Would you if you were able to wait it out? I mean, I've got 20 years to retirement. I am expecting at least one more downturn during that time. So, why not hold and wait?
Investing Strategies. What is your move?
- Thread starter PimTac
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It doesn’t matter who is in the big chair, there is no such thing as a painless correction. Now that we are in this situation the cure will hurt. The level of hurt depends on one’s financial status. Obviously those with lower income and high debt will feel more pain.
Another point; I may sound gloomy here but you can also see this as a opportunity. If you are dollar cost averaging then keep that going. You are buying shares at sales prices.
Also, if you have kids this is the opportunity to sit down with them and be frank about money and spending. The lessons they learn from this will stick and they will know what to do the next time around and what to teach their children. Nobody wants their children to do without but getting them involved in various ways to save money will teach them how to cope in the future when times are tough.
Also, if you have kids this is the opportunity to sit down with them and be frank about money and spending. The lessons they learn from this will stick and they will know what to do the next time around and what to teach their children. Nobody wants their children to do without but getting them involved in various ways to save money will teach them how to cope in the future when times are tough.
Yes, I would wait it out, cash on the sidelines is prudent when there’s bad storm clouds on the horizon.
Late 2019 I went to the sidelines because of bad economic news, I still believe to this day there would had been a recession (don’t know how big) if the global illness didn’t shutdown entire globe. I got back in after the market hit.
You can evaluate all the bad economic news and make some good decisions to shelter gains.
I did PM someone on here back in late 2019 with my ’game plan’. I would love for him to repost it but it’s been long deleted. Keep your eyes open to all the warning signs.
Over the course of my career I've been through many downturns. I've stayed in the whole time and it has worked out well.
Some people advocate selling out and sitting on the sidelines. Then, in addition to having taxes on your capital gains, you'll face a critical decision - when to get back in? You might guess right but you could be faked out by a bear market rally and get back in too early, or you might think it's a bear market rally and miss those golden few days at the start of the next boom.
If you check around a bit on the internet you'll find where someone has done the analysis showing what happens if you miss the 10 or 20 best days in a bull market - most of the gains just disappear.
The same can be said if you stay long in a bear market. Right now the Nasdaq is down 30% from the peak and both the Dow and Spx are down 20%. So that 2- 3 year return just vanished in a matter of a few months for staying long forever .
That’s my plan. Same course but i’m hoping to bolster cash on the side, maybe tighten the belt in the process—but otherwise keep dumping money in, as per my budgeting and planning. Was curious about your thoughts for people a ways out.
After the great recession I made the mistake of looking at my 401k. The huge drop was evident—but a couple years into the recovery it was like nothing happened at all. The parabolic curve for growth still applied-the dip was noise.
Now if i was trying to retire during the downturn then it would have been scary. I do believe that most advocate rebalancing 5 or so years from retirement for this reason. Get the five or so years of income in low risk holdings, then if there is a downturn, there is no issue: the market will recover in due time.
With dollar cost averaging you are accumulating shares and more of them during downturns. That in turn accelerates on the other side when the markets turn around. Most people concentrate on their dollar amounts in their accounts but keep an eye on the number of shares you have too.
As for missing the bottom, that happens a lot. Someone famous once said, “ when the train leaves the station you had better be on it.”
Sometimes something happens that is a clear signal. Back in 1982 something did occur that signaled the end of a long secular bear market that had been going on for 16 years.
Dave- I totally agree with you in context I think the federal reserve has been much more transparent since 2008 and as a result it has been easier to determine your appropriate weighting in equities accordingly. What scares me now is how will raising interest rates way below inflation rate when the supply chain is just as much of the problem as is the over supply of money will be very effective in tackling the problem. Another thing is the only country that really can pull a Volcker type move is Russia and when they did it was very effective in countering our financial attack
Although I think holding cash is a very draconian move with the very subpar interest rates paid for liquid accounts where you are way behind inflation by a wide margin. With the much reduced commission rates why not put the cash towards selling very short dated very low delta put options to bide the time? It will give you a much more favorable return on the cash
55% of my portfolio is in cash equivalents targeting these kind of put options sales and 95 % of the remaining portfolio is a 70s mimic ( very energy overweight) that ironically most of it was purchased when absolute stupidity occurred when WTI oil was priced negative and at the time bought a bunch of smaller cap companies with pristine balance sheets.
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I got my "portfolio" right where I want it proportionally. So I divested 3 weeks ago by 50%, then I took out another 50%, and I'm leaving the rest be. When the market gets some real leadership, I'll simply increase the % of my pie by 50% and raise from there. The rest is committed wherever the market goes.
I think that will be a while from now....
I think that will be a while from now....
Depends how you're invested. I have a combination of broad market ETFs, conservative dividend stocks, and a few low cost mutual funds (from the "olden days" which I don't want to get out of as they are actually good performing and have massive attached capital gains).
I'm down less than 9% for the year. 3 of my 4 Canadian bond funds were up this week. The 4th one was up a lot last week. And many of my (mostly Canadian) dividend stocks were also up, about twice as many as last week.
I'm holding quite a bit of cash - and starting to buy on opportunity. Everything is on sale after all. I just hope I haven't missed the bottom, though I don't think so.
I've been through this before. In my case it has all worked out - so far.
Not me. I am down a lotta dollars this year but up waaaay more over the last 3. And I expect to get it all back and more.
I stick to my opinion, if you gotta make big changes to your portfolio you got the wrong portfolio.
Every person has their own idea what to do with their investments.
I was very Tech heavy in my accounts and knew the exponential Nasdaq driven run up would eventually run out of steam. I sold everything before the peak and do NOT care about paying big capital gains taxes. There was no way for QQQ / FAANG type stocks would keep going up forever.
Was it a bad idea to dump everything 1 month before the peak, shelter those big $$$ gains and pay the taxes…. ?
I think it was a great idea. Nasdaq is down almost 30% YTD.
I‘m now trading SQQQ and been enjoying some crazy days with so much volatility.…
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Todays woodshed visitor is Abercrombie and Fitch who is reporting a large loss and weak guidance. Shares are down over 30% in the pre-market.
https://www.cnbc.com/quotes/ANF
https://www.cnbc.com/quotes/ANF
Not really, investing in solid companies with long track records of turning profits and selling at a reasonable P/E ratio hold up better in a downturn then high P/E spec companies.
It really depends on your goals and investing style and using the word "peak" to judge realized and unrealized gains and losses isnt representative of the typical investment. Most people investing cant not hit peaks and downturns within a couple week or even month period, if they do then it is more luck and would not work over the long term.
What I am saying is the unrealized gain isnt gone forever (if at all) if you invested in a company with a history of solid earnings growth because the P/E would just be that more attractive.
Example over the last 3 years, as of last nights close, even after the last few month market melt down;
WMT = up 20% over the last three years
TMUS = up roughly 80%
WFC = down 6% or so... (except for me because I bought more when it was getting trashed mid to late 2020, all the way down into the low twenties.
and these above numbers take into account the worst the market has dished out in a long time, any rebound and they are right back up there any downturn and my unrealized gains are still not gone. I believe the 3 stocks I mentioned are really solid up or down long term investments.
I will admit... WFC keeps me at the edge of my seat! A bit out of my comfort zone.
This isnt a get rich quick things for me, its a fun thing, watching my money grow. Sure, get rich quick is nice, I just dont think or would advise someone that it will work over decades of investing.
Kind of like the lottery, sure, there are some big, huge winners out there but that is not the norm.
I did say to Dave Hess, wow, I wish I sold these 3 off just a few months ago as they all hit highs, I SERIOUSLY considered it... but I have felt that way before and was glad I didnt and I guess this is what long term is about, solid earnings and or low P/E... I do agree the WFC is a bit "out there" but its worked out well for me.
True, like I say, no right or wrong, Im preserving and growing my investment, I wont strike it rich, just looking for solid earnings with what I think, low exposure. Maybe with some stroke of luck one day ... well...
I will admit, some tech stocks are starting to look attractive to me... but whatever.
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*LOL* I wasnt sure they still were in business!
Half kidding, well, they have been in the gutter for a long time, speculation has increased the stock price 100% in two years, so much for that.
*LOL* I wasnt sure they still were in business!
Half kidding, well, they have been in the gutter for a long time, speculation has increased the stock price 100% in two years, so much for that.
They are one of those mall stores that never has customers inside.
A typical mall scenario is 100 stores with about five stores getting all the traffic.
Oh yeah, I know them well. One in the mall near me, it was looking REALLY shabby two or three years ago. Thought they were in some restructuring of their business or sold their name, no longer the Hollister or American Eagle feel but more of a BigLots store *LOL*
Ill admit though, that was some nice short term run in the stock price.
I had not been to a mall in probably 3 years or so......needed a dress shirt (yes I retired and threw them all out when we moved). I need a shirt for a wedding celebration (giving a speech). Anyway need a shirt.....................
The mall was ODD. There was a store for a local rock hound club, a very strange mom and pop tailor, also mom and pop food places..............some other non chain stores............I wish them all success in heaps, but the hell happened to the cheezy chain stores? Yeah, stuff NOT to invest in.
Retail still bites me in the ass with surprising repetition, I just say NO. WMT, HBI, STZ now?............maybe. MMM count? I did buy AMRK and it's been great.
The mall was ODD. There was a store for a local rock hound club, a very strange mom and pop tailor, also mom and pop food places..............some other non chain stores............I wish them all success in heaps, but the hell happened to the cheezy chain stores? Yeah, stuff NOT to invest in.
Retail still bites me in the ass with surprising repetition, I just say NO. WMT, HBI, STZ now?............maybe. MMM count? I did buy AMRK and it's been great.
Yep. They were a fad. It sounds like one of those stocks that Jimmy Cramer likes to pump but I don’t watch him so that’s speculation on my part.
Forever 21 was another Roman candle fad. They were the hot store until they weren’t. It was sudden too.
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