Author Topic: Anyone Else Terrified of Stock Market Right Now?  (Read 10093 times)

nihilism122

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Anyone Else Terrified of Stock Market Right Now?
« on: November 24, 2020, 09:39:17 AM »
I have been investing for over a decade.  This is the first time the stock market has ever scared me.  These valuations are insane.  Companies that are losing money hand over fist have stock that is doubling.  Just about everything is at all-time highs while economies are being destroyed and revenues are dried up.  It makes absolutely no sense.  I don't know what to do with my money anymore.  Nothing makes sense anymore. 


dandarc

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #1 on: November 24, 2020, 09:43:02 AM »
If I find myself nervous about valuations, I re-read the stock series. This one in particular is always calming:

https://jlcollinsnh.com/2012/04/19/stocks-part-ii-the-market-always-goes-up/

v8rx7guy

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #2 on: November 24, 2020, 09:44:56 AM »
Paging @RWD

dougules

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #3 on: November 24, 2020, 10:51:01 AM »
On some level it makes me a little nervous, too, honestly, but I'm not changing what I'm doing.  Two things:

What would you do with your money otherwise?  Bonds are making nothing right now.  Real estate is ridiculous.  Cash always loses sooner or later to inflation.  Current valuations make sense when you consider how low interest rates are.

What is your timeframe?  If a few years of bad performance is a deal breaker, you shouldn't be in stocks one way or the other.  If you won't need most of the money for a decade or so, you have nothing to fear but fear itself. 

RWD

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #4 on: November 24, 2020, 11:10:12 AM »
Paging @RWD

We didn't even get to go a month between threads... As you can see below fear of the market is directly correlated with the market PLUMMETING!! Oh wait, sorry, it's the opposite.

Eventually the market will drop and all the fear mongers will say "I told you so" as they hold on to their cash and wait too long to buy back in.

1/2013  [SP500 = 1462]
https://forum.mrmoneymustache.com/investor-alley/is-now-a-bad-time-to-invest-in-stock-index-funds/
5/2013  [1583]
https://forum.mrmoneymustache.com/investor-alley/starting-today!/
https://forum.mrmoneymustache.com/investor-alley/$80k-sitting-in-cash-bc-scared-of-high-flying-stock-mkt-punch-me/
10/2013  [1695]
https://forum.mrmoneymustache.com/investor-alley/stock-market-expensive-now-alternatives/
5/2014  [1884]
https://forum.mrmoneymustache.com/investor-alley/stock-market-is-high-am-i-too-late/
https://forum.mrmoneymustache.com/investor-alley/is-the-stock-market-too-expensive-to-get-back-in/
7/2014  [1973]
https://forum.mrmoneymustache.com/investor-alley/current-market-has-me-scared-to-invest/
9/2014  [2002]
https://forum.mrmoneymustache.com/investor-alley/is-it-a-good-time-to-invest-new-money/
10/2014  [1946]
https://forum.mrmoneymustache.com/ask-a-mustachian/stock-market-would-you-buy-now-or-wait/
1/2015  [2058]
https://forum.mrmoneymustache.com/investor-alley/stock-market-should-i-be-concerned/
3/2015  [2117]
https://forum.mrmoneymustache.com/investor-alley/talk-me-out-of-timing-the-australian-market/
12/2015  [2103]
https://forum.mrmoneymustache.com/ask-a-mustachian/where-to-put-a-large-windfall-with-stock-market-near-all-time-highs/
1/2016  [2013]
https://forum.mrmoneymustache.com/investor-alley/about-to-sell-everything-talk-me-off-the-ledge-(or-push-me-off)-please!/
4/2016 [2073]
https://forum.mrmoneymustache.com/investor-alley/here-it-comes-red-dow/
2/2017  [2280]
https://forum.mrmoneymustache.com/investor-alley/does-anyone-think-we-are-in-a-bubble/
4/2017  [2359]
https://forum.mrmoneymustache.com/investor-alley/top-is-in/
6/2017  [2430]
https://forum.mrmoneymustache.com/continue-the-blog-conversation/recession-coming/
8/2017  [2476]
https://forum.mrmoneymustache.com/investor-alley/getting-scared-of-stock-market/
1/2018  [2696]
https://forum.mrmoneymustache.com/investor-alley/nervous-about-the-market/
3/2018  [2678]
https://forum.mrmoneymustache.com/investor-alley/when-would-you-get-back-in/
5/2018  [2655]
https://forum.mrmoneymustache.com/investor-alley/investing-in-a-bull-market/
6/2018  [2735]
https://forum.mrmoneymustache.com/investor-alley/moving-to-cash-market-timing-can%27t-believe-it/
10/2018  [2925]
https://forum.mrmoneymustache.com/welcome-to-the-forum/sell-index-funds-now-for-down-payment-during-recession/
2/2019  [2707]
https://forum.mrmoneymustache.com/investor-alley/welp-i'm-going-to-take-a-stab-at-timing-the-market/
4/2019  [2867]
https://forum.mrmoneymustache.com/investor-alley/buy-vtsax-now-while-its-this-high-or-wait-till-a-drop/
https://forum.mrmoneymustache.com/investor-alley/how-concerned-are-you-about-the-everything-bubble/
5/2019  [2924]
https://forum.mrmoneymustache.com/ask-a-mustachian/scared-of-investing-in-the-stock-market-now/
6/2019  [2890]
https://forum.mrmoneymustache.com/uk-tax-discussion/global-index-tracker-is-so-high!-do-i-just-keep-putting-my-money-into-it-anyway/
7/2019 [3026]
https://forum.mrmoneymustache.com/investor-alley/would-you-106836/
8/2019 [2889]
https://forum.mrmoneymustache.com/investor-alley/vtsax-and-a-looming-recession/
9/2019 [2978]
https://forum.mrmoneymustache.com/investor-alley/recession-in-2-ish-years-scale-and-nature/
10/2019 [2986]
https://forum.mrmoneymustache.com/investor-alley/advice-needed-108726/
11/2019 [3110]
https://forum.mrmoneymustache.com/investor-alley/questions-from-37yr-old-that-very-recently-became-serious-about-fi/
https://forum.mrmoneymustache.com/investor-alley/where-to-invest-my-cash-now/
12/2019 [3169]
https://forum.mrmoneymustache.com/ask-a-mustachian/help!-i-dont-know-where-to-start/
https://forum.mrmoneymustache.com/investor-alley/the-old-excuses-for-down-swings-and-a-reality-yet-we-are-at-all-time-highs!/
1/2020 [3296]
https://forum.mrmoneymustache.com/investor-alley/what-to-do-with-a-large-sum-of-money-bad-time-to-buy-index-funds/
2/2020 [3345]
https://forum.mrmoneymustache.com/real-estate-and-landlording/in-a-pickle/
6/2020 [3125]
https://forum.mrmoneymustache.com/investor-alley/august-is-when-it-all-implodes/
https://forum.mrmoneymustache.com/investor-alley/should-i-move-my-bond-etf-to-money-market-fund-or-cd/
https://forum.mrmoneymustache.com/investor-alley/anyone-else-struggling-to-not-sell/
8/2020 [3360]
https://forum.mrmoneymustache.com/investor-alley/invest-lump-sum-or-wait/
11/2020 [3585]
https://forum.mrmoneymustache.com/investor-alley/little-reminder-just-how-gross-the-valuation-of-equities-is/
https://forum.mrmoneymustache.com/investor-alley/anyone-else-terrified-of-stock-market-right-now/

Miscellaneous
https://forum.mrmoneymustache.com/investor-alley/%27but-right-now-the-market-is-at-an-all-time-high-%27/
https://forum.mrmoneymustache.com/investor-alley/the-great-market-crash-of-2016!/
https://forum.mrmoneymustache.com/investor-alley/how-to-deal-with-losing-$117k-in-stock-market/
https://forum.mrmoneymustache.com/investor-alley/so-we're-basically-on-track-for-a-bear-market-by-tomorrow/
https://forum.mrmoneymustache.com/investor-alley/anyone-else-feeling-depressed-about-global-equities-10-year-outlook/
https://forum.mrmoneymustache.com/investor-alley/stocks-will-only-return-4-annually-for-next-decade-john-bogle/
https://forum.mrmoneymustache.com/welcome-to-the-forum/new-saver-worried-about-future-stockmarket/
« Last Edit: December 21, 2020, 08:05:19 AM by RWD »

MustacheAndaHalf

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #5 on: November 24, 2020, 11:39:53 AM »
Tech is a bigger and bigger part of the U.S. stock market, with Vanguard Information Technology (VGT) gaining +33% this year.  Morningstar shows technology as 23% of the U.S. stock market, meaning tech has given the overall market a +7.6% gain this year.  And the overall U.S. stock market (VTI) is up 14.4%.  It looks like tech stocks make up half the overall market's gains.

For this month specifically, there's many beaten up stocks in the market that have been surging.  Macy's stock has gained about +44% this month, ignoring today's +6% jump...   Even after that roughly +50% jump, Macy's is down -37% year to date.  Should stocks that risked going out of business be standing still as 3 effective vaccines are announced?

ChpBstrd

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #6 on: November 24, 2020, 11:47:44 AM »
If you are following Tesla, Salesforce, or Zoom stock, then yes this market looks exactly like 1999. Step away from the financial press darlings and coastal real estate, and you'll find bargains galore.

Forward PE ratios:
     US: 22.5
     Australia: 18.7
     All-countries world ex-US: 16.3
     Germany: 15.8
     Canada: 15.1
     China: 15.1
     Emerging Markets: 14.5
     UK: 14.4
     Mexico: 14.2
     Brazil: 12.3
     Korea: 11.9
     Eastern Europe: 8.6
     Source: https://www.yardeni.com/pub/mscipe.pdf

In LCOL areas like mine, grade B and C residential real estate is still selling according to the 1% rule (market rent should be 1% of price).

     https://www.zillow.com/homedetails/1248-S-73rd-East-Ave-Tulsa-OK-74112/22133724_zpid/

     https://www.realtor.com/realestateandhomes-detail/2570-E-Oakbrook-Dr_Columbia_MO_65202_M87539-84932

     https://www.realtor.com/realestateandhomes-detail/129-Lari-Ln_Anderson_SC_29625_M97154-93714
     
You can also buy healthcare REITs such as LTC, NHI, or OHI with yields over 6%, or there are apartment REITs like IRET with a Price/FCF under 10. Many banks are also cheap.

achvfi

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #7 on: November 24, 2020, 12:41:16 PM »
If your gut tells you that you should be scared, there is something to it right.

This is not a popular opinion here, but while keeping most of your portfolio in place take some chips off if makes you feel better. It doesn't have to be all or nothing.

Use asset allocation that keeps you comfortable.

cincystache

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #8 on: November 24, 2020, 01:08:26 PM »
deep breaths... I really appreciate @RWD showing how common this is and how we (humans) have always been wrong in the past. I know the counterargument about "this time is different" but c'mon be honest, we aren't that special/unique...

I also agree with @achvfi in that it doesn't have to be 100% stock OR 100% cash (or gold or guns, or bullets, or bitcoin, or whatever other non-stock asset class). Pick an asset allocation (maybe a bit of all the above) and stick with it regardless of market conditions. You'll do better than most. Some will beat you (the lucky few that call the top and bottom) but most people who try that game end up far below the averages. Don't be one of them.

RWD

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #9 on: November 24, 2020, 01:46:50 PM »
Use asset allocation that keeps you comfortable.
I also agree with @achvfi in that it doesn't have to be 100% stock OR 100% cash

Yes, a reasonable asset allocation can go a long ways to helping you sleep at night. The site Portfolio Charts has a nice metric called the "Ulcer Index". A conservative portfolio like the All Seasons Portfolio coming in at 3.6 while something like the traditional Three-Fund Portfolio scores a 9.8. For comparison 100% [USA] Total Stock Market is a 16.5.

MustacheAndaHalf

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #10 on: November 24, 2020, 02:30:38 PM »
ChpBstd - Your list got me searching for the lowest P/E ratio you listed, that of Eastern Europe.  The closest I could get was country-specific ETFs for the largest Eastern European country: Russia.  Russia ETFs have P/E ratios of 6.24, 8.8 and 10.37 according to etfdb.

achvfi - Advice to respect gut feel can be problematic for investors.  Market sentiment was horrible back in mid March - everyone was selling every asset except short-term treasuries.  Gold, corporate bonds, long-term bonds, U.S. equities, international equities...  gut feel would have people sell after that drop, with no feeling to get back in.  So I'd emphasize gut feel and as you say not making all or none decisions.  Trust gut feel... a little, but stay invested, mostly.

KateFIRE

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #11 on: November 24, 2020, 03:29:05 PM »
I've taken a long break from this forum, but lately I have felt like the world is not right. The stock market doesn't reflect the reality that I see in my own family and among my community. I know that projecting personal circumstances to the economy is foolish, but our life is NOT better. The money that is being pumped into the stock market is not coming from work, it is coming from debt. People are borrowing and investing. Tesla has only been profitable for 5 quarters and yet Elon Musk is the 2nd richest man in the world. It's all speculation and nothing real. No one I know has ever spent $1 on Tesla. They make a physical car... not really a tech company. Not a ground breaking invention. Many competitors. I really don't get it! My husband says SpaceX helps to sell cars... it's still the same product with expensive marketing.
« Last Edit: November 24, 2020, 03:37:05 PM by KateFIRE »

mistymoney

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #12 on: November 24, 2020, 03:54:32 PM »
I'm only afraid because it might make me quit my job. Then I'd be not too happy if the market tanked!

Otherwise, I've been on this roller coaster before. You go down, you're sad, maybe for 2-3 years, and then the fun begins again.

theolympians

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #13 on: November 24, 2020, 04:37:04 PM »
no

ice_beard

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #14 on: November 24, 2020, 04:57:29 PM »
There are sectors of the market that are still very undervalued.  Someone else mentioned banks.  Lots of regional banks still selling 30-50% below 2020 highs.  Oil and gas, REITs, etc. 
Yeah, I'm not touching tech or Covid darling stocks.  These are insanely expensive.  But there are un-loved sectors that have some serious room to run although the race began a few weeks ago, imho. 

Retire-Canada

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #15 on: November 24, 2020, 05:46:32 PM »
I'm not worried. There is another stock market crash coming. Nobody knows when, but it will happen and things will be fine. If you are hoping to retire with a stock market funded plan you'll have to deal with this cycle several times over the decades. For me that means an AA I am comfortable with when the market goes up or down without needing any action from me beyond rebalancing very occasionally.

celerystalks

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #16 on: November 24, 2020, 07:11:37 PM »
Yes! Now is the time to panic and freak out!!!

celerystalks

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #17 on: November 24, 2020, 07:12:07 PM »
Yes! Now is the time to panic and freak out!!!

Just kidding. Stay the course.

Abe

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #18 on: November 24, 2020, 08:28:27 PM »
Terrified is a strong word I usually associate with large animal attacks. More just mildly amused. I have no idea where this market will be in 10 years (my horizon), but I'm hoping it'll be higher or even. I find it hard to get interested in something so nebulous and out of my control.

RWD

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #19 on: November 24, 2020, 09:00:18 PM »
No one I know has ever spent $1 on Tesla.
One of my neighbors just bought a brand new Tesla (in the rural South!). There, I can give anecdotes too.

Also, Tesla makes up less than 1% of VTSAX. If the company value suddenly goes to zero my portfolio won't even notice.

vand

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #20 on: November 25, 2020, 02:16:24 AM »
FWIW have been cutting back my general equity exposure by about 20% since the market rallied off the vaccine news.

We've had a very good run up since the bear market bottom, short term sentiment has flipped to extreme greed, and personally I don't think the risk/reward in equities looks nearly as attractive from this point.


shinn497

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #21 on: November 25, 2020, 06:23:38 AM »
As someone with a portfolio that has a small cap value international exposure

No

Jack0Life

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #22 on: November 25, 2020, 09:41:46 AM »
I've taken a long break from this forum, but lately I have felt like the world is not right. The stock market doesn't reflect the reality that I see in my own family and among my community. I know that projecting personal circumstances to the economy is foolish, but our life is NOT better. The money that is being pumped into the stock market is not coming from work, it is coming from debt. People are borrowing and investing. Tesla has only been profitable for 5 quarters and yet Elon Musk is the 2nd richest man in the world. It's all speculation and nothing real. No one I know has ever spent $1 on Tesla. They make a physical car... not really a tech company. Not a ground breaking invention. Many competitors. I really don't get it! My husband says SpaceX helps to sell cars... it's still the same product with expensive marketing.

I actually agree with everything you said until you mentioned Tesla.
While I think Tesla current valuations are way too high, they will be no doubt be one of the biggest company in the world.
It's their battery technology that's far better than everyone else.
The are using their battery technology to move into home solar and that market is limitless. Here in the US and everywhere else in the world.
$564 is way too high for their stock right now but in 10 yrs, everyone will look back and say man I wish I bought some at that price. Just like when I looked back a month ago and I wish I bough them at $388.

vand

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #23 on: November 25, 2020, 01:07:01 PM »
I've taken a long break from this forum, but lately I have felt like the world is not right. The stock market doesn't reflect the reality that I see in my own family and among my community. I know that projecting personal circumstances to the economy is foolish, but our life is NOT better. The money that is being pumped into the stock market is not coming from work, it is coming from debt. People are borrowing and investing. Tesla has only been profitable for 5 quarters and yet Elon Musk is the 2nd richest man in the world. It's all speculation and nothing real. No one I know has ever spent $1 on Tesla. They make a physical car... not really a tech company. Not a ground breaking invention. Many competitors. I really don't get it! My husband says SpaceX helps to sell cars... it's still the same product with expensive marketing.

I actually agree with everything you said until you mentioned Tesla.
While I think Tesla current valuations are way too high, they will be no doubt be one of the biggest company in the world.
It's their battery technology that's far better than everyone else.
The are using their battery technology to move into home solar and that market is limitless. Here in the US and everywhere else in the world.
$564 is way too high for their stock right now but in 10 yrs, everyone will look back and say man I wish I bought some at that price. Just like when I looked back a month ago and I wish I bough them at $388.

So they're basically a utility company then :D

PDXTabs

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #24 on: November 25, 2020, 02:25:20 PM »
I'm way more terrified of the US dollar or bonds. I'll happily take equities as the lesser evil.

Companies that are losing money hand over fist have stock that is doubling.

But of all the globally traded stocks, how many really fit this description? What percentage of the Wilshire 5000 are losing money while their stocks double?
« Last Edit: November 25, 2020, 02:31:15 PM by PDXTabs »

Abe

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #25 on: November 25, 2020, 08:58:41 PM »
I found this searching sp500 company profit margins. I donít know anything about this group, but seems reasonably accurate. Almost all sectors have remained profitable (noteable exceptions are tourism-related companies and oil/gas).
https://www.yardeni.com/pub/sp500margin.pdf

The latest labor statistics show (since August) that unemployment is going down (obviously still worse than last year), and the average hours and average hourly salary are stable. There has been an uptick in long-terms employed (>26wks) that will need to be watched.

https://www.bls.gov/news.release/pdf/empsit.pdf

I can see why the market should be mixed up to now (instead of quite a bit higher than January), but not sure why the market should not go up at this point. We have news that the first-order cause of market failure will be resolved within a few months (vaccine distribution pending) and second-order effects so far have not been severe enough to disrupt profits. I guess if we assume the second-order effects are exponential with time then we would have post-vaccine lingering effects on unprofitable sectors that will take a few years to sort out, but wonít seem to cause long-term problems for the overall economy.

I am by no means an economist, so if there are long-term problems Iíd like to know!
« Last Edit: November 25, 2020, 09:07:40 PM by Abe »

v8rx7guy

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #26 on: November 25, 2020, 09:15:48 PM »
I just lived through and stuck with a 35%+ drop in a matter of weeks... ain't nothing terrifying me stock market related at this point.

ender

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #27 on: November 25, 2020, 09:37:19 PM »
Top is definitely in.

Bloop Bloop Reloaded

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #28 on: November 26, 2020, 05:32:32 AM »
What's there to be scared of? Low interest rates + lots of rich people running around = people with money to plunge into shares and property.

People act like the economy is terrible but it's only the lower end of the economy that's struggling. The top half of the middle class, the upper middle class and the upper class are doing great. And they are the ones who determine the value of shares and property.

joleran

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #29 on: November 26, 2020, 05:51:56 AM »
I just lived through and stuck with a 35%+ drop in a matter of weeks... ain't nothing terrifying me stock market related at this point.

Try on for size an historically really bad 10 year period, with the market dropping 8% real every year.  Sure, historically it works out, but sitting there at twice what you thought your SWR should be and carrying it through is another matter.

RWD

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #30 on: November 26, 2020, 07:00:47 AM »
I just lived through and stuck with a 35%+ drop in a matter of weeks... ain't nothing terrifying me stock market related at this point.

Try on for size an historically really bad 10 year period, with the market dropping 8% real every year.  Sure, historically it works out, but sitting there at twice what you thought your SWR should be and carrying it through is another matter.

Which decade was it that the market went -8% real every year? DQYDJ has -5.9% as the worst ever real annual return for a 10-year period (though it doesn't state when that was).

I also found this nice inflation adjusted chart:

Malcat

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #31 on: November 26, 2020, 07:21:24 AM »
Nope.

Until something happens to make index funds a bad choice, I just won't care about it or pay much attention to it.

Give me actionable information and I'll pay attention, until then, it's just background noise.

John Galt incarnate!

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #32 on: November 26, 2020, 08:58:48 AM »
I have been investing for over a decade.  This is the first time the stock market has ever scared me.  These valuations are insane.  Companies that are losing money hand over fist have stock that is doubling.  Just about everything is at all-time highs while economies are being destroyed and revenues are dried up.  It makes absolutely no sense.  I don't know what to do with my money anymore.  Nothing makes sense anymore.

I've never been terrified by the stock market.

If it plunges I'll take advantage of another  opportunity to  buy "stocks on sale."

fattest_foot

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #33 on: November 26, 2020, 09:37:56 AM »
Try on for size an historically really bad 10 year period, with the market dropping 8% real every year.  Sure, historically it works out, but sitting there at twice what you thought your SWR should be and carrying it through is another matter.

Why not 10% every year? Or 20%? If we're just making up hypothetical doomsday scenarios, think bigger.

Chaplin

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #34 on: November 26, 2020, 10:07:25 AM »
With username containing "nihilism" perhaps the OP will come to realize that the stock market, like everything, doesn't really matter...

In fairness, I get why people are concerned, but I agree that feeling it's "too high" is no more "actionable" than it was four years ago, and pulling out then would have been a regrettable decision then too.
« Last Edit: November 26, 2020, 04:27:01 PM by Chaplin »

habanero

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #35 on: November 26, 2020, 11:34:58 AM »
Why not 10% every year? Or 20%? If we're just making up hypothetical doomsday scenarios, think bigger.

Easy.

During 1974-78 the Portugal market dropped by 97%, or about -50% annual returns for 5 years in a row. . This is supposedly the biggest on record for which there is somewhat reliable data. So if anyone comes up with a bigger number than that it's prob safe to call BS on it.

Not sure if that's inflation adjusted or not but really doesn't matter that much.


Bloop Bloop Reloaded

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #36 on: November 26, 2020, 02:00:17 PM »
I have been investing for over a decade.  This is the first time the stock market has ever scared me.  These valuations are insane.  Companies that are losing money hand over fist have stock that is doubling.  Just about everything is at all-time highs while economies are being destroyed and revenues are dried up.  It makes absolutely no sense.  I don't know what to do with my money anymore.  Nothing makes sense anymore.

I've never been terrified by the stock market.

If it plunges I'll take advantage of another  opportunity to  buy "stocks on sale."

Yes, I take the same approach. I don't ever plan to sell my shares/property, just subsist on the dividends/rent, so the actual value of the capital is a secondary consideration.

Besides, what we really want is not "wealth"; it is purchasing power. If everyone's portfolio drops 90% then no one's purchasing power has been affected at all, other than those who actually intend to sell off principal (and that's not me).  A market crash would be beneficial for young people on high incomes who then can buy in harder.

chevy1956

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #37 on: November 26, 2020, 03:13:19 PM »
We've had a rough time over the past year or so. Some pretty significant drops. The market seems to have recovered quickly. We have a world economy that has tremendous growth potential in it. Does anyone else think we may be heading for the roaring 20's again.

As @Malcat states I just invest in the best long term option according to my risk profile and leave it at that. If there is a better option than my current high stock percentage index portfolio than let me know.
« Last Edit: November 26, 2020, 03:16:56 PM by chevy1956 »

dividendman

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #38 on: November 26, 2020, 03:39:14 PM »
Top is definitely in.

I normally just chime in on these threads with a similar comment, but I'll add something this time:

What is the worst case scenario?

I love to imagine what is the worst (plausible) case. Let's say I quit (again, I already quit once and was lured back in) and the market immediately tanks 70%. OK. Now what? Will I be on the street? Nope. Will I starve? Nope. Will I have to work again? Probably. Oh wait, I work right now anyway.... so.... basically it will have no impact on my current lifestyle. Maybe I'd spend a bit less.

How will it impact how you live day to day?

Dicey

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #39 on: November 26, 2020, 04:25:29 PM »
Nope. We've got plenty of dry powder.

reeshau

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #40 on: November 26, 2020, 06:10:30 PM »
The money that is being pumped into the stock market is not coming from work, it is coming from debt. People are borrowing and investing.

While I don't doubt your personal perspective, the truth is that while savings rates are down from April, they are still the highest they have been since the 1970's.

https://fred.stlouisfed.org/series/PSAVERT

So, there is a lot of cash--not spent travelling, or shopping, or whatever--Looking to be saved, and looking for something above near-zero interest rates.  The economy is definitely bifurcated, with people in the "wrong" businesses (travel, leisure, entertainment, dining) suffering a depression, and others being forced in better (financial) circumstances as they work from home.  And maybe the third part of essential workers, who are looking at a second straight marathon as we head toward winter.

vand

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #41 on: November 27, 2020, 01:55:54 AM »
I think a healthy amount of caution is warranted at this stage.
The CNN greed/fear gauge flipped from bearish to mega bullish in record time.

I think the chances are good that the market will offer better buying opportunities over the next 6-12 months than today.

https://money.cnn.com/data/fear-and-greed/

habanero

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #42 on: November 27, 2020, 02:53:59 AM »
I think the chances are good that the market will offer better buying opportunities over the next 6-12 months than today.

A fair statement, and you might even be proved correct. Who knows. The overall idea for a lot of folks on this forum is however that it is hard to build a strategy and develop an action plan based on something (easily) observable. If anyone told me that we in 2020 would have a raving pandemic with international travel grounding to a standstill, truckloads of unemployed and large population centers in lockdown with lots of bisinesses shut down and despite all this markets would be at ATH towards the end of the year I would say that anyone making that claim was bat-shit-crazy but that's what actually has happened. Just as an indication of how difficult it is to predict the market. And this is what one would generally consider a no-brainer.

There is a constant stream of news, opinions and ideas from very smart people who make top money from devoting most of their awake hours to have an opinion on this, and depending on who you listen to you can make a case for almost anything. Or you can view it as pure noise knowing most of these folks are wrong around 50% of the time and it's probably impossible to tell beforehand who will be right in the end. Some might be right, but the reason being something completely different than what they argued, some might be wrong despite events playing out as predicted, just that the market had another opinion on things.

It's very hard to come up with a better strategy sustainable over long periods of time (maybe decades) other than keep investing, stay diversified and pay as little fees as possible.

vand

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #43 on: November 27, 2020, 03:47:42 AM »
It's very hard to come up with a better strategy sustainable over long periods of time (maybe decades) other than keep investing, stay diversified and pay as little fees as possible.

I agree, but that doesn't mean that you can't shift your asset allocation around depending on the relative risk/reward you see in various asset classes as their relative prices change. The S&P has rallied 65% since it's March bottom. That's an annulised growth rate of very nearly 100%.. in an asset class whose long term growth rate is around 9-10%pa.

Some of the longer term future returns from March MUST have been pulled forward, therefore equities aren't as attractive to me they were in March, which warrants less exposure to equities.

We are entering bubble territory, imo most similar to the 1998-2000 blowoff top after the Asian panic late in that decade. Sure, there may be some juice still left, which is fine as I still have considerable exposure, but it's time to be start being fearful when everyone else is getting very greedy imo.

« Last Edit: November 27, 2020, 04:00:37 AM by vand »

Accrual

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #44 on: November 27, 2020, 06:47:29 AM »
Somewhat. Mainly for my folks who are at retirement age; I am unsure if they have reduced their AA appropriately over the years. Also for myself but anxious is almost my baseline.

RWD

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #45 on: November 27, 2020, 07:07:47 AM »
I think the chances are good that the market will offer better buying opportunities over the next 6-12 months than today.
We are entering bubble territory, imo most similar to the 1998-2000 blowoff top after the Asian panic late in that decade.

You also called stocks "undeniably expensive" at SP500 ~2600 and have continued to express that opinion at every opportunity for the two years you've been on this forum so you're kinda like the boy who cried wolf at this point.

Malcat

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #46 on: November 27, 2020, 07:10:59 AM »
It's very hard to come up with a better strategy sustainable over long periods of time (maybe decades) other than keep investing, stay diversified and pay as little fees as possible.

I agree, but that doesn't mean that you can't shift your asset allocation around depending on the relative risk/reward you see in various asset classes as their relative prices change. The S&P has rallied 65% since it's March bottom. That's an annulised growth rate of very nearly 100%.. in an asset class whose long term growth rate is around 9-10%pa.

Some of the longer term future returns from March MUST have been pulled forward, therefore equities aren't as attractive to me they were in March, which warrants less exposure to equities.

We are entering bubble territory, imo most similar to the 1998-2000 blowoff top after the Asian panic late in that decade. Sure, there may be some juice still left, which is fine as I still have considerable exposure, but it's time to be start being fearful when everyone else is getting very greedy imo.

I mean, people *can* actively adjust their AA in response to the market as a form of market timing if they want to...

Sure, that's an option.

It's probably a shit option for most since people tend to be TERRIBLE at market timing. I'm not saying you aren't, I'm absolutely certain some people pull it off in a sane and measured manner and capture some pretty decent gains as a result.

I just don't think that's most people. Or, at least, not many of the people I've seen here try to time the market.

Of course, changing AA over time can make sense for anyone if it's part of their plan for handling SORR, but that's not the same thing at all.

Also, those of us who are more "set it and forget it" aren't greedy. I for one am not greedy, I barely care about my returns and genuinely could not tell you what they've been year over year since I started investing in 2015. That's not greed, that's near total detachment. Even if stocks plummet for the next decade, it has no impact on me as long as they eventually come back up.

I don't care about volatility, I expect the market will probably go up over time, and if it doesn't, I anticipate that I will have bigger societal concerns than my investment returns.

I will adjust my AA according to my timeline, not market performance because I don't have nearly the inclination or skill to be able to do so.

vand

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #47 on: November 27, 2020, 07:54:27 AM »
I think the chances are good that the market will offer better buying opportunities over the next 6-12 months than today.
We are entering bubble territory, imo most similar to the 1998-2000 blowoff top after the Asian panic late in that decade.

You also called stocks "undeniably expensive" at SP500 ~2600 and have continued to express that opinion at every opportunity for the two years you've been on this forum so you're kinda like the boy who cried wolf at this point.


Wolf schmolf.

I've never call a top, I just said that future returns are likely to be worse the more expensive the market gets, and if you dig back through some more of my posts you'll see that I said stocks were pretty fairly priced back in March (and ex-US was even cheap), and I was buying heavily in the downturn as stocks got cheaper.

I'm saying that once again the market has become expensive, and correspondingly the chances of mediocre returns going forward are much more significant. I'm NOT saying the market can't go higher, I just don't think the expected return for the level of risk taken on is particularly attractive as of today.

and yeah, I'm sure you'll fire back the canned response of a thousand thread calling the market top

Laserjet3051

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #48 on: November 27, 2020, 07:58:25 AM »
Terrified? No, should I be? I'm not planning on selling anything for at least another 15 years and I will continue buying through all price gyrations until then. Rebalancing along the way by buying less of expensive securities and more of cheaper ones helps to allay my concerns of "potential" overvaluation.

MustacheAndaHalf

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Re: Anyone Else Terrified of Stock Market Right Now?
« Reply #49 on: November 27, 2020, 09:36:12 AM »
It's very hard to come up with a better strategy sustainable over long periods of time (maybe decades) other than keep investing, stay diversified and pay as little fees as possible.
I agree, but that doesn't mean that you can't shift your asset allocation around depending on the relative risk/reward you see in various asset classes as their relative prices change. The S&P has rallied 65% since it's March bottom. That's an annulised growth rate of very nearly 100%.. in an asset class whose long term growth rate is around 9-10%pa.

Some of the longer term future returns from March MUST have been pulled forward, therefore equities aren't as attractive to me they were in March, which warrants less exposure to equities.

We are entering bubble territory, imo most similar to the 1998-2000 blowoff top after the Asian panic late in that decade. Sure, there may be some juice still left, which is fine as I still have considerable exposure, but it's time to be start being fearful when everyone else is getting very greedy imo.
You ignore how far the market fell in March, and only measure how far it recovered?  And then call it a bubble when the S&P 500 returns 13% year to date?

EDIT: Yahoo Finance provides a wide range of YTD figures:
https://finance.yahoo.com/quote/VOO/performance?p=VOO
"monthly" YTD: 2.77%
"daily" YTD: 12.54%

https://www.portfoliovisualizer.com/backtest-portfolio#analysisResults
2020 return: 2.77%

https://www.morningstar.com/etfs/arcx/voo/performance
YTD return (price): 14.54%
YTD return (NAV): 14.18%
« Last Edit: November 27, 2020, 07:35:54 PM by MustacheAndaHalf »