You can't predict where the market is going, so you just take a balanced approach, diversify, and pay attention.
But, I'm only 37 so I haven't accumulated enough wealth to truly be affected the last few bubbles or crashes. In any case, my strategy has been to worry less about being reactive in protecting my wealth and being more proactive in generating it. Make hay while the sun is shining, I guess they would say.
Edit: for whatever reason, I thought were were grading on a scale of 1-18. lol. No, I meant 5 on a scale of 10.
Posts: 13047 | Location: Orange County, California | Registered: May 19, 2002
I'd say I'm about a 2 or 3. I do think the market is going to suffer a bit in the short term, but I'm not worried. It's all part of the normal ebb and flow of the market.
Regardless of what the market might do, set up a balanced, diversified portfolio - ideally taking advantage of index funds rather than individual bonds/equities - and continue to contribute to your investing account(s) regularly. Stick to that, regardless of the market. This allows you to dollar cost average your shares through the dips and spikes, to help even out some of the volatility.
With a well-diversified portfolio, you may lose a little money in the short term at times, but you'll always come out on top in the long run. For every correction/crash/recession, there's a recovery, and the market comes back stronger than before. And while the market was down, your regular contributions were going even further by being able to buy more shares for the same contribution, so you're even better situated to take advantage of the recovery.
Unless you're an active speculator/day trader (i.e. gambler) trying to buy low/sell high to flip your investments for a quick small gain, don't worry about short term profits and losses, or what the market's doing today, or this week, or this month, or this quarter, or whatever. Ideally, you'd be in it for the long term (decades) instead.
Tune out the hype and the noise. Stick to the plan. Contribute regularly. Reinvest your returns. Check on your portfolio once or twice a year, to see if you need to rebalance it.
I'm still 100% at the level I was before this pullback or pullback depending on how you want to look at it. I intend to stay in and continue to buy whats on sale.
We need a correction or three so we can continue.
In several cases, people are paying insane per share amounts for some stocks. There are also folks doing the meme stock thing. Then, there is the Fed...Then there is Tesla,,,
Posts: 1447 | Location: Western WA | Registered: September 11, 2006
At retirement age the thought process tends to be a little different. Just One tends to look more frequently at what they hope is still there because that is what they plan to exist on.
If you're near/at retirement age, and are going to be relying on your investments to pay your bills, it's time to start moving much of your investments away from stocks and into less risky (but lower return) investments like bonds. That will protect you from much of the overly drastic short term whims of the stock market, since you may not have enough time left to recover from a sharp dip like a crash. (But that's not just because you're assuming a crash is imminent... That would generally be the plan for most retirees anyway, regardless of whether you think a crash is looming or not.)
But if you have other sources of retirement income to pay all your bills, you may just want to keep riding the market with your "fun money".
If you're nearing retirement, and haven't already, you really ought to speak to a financial planner. They can work with you to figure out how much you'll need to plan to withdraw each year, and how best to structure your investment portfolio to allow that rate of withdrawal while also shielding you as much as possible from the unpredictable whims of the economy.
Originally posted by 2PAK: I'm still 100% at the level I was before this pullback or pullback depending on how you want to look at it. I intend to stay in and continue to buy whats on sale.
We need a correction or three so we can continue.
In several cases, people are paying insane per share amounts for some stocks. There are also folks doing the meme stock thing. Then, there is the Fed...Then there is Tesla,,,
This.
I'll add that there's about to be a flood of money pumped into the economy for no reason right now. Just read an article if passed a family of four with <$150,000k income will be getting $15k. A lot of that will get dumped into the market, and a lot will buy consumer goods.
The long term outlook for your investments is going down, these checks the government are writing aren't interest free, we and out kids will be paying the bill in inflation. This makes me more worried about retirement and if my accounts can keep up with inflation.
Jesse
Sic Semper Tyrannis
Posts: 20819 | Location: Loudoun County, Virginia | Registered: December 27, 2014
Originally posted by Aeteocles: I've been getting analyst reports of an impending crash for like 2 years now. A crash may happen tomorrow, or it may happen another 2 years from now.
Or it might just be a blip like we had a year ago when COVID restrictions were enacted.
That blip was pretty lucrative for those who jumped in when the market was down. It was the biggest stock discount in my lifetime. I've got some cash amassed in my brokerage accounts just waiting for another big correction, which I expect to be relatively short-lived when it does happen. I still think dollar cost averaging across a long-term horizon is the best way to build wealth in the market. I do not predict an unrecoverable cataclysmic crash.
Posts: 2484 | Location: WI | Registered: December 29, 2012
Originally posted by ulsterman: It will go up. It will go down. We pay someone to do the research and invest for us. The money we pay that firm is worth my time.
I'm with ulsterman. I don't have the knowledge/skill or time to manage it myself. I'm glad there are pros and that I have a good one managing my little piggy bank.
As for predictions: I'm seeing a downward trend since mid-February. I think that will continue until summer, and then head upward again as people settle into dealing with the new administration, and get their minds on summer, vacation, and the end of cabin fever. But that's just a guess....
God bless America.
Posts: 13493 | Location: The mountainous part of Hokie Nation! | Registered: July 15, 2007
