Author Topic: 100% stocks still?  (Read 23709 times)

Buffaloski Boris

  • Handlebar Stache
  • *****
  • Posts: 2121
Re: 100% stocks still?
« Reply #50 on: March 10, 2020, 03:25:04 PM »

Unless the S&P will never reach its recent high of 3,393 again, anything below that is a sale for the long-term investor.

 It depends on the time it takes. If that’s 10 weeks from now, yeah it’s a great investment. 10 years, not so much. Opportunity cost and all.

frugledoc

  • Pencil Stache
  • ****
  • Posts: 743
Re: 100% stocks still?
« Reply #51 on: March 10, 2020, 03:41:04 PM »
You poor sods.

A 20% discount from record valuations does not a bargain make. Stocks are merely horribly overpriced now instead to hideously overpriced.

The time to be 100% stocks is when you see generational lows after stocks lose at least half their value, not just when the market falls back to where it was last summer.

Bottom is in, and you missed it (why am I not surprised?)

vand

  • Handlebar Stache
  • *****
  • Posts: 2302
  • Location: UK
Re: 100% stocks still?
« Reply #52 on: March 10, 2020, 03:42:34 PM »
You poor sods.

A 20% discount from record valuations does not a bargain make. Stocks are merely horribly overpriced now instead to hideously overpriced.

The time to be 100% stocks is when you see generational lows after stocks lose at least half their value, not just when the market falls back to where it was last summer.

Bottom is in, and you missed it (why am I not surprised?)

Actually I have been heavily buying in the last 2 weeks. Far from missing it I've been able to take advantage much more than the passive investors, but my allocation has only nudged up from about 45% to 50%.
« Last Edit: March 10, 2020, 03:44:18 PM by vand »

Buffaloski Boris

  • Handlebar Stache
  • *****
  • Posts: 2121
Re: 100% stocks still?
« Reply #53 on: March 10, 2020, 03:56:58 PM »

Actually I have been heavily buying in the last 2 weeks. Far from missing it I've been able to take advantage much more than the passive investors, but my allocation has only nudged up from about 45% to 50%.

Really? Do tell. Domestic UK equities?

vand

  • Handlebar Stache
  • *****
  • Posts: 2302
  • Location: UK
Re: 100% stocks still?
« Reply #54 on: March 10, 2020, 05:38:30 PM »

Actually I have been heavily buying in the last 2 weeks. Far from missing it I've been able to take advantage much more than the passive investors, but my allocation has only nudged up from about 45% to 50%.

Really? Do tell. Domestic UK equities?

yeah, I've been buying the FTSE100/AllShare. On CAPE and Buffett indcator its nearly as cheap as it was at the bottom of the GFC.

hodedofome

  • Handlebar Stache
  • *****
  • Posts: 1463
  • Age: 44
  • Location: Texas
Re: 100% stocks still?
« Reply #55 on: March 10, 2020, 09:23:44 PM »
My grandpa hasn’t bought a bond his entire life, and all his wealth was from saving and investing 100% in stocks. He’s worth $10 million and would never dream of owning a bond when stocks have higher returns.

ctuser1

  • Handlebar Stache
  • *****
  • Posts: 1741
Re: 100% stocks still?
« Reply #56 on: March 11, 2020, 06:45:05 AM »
I've lived through the thick of 2008, and saw the financial industry almost crumble around me. This does not feel quite as bad, and is unlikely to get that bad.

I had my puny accounts in 100% stocks then, and bought more through the dip. I plan to do the same now, just at a grander scale given DW works now and we save a lot more $$ every year.

I have about 6 months of expenses in cash. That's ~$40k. Rest are all in 100% stocks.




steevven1

  • Stubble
  • **
  • Posts: 150
  • Location: Florida
Re: 100% stocks still?
« Reply #57 on: March 11, 2020, 06:48:14 AM »
Started investing at 22. Never been 100% stocks. Keeping a slightly more conservative portfolio has given me the confidence to take a lot of long sabbaticals over the past 8 years, and never feel obligated to stick to a paycheck. I think 100% stocks is fine if you have no intention of leaving your job for a long while.

In retrospect, we were in a bull market the entire time, and I had nothing to worry about, but that was of course unknowable.

StashingAway

  • Pencil Stache
  • ****
  • Posts: 895
Re: 100% stocks still?
« Reply #58 on: March 11, 2020, 09:04:15 AM »
Never been 100% stocks. Keeping a slightly more conservative portfolio has given me the confidence to take a lot of long sabbaticals over the past 8 years, and never feel obligated to stick to a paycheck. I think 100% stocks is fine if you have no intention of leaving your job for a long while.

Can you explain further why having some bonds allowed you a sabbatical whereas stocks wouldn't? I'm not sure I follow why it would make a difference (other than that your bonds make less interest over the long run, historically). Are you selling off the bonds to fund your sabbatical?


effigy98

  • Pencil Stache
  • ****
  • Posts: 555
Re: 100% stocks still?
« Reply #59 on: March 11, 2020, 09:11:31 AM »
This is going to be a great learning opportunity for people who jump out near the bottom and did not diversify and ignored the CAPE. It took me two rounds of dotcom and gfc to give in and go more conservative like golden butterfly.
« Last Edit: March 11, 2020, 09:13:31 AM by effigy98 »

DadJokes

  • Handlebar Stache
  • *****
  • Posts: 2360
Re: 100% stocks still?
« Reply #60 on: March 11, 2020, 09:31:08 AM »
This is going to be a great learning opportunity for people who jump out near the bottom and did not diversify and ignored the CAPE. It took me two rounds of dotcom and gfc to give in and go more conservative like golden butterfly.

The lesson shouldn't be to invest more conservatively - it should be to ignore short-term market volatility. The person dollar cost averaging into 100% broad-based equities and not freaking out over volatility is doing just fine.

frugalnacho

  • Walrus Stache
  • *******
  • Posts: 5055
  • Age: 41
  • Location: Metro Detroit
Re: 100% stocks still?
« Reply #61 on: March 11, 2020, 10:11:20 AM »
This is going to be a great learning opportunity for people who jump out near the bottom and did not diversify and ignored the CAPE. It took me two rounds of dotcom and gfc to give in and go more conservative like golden butterfly.

How is that your take away?  My take away would be to buy and hold broad index funds and ignore the noise and you would have done phenomenally well.  So that is my plan now too.  10 years from now I'll be rich.

Car Jack

  • Handlebar Stache
  • *****
  • Posts: 2141
Re: 100% stocks still?
« Reply #62 on: March 11, 2020, 11:33:20 AM »
I'm 50/50.  My bond funds have been skyrocketing.  Enough to trigger some rebalancing.  Was able to tax loss harvest in my taxable account to move from an ETF to BRk/b as I want more no-dividend exposure.  Good opportunity overall to change up the portfolio a bit without generating taxes.

Alternatepriorities

  • Handlebar Stache
  • *****
  • Posts: 1635
  • Age: 43
  • Location: Alaska
  • Engineer, explorer, investor
    • Alternate Priorities
Re: 100% stocks still?
« Reply #63 on: March 11, 2020, 11:40:23 AM »
This is going to be a great learning opportunity for people who jump out near the bottom and did not diversify and ignored the CAPE. It took me two rounds of dotcom and gfc to give in and go more conservative like golden butterfly.

How is that your take away?  My take away would be to buy and hold broad index funds and ignore the noise and you would have done phenomenally well.  So that is my plan now too.  10 years from now I'll be rich.

I think the lesson there is to know what asset allocation you can maintain through drop. It's as important to know yourself as to know the math. I think that's why so many members of the forum are hesitant to directly answer AA questions.

[/quote]
“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”
― Sun Tzu, The Art of War
[/quote]

Alternatepriorities

  • Handlebar Stache
  • *****
  • Posts: 1635
  • Age: 43
  • Location: Alaska
  • Engineer, explorer, investor
    • Alternate Priorities
Re: 100% stocks still?
« Reply #64 on: March 11, 2020, 11:43:45 AM »
I'm 50/50.  My bond funds have been skyrocketing.  Enough to trigger some rebalancing.  Was able to tax loss harvest in my taxable account to move from an ETF to BRk/b as I want more no-dividend exposure.  Good opportunity overall to change up the portfolio a bit without generating taxes.

That is an interesting idea. As a giant conglomerate Berkshire is a bit like a managed ETF that doesn't pay a dividend. How does the succession plan impact your thinking, or does it?

waltworks

  • Walrus Stache
  • *******
  • Posts: 5653
Re: 100% stocks still?
« Reply #65 on: March 11, 2020, 11:58:59 AM »
This is going to be a great learning opportunity for people who jump out near the bottom and did not diversify and ignored the CAPE. It took me two rounds of dotcom and gfc to give in and go more conservative like golden butterfly.

Actually, you don't need to be "conservative" at all. If you, for example, jumped in *right before* the 2007 crash with a $10k starting amount (100% US equities), and then contributed a relatively small $2000 a month (even fairly low income folks here on the forum easily manage that), every month, until now, you'd have over $620k now.

If you started right before the .com crash in 1999, (same $10k to start, same $2k/month invested) you'd have $1.2 million today.

That's with no bonds and TERRIBLE timing.

-W

steevven1

  • Stubble
  • **
  • Posts: 150
  • Location: Florida
Re: 100% stocks still?
« Reply #66 on: March 11, 2020, 01:32:41 PM »
Never been 100% stocks. Keeping a slightly more conservative portfolio has given me the confidence to take a lot of long sabbaticals over the past 8 years, and never feel obligated to stick to a paycheck. I think 100% stocks is fine if you have no intention of leaving your job for a long while.

Can you explain further why having some bonds allowed you a sabbatical whereas stocks wouldn't? I'm not sure I follow why it would make a difference (other than that your bonds make less interest over the long run, historically). Are you selling off the bonds to fund your sabbatical?

It's not that I actually had to fund my sabbaticals with my investments (I didn't...I actually managed to cashflow them through part-time work), but it's the idea that I was confident that I could endure anything with a slightly more conservative portfolio. For example, a big downturn coupled with a medical emergency after having quit my job.

Without that confidence, I wouldn't have taken the time off (or left a good job) in the first place.

FireinNY

  • 5 O'Clock Shadow
  • *
  • Posts: 3
Re: 100% stocks still?
« Reply #67 on: March 11, 2020, 01:36:19 PM »
I'm 39, worked/lived through the financial crisis and fully expect this market downturn to fully run it's course. My main 401k is 50% bonds at this point with my newer 401k's and investable accounts all equity. I am continuing to dollar cost average but have an overall bond exposure of close to 35% (which is high). 

Buffaloski Boris

  • Handlebar Stache
  • *****
  • Posts: 2121
Re: 100% stocks still?
« Reply #68 on: March 11, 2020, 01:57:44 PM »
I think the lesson learned here is to watch your CAPE/PE ratios and invest accordingly if you’re in the accumulation phase. If I had it to do over again, I would have had about 100% equities when the US CAPE ratio was in the teens (for the SP 500) circa 2009-2010, and tapered the exposure down gradually. Not necessarily getting out of equities but shifting more to international as the US market got more pricey.

Right now the US market is getting more reasonable, but at the same time international is getting to be a good deal. Give it some time and I suspect it’ll become a screaming good deal.

StashingAway

  • Pencil Stache
  • ****
  • Posts: 895
Re: 100% stocks still?
« Reply #69 on: March 12, 2020, 08:44:38 AM »
Never been 100% stocks. Keeping a slightly more conservative portfolio has given me the confidence to take a lot of long sabbaticals over the past 8 years, and never feel obligated to stick to a paycheck. I think 100% stocks is fine if you have no intention of leaving your job for a long while.

Can you explain further why having some bonds allowed you a sabbatical whereas stocks wouldn't? I'm not sure I follow why it would make a difference (other than that your bonds make less interest over the long run, historically). Are you selling off the bonds to fund your sabbatical?

It's not that I actually had to fund my sabbaticals with my investments (I didn't...I actually managed to cashflow them through part-time work), but it's the idea that I was confident that I could endure anything with a slightly more conservative portfolio. For example, a big downturn coupled with a medical emergency after having quit my job.

Without that confidence, I wouldn't have taken the time off (or left a good job) in the first place.

We did a two year trip in a van and we are all in stocks, left a good job like you. I think the point I'm trying to sues out is that your savings (whether bonds or stocks) shouldn't matter at all until you are ready to draw from it. We didn't plan on dipping into invested savings for the trip, and if we did we'd be in a more demanding circumstance than to worry about investment ratios. We might just have different views of what "investments" count as: I'm speaking of retirement/financial independence funds. I'm not speaking of emergency funds or down payment savings or the like.

The MMM philosophy is to get enough into stocks to be FI on the 4% rule, which factors in significant market downturns. That's the goal for my family at this point. But it sounds like you are creating a financial cushion to have long sabbaticals, in which case you may want access to your savings and so create a less risky portfolio for peace of mind. In this setup, your end FI will be delayed, but you have access to more conservative portfolio should you need it in the interim.

effigy98

  • Pencil Stache
  • ****
  • Posts: 555
Re: 100% stocks still?
« Reply #70 on: March 12, 2020, 10:20:06 AM »
This is going to be a great learning opportunity for people who jump out near the bottom and did not diversify and ignored the CAPE. It took me two rounds of dotcom and gfc to give in and go more conservative like golden butterfly.

The lesson shouldn't be to invest more conservatively - it should be to ignore short-term market volatility. The person dollar cost averaging into 100% broad-based equities and not freaking out over volatility is doing just fine.

Takes a VERY special personality to be able to do that. There are not many normal humans that can do that. This advice is like saying don't get into debt, don't eat too much and get fat, don't smoke, etc, yet a majority of people have some kind of bad habit.
« Last Edit: March 12, 2020, 10:21:37 AM by effigy98 »

effigy98

  • Pencil Stache
  • ****
  • Posts: 555
Re: 100% stocks still?
« Reply #71 on: March 12, 2020, 10:24:05 AM »
This is going to be a great learning opportunity for people who jump out near the bottom and did not diversify and ignored the CAPE. It took me two rounds of dotcom and gfc to give in and go more conservative like golden butterfly.

How is that your take away?  My take away would be to buy and hold broad index funds and ignore the noise and you would have done phenomenally well.  So that is my plan now too.  10 years from now I'll be rich.

I think the lesson there is to know what asset allocation you can maintain through drop. It's as important to know yourself as to know the math. I think that's why so many members of the forum are hesitant to directly answer AA questions.



Yes well put, exactly my opinion based on years of experience.

effigy98

  • Pencil Stache
  • ****
  • Posts: 555
Re: 100% stocks still?
« Reply #72 on: March 12, 2020, 10:26:40 AM »
This is going to be a great learning opportunity for people who jump out near the bottom and did not diversify and ignored the CAPE. It took me two rounds of dotcom and gfc to give in and go more conservative like golden butterfly.

Actually, you don't need to be "conservative" at all. If you, for example, jumped in *right before* the 2007 crash with a $10k starting amount (100% US equities), and then contributed a relatively small $2000 a month (even fairly low income folks here on the forum easily manage that), every month, until now, you'd have over $620k now.

If you started right before the .com crash in 1999, (same $10k to start, same $2k/month invested) you'd have $1.2 million today.

That's with no bonds and TERRIBLE timing.

-W

.. and your a robot with no emotion, internet, or TV watching CNBC. Most people are not like this. Panic, fear, blood in streets, etc. Not everyone likes there job but sucked it up and endured it for a future payoff and worked really hard to gain that money, seeing it get destroyed is a very scary thing even if it is only over 2 years.
« Last Edit: March 12, 2020, 10:28:18 AM by effigy98 »

HBFIRE

  • Handlebar Stache
  • *****
  • Posts: 1311
  • Age: 45
  • Location: Huntington Beach, CA
Re: 100% stocks still?
« Reply #73 on: March 12, 2020, 10:53:59 AM »
I have a lot of respect for those who have the cajones and can weather a 50% downturn with 100% exposure.

As for myself, no way.  70/30 is my max limit of comfort.  I would experience stress that is likely to impact my health with 100% exposure and seeing it drop by half.

Additionally, I'm recognizing that I want to build up my passive income streams and diversify into rental properties.
« Last Edit: March 12, 2020, 10:56:00 AM by HBFIRE »

MilesTeg

  • Handlebar Stache
  • *****
  • Posts: 1363
Re: 100% stocks still?
« Reply #74 on: March 12, 2020, 11:10:09 AM »
If you are still 100% stocks in tax sheltered accounts you have made a very bad call. Moved 100% of retirement accounts (2/3 of total investments) into bond funds/money market a couple weeks ago. Only regret is waiting as long as I did.

Also put a 25k position in SDS.

It's going to get worse before it gets better. This is not a 'correction'.

frugalnacho

  • Walrus Stache
  • *******
  • Posts: 5055
  • Age: 41
  • Location: Metro Detroit
Re: 100% stocks still?
« Reply #75 on: March 12, 2020, 11:20:16 AM »
If you are still 100% stocks in tax sheltered accounts you have made a very bad call. Moved 100% of retirement accounts (2/3 of total investments) into bond funds/money market a couple weeks ago. Only regret is waiting as long as I did.

Also put a 25k position in SDS.

It's going to get worse before it gets better. This is not a 'correction'.

I'm going to take my chances and ride this out.  In fact I'm going to put even more money into equities in my tax sheltered accounts, and hold them there for most of the rest of my life.

maizefolk

  • Walrus Stache
  • *******
  • Posts: 7400
Re: 100% stocks still?
« Reply #76 on: March 12, 2020, 11:31:58 AM »
Same. This has happened so fast I haven't had a retirement contribution hit since the biggest part of the slide, but my April 1st paycheck will be continuing to purchases more stocks in my tax sheltered accounts.

Was trying to set up my HSA account today so I can defer and investing even more,* but had to call Fidelity and their phone system is overwhelmed -- for one reason or another -- today. Will try again tomorrow if the markets are less volatile, but one way or another I'll get it done before my April paycheck.

*Should have done this back in January when my health insurance plan switched, but got busy with life stuff.

StashingAway

  • Pencil Stache
  • ****
  • Posts: 895
Re: 100% stocks still?
« Reply #77 on: March 12, 2020, 11:32:13 AM »

.. and your a robot with no emotion, internet, or TV watching CNBC. Most people are not like this. Panic, fear, blood in streets, etc. Not everyone likes there job but sucked it up and endured it for a future payoff and worked really hard to gain that money, seeing it get destroyed is a very scary thing even if it is only over 2 years.

It's against human nature but it's not an impossible obstacle. This is a personal question; general investment advice (advice that works for "most people") is impossible to give. But you can easily tune out the market like a robot. I have, and surely I'm not the only person.

magnet18

  • Bristles
  • ***
  • Posts: 321
Re: 100% stocks still?
« Reply #78 on: March 12, 2020, 11:33:01 AM »
Millennial/borderline zoomer here
80/20 us/ex-us equities
Current mood towards investing in more equities


Before this I was planning on getting a rental house, but stocks falling this steep has me questioning if I should keep putting it in the market.


FWIW, I was too young to invest in 08, but had my parents taken investing advice from their 13 year old and gone in big on apple, they'd be up 2000% right now.  Instead they panic sold and told me any adult would be insane to enter the market in those conditions. 
¯\_(ツ)_/¯

StashingAway

  • Pencil Stache
  • ****
  • Posts: 895
Re: 100% stocks still?
« Reply #79 on: March 12, 2020, 11:34:45 AM »
If you are still 100% stocks in tax sheltered accounts you have made a very bad call.

Not if that's what your plan has been all along. Changing things around based on emotion is exactly what gets you in trouble in the stock market.

theoverlook

  • Pencil Stache
  • ****
  • Posts: 505
Re: 100% stocks still?
« Reply #80 on: March 12, 2020, 11:38:57 AM »
If you are still 100% stocks in tax sheltered accounts you have made a very bad call. Moved 100% of retirement accounts (2/3 of total investments) into bond funds/money market a couple weeks ago. Only regret is waiting as long as I did.

Also put a 25k position in SDS.

It's going to get worse before it gets better. This is not a 'correction'.
And your crystal ball is where? Everyone's an expert and every down turn is seen as the next big one.

solon

  • Handlebar Stache
  • *****
  • Posts: 2359
  • Age: 1823
  • Location: OH
Re: 100% stocks still?
« Reply #81 on: March 12, 2020, 11:44:58 AM »
If you are still 100% stocks in tax sheltered accounts you have made a very bad call. Moved 100% of retirement accounts (2/3 of total investments) into bond funds/money market a couple weeks ago. Only regret is waiting as long as I did.

Also put a 25k position in SDS.

It's going to get worse before it gets better. This is not a 'correction'.

What do you mean this isn't a 'correction'? Do you think the stock market is staying permanently down? If not, then it seems bonkers to get out now.

MilesTeg

  • Handlebar Stache
  • *****
  • Posts: 1363
Re: 100% stocks still?
« Reply #82 on: March 12, 2020, 11:45:46 AM »
If you are still 100% stocks in tax sheltered accounts you have made a very bad call.

Not if that's what your plan has been all along. Changing things around based on emotion is exactly what gets you in trouble in the stock market.

It's not emotion, it's calculated analysis. The potential upside of the market 2 weeks ago was tiny, the potential downside huge.

MilesTeg

  • Handlebar Stache
  • *****
  • Posts: 1363
Re: 100% stocks still?
« Reply #83 on: March 12, 2020, 11:48:39 AM »
If you are still 100% stocks in tax sheltered accounts you have made a very bad call. Moved 100% of retirement accounts (2/3 of total investments) into bond funds/money market a couple weeks ago. Only regret is waiting as long as I did.

Also put a 25k position in SDS.

It's going to get worse before it gets better. This is not a 'correction'.

What do you mean this isn't a 'correction'? Do you think the stock market is staying permanently down? If not, then it seems bonkers to get out now.

It's not a correction because it's not a minor adjustment to values. It's an economic recession that may turn far worse.

Jimbo

  • Stubble
  • **
  • Posts: 162
  • Location: Montreal, Qc
Re: 100% stocks still?
« Reply #84 on: March 12, 2020, 11:49:26 AM »
If you are still 100% stocks in tax sheltered accounts you have made a very bad call.

Not if that's what your plan has been all along. Changing things around based on emotion is exactly what gets you in trouble in the stock market.

It's not emotion, it's calculated analysis. The potential upside of the market 2 weeks ago was tiny, the potential downside huge.

Wow, spectacular analysis right there. Surely you must be a billionaire with such profound insight?

Come on! If you can see the future, good for you. But don't blame us for not believing you can see the future.

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 6631
Re: 100% stocks still?
« Reply #85 on: March 12, 2020, 11:53:13 AM »
If you are still 100% stocks in tax sheltered accounts you have made a very bad call. Moved 100% of retirement accounts (2/3 of total investments) into bond funds/money market a couple weeks ago. Only regret is waiting as long as I did.

Also put a 25k position in SDS.

It's going to get worse before it gets better. This is not a 'correction'.
Congrats, this week has been a good one to skip.

You left 1/3rd of your investments in equities, it sounds like, and went short $50k (since SDS is 2x short of $25k).  Wouldn't it be better to just sell $50k of your investments and wait?  You could save on the expense ratio, and wait in bonds / MMF.

What's your theory for getting back in?

frugalnacho

  • Walrus Stache
  • *******
  • Posts: 5055
  • Age: 41
  • Location: Metro Detroit
Re: 100% stocks still?
« Reply #86 on: March 12, 2020, 11:57:33 AM »
Yeah, forgive us for being skeptical but this forum has been littered with naysayers and doomsday predictions since before I joined in 2014.   They have all been wrong every single time and I'm so much better off financially speaking for having ignored them that I could weather just about anything the stock market does, even if this time actually is different and we are up against an unprecedented recession.  I'm going to listen to the rich and retired that have advised me to stay the course.   

DadJokes

  • Handlebar Stache
  • *****
  • Posts: 2360
Re: 100% stocks still?
« Reply #87 on: March 12, 2020, 12:17:38 PM »
Yeah, forgive us for being skeptical but this forum has been littered with naysayers and doomsday predictions since before I joined in 2014.   They have all been wrong every single time and I'm so much better off financially speaking for having ignored them that I could weather just about anything the stock market does, even if this time actually is different and we are up against an unprecedented recession.  I'm going to listen to the rich and retired that have advised me to stay the course.   

"...attempt to be fearful when others are greedy and to be greedy only when others are fearful."

I'm seeing a low of fear in the market right now.

MilesTeg

  • Handlebar Stache
  • *****
  • Posts: 1363
Re: 100% stocks still?
« Reply #88 on: March 12, 2020, 12:24:38 PM »
Yeah, forgive us for being skeptical but this forum has been littered with naysayers and doomsday predictions since before I joined in 2014.   They have all been wrong every single time and I'm so much better off financially speaking for having ignored them that I could weather just about anything the stock market does, even if this time actually is different and we are up against an unprecedented recession.  I'm going to listen to the rich and retired that have advised me to stay the course.

I'm sorry, but this isn't 'hey guys I think stocks are over valued, top is in tuck yuck'.

It's 'hey look guys, the factories in China have been at a standstill for over two months, millions of people are being quarantined, businesses are seeing steep declines. Infections are spreading uncontrolled and even actively unmonitored in the U.S. due to incompetent leadership. Oh and the markets were already softening before all that'.

Two completely different things.

Mighty Eyebrows

  • Stubble
  • **
  • Posts: 238
  • Location: Vancouver Island, Canada
Re: 100% stocks still?
« Reply #89 on: March 12, 2020, 12:32:32 PM »
Being 100% stocks is the new "I don't even have a TV".

I have 20% of a TV. However, I may reduce my TV holdings and put a bit more in the non-TV world with the current sale on not-TVs right now.

MilesTeg

  • Handlebar Stache
  • *****
  • Posts: 1363
Re: 100% stocks still?
« Reply #90 on: March 12, 2020, 12:41:57 PM »
If you are still 100% stocks in tax sheltered accounts you have made a very bad call. Moved 100% of retirement accounts (2/3 of total investments) into bond funds/money market a couple weeks ago. Only regret is waiting as long as I did.

Also put a 25k position in SDS.

It's going to get worse before it gets better. This is not a 'correction'.
Congrats, this week has been a good one to skip.

You left 1/3rd of your investments in equities, it sounds like, and went short $50k (since SDS is 2x short of $25k).  Wouldn't it be better to just sell $50k of your investments and wait?  You could save on the expense ratio, and wait in bonds / MMF.

Not even remotely, We would have lost about 200k in value (and counting) by riding this down. And while markets can drop overnight like they have, they never bounce back as quickly. It may be years before we return to the previous highs. Last I looked the s&p is down another 10% today.

It's an easy call with tax sheltered accounts to liquidate in these types of scenarios. It's certainly not as easy in taxable accounts, but I may regret staying there I think.

Also luckily ee are not fool enough to put all our money in the stock market.

Quote
What's your theory for getting back in?

When markets stabilize again, whenever that is.

Dicey

  • Senior Mustachian
  • ********
  • Posts: 22318
  • Age: 66
  • Location: NorCal
Re: 100% stocks still?
« Reply #91 on: March 12, 2020, 12:45:33 PM »
My Donor Advised Fund is 100% in stocks. I was going to write some checks out in early Feb, but procrastinated, which pisses me off. MPP: Perhaps I'll just write the checks out of ordinary income this year (DH still works) and wait for the markets to do what they will inevitably do. Of course, I can always put more in so the bounce is higher when it does.

MishMash

  • Pencil Stache
  • ****
  • Posts: 731
Re: 100% stocks still?
« Reply #92 on: March 12, 2020, 12:58:05 PM »
This is going to be a great learning opportunity for people who jump out near the bottom and did not diversify and ignored the CAPE. It took me two rounds of dotcom and gfc to give in and go more conservative like golden butterfly.

Actually, you don't need to be "conservative" at all. If you, for example, jumped in *right before* the 2007 crash with a $10k starting amount (100% US equities), and then contributed a relatively small $2000 a month (even fairly low income folks here on the forum easily manage that), every month, until now, you'd have over $620k now.

If you started right before the .com crash in 1999, (same $10k to start, same $2k/month invested) you'd have $1.2 million today.

That's with no bonds and TERRIBLE timing.

-W

.. and your a robot with no emotion, internet, or TV watching CNBC. Most people are not like this. Panic, fear, blood in streets, etc. Not everyone likes there job but sucked it up and endured it for a future payoff and worked really hard to gain that money, seeing it get destroyed is a very scary thing even if it is only over 2 years.

We are pretty much 100% in stocks, we are down a half a million dollars since the spanking began, hell, I'm pretty sure we are down six figures today alone.  Are we panicking, not in the least, DH and I just shrugged at each other this morning and decided it was time to move the 200k cash we'd been sitting on for a year into Vanguard so we can begin buying.

Jacobi

  • 5 O'Clock Shadow
  • *
  • Posts: 21
Re: 100% stocks still?
« Reply #93 on: March 12, 2020, 01:02:19 PM »
I'm sorry, but this isn't 'hey guys I think stocks are over valued, top is in tuck yuck'.

It's 'hey look guys, the factories in China have been at a standstill for over two months, millions of people are being quarantined, businesses are seeing steep declines. Infections are spreading uncontrolled and even actively unmonitored in the U.S. due to incompetent leadership. Oh and the markets were already softening before all that'.

Two completely different things.
My understanding is that this attitude of "this time it's different" is EXACTLY what everyone always warns about, and is what fuels the big drops every cycle. If people didn't feel that this was a uniquely bad situation, the market wouldn't drop.

vand

  • Handlebar Stache
  • *****
  • Posts: 2302
  • Location: UK
Re: 100% stocks still?
« Reply #94 on: March 12, 2020, 01:14:33 PM »
This is going to be a great learning opportunity for people who jump out near the bottom and did not diversify and ignored the CAPE. It took me two rounds of dotcom and gfc to give in and go more conservative like golden butterfly.

Actually, you don't need to be "conservative" at all. If you, for example, jumped in *right before* the 2007 crash with a $10k starting amount (100% US equities), and then contributed a relatively small $2000 a month (even fairly low income folks here on the forum easily manage that), every month, until now, you'd have over $620k now.

If you started right before the .com crash in 1999, (same $10k to start, same $2k/month invested) you'd have $1.2 million today.

That's with no bonds and TERRIBLE timing.

-W

.. and your a robot with no emotion, internet, or TV watching CNBC. Most people are not like this. Panic, fear, blood in streets, etc. Not everyone likes there job but sucked it up and endured it for a future payoff and worked really hard to gain that money, seeing it get destroyed is a very scary thing even if it is only over 2 years.

We are pretty much 100% in stocks, we are down a half a million dollars since the spanking began, hell, I'm pretty sure we are down six figures today alone.  Are we panicking, not in the least, DH and I just shrugged at each other this morning and decided it was time to move the 200k cash we'd been sitting on for a year into Vanguard so we can begin buying.

You can't be 100% in stocks if you still have enough cash to buy a house sitting on the side.

frugalnacho

  • Walrus Stache
  • *******
  • Posts: 5055
  • Age: 41
  • Location: Metro Detroit
Re: 100% stocks still?
« Reply #95 on: March 12, 2020, 01:33:41 PM »
Yeah, forgive us for being skeptical but this forum has been littered with naysayers and doomsday predictions since before I joined in 2014.   They have all been wrong every single time and I'm so much better off financially speaking for having ignored them that I could weather just about anything the stock market does, even if this time actually is different and we are up against an unprecedented recession.  I'm going to listen to the rich and retired that have advised me to stay the course.

I'm sorry, but this isn't 'hey guys I think stocks are over valued, top is in tuck yuck'.

It's 'hey look guys, the factories in China have been at a standstill for over two months, millions of people are being quarantined, businesses are seeing steep declines. Infections are spreading uncontrolled and even actively unmonitored in the U.S. due to incompetent leadership. Oh and the markets were already softening before all that'.

Two completely different things.

Sorry but it's exactly the same thing, only a slightly different flavor this time.  You're not blindly saying stocks are too expensive, but you are saying this time it's different for reasons.  The reasons always sound plausible as you are living through them.  We've had recessions, depressions, diseases, terrorism, multiple wars, etc and everything keeps on chugging.   



There are dozens of charts just like that one.  If the forum had been around I guarantee we'd have threads on every single one of those reasons (and many more) all explaining how this time it's different.  It's never different! Everything keeps on chugging! We may get beat up short term.  I think the economic effects of this are going to be real, but I think it's absurd to claim that it's truly different and unprecedented and you should move your long term money out of stocks and try to time the market.  You can't time the market, and neither can I.  You might get lucky though.  If people are perpetually predicting a recession and a drop in stock prices someone is bound to be right eventually, so maybe it's you?

I can't time the market.  I don't know where it's going tomorrow, or next month, or next year.  But I feel very confident that in 10 years the coronavirus will be a distant memory and the prices of the indices will be higher than they are today.  I'm betting my entire retirement on it. 

MilesTeg

  • Handlebar Stache
  • *****
  • Posts: 1363
Re: 100% stocks still?
« Reply #96 on: March 12, 2020, 01:33:46 PM »
If you are still 100% stocks in tax sheltered accounts you have made a very bad call.

Not if that's what your plan has been all along. Changing things around based on emotion is exactly what gets you in trouble in the stock market.

It's not emotion, it's calculated analysis. The potential upside of the market 2 weeks ago was tiny, the potential downside huge.

Wow, spectacular analysis right there. Surely you must be a billionaire with such profound insight?

Come on! If you can see the future, good for you. But don't blame us for not believing you can see the future.

Doesn't take a crystal ball, or even a particularly smart person, to understand that when factories in China are non-operational for months and millions are quarantined (and 100s of millions reducing their economic activity with social isolation) it's going to have a major negative impact on the economy.

frugalnacho

  • Walrus Stache
  • *******
  • Posts: 5055
  • Age: 41
  • Location: Metro Detroit
Re: 100% stocks still?
« Reply #97 on: March 12, 2020, 01:39:55 PM »
If you are still 100% stocks in tax sheltered accounts you have made a very bad call.

Not if that's what your plan has been all along. Changing things around based on emotion is exactly what gets you in trouble in the stock market.

It's not emotion, it's calculated analysis. The potential upside of the market 2 weeks ago was tiny, the potential downside huge.

Wow, spectacular analysis right there. Surely you must be a billionaire with such profound insight?

Come on! If you can see the future, good for you. But don't blame us for not believing you can see the future.

Doesn't take a crystal ball, or even a particularly smart person, to understand that when factories in China are non-operational for months and millions are quarantined (and 100s of millions reducing their economic activity with social isolation) it's going to have a major negative impact on the economy.

Right, and prices have already plummeted ~25% from just a month ago, with some wild daily swings up and down.  What actionable advice do you actually have though? Besides to get out of stocks and into bonds like you already suggested.  But when should you get back in? Do you know how low prices are going to go? And when they are going to recover? Do you know how bonds or other assets are going to perform over that time period?

MilesTeg

  • Handlebar Stache
  • *****
  • Posts: 1363
Re: 100% stocks still?
« Reply #98 on: March 12, 2020, 01:41:56 PM »
Yeah, forgive us for being skeptical but this forum has been littered with naysayers and doomsday predictions since before I joined in 2014.   They have all been wrong every single time and I'm so much better off financially speaking for having ignored them that I could weather just about anything the stock market does, even if this time actually is different and we are up against an unprecedented recession.  I'm going to listen to the rich and retired that have advised me to stay the course.

I'm sorry, but this isn't 'hey guys I think stocks are over valued, top is in tuck yuck'.

It's 'hey look guys, the factories in China have been at a standstill for over two months, millions of people are being quarantined, businesses are seeing steep declines. Infections are spreading uncontrolled and even actively unmonitored in the U.S. due to incompetent leadership. Oh and the markets were already softening before all that'.

Two completely different things.

Sorry but it's exactly the same thing, only a slightly different flavor this time.  You're not blindly saying stocks are too expensive, but you are saying this time it's different for reasons.  The reasons always sound plausible as you are living through them.  We've had recessions, depressions, diseases, terrorism, multiple wars, etc and everything keeps on chugging.   



There are dozens of charts just like that one.  If the forum had been around I guarantee we'd have threads on every single one of those reasons (and many more) all explaining how this time it's different.  It's never different! Everything keeps on chugging! We may get beat up short term.  I think the economic effects of this are going to be real, but I think it's absurd to claim that it's truly different and unprecedented and you should move your long term money out of stocks and try to time the market.  You can't time the market, and neither can I.  You might get lucky though.  If people are perpetually predicting a recession and a drop in stock prices someone is bound to be right eventually, so maybe it's you?

I can't time the market.  I don't know where it's going tomorrow, or next month, or next year.  But I feel very confident that in 10 years the coronavirus will be a distant memory and the prices of the indices will be higher than they are today.  I'm betting my entire retirement on it.

I agree over the long term "things will keep chugging". I am not saying I'm out forever or some silliness, but I am not such a zealot/hard liner that I won't take steps to protect myself when there are clear and obvious major problems. That's just insane.

I mean, despite being a confirmed lifetime pessimist, I've stuck with the market the last 4-5 years because there was no concrete evidence of any major problem. And like I said in my previous post, it's not crystal ball or super genius investment knowledge, it's just looking at the facts. When there is a massive drop in both supply and demand for goods & services, bad shit is going to happen every time.

Telecaster

  • Magnum Stache
  • ******
  • Posts: 3551
  • Location: Seattle, WA
Re: 100% stocks still?
« Reply #99 on: March 12, 2020, 01:45:34 PM »
Doesn't take a crystal ball, or even a particularly smart person, to understand that when factories in China are non-operational for months and millions are quarantined (and 100s of millions reducing their economic activity with social isolation) it's going to have a major negative impact on the economy.

Indeed.  However, the stock market is not the economy.