Author Topic: Brexit  (Read 44448 times)

capitalninja

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Re: Brexit
« Reply #50 on: June 24, 2016, 07:12:34 AM »
It's currently much ado about nothing really. If you look at how the markets reacted yesterday (closing up 1.29%) due to the speculation that the UK would remain in the EU against the current futures (down 2.73%), we're talking about a 1.44% spread. Hardly anything to get excited about.

Now if next week the panic selling continues then you *might* be in a position to take advantage of a true dip. For today assuming that the futures holds at < 3% down, I wouldn't bother putting in additional money than you ordinarily would have today.

In other words at current levels, it's still not a huge buying opportunity like the start of this year when panic over price of oil was pulling the markets down.

Just my 10 cents.

chesebert

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Re: Brexit
« Reply #51 on: June 24, 2016, 07:20:07 AM »
I've got $5k or so that had been earmarked for paying off a credit card when the 0% rate expires, but now I think I'll do a balance transfer and shove the $5K into the market instead.

(Yeah, I'm timing the market... but the Efficient Market Hypothesis clearly failed on this Really Bad Day, and I'm gonna take advantage of it!)

Anyway, what do y'all think will be the best fund to buy (VTIAX?), and when would be the best time to buy it? (I'm leaning towards today, but would it be better to wait until next week?)
Pay off your cc debt.

gggggg

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Re: Brexit
« Reply #52 on: June 24, 2016, 07:23:33 AM »
I've got $5k or so that had been earmarked for paying off a credit card when the 0% rate expires, but now I think I'll do a balance transfer and shove the $5K into the market instead.

(Yeah, I'm timing the market... but the Efficient Market Hypothesis clearly failed on this Really Bad Day, and I'm gonna take advantage of it!)

Anyway, what do y'all think will be the best fund to buy (VTIAX?), and when would be the best time to buy it? (I'm leaning towards today, but would it be better to wait until next week?)
Pay off your cc debt.
Agreed, pay off your debt imo.

Le Barbu

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Re: Brexit
« Reply #53 on: June 24, 2016, 08:07:39 AM »
I am looking for buying VGK with spare cash, probably 5-10k$

Heckler

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Re: Brexit
« Reply #54 on: June 24, 2016, 08:32:10 AM »


Anyway, what do y'all think will be the best fund to buy (VTIAX?), and when would be the best time to buy it? (I'm leaning towards today, but would it be better to wait until next week?)
Pay off your cc debt.
Agreed, pay off your debt imo.

+1 :  pay off the debt.

Kaspian

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Re: Brexit
« Reply #55 on: June 24, 2016, 09:03:14 AM »


Anyway, what do y'all think will be the best fund to buy (VTIAX?), and when would be the best time to buy it? (I'm leaning towards today, but would it be better to wait until next week?)
Pay off your cc debt.
Agreed, pay off your debt imo.

+1 :  pay off the debt.

I third that!  Sure, if you had the extra $5K sitting around doing sweet fuck all you might want to buy a dip (note: timing is still bad bahavior), but with CC debt?  Get rid of that mofo!

mtn

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Re: Brexit
« Reply #56 on: June 24, 2016, 09:10:45 AM »


Anyway, what do y'all think will be the best fund to buy (VTIAX?), and when would be the best time to buy it? (I'm leaning towards today, but would it be better to wait until next week?)
Pay off your cc debt.
Agreed, pay off your debt imo.

+1 :  pay off the debt.

I third that!  Sure, if you had the extra $5K sitting around doing sweet fuck all you might want to buy a dip (note: timing is still bad bahavior),

I always see this, but I don't know if I always agree. If you see a dip, why wouldn't you buy? Sure, trying to buy low and sell high isn't a good thing, but if you're in it for the long run why not try to "time" the market and buy more when it is in a dip?

I'm in a somewhat similar position--I have about $2k of CC Debt due to making a bunch of purchases I knew were coming up and taking advantage of the 0% interest. I was planning on paying them off this next paycheck, but now am planning on keeping it longer (still 0%) and funneling more into my IRA right now.

opnfld

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Re: Brexit
« Reply #57 on: June 24, 2016, 09:30:02 AM »


Anyway, what do y'all think will be the best fund to buy (VTIAX?), and when would be the best time to buy it? (I'm leaning towards today, but would it be better to wait until next week?)
Pay off your cc debt.
Agreed, pay off your debt imo.
+1 :  pay off the debt.
I third that!  Sure, if you had the extra $5K sitting around doing sweet fuck all you might want to buy a dip (note: timing is still bad bahavior), but with CC debt?  Get rid of that mofo!
Pay off the credit card.  You'll incur ~3% charge to make the transfer, right?  Assuming things land around -7% today, you're talking about a 4% net gain back to yesterday's close.  Things could get a lot worse on an uncertain time frame before they get better.  Not worth the risk.

After watching the results last night, this is the first place (after NY Times) I turned this morning.  Thanks for the thoughtful and reasoned discussion.  My task for the day is figure out if the sell-off will take me below my rebalancing band.  If it does I can sell bonds to buy stocks and rationalize the timing as in accordance with my IPS.  The equity portion of my portfolio is 50/50 US/Intnl with a slight overweight to Intl Value which is down 9%.  My FIRE date is Aug 1 so these are some pretty big numbers.  Strangely the sensation I'm experiencing is more excitement and interest than anxiety.

dividendman

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Re: Brexit
« Reply #58 on: June 24, 2016, 09:32:53 AM »

I always see this, but I don't know if I always agree. If you see a dip, why wouldn't you buy? Sure, trying to buy low and sell high isn't a good thing, but if you're in it for the long run why not try to "time" the market and buy more when it is in a dip?

I'm in a somewhat similar position--I have about $2k of CC Debt due to making a bunch of purchases I knew were coming up and taking advantage of the 0% interest. I was planning on paying them off this next paycheck, but now am planning on keeping it longer (still 0%) and funneling more into my IRA right now.

The reason is this:
If you have $X lying around in wait of a dip to buy, the odds are you will never see that dip because the market tends to move higher, so in general you lose more waiting for a dip that may never occur. Then you have to decide how long with no dip are you willing to do? A day? A month? A year

Take this scenario. Let's say you had 10k last two months and were waiting for a dip. You decide that since the Brexit vote is in two months you'll wait.

If the Brits decided to say, you would have lost out on a lot of gains.

The Brits decided to leave - your clairvoyance skills worked, so you buy! Woohoo, you're a smart long term investing dip buyer, but not really. The market (S&P500) is still up over 1% since then. Also, most vanguard funds including VOO+VTI paid a dividend just last week which is another .5% or so. So you still lost out even though the scenario you envisioned happening occurred.

TL;DR - Junk the cash into the market when you have it.

« Last Edit: June 24, 2016, 09:36:00 AM by dividendman »

onlykelsey

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Re: Brexit
« Reply #59 on: June 24, 2016, 09:38:26 AM »

I always see this, but I don't know if I always agree. If you see a dip, why wouldn't you buy? Sure, trying to buy low and sell high isn't a good thing, but if you're in it for the long run why not try to "time" the market and buy more when it is in a dip?

I'm in a somewhat similar position--I have about $2k of CC Debt due to making a bunch of purchases I knew were coming up and taking advantage of the 0% interest. I was planning on paying them off this next paycheck, but now am planning on keeping it longer (still 0%) and funneling more into my IRA right now.

The reason is this:
If you have $X lying around in wait of a dip to buy, the odds are you will never see that dip because the market tends to move higher, so in general you lose more waiting for a dip that may never occur. Then you have to decide how long with no dip are you willing to do? A day? A month? A year

Take this scenario. Let's say you had 10k last two months and were waiting for a dip. You decide that since the Brexit vote is in two months you'll wait.

If the Brits decided to say, you would have lost out on a lot of gains.

The Brits decided to leave - your clairvoyance skills worked, so you buy! Woohoo, you're a smart long term investing dip buyer, but not really. The market (S&P500) is still up over 1% since then. Also, most vanguard funds including VOO+VTI paid a dividend just last week which is another .5% or so. So you still lost out even though the scenario you envisioned happening occurred.

TL;DR - Junk the cash into the market when you have it.

well put.  If you unexpectedly came in to a lump to invest just yesterday, I suppose I could see waiting to see what Brexit does.  But that's a pretty rare situation.

mtn

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Re: Brexit
« Reply #60 on: June 24, 2016, 09:42:47 AM »

I always see this, but I don't know if I always agree. If you see a dip, why wouldn't you buy? Sure, trying to buy low and sell high isn't a good thing, but if you're in it for the long run why not try to "time" the market and buy more when it is in a dip?

I'm in a somewhat similar position--I have about $2k of CC Debt due to making a bunch of purchases I knew were coming up and taking advantage of the 0% interest. I was planning on paying them off this next paycheck, but now am planning on keeping it longer (still 0%) and funneling more into my IRA right now.

The reason is this:
If you have $X lying around in wait of a dip to buy, the odds are you will never see that dip because the market tends to move higher, so in general you lose more waiting for a dip that may never occur. Then you have to decide how long with no dip are you willing to do? A day? A month? A year

Take this scenario. Let's say you had 10k last two months and were waiting for a dip. You decide that since the Brexit vote is in two months you'll wait.

If the Brits decided to say, you would have lost out on a lot of gains.

The Brits decided to leave - your clairvoyance skills worked, so you buy! Woohoo, you're a smart long term investing dip buyer, but not really. The market (S&P500) is still up over 1% since then. Also, most vanguard funds including VOO+VTI paid a dividend just last week which is another .5% or so. So you still lost out even though the scenario you envisioned happening occurred.

TL;DR - Junk the cash into the market when you have it.

well put.  If you unexpectedly came in to a lump to invest just yesterday, I suppose I could see waiting to see what Brexit does.  But that's a pretty rare situation.

I guess I think in shorter time spans--I come into a lump sum twice a month. I basically live paycheck to paycheck; between rent, debt, and investments I don't spend much money--and the debt can almost always be taken care of at a later date (Yay 0% credit cards and paying way more than the minimum on my wife's student loans!).

FIKristen

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Re: Brexit
« Reply #61 on: June 24, 2016, 09:54:36 AM »
I happen to have 300k cash on the side from a recent sale of a house.  Time to buy? 

Winston

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Re: Brexit
« Reply #62 on: June 24, 2016, 10:00:06 AM »
I happen to have 300k cash on the side from a recent sale of a house.  Time to buy?

Every day you have the money to do so is the time to buy. What the market is doing is immaterial. Should you buy today? Yes. Should you have bought yesterday? Yes.

onlykelsey

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Re: Brexit
« Reply #63 on: June 24, 2016, 10:02:11 AM »

I always see this, but I don't know if I always agree. If you see a dip, why wouldn't you buy? Sure, trying to buy low and sell high isn't a good thing, but if you're in it for the long run why not try to "time" the market and buy more when it is in a dip?

I'm in a somewhat similar position--I have about $2k of CC Debt due to making a bunch of purchases I knew were coming up and taking advantage of the 0% interest. I was planning on paying them off this next paycheck, but now am planning on keeping it longer (still 0%) and funneling more into my IRA right now.

The reason is this:
If you have $X lying around in wait of a dip to buy, the odds are you will never see that dip because the market tends to move higher, so in general you lose more waiting for a dip that may never occur. Then you have to decide how long with no dip are you willing to do? A day? A month? A year

Take this scenario. Let's say you had 10k last two months and were waiting for a dip. You decide that since the Brexit vote is in two months you'll wait.

If the Brits decided to say, you would have lost out on a lot of gains.

The Brits decided to leave - your clairvoyance skills worked, so you buy! Woohoo, you're a smart long term investing dip buyer, but not really. The market (S&P500) is still up over 1% since then. Also, most vanguard funds including VOO+VTI paid a dividend just last week which is another .5% or so. So you still lost out even though the scenario you envisioned happening occurred.

TL;DR - Junk the cash into the market when you have it.

well put.  If you unexpectedly came in to a lump to invest just yesterday, I suppose I could see waiting to see what Brexit does.  But that's a pretty rare situation.

I guess I think in shorter time spans--I come into a lump sum twice a month. I basically live paycheck to paycheck; between rent, debt, and investments I don't spend much money--and the debt can almost always be taken care of at a later date (Yay 0% credit cards and paying way more than the minimum on my wife's student loans!).

It sounds like you have extra cash you should be putting to work for you on a regular schedule!  I lump sum my bonus at year's end, and throw 1K in Vanguard every two weeks (about to be upped because my 401(K) is maxed).

spud1987

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Re: Brexit
« Reply #64 on: June 24, 2016, 10:02:23 AM »
I happen to have 300k cash on the side from a recent sale of a house.  Time to buy?

This question is impossible to answer.

This is why everyone should have an investment policy statement (IPS). You should specify your ideal asset allocation. You should specify whether you dollar cost average or lump sum invest. Maybe you only lump sum invest when the market is down 20% from previous highs. Or maybe only when the sp500 pe ratio drops under 16. There are a number of reasonable methods to invest, but investing by feeling is pure market timing.

To answer your question how I would invest: if I had 300k in cash with no near term cash needs I would invest in the market asap. I would put 60% in VTSAX, 20% in Vanguard REIT, 20% in Vanguard Emerging Markets. If the Schiller PE is above 25 (like now) my IPS says I should DCA over 6 months-1 year.



nedotykomka

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Re: Brexit
« Reply #65 on: June 24, 2016, 10:09:38 AM »
Hi everyone. I've been reading Money Mustache forums for a few months now, and they're great! Really changing my life, I hope. This is my first real post, so here goes. After reading these forums for a while I moved a good sum of money from a 401K managed by a previous employer over to a Vanguard IRA. There, I let it sit in a money market account for a month or so, mainly because I'm disorganized. Today, I put it back to work in the market, according to a diverse allocation. I'm feeling lucky to have missed the Brexit dive but also a little worried, because I hope the markets (and the world) can get their acts together. (I have another retirement account with my for-now employer that did take a big hit. Planning just not to look at that one for a while!)

Jack

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Re: Brexit
« Reply #66 on: June 24, 2016, 10:19:10 AM »
Pay off the credit card.  You'll incur ~3% charge to make the transfer, right?  Assuming things land around -7% today, you're talking about a 4% net gain back to yesterday's close.  Things could get a lot worse on an uncertain time frame before they get better.  Not worth the risk.

I couldn't care less about how long it takes markets to recover (since I have faith that they will, eventually); once I buy the money would stay in for at least a decade, and realistically much longer.

Also, more details about the situation: the CC rate doesn't expire until 8/23, and (given my wife's relatively-lucrative temporary job) we're currently cash-flow-positive by several thousand dollars a month, after subtracting out our normal periodic investing (maxing 401k and IRAs at $2416.67/month). In other words, it's entirely reasonable that I could drop the money I currently have saved into the market today, then save it up again starting from $0 in the two months before the payment is due. It'd be a little tight, but doable (in fact, that might be a good thing -- I've been getting a little lax in my spending recently, and that might help fix it!). If I didn't invest this $5K today, I'd almost certainly be investing that next $5K in a couple months anyway. Rolling over the entire $5K CC balance would represent either a worst-case scenario or a calculated decision based on an even more extreme drop in the markets.

So, thinking it through some more, it seems like the risk I'm taking is that (a) something would happen to force me to roll over the balance or (b) the markets would continue to drop over the next few months, making waiting to invest better, vs. the assumptions that (c) today is a "Really Bad Day" allowing an abnormal >4% "panic discount" and (d) on average, markets go up (meaning that by default I plan as if the price will be higher in a few months).

runningthroughFIRE

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Re: Brexit
« Reply #67 on: June 24, 2016, 10:21:55 AM »
I think of my emergency fund as a dry powder keg I can use either to avoid incurring debts or to take advantage of dips in the market.  When I believe the dip is significant enough (and actually a dip) to compensate for the added liquidity risk, I carve out a portion of my emergency cash fund to take advantage of it.  While the market recovers, I let my cash flow fill up my emergency fund rather than go to the market.  The total amount I invest is the same, but the result is front loading and buying at a lower overall price.

Hi everyone. I've been reading Money Mustache forums for a few months now, and they're great! Really changing my life, I hope. This is my first real post, so here goes. After reading these forums for a while I moved a good sum of money from a 401K managed by a previous employer over to a Vanguard IRA. There, I let it sit in a money market account for a month or so, mainly because I'm disorganized. Today, I put it back to work in the market, according to a diverse allocation. I'm feeling lucky to have missed the Brexit dive but also a little worried, because I hope the markets (and the world) can get their acts together. (I have another retirement account with my for-now employer that did take a big hit. Planning just not to look at that one for a while!)
Why exactly are you worried?  Even if the market dips further, it will ultimately recover and presumably from your post you won't need to be pulling the money out for anything in the near future.  Plus, if you are still working and contributing regularly, you'll be buying the same piece of ownership of hundreds of companies at lower and lower prices as the market dips.  Keep calm and stay the course (and welcome to the forums!)

onlykelsey

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Re: Brexit
« Reply #68 on: June 24, 2016, 10:24:26 AM »
I think of my emergency fund as a dry powder keg I can use either to avoid incurring debts or to take advantage of dips in the market.  When I believe the dip is significant enough (and actually a dip) to compensate for the added liquidity risk, I carve out a portion of my emergency cash fund to take advantage of it.  While the market recovers, I let my cash flow fill up my emergency fund rather than go to the market.  The total amount I invest is the same, but the result is front loading and buying at a lower overall price.

Hi everyone. I've been reading Money Mustache forums for a few months now, and they're great! Really changing my life, I hope. This is my first real post, so here goes. After reading these forums for a while I moved a good sum of money from a 401K managed by a previous employer over to a Vanguard IRA. There, I let it sit in a money market account for a month or so, mainly because I'm disorganized. Today, I put it back to work in the market, according to a diverse allocation. I'm feeling lucky to have missed the Brexit dive but also a little worried, because I hope the markets (and the world) can get their acts together. (I have another retirement account with my for-now employer that did take a big hit. Planning just not to look at that one for a while!)
Why exactly are you worried?  Even if the market dips further, it will ultimately recover and presumably from your post you won't need to be pulling the money out for anything in the near future.  Plus, if you are still working and contributing regularly, you'll be buying the same piece of ownership of hundreds of companies at lower and lower prices as the market dips.  Keep calm and stay the course (and welcome to the forums!)

The result is definitely frontloading.  Whether it will definitely be buying at a lower price is a bit of a gamble each time, no?

mtn

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Re: Brexit
« Reply #69 on: June 24, 2016, 10:25:57 AM »

I always see this, but I don't know if I always agree. If you see a dip, why wouldn't you buy? Sure, trying to buy low and sell high isn't a good thing, but if you're in it for the long run why not try to "time" the market and buy more when it is in a dip?

I'm in a somewhat similar position--I have about $2k of CC Debt due to making a bunch of purchases I knew were coming up and taking advantage of the 0% interest. I was planning on paying them off this next paycheck, but now am planning on keeping it longer (still 0%) and funneling more into my IRA right now.

The reason is this:
If you have $X lying around in wait of a dip to buy, the odds are you will never see that dip because the market tends to move higher, so in general you lose more waiting for a dip that may never occur. Then you have to decide how long with no dip are you willing to do? A day? A month? A year

Take this scenario. Let's say you had 10k last two months and were waiting for a dip. You decide that since the Brexit vote is in two months you'll wait.

If the Brits decided to say, you would have lost out on a lot of gains.

The Brits decided to leave - your clairvoyance skills worked, so you buy! Woohoo, you're a smart long term investing dip buyer, but not really. The market (S&P500) is still up over 1% since then. Also, most vanguard funds including VOO+VTI paid a dividend just last week which is another .5% or so. So you still lost out even though the scenario you envisioned happening occurred.

TL;DR - Junk the cash into the market when you have it.

well put.  If you unexpectedly came in to a lump to invest just yesterday, I suppose I could see waiting to see what Brexit does.  But that's a pretty rare situation.

I guess I think in shorter time spans--I come into a lump sum twice a month. I basically live paycheck to paycheck; between rent, debt, and investments I don't spend much money--and the debt can almost always be taken care of at a later date (Yay 0% credit cards and paying way more than the minimum on my wife's student loans!).

It sounds like you have extra cash you should be putting to work for you on a regular schedule! 

Not really. Or I already am. I get my paycheck (and I'm not talking about what goes into either to my IRA or my 401k without me ever seeing it) and the whole paycheck is basically spoken for--rent, wife's student loan, groceries, or credit card debt (which was planned in advance). When the CC is paid off, I'll up my 401k until maxed, when that is maxed, we'll up the wife's IRA or 401k or student loans.

But the thing is that we can pay less into the student loans or the credit card if we think the market will dip. We just never try to sell.

Travis

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Re: Brexit
« Reply #70 on: June 24, 2016, 10:38:36 AM »
My travel reimbursement came back a few days ago. I was going to wait until the 1st when I do most of my stock buying, but I might just bump that up a few days since it was all going to my international allocation anyways.

Kaspian

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Re: Brexit
« Reply #71 on: June 24, 2016, 10:45:02 AM »

Hi everyone. I've been reading Money Mustache forums for a few months now, and they're great! Really changing my life, I hope. This is my first real post, so here goes. After reading these forums for a while I moved a good sum of money from a 401K managed by a previous employer over to a Vanguard IRA. There, I let it sit in a money market account for a month or so, mainly because I'm disorganized. Today, I put it back to work in the market, according to a diverse allocation. I'm feeling lucky to have missed the Brexit dive but also a little worried, because I hope the markets (and the world) can get their acts together. (I have another retirement account with my for-now employer that did take a big hit. Planning just not to look at that one for a while!)
Why exactly are you worried?  Even if the market dips further, it will ultimately recover and presumably from your post you won't need to be pulling the money out for anything in the near future.  Plus, if you are still working and contributing regularly, you'll be buying the same piece of ownership of hundreds of companies at lower and lower prices as the market dips.  Keep calm and stay the course (and welcome to the forums!)

Yep!  "Worried" never won at investing, logic and math usually does.  Keep emotions the heck out of your portfolio--they got no business there.

21runner

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Re: Brexit
« Reply #72 on: June 24, 2016, 10:49:09 AM »
I have around 4x as much money to put into my Roth IRA this month as I have over the last couple of months. Usually I just add the money to my Vanguard account once I'm paid at the end of the month, but I'm debating on putting the money in now instead of when I'm paid next week. Good idea or no? Some of the other posts mention not changing up your usual investing schedule, so maybe I just need to wait another week and invest when I normally do...

Seppia

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Re: Brexit
« Reply #73 on: June 24, 2016, 10:54:45 AM »
Great day today, I have my automatic investments planned for July 1st, but could not resist tapping into the emergency fund and buying some Vanguard developed Europe at the opening, down a neat 9% vs yesterday.

Gave me a very good feeling to buy at 24.9€ per share.

TheAnonOne

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Re: Brexit
« Reply #74 on: June 24, 2016, 11:07:19 AM »
I have around 4x as much money to put into my Roth IRA this month as I have over the last couple of months. Usually I just add the money to my Vanguard account once I'm paid at the end of the month, but I'm debating on putting the money in now instead of when I'm paid next week. Good idea or no? Some of the other posts mention not changing up your usual investing schedule, so maybe I just need to wait another week and invest when I normally do...

It might be down 20% by the first, and you'd be kicking yourself to have bought when its only down 3%. Likewise, it could be up 5% by then, and you would kick yourself for not buying now.

Ultimately, the money you buy now is probably a smaller portion of the total portfolio and it shouldn't matter too much...

Say you have 200k in VTSAX, and it goes down 5% today, and you buy 3k worth. You "Made" 5% on 3k or $150 once the price comes back. I don't market time for this reason....

Now if you were lump summing in your entire 203k above, the effects would be much larger.

runningthroughFIRE

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Re: Brexit
« Reply #75 on: June 24, 2016, 11:14:42 AM »
I think of my emergency fund as a dry powder keg I can use either to avoid incurring debts or to take advantage of dips in the market.  When I believe the dip is significant enough (and actually a dip) to compensate for the added liquidity risk, I carve out a portion of my emergency cash fund to take advantage of it.  While the market recovers, I let my cash flow fill up my emergency fund rather than go to the market.  The total amount I invest is the same, but the result is front loading and buying at a lower overall price.

Hi everyone. I've been reading Money Mustache forums for a few months now, and they're great! Really changing my life, I hope. This is my first real post, so here goes. After reading these forums for a while I moved a good sum of money from a 401K managed by a previous employer over to a Vanguard IRA. There, I let it sit in a money market account for a month or so, mainly because I'm disorganized. Today, I put it back to work in the market, according to a diverse allocation. I'm feeling lucky to have missed the Brexit dive but also a little worried, because I hope the markets (and the world) can get their acts together. (I have another retirement account with my for-now employer that did take a big hit. Planning just not to look at that one for a while!)
Why exactly are you worried?  Even if the market dips further, it will ultimately recover and presumably from your post you won't need to be pulling the money out for anything in the near future.  Plus, if you are still working and contributing regularly, you'll be buying the same piece of ownership of hundreds of companies at lower and lower prices as the market dips.  Keep calm and stay the course (and welcome to the forums!)

The result is definitely frontloading.  Whether it will definitely be buying at a lower price is a bit of a gamble each time, no?
I'll grant you that.  I minimize the gambling risk by only really taking advantage if I feel the dip is large.  For what I am invested in, the Brexit dip thus far hasn't been enough for me to care about.  Since the money actually serves a purpose by sitting in cash, it allows me to be slightly more flexible, which I believe to be advantageous.

I have around 4x as much money to put into my Roth IRA this month as I have over the last couple of months. Usually I just add the money to my Vanguard account once I'm paid at the end of the month, but I'm debating on putting the money in now instead of when I'm paid next week. Good idea or no? Some of the other posts mention not changing up your usual investing schedule, so maybe I just need to wait another week and invest when I normally do...
If you're even slightly unsure of what you want to do, just stick to your regular investment plan.  Changing up your plans on the fly based on market fluctuations is not a smart move unless you've thought through your reactions ahead of time.

21runner

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Re: Brexit
« Reply #76 on: June 24, 2016, 11:21:20 AM »
Thanks, I'll wait as I usually do. I knew in the back of my mind that's what I needed to do, but the temptation was still there. The 2% drop so far isn't that big of a deal yet anyways.

FerrumB5

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Re: Brexit
« Reply #77 on: June 24, 2016, 11:21:49 AM »
If market goes down 10% and you say "yay, sales" and go buy 1% of your portfolio worth.. well, you just lost 9% of your money. I'd rather watch market go steadily up 0.03% /day than be happy about investing a tiny amount of your NW on a very bad day for market

maizeman

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Re: Brexit
« Reply #78 on: June 24, 2016, 11:26:16 AM »
If market goes down 10% and you say "yay, sales" and go buy 1% of your portfolio worth.. well, you just lost 9% of your money. I'd rather watch market go steadily up 0.03% /day than be happy about investing a tiny amount of your NW on a very bad day for market

Well the assumption has to be that 20 years from now, the market is going to be at the same place regardless of whether it drops 10% today or not. If that's the case, you haven't actually lost anything. And you have 0.11% more total shares in 20 years ((1%/90%)-(1%/100%)) than you would have if it hadn't dropped.

FerrumB5

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Re: Brexit
« Reply #79 on: June 24, 2016, 11:34:12 AM »
If market goes down 10% and you say "yay, sales" and go buy 1% of your portfolio worth.. well, you just lost 9% of your money. I'd rather watch market go steadily up 0.03% /day than be happy about investing a tiny amount of your NW on a very bad day for market

Well the assumption has to be that 20 years from now, the market is going to be at the same place regardless of whether it drops 10% today or not. If that's the case, you haven't actually lost anything. And you have 0.11% more total shares in 20 years ((1%/90%)-(1%/100%)) than you would have if it hadn't dropped.

OK, let's do math. You had 100k, market went down 10% - you have 90k NOW. You go buy 1% of initial 100k = 1k. Now you have 91k in market. In 20 years that would be 353140 at 7%. If market didn't go down, in 20 years you would have had (out of that 100k) 386k. Net loss is 33k + 1k that you spent today = 34k.
LOSS

Tyler

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Re: Brexit
« Reply #80 on: June 24, 2016, 11:40:27 AM »
Golden butterfly, save me!

:)

Golden Butterfly or not, days like today are good times to gain some much-needed perspective on your own risk tolerance and the value of diversification.

runningthroughFIRE

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Re: Brexit
« Reply #81 on: June 24, 2016, 11:46:59 AM »
If market goes down 10% and you say "yay, sales" and go buy 1% of your portfolio worth.. well, you just lost 9% of your money. I'd rather watch market go steadily up 0.03% /day than be happy about investing a tiny amount of your NW on a very bad day for market

Well the assumption has to be that 20 years from now, the market is going to be at the same place regardless of whether it drops 10% today or not. If that's the case, you haven't actually lost anything. And you have 0.11% more total shares in 20 years ((1%/90%)-(1%/100%)) than you would have if it hadn't dropped.

OK, let's do math. You had 100k, market went down 10% - you have 90k NOW. You go buy 1% of initial 100k = 1k. Now you have 91k in market. In 20 years that would be 353K at 7%. If market didn't go down, in 20 years you would have had (out of that 100k) 386k. Net loss is 33k + 1k that you spent today = 34k.
LOSS
[I edited your formatting just a bit for consistency]
So you're arguing that adding in 1K after a market crash because stocks are on sale is worse than successfully predicting the market dip and pulling out 10K of your investments, then putting that 10K back in after the dip?

If so, then you're not wrong, but I don't see your point.  Also you're double-counting the 1K you're putting in today, plus adding together money in today's dollars with money in today+20 years' dollars.

maizeman

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Re: Brexit
« Reply #82 on: June 24, 2016, 11:51:09 AM »
If market goes down 10% and you say "yay, sales" and go buy 1% of your portfolio worth.. well, you just lost 9% of your money. I'd rather watch market go steadily up 0.03% /day than be happy about investing a tiny amount of your NW on a very bad day for market

Well the assumption has to be that 20 years from now, the market is going to be at the same place regardless of whether it drops 10% today or not. If that's the case, you haven't actually lost anything. And you have 0.11% more total shares in 20 years ((1%/90%)-(1%/100%)) than you would have if it hadn't dropped.

OK, let's do math. You had 100k, market went down 10% - you have 90k NOW. You go buy 1% of initial 100k = 1k. Now you have 91k in market. In 20 years that would be 353140 at 7%. If market didn't go down, in 20 years you would have had (out of that 100k) 386k. Net loss is 33k + 1k that you spent today = 34k.
LOSS

Yes, if you don't assume that the market is going to be in the same place in 20 years either way you've lost money. That's why I pointed out you had to have that assumption in order to be excited about stocks going on sale.

If shares were selling for $1/share yesterday and $4/share in 20 years, being able to buy shares at $0.90/share today is a great deal.

If shares were going to be worth $4/share in 20 years yesterday and today they're only going to be worth $3.60 in 20 years then being able to buy shares at $0.90/share today is incredibly depressing. 

FerrumB5

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Re: Brexit
« Reply #83 on: June 24, 2016, 11:51:21 AM »
@running - yes, double counted 1k.
My point is that math should work. I would rather have no 10% dips and run around with pants down "buy, buy, buy! so happy market went down 10%" than just sit and watch market do it's steady normal 7% grow at fractions of % up/down here and there. Show me how you will have MORE money in 20 years given 100k invested beginning of day today and assuming 10% market crash EOD and adding 1k today at EOD price.

FerrumB5

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Re: Brexit
« Reply #84 on: June 24, 2016, 11:54:04 AM »
maizeman - do the math. If you assume market will be normal 7% up 1 year from hypothetical today given 10% loss, you are looking at 17% rally.

Jack

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Re: Brexit
« Reply #85 on: June 24, 2016, 11:56:46 AM »
If market goes down 10% and you say "yay, sales" and go buy 1% of your portfolio worth.. well, you just lost 9% of your money. I'd rather watch market go steadily up 0.03% /day than be happy about investing a tiny amount of your NW on a very bad day for market

Well the assumption has to be that 20 years from now, the market is going to be at the same place regardless of whether it drops 10% today or not. If that's the case, you haven't actually lost anything. And you have 0.11% more total shares in 20 years ((1%/90%)-(1%/100%)) than you would have if it hadn't dropped.

OK, let's do math. You had 100k, market went down 10% - you have 90k NOW. You go buy 1% of initial 100k = 1k. Now you have 91k in market. In 20 years that would be 353140 at 7%. If market didn't go down, in 20 years you would have had (out of that 100k) 386k. Net loss is 33k + 1k that you spent today = 34k.
LOSS

That's the wrong way to think about it.

Your choice is not whether the market goes down or not; your choice is whether to invest or not. If you don't buy the $1K today, then only $90K compounds for that 20 years at 7%, resulting (assuming continuous compounding) in a final balance of $364,968 vs. the $369,023.20 (again, assuming continuous compounding -- I have no idea how you came up with that 353140 figure) you'd get if you invested.

Saying "yay, sales" and investing the $1k instead of holding it in cash results in a long-term gain, not a loss, of about $4,000.

I mean, sure, you can whinge about "but think of how great it would have been if it didn't crash at all," but that's utterly pointless because it's not something you get to decide.

FerrumB5

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Re: Brexit
« Reply #86 on: June 24, 2016, 12:00:53 PM »
Jack, correct. That was my main point - I'd really rather sit and watch market go slowly w/o big jumps/downs. But if it's not in our power to prevent a crash, - then yes, investing 1k is better than sitting on your ass. It's not the reason to go yell "yay, sale" because you will have less in 20 years given average mkt performance and today's 10% loss.

 

Livewell

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Re: Brexit
« Reply #87 on: June 24, 2016, 12:10:31 PM »
Who knows the ultimate outcome of Brexit.   on the surface a mixed bag that on the whole is bad economically for the UK. 

Some minor impact to the US is likely, but really what is a 10% decline in a country we do less than 5% trade with?   Investment wise, the silver lining here is the Fed is likely to hold off interest rate hikes for a while longer given the uncertainty and the drag a strong dollar creates. 

It's also that uncertainty, specifically in the EU, that will lead to continued investment in the US over the intermediate term.   We continue to be not as strong as we'd like but more attractive (and safe) than many other places in the world.  Now if we could get some investment in infrastructure going...

The biggest risk here is this adds fuel to the fire of the far right, the Donald included.   I am hopeful we are not so stupid to take that path. 

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Brexit
« Reply #88 on: June 24, 2016, 12:11:40 PM »
Jack, correct. That was my main point - I'd really rather sit and watch market go slowly w/o big jumps/downs. But if it's not in our power to prevent a crash, - then yes, investing 1k is better than sitting on your ass. It's not the reason to go yell "yay, sale" because you will have less in 20 years given average mkt performance and today's 10% loss.



And that's the whole point of being happy when market is down during accumulation phase. You cannot control market swings

Seppia

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Re: Brexit
« Reply #89 on: June 24, 2016, 12:14:30 PM »
Jack, correct. That was my main point - I'd really rather sit and watch market go slowly w/o big jumps/downs. But if it's not in our power to prevent a crash, - then yes, investing 1k is better than sitting on your ass. It's not the reason to go yell "yay, sale" because you will have less in 20 years given average mkt performance and today's 10% loss.



And that's the whole point of being happy when market is down during accumulation phase. You cannot control market swings

Also, mathematically, if you just DCA (or monthly lump sum invest as some would say), you're much better off with volatility VS steady growth, assuming same cagr

Livewell

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Re: Brexit
« Reply #90 on: June 24, 2016, 12:16:35 PM »
I will add that if you have funds you were thinking about investing, hold off for the day and don't watch the market, and think about buying some time next week.   I like doing multiple days during times like this, something like 1/3 Monday, Tuesday and Wednesday.   While I don't advocate holding long term trying to time the market, I have let my cash holding run up a bit over the past couple of years and purchased during correction events - August '15 and February '16 for me.    I believe this is a prudent way to get a bit extra out of a flat market, and I'm comfortable with the risk that I might miss out a bit.   (note 95% of our net worth is invested already)


runningthroughFIRE

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Re: Brexit
« Reply #91 on: June 24, 2016, 12:17:02 PM »
@running - yes, double counted 1k.
My point is that math should work. I would rather have no 10% dips and run around with pants down "buy, buy, buy! so happy market went down 10%" than just sit and watch market do it's steady normal 7% grow at fractions of % up/down here and there. Show me how you will have MORE money in 20 years given 100k invested beginning of day today and assuming 10% market crash EOD and adding 1k today at EOD price.
I think you're framing this differently than most other people here.  The way you've set up your math problem, you're investing 100K vs investing 91K.  Realistically, you already have 100K invested, and you're adding in more later.  You've removed the price of the individual stocks (or ETF/funds) that were the root cause of the market dropping from your equation, which is distorting things.

Think of it this way, with two sequences of events:
Have 100K invested --> Markets fall 10% to 90K --> Markets recover back to 100K --> Invest 1K additionally (on your normal schedule) bringing your total investment to 101K --> Have ~390.8K after 20 years

Have 100K invested -->  Markets fall 10% to 90K --> Think stocks are on sale and invest 1K early to take advantage (have 91K) -->  Markets recover at the same ~11.1% as before, which means you now have ~101.1K invested --> Have ~391K after 20 years

You have a slight gain from making your investment ahead of your normal schedule when prices are lower.  The arguement against this is that you don't know for sure that everything will go right back up after your make your investment, but might instead dip further down.
(I assumed only monthly compounding)

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Re: Brexit
« Reply #92 on: June 24, 2016, 12:28:34 PM »
I'm a UK investor and I have a 1 fund portfolio in Vanguard All World.  Because it's unhedged it's up almost 4% today and my networth in pounds has had  a very large jump. 

Mustachian person problem -  I was hoping for a crash because I was naughtily market timing with a chunk of money.

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Re: Brexit
« Reply #93 on: June 24, 2016, 12:52:59 PM »
Who knows the ultimate outcome of Brexit.   on the surface a mixed bag that on the whole is bad economically for the UK. 

Some minor impact to the US is likely, but really what is a 10% decline in a country we do less than 5% trade with?   Investment wise, the silver lining here is the Fed is likely to hold off interest rate hikes for a while longer given the uncertainty and the drag a strong dollar creates. 

It's also that uncertainty, specifically in the EU, that will lead to continued investment in the US over the intermediate term.   We continue to be not as strong as we'd like but more attractive (and safe) than many other places in the world.  Now if we could get some investment in infrastructure going...

The biggest risk here is this adds fuel to the fire of the far right, the Donald included.   I am hopeful we are not so stupid to take that path.

I don't think the UK will end up that poorly after everything shakes out.  They're a strong economy and while they shot themselves in the foot with this vote, they're recover.  The part that has me worried is if this leads to a mass exodus of countries from the EU and essentially destroys the current Eurozone.  France is ripe with anti-immigrant furor.  So is Germany.  If either of these countries decide to take their ball and go home, the whole EU collapses.  Then what?

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Re: Brexit
« Reply #94 on: June 24, 2016, 01:15:08 PM »
Who knows the ultimate outcome of Brexit.   on the surface a mixed bag that on the whole is bad economically for the UK. 

Some minor impact to the US is likely, but really what is a 10% decline in a country we do less than 5% trade with?   Investment wise, the silver lining here is the Fed is likely to hold off interest rate hikes for a while longer given the uncertainty and the drag a strong dollar creates. 

It's also that uncertainty, specifically in the EU, that will lead to continued investment in the US over the intermediate term.   We continue to be not as strong as we'd like but more attractive (and safe) than many other places in the world.  Now if we could get some investment in infrastructure going...

The biggest risk here is this adds fuel to the fire of the far right, the Donald included.   I am hopeful we are not so stupid to take that path.

I don't think the UK will end up that poorly after everything shakes out.  They're a strong economy and while they shot themselves in the foot with this vote, they're recover.  The part that has me worried is if this leads to a mass exodus of countries from the EU and essentially destroys the current Eurozone.  France is ripe with anti-immigrant furor.  So is Germany.  If either of these countries decide to take their ball and go home, the whole EU collapses.  Then what?

Then they trade with each other in basically the same way but control their own currencies.... I feel like not much would change either way. (Other than everyone freaking out in the short term)

maizeman

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Re: Brexit
« Reply #95 on: June 24, 2016, 01:19:37 PM »
maizeman - do the math. If you assume market will be normal 7% up 1 year from hypothetical today given 10% loss, you are looking at 17% rally.

To be clear I said 20 years, not one year. But yes, it is quite clear you disagree with the assumption --  which I clearly stated in my original post on the subject to be an assumption not a fact -- that whatever happens today doesn't change what the stock market will be worth 20 years from now.

capitalninja

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Re: Brexit
« Reply #96 on: June 24, 2016, 01:30:09 PM »
*News Flash*

Starting Today! International Developed Nation ETFs (VSS, VEA, FNDF, etc) on sale. Everything Must Go! Sale probably to extend until the masses calm down!!!

#crackingmyselfup  :-)

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Eric

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Re: Brexit
« Reply #98 on: June 24, 2016, 02:17:31 PM »
Who knows the ultimate outcome of Brexit.   on the surface a mixed bag that on the whole is bad economically for the UK. 

Some minor impact to the US is likely, but really what is a 10% decline in a country we do less than 5% trade with?   Investment wise, the silver lining here is the Fed is likely to hold off interest rate hikes for a while longer given the uncertainty and the drag a strong dollar creates. 

It's also that uncertainty, specifically in the EU, that will lead to continued investment in the US over the intermediate term.   We continue to be not as strong as we'd like but more attractive (and safe) than many other places in the world.  Now if we could get some investment in infrastructure going...

The biggest risk here is this adds fuel to the fire of the far right, the Donald included.   I am hopeful we are not so stupid to take that path.

I don't think the UK will end up that poorly after everything shakes out.  They're a strong economy and while they shot themselves in the foot with this vote, they're recover.  The part that has me worried is if this leads to a mass exodus of countries from the EU and essentially destroys the current Eurozone.  France is ripe with anti-immigrant furor.  So is Germany.  If either of these countries decide to take their ball and go home, the whole EU collapses.  Then what?

Then they trade with each other in basically the same way but control their own currencies.... I feel like not much would change either way. (Other than everyone freaking out in the short term)

That's a very optimistic view.  Have you considered the reverse?  If the Eurozone collapses and take the Euro with it, then all countries would presumably revert back to their previous individual currencies.  Except that Italy, Greece, Portugal, and possibly Spain would find themselves with currency worth somewhere between 50 and 100% less than it was previously.  This would cause all of them to default on their debt payments almost immediately, and could easily cause the economies of these countries to collapse, plunging the world into a global recession.  Considering that world banks are already at basically 0% interest rates, they would be fighting this recession with one hand tied behind their back.  This would result in a prolonged recession and a rise of facist powers in many areas leading to WW3.

Now I'm not saying all that is going to happen, but there's basically little chance that things would just go on as normal if the Eurozone collapsed.  It would cause a *major* shock to the system and the poorer countries with already high debt load would almost certainly default with a much weakened currency.

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Re: Brexit
« Reply #99 on: June 24, 2016, 05:13:24 PM »
In preparation for Brexit I picked up TVIX,   sold GDX (gold) to buy more USLV (silver).    I should have kept the GDX.
TVIX dove yesterday but recovered today and mine sold at par because I ran the trailing limit to tight.   USLV also sold on a trail ing limit but with a good return.    I also stopped out on RING with a profit.

I used the proceeds to double my positons in NHF and PEY.    Looking at sale priced ETFs I picked up FAS and EURL,  but only a small stake  since who knows how much more the market will drop.

In a very speculative move I rode BRZU to a nice short term profit early this month but missed the second run from 70 to over 90.  It's dropping back (around 80) I may buy back in. 

Since I'm mostly limited to ETFs or mutual funds  I try to pick ones that are increasing in the long term and have 2% to 10% dividends.   The goal is to achieve 7% - 10% annual returns

50% of my 401k is in mutual funds  (small cap, SP500 index, REIT, and aggressive bond).  25% is in cash and 25% are in the ETFs, some of which are described above.