Poll

Do you believe a market crash/correction is coming and what percentage of stocks is your portfolio?

Yes. 100%
Yes. 90% - 100%
Yes. 80% - 90%
Yes. 70% - 80%
Yes. 50% - 70%
Yes. < 50%
I do not believe the market will crash/correct in the near future
I do not care if a market crash is imminent

Author Topic: Those of you who think the market is bound to correct, do you still hold stocks?  (Read 2997 times)

ender

  • Walrus Stache
  • *******
  • Posts: 5576
I frequently see people here make comments along the lines of, "market crash imminent, stocks are dangerous!"

I am curious how many people who believe this still have high percentage stock portfolios. It seems to be a common piece of advice here when people ask about investment planning. I am curious if this belief translates to people actually moving considerable portions of their portfolios to bonds or less risky investments. I know if I was convinced that the market was going to crash in the next year, I would move it to less risky investments. The "crash/correction incoming!" attitude is common enough advice to others that I am interested in understanding a bit better.

If you believe that the market is going to crash/correct soon, how does that influence your portfolio allocation? Do you folks who believe this have more conservative portfolios?

JLee

  • Walrus Stache
  • *******
  • Posts: 6147
Market timing generally results in making less (or losing) money. My allocation stays the same.

PhysicianOnFIRE

  • Bristles
  • ***
  • Posts: 458
  • Age: 44
  • Location: Up North
    • Physician On FIRE
I know for a fact a correction is coming. Several of them, actually.

I have no idea when they will occur.

I maintain my asset allocation and IPS, and will stick through it during the numerous corrections I expect to see in my remaining years on this earth.


Tyson

  • Magnum Stache
  • ******
  • Posts: 2512
  • Age: 48
  • Location: Denver, Colorado
The market will crash and it will recover.   That's just the mechanics of the market.  If people can't accept that fact then they really shouldn't be in the market.

seattlecyclone

  • Walrus Stache
  • *******
  • Posts: 5472
  • Age: 36
  • Location: Seattle, WA
    • My blog
Certain statistics about the market are higher than their historical averages, which is a sign that the market may be overvalued. It seems reasonable to believe that prices will revert to the mean; that could mean a small correction, or it could mean a few years of slower-than-typical price growth. I'm sticking with my existing asset allocation. I have no way of knowing when or if a crash will come. If it does, I'll rebalance to buy more stocks when they go down.

forummm

  • Walrus Stache
  • *******
  • Posts: 7389
  • Senior Mustachian
I quibble with your poll. I am 100% sure that the market will have a correction. But I have no idea when that will be. There will be many in the future. However, I remain in stocks because in the long run the market will go up even if it's overvalued now. My $1 will be worth many dollars in future decades, even if it goes below $1 at some point.

TravelJunkyQC

  • Bristles
  • ***
  • Posts: 465
  • Age: 34
  • Location: Québec City, Canada
No doubt there will be many crashes/sales on stocks. I care very little as I'm not retired, don't depend on my investments, and have years and years to wait it out afterwards. I'll continue trudging along as I always have, and will invest on a consistent basis no matter what happens.

That being said, about 1/3 of my portfolio is in bonds for the simple reason that I used to have very unstable income (photographer), which is why at the time, my investments were all in bonds in case of emergency. I have kept those over the years (ladder system, first one will "expire" in 2019), and they provide a certain amount of albeit not-necessary security.

Huskie87

  • Stubble
  • **
  • Posts: 134
I'm new to the forums and when I read the headline I thought 'oh man, this should be entertaining'.  But nope, just a bunch of level-headed and rational responses.  This might be the smartest internet forum I've ever been on, well done.

frugaliknowit

  • Handlebar Stache
  • *****
  • Posts: 1687
1.  Trying to time the market is a losing proposition.
2.  You have to be right twice to time the market:  When to get out, then when to get back in.

I just ride it.