For the first time ever I sold all my stocks

[sgstaley]

I am one that stayed in through the whole of 2020. I bought stock in April and May of 2020. I have sold a few stock lately and taken a little off of the table in profits. All in all I am SO used to wild swings in stock that it almost looks like a new normal.
At the end of the day, considering how much money the United States is printing, coupled with the way that the 2020 election cycle is turning out, with the word "trillions" in most all conversations, I am taking profits from equities and putting them in precious metals. THAT is a whole other story in itself.

 

[Markola]

Through October, it's 31.27 So with Shiller's website, only about 2 months of slippage.

Good. That’s the right direction.

 

[Markola]

One big problem with that site, and recent CAPE10 calcs in general, is that the earnings data is way, way behind. Like the last S&P 500 earnings is for June 30. That’s a 6 month lag! Recent points on the graph are using the June data AFAIK. So we don’t actually know what the last 6 months graph looks like. I think the earnings data is coming from Shiller.

Geez! It’s misleading that the page indicates the current date, then.

 

[iloveyoga]

OP here--don't want folks to worry about me. On November 8 (won't say what the significance of that date was) I got back in the stock market because I thought things were looking up for the economy. Since I am 69 and don't need or want to take too much risk I stayed with a very conservative allocation. Thanks to everyone and HAPPY NEW YEAR! 2021 has to better than 2020.

Happy New Year!

 

[RetiredAtThirty-eight]

I am one that stayed in through the whole of 2020. I bought stock in April and May of 2020. I have sold a few stock lately and taken a little off of the table in profits. All in all I am SO used to wild swings in stock that it almost looks like a new normal.
At the end of the day, considering how much money the United States is printing, coupled with the way that the 2020 election cycle is turning out, with the word "trillions" in most all conversations, I am taking profits from equities and putting them in precious metals. THAT is a whole other story in itself.

One thing I've noticed over my investment career is that the biggest profits come from companies that innovate new things and grow quickly. While precious metals might fluctuate up and down a lot, they tend to not perform much better than the amount cash declines in value due to cost of living increases. Sure, after 20 years your gold or silver might be worth more in dollar terms but it has barely kept it's head above water in terms of inflation.

On the other hand, good companies have increased in value 10% to 15% or even more each year. Over 20 years the compound growth of that 10% is 570% and 15% is 1537%.

Or, put in dollar terms, $1000 turns into $6,728.00 at 10% annually and $16,337.00 at 15%. So I've avoided investing in gold or silver (except when I was only 25 years old and didn't understand that investing is about productivity. Precious metals are not productive - they just sit there.

If you don't want to pick individual stocks, you might look into some ETF's based on technological disruptions. This is a big driver of the economy now and going forward. I like the ARK family of funds because their analysis relies on the expertise of technologists, not MBA's.

 

[OldShooter]

One thing I've noticed over my investment career is that the biggest profits come from companies that innovate new things and grow quickly. While precious metals might fluctuate up and down a lot, they tend to not perform much better than the amount cash declines in value due to cost of living increases. Sure, after 20 years your gold or silver might be worth more in dollar terms but it has barely kept it's head above water in terms of inflation.

On the other hand, good companies have increased in value 10% to 15% or even more each year. Over 20 years the compound growth of that 10% is 570% and 15% is 1537%.

Or, put in dollar terms, $1000 turns into $6,728.00 at 10% annually and $16,337.00 at 15%. So I've avoided investing in gold or silver (except when I was only 25 years old and didn't understand that investing is about productivity. Precious metals are not productive - they just sit there.

If you don't want to pick individual stocks, you might look into some ETF's based on technological disruptions. This is a big driver of the economy now and going forward. I like the ARK family of funds because their analysis relies on the expertise of technologists, not MBA's.

Yes. I too have noticed that buying unproductive assets produces no growth. Absent inflation, you might as well buy a frying pan or a rock. (Although, come to think of it, there are people who collect fryng pans. Maybe there is an inflation hedge there too.)

I have also noticed, though, that gold is a sort of religion for a surprising number of folks, most of whom are interested in neither history nor logic.

 

[Beachcomber]

ARK may be investing heavily into BNGO this week. Not sure if I should quote this here, but take it for what it cost you:

"Been reading up on Bngo and crsp more and more. The technology of dna editing will be an absolute game changer in the field of medicine. During undergrad training in molec bio (20 years ago) the ability to sequence a genome and be able to cut/edit parts out was a fantasy. We are now very close to have this ability! Again, this will revolutionize medicine much in the same way the discovery of antibiotics did. There is no question that this science will be the wave of the future in medicine. The real question is what company will be able to monetize this solution properly.

FWIW:
I plan on reallocating more of my mid/long term holdings to both BNGO and CRSP over the next month."

This is exactly what retiredatthirtyeight refers to in his first sentence.

 

[Aerides]

OP here--don't want folks to worry about me. On November 8 (won't say what the significance of that date was) I got back in the stock market because I thought things were looking up for the economy. Since I am 69 and don't need or want to take too much risk I stayed with a very conservative allocation. Thanks to everyone and HAPPY NEW YEAR! 2021 has to better than 2020.

I'm a bit younger than you, and bought back in a little bit along the way, but I think that was the same day that DH and I went back to our prior AA.
All in all we still had a very good year, and we slept better too.

 

[targatom2019]

2020 was an interesting year, many people lost a lot of money and many people made a lot of money pretty money fast. The 1,000+ point wing was fast and furrious.

 

[harllee]

I made plenty of money in 2020--probably could have made a little more had I stayed in the market all 12 months but during the time I was out of the market it was very volatile and I slept so much better being out.

 

[Midpack]

OP here--don't want folks to worry about me. On November 8 (won't say what the significance of that date was) I got back in the stock market because I thought things were looking up for the economy. Since I am 69 and don't need or want to take too much risk I stayed with a very conservative allocation. Thanks to everyone and HAPPY NEW YEAR! 2021 has to better than 2020.

You missed a lot of upside between May and Nov, about 16% on equity allocation, but glad you don’t regret selling off.

 

[targatom2019]

I made plenty of money in 2020--probably could have made a little more had I stayed in the market all 12 months but during the time I was out of the market it was very volatile and I slept so much better being out.

Good for you and happy new year, did your AA change now or it's the same as before March ?

 

[tdv2]

It's good to hear you made money in 2020....it was a good year if you had exposure to the broad US equity market.

SP500 was up ~ 16% on the year.
From beginning of 2020 until May 11 SP500 was down ~11%. From May 11 to Nov 8 the SP500 up ~24%. I guess you are correct in saying...."I could have made a little more had I stayed in all 12 months"

 

[harllee]

Good for you and happy new year, did your AA change now or it's the same as before March ?

Went a little more conservative since I am turning 70 this year.

My net worth increased because of the stock market increase but my bonds also did well. My net worth also increased because I spent very little--no travel, no eating out, etc. I was amazed how little I spent in 2020 but it was not much fun.

 

[audreyh1]

Shiller's own spreadsheet has correct calculations through October. There are calculations for both November and December, but if you select the column with the CAPE calculation you'll see that it's including some blank data for those two months in the calculation. Through October, it's 31.27 So with Shiller's website, only about 2 months of slippage.
Shiller's spreadsheet doesn't even have a point that matches what's in Multpl's website's number (34.19) so I'm guessing they have some sort of extrapolation going on.

Online Data - Robert Shiller

Cheers.

Thanks!

I guess the multpl.com site isn’t getting updated often. Mostly runs on autopilot.

Yes, I asked them once and they said they were using extrapolation between quarters for earnings.

 

[bada bing]

Yes. I too have noticed that buying unproductive assets produces no growth. Absent inflation, you might as well buy a frying pan or a rock. (Although, come to think of it, there are people who collect fryng pans. Maybe there is an inflation hedge there too.)

I have also noticed, though, that gold is a sort of religion for a surprising number of folks, most of whom are interested in neither history nor logic.

To play the devil's advocate, if you are interested in history, you only have to rewind to the "lost decade" of 2000-2010 to witness a period where precious metals smoked equities and a position in gold was a great diversification buffer. I'm not a market timer nor gold bug and hold no gold, but I understand hindsight "history" and can easily understand arguments for 2021 looking a lot like the top of the dot-com blow off.

We are always in uncharted territory, but to me the current market seems a bit surreal. I'm not a market timer, so feelings don't influence portfolio, but I do wonder about what is a safe haven right now. "Cash is trash" because the world is awash in printed money. There are nose bleed valuations on stock market darlings, my small bitcoin holding is up 350% in less than a year. If I was to seek shelter, I think PM looks like a good bet right now.

 

[big-papa]

To play the devil's advocate, if you are interested in history, you only have to rewind to the "lost decade" of 2000-2010 to witness a period where precious metals smoked equities and a position in gold was a great diversification buffer. I'm not a market timer nor gold bug and hold no gold, but I understand hindsight "history" and can easily understand arguments for 2021 looking a lot like the top of the dot-com blow off.

We are always in uncharted territory, but to me the current market seems a bit surreal. I'm not a market timer, so feelings don't influence portfolio, but I do wonder about what is a safe haven right now. "Cash is trash" because the world is awash in printed money. There are nose bleed valuations on stock market darlings, my small bitcoin holding is up 350% in less than a year. If I was to seek shelter, I think PM looks like a good bet right now.

Why do you think PM's are a good bet? If you think market valuations are high, implying stocks have little room to go up and if you see that interest rates are low (or even negative in real terms), then why would PM be a safe haven when something like gold is very close to an all-time high as well?
https://goldprice.org/gold-price-chart.html

Alternatively, as non-market-timers, we can admit that we have no idea where things will go and just try to be as diversified as possible.

 

[CSdot]

OP here--don't want folks to worry about me. On November 8 (won't say what the significance of that date was) I got back in the stock market because I thought things were looking up for the economy. Since I am 69 and don't need or want to take too much risk I stayed with a very conservative allocation. Thanks to everyone and HAPPY NEW YEAR! 2021 has to better than 2020.

Happy New Year!!

Sounds like you are doing fine.

 

[audreyh1]

That Shiller data - has S&P 500 earnings through Sept 2020, and says Sept 2020 is an estimate.

Earnings have continued to drop since Feb, and are now under $100. Quite a drop from over $139 at the end of last year.

 

[Running_Man]

One thing I've noticed over my investment career is that the biggest profits come from companies that innovate new things and grow quickly. While precious metals might fluctuate up and down a lot, they tend to not perform much better than the amount cash declines in value due to cost of living increases. Sure, after 20 years your gold or silver might be worth more in dollar terms but it has barely kept it's head above water in terms of inflation.

On the other hand, good companies have increased in value 10% to 15% or even more each year. Over 20 years the compound growth of that 10% is 570% and 15% is 1537%.

Or, put in dollar terms, $1000 turns into $6,728.00 at 10% annually and $16,337.00 at 15%. So I've avoided investing in gold or silver (except when I was only 25 years old and didn't understand that investing is about productivity. Precious metals are not productive - they just sit there.

If you don't want to pick individual stocks, you might look into some ETF's based on technological disruptions. This is a big driver of the economy now and going forward. I like the ARK family of funds because their analysis relies on the expertise of technologists, not MBA's.

You know it is remarkably easy to see how gold has done over the last 20 years. It has outperformed inflation by 12X! It has outperformed the SP500 by 2X. But it is remarkably easy to make a post based on fiction because it sounds right.

 

[RetiredAtThirty-eight]

You know it is remarkably easy to see how gold has done over the last 20 years. It has outperformed inflation by 12X! It has outperformed the SP500 by 2X. But it is remarkably easy to make a post based on fiction because it sounds right.

That's why I said "precious metals might fluctuate up and down a lot". Gold is near it's 20 year high. During the previous 20 years gold lost over half it's value.

Check back with me in 20 years. If you think you can time the markets then gold might be a good investment. Otherwise it's better to stick with assets that actually produce wealth rather than represent wealth. Gold is a non-productive asset and is currently priced over twice it's cost to extract from the earth.

 

[Spanky]

That's why I said "precious metals might fluctuate up and down a lot". Gold is near it's 20 year high. During the previous 20 years gold lost over half it's value.

Check back with me in 20 years. If you think you can time the markets then gold might be a good investment. Otherwise it's better to stick with assets that actually produce wealth rather than represent wealth. Gold is a non-productive asset and is currently priced over twice it's cost to extract from the earth.

The purpose of gold, I thought, is for risk reduction as opposed to enhancing return.

 

[RobbieB]

Except in times of uncertainty and upheaval. Like now eh?

I'm wishing I bought 40 ounces back when it was $1350.

 

[NW-Bound]

Except in times of uncertainty and upheaval. Like now eh?

I'm wishing I bought 40 ounces back when it was $1350.

With gold at $1922 now, that's only a gain of $22,880 on a purchase of $54K. You can't retire on that gain. Oops, forgot that you are already retired.

Oh well, it's still better than holding cash, and I have a heck of a lot more cash than $54K.

 

[smihaila]

And on the personal investing front:

We had another neighborhood street happy hour last Friday. A recently retired corporate lawyer (and very success senior partner) told me he is completely out of the stock market for the first time in his life because of unrealistic forward PE estimates. His firm was in Delaware, so he provided legal advice primarily for companies listed on the NYSE.

Based on his 2008-2009 experience, he said corporate boardrooms in many sectors are likely in the panic mode right now, trying to raise capital in the short term to avoid bankruptcy filings by creditors, while not taking on too much debt and cripple earnings for too many years in the future. Since company executives and board members of publicly traded companies are heavy equity holders they have a personal interest to avoid restructuring under federal bankruptcy laws which can wipe out owners and replace them with the previous bondholders. At the same time, many of these companies have pulled annual earnings estimates because executives have little idea of what the future looks like, and are still trying to plan for different scenarios.

On a side note, he told me never to invest in a Chinese company (not that such risk was on my radar anyway) because they file onto the NYSE through shell companies, don't follow GAAP, and the Sarbanes-Oxley law cannot reach into China and imprison a CEO for cooking the books.

But what the hell does he know anyway?

So much for ... buy & hold, "stocks for the long run", and "don't try to time the market"