For those who are waiting to get back into the market...

[mistermike40]

You seem to have a unique power. Can you let us know when to get back in?

I have a great deal of respect for the financial opinions of *many* ER forum members... I've learned a lot from mostly lurking over the years. I started this thread with the hope of gaining some insight on what to do. I've found myself in this unusual (for me) situation and am truly unsure of when to get back in, and was curious what others thought. Quite a few members have offered interesting and useful perspectives, and I thank those people.

However, sarcastic remarks like this one make we wish I'd never asked the question in the first place. I'll use you as an example travelover... is it your intent to dissuade people from asking serious questions, and using this incredible resource to bounce ideas off and to learn? I'm very curious about the motivation behind your comment.

 

[travelover]

..........However, sarcastic remarks like this one make we wish I'd never asked the question in the first place. I'll use you as an example travelover... is it your intent to dissuade people from asking serious questions, and using this incredible resource to bounce ideas off and to learn? I'm very curious about the motivation behind your comment.

I've been on this forum for about 15 years. Over those years many people have posted about their skills in timing the market. I've never seen anyone yet that has any more insight as to when to buy or sell than random chance would merit. You posted that you had unique insight to know when to sell.

I changed AA because I sensed there was/is almost a perfect storm of events that could cause the market to collapse.

Do you seriously think you have more insight than people that have been doing this for a living for decades? If not it is all baked into the cake already. But please continue on, I won't see your posts anymore.

 

[cyber888]

In the other direction, current debt levels of the Federal Government provide a huge incentive not to let interest rates get too high.

I agree .. the Fed will chicken out in October, right after a September hike.

 

[COcheesehead]

I agree .. the Fed will chicken out in October, right after a September hike.

…and right before the election.

 

[Time2]

I will probably start dollar cost averaging stocks at a 40% drop.

Many of us are praying you dream does not come true.

 

[Time2]

So this is a chart of every year since 1926 YTD performance of S&P500. Will be interesting to me

Not that it means anything, but it looks like about 77% of the time the S&P ends the years higher.

 

[mistermike40]

I've been on this forum for about 15 years. Over those years many people have posted about their skills in timing the market. I've never seen anyone yet that has any more insight as to when to buy or sell than random chance would merit. You posted that you had unique insight to know when to sell.

Do you seriously think you have more insight than people that have been doing this for a living for decades? If not it is all baked into the cake already. But please continue on, I won't see your posts anymore.

I suppose you won't see this, but it's seems either you didn't understand what I said, or maybe I didn't state it clearly enough. I possess *no* selling insight at all... zero... in fact I've been stressing the opposite (and it's why I started this thread). I was hoping to get some ideas from people who know *way* more on this topic than I do.

As far as when I got out, I saw the market dropping and - given inflation, war, pandemic, gas prices, supply chain issues, government gridlock, etc - I thought the market might be ripe for a correction. No special insight, I'm sure that thought crossed everyone's mind. The SP500 could have just as easily gone up another 500 points.

Like most people, I really try to avoid both drama and confrontation... life is too short and I want to get along with everyone. I had no idea when I started this thread that it would be controversial at all... had I known that I never would have posted it.

If I've somehow offended anyone either by starting this thread or by any of my posts within it, it was completely unintentional and I sincerely apologize.

 

[purplesky]

I have a great deal of respect for the financial opinions of *many* ER forum members... I've learned a lot from mostly lurking over the years. I started this thread with the hope of gaining some insight on what to do. I've found myself in this unusual (for me) situation and am truly unsure of when to get back in, and was curious what others thought. Quite a few members have offered interesting and useful perspectives, and I thank those people.

However, sarcastic remarks like this one make we wish I'd never asked the question in the first place. I'll use you as an example travelover... is it your intent to dissuade people from asking serious questions, and using this incredible resource to bounce ideas off and to learn? I'm very curious about the motivation behind your comment.

Dude you are a market timer. We all are now market timers by default in a crashing stock market with a war happening at the same time. You told us you are not a market timer but started a thread about timing the market and finding the bottom of a Bear market.

You are asking people what they see in their market timing crystal ball.

My insight for you is don't be the investor sitting on the sidelines when the Bull market happens fast and the investor sitting on the sidelines missing the quick ride backup.

 

[copyright1997reloaded]

I've been on this forum for about 15 years. Over those years many people have posted about their skills in timing the market. I've never seen anyone yet that has any more insight as to when to buy or sell than random chance would merit. You posted that you had unique insight to know when to sell.

Do you seriously think you have more insight than people that have been doing this for a living for decades? If not it is all baked into the cake already. But please continue on, I won't see your posts anymore.

This is the active investing section, where at least theoretically discussions of timing are welcome.

I worked with "people that have been doing this for a living for decades" and can tell you that they are humans, with human faults and biases. The result of that are inaccurate pricing characteristics at various times in terms of market behavior.

It the long run, information becomes baked into the cake, but as Keynes stated: in the long run we are all dead.

As an example, before the GFC, AIG wrote "insurance" (credit default swaps) at very low rates, even as those pools contained more and more sub-prime / adjustable / no-doc loans. They were experts who were doing risk assessment for decades, yet were not able to see what was in front of them.

 

[travelover]

..........As an example, before the GFC, AIG wrote "insurance" (credit default swaps) at very low rates, even as those pools contained more and more sub-prime / adjustable / no-doc loans. They were experts who were doing risk assessment for decades, yet were not able to see what was in front of them.

I think we can agree, the "experts", like the guy I just put on IGNORE, can't predict the future. My only issue is when people claim they can.

 

[jurgs01]

... how much longer are you planning to wait? Until after the midterms, or Ukraine is resolved, or the supply chain is corrected?



Here's my take: eventually, the SP500 will go back to its January 2022 high. It might be later this year, or next year, or 2024/2025... but it will get there. And looking at where the SP500 is right now, that will represent a 32% net gain (from today).



I realize the market will almost definitely go down further, but you're never going to time it at its absolute lowest... and I'll take a 32% ROI any day.



Any thoughts on this? I'm not going to pull the trigger today but I think I'm getting pretty close.

Take a 50 year P/E trendline for a sector, and start DCA'ing when we drop below it.

 

[copyright1997reloaded]

I think we can agree, the "experts", like the guy I just put on IGNORE, can't predict the future. My only issue is when people claim they can.

While I don't agree with his assessment that the market will return to new highs this year...nothing he stated deserves an ignore (at least in my estimation).

Myself, in all my years here (before 2008 as somehow my original ID got lost, thus "reloaded") I don't think I've ever put anyone on ignore. Eh, even when I disagree with people I like to hear what they are saying (and what others are saying which sometimes brings additional insight).

But you do you if it makes you feel better.

 

[COcheesehead]

Not that it means anything, but it looks like about 77% of the time the S&P ends the years higher.

Mid term election years in the second year of a new president are usually down.

 

[travelover]

.......

Myself, in all my years here (before 2008 as somehow my original ID got lost, thus "reloaded") I don't think I've ever put anyone on ignore. Eh, even when I disagree with people I like to hear what they are saying (and what others are saying which sometimes brings additional insight).

But you do you if it makes you feel better.

If you are trying to start a pi$$ing contest, you are wasting your time with me.

 

[NW-Bound]

I am a market timer, but not one who is ever cockily sure. And so, I practice Tactical AA where I reduce stock AA if I feel the market is overpriced, and increase stock AA when I feel pessimism in the market is high.

And once I sell something, as long as I buy the same stock back at a lower price than I sold, I call it a success. Meaning, if I lose money less than buy-and-hold the same thing, then my trading is fruitful. I don't expect to hit the exact top or bottom.

So, had I sold out at the top, I would DCA back starting right now.

In my case, I sold just about 8 to 10% of stocks late last year via calls, and have been selling OTM puts to buy them back. I bought them back too early, but still lower than where I sold.

And the premium I collect from selling calls, then selling puts, adds up to $103K YTD. I still lost quite a bit of money overall, but less than if I had done nothing.

I got all the stocks back, plus that extra cash which is way more than I spend. I feel quite OK with that. And that with just 10% variation on stock AA.

 

[MichaelB]

Ah, yes, back on topic …

And once I sell something, as long as I buy the same stock back at a lower price than I sold, I call it a success. Meaning, if I lose money less than buy-and-hold the same thing, then my trading is fruitful. I don't expect to hit the exact top or bottom.

I think that’s reasonable. In the case of a taxable account, it would mean buying back the same stock at the lower price and after paying the cap gain tax.

 

[Exchme]

I suppose you won't see this, but it's seems either you didn't understand what I said, or maybe I didn't state it clearly enough. I possess *no* selling insight at all... zero... in fact I've been stressing the opposite (and it's why I started this thread). I was hoping to get some ideas from people who know *way* more on this topic than I do.

As far as when I got out, I saw the market dropping and - given inflation, war, pandemic, gas prices, supply chain issues, government gridlock, etc - I thought the market might be ripe for a correction. No special insight, I'm sure that thought crossed everyone's mind. The SP500 could have just as easily gone up another 500 points.

Like most people, I really try to avoid both drama and confrontation... life is too short and I want to get along with everyone. I had no idea when I started this thread that it would be controversial at all... had I known that I never would have posted it.

If I've somehow offended anyone either by starting this thread or by any of my posts within it, it was completely unintentional and I sincerely apologize.

You did better than I, I didn't change anything. Having gotten one insight (or guess) right, your brain will now think you can do it again. But next time or the time after that, your instincts may lead you astray. If you are one of the lucky few that can have a good enough batting average to make money, then it probably isn't going to help to ask a bunch of folks what to do when we mostly didn't get it right.

 

[jazz4cash]

Sort of along these lines, I have a stable value type fund (Federal TSP G Fund) and I have put on the calendar to transfer each month 1% to the C Fund (S&P500) and 1% to the L fund (income fund). Very slow DCA starting now.

Transferring from G fund to L fund income? L fund Income is comprised of 70% G fund so that is indeed a very slow adjustment.

Edit: L fund Income is my favorite fund.

 

[copyright1997reloaded]

Ah, yes, back on topic …



I think that’s reasonable. In the case of a taxable account, it would mean buying back the same stock at the lower price and after paying the cap gain tax.

I believe he's doing this in tax-deferred accounts.

In my case, most of my tax-deferred assets are in 401k/403b/457 plans and thus I can't buy/sell individual securities in these, so no options for me.
In terms of my regular accounts, I've done some options over the years, but in the scope of things very very small amounts compared to my holdings, and just about nothing compared to NW's trading!

This year, I have tried to manage the tax consequences of my trades/changes in holdings. Right now I have the worst of all worlds, short term losses which are being offset by long term gains. So, in some cases if I have a short term gain I will take it NOW, and buy back the security. If I don't and I end the year w/STL and LTG, I will be wasting my lower-taxed LTG which will be matched against the STL.

My LTG's are because I've trimmed a few long term big time winners (like Apple, which is even after trimming my largest single stock holding).

I'm mentioning the above kinds of things because one of the advantages we can do now w/the market down so much is to try to take advantage of it a bit by repositioning things in terms of tax consequences.

 

[target2019]

... how much longer are you planning to wait? Until after the midterms, or Ukraine is resolved, or the supply chain is corrected?

Here's my take: eventually, the SP500 will go back to its January 2022 high. It might be later this year, or next year, or 2024/2025... but it will get there. And looking at where the SP500 is right now, that will represent a 32% net gain (from today).

I realize the market will almost definitely go down further, but you're never going to time it at its absolute lowest... and I'll take a 32% ROI any day.

Any thoughts on this? I'm not going to pull the trigger today but I think I'm getting pretty close.

Sometimes the framing of a question leads to contentious discussion, so there's that.

I offer that most investors on this forum have a plan that is driven by asset allocation and indexing. You pick a ratio and live with it. Looking through some of your responses it seems likely you are not in this camp.

The way I see your predicament, you sold significant holdings (and kinda got it right as a market timer), but now you're looking for ideas as to when to buy low (the 2nd part of market timing).

My first idea is that you could select an asset allocation that provides what you need, and stick to that. However, it is clear to me at least, that some investors cannot do that.

My second idea is yes, I am a dirty market timer too. When 25% of our indexing went to cash during two 401K rollovers, I decided that our future with 5 legs (at least), could withstand some market timing. I did not want us to continue with a 60/40 portfolio or so during a time with impending recession and market decline, and two wage earners entering retirement.

1) I need the total portfolio to be invested in a way that is as automatic as possible.
2) Carrying 25% cash into the future is not something I want to try with rising rates and inflation.
3) I have limited time to construct what I described in #1. So I am actively carrying out a buying strategy to get back to a 50/50 asset allocation.

In my default excel macro sheet I am keeping track of the progress as I approach the desired allocation. What I have decided to do is, of course, a big no-no to the experts you seek response from.

In a nutshell, I am buying in tranches as the stock market declines, and we have about one-third of the way to go. Yes, I could wait for the lowest entry point, but I don't. Yes, I could calculate ROI and use up what's left of my time doing so, but I have no interest in that.

The illustration shows the desired A/A for this corner of the total portfolio. When accomplished will be 50/50 overall.

YMMV.

 

[mistermike40]

Sometimes the framing of a question leads to contentious discussion, so there's that...

Thanks for your reply target2019, I really appreciate your input - everything that you wrote. I've thought about your first comment, and maybe that's what upset some people? Let me explain once more what happened (and then I think I'm done with this thread):

1) I didn't time the market even close to "exactly", I actually lost quite a bit of money (of which I suspect I have less than most people here)
2) My intent wasn't to hold it this long... I saw the market drop and (kinda) panicked, changed AA with the thoughts of possibly shifting it back almost immediately if things leveled out quickly (not a good idea, I know - I usually keep AA at 60/40)
3) When I tried to shift money back to my normal AA, I found out that I have to wait 30 days before transferring money back into SPI (after a withdrawal)... I don't know if this is typical or unique to my 401k. So, for most of February my hands were tied... I was forced to wait (i.e. sweat) it out.
4) Which leaves me where I'm at now, trying to determine the best time to shift AA back to normal
5) I was hoping to get some advice from people here (which I did and am grateful)
6) I had *no* idea anyone would take offense to my request for help. I wasn't trying to time the market on purpose, and certainly have no crystal ball. I have to admit it hurt a bit when some people here said that about me, and it made me feel defensive.
7) I still plan to lurk here, and leave an innocuous comment now and then
8) Thanks again for those who went out of their way to give me thoughtful advice.

 

[kgtest]

i just keep buying more equities. Either way I slice it, market timing to sell and buy lower, or just continuing to buy brings me to the same destination. I still own more shares...

He who dies with the most shares, dies with the most shares. Someone on this forum taught me that.

 

[NW-Bound]

... He who dies with the most shares, dies with the most shares. Someone on this forum taught me that.

Oh, but many posters also say that having more shares allow them to BTD.

 

[Out of Steam]

Transferring from G fund to L fund income? L fund Income is comprised of 70% G fund so that is indeed a very slow adjustment.

Edit: L fund Income is my favorite fund.

I'm a cautious investor, but still find 30% stock a bit low as a retirement allocation. Going through this market drop calmly starting at 40% stock is making me think that it's a reasonable long-term floor.

 

[purplesky]

Thanks for your reply target2019, I really appreciate your input - everything that you wrote. I've thought about your first comment, and maybe that's what upset some people? Let me explain once more what happened (and then I think I'm done with this thread):

1) I didn't time the market even close to "exactly", I actually lost quite a bit of money (of which I suspect I have less than most people here)
2) My intent wasn't to hold it this long... I saw the market drop and (kinda) panicked, changed AA with the thoughts of possibly shifting it back almost immediately if things leveled out quickly (not a good idea, I know - I usually keep AA at 60/40)
3) When I tried to shift money back to my normal AA, I found out that I have to wait 30 days before transferring money back into SPI (after a withdrawal)... I don't know if this is typical or unique to my 401k. So, for most of February my hands were tied... I was forced to wait (i.e. sweat) it out.
4) Which leaves me where I'm at now, trying to determine the best time to shift AA back to normal
5) I was hoping to get some advice from people here (which I did and am grateful)
6) I had *no* idea anyone would take offense to my request for help. I wasn't trying to time the market on purpose, and certainly have no crystal ball. I have to admit it hurt a bit when some people here said that about me, and it made me feel defensive.
7) I still plan to lurk here, and leave an innocuous comment now and then
8) Thanks again for those who went out of their way to give me thoughtful advice.

It's a guessing game now as the market continues to crash.
But right now the market is on sale. Setting new 52 week lows.

Only you can decide to make a AA move.

Everyone is nervous about the (world) economy. You are not alone. Relax.