How much did we lose today?

HHusky

I was asked this again, by she who must be considered, in light of the stock market drop today. My answer is always the same: “Nothing. We’ve never sold shares because the market goes down.” In fact, as we often do when there’s a slide, we bought some shares today.

But that got me to thinking how I am extremely reluctant to buy when the market goes up, even when I simultaneously expect that it can and will rise more. It’s irrational, and sometimes I overcome it, but I can’t shake it.

creepycoug

HHusky said:

I was asked this again, by she who must be considered, in light of the stock market drop today. My answer is always the same: “Nothing. We’ve never sold shares because the market goes down.” In fact, as we often do when there’s a slide, we bought some shares today.

But that got me to thinking how I am extremely reluctant to buy when the market goes up, even when I simultaneously expect that it can and will rise more. It’s irrational, and sometimes I overcome it, but I can’t shake it.

The psychology of it cannot be overstated. @DawgsCanDance

TheRoarOfTheCrowd

@RaceBannon says it best "well, I've been drinking more lately"

PurpleThrobber

This is the same concept as when my wife says she 'saved' a bunch of money by purchasing TWO things instead of just one out shopping.

RaceBannon

HHusky said:

I was asked this again, by she who must be considered, in light of the stock market drop today. My answer is always the same: “Nothing. We’ve never sold shares because the market goes down.” In fact, as we often do when there’s a slide, we bought some shares today.

But that got me to thinking how I am extremely reluctant to buy when the market goes up, even when I simultaneously expect that it can and will rise more. It’s irrational, and sometimes I overcome it, but I can’t shake it.

At 20,000 I was same - this is a horrible time to buy right at the top. It's 30,000 now

The initial covid dip has been about as low as it got in recent times

TheRoarOfTheCrowd

One comment I can make is that in history if the market is ever down -25 or more from the previous peak if a person has stepped up and invested even a portion of their capital regardless of the nature of the calamity, they have done very well. Of course that assumes that you are not looking a repeat of the 30's where the market is simply not going to come back for a decade or more... as my dad used to say, if you want to, you can always identify a problem with any blanket assertion.

Swaye

Related thing. I have been thinking about pulling money out of the mutual fund my IRA money is in. Not removing it from the account, just letting it sit as cash for awhile. I know the conventional wisdom is never try to time the market, and I never have before, but I just have this nagging feeling that the other shoe will drop in the next year and we will have a big 20% correction (or whatever) and a few years of choppy markets. Anyone have any thoughts on this?

AtomicPiss

Swaye said:

Related thing. I have been thinking about pulling money out of the mutual fund my IRA money is in. Not removing it from the account, just letting it sit as cash for awhile. I know the conventional wisdom is never try to time the market, and I never have before, but I just have this nagging feeling that the other shoe will drop in the next year and we will have a big 20% correction (or whatever) and a few years of choppy markets. Anyone have any thoughts on this?

I just did this with my Roth IRA last week. I'm leaving my regular IRA alone.

creepycoug

Swaye said:

Related thing. I have been thinking about pulling money out of the mutual fund my IRA money is in. Not removing it from the account, just letting it sit as cash for awhile. I know the conventional wisdom is never try to time the market, and I never have before, but I just have this nagging feeling that the other shoe will drop in the next year and we will have a big 20% correction (or whatever) and a few years of choppy markets. Anyone have any thoughts on this?

Yeah, this is the question with which I've been struggling for the last month or so. I wish I would have had the balls to do it $150,000+ ago.

creepycoug

DawgsCanDance said:

One comment I can make is that in history if the market is ever down -25 or more from the previous peak if a person has stepped up and invested even a portion of their capital regardless of the nature of the calamity, they have done very well. Of course that assumes that you are not looking a repeat of the 30's where the market is simply not going to come back for a decade or more... as my dad used to say, if you want to, you can always identify a problem with any blanket assertion.

This is my deepest darkest fear; that timeframe would cross my retirement line.

HHusky

creepycoug said:

DawgsCanDance said:

One comment I can make is that in history if the market is ever down -25 or more from the previous peak if a person has stepped up and invested even a portion of their capital regardless of the nature of the calamity, they have done very well. Of course that assumes that you are not looking a repeat of the 30's where the market is simply not going to come back for a decade or more... as my dad used to say, if you want to, you can always identify a problem with any blanket assertion.

This is my deepest darkest fear; that timeframe would cross my retirement line.

An argument for always holding some cash. Deflation averaged 10% a year 1930-33. And for a brave soul willing to buy every time the S&P 500 declined 10 or more percent, there were also some spectacular rises. Still, that would be nerve wracking.

creepycoug

HHusky said:

creepycoug said:

DawgsCanDance said:

One comment I can make is that in history if the market is ever down -25 or more from the previous peak if a person has stepped up and invested even a portion of their capital regardless of the nature of the calamity, they have done very well. Of course that assumes that you are not looking a repeat of the 30's where the market is simply not going to come back for a decade or more... as my dad used to say, if you want to, you can always identify a problem with any blanket assertion.

This is my deepest darkest fear; that timeframe would cross my retirement line.

An argument for always holding some cash. Deflation averaged 10% a year 1930-33. And for a brave soul willing to buy every time the S&P 500 declined 10 or more percent, there were also some spectacular rises. Still, that would be nerve wracking.

The big annual cash in-flow happens next week. I'm going to stay in cash, notwithstanding @HoustonHusky 's admonishment to do otherwise.

I don't think his barter economy is anywhere near around the corner, and he says so himself that the gov't probably will take more steps to keep it propped up further. I therefore believe the market will continue to fall and cycle back up again, and I want some dry powder to catch the low.

Yeah yeah, people say "don't time the market", but I've set some cash aside before and caught a few dips. It's not impossible. You might not time the absolute bottom, but you might be able to see that you just missed it when it starts climbing, which is still a good re-entry point.

I know @DawgsCanDance has that exercise down to an algorithm. Those damn data guys.

ntxduck

creepycoug said:

HHusky said:

creepycoug said:

DawgsCanDance said:

One comment I can make is that in history if the market is ever down -25 or more from the previous peak if a person has stepped up and invested even a portion of their capital regardless of the nature of the calamity, they have done very well. Of course that assumes that you are not looking a repeat of the 30's where the market is simply not going to come back for a decade or more... as my dad used to say, if you want to, you can always identify a problem with any blanket assertion.

This is my deepest darkest fear; that timeframe would cross my retirement line.

An argument for always holding some cash. Deflation averaged 10% a year 1930-33. And for a brave soul willing to buy every time the S&P 500 declined 10 or more percent, there were also some spectacular rises. Still, that would be nerve wracking.

The big annual cash in-flow happens next week. I'm going to stay in cash, notwithstanding @HoustonHusky 's admonishment to do otherwise.

I don't think his barter economy is anywhere near around the corner, and he says so himself that the gov't probably will take more steps to keep it propped up further. I therefore believe the market will continue to fall and cycle back up again, and I want some dry powder to catch the low.

Yeah yeah, people say "don't time the market", but I've set some cash aside before and caught a few dips. It's not impossible. You might not time the absolute bottom, but you might be able to see that you just missed it when it starts climbing, which is still a good re-entry point.

I know @DawgsCanDance has that exercise down to an algorithm. Those damn data guys.

D.C.A.

And to play devils avocado, and advice I have to remind myself of all the time; more money has been lost by people trying to time the market and selling in fear of a crash, then by the actual crash.

USMChawk

I’m still investing every month. There’s a downturn coming and I’ll ride it out like the rest of them. I have a couple of investments that are ready for the profit taking and I’ll hold that cash until after the bubble bursts. In consideration of my age, that’ll be reinvested into ETFs. Unless someone here has an awesome insider tip?

Tequilla

I'd always advocate having 6-12 months of income laying around as dry powder regardless in the best of times.

I suspect that there's going to be some very good opportunities to come over the next 6-12 months where bets will be able to be made on what you think are going to be big winners over the next 5-10 years.

Also really important to keep an eye on interest rates but for non obvious reasons. The higher the rate pressure is, the more likely you're going to have companies whose valuations that are based on future cash flows take on water due to changing discount rates. Important to isolate the noise as while the change in the discount rate matters, it doesn't necessarily result in changing the fundamentals of the company.

Swaye

So here are my latest thoughts...checked asset allocation last night and I have one account (Roth IRA) that is about 60% of my retirements holdings, the other 40% is spread around current job 401K and a couple smaller mutual funds. Thinking I might just keep letting the 40% of smaller accounts ride in the index funds they are in, and pull the big enchilada 60% out of play into cash for awhile (years?) until something significant happens. That way I limit exposure to the inevitable downturn, while also keeping something in play and just riding the market. Of course if I do this, the market will go up another 5% because I suck and never guess right, but meh. The thoughts of having a good chunk of my retirement nest egg out of play right now is very comforting.

Everything just seems so overheated - all jokes aside I am heavy (too heavy tbh) into the high end watch market (for a relative peasant) and we are approaching tulip mania there so I have been selling off winners and profit taking with watches for a year now as well. Just consolidating into a single brand that I love because if watches tank hard at least I will still have the watches I actually love, and will have already made my money anyway. Watches have been very lucrative the last couple years as a side hustle, and I know the market well, but we are reaching absurd levels of valuation on many pieces which also gets my spidey senses tingling that the music is about to stop.

HoustonHusky

creepycoug said:

HHusky said:

creepycoug said:

DawgsCanDance said:

One comment I can make is that in history if the market is ever down -25 or more from the previous peak if a person has stepped up and invested even a portion of their capital regardless of the nature of the calamity, they have done very well. Of course that assumes that you are not looking a repeat of the 30's where the market is simply not going to come back for a decade or more... as my dad used to say, if you want to, you can always identify a problem with any blanket assertion.

This is my deepest darkest fear; that timeframe would cross my retirement line.

An argument for always holding some cash. Deflation averaged 10% a year 1930-33. And for a brave soul willing to buy every time the S&P 500 declined 10 or more percent, there were also some spectacular rises. Still, that would be nerve wracking.

The big annual cash in-flow happens next week. I'm going to stay in cash, notwithstanding @HoustonHusky 's admonishment to do otherwise.

I don't think his barter economy is anywhere near around the corner, and he says so himself that the gov't probably will take more steps to keep it propped up further. I therefore believe the market will continue to fall and cycle back up again, and I want some dry powder to catch the low.

Yeah yeah, people say "don't time the market", but I've set some cash aside before and caught a few dips. It's not impossible. You might not time the absolute bottom, but you might be able to see that you just missed it when it starts climbing, which is still a good re-entry point.

I know @DawgsCanDance has that exercise down to an algorithm. Those damn data guys.

If you think things are going to crash going to cash short-term isn’t bad....just don’t get stuck waiting and holding a ton of cash long-term and watch everything else inflate it away. I think the disconnect in my not communicating well is that I think there will be a huge swing in actual Inflation with “measured” inflation still 1%, which means any cash you have in the bank looses value. Once there is a swing and everything catches up (ie interest rates rise and banks pay interest) then having cash isn’t so bad. Just think it’s possible to lose a good 10-20% before that happens.

Here is one bank’s recommendation for the next few years...seems sensible if not a bit early. I still think the Fed banks won’t throw in the towel and will go on a massive printing spree before they realize they are fucked...

https://www.zerohedge.com/markets/one-bank-turn-apocalyptic-fed-will-inevitably-move-ycc-rates-are-no-longer-anchored

And finally, Hartnett's views on the rest of the 2020s:

We expect low, volatile, clustered, 3-5% long-run returns, like 1970s;
We say optimal AA is 25/25/25/25in bond/stock/cash/commodities and/or in growth/yield/quality/inflation in 2020s;
While we worry in very short-term inflation overpriced, we still think AA need to raise inflation hedges as US dollar weakens medium-term (commodities, gold, real assets, TIPS, small cap value, volatility);
Tech leadership is over, but YCC should provide good entry point into small cap tech.

Pitchfork51

Swaye said:

Related thing. I have been thinking about pulling money out of the mutual fund my IRA money is in. Not removing it from the account, just letting it sit as cash for awhile. I know the conventional wisdom is never try to time the market, and I never have before, but I just have this nagging feeling that the other shoe will drop in the next year and we will have a big 20% correction (or whatever) and a few years of choppy markets. Anyone have any thoughts on this?

The dems are fixing the republican mess.

creepycoug

HoustonHusky said:

creepycoug said:

HHusky said:

creepycoug said:

DawgsCanDance said:

One comment I can make is that in history if the market is ever down -25 or more from the previous peak if a person has stepped up and invested even a portion of their capital regardless of the nature of the calamity, they have done very well. Of course that assumes that you are not looking a repeat of the 30's where the market is simply not going to come back for a decade or more... as my dad used to say, if you want to, you can always identify a problem with any blanket assertion.

This is my deepest darkest fear; that timeframe would cross my retirement line.

An argument for always holding some cash. Deflation averaged 10% a year 1930-33. And for a brave soul willing to buy every time the S&P 500 declined 10 or more percent, there were also some spectacular rises. Still, that would be nerve wracking.

The big annual cash in-flow happens next week. I'm going to stay in cash, notwithstanding @HoustonHusky 's admonishment to do otherwise.

I don't think his barter economy is anywhere near around the corner, and he says so himself that the gov't probably will take more steps to keep it propped up further. I therefore believe the market will continue to fall and cycle back up again, and I want some dry powder to catch the low.

Yeah yeah, people say "don't time the market", but I've set some cash aside before and caught a few dips. It's not impossible. You might not time the absolute bottom, but you might be able to see that you just missed it when it starts climbing, which is still a good re-entry point.

I know @DawgsCanDance has that exercise down to an algorithm. Those damn data guys.

If you think things are going to crash going to cash short-term isn’t bad....just don’t get stuck waiting and holding a ton of cash long-term and watch everything else inflate it away. I think the disconnect in my not communicating well is that I think there will be a huge swing in actual Inflation with “measured” inflation still 1%, which means any cash you have in the bank looses value. Once there is a swing and everything catches up (ie interest rates rise and banks pay interest) then having cash isn’t so bad. Just think it’s possible to lose a good 10-20% before that happens.

Here is one bank’s recommendation for the next few years...seems sensible if not a bit early. I still think the Fed banks won’t throw in the towel and will go on a massive printing spree before they realize they are fucked...

https://www.zerohedge.com/markets/one-bank-turn-apocalyptic-fed-will-inevitably-move-ycc-rates-are-no-longer-anchored

And finally, Hartnett's views on the rest of the 2020s:

We expect low, volatile, clustered, 3-5% long-run returns, like 1970s;
We say optimal AA is 25/25/25/25in bond/stock/cash/commodities and/or in growth/yield/quality/inflation in 2020s;
While we worry in very short-term inflation overpriced, we still think AA need to raise inflation hedges as US dollar weakens medium-term (commodities, gold, real assets, TIPS, small cap value, volatility);
Tech leadership is over, but YCC should provide good entry point into small cap tech.

This is key, and it's the hard part when you've hoarded cash. Whatever caused you to do it in the first place will be the reason you hesitate for too long.

creepycoug

creepycoug said:

HoustonHusky said:

creepycoug said:

HHusky said:

creepycoug said:

DawgsCanDance said:

One comment I can make is that in history if the market is ever down -25 or more from the previous peak if a person has stepped up and invested even a portion of their capital regardless of the nature of the calamity, they have done very well. Of course that assumes that you are not looking a repeat of the 30's where the market is simply not going to come back for a decade or more... as my dad used to say, if you want to, you can always identify a problem with any blanket assertion.

This is my deepest darkest fear; that timeframe would cross my retirement line.

An argument for always holding some cash. Deflation averaged 10% a year 1930-33. And for a brave soul willing to buy every time the S&P 500 declined 10 or more percent, there were also some spectacular rises. Still, that would be nerve wracking.

The big annual cash in-flow happens next week. I'm going to stay in cash, notwithstanding @HoustonHusky 's admonishment to do otherwise.

I don't think his barter economy is anywhere near around the corner, and he says so himself that the gov't probably will take more steps to keep it propped up further. I therefore believe the market will continue to fall and cycle back up again, and I want some dry powder to catch the low.

Yeah yeah, people say "don't time the market", but I've set some cash aside before and caught a few dips. It's not impossible. You might not time the absolute bottom, but you might be able to see that you just missed it when it starts climbing, which is still a good re-entry point.

I know @DawgsCanDance has that exercise down to an algorithm. Those damn data guys.

If you think things are going to crash going to cash short-term isn’t bad....just don’t get stuck waiting and holding a ton of cash long-term and watch everything else inflate it away. I think the disconnect in my not communicating well is that I think there will be a huge swing in actual Inflation with “measured” inflation still 1%, which means any cash you have in the bank looses value. Once there is a swing and everything catches up (ie interest rates rise and banks pay interest) then having cash isn’t so bad. Just think it’s possible to lose a good 10-20% before that happens.

Here is one bank’s recommendation for the next few years...seems sensible if not a bit early. I still think the Fed banks won’t throw in the towel and will go on a massive printing spree before they realize they are fucked...

https://www.zerohedge.com/markets/one-bank-turn-apocalyptic-fed-will-inevitably-move-ycc-rates-are-no-longer-anchored

And finally, Hartnett's views on the rest of the 2020s:

We expect low, volatile, clustered, 3-5% long-run returns, like 1970s;
We say optimal AA is 25/25/25/25in bond/stock/cash/commodities and/or in growth/yield/quality/inflation in 2020s;
While we worry in very short-term inflation overpriced, we still think AA need to raise inflation hedges as US dollar weakens medium-term (commodities, gold, real assets, TIPS, small cap value, volatility);
Tech leadership is over, but YCC should provide good entry point into small cap tech.

This is key, and it's the hard part when you've hoarded cash. Whatever caused you to do it in the first place will be the reason you hesitate for too long.

Thought this was too good not to share @HoustonHusky -

whlinder

Swaye said:

So here are my latest thoughts...checked asset allocation last night and I have one account (Roth IRA) that is about 60% of my retirements holdings, the other 40% is spread around current job 401K and a couple smaller mutual funds. Thinking I might just keep letting the 40% of smaller accounts ride in the index funds they are in, and pull the big enchilada 60% out of play into cash for awhile (years?) until something significant happens. That way I limit exposure to the inevitable downturn, while also keeping something in play and just riding the market. Of course if I do this, the market will go up another 5% because I suck and never guess right, but meh. The thoughts of having a good chunk of my retirement nest egg out of play right now is very comforting.

Don’t forget tax considerations. I am not a CPA/Wealth Advisor or any of that shit, and don’t know how far you are from retirement, but don’t forget earnings (and distributions) on your Roth are tax free, while the 401k will hit your withdrawals with tax.

Because of that treatment when I look at my entire asset allocation I do full index funds in the Roth (longer time horizon and therefore expected higher returns) and more conservative in the 401k.

Whether this is ideal, I have no idea, but I would think it would make more sense to asset allocate across the different tax treatments you get.

On the note of avoiding the collapse that everyone seems to believe is coming, we pulled almost everything out of equites for the child’s 529 fund. With freshman year 2.5 years away and sophomore 3.5 we made sure to get out of equities for that time horizon.