Market correction anxiety

[ERD50]

The look of my portfolio balance is so sad now especially after I got used to the fat number a month or so ago and was hoping to hit a new milestone by the end of the year.

Dang market, why me? LOL

Geez, markets go up and down.

Look back 1 year, or 2, or 5 and you should feel good.

If you can't take volatility, move to 100% fixed income. You won't see dips, but you won't see rises either. Remember, the market dips occur from peaks that don't exist in a 100% fixed AA. You can't fall if you never get up.

-ERD50

 

[GravitySucks]

It's just the script the market follows. Must be driven by some sort of Freudian thing.

More B. F. Skinner than Freud....

QUOTE=bada bing;2135358]Evolutionary penchant for double bottoms ? [/QUOTE]

It does make the rocking' world go around.

 

[HadEnuff]

This market is schizo.

My advice to myself: Find a comfortable AA, and sit back, relax, do nothing.

 

[dvalley]

Can still have a Santa rally. Let's see after the elections.

Yep! hoping for it

Geez, markets go up and down.

Look back 1 year, or 2, or 5 and you should feel good.

If you can't take volatility, move to 100% fixed income. You won't see dips, but you won't see rises either. Remember, the market dips occur from peaks that don't exist in a 100% fixed AA. You can't fall if you never get up.

-ERD50

You're right, of course.

Sure I can take the volatility, can you take a joke?

 

[NW-Bound]

With 3.1 YoY wage growth, the Fed will continue to hit the brakes. God forbid workers actually make more.

We talked about this some time ago on this forum. High inflation treats workers better than investors.

 

[Cassius King]

This is a very complicated case, Maude. You know, a lotta ins, a lotta outs, a lotta what-have-yous. And, uh, a lotta strands to keep in my head, man. Lotta strands in old Duder's head.

 

[copyright1997reloaded]

We talked about this some time ago on this forum. High inflation treats workers better than investors.

I know. Just caring about the little people with my statement, in case I ever run for office and someone goes through all my social media accounts.

 

[jebmke]

December rate hike is almost guaranteed. Today’s strong jobs report and wage increases make it almost certain.

Interest rates are making a large move up today.

Maybe we will eventually get some reasonable rates on longer TIPS. If we could get up over 2% on 10 years I'd probably take a look.

 

[RenoJay]

I heard it said were in a rolling correction. But are we rolling up hill or down hill?

People in this forum are probably sick of my bearishness, but I fully expect we are rolling mostly down for a long time. The reason is that by many measure, the US stock market is severely over valued. Valuations don't matter....until they do. Then they matter with a vengeance. Elections, international relations, etc. all matter for short term return. But for long term, valuations matter. A LOT! We very well may have another short term run up, but in reading 10 year forecasts, I find very few credible observers who predict anything better than extremely mediocre returns over the next 10-12 years, including Vanguard. Personally, I've sold out most of my equities (and am enduring enormous capital gains taxes to do so) on the expectation that sometime in the next five years, there will be a significantly better entry point back into equities. I think for people who prefer not to follow this stuff, a buy and hold forever mentality is ok, but I think they'll be very underwhelmed looking at their account statements a decade from now.

 

[W2R]

This market is schizo.

My advice to myself: Find a comfortable AA, and sit back, relax, do nothing.

+1

The market will go up, the market will go down, and do all this over and over. I plan to do nothing and just live my life. Hopefully we'll get through whatever is in store, with no excessive difficulties.

Now it wasn't so easy to be this nonchalant about it, when I was working! At that time, I was afraid that market swings might mean I'd have to delay my retirement. But now, at age 70 and retired, that isn't an issue and neither is going back to work. The only possible negative outcome is having to tighten the belt, and hey, we all know how to do that. I have a paid off house and car, and no debts, so that means I can sleep at night pretty easily and won't need much over my SS to live on.

I watch the market mostly for entertainment.

 

[marko]

I tape the 50 year Dow trend on one wall of my living room.
Then I walk across to the opposite wall.
My eyesight isn't great but what I see is a steady upward trend with what I think are ups and downs along the way.

 

[Free bird]

This all boils down to a know thy self exercise. If your comfortable taking a 50-90% hit on the stock side of a 50-50 portfolio then you should not deviate from your stay the course plan. If you have faith the system will recover in a big draw down event before you burn through your cash then you should stay the course. But if you know you will fold during a gut check & have doubts about a relatively quick recovery then the stock market isn't an option. The last recession we had was 10 years ago. Without some serious intervention the finacial system was in doubt. At my age my risk tolerance is lower than it was 10 years ago. Will the American consumer carry the day or will the rest of the world be needed & play a larger part in keeping the system clicking along?

 

[marko]

This all boils down to a know thy self exercise. If your comfortable taking a 50-90% hit on the stock side of a 50-50 portfolio then you should not deviate from your stay the course plan.

I saw an almost 40% paper 'loss' in '08. Stayed the course.
By June of '09 I had developed nerves of steel.

 

[haha]

This all boils down to a know thy self exercise. If your comfortable taking a 50-90% hit on the stock side of a 50-50 portfolio then you should not deviate from your stay the course plan. If you have faith the system will recover in a big draw down event before you burn through your cash then you should stay the course. But if you know you will fold during a gut check & have doubts about a relatively quick recovery then the stock market isn't an option. The last recession we had was 10 years ago. Without some serious intervention the finacial system was in doubt. At my age my risk tolerance is lower than it was 10 years ago. Will the American consumer carry the day or will the rest of the world be needed & play a larger part in keeping the system clicking along?

I would sure like to meet the god or goddess who could be comfortable with a 90% stock hit.

Ha

 

[ERD50]

People in this forum are probably sick of my bearishness, ...

You can be as bearish as you want, it's just an opinion, it doesn't make me 'sick'. I like to hear different viewpoints.

... but I fully expect we are rolling mostly down for a long time. The reason is that by many measure, the US stock market is severely over valued. .... We very well may have another short term run up, but in reading 10 year forecasts, I find very few credible observers who predict anything better than extremely mediocre returns over the next 10-12 years, including Vanguard. Personally, I've sold out most of my equities (and am enduring enormous capital gains taxes to do so) on the expectation that sometime in the next five years, there will be a significantly better entry point back into equities. ....

But when I go back and look at charts, I just really don't feel confident that I can pick an exit, and then a re-entry point below that exit. It's easy to see in hindsight, but what if a few years later, the market is 10% below your exit - do you jump in, or wait for 12%, or 15%? What if 12% never comes?

The market could just go mostly sideways for a long time, until valuations catch up.

.... I think for people who prefer not to follow this stuff, a buy and hold forever mentality is ok, but I think they'll be very underwhelmed looking at their account statements a decade from now.

I've decided to buy and hold, because I follow this stuff!

-ERD50

 

[IMATERP]

December rate hike is almost guaranteed. Today’s strong jobs report and wage increases make it almost certain.

Interest rates are making a large move up today.

Maybe a half a point. The Fed is capable of bringing "the Don" down.

I

 

[NW-Bound]

I tape the 50 year Dow trend on one wall of my living room.
Then I walk across to the opposite wall.
My eyesight isn't great but what I see is a steady upward trend with what I think are ups and downs along the way.

Yes. But not many of us still have 50 years left to live.

In fact, having to "sell low" to get money to cover our living expenses kind of sucks.

 

[Free bird]

When the fed raises in Dec I will have bumps & maturing to invest at a higher rate. At some point savers will be back in vogue

 

[marko]

In fact, having to "sell low" to get money to cover our living expenses kind of sucks.

That's one of the reasons we like to keep 2+ years expenses in MM

 

[marko]

I would sure like to meet the god or goddess who could be comfortable with a 90% stock hit.

Ha

It depends on how long that 90% drop stays down there. As noted I was down 40% at the end of 2008 but by June was feeling a lot better.
I would personally view a 90% drop as a once in a lifetime buying opportunity.
Having said that, I think such a scenario is unlikely.

 

[Free bird]

I'm sure they considered a 90% drop unlikely in the 1920s

 

[marko]

I'm sure they considered a 90% drop unlikely in the 1920s

Likely not, but my grandfather didn't sell at that time and made out much better than his peers.

In fact the house I'm living in now, he bought for pennies on the dollar as a foreclosure in 1932.

But is this what this discussion is about? I thought we were talking about a 'market correction' not a 1929 style Depression.

 

[Free bird]

How old was grandpa when he bought your house? Probably a young man.

 

[marko]

How old was grandpa when he bought your house? Probably a young man.

Early 40s but not sure how that means anything.

 

[Free bird]

Age matters. I know it does for me.