How much do you invest when the market is down?

[wmc1000]

When it dropped 10%+ we put in 1/3 of our accumulated cash pile as we are retired but our expenses are less than our SS and dividend income.

 

[mrfeh]

So. I've shown you mine, what formula or feeling or method do you savvier stock buyers use to inform your purchase times and quantities?

Just don't. Rebalance according to pre-defined metrics.

No dry powder.

 

[Dash man]

We had some cash handy from dumping Boeing, so bought 100 shares of AAPL and 100 of V. Mostly we just stay around 50-50 not counting real estate and don’t react to downturns unless we have available cash.

 

[Rianne]

We've been re investing dividends for years. Won't be touching VG portfolio for another 3-4 years if all goes as planned. Living on cash set aside and DH part time (home based) consulting income

 

[jollystomper]

99% of the time we did not change anything. When I was working, I continued my automatic investing. Now retired, we are still reinvesting most of our dividends along with DW's SS check.

A couple of times I did invest, but that was more spur of the moment when we had funds with no immediate need for them. For example, Friday I made more Roth IRA contributions and bought some funds, since we had not yet maximized our 2019 contributions.

 

[Chuckanut]

Q: How much do I invest when the market is down?

A: More than when the market is up.



I am not good at timing the market (stocks or bonds). When the market drops 10-20% and I have a few extra dollars sitting around I dump in a little more. But, never enough to bet loose the farm or cancel my plans. This time I had no extra dollars, so I just did a Roth conversion and saved maybe 10% on the taxes I would have paid a month ago.

 

[mchisam]

Today was my day to re-enter the market. Praying for anyone affected by this virus but believe we will overcome this and overcome heading into spring/summer.

We have faced so many of these challenges in the past

 

[Arizona1]

Bought VTI last week using 1/3 of money waiting several years for a downturn. Bought more this morning when the market dumped. Averaged I’m down about a dollar per share. Will be using the other 1/3 in another week or two. I’ve got cd’s laddered out until December and will put it in also unless the market recovers fully.
Plan to leave it all there for at least 10 years.

 

[PointBreeze]

That's easy. I just invest enough to rebalance, and no more.

+1

 

[themillerman]

I just continue to let my IRA interest and dividends reinvest monthly and quarterly as they are paid out, that way during down markets my dollar cost averaging buys more shares than during an up market. Also, important to re-balance when asset allocations veer more than 5% from target ranges.

 

[Ready]

I keep my equity exposure to 55%. I sell when they reach 60% and buy when they drop to 50%.

But even after yesterday’s big drop, I was still at 52%. At the market high I was at 56%. I still can’t figure out how we could we having such big swings in the market and my exposure has only moved by 4% from high to low.

Does that make sense to anyone?

 

[calmloki]

We had filled the 5% and 10% below 52 week high orders but didn't quite get to the $135.86 20% off order we have in for VTI. Really had hopes for that, as it would have exhausted the cash sitting in the settlement account.

 

[Dtail]

I keep my equity exposure to 55%. I sell when they reach 60% and buy when they drop to 50%.

But even after yesterday’s big drop, I was still at 52%. At the market high I was at 56%. I still can’t figure out how we could we having such big swings in the market and my exposure has only moved by 4% from high to low.

Does that make sense to anyone?

Yes that can make sense.
It also matters what type of short term growth you have had on the Fixed Income side. For example, if you are heavy into 30 year bonds, your equity % will shrink even faster.

 

[audreyh1]

When I rebalance, I do it in one or two days. If I have enough in my cash to cover my trades, I can do it all in one day.

Otherwise I might have to sell some funds and then wait until the next day to buy.

I don't worry about day to day variability.

I don't "save dry powder" to put into the market at presumably opportune moments. I find that way too difficult in addition to requiring way more vigilance than I am willing to give to micro-managing my investments.

That's easy. I just invest enough to rebalance, and no more.

Exactly!

 

[easysurfer]

That's easy. I just invest enough to rebalance, and no more.

+1

I couldn't have said it any better .

 

[Scrapr]

I am sitting on a pile of cash. So rather than picking days or market levels to feed it in I chose 18 months as a time period. Divided the amount by 18 and buy on the 15th. That way I don't have to be smart. Because I'm not

 

[target2019]

I keep my equity exposure to 55%. I sell when they reach 60% and buy when they drop to 50%.

But even after yesterday’s big drop, I was still at 52%. At the market high I was at 56%. I still can’t figure out how we could we having such big swings in the market and my exposure has only moved by 4% from high to low.

Does that make sense to anyone?

I looked at 3 funds that are 50/50 AA. I think your drop from recent high to low should be something like -10%. If you're calculating in a spreadsheet their could be an error of some kind. Still, you could be in funds/etf/stocks that are doing better than the average.

FFAMX
19.14
17.28
-10%

MDCPX
24.37
21.51
-12%

RLBGX
29.43
26.46
-10%

 

[atmsmshr]

Stay fully invested at your desired mix of stocks/bonds.

Then you never have "dry powder" to worry about.

I would/will rebalance if we are 5% off. The dip last week didn't get to 5% off.

My 401k did hit on Friday. I just did not deploy an un-invested funds.

+1

For my risk tolerance, it was essentially 100% stocks while working, until tapering down a year before retiring, and now I expect a rising glidepath till Social Security.

 

[Archman]

I went in to IVV Friday (about 10% of cash reserves)to see if I could get some benefit when this turns around. If it goes down some more this week, I may go another 10%.

As for my retirement accounts, my AA is usually 60/40, and I am not doing anything yet. If we continue to drop however, I may bump the equity up to 80% since I have a fair amount of recovery time.

On 3/5 I bought IVV. As of this writing I'm down 9.3%

 

[Lawrencewendall]

Have about 7k sitting on the side. Thinking of plowing it into NEWT. Currently paying 11.64% annually. Dunno.

 

[calmloki]

Got up this morning to find that the limit order for a buy on VTI at 20% under a 52 week high had executed. Elation was tempered by seeing that VTI was now selling for about $8 less than our limit order. So went to Vanguard and find that the executed price on our order was $6.68/share less than our limit price! My lack of knowledge on the stock market is deep - all I can imagine is that VTI opened at a super low price? In any case, glad to have the buy action taken without my having to dither about the timing of the purchase.

Fun fact: our purchases have not managed to keep our total stock value above our value on 2/19/20

 

[pc95]

Not retired yet, but ~60% in currencies/bonds. We have taken a big black-eye paper-loss these last 2.5 weeks - but we are hopefully employed awhile longer....I'm worried about the aftermath and longer term affects (low market plateauing), unemployment, economic strife, malaise etc more than the actual virus at this point. This looks a factor worse than 2008, and closer to the 1930s. Certainly now the largest negative panic-driven world event in the 21st Century. New strains of this virus becoming more lethal are numero uno for humanity now. Reading about the Influenza pandemic in 1918, it was a subsequent strain to the first wave of the virus that was much more lethal. at Hopefully that doesn't repeat with the current virus.

https://www.archives.gov/exhibits/influenza-epidemic/

 

[Toocold]

I'm in an usual situation where I have a significant pile of cash because I exercised stock options from leaving work. My original plan was to invest 10% every month at a 60/40 AA. With the wild swings, new strategy is to invest 10% every month or if equities drop 5/10/20%, so I have purchased at each of these levels. Going forward, I'll invest 10% each month or if the market drops 30%/40%/50%/60%/70%/80%/90% and finally the Apocalypse laugh.

I don't need this cash.

 

[NotYourAverageJones]

Not retired yet, but ~60% in currencies/bonds. We have taken a big black-eye paper-loss these last 2.5 weeks - but we are hopefully employed awhile longer....

Same...we are planning to retire end of next year. Our paper losses are upper 6 figures but we still have all our shares. So while it's a bit of a shocking figure to see, it's not permanent and it will go back up. We are just grateful this is happening now and not in the year after we retire. That would be a tougher pill to swallow.

We had about 40% in available cash on hand in prep for retirement spending, so we are leveraging that cash to buy back the equivalent of our total losses. So far we have bought back in about 50% of our overall losses. We deployed it a little early (on Wednesday) but still way below the highs. So way better early than too late and we do expect continued volatility ahead which will mean more buying opportunity. We are just waiting for Mr. Buffet to jump off that $128 billion pile of cash, then we will deploy our remaining cash...

The difference between now and Oct 2008 for us is we aren't too scared to act and deploy cash! We were just starting out and we were paralyzed by fear, which is normal when it’s your first significant decline during your accumulation stage. But a good lesson was learned and we now know that this too shall pass and we don't want to regret not taking advantage of this fire sale! For us, this buying opportunity will prob be our last, since we are retiring next year and won't have any more wage income to deploy. Try not to panic and stay the course...

 

[stephenson]

Have about 7k sitting on the side. Thinking of plowing it into NEWT. Currently paying 11.64% annually. Dunno.

LW,

Wow - some kind of dividend on NEWT ... how’d you isolate it from the herd?