Author Topic: Are you taking advantage of the correction?  (Read 3405 times)

Valvore

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Are you taking advantage of the correction?
« on: February 27, 2020, 03:11:47 PM »
I look at market corrections/dips as a way to go back in time and buy more stocks/index funds. The Dow is about where it was in October 2019.

I have my normal DCA investments going on autopilot, but I also build up my EF and drain it into my IRA core account throughout the year. This helps me save because I'm always reaching for a goal and don't feel too comfortable when I look at my savings amount. I use this core money to periodically buy up stock/funds whenever the market dips (I know it sounds like market timing (and it kind of is lol) but I don't let my core money go over a certain # so I am forced to buy). Well a correction is a great time to buy! I put $2K in on Tuesday another $2K in today. And I have my auto investments of 2K going in Friday. I have another $4K available but will feel out the next couple weeks before diving in again.

Anyone else jumping in? There was a thread a going recently surrounding regrets about not getting in the market sooner or sitting on the sidelines. Anyone from that thread jumping in now?

JLee

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Re: Are you taking advantage of the correction?
« Reply #1 on: February 27, 2020, 03:15:07 PM »
I am not doing anything differently than I would otherwise.

wenchsenior

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Re: Are you taking advantage of the correction?
« Reply #2 on: February 27, 2020, 03:59:41 PM »
I don't sit on the sidelines and I don't jump in or out based on market fluctuations. Just investing every 2 weeks as usual. So...yes? or no?

Valvore

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Re: Are you taking advantage of the correction?
« Reply #3 on: February 27, 2020, 04:04:53 PM »
You two aren't tempted to scrape up some extra cash lying around and buy up a bit? @wenchsenior @JLee

OtherJen

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Re: Are you taking advantage of the correction?
« Reply #4 on: February 27, 2020, 04:06:27 PM »
No. This has the potential to disrupt both my and my husbandís incomes. Weíre planning to hold more in cash over the short term because we may need it.

obstinate

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Re: Are you taking advantage of the correction?
« Reply #5 on: February 27, 2020, 04:57:16 PM »
I have been saving hard for ten years so at this point it's gotten to where market fluctuations make a much bigger difference than whatever I can put in. Case in point, the market drop over the last week has wiped out the equivalent of our annual take home pay. That said, it's hard to imagine a job more secure than ours, and we have enough saved to fire in an mcol or lcol locale, so we are not worried. Gonna keep plonking in the money every month, taking advantage of the brief discount on stocks, but otherwise no change. I only wish we had started work on our kitchen remodel six months later. If there is a recession we could have gotten a discount on the GC.

Zikoris

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Re: Are you taking advantage of the correction?
« Reply #6 on: February 27, 2020, 05:13:58 PM »
I guess a little? I'm depositing my usual amount every payday. Boyfriend is saving up for his tax bill right now, so he's missing out a bit. We don't have some secret cash pile that we can whip out in downturns - everything not needed for either our slush fund or spending is already in investments. There isn't really anything we could "scrape up", unless one of us got a second job.

JLee

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Re: Are you taking advantage of the correction?
« Reply #7 on: February 27, 2020, 05:14:46 PM »
You two aren't tempted to scrape up some extra cash lying around and buy up a bit? @wenchsenior @JLee

Tempted sure, but so far logic is winning. If I don't pull cash out when I think the market is high, I shouldn't go out of my way to put extra cash in if I think the market is low. I don't have any idea what's going to happen, so I'm carrying on as usual.

Schaefer Light

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Re: Are you taking advantage of the correction?
« Reply #8 on: February 27, 2020, 05:14:59 PM »
I have more cash on hand than usual due to selling a house last year and my indecision over whether or not to buy a new house.  I invested some of that money today.  If the market continues to drop, I'll invest even more of it.

American GenX

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Re: Are you taking advantage of the correction?
« Reply #9 on: February 27, 2020, 05:41:41 PM »

I'm sitting tight with my conservative AA.  I think the market has quite a ways to drop from here.  It dropped a lot more than this back in 2018, and there seems to be a much better reason for it today.  This could even throw us into a recession - not a time to be increasing your equity exposure.

Sibley

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Re: Are you taking advantage of the correction?
« Reply #10 on: February 27, 2020, 06:18:29 PM »
Nope. Everything is automated for a reason. If I hadn't seen posts on here, I wouldn't even know about the drop.

Freedom2016

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Re: Are you taking advantage of the correction?
« Reply #11 on: February 27, 2020, 06:32:25 PM »
Yes, but accidentally.

I had to roll over a (big) 401k and the account was cashed out about 10 days ago.... the check is making its way to Vanguard and will be reinvested in the next several days...

brooklynmoney

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Re: Are you taking advantage of the correction?
« Reply #12 on: February 27, 2020, 08:49:06 PM »
Have been catching the falling knife now out of extra cash to invest.

ChickenStash

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Re: Are you taking advantage of the correction?
« Reply #13 on: February 28, 2020, 07:46:09 AM »
Nope. Since I'm still a working stiff, everything is just auto-deposited from my paycheck according to my predefined asset allocation. I also don't leave any significant amounts of cash laying around - it's either used to pay bills or invested.

Spitfire

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Re: Are you taking advantage of the correction?
« Reply #14 on: February 28, 2020, 07:55:21 AM »
Not in a big way, but indirectly I am. Got paid today so my 401k contribution will go in, and today is also my automatic investment into VTSAX.

ChpBstrd

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Re: Are you taking advantage of the correction?
« Reply #15 on: February 28, 2020, 08:13:12 AM »
The market could still go down 30-40% from here - or up the same. This is why asset allocation decisions must be maintained and rebalancing must occur according to plan. Imagine going all in during spring 2008.

That said, I decided on my AA partly based on valuations (e.g. CAPE > 30 is ominous). Stocks would need to fall a lot further to get close to historical norms, and theyíre not even close yet. If the SHTF and stocks returned to normal earning yields and cash flow yields, Iíd be tempted to raise my equities AA. Frankly, it would take a major crash, not some pedestrian 10% correction, to move that needle.

GuitarStv

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Re: Are you taking advantage of the correction?
« Reply #16 on: February 28, 2020, 08:17:03 AM »
Typically I re-balance our portfolio once or twice a year.  If the market makes things more than about 7% off of our target allocations then I'll do an additional re-balance.

So . . . I guess that I take advantage of corrections?

Dogastrophe

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Re: Are you taking advantage of the correction?
« Reply #17 on: February 28, 2020, 08:22:37 AM »
Nope.  I did our quarterly RRSP contribution on Tuesday of this week ... kind of wished I had waited until today (I am excellent at predicting the past!) but no matter.
« Last Edit: February 28, 2020, 09:09:39 AM by Dogastrophe »

mistymoney

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Re: Are you taking advantage of the correction?
« Reply #18 on: February 28, 2020, 08:28:03 AM »
I'm unsure of the terminology. A correction to my mind was unrelated to real market changes - stocks were overvalued - so whent he enthusiasm dried up they corrected.

This changed is based on supply chain fears - which may or may not be realized - depending on the course of Covid-19.

So for me - I am wait and watch. I think it could go either way.

But how would that be different from any other day?

mistymoney

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Re: Are you taking advantage of the correction?
« Reply #19 on: February 28, 2020, 08:29:51 AM »
also - when will the dead cat bounce come into play?

renata ricotta

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Re: Are you taking advantage of the correction?
« Reply #20 on: February 28, 2020, 08:52:07 AM »
Yes, but accidentally.

I had to roll over a (big) 401k and the account was cashed out about 10 days ago.... the check is making its way to Vanguard and will be reinvested in the next several days...

Something similar happened to me, but I was a little more active in timing the market. I rolled over a 401k of $90k or so in early December, with a sale price of $74 or so for VTSAX. While the check was in the mail, the market jumped up significantly. I couldnít stomach putting it all in immediately and locking in a loss, even though I know I shouldnít market time. So instead Iíve been pushing $5k over from my settlement account to VTSAX every week or so, keeping the bulk in reserve for when the market settled down to something closer to $74. That happened this week so I pushed $30k over yesterday with an execution price just under $74. Iíll sweep the rest over today.

StarBright

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Re: Are you taking advantage of the correction?
« Reply #21 on: February 28, 2020, 09:04:15 AM »
I have a boss that has a habit of holding our 401k deductions because he can't figure out auto deposit. He tends to notice the stock market on a run up and that reminds him to put our money in.

I emailed him this morning asking him to please deposit my money (5 paychecks worth) because he tends to avoid dips and ends up doing big deposits on highs.

Otherwise we aren't doing anything special.

(I do not think my boss does this maliciously or sketchily. We are just a small company and he hates dealing with payroll and benefits. And yes, several of us have complained and pointed out that it is illegal to hold the money for more than 30 days, but boss says it is such a pain in the butt that he might just stop offering 401ks and profit sharing- so we've all stopped complaining.)

American GenX

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Re: Are you taking advantage of the correction?
« Reply #22 on: February 28, 2020, 09:08:30 AM »

I see a lot more downside ahead.  I will rebalance at some point, but I'm not there, yet.

ChpBstrd

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Re: Are you taking advantage of the correction?
« Reply #23 on: February 28, 2020, 09:11:03 AM »
I'm unsure of the terminology. A correction to my mind was unrelated to real market changes - stocks were overvalued - so whent he enthusiasm dried up they corrected.

This changed is based on supply chain fears - which may or may not be realized - depending on the course of Covid-19.

So for me - I am wait and watch. I think it could go either way.

But how would that be different from any other day?

IMO, the virus was the match and the overpriced market was the pile of dry leaves, paper, and dryer lint. The virus was not the cause, because anything can set off a correction and at these valuations it is inevitable that something will.

MichaelB

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Re: Are you taking advantage of the correction?
« Reply #24 on: February 28, 2020, 09:16:32 AM »
Not changing any automated contributions. Usually I'll throw in some ad hoc additions on the odd -2% days (because, cool, things are 2% cheaper than they were yesterday), but this one feels different. As I type this, the S&P 500 is down about 3.25% Friday, which would make 4 of 5 days this week of 3+% losses. We went from all time highs to correction territory with a speed not seen since the Great Depression. Not that this is another Great Depression, but this is a historically sharp selloff.

So I won't be changing my allocation or my automated contributions, but I am at least going to hold off on finishing up my 2019 IRA contributions until things seem a bit more settled.

texxan1

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Re: Are you taking advantage of the correction?
« Reply #25 on: February 28, 2020, 09:38:41 AM »
For me, it was maybe luck or whatever.

I have been holding cash, because of a business venture for the last few months.. the venture did not pan out, got the formal notificaton 3 days ago... Not to mention, my bonus goes into the bank today... The first two months of the year, i always put 100% of my paycheck into my 401k... So add those together and im being able to buy in 150k come monday... but whatever, it was going in no matter what it was.... So just a bonus that will eventually pan out to be positive...

Happy days

rab-bit

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Re: Are you taking advantage of the correction?
« Reply #26 on: February 28, 2020, 09:44:59 AM »
I just rebalanced to my target allocation today, and I'll keep doing that any time it's off by 5% or more. If stocks got really stupid-cheap (like a 40-50% drop from here), then I would consider increasing my stock allocation somewhat.

mistymoney

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Re: Are you taking advantage of the correction?
« Reply #27 on: February 28, 2020, 09:46:18 AM »
I'm unsure of the terminology. A correction to my mind was unrelated to real market changes - stocks were overvalued - so whent he enthusiasm dried up they corrected.

This changed is based on supply chain fears - which may or may not be realized - depending on the course of Covid-19.

So for me - I am wait and watch. I think it could go either way.

But how would that be different from any other day?

IMO, the virus was the match and the overpriced market was the pile of dry leaves, paper, and dryer lint. The virus was not the cause, because anything can set off a correction and at these valuations it is inevitable that something will.

I agree that would be a correction pure and simple. IMO- The potential here is more than that if China exports dry up over an extended period of time.

Meanwhile - travel industry is definitely going to take a hit for the duration.

And - not factoring in any potentials for US based effects of Covid-19.

Then again - there have been other contagions that have been of equal danger - but were shut down quickly.

So - I'm still thinking - either way is possible.

Dicey

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Re: Are you taking advantage of the correction?
« Reply #28 on: February 28, 2020, 09:51:16 AM »
This was my reply on an earlier thread asking how much your balances have dropped in this downturn.

Not even gonna look. Luckily, because we were busy doing other things, we hadn't funded our 2019 Roths yet. We'll be doing that, plus filling the 2020 Roths in the next couple of days. That's a drop in the bucket, but a nice consolation.

...for being lazy. We are cash heavy right now because we flipped a house last year, so we are looking at dumping some of it into the market.

mm1970

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Re: Are you taking advantage of the correction?
« Reply #29 on: February 28, 2020, 10:32:08 AM »
As it so happens, yes, but accidentally.  I just changed my 401k withholding on this week's paycheck to take advantage of "catch up" contributions.

Catbert

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Re: Are you taking advantage of the correction?
« Reply #30 on: February 28, 2020, 10:55:59 AM »
Just did  Roth conversion.   More mutual fund shares converted for less tax.

wenchsenior

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Re: Are you taking advantage of the correction?
« Reply #31 on: February 28, 2020, 11:11:04 AM »
You two aren't tempted to scrape up some extra cash lying around and buy up a bit? @wenchsenior @JLee

Oh sure, but I'm always tempted to throw any extra money in the market if I happen to have any, whether it's high or low. If I end up with extra in the next month or so, I'll throw it in there.  But I did that a few months ago when I had some extra, too, so...

JLee

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Re: Are you taking advantage of the correction?
« Reply #32 on: February 28, 2020, 11:51:51 AM »
I was just quoted a mortgage refinance at 3.25% with enough lender credit to nearly cover closing costs, so I may be taking advantage of it after all, but in a different way :P

merlin7676

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Re: Are you taking advantage of the correction?
« Reply #33 on: March 02, 2020, 10:54:36 AM »
Not really, but kinda?

It's all automated so every 2 weeks when I get paid, it's taken out.

That being said, if I spend less than usual, I may kick over a little extra. Like last week, for example, I worked from home 2 days so this morning, I did kick an extra $30 in. Not that I would have spent 30 on gas for those two days and not like 30 is going to make me FI any faster, but I usually do kick anywhere for $10-50 in between pay checks if I have some spare money sitting around in my account.

I do plan on holding onto some cash though this year and I want to build it up some. Don't really have an emergency account since I can get access to money if I needed to so I hold on to about 1K in actual cash at any given time.  But I see that this year I have an potential expense or two coming up that will go easier if I have a few thousand if necessary


Dragonswan

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Re: Are you taking advantage of the correction?
« Reply #34 on: March 02, 2020, 11:41:02 AM »
Well, I have a little money in a HYSA that I could put in the market, but it's earmarked as a down payment for my retirement house, about 5 years away (still saving to get 20%).  So I'm debating whether or not to risk that.  So just to make myself feel good, I had a few rewards dollars with fidelity sitting in the cash account and I just used it to buy FSKAX shares.

Boofinator

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Re: Are you taking advantage of the correction?
« Reply #35 on: March 02, 2020, 12:03:27 PM »
Finally get to do some good old fashioned tax loss harvesting, though it would have been nice to have started before the new year.

2sk22

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Re: Are you taking advantage of the correction?
« Reply #36 on: March 03, 2020, 05:31:19 AM »
I have been a little hash heavy so I've been nibbling at the market. For the past week or so, I have been one share of the DIA ETF everyday at about noon.

wenchsenior

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Re: Are you taking advantage of the correction?
« Reply #37 on: March 03, 2020, 07:36:00 AM »
I have been a little hash heavy so I've been nibbling at the market. For the past week or so, I have been one share of the DIA ETF everyday at about noon.

Market drops give me the munchies.

Helvegen

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Re: Are you taking advantage of the correction?
« Reply #38 on: March 03, 2020, 01:01:33 PM »
Finally get to do some good old fashioned tax loss harvesting, though it would have been nice to have started before the new year.

I tried to do that yesterday, but I didn't harvest near what I wanted to for 2020. However, that was all I am going to sell for a good long while so is it what it is.

Boofinator

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Re: Are you taking advantage of the correction?
« Reply #39 on: March 04, 2020, 07:45:03 AM »
Finally get to do some good old fashioned tax loss harvesting, though it would have been nice to have started before the new year.

I tried to do that yesterday, but I didn't harvest near what I wanted to for 2020. However, that was all I am going to sell for a good long while so is it what it is.

Yeah, I'm in the same boat. Surprisingly, I wasn't able to harvest any domestic, only international (most of my investing in the new year has been in the IRA).

ChpBstrd

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Re: Are you taking advantage of the correction?
« Reply #40 on: March 04, 2020, 03:11:08 PM »
I sold 20 bear call spreads on the VIX at 23 and 25, with expiration in July, for 0.56 per unit. This gave me a credit of $1120 with a maximum potential loss of $4k-1120=$2880. Itís a small bet that volatility settles into historically normal ranges within the next 4 months. In that case, both my long and my short calls expire worthless and I keep the credit. Looking at a long term VIX chart, I think my odds are  a lot better than the marketís implied odds of 39%.

Something close to this spread price is still available, but donít gamble more than you can survive losing!

I had sold a put on TLT for $179 on 2/21. This has obviously done phenomenally well and is almost worthless. Will close it soon for pennies just to free up the $14.7k cash to buy index funds (glad I tied up the cash, BTW).

In preparation to make this trade, Iíve already sold a put on QQQ expiring 3/13 for $559. So far Iím up $274 on the QQQ put, and I might ratchet the strike price higher to collect more money and mitigate the risk of a fast rebound leaving me in the dust. Yet, for now my hunch is that we are in the typical dead cat bounce, Iíll get assigned 100 shares of QQQ, itíll look bad for a while, and then Iíll do great over the next year.

For those concerned, this is play money, and does not materially affect my AA.

ambimammular

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Re: Are you taking advantage of the correction?
« Reply #41 on: March 07, 2020, 08:15:38 AM »
Little bit. DH's 403b set up is automatic, but I have 4000 to split between our Roths that I've been purchasing over the last weeks. I don't want to go harder than that because I'm saving up for a short/mid term goal. (slow travel, 1 year, w/ kids) But I do hate to miss a sale.

TomTX

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Re: Are you taking advantage of the correction?
« Reply #42 on: March 08, 2020, 07:24:08 AM »
I have a boss that has a habit of holding our 401k deductions because he can't figure out auto deposit. He tends to notice the stock market on a run up and that reminds him to put our money in.

I emailed him this morning asking him to please deposit my money (5 paychecks worth) because he tends to avoid dips and ends up doing big deposits on highs.

Otherwise we aren't doing anything special.

(I do not think my boss does this maliciously or sketchily. We are just a small company and he hates dealing with payroll and benefits. And yes, several of us have complained and pointed out that it is illegal to hold the money for more than 30 days, but boss says it is such a pain in the butt that he might just stop offering 401ks and profit sharing- so we've all stopped complaining.)

Have you offered to handle it for him? My first real job was at a very small business, no retirement plan at all. Boss didn't really want to deal with it, so I offered to take care of it and he accepted. Set up a cheap SIMPLE IRA plan with Vanguard and handled it for the business until it was eventually sold.

StarBright

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Re: Are you taking advantage of the correction?
« Reply #43 on: March 08, 2020, 08:35:49 AM »
I have a boss that has a habit of holding our 401k deductions because he can't figure out auto deposit. He tends to notice the stock market on a run up and that reminds him to put our money in.

I emailed him this morning asking him to please deposit my money (5 paychecks worth) because he tends to avoid dips and ends up doing big deposits on highs.

Otherwise we aren't doing anything special.

(I do not think my boss does this maliciously or sketchily. We are just a small company and he hates dealing with payroll and benefits. And yes, several of us have complained and pointed out that it is illegal to hold the money for more than 30 days, but boss says it is such a pain in the butt that he might just stop offering 401ks and profit sharing- so we've all stopped complaining.)

Have you offered to handle it for him? My first real job was at a very small business, no retirement plan at all. Boss didn't really want to deal with it, so I offered to take care of it and he accepted. Set up a cheap SIMPLE IRA plan with Vanguard and handled it for the business until it was eventually sold.

I have :) He is not interested in having anyone else touch it.

Staunch Aim

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Re: Are you taking advantage of the correction?
« Reply #44 on: March 08, 2020, 12:04:57 PM »
I've been making automatic investments into 401K, IRA and HSA, so have taken advantage through them.  Though, timing has thus far prevented me from taking full advantage with after-tax investments.  About a month's worth of those funds are being used to pay my state and federal taxes, as well as some medical bills from a wrist injury.

I'll be stoked if things continue in this manner for a while longer, which would allow me to pile in a bunch of after tax cash, too.
« Last Edit: March 08, 2020, 03:50:47 PM by Staunch Aim »

itchyfeet

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Re: Are you taking advantage of the correction?
« Reply #45 on: March 08, 2020, 12:17:16 PM »
I am taking the opportunity to pay down some debt and watch from the sidelines. The cash will be in my redraw facility if I need them.

 I will start buying hard if the market drops more than 30% from its top. Otherwise Iíll just wait and see what this virus does.

Some good news coming out of China and Korea so fingers crossed.