Author Topic: Ready for a Correction  (Read 91072 times)

Mr. Green

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Ready for a Correction
« on: August 21, 2015, 06:11:58 AM »
I think all the right elements are in place. Oil, China, rate hike, etc. I think we only need another 3% drop or so. I had some cash in an online savings account that I've been content to let sit until now. I've yanked it in anticipation of throwing it in with the rest of my investments. I'm not looking to time the bottom, just pick up a healthy bump on the drop since I don't see the fundamentals for a prolonged or deep drop in the markets. I know, I know timing. But this is just a little game for me that I enjoy.

GGNoob

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Re: Ready for a Correction
« Reply #1 on: August 21, 2015, 06:52:18 AM »
Might be a good time to add emerging markets to your portfolio if you don't already hold them...down over 20% in 3 months and at a price that I believe hasn't been seen since 2009. Of course, they may just keep going down, so DCA into them could be a good idea.

innerscorecard

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Re: Ready for a Correction
« Reply #2 on: August 21, 2015, 08:34:43 AM »
Might be a good time to add emerging markets to your portfolio if you don't already hold them...down over 20% in 3 months and at a price that I believe hasn't been seen since 2009. Of course, they may just keep going down, so DCA into them could be a good idea.

Emerging markets fundamentals are also getting worse. If you are investing passively rather than based on fundamental research, you shouldn't buy just because the price is down.

hodedofome

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Re: Ready for a Correction
« Reply #3 on: August 21, 2015, 09:18:01 AM »
How do you know there will be a rate hike?


Sent from my iPhone using Tapatalk

Easye418

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Re: Ready for a Correction
« Reply #4 on: August 21, 2015, 09:46:26 AM »
I think all the right elements are in place. Oil, China, rate hike, etc. I think we only need another 3% drop or so. I had some cash in an online savings account that I've been content to let sit until now. I've yanked it in anticipation of throwing it in with the rest of my investments. I'm not looking to time the bottom, just pick up a healthy bump on the drop since I don't see the fundamentals for a prolonged or deep drop in the markets. I know, I know timing. But this is just a little game for me that I enjoy.

Hmm... my portfolio is 80/20 stocks to bonds.... do I sell all my admiral bonds and move em to admiral stocks?

forummm

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Re: Ready for a Correction
« Reply #5 on: August 21, 2015, 09:47:14 AM »
I'm kind of excited about the dip this week--even though our daily losses are exceeding our monthly income :)

I hope we finally get down to more historically average valuations in the next few months. It will make me a lot richer in the long run.

dandarc

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Re: Ready for a Correction
« Reply #6 on: August 21, 2015, 09:51:31 AM »
Really hoping this lasts for a good while - more or less missed the 2008 disaster due to my financial ineptitude at the time, and even most of the October dip last year.  6-12 months of down prices would help me a lot.

Easye418

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Re: Ready for a Correction
« Reply #7 on: August 21, 2015, 09:55:34 AM »
I'm kind of excited about the dip this week--even though our daily losses are exceeding our monthly income :)

I hope we finally get down to more historically average valuations in the next few months. It will make me a lot richer in the long run.

Sold bonds.  Bought Stocks.  Thanks for the dip market.

Eric

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Re: Ready for a Correction
« Reply #8 on: August 21, 2015, 10:03:39 AM »
I've got my seat belt fastened.


Mr. Green

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Re: Ready for a Correction
« Reply #9 on: August 21, 2015, 10:09:51 AM »
The market is straight tanking today. C'mon 10% drop!

I think we'll see a rate hike because unemployment remains low, job growth remains steady, housing data is trending up, and consumers are starting to spend money. I'm still all in on the US. I have no investments internationally because I believe the US has the best fundamentals for the next few years. Plus it all averages out in the end anyway. I don't care if International stocks do better for a couple years because I'm investing for a 70 year span.

However, short term (a few months at most) I think we're ripe for a correction. China data looks bad, and a rate hike looks inevitable. The market has a history of a brief downturn before rate hikes. Plus there's the expectation of a correction because of how long this bull market has run. I think all that means I'm going to be presented with a good buying opportunity. I'm questioning whether it's worth cashing our 40k worth of 5-year CDs @ 3% early to take advantage. Maybe that will be Phase 2 if the drop is sustained and closer to 20% than 10%.
« Last Edit: August 21, 2015, 10:11:24 AM by Mr. Green »

Easye418

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Re: Ready for a Correction
« Reply #10 on: August 21, 2015, 10:24:34 AM »
The market is straight tanking today. C'mon 10% drop!

I think we'll see a rate hike because unemployment remains low, job growth remains steady, housing data is trending up, and consumers are starting to spend money. I'm still all in on the US. I have no investments internationally because I believe the US has the best fundamentals for the next few years. Plus it all averages out in the end anyway. I don't care if International stocks do better for a couple years because I'm investing for a 70 year span.

However, short term (a few months at most) I think we're ripe for a correction. China data looks bad, and a rate hike looks inevitable. The market has a history of a brief downturn before rate hikes. Plus there's the expectation of a correction because of how long this bull market has run. I think all that means I'm going to be presented with a good buying opportunity. I'm questioning whether it's worth cashing our 40k worth of 5-year CDs @ 3% early to take advantage. Maybe that will be Phase 2 if the drop is sustained and closer to 20% than 10%.

I agree. I hope it drops a bit more.  Got my exchange order in. (in hopes of a giant rally on Monday of course)
« Last Edit: August 21, 2015, 10:42:25 AM by Easye418 »

Fortuna

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Re: Ready for a Correction
« Reply #11 on: August 21, 2015, 10:35:26 AM »
I save my contributions and invest 3x a year.  To make it automatic I picked April 15, August 15 and December 15 as roughly the days I would buy the EFTs in my passive portfolio.

So here I am with the cash for the last few months savings ready to add and find myself hesitating as each day I looked things were dropping.  You cannot time a bottom but I do find myself wanting to wait till there is a day or two with out triple digit drops.

Logic tells me to just stick to my plan because in 3-4 months I will have more cash to add and if it keeps dropping that will be invested lower.  If it is higher then this months purchases will have made some gains.  Plus you are here for the long run.

Any thoughts does anyone else find themselves holding off something planned this week to wait this out? 

SuperSecretName

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Re: Ready for a Correction
« Reply #12 on: August 21, 2015, 10:38:07 AM »
TLH now, or wait a few more days to see what happens?

tomq04

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Re: Ready for a Correction
« Reply #13 on: August 21, 2015, 11:01:12 AM »
I'll bite guys,

52 week low for S&P is ~1830, seems like a great time to start buying when we close in on that.  100 week low is just under 1700...

If you are still working and accumulating assets, keep buying the whole time, and have no worries about your decision.  If you like lol "market timing", I like using 52 week low's as great starting points to start buying.

Mr. Green

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Re: Ready for a Correction
« Reply #14 on: August 21, 2015, 11:07:00 AM »
To each his own. I'm already investing in two 401ks on the regular and dumping all our extra into brokerages accounts monthly. I just have some extra cheddar (34k) laying around in online savings account from before finding MMM. As a very small percentage of our liquid assets I was content with keeping it there until we saw a correction. It's still early in the day but two 300 point drops back-to-back would not be a bad time to make a purchase, correction or no correction. I'm waiting for a correction because I think we're going to get one. Don't buy or sell on my opinion though!

matchewed

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Re: Ready for a Correction
« Reply #15 on: August 21, 2015, 11:08:37 AM »
I'm always ready for a correction, or an increase, or a decrease, or a plateau... you know what, there's more important things to do than stare at the stock market.

cloudsail

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Re: Ready for a Correction
« Reply #16 on: August 21, 2015, 11:27:19 AM »
I really really really hope the market keeps dropping for the rest of the year, but that seems unlikely.

Maybe if the Fed goes crazy with rate hikes or something... I dunno.  Although I'm hopeful that China will continue to slide, and take the rest of the world with them.

sol

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Re: Ready for a Correction
« Reply #17 on: August 21, 2015, 11:42:03 AM »
I really really really hope the market keeps dropping for the rest of the year, but that seems unlikely.

Maybe if the Fed goes crazy with rate hikes or something... I dunno.  Although I'm hopeful that China will continue to slide, and take the rest of the world with them.

I'm pretty sure the Fed rate hike is going to be so minuscule that we'll all laugh about the fear it caused.

China is down but I think it's a blip.  Too many people (and investors) there to seriously collapse their economy, and in the long run they should be more resilient to bears than US or Europe because they have greater freedom to intervene in their markets.

Tanor85

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Re: Ready for a Correction
« Reply #18 on: August 21, 2015, 11:58:44 AM »
BUY BUY BUY!

DoubleDown

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Re: Ready for a Correction
« Reply #19 on: August 21, 2015, 12:05:28 PM »
Why I hate (all in good fun, that is) these inevitable threads as the markets go down:

1. We get all the expected market timers talking about "buying the dip," "firing their dry powder," "Just waiting for the Schiller Index divided by the ratio of pork bellies to Chinese futures to hit 32.84", etc. Gag me.

2. We get all those in the accumulation phase cheering for everything to get all f'ed up for those who are post-accumulation. It's like fucking dancing on someone's grave or throwing a party in a person's office (while they're still sitting there) who just got laid off, because you get to take over their corner office.

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Re: Ready for a Correction
« Reply #20 on: August 21, 2015, 12:07:04 PM »
I started investing in 2008, so I witnessed all the panic and crises from everyone, but I am glad I witnessed that period because today I invest with ease, I am hardly worried about investing during a downturn. I find it made me tougher. I just can't wait for september to arrive so i can contribute again.

Mr. Green

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Re: Ready for a Correction
« Reply #21 on: August 21, 2015, 12:09:33 PM »
Why I hate (all in good fun, that is) these inevitable threads as the markets go down:

1. We get all the expected market timers talking about "buying the dip," "firing their dry powder," "Just waiting for the Schiller Index divided by the ratio of pork bellies to Chinese futures to hit 32.84", etc. Gag me.

2. We get all those in the accumulation phase cheering for everything to get all f'ed up for those who are post-accumulation. It's like fucking dancing on someone's grave or throwing a party in a person's office (while they're still sitting there) who just got laid off, because you get to take over their corner office.
I generally don't even look in this section of the forum. And I certainly don't take it very seriously. To me it's a game. Hopefully others are able to take it as lightly. I agree with matchewed that there are more important things to spend your time on. But since I happen to have some cash on hand due to my personal circumstances, I'm having a little fun with it.

brooklynguy

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Re: Ready for a Correction
« Reply #22 on: August 21, 2015, 12:18:48 PM »
2. We get all those in the accumulation phase cheering for everything to get all f'ed up for those who are post-accumulation. It's like fucking dancing on someone's grave or throwing a party in a person's office (while they're still sitting there) who just got laid off, because you get to take over their corner office.

Consider it payback for all the dancing on the graves of us accumulators done by all the self-congratulatory ER bloggers over the past few years of uninterrupted market gains.

DoubleDown

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Re: Ready for a Correction
« Reply #23 on: August 21, 2015, 12:32:27 PM »
2. We get all those in the accumulation phase cheering for everything to get all f'ed up for those who are post-accumulation. It's like fucking dancing on someone's grave or throwing a party in a person's office (while they're still sitting there) who just got laid off, because you get to take over their corner office.

Consider it payback for all the dancing on the graves of us accumulators done by all the self-congratulatory ER bloggers over the past few years of uninterrupted market gains.

LOL

By the way, I'll be in your office next Tuesday with balloons and streamers to measure the drapes. :-)

DaveInVirginia

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Re: Ready for a Correction
« Reply #24 on: August 21, 2015, 12:34:06 PM »

Consider it payback for all the dancing on the graves of us accumulators done by all the self-congratulatory ER bloggers over the past few years of uninterrupted market gains.

Better yet, let's just line up recent retirees in their 70s and kick them in the teeth!  U-S-A! U-S-A!

Seriously, praying for the world economy to go to shit so you can get a 10% sale is a bit twisted.  Most people don't invest and only get the shaft during these kinds of downturns.  Self-congratulatory ER bloggers make up .000000002% of the world population.

matchewed

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Re: Ready for a Correction
« Reply #25 on: August 21, 2015, 12:35:49 PM »

Consider it payback for all the dancing on the graves of us accumulators done by all the self-congratulatory ER bloggers over the past few years of uninterrupted market gains.

Better yet, let's just line up recent retirees in their 70s and kick them in the teeth!  U-S-A! U-S-A!

Seriously, praying for the world economy to go to shit so you can get a 10% sale is a bit twisted.  Most people don't invest and only get the shaft during these kinds of downturns.  Self-congratulatory ER bloggers make up .000000002% of the world population.

Well if most people aren't invested then the 10% drop shouldn't really affect them. :)

Eric

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Re: Ready for a Correction
« Reply #26 on: August 21, 2015, 12:43:37 PM »
Seriously, praying for the world economy to go to shit so you can get a 10% sale is a bit twisted.  Most people don't invest and only get the shaft during these kinds of downturns.  Self-congratulatory ER bloggers make up .000000002% of the world population.

So us atheists are in the clear!  Come on crash!!

Mr. Green

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Re: Ready for a Correction
« Reply #27 on: August 21, 2015, 01:00:41 PM »
I'm just reacting to the data at hand. Nothing I can do about China. It is what it is. Doesn't mean it can't be an opportunity.

And I'd be a little hesitant to call a 10% drop "going to shit." Call me when Lehman Brothers goes under and AIG is on the brink of collapse. :)

thd7t

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Re: Ready for a Correction
« Reply #28 on: August 21, 2015, 01:14:27 PM »
With the market off by under 10%, I think it's a pretty big stretch to call this anything other than a dip at this point.

forummm

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Re: Ready for a Correction
« Reply #29 on: August 21, 2015, 01:17:59 PM »

Consider it payback for all the dancing on the graves of us accumulators done by all the self-congratulatory ER bloggers over the past few years of uninterrupted market gains.

Better yet, let's just line up recent retirees in their 70s and kick them in the teeth!  U-S-A! U-S-A!

Seriously, praying for the world economy to go to shit so you can get a 10% sale is a bit twisted.  Most people don't invest and only get the shaft during these kinds of downturns.  Self-congratulatory ER bloggers make up .000000002% of the world population.

Why does the economy have to be affected when investors start to have more realistic valuations for businesses? PE is still far above historical average.

charis

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Re: Ready for a Correction
« Reply #30 on: August 21, 2015, 01:32:41 PM »

Consider it payback for all the dancing on the graves of us accumulators done by all the self-congratulatory ER bloggers over the past few years of uninterrupted market gains.

Better yet, let's just line up recent retirees in their 70s and kick them in the teeth!  U-S-A! U-S-A!

Seriously, praying for the world economy to go to shit so you can get a 10% sale is a bit twisted.  Most people don't invest and only get the shaft during these kinds of downturns.  Self-congratulatory ER bloggers make up .000000002% of the world population.

Well if most people aren't invested then the 10% drop shouldn't really affect them. :)

I think the poster meant that most people don't buy during a downturn, not that they aren't already invested.  Hence, they get the shaft.

Mississippi Mudstache

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Re: Ready for a Correction
« Reply #31 on: August 21, 2015, 01:40:16 PM »

Consider it payback for all the dancing on the graves of us accumulators done by all the self-congratulatory ER bloggers over the past few years of uninterrupted market gains.

Better yet, let's just line up recent retirees in their 70s and kick them in the teeth!  U-S-A! U-S-A!

Seriously, praying for the world economy to go to shit so you can get a 10% sale is a bit twisted.  Most people don't invest and only get the shaft during these kinds of downturns.  Self-congratulatory ER bloggers make up .000000002% of the world population.

Well if most people aren't invested then the 10% drop shouldn't really affect them. :)

I think the poster meant that most people don't buy during a downturn, not that they aren't already invested.  Hence, they get the shaft.

So aren't they, by definition, giving themselves the shaft? I don't get why people who don't invest deserve sympathy.

Mr. Green

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Re: Ready for a Correction
« Reply #32 on: August 21, 2015, 02:02:57 PM »
As of market close today, The DJIA, Nasdaq, and Russell 2000 are all down 10%. The S&P 500 is down ~7.5%.

forummm

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Re: Ready for a Correction
« Reply #33 on: August 21, 2015, 02:09:46 PM »
As of market close today, The DJIA, Nasdaq, and Russell 2000 are all down 10%. The S&P 500 is down ~7.5%.

EURO STOXX down 15%. SSE (Shangai) down 32%.

Frugal D

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Re: Ready for a Correction
« Reply #34 on: August 21, 2015, 02:22:16 PM »
I'd be shocked if the Fed raises by more than 25 bps anytime in the next 12 months. The only reason to do so would be to get off the zero bound just to again lower rates after they torpedo the economy. There's a better chance we'll get QE4 and negative rates before we see materially higher rates.


Vagabond76

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Re: Ready for a Correction
« Reply #35 on: August 21, 2015, 02:26:16 PM »
Well if most people aren't invested then the 10% drop shouldn't really affect them. :)

The "most people" you refer to tend to be affected the most, as they are the first to get laid off.  What is worse, a 10% paper loss for an investor or a 100% income loss for a wage earner?

milesdividendmd

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Ready for a Correction
« Reply #36 on: August 21, 2015, 02:32:44 PM »
It's hilarious how everyone's jumping in on the prediction game (although I must admit, the OP did nail it!)

Why even have an opinion on where the market is going unless,

1. Your opinion's have been right more often than not in the past. (Ie you you have beaten the market over long time periods actively investing.)

And

2. You believe that timing the market is smart?

We people are funny!

Eric

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Re: Ready for a Correction
« Reply #37 on: August 21, 2015, 02:35:03 PM »
Well if most people aren't invested then the 10% drop shouldn't really affect them. :)

The "most people" you refer to tend to be affected the most, as they are the first to get laid off.  What is worse, a 10% paper loss for an investor or a 100% income loss for a wage earner?

10% market drop causes mass layoffs and a disaster of biblical proportions!  MASS HYSTERIA!!

dandarc

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Re: Ready for a Correction
« Reply #38 on: August 21, 2015, 02:38:10 PM »
Well if most people aren't invested then the 10% drop shouldn't really affect them. :)

The "most people" you refer to tend to be affected the most, as they are the first to get laid off.  What is worse, a 10% paper loss for an investor or a 100% income loss for a wage earner?

10% market drop causes mass layoffs and a disaster of biblical proportions!  MASS HYSTERIA!!
Cats and Dogs living together!

BTDretire

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Re: Ready for a Correction
« Reply #39 on: August 21, 2015, 02:57:20 PM »
I really really really hope the market keeps dropping for the rest of the year, but that seems unlikely.

Maybe if the Fed goes crazy with rate hikes or something... I dunno.  Although I'm hopeful that China will continue to slide, and take the rest of the world with them.

 Gee, and just two days ago, I used firecalc and it said "Retire now"
And you want the market to go down?
Don't you care about us retiring people?
 Ok, a little fun on you. :-)
I've lost $60K in two days, and firecalc still says "Retire now"
Don't look for the "Retire Now" window in firecalc, I just  had zero
failures to have assets after 30 years.
Neat program!


Mr. Green

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Re: Ready for a Correction
« Reply #40 on: August 21, 2015, 03:33:34 PM »
It's hilarious how everyone's jumping in on the prediction game (although I must admit, the OP did nail it!)

Why even have an opinion on where the market is going unless,

1. Your opinion's have been right more often than not in the past. (Ie you you have beaten the market over long time periods actively investing.)

And

2. You believe that timing the market is smart?

We people are funny!
Cracks me up where this thread has gone. We went from a healthy correction to the world going to shit. I just posted because I thought it would be interesting to see if we get one, and I was having some fun. I didn't think we'd pretty much get there today. I called the market in '08, moving everything to cash, because it seemed obvious, but in the same breath I waited until partway through the recovery to get back in. That was a younger, dumber (maybe not?) me though. :)

I will say today was a great day to buy, and buy I did!
« Last Edit: August 21, 2015, 03:41:31 PM by Mr. Green »

StockBeard

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Re: Ready for a Correction
« Reply #41 on: August 21, 2015, 03:34:28 PM »
Might be a good time to add emerging markets to your portfolio if you don't already hold them...down over 20% in 3 months and at a price that I believe hasn't been seen since 2009. Of course, they may just keep going down, so DCA into them could be a good idea.
I was over my target allocation on emerging markets, seems like the market did the rebalancing for me :'(

Heckler

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Re: Ready for a Correction
« Reply #42 on: August 21, 2015, 04:26:56 PM »
Sometimes it's nice to hold in Canadian dollars.  My Total US is still up 8.2% and my EAFE is up 11.3%, having bought late last year.  What's the big deal?  I'm diversified and unhedged.  Seems the $CAD is dropping faster than the international markets.

However, I do wish I had more cash on hand to buy Canadian All Cap and Emerging.  That is on sale right now.


A testament to Canadian Couch Potato!  $C 250K has only dropped $C 3.5K since last weekend. 

neil

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Re: Ready for a Correction
« Reply #43 on: August 21, 2015, 04:51:45 PM »
It's still a far different feeling coming off of a recent high and driving into thirteen year lows.

https://web.archive.org/web/20090306024224/http://finance.yahoo.com/

I wish I did more then, but I wasn't sure if I should be saving for a downpayment.   In the end, I did neither and accumulated too much cash. :(

Dexterous

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Re: Ready for a Correction
« Reply #44 on: August 21, 2015, 05:01:39 PM »
I got stuck leading a meeting during the entire trading day, so I missed out on the action.  :\  FML.  Hahah

I did buy every other day this week though, so I got some money in during this correction.

SirFrugal

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Re: Ready for a Correction
« Reply #45 on: August 21, 2015, 05:12:23 PM »
I think all the right elements are in place. Oil, China, rate hike, etc. I think we only need another 3% drop or so. I had some cash in an online savings account that I've been content to let sit until now. I've yanked it in anticipation of throwing it in with the rest of my investments. I'm not looking to time the bottom, just pick up a healthy bump on the drop since I don't see the fundamentals for a prolonged or deep drop in the markets. I know, I know timing. But this is just a little game for me that I enjoy.

I'm in a similar boat...finished school and really got my spending levels down over the last couple years, as well as my income increasing quite a bit, so I finally got in a position where I could really start to invest heavily.  I opened a brokerage account and started putting extra money into it waiting for a good time to buy.  I guess some would call it timing the market but it seemed kind of dumb to hop in when the market was at all time highs, and I'm still thinking QE/0% rates have created a bit of a bubble, and we are towards a bull run that has been one of the longest in history...it just seemed way too likely a downturn was on the way.

I have no desire to try to be a wannabe daytrader or anything...I don't want to be buying/selling trying to time the market in that regard.  I also have been keeping my 401k contributions steady regardless of market moving...but getting in with a lump sum over the last year just seemed like a bad idea.  Even if I had spread it out so I put in 5k a month until I got it all it the market I'd still have lost at this point, as I would have just been buying into a sideways moving market hovering near all time highs.  Once I get a decent entry point, which I'm thinking will be soon, I plan on approaching it with the mind set that shares = dividends = income, so ultimately I just want to accumulate shares of quality dividend payers.

Roland of Gilead

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Re: Ready for a Correction
« Reply #46 on: August 21, 2015, 05:23:30 PM »
I purchased Netflix puts when it was over $125 and $@#% stupid stupid me sold them when it refused to fall below $120 after several days.   We are not talking about a tiny bit of missed opportunity...I had 50 Sept $120 puts that I sold for $5.50, missing out on about $75,000 gain in the past couple of days.

FIRE47

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Re: Ready for a Correction
« Reply #47 on: August 21, 2015, 05:31:49 PM »
The end of days is upon us!

Liquidated my positions last night.

milesdividendmd

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Re: Ready for a Correction
« Reply #48 on: August 21, 2015, 05:32:50 PM »

I purchased Netflix puts when it was over $125 and $@#% stupid stupid me sold them when it refused to fall below $120 after several days.   We are not talking about a tiny bit of missed opportunity...I had 50 Sept $120 puts that I sold for $5.50, missing out on about $75,000 gain in the past couple of days.

Ouch!

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Re: Ready for a Correction
« Reply #49 on: August 21, 2015, 07:38:20 PM »
I was ready.  I have put about 70% of my formerly sizeable cash pile into the stock market over the past 6 weeks, and I bought a bunch more today.  If the market prices continue going down, I will continue to buy.