For the first time ever I sold all my stocks

[JustVisitingThisPlanet]

I just misread this thread title as, "For the first time ever, I sold all my socks".

Seems like a valid retirement subject. My oldest brother, who has been retired for a few years now, owns only one pair of socks. They are a pair of black ones, for weddings and funerals.

I buy 30 pair of exact same black socks so that I don't have to deal with matching them. And if one gets a hole, can throw away - no big deal if odd number of socks.

 

[Sunset]

I buy 30 pair of exact same black socks so that I don't have to deal with matching them. And if one gets a hole, can throw away - no big deal if odd number of socks.

Same here, except I do it for white pairs , and black pairs.

 

[Mr. Tightwad]

I just misread this thread title as, "For the first time ever, I sold all my socks".

Seems like a valid retirement subject. My oldest brother, who has been retired for a few years now, owns only one pair of socks. They are a pair of black ones, for weddings and funerals.

I consider those two ceremonies to be pretty much the same.

 

[pb4uski]

I just misread this thread title as, "For the first time ever, I sold all my socks". ...

I hear that holy socks are especially prized... you may get a good orice for those.

 

[corn18]

This is why Buffet is hoarding cash.
Market Cap to GDP is a long-term valuation indicator for stocks. Warren Buffett says "it is probably the best single measure of where valuations stand at any given moment."

A larger view:

 

[Chuckanut]

Seems like a valid retirement subject. My oldest brother, who has been retired for a few years now, owns only one pair of socks. They are a pair of black ones, for weddings and funerals.

I know a guy who has been a hard core loaner. He literally had one place setting for eating. One plate, bowl, cup and saucer, beer stein, knife, fork and spoon. Well into his 50's he met a lady he fancied. When asked how serious he was about her, he mentioned that he had to buy another place setting for when he had her over for lunch!!

 

[OldShooter]

This is why Buffet is hoarding cash.
Market Cap to GDP is a long-term valuation indicator for stocks. Warren Buffett says "it is probably the best single measure of where valuations stand at any given moment."

I'm not a believer in any of this astrology stuff, but IMO that one is particularly bad. Buffett came up with it 20 years ago when exports were much less a factor for US business than they are now. So it measures a very different thing today than it measured 20 years ago.

 

[Major Tom]

I know a guy who has been a hard core loaner. He literally had one place setting for eating. One plate, bowl, cup and saucer, beer stein, knife, fork and spoon. Well into his 50's he met a lady he fancied. When asked how serious he was about her, he mentioned that he had to buy another place setting for when he had her over for lunch!!

That's great! For someone so set in his ways, it sounds as if that really was a mark of how much he liked her

 

[Brat]

Speaking of socks. Grandkids wanted a dog. Their previous dogs had died of old age and now that they were home they could care for it (ya, I know, but they promised Mom and Dad). Pup is now about 3 months old and adores the kids to the extent that they found a dirty kid sock hanging from his mouth last week. They made him throw it up... out came two more socks. The pup cannot visit their bedrooms unless their clothes are put away in the closet (another story as that was an issue when their Dad was a kid).

Back to STOCKS. In March I bailed out of everything but VWELX. I am not a trader and have learned that unless I know the business and their industry very well (aka NIKE) the smart thing for me is to invest in a mutual fund or ETF. I agree that given our current economic condition it is difficult to value a stock/business. For that reason, I subsequently invested in large-cap blue-chip growth, technology, and biotech funds. For ballast, I also bought a balanced fund. Mother told me not to spend all my money in one place. So far so good.

 

[Lawrencewendall]

Just put in a $3.5k limit order of GEO at 13. We'll see if it's filled

 

[Digger1000]

Looking back over the 20-year period from Jan. 1, 1999, to Dec. 31, 2018, if you missed the top 10 best days in the stock market, your overall return WAS CUT IN HALF. That's a significant difference for only 10 days over two decades!


It doesn't take brains to make money in the stock market, IT TAKES COURAGE.

 

[corn18]

Looking back over the 20-year period from Jan. 1, 1999, to Dec. 31, 2018, if you missed the top 10 best days in the stock market, your overall return WAS CUT IN HALF. That's a significant difference for only 10 days over two decades!


It doesn't take brains to make money in the stock market, IT TAKES COURAGE.

What if you missed the worst ten trading days?

 

[OldShooter]

What if you missed the worst ten trading days?

Here's a version of the ubiquitous chart on the subject:

​

It lends itself to a lot of hypotheticals, but the most interesting factoid to me is that the majority of the best days occurred within 2 weeks of the worst. It is difficult for me to believe that someone who was spooked out of the market would have the courage to jump back in that fast.

 

[corn18]

It's fascinating to me that I can find at least a million charts showing what happens if I miss the 10 best days, 100,000 charts if I miss the 10 best and 10 worst days, but I can't find a single chart showing what happens if I only miss the 10 worst days.

 

[Markola]

It's fascinating to me that I can find at least a million charts showing what happens if I miss the 10 best days, 100,000 charts if I miss the 10 best and 10 worst days, but I can't find a single chart showing what happens if I only miss the 10 worst days.

Me too. Of course, it’s because the majority are focused only on playing offense to get rich vs. defense to avoid becoming poor. Over 20 year periods, an AA of 50/50 periodically breaks even with a much, much more aggressive and volatile portfolio, precisely because the bonds smooth out the peaks and fill in the valleys.

 

[stevemac]

Well, I learned my tolerance level today, and cashed out for now. I've positive and decided to keep the overall gains. "Overall" because my taxable account incurred a very slight loss (<$10k) and the tax-advantaged accounts (bulk of the retirement funds) were positive much higher. I've ridden through a lot of ups and downs, but this one just feels different -- skittish market in a way I've not felt before. So, I might miss out on some upcoming gains, but FireCalc says I can withdraw 3-4% without even investing and live well enough, so a temporary sideline makes me feel better.

To those of you staying in, I hope you reap HUGE rewards; I truly do.

 

[targatom2019]

^^^ are you retired and are you planning to get back in ?

 

[tdv2]

I've ridden through a lot of ups and downs, but this one just feels different -- skittish market in a way I've not felt before.

As I have said before, decisions based on intuition should be avoided. The "skittish market" you refer to is the market, there is nothing to be learned from it.

 

[VanWinkle]

Me too. Of course, it’s because the majority are focused only on playing offense to get rich vs. defense to avoid becoming poor. Over 20 year periods, an AA of 50/50 periodically breaks even with a much, much more aggressive and volatile portfolio, precisely because the bonds smooth out the peaks and fill in the valleys.

+1 for the 50/50

 

[stevemac]

^^^ are you retired and are you planning to get back in ?

I retired on January 31 (great timing, eh? ), and do plan to get back in. I've cashed out entirely before (the description of which answers the post after yours, so I'll do it there). I have great faith in the market overall.

 

[stevemac]

As I have said before, decisions based on intuition should be avoided. The "skittish market" you refer to is the market, there is nothing to be learned from it.

Overall I agree with you except that sometimes "intuition" has been the exact right thing to follow. My intuition in 2007-2008 was that NINJA loans, 125% equity, and securitizing such loans was a recipe for disaster (especially as ARM's were about to reset), and so got out of the market completely about a month before the big crash. I then re-entered after a short while, and that intuition allowed me (because of this bull market) to retire years before I had planned.

Once or twice in the decade since I've also successfully mostly sold right before big drops I sensed were coming. This is not to say I try to time the market, just that I have a comfort level about movement, and so far it has served me well. My preference, though, is to ride things out and have often done so beyond my comfort level. But as I wrote initially, something feels different this time.

I hope to be wrong, for the sake of everyone here riding it out. As I also said, I don't mind missing out on some gains, since they won't really affect my overall retirement pool. But I'll be back in at some point.

This group has been unbelievably helpful to so many working toward retirement, including me. Thanks.

 

[OldShooter]

... sometimes "intuition" has been the exact right thing to follow. ...

Undoubtedly true. And sometimes "intuition" has been the exact wrong thing to follow. Random guesses are like that.

Overall, intuition doesn't seem to do so well. When I was doing research for my Adult-Ed class I spent some time talking to a TDAmeritrade branch manager. At one point I asked her what TD's amateur trader customers achieved nationally/overall in the previous year/2017. After an embarrassed silence, she said: "One and a half percent." In 2017, the indices were up by 20 to 40%.

 

[youbet]

At one point I asked her what TD's amateur trader customers achieved nationally/overall in the previous year/2017. After an embarrassed silence, she said: "One and a half percent." .

How did she know that? They track every trade made? Or did they get it from gain/loss reports issued at tax time?

What does TD consider an "amateur trader?" Someone that trades most days? Someone, like me, that trades a few percent of their portfolio for yucks and on a relatively infrequent basis?

I'm just curious because I've heard those low performance figures before. Yet, I've done much better than that, sometimes even beating the common benchmarks. I limit myself to having no more than 5% of my FIRE portfolio subject to my trading fetish at any time and Schwab calculates those returns separately from the account which holds the 95% (my buy and hold, 55 - 45) long term money. Trading is more fun that cross word puzzles and keeps me entertained. About the time I get a decent understanding of some area of the investment world, I get bored with it and move on. So, I would have thought I'd be a the bottom on the heap. Apparently not.

In 2017, the indices were up by 20 to 40%.

From the Market Watch site:

• The Dow is up 25.1% over 2017, its second straight annual increase, as well as its best year since 2013.
• The S&P rose 19.4% over the year. Like the Dow, it rose for a second straight year and had its best year since 2013.
• The Nasdaq gained 28.2% in 2017, its best year since 2013. 2017 was the Nasdaq’s sixth straight annual gain. According to the WSJ Market Data Group, this is the longest streak for the Nasdaq since a six-year streak lasting from 1975 to 1980.
• The Russell gained 13.3% in 2017, its second straight annual gain.

Where'd ya get that 40% number? One of the international indexes?

 

[nwsteve]

What a GREAT factoid!
If you still have your TD contact, I wonder what the data point would be for 2018-19?

 

[OldShooter]

How did she know that? They track every trade made? Or did they get it from gain/loss reports issued at tax time?

Well, they are the broker. They already have a record of every trade and I'd guess that the SEC requires that they keep those records for a long time. So a little simple data mining and the result drops into their lap.

What does TD consider an "amateur trader?" Someone that trades most days? Someone, like me, that trades a few percent of their portfolio for yucks and on a relatively infrequent basis?

TD's market historically has been the retail customer who trades frequently. That's what they designed their web platform for. I don't know exactly how they segment their market though. Certainly they have tagged every customer record with a segment designation and will have used that for data mining.

I'm just curious because I've heard those low performance figures before. Yet, I've done much better than that, sometimes even beating the common benchmarks. I limit myself to having no more than 5% of my FIRE portfolio involved at any time and about the time I get a decent understanding of some area of the investment world, I get bored with it and move on. So, I would have thought I'd be a the bottom on the heap. Apparently not.

Well the random nature of the market pretty much guarantees that some people will have good luck. And the nature of brokers' marketing virtually guarantees that they will attract a certain percentage of complete idiots. So somewhere between those poles is the amateur average over any given time period. The average of all traders, including the pros, is the market average of course. I would expect that the average of all amateurs will be worse because they do not have the speed and quantity of information that the pros have. At best, the information they have is the information that everyone else has but they get it more slowly. (From Rick Ferri's "All About Asset Allocation" : "There is a classic saying on Wall Street, 'What everybody already knows is not worth knowing.')