Author Topic: Sat out the Trump Rally-Advice on Jumping back in.  (Read 3008 times)

CHstp

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Sat out the Trump Rally-Advice on Jumping back in.
« on: August 02, 2017, 08:35:03 PM »
Thought I was smart sitting on the sidelines since November with a pretty substantial retirement acct. Was going to take the opportunity to self direct with a simple mix of Vanguard funds.  First "bright" move on this experiment was sitting it out despite
the sound advice to "never time the market".  Now I'm nervous of course about getting back in now having lost the opportunity
to use any of the last 8 months appreciation as a buffer against the next drop-just stupidly got myself into a fearful position now-exactly what I didn't want.

So, now what to do? Go back in with all of it at one time? (Looking at about a 10-25 year horizon on this acct.) Average in perhaps 25% per quarter over a year with the option to accelerate on a dip?

I'm ready to move past this missed opportunity.  So any level headed advice on how to get back in wisely would be much appreciated.

Thanks!

powskier

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #1 on: August 02, 2017, 08:41:09 PM »
You made a mistake and learned from it.
Don't repeat the mistake by still trying to time the market, particularly with such a long time horizon.
Keep a larger cash stash if that will make you more comfortable in the next downturn, so you won't have to sell anything "at a loss" should you need cash.

Radagast

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #2 on: August 02, 2017, 11:18:03 PM »
Choose an allocation that doesn't suck and put your money in ASAP. Same as before. For example, 45% US stock, 30% international stock, 25% bonds.

COEE

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #3 on: August 02, 2017, 11:28:06 PM »
Put it all in just like you pulled it all out.  Don't wait.  I'm sorry you've missed the last 8 months.  They've been kick ass.

Mighty-Dollar

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #4 on: August 03, 2017, 03:47:45 AM »
Those of us who are always fully invested are "jumping all-in" every single day.

If you're diversified into bonds then you don't worry about a stock market crash.

CHstp

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #5 on: August 03, 2017, 05:40:34 AM »
Thank you for replies. 

runewell

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #6 on: August 03, 2017, 07:14:25 AM »
Those of us who are always fully invested are "jumping all-in" every single day.

If you're diversified into bonds then you don't worry about a stock market crash.

Right, you only worry about the rest of the time when the stock market goes up.
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L.A.S.

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #7 on: August 03, 2017, 07:19:26 AM »
There is a related thread here about the "Top is in" which should provide sufficient guidance on what to do next, or what to wait for, in your situation....

Just kidding.

Decide what your asset allocation should be based on your risk tolerance and investing horizon and pull the trigger.  Don't look back.

In Feb. or March of this year there was a good interview with Warren Buffett on CNBC in which he advised against basing investing decision on the political winds .  He explained that he didn't like who was running Washington for about half of his investing career.  If he had sat out the market during those periods he would have missed good investing opportunities.


WhiteTrashCash

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #8 on: August 03, 2017, 09:44:25 AM »
There is a related thread here about the "Top is in" which should provide sufficient guidance on what to do next, or what to wait for, in your situation....

Just kidding.

Decide what your asset allocation should be based on your risk tolerance and investing horizon and pull the trigger.  Don't look back.

In Feb. or March of this year there was a good interview with Warren Buffett on CNBC in which he advised against basing investing decision on the political winds .  He explained that he didn't like who was running Washington for about half of his investing career.  If he had sat out the market during those periods he would have missed good investing opportunities.

Besides, it is really easy to invest with Trump in the White House because he's made the Stock Market rather predictable. Trump does/says something dumb = Buy because everything is going to be discounted for a day or so. Trump clarifies that he didn't mean dumb thing he did/said or Member of Cabinet/Staff corrects Trump's statement = Increase in stock market value for a day or so. Easy peasy for even casual investors.

kenaces

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #9 on: August 03, 2017, 03:32:55 PM »
I think the research show that lump sum > averaging into markets over longer time periods BUT you have to match your investments to your psychology and risk tolerance.  Otherwise you will just screw it all up at some future point when you get too excited or too afraid.

Spend some time looking at some asset allocation and their past performance to get an idea on what you would be comfortable with.  Then you can start to shift towards that allocation.  If your time horizon is ~20 years until retirement then no need to rush the transition as in the long term weather you average in over 3 months or 3 years will make less of a difference to your results than your ability to have good allocation that you stick with for 20+ years

Mr. Green

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #10 on: August 03, 2017, 04:58:21 PM »
Take you lumps and get back in. Just saw an article from the "experts" saying we could see another 8-10% increase next year based on fundamentals. The higher it goes the harder it'll be psychologically because you'll be thinking we're just that much closer to the next drop. Which is a poor thought anyway because the next drop might only be 10-15%. One never knows.
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2Birds1Stone

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #11 on: August 04, 2017, 06:41:21 AM »
If you had the money invested now would you pull it all out?

If not, I would just get right back in and chalk it off as a learning experience.
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birdman2003

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #12 on: August 04, 2017, 06:58:18 AM »
Don't repeat your painful lesson on timing the market by . . . timing the market . . .

Kaspian

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #13 on: August 04, 2017, 09:27:59 AM »
Here's a question to ask yourself:  If all that money was currently sitting in investments, would you pull it out now?  If not, why?  This is actually the same question you posed framed differently.  $20K is $20K whether it's sitting in investments, a savings account, or under a mattress.  Remove emotion from the equation. 

Umm.... Just noticed 2Birds1Stone said the exact same thing.  Great minds...  ;)
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ChpBstrd

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #14 on: August 04, 2017, 02:16:59 PM »
You pulled out of the market for a reason that may reoccur. Maybe your allocation is too risky for your personality/situation. If so, getting back into that same allocation might just result in you being scared out of the market yet again at some point in the future. In other words, over the past 8 months, you might have been better off in a portfolio of bonds, REITs, preferreds, and utilities rather than, I presume, cash.

There are 2 possible solutions:

1) Change behavior/attitudes so that risk is easier to stomach. E.g. consume less financial "news" and opinion or check balances less often.

2) Change portfolio allocation so you'll never bail out again. Maybe that means a low-volatility portfolio that will yield less than the stock market, but more than you investing in and out of the stock market. Maybe that means ex-US stocks so that the news is farther away. Or maybe you need to become a landlord to better control your returns.

Free Forever

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #15 on: August 06, 2017, 02:10:34 PM »
 It's too bad that finding a good human financial advisor/coach (that follows the low fee, indexing philosophy) requires navigating around so many scummy sales people masquerading as advisors. However it might be worth it for you to go this route if you can find someone who charges a low enough fee and is reputable. A reasonable fee is worth it if they're able to keep you adhered to your personal investment plan.


CHstp

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #16 on: August 07, 2017, 05:05:14 AM »
Thanks, All. My allocations should be fine and appropriate for this retirement account.  I was changing over from and advisor to self-managed.
My first independent choice was "timing". Won't happen again.  Thanks for all the level-headed reinforcements of what I already knew (but didn't follow).

davisgang90

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #17 on: August 07, 2017, 05:25:28 AM »
Timing the market is a siren song.  Ignore it and stick to your AA.
Check out my blog.  Early retirement from a military perspective.

http://chartprepping.com




jjandjab

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #18 on: August 07, 2017, 10:01:20 AM »
I understand where you are coming from, having done this a decade ago. I pulled my investments right around the time of the 2008-9 downturn. So I felt good - at first. Then I sat out waaayyy too long and missed the first part of the steady climb back up. I probably came out slightly ahead on my old money, but lost out on the appreciation of the new contributions which just sat in cash. That jump back in is really hard.

I personally did dollar cost average back in once I started. I bought my bonds immediately, but I bought my stock allocation every month with 1/12th of those funds. It just made me feel better. And so if it makes you feel better to know you might benefit a dip in the next year, then do it that way. But I would make sure to automate it to take away the emotion, which is what we all (or most of us anyway) fight against when investing on our own.

DarkandStormy

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #19 on: August 09, 2017, 06:48:29 AM »
https://www.cnbc.com/2017/08/09/even-if-you-bought-just-as-the-global-financial-crisis-erupted-10-years-ago.html

Ten years later, investors who bought and held before the financial crisis hit are still in good shape.
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runewell

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #20 on: August 09, 2017, 09:19:36 AM »
https://www.cnbc.com/2017/08/09/even-if-you-bought-just-as-the-global-financial-crisis-erupted-10-years-ago.html

Ten years later, investors who bought and held before the financial crisis hit are still in good shape.

Good luck with the next ten since our valuations are getting us ready for the next downturn.   
Please leave Dicey out of this! Have you not been paying any attention? Trolls are not welcome here!

DarkandStormy

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #21 on: August 09, 2017, 09:37:32 AM »
https://www.cnbc.com/2017/08/09/even-if-you-bought-just-as-the-global-financial-crisis-erupted-10-years-ago.html

Ten years later, investors who bought and held before the financial crisis hit are still in good shape.

Good luck with the next ten since our valuations are getting us ready for the next downturn.   

Did you read the article?
« Last Edit: August 23, 2017, 08:29:05 AM by DarkandStormy »
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Earn a $150 bonus with Chase Freedom Unlimited - only $500 spend needed in 3 months.
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Earn a $150 bonus with Chase Freedom - only $500 spend needed in 3 months.
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Southwest Cards - Earn 40k miles for $2k spend in 3 months.
Premier -
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Retire-Canada

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Re: Sat out the Trump Rally-Advice on Jumping back in.
« Reply #22 on: August 11, 2017, 08:48:43 PM »
Did you read the article?

He doesn't do that. It's sad, but true.