Author Topic: Top is in  (Read 414639 times)

mies

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Re: Top is in
« Reply #2000 on: February 05, 2018, 02:29:57 PM »
I hope the drop holds through the end of the week. We get paid this week, so I need prices to stay low at least through Thursday so I can get some cheaper shares for my 401(k) contribution.
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MrMoneyMullet

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Re: Top is in
« Reply #2001 on: February 05, 2018, 02:32:45 PM »
The Later-Era Millennials' reactions over the past two days were kind of like how the "Summer Knights" reacted when winter came to Westeros on "A Song of Ice and Fire". There's nearly an entire generation of American adults who have no real memory of any kind of stock market downturn. It's interesting to observe.

I don't understand the reference, but I consider myself an older Millennial (perhaps that was intentional on your part... )

I started my career right before the crash, then was pissed that the markets recovered so fast before I could really pump a ton of cash into my retirement accounts!!
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sol

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Re: Top is in
« Reply #2002 on: February 05, 2018, 02:33:09 PM »
There's nearly an entire generation of American adults who have no real memory of any kind of stock market downturn. It's interesting to observe.

On black Monday in 1987 the Dow dropped 22% in a day.  Stock brokers jumped out of windows and went splat on the sidewalks below.

Today's 4.6% drop?  Yawn.  I made more than that last month alone.  My retirement is not exactly in danger.

WhiteTrashCash

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Re: Top is in
« Reply #2003 on: February 05, 2018, 02:39:02 PM »
There's nearly an entire generation of American adults who have no real memory of any kind of stock market downturn. It's interesting to observe.

On black Monday in 1987 the Dow dropped 22% in a day.  Stock brokers jumped out of windows and went splat on the sidewalks below.

Today's 4.6% drop?  Yawn.  I made more than that last month alone.  My retirement is not exactly in danger.

Yeah, it would have to drop at least 20% before I really would take any notice of it. Besides, I'm not planning to retire for at least another 9 years, so I see this as a nice opportunity to get some cheap shares.

NoraLenderbee

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Re: Top is in
« Reply #2004 on: February 05, 2018, 02:40:30 PM »
You all missed it. The top was last week.

ender

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Re: Top is in
« Reply #2005 on: February 05, 2018, 02:41:30 PM »

OurTown

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Re: Top is in
« Reply #2006 on: February 05, 2018, 02:45:25 PM »
S&P 500 at 2,300 would be a good point to re-balance I think.

sol

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Re: Top is in
« Reply #2007 on: February 05, 2018, 03:00:21 PM »
To be fair to all of the fearful people bailing on stocks and driving down the price, the market has admittedly seemed a little overzealous recently, and the huge new deficits that republicans created with their tax bill are going to come home to roost eventually, and interest rates are still too low to let the fed effectively manage the next recession.  There are real risks in the market.

OTOH, corporate profits are at record highs.  Employment is up, production is up, and Trump hasn't poked North Korea with threats of nuclear annihilation in almost a month now.  I think the US economy is fine, and stocks are due for a little correction.  A 10% drop would probably be a good thing, right about now.

anisotropy

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Re: Top is in
« Reply #2008 on: February 05, 2018, 03:02:19 PM »
I thought it was time to buy a little more when it was 6% off the top (this morning), of course, it dropped another 2% literally right after I bought. lol

Got cash for one more buy.... then will have to unload the bonds... to buy more stocks.

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Re: Top is in
« Reply #2009 on: February 05, 2018, 03:11:17 PM »
I'll get excited and start piling money in if the market drops another 15%-30%. Otherwise it's just noise.
Why do you (apparently) have all this money sitting on the sidelines not invested?
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Travis

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Re: Top is in
« Reply #2010 on: February 05, 2018, 03:12:37 PM »
I'll get excited and start piling money in if the market drops another 15%-30%. Otherwise it's just noise.

Although I am getting some excellent farcical entertainment. Turned on Bloomberg just to see what magical "analysis" they had to offer. Technical analyst just said that "whatever happens in the next 2 minutes (before market close) will either make the day look better or worse."

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ender

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Re: Top is in
« Reply #2011 on: February 05, 2018, 03:13:21 PM »
I'll get excited and start piling money in if the market drops another 15%-30%. Otherwise it's just noise.
Why do you (apparently) have all this money sitting on the sidelines not invested?

obviously because they knew top was in!

sol

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Re: Top is in
« Reply #2012 on: February 05, 2018, 03:13:39 PM »
I'll get excited and start piling money in if the market drops another 15%-30%. Otherwise it's just noise.
Why do you (apparently) have all this money sitting on the sidelines not invested?

He's been "keeping his powder dry" since 2013.

MrMoneyMullet

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Re: Top is in
« Reply #2013 on: February 05, 2018, 03:17:34 PM »
I'll get excited and start piling money in if the market drops another 15%-30%. Otherwise it's just noise.
Why do you (apparently) have all this money sitting on the sidelines not invested?

obviously because they knew top was in!

LOL YES! This is the sarcastic - correct answer.
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MrMoneyMullet

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Re: Top is in
« Reply #2014 on: February 05, 2018, 03:19:15 PM »
I'll get excited and start piling money in if the market drops another 15%-30%. Otherwise it's just noise.
Why do you (apparently) have all this money sitting on the sidelines not invested?

He's been "keeping his powder dry" since 2013.

No - I don't have a ton of money on the sidelines. I have saved up a year's worth of living expenses as a sabbatical fund because I'm planning to quit my corporate job this spring. Most likely I'd cut expenses in order to put money into the market if it dropped a lot. We're frugal compared to most people but not close to MMM level.
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2Birds1Stone

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Re: Top is in
« Reply #2015 on: February 05, 2018, 03:39:11 PM »
I would expect this carnage to continue for a few more days. We will enter correction territory by Friday, if not early next week.

Dani S

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Re: Top is in
« Reply #2016 on: February 05, 2018, 03:40:48 PM »
This thread is blowing up. Volatility of this thread is correlated with U.S. equities. Running analysis..beep..boop..beep..


Top is in.

Jsn

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Re: Top is in
« Reply #2017 on: February 05, 2018, 04:54:30 PM »
I would expect this carnage to continue for a few more days. We will enter correction territory by Friday, if not early next week.

Yup. Friday was a genuine trend. Today was driven by automated sell levels kicking in. Tomorrow will be panicked individuals desperate to lock in their losses.

2Birds1Stone

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Re: Top is in
« Reply #2018 on: February 05, 2018, 04:59:49 PM »
I hope we see another 10% decline before any sort of end to this correction. Still have lots of accumulation ahead of us.

gerardc

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Re: Top is in
« Reply #2019 on: February 05, 2018, 05:10:56 PM »
I'll get excited and start piling money in if the market drops another 15%-30%. Otherwise it's just noise.
Why do you (apparently) have all this money sitting on the sidelines not invested?

He's been "keeping his powder dry" since 2013.

No - I don't have a ton of money on the sidelines. I have saved up a year's worth of living expenses as a sabbatical fund because I'm planning to quit my corporate job this spring. Most likely I'd cut expenses in order to put money into the market if it dropped a lot. We're frugal compared to most people but not close to MMM level.

1 year expenses, so 3-4% of your portfolio? That's negligible, move along.

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Re: Top is in
« Reply #2020 on: February 05, 2018, 05:18:08 PM »
Here's my entire net worth, since I found MMM, including the last week's losses.  Should I be worried?  /snark

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Re: Top is in
« Reply #2021 on: February 05, 2018, 05:18:28 PM »
Keep calm and rebalance on.
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DavidAnnArbor

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Re: Top is in
« Reply #2022 on: February 05, 2018, 06:16:12 PM »
Just watch Netflix or Hulu.

sol

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Re: Top is in
« Reply #2023 on: February 05, 2018, 06:17:59 PM »
One dirty corner of the internet I was reading suggested that the market slide is the direct results of the new tax bill spiking the US deficit. 

Their argument is that Treasury is suddenly hemorrhaging funds as as payroll tax receipts fell off a cliff after the tax bill passed, and so has flooded the market with bonds to make up the difference.  The glut of bonds drives down prices, which drives up yields, which suddenly makes bonds a more attractive asset relative to stocks. 

Exacerbating this trend, people who are just consciously maintaining their asset allocation have to buy more bonds as stock prices skyrocket.  The net effect is the same, in that money flees stocks.

I'm not ready to totally blame the tax bill for the stock market mini-crash, but there does appear to be at least one explanatory argument linking the two.  Giving money to corporations and the wealthy was a conservative wet dream, of course, but in this case they did it by creating federal debt and that has perhaps led to the move out of stocks.  I mean, that money has to go somewhere, right?  You don't just park 6.6% of the US economy in cash over a three day decline.


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« Last Edit: February 05, 2018, 06:39:38 PM by thorstach »

Xlar

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Re: Top is in
« Reply #2025 on: February 05, 2018, 06:29:31 PM »
One dirty corner of the internet I was reading suggested that the market slide is the direct results of the new tax bill spiking the US deficit. 

Their argument is that Treasury is suddenly hemorrhaging funds as as payroll tax receipts fell off a cliff after the tax bill passed, and so has flooded the market with bonds to make up the difference.  The glut of bonds drives down prices, which drives up yields, which suddenly makes bonds a more attractive asset relative to stocks. 

Exacerbating this trend, people who are just consciously maintaining their asset allocation have to buy more bonds as stock prices skyrocket.  The net effect is the same, in that money flees stocks.

I'm not ready to totally blame the tax bill for the stock market mini-crash, but there does appear to be at least one explanatory argument linking the two.  Giving money to corporations and the wealthy was a conservative wet dream, of course, but in this case they did it by creating federal debt and that has perhaps led to the move out of stocks.  I mean, that money has to go somewhere, right?  You don't just park 6.6% of the US economy in cash over a three day decline.

I would be curious to read about this. Could you post a link to this article?

nereo

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Re: Top is in
« Reply #2026 on: February 05, 2018, 06:30:30 PM »
One dirty corner of the internet I was reading suggested that the market slide is the direct results of the new tax bill spiking the US deficit. 
...
You mean slashing taxes has consequences??  Why didnít anyone say so beforehand??!!
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dragoncar

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Re: Top is in
« Reply #2027 on: February 05, 2018, 06:33:30 PM »
Stairs up, Elevator down!

Wheels up in 15.  Weíre getting outta here

DavidAnnArbor

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Re: Top is in
« Reply #2028 on: February 05, 2018, 06:34:09 PM »
Treasury rates have gone up a little bit, but not that much.

I would just say that the market tanking recently is just emotional selling after such a large emotional climb up of the market.

dragoncar

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Re: Top is in
« Reply #2029 on: February 05, 2018, 06:37:49 PM »

TheAnonOne

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Re: Top is in
« Reply #2030 on: February 05, 2018, 07:11:30 PM »
I think it's important to note that, even IF the top truly is in, after a massive 7% drop we are STILL 13->15% higher than when the OP started this.

thorstach

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Re: Top is in
« Reply #2031 on: February 05, 2018, 07:37:06 PM »
S&P 500 futures down another 2%+, nikkei down 5%


JAYSLOL

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Re: Top is in
« Reply #2032 on: February 05, 2018, 07:40:11 PM »
S&P 500 futures down another 2%+, nikkei down 5%



Charts!  Fear!  We love you buddy. 

JAYSLOL

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Re: Top is in
« Reply #2033 on: February 05, 2018, 07:48:20 PM »
I hope we see another 10% decline before any sort of end to this correction. Still have lots of accumulation ahead of us.

Same, I hope we get a break from crazy prices for a while.  A nice 25% drop and an even nicer stagnant market for a few years before the next bull run would do wonders for my FIRE timeline. 

Cork

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Re: Top is in
« Reply #2034 on: February 05, 2018, 08:16:24 PM »
Ahhhh what we see here is the classic Neo-classical Curly Bounced Up Dead Cat Bacon Flop market response.  Shoulda flippin known this was coming.

Predicting the market will go down has never been this funny.  I love this thread. 
Prost!

Radagast

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Re: Top is in
« Reply #2035 on: February 05, 2018, 08:43:44 PM »
S&P 500 futures down another 2%+, nikkei down 5%


If a full 10% correction develops I'll give you an award!

This is bringing my cheese and bacon back in balance 8'-( No rebalancing the bacon cheese cat burger for me 8'-(
« Last Edit: February 05, 2018, 08:49:12 PM by Radagast »

Padonak

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Re: Top is in
« Reply #2036 on: February 05, 2018, 08:43:51 PM »
I say bring on a major market crash and recession. Better now while I'm still wage slavin' than later when I'm retired.

Also, those who are still employed (and even some of those who aren't) will be able to buy some cheap real estate in places like FL.

I don't think the market is going to crash this time though. Knowing how lucky I am, it'll probably happen a few months after I retire. I'll give you guys a heads up.


Radagast

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Re: Top is in
« Reply #2037 on: February 05, 2018, 08:50:20 PM »
One dirty corner of the internet I was reading suggested that the market slide is the direct results of the new tax bill spiking the US deficit. 

Their argument is that Treasury is suddenly hemorrhaging funds as as payroll tax receipts fell off a cliff after the tax bill passed, and so has flooded the market with bonds to make up the difference.  The glut of bonds drives down prices, which drives up yields, which suddenly makes bonds a more attractive asset relative to stocks. 

Exacerbating this trend, people who are just consciously maintaining their asset allocation have to buy more bonds as stock prices skyrocket.  The net effect is the same, in that money flees stocks.

I'm not ready to totally blame the tax bill for the stock market mini-crash, but there does appear to be at least one explanatory argument linking the two.  Giving money to corporations and the wealthy was a conservative wet dream, of course, but in this case they did it by creating federal debt and that has perhaps led to the move out of stocks.  I mean, that money has to go somewhere, right?  You don't just park 6.6% of the US economy in cash over a three day decline.
Meh. Probably just a mix of trading algorithms and Fed Fear at this point.

dragoncar

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Re: Top is in
« Reply #2038 on: February 05, 2018, 09:22:10 PM »
I'll get excited and start piling money in if the market drops another 15%-30%. Otherwise it's just noise.

Although I am getting some excellent farcical entertainment. Turned on Bloomberg just to see what magical "analysis" they had to offer. Technical analyst just said that "whatever happens in the next 2 minutes (before market close) will either make the day look better or worse."

Brilliant advice. Definitely worth $500k salary and 1% AUM.

Check this out:

ďMark Zandi, the chief economist for Moody's Analytics, dismissed the drop as relatively temporary, saying that unless it holds for multiple weeks, it likely won't make much of an impact.Ē

(http://abcnews.go.com/amp/US/todays-record-breaking-dow-drop-impact-experts/story?id=52858569)

Uh yeah.  Insightful.  Not at all circular

dragoncar

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Re: Top is in
« Reply #2039 on: February 05, 2018, 09:25:46 PM »
I hope we see another 10% decline before any sort of end to this correction. Still have lots of accumulation ahead of us.

I gotta say Iím tired of this sentiment.  I understand why people say this, but surely you realize that there are a lot of us here who are actually retired and will be hurt by a downturn.  For us itís not a buying opportunity, so maybe limit your enthusiasm? 

dont fucking dance

anisotropy

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Re: Top is in
« Reply #2040 on: February 05, 2018, 09:32:22 PM »
One dirty corner of the internet I was reading suggested that the market slide is the direct results of the new tax bill spiking the US deficit. 

Their argument is that Treasury is suddenly hemorrhaging funds as as payroll tax receipts fell off a cliff after the tax bill passed, and so has flooded the market with bonds to make up the difference.  The glut of bonds drives down prices, which drives up yields, which suddenly makes bonds a more attractive asset relative to stocks. 

Exacerbating this trend, people who are just consciously maintaining their asset allocation have to buy more bonds as stock prices skyrocket.  The net effect is the same, in that money flees stocks.

I'm not ready to totally blame the tax bill for the stock market mini-crash, but there does appear to be at least one explanatory argument linking the two.  Giving money to corporations and the wealthy was a conservative wet dream, of course, but in this case they did it by creating federal debt and that has perhaps led to the move out of stocks.  I mean, that money has to go somewhere, right?  You don't just park 6.6% of the US economy in cash over a three day decline.

I am unconvinced of the 1 trillion new bond issuance dropping the stock, I think it's a coincidence they happened around the same time frame.

Also thorstach, nice chart, it will be scarred into inverse VIX "investors" minds for the rest of their lives. :)

CrankAddict

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Re: Top is in
« Reply #2041 on: February 05, 2018, 09:36:32 PM »
I hope we see another 10% decline before any sort of end to this correction. Still have lots of accumulation ahead of us.

I gotta say Iím tired of this sentiment.  I understand why people say this, but surely you realize that there are a lot of us here who are actually retired and will be hurt by a downturn.  For us itís not a buying opportunity, so maybe limit your enthusiasm? 

dont fucking dance

I'm totally with you on not cheering too hard on any particular market direction - there is almost always somebody who is feeling pain whether things are moving up or down.  But as a genuine question, if you are already retired, shouldn't you be in asset classes that aren't going to get hammered nearly as hard?  If things really tank, sure, but isn't the portfolio of a retired person supposed to be fairly indifferent to stocks going +/- 20%?  Again, please don't read this as snarky, I'm honestly just trying to understand the position I'll be in some day.

dragoncar

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Re: Top is in
« Reply #2042 on: February 05, 2018, 09:43:23 PM »
I hope we see another 10% decline before any sort of end to this correction. Still have lots of accumulation ahead of us.

I gotta say Iím tired of this sentiment.  I understand why people say this, but surely you realize that there are a lot of us here who are actually retired and will be hurt by a downturn.  For us itís not a buying opportunity, so maybe limit your enthusiasm? 

dont fucking dance

I'm totally with you on not cheering too hard on any particular market direction - there is almost always somebody who is feeling pain whether things are moving up or down.  But as a genuine question, if you are already retired, shouldn't you be in asset classes that aren't going to get hammered nearly as hard?  If things really tank, sure, but isn't the portfolio of a retired person supposed to be fairly indifferent to stocks going +/- 20%?  Again, please don't read this as snarky, I'm honestly just trying to understand the position I'll be in some day.

Yes Iím happy with my AA, which is only around 50% equities at the moment.  But I think it behooves us all to root for widespread economic prosperity vs tanking stock markets just so we can buy on sale.  I totally agree that a downturn is not the end of the world, especially when accumulating, but I think some posters take this too far and express actual hope for a severe downturn without regard for what that means to the vast majority of people in the world.  Iím hedged, but Iíd rather see my hedges go down while I and everyone else makes money in equities
« Last Edit: February 05, 2018, 09:45:00 PM by dragoncar »

Radagast

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Re: Top is in
« Reply #2043 on: February 05, 2018, 09:45:05 PM »
I hope we see another 10% decline before any sort of end to this correction. Still have lots of accumulation ahead of us.

I gotta say Iím tired of this sentiment.  I understand why people say this, but surely you realize that there are a lot of us here who are actually retired and will be hurt by a downturn.  For us itís not a buying opportunity, so maybe limit your enthusiasm? 

dont fucking dance
Market moves are good for you (selling) in direct proportion to how bad they are for me (buying). I'll stop cheering crashes if you stop cheering gains! Note, I am cheering for market declines, not broad economic declines.

anisotropy

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Re: Top is in
« Reply #2044 on: February 05, 2018, 09:48:29 PM »
The thing is, tons of the "early retired" demographics are in theirs 30s-40s (myself included). We never really experienced a bear market's full wrath and many of us are not that prepared to face it, which is why plenty people have super high allocation ( >90%) in equities and are likely feeling the pain. I've been a big proponent in holding at least 10% bonds and have some asset and currency hedge to mitigate losses in events like this, but certain things need to be experienced in person to understand the severity of the situation.

dragoncar

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Re: Top is in
« Reply #2045 on: February 05, 2018, 10:02:33 PM »
I hope we see another 10% decline before any sort of end to this correction. Still have lots of accumulation ahead of us.

I gotta say Iím tired of this sentiment.  I understand why people say this, but surely you realize that there are a lot of us here who are actually retired and will be hurt by a downturn.  For us itís not a buying opportunity, so maybe limit your enthusiasm? 

dont fucking dance
Market moves are good for you (selling) in direct proportion to how bad they are for me (buying). I'll stop cheering crashes if you stop cheering gains! Note, I am cheering for market declines, not broad economic declines.

When did I cheer market gains?  I do think itís reasonable for me to be happy to achieve a 4% WR, since thatís pretty much what we are all hoping to do here. 

I think itís false equivalence to view market gains as losses on your part. The stock market is not a zero sum game.  You are better off accumulating in an up market that continues to go up after retirement than a down market that continues to go down (eg japan scenario)

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Re: Top is in
« Reply #2046 on: February 05, 2018, 10:48:52 PM »
But as a genuine question, if you are already retired, shouldn't you be in asset classes that aren't going to get hammered nearly as hard?  If things really tank, sure, but isn't the portfolio of a retired person supposed to be fairly indifferent to stocks going +/- 20%?  Again, please don't read this as snarky, I'm honestly just trying to understand the position I'll be in some day.

Not necessarily.  A rational early retiree might try to position themselves at the efficient frontier of an AA such as to maximize the historical SWR over his projected life span.  For example, I'm 48 and I use a 40 year planning horizon.  From what I can tell, the AA that maximizes the historical SWR is approximately 90/10.  So that is my investment allocation.

It is also true, however, that the drops of the last two days are not that big of a deal for people in my situation, especially since I am at about a 2% net WR.  Look at it this way:  If the market has dropped 10% so far(*), that means I went from a 2/100 = 2% WR to a 2/90 = 2.22% WR.

Note that a traditional retiree (say aged 65) might have a more conservative portfolio for any number of reasons:  They're less able and probably less willing to return to the workforce.  They may be less likely or less able to do side gigs.  They may have more expensive health insurance and/or health expenses than an early retiree.  And they might be more conservative because that was the more common teaching up until the past decade or so.

(*) I don't know exactly, but it's somewhere in that ballpark.
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Radagast

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Re: Top is in
« Reply #2047 on: February 05, 2018, 11:12:15 PM »
I think itís false equivalence to view market gains as losses on your part. The stock market is not a zero sum game.  You are better off accumulating in an up market that continues to go up after retirement than a down market that continues to go down (eg japan scenario)
True. We have to assume it will continue to go up at something like its historic trend of 5% real in order to cheer losses as we buy, which we can't know in advance. Enough losses would make that no longer true. But, if it's going up at 5% real over the next 30 years regardless, then losses are good for buyers. Actually I'm not cheering any falls yet because I haven't bought anything since the 1st. So right now "meh."

sol

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Re: Top is in
« Reply #2048 on: February 05, 2018, 11:21:29 PM »
I think it behooves us all to root for widespread economic prosperity vs tanking stock markets

Don't confuse these two things.  The economy is not the stock market.  The economy is profitable businesses, which are profitable or not profitable regardless of their stock price.

Right now the economy still looks great and the stocks are getting cheaper.  I'm not worried.

dragoncar

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Re: Top is in
« Reply #2049 on: February 05, 2018, 11:28:28 PM »
I think it behooves us all to root for widespread economic prosperity vs tanking stock markets

Don't confuse these two things.  The economy is not the stock market.  The economy is profitable businesses, which are profitable or not profitable regardless of their stock price.

Right now the economy still looks great and the stocks are getting cheaper.  I'm not worried.

This is true, but they are also related.  Has a large stock market drop ever ocurred in the absence of economic trouble or a recession?  Although the poster I responded to merely hoped for a 10% drop, Iíve seen MMM users express hope for another 2008 style downturn.

To be clear, Iím not personally sweating a single 4% down day, but add enough of those together and I think it will correlate with economic problems