For the first time ever I sold all my stocks

[JustVisitingThisPlanet]

^Have been pulling out of market last few years for private equity world. Pulled rest out of market in Jan. Didn't buy back in at bottom, went for better PE opportunity with more upside.

 

[sgstaley]

I can't get out of my own way. I was up as high as 90% equities at the beginning of Shelter in Place but then had a 'minor' panic attack and sold equities that i had a 100% profit on which was a huge portion of my IRA & Roth. But as of this morning I'm back to 87% equities, 8% cash, & 5% bonds. Seems all I did was lock in an eventual 5% drop.


Others hoard TP / I hoard stocks & cash

I ended up staying (in equities.) Watching my portfolio evaporate in large chunks daily was quite unsettling. I used the opportunity to educate myself on the situation and pay close attention to what was happening in the market. Rare times indeed.
Now that the market has headed back up, I have bought and sold several positions as somewhat of a rebalance, but mainly looking for opportunities to profit, whether it be short term or longer term. Currently, I am down 5% also, but have made many changes to my portfolio. In the end, I think that I am in a better place than when all of this started, based on the belief that our economy will survive just fine and that the stock market will soar once again.

I think that I might be in the stock and cash hoarder group also.

 

[Time2]

I am sure they will all be buying dune buggies by the end of the year...

Yep, my neighbor just spent $17k on a Honda ATV. He's still working, but he is working less ours then before.
I tried to get him into the stock market, but it's to volatile, especially after 9-11! Ya, he pulled his money out then.

 

[BeachOrCity]

Wonder how many people bailed out when the market was falling, didn't buy back it and are now kicking themselves? Just wondering and probably no one would admit to it as everyone is a market Samurai these days.

Lots of people including myself are pretty open about it. Is it possible you are making this assumption without having read thru the comments?

 

[Mr._Graybeard]

Wonder how many people bailed out when the market was falling, didn't buy back it and are now kicking themselves? Just wondering and probably no one would admit to it as everyone is a market Samurai these days.

In my case, DW and I rode the market up since 2009 for a big gain. We have all the money we need, so it feels OK to be 35%-40% in cash. We're still about 25% in equities but have no need to risk any more to run up the score.

We also held a pretty big share of our nest egg in cash in 2006 because I didn't see anything worth investing in. Then I started reading about the inverted yield curve and decided to sit tight. I feel the same way about the general state of things now. As another forum member observed, capital preservation is a legitimate investment objective.

 

[Tiger8693]

I had to cancel 3 trips that will not be rescheduled any time soon--so about $10,000 in savings. I have also found I can cut my own hair just fine so I may never go back to the salon. We are also cleaning the house OK so maybe no more housekeeper for a while. I have also figured out DH is a pretty darn good cook on the grill so maybe no more expensive steaks in a restaurant ever. The virus will probably lower our spending permanently or at least for a long long time.

There is a really good book I would like to recommend for you to read that may give you some different insight and opinions. Maybe not, but it's a good read anyway. Hope you enjoy your retirement, however you choose to approach it.

How To Retire Happy, Wild and Free by Ernie J. Zelinski

 

[PatrickA5]

Wonder how many people bailed out when the market was falling, didn't buy back it and are now kicking themselves? Just wondering and probably no one would admit to it as everyone is a market Samurai these days.

I bailed, but not at the bottom, and am down a little over 9%. Every time the market goes up 500 points I cringe. But, I also feel that if I'd kept my original 30/70 allocation that I'd want to be selling at this point. In the short term (6 - 18 months), I just don't see much upside from here and feel there's a better chance of seeing more downside.

Having said that, it bothers me not to have any equities as equities are what got me where I'm at. I've got a scheduled plan in place to slowly get back to 25/75 (maybe 30/70) over then next 12 months. I know that studies shows to do it all at once, but that would almost guarantee another crash.

I've learned one thing. My risk tolerance now that we're close to starting real retirement isn't what it was back when I was bringing in a paycheck during the last crisis, or the one before that.

 

[Dash man]

I just looked at our total net worth and was pleasantly surprised that we have recovered to the pre-Covid-19 numbers. Some of my individual stocks are still down, but my purchases when the markets were near their lows help raise us back up.

 

[pb4uski]

Wonder how many people bailed out when the market was falling, didn't buy back it and are now kicking themselves? Just wondering and probably no one would admit to it as everyone is a market Samurai these days.

I bailed, but not at the bottom, and am down a little over 9%. Every time the market goes up 500 points I cringe. But, I also feel that if I'd kept my original 30/70 allocation that I'd want to be selling at this point. In the short term (6 - 18 months), I just don't see much upside from here and feel there's a better chance of seeing more downside.

Having said that, it bothers me not to have any equities as equities are what got me where I'm at. I've got a scheduled plan in place to slowly get back to 25/75 (maybe 30/70) over then next 12 months. I know that studies shows to do it all at once, but that would almost guarantee another crash.

I've learned one thing. My risk tolerance now that we're close to starting real retirement isn't what it was back when I was bringing in a paycheck during the last crisis, or the one before that.

Even before March I was uneasy that stocks were overvalued. Similar to Patrick I bailed out near but not at the bottom.

Not kicking myself at all as I think the market will eventually test its March lows once traders on Wall Street understand the economic reality of this recession and the impacts of 30 million people unemployed, businesses operating at much less than full capacity, etc and if the Fed ever stops making stocks the only game in town.

I will admit to a small amount of FOMO as the market has rebounded from March lows.... at the time bailed I conceded that I might not be right.

The only equity-like thing that I currently hold is SWAN.

 

[Time2]

The big question how much of that "30 million people unemployed, businesses operating at much less than full capacity, etc" is priced into the market. It is not a secret, we all know how bad the immediate situation is.


To me the light at the end of the tunnel is all the people that got out and will get back in supporting a rising stock market.

 

[OldShooter]

Wonder how many people bailed out when the market was falling, didn't buy back it and are now kicking themselves? Just wondering and probably no one would admit to it as everyone is a market Samurai these days.

You make a very important point phrased as a question.

Nassim Taleb calls your missing posts "silent evidence." We hear about the winners but the losers are silent. For inexperienced investors, particularly, this creates a inaccurate mental picture of risk/reward. And the "Samurais," having gotten lucky, often conclude from that they are geniuses. This is dangerous too. (Yes, I am currently re-reading "Fooled by Randomness." I get something new every time I read it.)

Here's a web post that talks more about the silent evidence problem: https://johnaugust.com/2007/silent-evidence Lots of similar discussions out there.

 

[gayl]

Currently, I am down 5% also,

I wish!! I know I'll eventually be down 5% as I'm actually down 13% now. I helped DGS set up his 1st Roth this year and it mirrored my AA. He's down 8%. I've always preached 'stay the course' but failed to. I think I panicked due to being retired and eventually self insuring for LTC. Stupid stupid me [emoji17]

 

[harllee]

Wonder how many people bailed out when the market was falling, didn't buy back it and are now kicking themselves? Just wondering and probably no one would admit to it as everyone is a market Samurai these days.

I am the original poster. I am certainly not kicking myself for being out of equities--I am not even looking at the stock market now--don't need to. The pandemic and the recession are not over by a long shot. I may get back in the market some day but not while this chaos reins. If I never get back in that is OK too. I have plenty of assets to live on comfortably and I am still not even taking my SS yet (waiting until age 70). I am sleeping so much better and much less worried about life in general. Thank you for your concern.

 

[frayne]

Lots of people including myself are pretty open about it. Is it possible you are making this assumption without having read thru the comments?

True !

 

[PatrickA5]

Wonder how many people bailed out when the market was falling, didn't buy back it and are now kicking themselves? Just wondering and probably no one would admit to it as everyone is a market Samurai these days.

It's easy to wonder things like this in hindsight. I wonder if maybe the quote would be different if the market had gone down 50% and stayed there. Maybe something like this:

"Wonder how many people hung onto their stocks, didn't sell and are now kicking themselves. Probably no one would admit to it as everyone is a market Samurai these days".

 

[Sunset]

Wonder how many people bailed out when the market was falling, didn't buy back it and are now kicking themselves? Just wondering and probably no one would admit to it as everyone is a market Samurai these days.

Previously, I've said how I'm willing to sell some things as we are too stock heavy at ~ 85% maybe more.

I did sell some in IRA's not at the high nor the low point, but higher than 1 year ago.

I also sold off Royal Caribbean and Norwegian and Carnival at a loss, as they may not survive, these are in a taxable account, so will have a tax loss for them to claim next year.

Have been selling options on a few others, and a couple just got called, where I've sold it, including the option, for more than the stock is currently priced .

My concern is, nothing has changed since folks realized the virus is a problem, it's still here, so businesses will be severely impacted.

Example Ford opened their a plant and besides some workers being reluctant it all seemed good. Until one or two days later, someone tests positive, and they close the plant for a day or two to clean it.

How often are they going to be closing the plant each month ?
This is probably happening in lots of businesses.

Basically trying to balance between, normally optimistic and thinking what if it was 1/2 as bad as the Great Depression , and takes 14.5 yrs to return to previous high and beyond.

 

[Dtail]

Previously, I've said how I'm willing to sell some things as we are too stock heavy at ~ 85% maybe more.

I did sell some in IRA's not at the high nor the low point, but higher than 1 year ago.

I also sold off Royal Caribbean and Norwegian and Carnival at a loss, as they may not survive, these are in a taxable account, so will have a tax loss for them to claim next year.

Have been selling options on a few others, and a couple just got called, where I've sold it, including the option, for more than the stock is currently priced .

My concern is, nothing has changed since folks realized the virus is a problem, it's still here, so businesses will be severely impacted.

Example Ford opened their a plant and besides some workers being reluctant it all seemed good. Until one or two days later, someone tests positive, and they close the plant for a day or two to clean it.

How often are they going to be closing the plant each month ?
This is probably happening in lots of businesses.

Basically trying to balance between, normally optimistic and thinking what if it was 1/2 as bad as the Great Depression , and takes 14.5 yrs to return to previous high and beyond.

Was wondering about the same thing with schools. What happens with each individual case of COVID?

 

[Mountain skier]

capital preservation is a legitimate investment objective

 

[Lawrencewendall]

Wow, I'm not the only one that decreased spending...

This graph goes back to 1960

DW is doing her part to support the economy!

 

[Mountain skier]

I sold taxable $ (S&P 500) in early March. Market price just now close to early March levels- though I am surprised S&P already back to those levels.

In late March, near bottom- oh well, we sold significant % positions of my SEP and DW's Roth and put $ into Navy Federals 3% CD IRA.

I felt and still overwhelmingly believe market will return to late March levels again. If not my positions in equities will just where they are. I like having high level cash positions. We just retired last week.

It is all good

 

[2177V]

capital preservation is a legitimate investment objective

I absolutely agree. I adopted a capital preservation portfolio when I reallocate my 60/40 portfolio to 100% treasury bonds when the yield curve inverted in 2019.

I avoided the crash and now my VUSUX is +20% YTD in 2020. Most "inexperienced" investors do not even know what "capital preservation" is or have never used this legitimate investment objective.

You use this objective when the market risk increases above your risk tolerance. This happens when a bull market breaks the record of the longest bull market in history. The inexperienced investors believed that a bull market last forever and a bear market never happens. The experienced investors know how to quit when they are ahead and they are also fearfull when everyone is greedy.

 

[OldShooter]

The behavioral finance folks identify a couple of human behaviors that are very relevant to the buy/sell/hold anguish in this thread. Basically both the "endowment effect" and our genetic aversion to losses can lead to suboptimal investment decisions.

For an example of the endowment affect here's a thought experiment: Assume that all of your positions are sold instantaneously when the market opens Monday morning. You can buy them back with no loss or gain any time that day. Will you be buying 100% of them back? If the answer is "no," then the endowment effect may be clouding your judgment. The best place to learn about this is Richard Thaler's book "Misbehaving" but here is a Cliff's Notes version: https://en.wikipedia.org/wiki/Endowment_effect

If you have ever said (all of us probably have) "I'll sell that stock as soon as it gets back to what I paid for it," your genetically-programmed aversion to losses is affecting your investment decisions. Thaler, again, is the best place to understand but Wikipedia comes through: https://en.wikipedia.org/wiki/Loss_aversion

Another way these effects are sometimes countered is to observe that every day you "hold" a stock, you are effectively deciding that it is a "buy" at that day's price. IOW there is really no "hold" position at all. Your position is either "buy" or "sell."

If you're interested in this kind of stuff, Jason Zweig's "Your Money & Your Brain" will clue you into the neurological influences on investment decision making. More: https://awealthofcommonsense.com/2017/08/your-brain-on/

We are a lot less rational than we think we are. Even when we think we are remembering this.

[/tutorial]

 

[corn18]

Is making less return than inflation really capital preservation?

 

[Major Tom]

I left market entirely in Jan of this year after transitioning to private equity over last several years. PE has its own risks but they're better informed risks. Converting 401K/IRA to Self-Directed IRA has allowed getting my IRAs into private world. Am done with the emotional market.

Each to his/her own, but I don't see the stock market as particularly risky for those who have a medium to long-term outlook. As far as the market being emotional, it can get as emotional as it wants, as far as I'm concerned. All that sort of thing is short term, anyway.

It's a bit like a relationship, when things start getting reactive and emotional. It's surprising how things smooth out and get back on track if one or both parties take a time-out, so things can calm down a bit.

 

[pb4uski]

Is making less return than inflation really capital preservation?

What inflation?