Don't forget, if you're in a reasonably diversified portfolio, you haven't actually lost anything until you sell and lock in your loss.

That is an excellent point and not one I have seen made in all the threads of recent history here on this topic. Thanks for that perspective.

quote:

Originally posted by dave7378:

quote:

Originally posted by SIGnified:
My investments in Pb and brass have appreciated significantly; some of it by an order of magnitude in less than 10 yrs. Small Scrooge Mcduck vault of highly fungible assets.

Yes, but would you be willing to sell it?

Uh, … erm … ahh … no

Read up on Joe Granville. See how he did over the years.

quote:

Originally posted by SIGnified:

quote:

Originally posted by RogueJSK:
Which is why many financial advisors recommend the concept of a "glide path", where your retirement investments become more conservative the closer you get to retirement.

This means less exposure to the volatility of the stock market when you're running out of time to bounce back from a crash/correction.

An investment allocation that works for a 30 year old won't look the same as what's best for a 55 year old.

For example:

While traditionally very true… If I had followed that guidance I would’ve missed out on nearly 150% returns in the last 3+ yrs.

And bonds? With the Fed raising rates … we’ll, not for me ATM.

These plans do nothing for addressing the 20-30 year distribution phase of retirement…only the “glide path” towards a retirement…especially, as mentioned, if they are driving you into bonds during a rising rate market. I’m not a fan.

They are, however, attractive to those who are not comfortable directing their own investment portfolios and equally attractive to plan sponsors who want to minimize ERISA based lawsuits.

I'm also worried about the markets,.... and I know what I'm doing (commodity trader).

Investing is a great hobby - infinitely challenging. A person really can't accept anything as absolute since there are a lot of con artists out there. You would be surprised as to who is a fraud.

I would study the commodity markets and commodity traders if you want to take up the pursuit for yourself. Commodity traders work against long odds so the traders that survive are far, far more proficient than your average stock investor by a wide margin.

Check out a book called Zen in the Markets by Edwards Allen Toppel. It's a great (and necessary) attitude adjustment. It's available online as a PDF.

Learn some technical analysis (chart reading). It comes in handy.

I've posted in other threads on day trading, etc. I'm told it was worth reading. Check it out if you're interested.

The trend is your friend.

V.

If you're worried about the market going down continuously and never coming back up, what do you suggest? In that scenario, do you think your dollars in the bank or under your mattress will have any value? They will not.

I ask my wife when she is worried, "are you suggesting we pull it all out of the market and buy more guns and ammo?"

quote:

Originally posted by honestlou:
If you're worried about the market going down continuously and never coming back up, what do you suggest? In that scenario, do you think your dollars in the bank or under your mattress will have any value? They will not.

I ask my wife when she is worried, "are you suggesting we pull it all out of the market and buy more guns and ammo?"

No one is saying it will never come back up. That's a strawman.

Statistically, bear markets last 18 months which is when they hit bottom. And the biggest drops in a bear market occur in the last two thirds.

So one strategy would be to recognize the beginning of a bear market, minimize your loss by moving to "safer" investments and waiting 18 months out to jump back in.

Beware sitting on the sidelines in cash (or equivalent) while the market goes down.

https://www.fool.com/investing...-days-in-the-st.aspx

"Many of the best days in the market come right after the worst days. According to the J.P. Morgan study, six of the 10 best days occurred within two weeks of the 10 worst days. One example was in 2015: The best day was Aug. 26, just two days after the worst day in the stock market that year. "

Nobody knows when the market will be at the bottom, or even when it is darn close to the bottom. Trying to time the market is a losing bet.

Now having said that, I am about 50% cash right now as I have rolled over my 401k into my IRA. I am happy to be in cash the past month, though I have bought some silver and will be buying various investments into the dip, looking for value and quality rather than higher risk growth. Dollar cost averaging, with the confidence the market will rebound.

Now is a good time to reevaluate your strategy and redeploy assets for a likely generally flat or down market for the next 4-6 months. Also consider protecting against inflation in your allocation.

Here's another good article. https://www.thebalance.com/u-s...t-recoveries-2388520

We don't know if this is going to be a 50% bear market like has happened twice in my lifetime already, or if it will be a 15% bump down and then a slow recovery. My personal opinion (guess) is it will be about 20% but not worse, and the Republicans will do well in the mid-term elections next November which will bring the market back up. As the indications grow into August that the R's are going to do well, the market could turn around in the late summer or early autumn.

Being retired, I am hedging more against the down side and inflation. A younger person might either completely ignore the down turn while investing heavily, or rebalance the portfolio to be a bit defensive while remaining alert to when the upside returns. When the market changes into a new phase, adjust accordingly.

If we've already found the bottom, sitting in cash can cost a lot of lost upside opportunity.

quote:

Originally posted by Rey HRH:

quote:

Originally posted by honestlou:
If you're worried about the market going down continuously and never coming back up, what do you suggest? In that scenario, do you think your dollars in the bank or under your mattress will have any value? They will not.

I ask my wife when she is worried, "are you suggesting we pull it all out of the market and buy more guns and ammo?"

No one is saying it will never come back up. That's a strawman.

Statistically, bear markets last 18 months which is when they hit bottom. And the biggest drops in a bear market occur in the last two thirds.

So one strategy would be to recognize the beginning of a bear market, minimize your loss by moving to "safer" investments and waiting 18 months out to jump back in.

Not a strawman. I was responding to this:

"I always chuckle at this line. Because it sounds great. And I understand it. But what if we start a downward trend and it last a dozen years. Do you keep telling your self this for the next 12 years?"

Of course the obvious answer is to go to cash at the top of the market and get back in at the bottom. Oh yeah, nobody without a time machine can do that.

A downward trend means more down than up. It could be like a heart rhythm. Or it could be like a roller coaster. We have obviously been in an upward trend for quite some time. Some would say for more than a dozen years. That trend could change or continue on.

I have been in the market since 1997. I have seen the bad downturns, 1998, 2008, 2021-2022 and I am still up 160%. I have had losses on days that got close to six figures, a bunch of days actually. But those are unrealized losses because I did not sell. Each time they came back and went higher, with a few exceptions, thanks Under Armour and Boeing . But even the losers have been minor losses. Each time the market dumped, I doubled down on how much I invested, looking for value. Leaving it in for the long term has paid off, well again, unrealized gains as I have not sold. We'll see but I have no reason to fear. If it tanks that bad, we have bigger problems than lost money.

To be fair, I have gotten really good financial advice over the years. I didn't make these decisions based on my genius

quote:

Originally posted by dave7378:
I have been in the market since 1997. I have seen the bad downturns, 1998, 2008, 2021-2022 and I am still up 160%. I have had losses on days that got close to six figures, a bunch of days actually. But those are unrealized losses because I did not sell. Each time they came back and went higher, with a few exceptions, thanks Under Armour and Boeing . But even the losers have been minor losses. Each time the market dumped, I doubled down on how much I invested, looking for value. Leaving it in for the long term has paid off, well again, unrealized gains as I have not sold. We'll see but I have no reason to fear. If it tanks that bad, we have bigger problems than lost money.

To be fair, I have gotten really good financial advice over the years. I didn't make these decisions based on my genius

Excellent post and advice. Pretty much describes my situation except I've been in the market since around 1984.

quote:

Originally posted by Flash-LB:

quote:

Originally posted by dave7378:
I have been in the market since 1997. I have seen the bad downturns, 1998, 2008, 2021-2022 and I am still up 160%. I have had losses on days that got close to six figures, a bunch of days actually. But those are unrealized losses because I did not sell. Each time they came back and went higher, with a few exceptions, thanks Under Armour and Boeing . But even the losers have been minor losses. Each time the market dumped, I doubled down on how much I invested, looking for value. Leaving it in for the long term has paid off, well again, unrealized gains as I have not sold. We'll see but I have no reason to fear. If it tanks that bad, we have bigger problems than lost money.

To be fair, I have gotten really good financial advice over the years. I didn't make these decisions based on my genius

Excellent post and advice. Pretty much describes my situation except I've been in the market since around 1984.

Me too. I remember one day in 1987(?) we spent the night on the boat, and the market lost about 20% in one day! It was blamed on programmed trading, and the markets implemented circuit breakers that halted trading if markets fell by a specified amount. We did nothing, and recovered the paper losses within a couple of months.

It is good to have an uneasy feeling. There are many good reasons to be uneasy - a president who has never been right about anything, a Fed that is panicked, a war in Ukraine (Taiwan, Iran, Syria) and a lack of oil. All of these factors have been priced into the market.

When everyone is very sure that trees grow to the sky, that is the time to worry.

Robert Prechter (Elliot Wave) trying to sound the alarm at investment conference in Dec 2021. 20 minutes long

The last 2 corrections and bear markets (2001 and 2007-2008) lasted 7 years until the S&P500 regained it's previous high.

One thing to could do would be to move 10 years worth of living expenses to a stable fund and leave the rest in the market for growth.

I moved 100% out of the market (except for a 9% dividend portfolio) this past week. I do not see how the Fed can engineer a real soft landing this time.........

quote:

Originally posted by heathtx:
The last 2 corrections and bear markets (2001 and 2007-2008) lasted 7 years until the S&P500 regained it's previous high.

One thing to could do would be to move 10 years worth of living expenses to a stable fund and leave the rest in the market for growth.

I moved 100% out of the market (except for a 9% dividend portfolio) this past week. I do not see how the Fed can engineer a real soft landing this time.........

As I recall, people in a globally diversified portfolio still made reasonable returns during the periods in which the S&P 500 did poorly.

Many people seem to conflate the S&P 500 with being "the market", while there are many other indices, many other markets beyond the US, and many other companies in which to invest. Many of these additional options don't correlate with the movements of the S&P 500, and help reduce overall volatility.

Picking individual stocks and day trading are more gambling than investing in diversified investment products. Individual stocks may have more upside potential, but also have the ability to go down to zero (Enron, N.W. Mutual, etc), unlike broadly diversified investment products, which, short of a global nuclear war, are unlikely to ever go to zero.