Buying the dip or….

Great chart corn18.

Its too easy for people to forget we have had multiple 20% pullbacks in the last few years and its a good illustration of how quickly they were over (which I believe is by the vast amount of machine trading)...once the chart says to buy, they just all buy and the dip is over in an instant.
 
Personally I just start looking for tax loss opportunities when losses from peak approach 20%. Doesn’t happen very often, especially not if there has been a big run up ahead of it.

Oh yeah, and check if rebalancing is needed.
 
Last edited:
Just for completeness, here is my chart of SP500 drawdowns through several recessions. It uses monthly data so might be slightly optimistic. You can see the 1987 crash was down -30% and there was no recession though there were plenty of stories comparing it the 1930's back then. Pretty scary times.

If you are going to buckle up for the ride just be prepared for anything (if that is possible).


image3.jpg
 
Not the "market", but the Russell 2000 is close to 20% down. Just over 19% from the high.
 
I've been nibbling a bit as well. More down days, and I'll start taking big bites. I'd like to increase my equity allocation, and reduce cash.
 
Phroig said:
I've been nibbling a bit as well. More down days, and I'll start taking big bites. I'd like to increase my equity allocation, and reduce cash.
Click to expand...

I'm just the opposite. My equity allocation had crept up higher than I like, so this "automatic rebalancing" Mr. Market is doing meets my needs nicely. :LOL:
 
braumeister said:
I'm just the opposite. My equity allocation had crept up higher than I like, so this "automatic rebalancing" Mr. Market is doing meets my needs nicely. [emoji23]
Click to expand...

I’m the same. I’m doing nothing and want to wait till the market settles down from freaking out over interest rates and inflation. It’s only mid-January.
 
steelyman said:
I’m the same. I’m doing nothing and want to wait till the market settles down from freaking out over interest rates and inflation. It’s only mid-January.
Click to expand...


I’m also doing nothing with the exception of a little tax loss harvesting from some play money. If this turns bear, we have plenty of safe money to tide us over. May do some hefty Roth conversions if this becomes a bear.
 
braumeister said:
I'm just the opposite. My equity allocation had crept up higher than I like, so this "automatic rebalancing" Mr. Market is doing meets my needs nicely. :LOL:
Click to expand...


Same. I was creeping up on my AA and this has helped fix it. Another 10% should put me right at my 50/50 target.
 
Ronstar said:
He's got a boat. Most of that $160k will probably be boat related expenses.
Click to expand...

Yeah, sea test and survey next Thursday. Now shopping slips. The boat deal will probably be a hundred grand and we go from there...
 
I am a retired FA and went by the office to get something. I stuck my head in my replacement's office and demanded to know why the market was going down. Then told her I thought we should sell everything. She snatched up a stress ball from her desk and hurled it at my head. She said a few choice words and I exited laughing. [emoji1787][emoji1787]. Glad I don't have to do that anymore.
 
I’ve often wondered how exactly a stress ball relieves stress. Now I know.
 
I've been nibbling a bit but do expect more pain for a while. Individual stocks are largely down worse than the market as some large and mega caps like P&G have held in better. Small, mid-cap and high growth stocks have been hit the hardest. I've been buying a bit of VTI and IWN plus my new 401k money is going to 70% equities, 30% bonds/cash but I've put more $ into Fundrise / real estate than stocks as I think 2022 will be very strong again for RRE and 2023 likely better than most would expect for RRE.
 
I think we are seeing classic correction here IMO.....its the fee you pay for outstanding long term returns....most people dont want to pay that fee so they miss out, but on days or weeks or even months like this they say "I told you so" , but inevitably commit financial suicide by not participating in bull markets....
 
aja8888; said:
We have a dip in the making here folks! Get your cash ready. :cool:
Click to expand...


Not yet! I think the bear has awakened!
 
Dash man said:
Not yet! I think the bear has awakened!
Click to expand...

I'm already down more than 8% YTD so I have already started nibbling. Will dollar cost about 5% of networth (dry powder) into equities over the next 60 days. Picked up some INTEL this morning under $51.
 
Whew - the ride! Always scary, but also means a healthy market - I keep telling myself.

So, I need some "external" advice :) (like everyone today that feels the need to BUY).

First, we have sufficient income from corporate and military pension, NQP, as well as a couple of rental properties (not starting SS until 70ish) for whatever period of time the correction takes to heal ... what I do today will have no bearing on our lifestyle.

1. IRA cash on hand - about 20% of my Vanguard IRA is in cash, was waiting for "correction" from late 2020 - if it's here, it is time to start putting it back in. My gut reaction is to feed in about half of the 20% today, then the remainder over the next three days. My choice would follow where my US account component is: VTSAX.

2. Taxable account in Fidelity - I have non-play money sitting aside waiting for a correction ... while I love cash, I would prefer to be growing ... different concept for taxable than IRA, but -so, maybe set aside about a quarter of the cash and buy in the same way as above in 1., above? My choice would be ITOT.

Thoughts?
 
Depends if the helicopter is going to drop money again. That changes everything.
 
Fermion said:
Depends if the helicopter is going to drop money again. That changes everything.
Click to expand...

Wednesday's FED announcements are key here too, unless the talked about interest rate increase is already baked into this correction.

QE tapering actually started last December and is supposed to end in March reducing the FED's balance sheet significantly. Heck, the FED owns roughly 1/3 of all home mortgages in the U.S. right now with all the MBS buying over the last few years.
 
I just bought another chunk of VTI. I doubt that this is the bottom, but I am going to keep adding.
 
You must log in or register to reply here.

Similar threads

Brook2
Where did this investment advice come from?
Replies
2
Views
606
donheff
donheff
T
Selling stocks to buy house
Replies
19
Views
542
Sunset
Sunset
M
Investing extra money and possible recession 2024
Replies
6
Views
1K
DrRoy
DrRoy
2
Reducing stock exposure in Retirement, age 60+
4 5 6
Replies
144
Views
9K
Onda
O
S
Bonds Suc&k...
6 7 8
Replies
177
Views
11K
Out-to-Lunch
Out-to-Lunch

Latest posts

Back
Top Bottom