For the first time ever I sold all my stocks

[Speed Racer]

Reasonable points. That's I why I would hedge my risk by taking out the next 1-2 years of expenses. I'm not even sure there has to be a vaccine. If we have some kind of treatment, I still think we'll be fine. And what if we end up getting the talked about $5000 from SS? There are other ideas floating around as well. I have some other theories about the fed printing money having less of an effect on inflation than in the past, but I'm not even sure I understand the why yet, just that it's happening.

 

[Running_Man]

If you believe the Federal Reserve is in control and it is independent as has been continually stated (though questionable), they have indicated they are now at "QE Infinity" doing whatever is necessary. With this as the situation, if you subscribe to "Don't fight the Fed", the Fed is going to be there to prevent the stock market from falling "very much", regardless of the administration in place.

This theory entails that valuations are derived from Central Banks and not the economy and that Banks can keep stock markets from falling. This has been proven false over many governments that have utilized Central Banks to prop up the economy, one of the first and most famous was John Law leading to the French revolution when their policies failed. More famous is the German banking failures of the 1920's and early 1930's but more modern is the Japanese banking of the last 31 years which has seen the Japanese Central bank buy all of the issued long term debt and 80% of all ETF's in the stock market to prevent deflation. The net effect is the Japanese stock market is 50% below where it was 31 years ago. IF the economic value of activity underlying an economy falls into the abyss, valuations cannot be held up long term by Central Bank manipulations and to invest in that manner will not be rewarding in my opinion.

Furthermore, much is being made that business is going to be more productive as workers find working from home is better than travelling to a central location. Any work that can be done from a remote site in the United States can be performed in a remote site anywhere in the world, or even more likely, be automated out of existence by computer power. In that case the worker is competing not against other 100K employees but $8.00 an hour college educated workers in Asia and South America. Companies will be forced into these decisions by economics and the desire to not congregate in a central location, reducing the value of any person to person contact. While this is a very minor point currently it is going to increase greatly over the coming years.

 

[audreyh1]

Mutual fund orders can always be canceled right up until the market close.

Exactly! Definitely can at Fidelity.

This may be a problem at Vanguard. I recall someone saying it wasn’t possible to cancel mutual fund orders before the close, but maybe they were wrong.

 

[RetiredAt55.5]

This may be a problem at Vanguard. I recall someone saying it wasn’t possible to cancel mutual fund orders before the close, but maybe they were wrong.

At least for mutual fund transactions, the final step in the transaction (page with the 'Submit' button) says that once submitted, the transaction cannot be changed or cancelled.

Perhaps if you were a "big buck" client and called on the phone, they might do something for you. But I wouldn't count on it.

 

[OldShooter]

... I saw that another poster mentioned that the S&P hit 34% off the highs and asked if you got back in. Didn't see an answer, maybe I missed it? Just curious...

I have asked similar questions when a poster is raving about some kind of coming doom and gloom. Are you short? Have you bought a bunch of puts? The answers are never forthcoming, so obviously they are "no" and "no." Pontificating with no skin in the game is a risk-free way to stroke one's own ego.

 

[Sunset]

Love this quote, and it applies to this thread as well. After reading the whole thing, and then going back and re-reading the original post, the OP is *not* even asking a question. She just stated her position, including her opinions about the state and future of the market:
..

OP is a he.

We do not live in a world where the economy and financial markets resemble, in any way, those of a century ago. Why use that as a measuring stick?
..

I use that as a counter to the rosy view that this is like 2008. It's not like 2008 as the cause is totally a different type, and has affected the entire world.
It's so radically different that history is not useful to know the end of the story.

https://www.marketwatch.com/story/s...marks-by-feds-powell-2020-05-13?mod=home-page

I'm pretty sure people in 1928 had no idea the Great Depression would be so bad and so long. But again, when society runs into something unprecedented, the effects are unknown.

While the markets and economy are different, so is the problem which is worldwide this time, which means it could end up worse than the Great Depression

Of course I hope everything is fine in 2 years and you can tell me I was silly to worry.

 

[Aerides]

OP is a he.

You might have Harllee confused with Harley.

OP here--by the way I am a "she" not a "he" but I guess it does not matter...

 

[harllee]

OP here--I am a "she" but I don't think it matters. I am amazed at some of the comments here. To each his own. I am enjoying watching from the side lines. Why did it make some people mad that a 69 woman decided to get out of the stock market for a while? I have plenty to live on and no dependents looking for an inheritance. I just wanted to reduce the anxiety and stress in my life. I have appreciated the advice about where to park my cash now--CDs, munis, etc. I can use some help in that department so thanks to those who posted on that issue.

 

[Sunset]

You might have Harllee confused with Harley.

Oops, my mistake.

Hopefully I'm also mistaken about the market too

 

[LOL!]

Time to buy back in. You already avoided a 2% loss!

Make that "avoided a 4+% loss!"

 

[RetiredAt55.5]

Make that "avoided a 4+% loss!"

Unless the markets go back up again.

Not predicting anything.

 

[targatom2019]

I just wanted to reduce the anxiety and stress in my life.

+1

 

[audreyh1]

At least for mutual fund transactions, the final step in the transaction (page with the 'Submit' button) says that once submitted, the transaction cannot be changed or cancelled.

Perhaps if you were a "big buck" client and called on the phone, they might do something for you. But I wouldn't count on it.

That’s quite a restriction! Fidelity allows you to cancel any mutual fund trade before market close, including purchases of Vanguard funds AFAIK!

 

[tulak]

That’s quite a restriction! Fidelity allows you to cancel any mutual fund trade before market close, including purchases of Vanguard funds AFAIK!

I was curious so I just tried it. I transferred a small amount from one fund to another and then tried to cancel.

When I hit cancel, Vanguard said “You can’t cancel this transaction because it is past the cutoff time for cancelling Vanguard mutual funds transactions.”

I did this about 70 minutes prior to market close.

Personally, one more reason to move to ETFs. I also now have a trading restriction on the fund that I sold.

I was also burned by the 2% drop the other day. I needed to sell a small amount to rebalance back to my target and figured I was good since the market was stable most of the day. Not a big deal, but still annoying. I need to get in the habit of using ETFs for rebalancing.

 

[pb4uski]

.... I also now have a trading restriction on the fund that I sold. ...

That is one part of Vanguard's mutual funds that I won't miss. Don't get me wrong, I agree with the trading restrictions in principle, to encourage investors to buy-and-hold and not trade. But Vanguard doesn't exercise any judgement over the trading restrictions. I recall that once I had room in the 0% preferenced income bracket and decided to to a gains trade... sell VTSAX at a gain and buy it back the same day... so my transactions was not affecting the fund in any way other than some bookeeping but thye had no way to waive the frequent trading restrictions even given the circumstances.

Since I had do the sale first it was then going to restrict me from buying back.

I could do the buy side first from other money in the account and then a sale for the same amount but the proceeds would need to be put in something else other than what I sold to begin with. I could sell VTSAX and then buy S&P 500 and extended market index as a workaround.

 

[LOL!]

I am told that another work-around of the frequent trading restrictions is to schedule an automated trade a day ahead. They are easily scheduled and can be monthly or whatever and cancelled after one trade.

 

[pb4uski]

Yes, I've hear that too (but after I had the issue with the gains trading transaction).

 

[tulak]

I am told that another work-around of the frequent trading restrictions is to schedule an automated trade a day ahead. They are easily scheduled and can be monthly or whatever and cancelled after one trade.

I have done this in the past. I don’t remember that it had to be a reoccurring trade, only a trade scheduled in the future.

I get why Vanguard does this, but it is a hassle.

 

[Shredder]

OP here--I am a "she" but I don't think it matters. I am amazed at some of the comments here. To each his own. I am enjoying watching from the side lines. Why did it make some people mad that a 69 woman decided to get out of the stock market for a while? I have plenty to live on and no dependents looking for an inheritance. I just wanted to reduce the anxiety and stress in my life. I have appreciated the advice about where to park my cash now--CDs, munis, etc. I can use some help in that department so thanks to those who posted on that issue.

I don't know why that makes people mad either. Maybe nerves?

I just wanted to thank you for starting the thread though. Its been entertaining, if not a little stressful.

 

[harllee]

I don't know why that makes people mad either. Maybe nerves?

I just wanted to thank you for starting the thread though. Its been entertaining, if not a little stressful.

OP here, now that I am out of the market it is sort of fun to watch the market--before I was afraid to look.

 

[statsman]

We do not live in a world where the economy and financial markets resemble, in any way, those of a century ago. Why use that as a measuring stick?

This is true, but I don't recall the US shutting down most of the country almost instantaneously. I think the main concern is how much of the economy will disappear because of the lockdown orders, and how long will it take to replace it. Also, how easily convinced will the country be to go through additional shutdown orders when the next virus is foisted on the planet.

 

[COcheesehead]

I was curious so I just tried it. I transferred a small amount from one fund to another and then tried to cancel.

When I hit cancel, Vanguard said “You can’t cancel this transaction because it is past the cutoff time for cancelling Vanguard mutual funds transactions.”

I did this about 70 minutes prior to market close.

Personally, one more reason to move to ETFs. I also now have a trading restriction on the fund that I sold.

I was also burned by the 2% drop the other day. I needed to sell a small amount to rebalance back to my target and figured I was good since the market was stable most of the day. Not a big deal, but still annoying. I need to get in the habit of using ETFs for rebalancing.

You did a sell/buy, not a trade. The first is a two step transaction. The latter is a single step.

 

[brewer12345]

I don't know why that makes people mad either. Maybe nerves?

I just wanted to thank you for starting the thread though. Its been entertaining, if not a little stressful.

Heaven forfend you publicly deviate from the orthodox groupthink.

Like OP, I am much less stressed being on the sidelines. Then again, if we hit what I think are attractive valuations I will be panting and drooling to get long.

 

[LOL!]

It looks like we have found someone to declare "Anti-WHEEE!" as needed in the future. Would that just be "!EEEHW" ?

 

[clobber]

Since I made the decision to sale I have been sleeping better

I used to think this was just a phrase, "Whatever makes you sleep better." It is not.