Author Topic: Getting scared of stock market  (Read 10342 times)

Chesleygirl

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Getting scared of stock market
« on: August 11, 2017, 08:56:48 PM »
Dow went down after these threats on Guam.

I am 75/25 in my IRA right now but feel like putting more money into investment grade bonds. Maybe 50/50 at this point. Not sure. I'm a little heavy on stocks for my age, anyway.

Joeko

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Re: Getting scared of stock market
« Reply #1 on: August 11, 2017, 09:37:53 PM »
How far are you away from retirement?  75/25 maybe right for you depending on our date.  I have a few years to go, I'm 70/30.  A bear market, not routing for one, but it would be better to happen before your retire when your in Asset Accumulation stage than when you first retire.

Frankies Girl

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Re: Getting scared of stock market
« Reply #2 on: August 11, 2017, 09:39:31 PM »
The only thing to worry about is if you panic easily. The market goes down and yes, crashes every so often. On paper (screen) it will look terrible. The thing to keep reminding yourself is that you still own the same number of shares as before, they're just worth a lot less at the moment.

If you don't panic and sell - thus locking in that loss - then the market eventually starts going back up and those same number of funds will be worth as much if not more than before once the market starts its climb. AND you should be investing all the way down and all the way back up so you get to buy in while the market is on sale!

That's the really fun part - lows and crashes mean super SALES - you should be happy to see things go on sale, right? This is a good thing to happen, especially when you're still in active accumulation phase. Your investments are going to be fine as long as you're not going hard into specific calls and trying to play angles and hot tips.

May take a few days, a month, or even a year, but the market WILL go back up and rise even more than before, and if you took advantage of the lows and bought more at bargain pricing, you'll be even better positioned as it starts regaining value.
« Last Edit: August 11, 2017, 10:50:45 PM by Frankies Girl »
I frequently have no idea what I'm talking about. Like now.

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Chesleygirl

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Re: Getting scared of stock market
« Reply #3 on: August 11, 2017, 09:45:07 PM »
How far are you away from retirement? 

I am about 20  years away from retirement.

Chesleygirl

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Re: Getting scared of stock market
« Reply #4 on: August 11, 2017, 09:46:01 PM »
The only thing to worry about is if you panic easily. The market goes down and yes, crashes every so often. On paper (screen) it will look terrible. The thing to keep reminding yourself is that you still own the same number of shares as before, they're just worth a lot less at the moment.

If you don't panic and sell - thus locking in that loss - then the market eventually starts going back up and those same number of stocks will be worth as much if not more than before once the market starts its climb.

Thanks, that puts it into perspective.

Joeko

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Re: Getting scared of stock market
« Reply #5 on: August 11, 2017, 09:56:46 PM »
You have a long time horizon.  Stay the course

tp_from_ks

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Re: Getting scared of stock market
« Reply #6 on: August 11, 2017, 10:32:24 PM »
Stocks are one thing, maybe you mean index funds? The index funds spread the risk across many stocks, giving lower risk.

For me, I don't look day to day, usually monthly. I have 20+ years left of a healthy body to earn and stache. Sure I'd like FIRE sooner, but my less risky investing strategy with mostly index funds is fine. This less stress lets me enjoy the present rather than worrying about who-knows-what kind of future.

MDM

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Re: Getting scared of stock market
« Reply #7 on: August 11, 2017, 10:36:59 PM »
See U.S. stocks in freefall - Bogleheads.org for almost exactly 6 years of discussion on this topic.

GuitarStv

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Re: Getting scared of stock market
« Reply #8 on: August 12, 2017, 03:34:58 AM »
How far are you away from retirement? 

I am about 20  years away from retirement.

A crash at this point is only going to help you then.  You should be investing regularly and rooting for financial turmoil.  :P

h82goslw

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Re: Getting scared of stock market
« Reply #9 on: August 12, 2017, 06:50:55 AM »
How far are you away from retirement? 

I am about 20  years away from retirement.

That's an incredibly long time horizon.  Look at any 20 year period in the market.....it's always gone up. As long as you're investing in a 3 fund portfolio I'd be 90/10.

SwordGuy

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Re: Getting scared of stock market
« Reply #10 on: August 12, 2017, 07:05:04 AM »
The two most successful demographic groups when it comes to stock market investing are (1) dead people and (2) people who bought stock and forgot they had.

That is because neither group panics and sells when the market crashes.

Stock market investing via an index fund - so easy that (literally!) brain dead people can do it well.

Cubert

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Re: Getting scared of stock market
« Reply #11 on: August 12, 2017, 07:09:29 AM »
The main thing is to diversify. You might want to look into real estate for example. Different assets offer varying hedges against stocks. Regardless, ignore the real time news and let it ride. The market will go up and down, but over time, you'll add value over the long haul. Best!
www.abandonedcubicle.com -- 40-something corporate middle manager who's also a devoted husband, father of two, and gearing up to retire early from Corporate America in March, 2020.

L.A.S.

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Re: Getting scared of stock market
« Reply #12 on: August 12, 2017, 09:46:20 AM »
One the worst thing you can do when investing is react to price movements the way you are suggesting.

75/25 seems entirely appropriate for you.

Now, ignore the constant barrage of investment "news" and focus on something else. 

theolympians

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Re: Getting scared of stock market
« Reply #13 on: August 12, 2017, 09:59:40 AM »
There will always be the "doom and gloom" criers. I went marketwatch today and the lead story was about the "sick" stock market (how much has the market gone up in the last year?). Of course the author was writing about the big crash coming. MW has at least one of those articles  every week.

Just dollar-cost average and forget about it.

kenaces

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Re: Getting scared of stock market
« Reply #14 on: August 12, 2017, 12:05:03 PM »
The only thing to worry about is if you panic easily. The market goes down and yes, crashes every so often.

+1

Matching your true risk tolerance to your investing is critical.  It is easy to say on paper 90/10 is what everyone should do but if person is going to screw it up due to normal fear/greed reactions than the "paper studies" are irrelevant.

tralfamadorian

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Re: Getting scared of stock market
« Reply #15 on: August 12, 2017, 02:44:55 PM »
The only thing to worry about is if you panic easily. The market goes down and yes, crashes every so often.

+1

+2

You have 20 years; you should be excited that stocks might be going on sale. 

Laserjet3051

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Re: Getting scared of stock market
« Reply #16 on: August 13, 2017, 11:03:05 AM »
If these tiny micro-movements of equity markets scare you, I'd hate to see what your reaction would have been in the 2007/2008 meltdown, where not only did stocks crash, but housing collapsed and mass layoffs were the name of the game. Trifecta!

dividendman

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Re: Getting scared of stock market
« Reply #17 on: August 13, 2017, 12:24:28 PM »
If these tiny micro-movements of equity markets scare you, I'd hate to see what your reaction would have been in the 2007/2008 meltdown, where not only did stocks crash, but housing collapsed and mass layoffs were the name of the game. Trifecta!

Yeah.... what's happening now is an amazing bull year for all assets pretty much.... total US market is up over 8% this year. Total US bond market is up over 1.5% this year.... total international market is up over 15% this year.....

If this year is worrying you then I'm afraid that you're doomed when shit actually hits the fan. You might need 50%/50% bonds/equities or even more conservative to not panic when shit goes down.

sol

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Re: Getting scared of stock market
« Reply #18 on: August 13, 2017, 01:53:04 PM »
Bucking the trend here, I've started encouraging everyone who is fearful of the stock market to sell and get out.  Not because I think that's a good idea, but because we need irrational sellers to help keep prices down for those of us getting rich by dollar cost averaging. 

A stock market with a shortage of sellers gets too expensive as the abundance of buyers compete for fewer and fewer opportunities.  I'm a perpetual buyer, and I believe in the long term future of the US economy, so by all means please dump your shares at a discount during the next crash so that I can buy them from you.  Your loss is my gain.

Most folks here have learned the lesson that we don't hold stocks because of their current market value.  We hold them for the string of dividends they produce, and for the opportunity to exchange them for cash at some future time.  Today's prices are pretty damn irrelevant, in that context, because all that matters is future prices when you intend to sell (and of course the current cashflow).  The US stock market has never lost money over a 15 year period, so if your time horizon is 15 years or more, you shouldn't lose money by buying today.  Even on the day you retire, if you intend to live 40 more years and sell it all over that time, your average time until sale is still 20 years.

You've heard Buffet's story about the neighbor shouting prices over the fence?
Quote
Buffett compared the stock market to a moody neighbor who stood at the fence each day shouting out offers to either buy the farm or sell his own at various prices. Most people can own a profitable farm or apartment building for decades without being tempted into panic selling.

“Owners of stocks, however, too often let the capricious and often irrational behavior of their fellow owners cause them to behave irrationally as well.”

runewell

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Re: Getting scared of stock market
« Reply #19 on: August 13, 2017, 07:36:44 PM »
Today's prices are pretty damn irrelevant, in that context, because all that matters is future prices when you intend to sell (and of course the current cashflow). 
The US stock market has never lost money over a 15 year period, so if your time horizon is 15 years or more, you shouldn't lose money by buying today. 

Just because you don't lose money, that doesn't mean you will get a good return on your investment.  You can still buy high and live to regret it.  Excluding dividends, anyone putting their money in the S&P in January 2000 still had a loss as of October 2012.
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L.A.S.

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Re: Getting scared of stock market
« Reply #20 on: August 13, 2017, 07:50:00 PM »
Today's prices are pretty damn irrelevant, in that context, because all that matters is future prices when you intend to sell (and of course the current cashflow). 
The US stock market has never lost money over a 15 year period, so if your time horizon is 15 years or more, you shouldn't lose money by buying today. 

Just because you don't lose money, that doesn't mean you will get a good return on your investment.  You can still buy high and live to regret it.  Excluding dividends, anyone putting their money in the S&P in January 2000 still had a loss as of October 2012.

Why exclude dividends? I thought dividend reinvestment was part of the total return for stocks over a period of time?

sol

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Re: Getting scared of stock market
« Reply #21 on: August 13, 2017, 07:51:44 PM »
Excluding dividends, anyone putting their money in the S&P in January 2000 still had a loss as of October 2012.

Is that more than 15 years?  Let me do the math real quick...   Nope, not more than 15 years.  I stand by my original statement.

And since when are dividends not real money? 

MrSal

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Re: Getting scared of stock market
« Reply #22 on: August 13, 2017, 08:04:05 PM »
Excluding dividends, anyone putting their money in the S&P in January 2000 still had a loss as of October 2012.

Is that more than 15 years?  Let me do the math real quick...   Nope, not more than 15 years.  I stand by my original statement.

And since when are dividends not real money?

not just that but he's also considering that someone invested in 2000 and never again put money... calculating with DCA in mind gives amuch better return into 2012... actually it was about 11% if i remember correctly.

mxt0133

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Re: Getting scared of stock market
« Reply #23 on: August 13, 2017, 08:11:58 PM »
Just because you don't lose money, that doesn't mean you will get a good return on your investment.  You can still buy high and live to regret it.  Excluding dividends, anyone putting their money in the S&P in January 2000 still had a loss as of October 2012.

Not according to this chart.  Money invested in Jan 2000 in the S&P recovered by April 2007, excluding dividends.

https://finance.yahoo.com/chart/%5EGSPC#eyJtdWx0aUNvbG9yTGluZSI6ZmFsc2UsImJvbGxpbmdlclVwcGVyQ29sb3IiOiIjZTIwMDgxIiwiYm9sbGluZ2VyTG93ZXJDb2xvciI6IiM5NTUyZmYiLCJtZmlMaW5lQ29sb3IiOiIjNDVlM2ZmIiwibWFjZERpdmVyZ2VuY2VDb2xvciI6IiNmZjdiMTIiLCJtYWNkTWFjZENvbG9yIjoiIzc4N2Q4MiIsIm1hY2RTaWduYWxDb2xvciI6IiMwMDAwMDAiLCJyc2lMaW5lQ29sb3IiOiIjZmZiNzAwIiwic3RvY2hLTGluZUNvbG9yIjoiI2ZmYjcwMCIsInN0b2NoRExpbmVDb2xvciI6IiM0NWUzZmYiLCJyYW5nZSI6Im1heCJ9

mxt0133

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Re: Getting scared of stock market
« Reply #24 on: August 13, 2017, 08:32:16 PM »
Just to jump on the band wagon.  Since I'm still only about half way to FI, I'm looking for a down turn so I can do some tax loss harvesting.  I could then sell appreciated shares and offsetting those gains with shares that have losses.  Which I would put into a different fund that has a high correlation to the original fun, I.E. VTSAX to something like VFIAX*, but still meets the IRS criteria that does not trigger the wash rule.

In the end I would have less capital gains to pay taxes on my taxable accounts.

*https://finance.yahoo.com/chart/VTSAX#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

runewell

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Re: Getting scared of stock market
« Reply #25 on: August 14, 2017, 06:10:00 AM »
Excluding dividends, anyone putting their money in the S&P in January 2000 still had a loss as of October 2012.

Is that more than 15 years?  Let me do the math real quick...   Nope, not more than 15 years.  I stand by my original statement.

And since when are dividends not real money?

That's why I didn't disagree with your factual statements.  It doesn't negate the fact that the annualized return over that time period was a disappointment.
« Last Edit: August 14, 2017, 06:13:50 AM by runewell »
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runewell

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Re: Getting scared of stock market
« Reply #26 on: August 14, 2017, 06:12:56 AM »

Not according to this chart.  Money invested in Jan 2000 in the S&P recovered by April 2007, excluding dividends.


That is true, I carefully attempted to word my statement to be correct.  Had you sold around that time, you would have gotten out around break even.  Had you not, the wait would have been another five years.  Anyone that still held the money through 2012 not have seen a gain until the end of the year.
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ChpBstrd

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Re: Getting scared of stock market
« Reply #27 on: August 15, 2017, 12:31:25 PM »
There are other possible ways to reduce anxiety and market risk while staying in the market. Look up "protected put" or "options collar".

runewell

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Re: Getting scared of stock market
« Reply #28 on: August 15, 2017, 01:20:00 PM »

You have 20 years; you should be excited that stocks might be going on sale.

But they haven't gone on sale yet...

Also, just because stocks may have always been up in 20-yr periods, but some periods were much better than others.  If we are near the top and you buy in now, how good do you think your returns will be?  Not advocating being completely on the sidelines, but some caution might be warranted.
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Eric

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Re: Getting scared of stock market
« Reply #29 on: August 15, 2017, 01:38:43 PM »

You have 20 years; you should be excited that stocks might be going on sale.

But they haven't gone on sale yet...

Also, just because stocks may have always been up in 20-yr periods, but some periods were much better than others.  If we are near the top and you buy in now, how good do you think your returns will be?  Not advocating being completely on the sidelines, but some caution might be warranted.

But of course it's impossible to know if we're "near the top" or if this is a top at all.  Your speculation will cost you money in the long run.  If anyone ever needed proof that market timing is a fool's game, read this:

https://forum.mrmoneymustache.com/investor-alley/here-it-comes-red-dow/
"Compound interest is the most powerful force in the universe."  -- Einstein

Mr Mark

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Re: Getting scared of stock market
« Reply #30 on: August 15, 2017, 01:46:38 PM »

You have 20 years; you should be excited that stocks might be going on sale.

But they haven't gone on sale yet...

Also, just because stocks may have always been up in 20-yr periods, but some periods were much better than others.  If we are near the top and you buy in now, how good do you think your returns will be?  Not advocating being completely on the sidelines, but some caution might be warranted.

Oh ffs.  Having a really hard time believing you are an "actuary" and "45"

What you are is giving bad advice and cherry picking bad data. Excluding reinvested dividends for long term buy and hold index investment is just a super stupid thing to do. Pretending one invests everything at one point and then sells soon after a crash is super stupid.

OP
Please try reading jhcollins stock series of posts, or many of MMM's posts on this. Or bogleheads.

Keep saving into an asset allocation of low cost index funds. Reinvest dividends. Don't sell. It will be fine.

Ignore the financial press. They want you to sell and hold cash (or crap  like gold coins).
Mr. Mark

tralfamadorian

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Re: Getting scared of stock market
« Reply #31 on: August 15, 2017, 02:04:54 PM »

You have 20 years; you should be excited that stocks might be going on sale.

But they haven't gone on sale yet...

Also, just because stocks may have always been up in 20-yr periods, but some periods were much better than others.  If we are near the top and you buy in now, how good do you think your returns will be?  Not advocating being completely on the sidelines, but some caution might be warranted.

Challenge accepted.  Let's come back in 10 years and see who has better returns, those of us who hold and continued to invest a steady percentage of our income in our predetermined asset allocation until FIRE or those who sell to be "cautious". 

Radagast

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Re: Getting scared of stock market
« Reply #32 on: August 15, 2017, 02:13:57 PM »

You have 20 years; you should be excited that stocks might be going on sale.

But they haven't gone on sale yet...

Also, just because stocks may have always been up in 20-yr periods, but some periods were much better than others.  If we are near the top and you buy in now, how good do you think your returns will be?  Not advocating being completely on the sidelines, but some caution might be warranted.
Runewell, now that you are an expert on investing you should give concrete suggestions instead of saying people should be afraid for fear's sake. For example, I recommend a US investor who may be concerned about an upcoming crash be 45% US stocks, 30% international stocks, and 25% bonds and rebalance either once per year, or according to predetermined bands. What is your suggestion? What does "caution might be warranted" mean?

runewell

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Re: Getting scared of stock market
« Reply #33 on: August 15, 2017, 02:26:25 PM »

Runewell, now that you are an expert on investing you should give concrete suggestions instead of saying people should be afraid for fear's sake. For example, I recommend a US investor who may be concerned about an upcoming crash be 45% US stocks, 30% international stocks, and 25% bonds and rebalance either once per year, or according to predetermined bands. What is your suggestion? What does "caution might be warranted" mean?

Not sure why you are calling me an expert, I am just entitled to my opinion on this board like everyone else.

I recommend a diversified portfolio: 40% Elvis memorabilia, 30% snow domes, 20% Beanie Babies, and 10% under the mattress in case a good flea market comes to town, you want to be able to snap up a good buy.

It looks like your recommended allocation suffers from less home-country bias than other suggestions on this forum.
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Eric

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Re: Getting scared of stock market
« Reply #34 on: August 15, 2017, 02:32:59 PM »

Runewell, now that you are an expert on investing you should give concrete suggestions instead of saying people should be afraid for fear's sake. For example, I recommend a US investor who may be concerned about an upcoming crash be 45% US stocks, 30% international stocks, and 25% bonds and rebalance either once per year, or according to predetermined bands. What is your suggestion? What does "caution might be warranted" mean?

Not sure why you are calling me an expert, I am just entitled to my opinion on this board like everyone else.

I recommend a diversified portfolio: 40% Elvis memorabilia, 30% snow domes, 20% Beanie Babies, and 10% under the mattress in case a good flea market comes to town, you want to be able to snap up a good buy.

It looks like your recommended allocation suffers from less home-country bias than other suggestions on this forum.

You're entitled to your opinion, but you're not entitled to give shitty advice.  At least not without being called out on it, which you seem to relish for some reason.
"Compound interest is the most powerful force in the universe."  -- Einstein

seattlecyclone

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Re: Getting scared of stock market
« Reply #35 on: August 15, 2017, 02:42:49 PM »
Excluding dividends, anyone putting their money in the S&P in January 2000 still had a loss as of October 2012.

Is that more than 15 years?  Let me do the math real quick...   Nope, not more than 15 years.  I stand by my original statement.

And since when are dividends not real money?

That's why I didn't disagree with your factual statements.  It doesn't negate the fact that the annualized return over that time period was a disappointment.

A disappointment compared to what, though? Vanguard's Total Bond Index is up less than 1% annually since 2000, again excluding dividends. The lines crossed briefly in 2007, and again in 2013.

But why cherry-pick 2000? Looking only at that year is only relevant if you had a bunch of cash to invest right at that moment and never earned another cent before or since. For most of us with jobs that provide us a steady trickle of income, the performance starting any one year just doesn't matter that much. Yes, you would have been behind for a while on your year 2000 shares, but your year 1999 and 2002 and 2005 shares would have been in positive territory much longer.
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Retire-Canada

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Re: Getting scared of stock market
« Reply #36 on: August 15, 2017, 02:47:42 PM »
Excluding dividends, anyone putting their money in the S&P in January 2000 still had a loss as of October 2012.

Nobody invests for retirement by putting all their money into the market on one specific date and nobody invests for retirement and ignores dividends. You have to make up some really bat shit crazy assumptions to try and prove your incorrect point.

MDM

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Re: Getting scared of stock market
« Reply #37 on: August 15, 2017, 05:45:44 PM »
I recommend a diversified portfolio: 40% Elvis memorabilia, 30% snow domes, 20% Beanie Babies, and 10% under the mattress in case a good flea market comes to town, you want to be able to snap up a good buy.
Finally we have a suggestion from you.  It will be good to refer to this on other threads, so others may factor this into judgement.

GenXbiker

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Re: Getting scared of stock market
« Reply #38 on: August 15, 2017, 07:42:23 PM »
Dow went down after these threats on Guam.

I am 75/25 in my IRA right now but feel like putting more money into investment grade bonds. Maybe 50/50 at this point. Not sure. I'm a little heavy on stocks for my age, anyway.
With 20 years to go, I was 100% stocks.  I think you should be more weighted towards stocks, not bonds.

I wouldn't mind seeing a nice temporary dip in the market, much larger than the blip we just had.  I'm heavy cash right now, and I could go for a good stock sale.
« Last Edit: August 15, 2017, 07:43:59 PM by GenXbiker »

runewell

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Re: Getting scared of stock market
« Reply #39 on: August 15, 2017, 08:57:02 PM »
Excluding dividends, anyone putting their money in the S&P in January 2000 still had a loss as of October 2012.

Nobody invests for retirement by putting all their money into the market on one specific date and nobody invests for retirement and ignores dividends. You have to make up some really bat shit crazy assumptions to try and prove your incorrect point.

The only reason I exclude the dividends is because I can't easily say what the return would have been with dividends, not because I think they should be ignored - of course they should be considered.   The dividend yield at the time.

I recommend a diversified portfolio: 40% Elvis memorabilia, 30% snow domes, 20% Beanie Babies, and 10% under the mattress in case a good flea market comes to town, you want to be able to snap up a good buy.
Finally we have a suggestion from you.  It will be good to refer to this on other threads, so others may factor this into judgement.

Good idea, then they'll know someone who can't stand a little humor?
« Last Edit: August 15, 2017, 08:59:13 PM by runewell »
Please leave Dicey out of this! Have you not been paying any attention? Trolls are not welcome here!

DavidAnnArbor

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Re: Getting scared of stock market
« Reply #40 on: August 15, 2017, 09:01:16 PM »
I recommend a diversified portfolio: 40% Elvis memorabilia, 30% snow domes, 20% Beanie Babies, and 10% under the mattress in case a good flea market comes to town, you want to be able to snap up a good buy.
Finally we have a suggestion from you.  It will be good to refer to this on other threads, so others may factor this into judgement.

Good idea, then they'll know someone who can't stand a little humor?

I have to agree with Runewell on this one, I thought it was funny.

runewell

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Re: Getting scared of stock market
« Reply #41 on: August 15, 2017, 09:02:18 PM »
Nobody invests for retirement by putting all their money into the market on one specific date

Why shouldn't they?  Otherwise, that would be market timing right?  If the market is headed up then all dollar cost averaging does is lose you money.   

If there was one set-it-and-forget-it-for-20-years decision to make right now, 100% stocks probably would be ideal.
« Last Edit: August 15, 2017, 09:25:13 PM by runewell »
Please leave Dicey out of this! Have you not been paying any attention? Trolls are not welcome here!

seattlecyclone

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Re: Getting scared of stock market
« Reply #42 on: August 15, 2017, 09:05:08 PM »
Nobody invests for retirement by putting all their money into the market on one specific date

Why shouldn't they?  Otherwise, that would be market timing right?  If the market is headed up then all dollar cost averaging does is lose you money.   

If you start out with a pile of cash on Day 1, sure, but most people don't acquire all of their investable assets on one day. Instead, the more common thing is for a person to have a little bit extra to save from various paychecks over a period of a decade or more.
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The Roth IRA was named after William Roth, who represented Delaware in the US senate from 1971-2001. "Roth" is a name, not an acronym. There's no need to capitalize the final three letters.

Retire-Canada

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Re: Getting scared of stock market
« Reply #43 on: August 15, 2017, 09:07:26 PM »
Why shouldn't they?

Excepting trust funders and lottery winners nobody earns $1M+ on one day and invests it the next day. I haven't run into anyone like that on these forums.

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Re: Getting scared of stock market
« Reply #44 on: August 15, 2017, 09:15:35 PM »
I recommend a diversified portfolio: 40% Elvis memorabilia, 30% snow domes, 20% Beanie Babies, and 10% under the mattress in case a good flea market comes to town, you want to be able to snap up a good buy.
Finally we have a suggestion from you.  It will be good to refer to this on other threads, so others may factor this into judgement.

Good idea, then they'll know someone who can't stand a little humor?

I have to agree with Runewell on this one, I thought it was funny.

Yes, it would have been, had runewell taken a serious, positive position on something at another time.  Then it would have been a fine joke.  Unfortunately, we have yet to see runewell do that.

runewell

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Re: Getting scared of stock market
« Reply #45 on: August 15, 2017, 09:26:16 PM »

If you start out with a pile of cash on Day 1, sure, but most people don't acquire all of their investable assets on one day. Instead, the more common thing is for a person to have a little bit extra to save from various paychecks over a period of a decade or more.

Fair enough, I don't think of that as active DCA but rather as investing when I get my hands on the money every two weeks.  If I could get my hands on the entire paycheck on January 1, I would invest in January 1.
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CanuckExpat

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Re: Getting scared of stock market
« Reply #46 on: August 15, 2017, 09:35:45 PM »
That's an incredibly long time horizon.  Look at any 20 year period in the market.....it's always gone up. As long as you're investing in a 3 fund portfolio I'd be 90/10.

For fun, here's a total return chart of the last 20 years for each of the constituents:


If you had invested $10,000 in each of a US total bond fund, US total stock market fund, and International Total Stock Market fund  on one day, exactly 20 years ago (give or take a day) and reinvested dividends, at yesterdays closing you would have $92,767.27. More then tripling your money (in nominal dollars, roughly doubling in real dollars) even with the tech crash and great recession. Not the best 20 year period ever, but probably beat sitting on cash.
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DavidAnnArbor

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Re: Getting scared of stock market
« Reply #47 on: August 16, 2017, 08:41:39 AM »

"China's huge debt pile could be the trigger for the next financial crisis as borrowing reaches unsustainable levels, according to a study from the International Monetary Fund (IMF). "

http://www.businessinsider.com/imf-chinese-economy-debt-dangerous-growth-2017-8

Bottom line: You have to embrace the volatility. Think of them like a churning ocean, but the long-term trend is upward.

dividendman

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Re: Getting scared of stock market
« Reply #48 on: August 16, 2017, 09:39:41 AM »

"China's huge debt pile could be the trigger for the next financial crisis as borrowing reaches unsustainable levels, according to a study from the International Monetary Fund (IMF). "

http://www.businessinsider.com/imf-chinese-economy-debt-dangerous-growth-2017-8

Bottom line: You have to embrace the volatility. Think of them like a churning ocean, but the long-term trend is upward.

Good analogy. Especially because the oceans' long term trend is upward as well.

prognastat

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Re: Getting scared of stock market
« Reply #49 on: August 16, 2017, 09:47:35 AM »

"China's huge debt pile could be the trigger for the next financial crisis as borrowing reaches unsustainable levels, according to a study from the International Monetary Fund (IMF). "

http://www.businessinsider.com/imf-chinese-economy-debt-dangerous-growth-2017-8

Bottom line: You have to embrace the volatility. Think of them like a churning ocean, but the long-term trend is upward.

Good analogy. Especially because the oceans' long term trend is upward as well.

And both due to industrialization.