.

 

[Koolau]

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

This^^^^

I did do some selling at the first of the year for RMD cash. YMMV

 

[mistermike40]

Not at all. Sorry I came across that way

No worries, it's all good

 

[mistermike40]

So, all you have to do is invest when the market is at its low point. But how do you know you're at that point at the time??

First off, I'm not a financial expert But it stands to reason if you buy when the market is low (not necessarily it's lowest point), and sell when it is higher that when you bought it (not necessarily it's highest point), you'll do ok.

 

[Running_Man]

For those waiting to get into the market, continue to wait. 90% of all stocks in the S&P500 have fallen in 5 of the last 7 days. This has never happened before, ever. This is an unprecented amount of selling yet the market has not really even declined. I would think somewhere between 1500 and 2000 on the S&P500 would be a good place to start if you are out. If you are complelled to get in divide the amount of money you want to put in by 730 and put that much in every day for the next two years.

 

[COcheesehead]

For those waiting to get into the market, continue to wait. 90% of all stocks in the S&P500 have fallen in 5 of the last 7 days. This has never happened before, ever. This is an unprecented amount of selling yet the market has not really even declined. I would think somewhere between 1500 and 2000 on the S&P500 would be a good place to start if you are out. If you are complelled to get in divide the amount of money you want to put in by 730 and put that much in every day for the next two years.

That would be a 60% overall drop. 40% more than where we are at right now. Average bear is 35% down. A recession takes 30% out of the market on average. If you wait for those numbers you quoted, you may miss a whole lot.

 

[purplesky]

For those waiting to get into the market, continue to wait. 90% of all stocks in the S&P500 have fallen in 5 of the last 7 days. This has never happened before, ever. This is an unprecented amount of selling yet the market has not really even declined. I would think somewhere between 1500 and 2000 on the S&P500 would be a good place to start if you are out. If you are complelled to get in divide the amount of money you want to put in by 730 and put that much in every day for the next two years.

So you are not buying low now?

 

[wrigley]

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

Same here!

Mike

 

[audreyh1]

For those waiting to get back in: I’d say it’s too soon as the market is likely to continue its extreme volatility and it seems just as likely that you’d be scared back out again but at a lower price…..

I can’t handle the get back in again waiting, so I stick close to my AA.

In all seriousness, if you have a target AA that you are SURE you are comfortable with, the only way I can think to get back in would be to to average back in gradually over the next year - in monthly or quarterly. It still won’t feel easy, and will probably be nerve wracking.

 

[latexman]

I noticed my overall AA was 5% off it's 60/40 target yesterday morning. Between my IRA and 401k, the 401k was off the most. So, to start setting things back to target, I sold some of my longest duration bond fund (VIPIX / -8% YTD) and bought more of a mid-cap stock fund (FSMAX / -27%) I have. Today, the 401k is back to 60/40, and I'll work on the IRA.

 

[GenXguy]

For those waiting to get into the market, continue to wait. 90% of all stocks in the S&P500 have fallen in 5 of the last 7 days. This has never happened before, ever. This is an unprecented amount of selling yet the market has not really even declined. I would think somewhere between 1500 and 2000 on the S&P500 would be a good place to start if you are out. If you are complelled to get in divide the amount of money you want to put in by 730 and put that much in every day for the next two years.

Wow, you're really expecting a huge drop. I've already bought when the S&P 500 was 15% and 20% off the highs. But I still have more to move and am expecting it to go lower.

 

[pacergal]

mistermike40--
You say you don't need your money now and you are sleeping better since moving to 10/90. Why would you want to change that? What was the reason why you changed in the first place?
Plan a comfortable Asset Allocation and rebalance yearly.

 

[Magus]

For those waiting to get into the market, continue to wait. 90% of all stocks in the S&P500 have fallen in 5 of the last 7 days. This has never happened before, ever. This is an unprecented amount of selling yet the market has not really even declined. I would think somewhere between 1500 and 2000 on the S&P500 would be a good place to start if you are out. If you are complelled to get in divide the amount of money you want to put in by 730 and put that much in every day for the next two years.

You expect a ~65% decline then in total on the S&P 500, which would place the Nasdaq and Russell 2k down 80-85% from highs? Seems highly unlikely. You'd be looking at a dividend yield of 4% in the S&P 500 at that point and they would be trading at roughly 7x earnings. Would be a once in a generational buying opportunity - would be the second worst decline in history behind the great depression if that happens - but I wouldn't hold my breath waiting for those price points.