Author Topic: Buying back in to the market  (Read 3877 times)

frugaldrummer

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Buying back in to the market
« on: February 27, 2020, 09:58:00 AM »
So I am just a few years from retirement and knew a month ago that this pandemic would not be contained, so I put half my 401k into cash at the top of the market. (With a background in healthcare and molecular biology I felt for once that I had an understanding most investors did not ).

My plan is to buy back in on the crash so that my account will recover quicker and perhaps end up with a nice profit in the long run. But I am NOT a market timer - in fact, Iíve never really touched my 401k before. (Actually itís all in an IRA now due to recent rollover).

I know you canít really time the bottom of the market any more than you can time the top. I donít think the markets have hit the bottom though even given the big drops of the last few days. I think the market was pretty frothy in the first place, and figure average Joe investors will panic sell once quarantines start in the US.

My question for the more experienced investors here is, what strategy would you use for buying back in?  Dollar cost average back into VTSAX? Maybe additionally pick  a few individual stocks that become undervalued ? Wait for the market to drop by a certain percentage?  Just put it all directly back into a balanced mutually fund?  Iíd be interested in hearing peopleís strategies.

vand

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Re: Buying back in to the market
« Reply #1 on: February 27, 2020, 10:04:50 AM »
You obviously didnít need a second opinion on getting out of the market.. seems strange that you would want one regarding getting back in. Thatís not generally how the pros do it.

waltworks

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Re: Buying back in to the market
« Reply #2 on: February 27, 2020, 10:06:04 AM »
I'd just buy back in now.

My wife is a PhD biochemist and I'm a statistician and even I know better than to market time based on stuff I think I'm smart about.

That said, you already got a 10% discount, good job. Put the money back in and stop reading the news.

-W

Garrett B.

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Re: Buying back in to the market
« Reply #3 on: February 27, 2020, 10:11:24 AM »
I plan on buying in increments because I have no idea when this will bottom out. 

frugaldrummer

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Re: Buying back in to the market
« Reply #4 on: February 27, 2020, 10:14:18 AM »
Oh and regards to coronavirus itself? The actual fatality rate per infected person (not per case identified right now) is likely 0.3 - 0.6% according to one study. The bigger impact will be from quarantines, school closures, etc. It might actually make more sense at this point to just go about our business and accept that it is here. However, given our President's admitted germophobia, and his self-congratulation on the (supposed) effects of quarantines so far,  as well as the hope (not based on much fact) that if we can slow it down it might die out in the summer, I think he will go all in on quarantines, school closures etc.  This will cause considerable disruption to many businesses and stress families with lost income.  (In my own family, in case of a local outbreak my sister expects to lose hours at her second job at Sees which is in a mall - those will probably close if there is a quarantine, business may go way down even if they don't close. The school she works at could close, although she would still get paid for that, but an increase in hours that was promised to her probably would not go through. My own business will probably take a big hit although I would try to do appointments by telemedicine. My niece who is an ECMO nurse will likely be working overtime though.

Eventually we will be through this (although if it does die down in the summer it will come back in the winter) and I expect things to resume rather quickly. But middle class families will have seen their buying power affected by lost wages etc.

dougules

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Re: Buying back in to the market
« Reply #5 on: February 27, 2020, 10:14:26 AM »
I'd take the lucky break and buy back all in now.  Even if you knew what's going to happen with the virus, who knows how the market is going to react. 

steevven1

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Re: Buying back in to the market
« Reply #6 on: February 27, 2020, 10:18:56 AM »
+1 for "now" if you were happy with your asset allocation before. You made a lucky bet. Get back to the buy-and-hold strategy with this nice extra boost you've gained.

dogboyslim

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Re: Buying back in to the market
« Reply #7 on: February 27, 2020, 10:19:05 AM »
Today we got our bonus.  I put it in the market.  It may still go down from here, but long term the economy still looks strong to me so I'm still long the US economy.

wienerdog

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Re: Buying back in to the market
« Reply #8 on: February 27, 2020, 10:22:21 AM »

frugaldrummer

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Re: Buying back in to the market
« Reply #9 on: February 27, 2020, 10:41:44 AM »
Calling bullshit on the "you're more likely to die of influenza" trope. While technically true AT THIS MOMENT, going forward you are 4-8 times more likely to die of this coronavirus if it does spread (which I see no sign of that stopping).  The good news is, it's not a Spanish Flu 3-6% worldwide mortality order of magnitude, likely 1/10th of that. Again, I think efforts at containment are somewhat futile and likely to cause more problems than the virus itself.

Meanwhile Goldman Sachs has revised it's forecast to zero growth for US businesses in 2020.

https://www.nbcnews.com/business/corporations/u-s-companies-will-see-zero-growth-year-because-coronavirus-n1144081


waltworks

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Re: Buying back in to the market
« Reply #10 on: February 27, 2020, 10:45:42 AM »
Go outside away from your computer and get some exercise (that's what I'm going to do now). Maybe stop posting on forums for a few days just for a mental reset.

Then put your money back to work.

-W

utaca

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Re: Buying back in to the market
« Reply #11 on: February 27, 2020, 11:09:08 AM »
Put your money back in the market. And wash your hands often!

American GenX

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Re: Buying back in to the market
« Reply #12 on: February 27, 2020, 11:13:29 AM »

I would advise against market timing.  Yes, that's what you are doing.

I just heard one of the most nationally known experts in healthcare state that COVID-19 has a fatality rate of 2 to 3%.  Interestingly, Trump responded that the seasonal flu is higher than that.   LOL   COVID-19 could be 20X or more fatal than the seasonal flu.

frugaldrummer

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Re: Buying back in to the market
« Reply #13 on: February 27, 2020, 11:18:51 AM »
That's a different fatality rate. That's the rate among people who have been identified - which in most cases are people who are pretty sick because there are not enough test kits to test every person with a cold or even every contact in most places. But since most people who get the virus have mild or no symptoms, the fatality rate is most likely an order of magnitude less. The best estimate currently is that 90% of cases go undetected.

Bernard

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Re: Buying back in to the market
« Reply #14 on: February 27, 2020, 11:22:37 AM »
Pandemic?

So far about 50-some people in a country of 310,000,000 have been infected, with the exception of 1 all of them when traveling abroad. How many have died? Can't find any data about it online, but it may be 0 to 2 people. It's a non-issue, but it's a great opportunity to buy stocks at a discount.

frugaldrummer

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Re: Buying back in to the market
« Reply #15 on: February 27, 2020, 11:23:48 AM »
If I had a longer timeline I would never have bothered to market time. But as stated in my first post, I am only a few years from retirement and didn't want to have another very long wait for my investments to recover like occurred in 2009. Plus I felt this was one time I could actually make some money. So I'm not looking for advice on the wisdom of having done it, just strategies on buying back in by people who are experienced at doing this.

If you dollar cost average it back in, would you do:
10% a week?
20% a month?
wait for a certain percentage drop? Like 1/4 now at 10% drop, 1/4 at 20% drop, the rest at 30%?

Btw, no outside cash to throw into this market so everything will come from the money I put into cash within the IRA.  And I will keep some in cash as I may well need to draw on it for living expenses in the near future if my business income tanks for a while.


frugalnacho

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Re: Buying back in to the market
« Reply #16 on: February 27, 2020, 11:27:14 AM »
I always love the threads where someone claims emphatically that they are NOT a market timer, then describe how they are blatantly timing the market. 

To answer your question though, I would put all back in ASAP.  That's where I have all my money.

MrDelane

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Re: Buying back in to the market
« Reply #17 on: February 27, 2020, 11:38:19 AM »
I put half my 401k into cash at the top of the market.

My plan is to buy back in on the crash...

But I am NOT a market timer...

I'm not saying what you did (or are doing) is good or bad... but it is the definition of market timing:

"Market timing is an investment or trading strategy in which a market participant attempts to beat the stock market by predicting its movements and buying and selling accordingly."

And honestly I'm not sure what is more dangerous - actively timing the market or doing so while telling yourself you are not.
Personally, I don't have a big problem with people attempting to time the market (if that's what you want to do) - but I do feel all investment decisions should be made with eyes wide open and a clear understanding and ownership of the reasons, motivations and strategies behind them.  Doing so would have alleviated exactly the situation you find yourself in now - had you been honest with yourself on what you were doing then, before moving out of the market, you would have asked yourself the next obvious question, "at what point will I reenter?"

Given you don't have a clear metric to go by, my two cents would be to count yourself lucky and get back in now.
Then again, you should take my advice (and everyone else's) with a large grain of salt - keeping in mind that most of the advice is coming from people who did not feel the need to exit the market to begin with.

« Last Edit: February 27, 2020, 11:39:55 AM by MrDelane »

EvenSteven

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Re: Buying back in to the market
« Reply #18 on: February 27, 2020, 11:52:54 AM »
+1 to all who say now is the right time to get back into the market.

I don't think you should try and time the market based on corona virus fears especially because you have no background in medicine or molecular biology.

frugaldrummer

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Re: Buying back in to the market
« Reply #19 on: February 27, 2020, 12:12:42 PM »
I know I AM timing the market right now - just meant that I don't ever do that, it's not my general philosophy, but felt this was a special occasion. And again, if I had a longer timeline I wouldn't have even thought about it. My goal right now is just to make a decent amount of money on it if I can; since i sold at the top the worst that can happen is tht I buy back in late and am right back where I started, as the recovery is not likely to be abrupt unless this suddenly dies out in the next minute which isn't going to happen.

frugaldrummer

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Re: Buying back in to the market
« Reply #20 on: February 27, 2020, 12:13:54 PM »
Quote
I don't think you should try and time the market based on corona virus fears especially because you have no background in medicine or molecular biology.

But I very clearly stated I have both.

American GenX

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Re: Buying back in to the market
« Reply #21 on: February 27, 2020, 12:19:04 PM »
Pandemic?

So far about 50-some people in a country of 310,000,000 have been infected, with the exception of 1 all of them when traveling abroad. How many have died? Can't find any data about it online, but it may be 0 to 2 people. It's a non-issue, but it's a great opportunity to buy stocks at a discount.

It's not the topic of this thread, but I recommend reading the thread below.  You can't go by the current figures in places it's just breaking out.  It takes a while for the deaths to catch up with those getting infected.  I linked to a study involving tens of thousands of cases.

https://forum.mrmoneymustache.com/ask-a-mustachian/coronavirus-preparedness/msg2569098/#msg2569098

harvestbook

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Re: Buying back in to the market
« Reply #22 on: February 27, 2020, 12:20:13 PM »
I'd try to figure out what my real AA and risk appetite is, because you clearly weren't there before, and then buy in at that AA.

Pandemics are not black swans--they are part of the risk from which stocks produce theoretical returns, and they are fairly regular events. There will probably be many other various events in what is hopefully a long retirement, and who wants to spend golden years dancing in and out of an irrational market?

EvenSteven

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Re: Buying back in to the market
« Reply #23 on: February 27, 2020, 12:24:57 PM »
Quote
I don't think you should try and time the market based on corona virus fears especially because you have no background in medicine or molecular biology.

But I very clearly stated I have both.

That was meant to be a joke, sorry about the extra dry delivery. It was a comment on me reading that you have a background in medicine and molecular biology approximately eleventy billion times in all of the 18 different threads about covid19 that you have started.

frugaldrummer

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Re: Buying back in to the market
« Reply #24 on: February 27, 2020, 12:41:38 PM »
Look I'm not debating whether I should have done this - I did, I took a calculated risk that I thought could be profitable with very little downside for me at this moment. I didn't recommend anyone else do so and definitely wouldn't recommend it for anyone younger with a longer timeline.  I'm just looking for more useful input than "OMG, put it all back in, there's no pandemic" ok?

I could put it all in now for a 10% win, but since I expect a bigger drop once we have quarantines and people aren't so rosy about it, I'm looking for different strategies with that in mind.

And just a word of caution - yesterday at Trump's press conference, Dr. Fauci contradicted Trump's rosy predictions about a vaccine by pointing out, quite correctly, that even if the candidate they have now works out, it's an 18 month process.  Today, in response, DR. Fauci has been muzzled and all pronouncements are to come from Pence. This type of action means you really cannot trust what they will be telling you about this and I recommend, if you are interested, looking directly at the published research rather than taking pronouncements from this administration as fact. Or perhaps follow the WHO instead.

 https://www.nytimes.com/2020/02/27/us/politics/us-coronavirus-pence.html?fbclid=IwAR3Vcr8068xYTSXnmt8UlJqvbJ99N3EwQR05yXYoT1qnbaZYMUOKpQuph0I



achvfi

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Re: Buying back in to the market
« Reply #25 on: February 27, 2020, 12:43:46 PM »
I just made a random call.

I had some cash accumulating to be deployed into investments. Couple of weeks ago just made random call to deploy half if market dropped 5% and remaining in a week after. So when it dropped 6%, invested half and set date on calender for deploying next half.

No big reasoning for this, just random.

MrDelane

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Re: Buying back in to the market
« Reply #26 on: February 27, 2020, 12:54:21 PM »
I'm just looking for more useful input than "OMG, put it all back in, there's no pandemic" ok?

To be fair, my advice (and a few others) was to put it back now and consider your 10% bump lucky considering you exited without any strategy of when to re-enter.
This was said regardless of any potential or current pandemic.

Quote
I could put it all in now for a 10% win, but since I expect a bigger drop once we have quarantines and people aren't so rosy about it, I'm looking for different strategies with that in mind.
If you expect a bigger drop then it seems you really want us to tell you to keep it in cash for now.
In which case - keep it in cash until such time you feel the market has reached it's bottom, then buy back in.
If you want to split the difference then put some back in now and the rest in later.

Regardless of what you do - and regardless of how it ends up (you may very well make a killing here), I think the lesson to take away is not to pull out of the market without a plan of when you will re-enter (and vice-versa). Buying or selling is only half the equation, and the worse time to try to figure out the second half is after you've already pulled the trigger on the first, because now you feel the pressure and emotion that goes along with it.


Michael in ABQ

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Re: Buying back in to the market
« Reply #27 on: February 27, 2020, 01:01:40 PM »
Use half to buy back into the market now, lock in your 10% discount. Then decide to invest the other half at some pre-determined point. Say if it drops another 10%, or if it drops something less and returns to the current level.

EvenSteven

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Re: Buying back in to the market
« Reply #28 on: February 27, 2020, 01:28:34 PM »
Look I'm not debating whether I should have done this - I did, I took a calculated risk that I thought could be profitable with very little downside for me at this moment. I didn't recommend anyone else do so and definitely wouldn't recommend it for anyone younger with a longer timeline.  I'm just looking for more useful input than "OMG, put it all back in, there's no pandemic" ok?

I could put it all in now for a 10% win, but since I expect a bigger drop once we have quarantines and people aren't so rosy about it, I'm looking for different strategies with that in mind.

And just a word of caution - yesterday at Trump's press conference, Dr. Fauci contradicted Trump's rosy predictions about a vaccine by pointing out, quite correctly, that even if the candidate they have now works out, it's an 18 month process.  Today, in response, DR. Fauci has been muzzled and all pronouncements are to come from Pence. This type of action means you really cannot trust what they will be telling you about this and I recommend, if you are interested, looking directly at the published research rather than taking pronouncements from this administration as fact. Or perhaps follow the WHO instead.

 https://www.nytimes.com/2020/02/27/us/politics/us-coronavirus-pence.html?fbclid=IwAR3Vcr8068xYTSXnmt8UlJqvbJ99N3EwQR05yXYoT1qnbaZYMUOKpQuph0I

OK, you have rejected any advice to buy back in now. I hereby revise my recommendation such that you buy back in at the bottom.

waltworks

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Re: Buying back in to the market
« Reply #29 on: February 27, 2020, 01:29:52 PM »
Another vote for buying at the bottom!

-W

Garrett B.

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Re: Buying back in to the market
« Reply #30 on: February 27, 2020, 01:35:31 PM »
Another vote for buying at the bottom!

-W
How do you know this is the bottom? 

marty998

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Re: Buying back in to the market
« Reply #31 on: February 27, 2020, 01:37:50 PM »
Seriously doubt any of you guys advising to go "all in" right now would do so if you were in that position.

You might be inured to the daily ups and downs by virtue of already having a fully invested portfolio. OP isn't in that position right now.

How would you go buying $1m of VTSAX in the morning and watching $30,000 evaporate by mid afternoon? How would you tell your wives that at the dinner table?

@frugaldrummer - do what makes you sleep at night. I get it, I understand this is not an easy emotional call. Everyone says ignore emotion and follow the maths, but not everyone can act like a robot on every decision.

Perhaps a strategy to buy back in 10% per month will do. You may come out ahead, you may not. Who cares at the end of the day, you won't be waking up in cold sweats.

Buffaloski Boris

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Re: Buying back in to the market
« Reply #32 on: February 27, 2020, 01:47:33 PM »
So I am just a few years from retirement and knew a month ago that this pandemic would not be contained, so I put half my 401k into cash at the top of the market. (With a background in healthcare and molecular biology I felt for once that I had an understanding most investors did not ).

My plan is to buy back in on the crash so that my account will recover quicker and perhaps end up with a nice profit in the long run. But I am NOT a market timer - in fact, Iíve never really touched my 401k before. (Actually itís all in an IRA now due to recent rollover).

I know you canít really time the bottom of the market any more than you can time the top. I donít think the markets have hit the bottom though even given the big drops of the last few days. I think the market was pretty frothy in the first place, and figure average Joe investors will panic sell once quarantines start in the US.

My question for the more experienced investors here is, what strategy would you use for buying back in?  Dollar cost average back into VTSAX? Maybe additionally pick  a few individual stocks that become undervalued ? Wait for the market to drop by a certain percentage?  Just put it all directly back into a balanced mutually fund?  Iíd be interested in hearing peopleís strategies.

Congratulations on your skill and/or luck. I donít buy the argument that youíre not engaging in market timing. But I also donít have the aversion to it that many posters do. Arguably I engage in it myself when I (mostly) refuse to invest in what I think has been an overpriced US stock market. Oh well. I guess I wonít be getting my Investment Cadet merit badge.

I donít have much to offer in suggesting a re-entry strategy. What youíre trying to do is predict human behavior. Good luck with that. I would use some sort of strategy that youíre comfortable with, such as Dollar cost averaging or using a set metric. E.g invest X% when the S+P hits Y, invest Q% when it hits Z, etc. The research Iíve seen seems to indicate that youíre better off throwing it all in at once. I donít know though whether that holds true in times when the market is having a conniption, like this week.

Psychstache

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Re: Buying back in to the market
« Reply #33 on: February 27, 2020, 01:54:38 PM »
Another vote for buying at the bottom!

-W

Morgan Freeman Narrating: But he didn't know exactly where the bottom was, so he continued to wait. And that is how the market timer was born.

dogboyslim

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Re: Buying back in to the market
« Reply #34 on: February 27, 2020, 01:58:17 PM »
Another vote for buying at the bottom!

-W
How do you know this is the bottom?

If I'm reading correctly, they said don't time, have a strategy or invest now.  Paraphrase of OP is, It might still go down from here and I'd lose.  They said Okay fine, then buy at the bottom.  Intentionally avoiding the obvious question you made, in essence saying they are done giving advice about not timing to OP.  That's just my read though, so I may be misstating someone's position.

frugalnacho

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Re: Buying back in to the market
« Reply #35 on: February 27, 2020, 02:02:43 PM »
I know I AM timing the market right now - just meant that I don't ever do that, it's not my general philosophy, but felt this was a special occasion. And again, if I had a longer timeline I wouldn't have even thought about it. My goal right now is just to make a decent amount of money on it if I can; since i sold at the top the worst that can happen is tht I buy back in late and am right back where I started, as the recovery is not likely to be abrupt unless this suddenly dies out in the next minute which isn't going to happen.

No, the worst case is that you didn't sell at the top because we weren't really at the top, and you sit on the sideline waiting for the "real" correction to happen while the market marches higher and higher to the point you end up buying in at an even higher price than you sold.  You don't even seem to be considering that as a possibility, but I've seen that exact scenario play out dozens of time just on this forum.  Maybe you're right, or maybe you're wrong, I don't know, but neither do you.  If you are right it's likely pure luck.

Seriously doubt any of you guys advising to go "all in" right now would do so if you were in that position.

You might be inured to the daily ups and downs by virtue of already having a fully invested portfolio. OP isn't in that position right now.

How would you go buying $1m of VTSAX in the morning and watching $30,000 evaporate by mid afternoon? How would you tell your wives that at the dinner table?

@frugaldrummer - do what makes you sleep at night. I get it, I understand this is not an easy emotional call. Everyone says ignore emotion and follow the maths, but not everyone can act like a robot on every decision.

Perhaps a strategy to buy back in 10% per month will do. You may come out ahead, you may not. Who cares at the end of the day, you won't be waking up in cold sweats.

Dude I am literally "all in" right now.  I have the option to sell any/all of my stocks and I haven't done so because I would rather own those shares than have the cash.   Not selling is the same decision to buy.  If I had $600k cash right now and no investments, would I invest it all?  If not, then why would I continue to hold $600k in investments when I have the option to sell and convert it to cash?  I hold my investments precisely because I prefer that to cash.

Jack0Life

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Re: Buying back in to the market
« Reply #36 on: February 27, 2020, 02:09:59 PM »
I will admit I try to time the market from time to time.
Everytime I see a big drop in the market I would put some money into my Vanguard Index fund before the market closes.
I was stupid when I transfer most of my Index funds out after Trump won. I held it out for a year when the market went up like 20%.
Sometimes your stubbornness get it right.
Last Wed when the market had its last gain, I move around $200k from VTSAX to VBTLX. After 6 straight days of losses I think I saved myself like $25k.
As of 3:50pm today I did buy in $10k of fresh money on VTSAX. It can't nosedive forever right.
NO I'm not an advocate of market timing. Sometimes my stupidness do get it right .

PDXTabs

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Re: Buying back in to the market
« Reply #37 on: February 27, 2020, 02:12:37 PM »
It's a non-issue, but it's a great opportunity to buy stocks at a discount.

This is the investor forum. Businesses are starting to say out loud in public that they are having trouble with their supply chains, and that it will have a material impact on their revenue and profits. I'm not sure I would call that "a non-issue."

PDXTabs

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Re: Buying back in to the market
« Reply #38 on: February 27, 2020, 02:15:37 PM »
frugaldrummer,

I'm all in and I'm staying all in, I won't try to time the market. In part because I tried in 2007 when I saw the housing mess coming, but the market just kept going up. What's that old adage? The market can remain irrational longer than you can remain solvent?

Anyway, another adage is not to try to catch a falling knife. If I managed to get out at the top of the market and the market is falling 2~4% per day I'd probably wait a little bit to see how things go. Maybe think about dollar cost averaging back in.

effigy98

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Re: Buying back in to the market
« Reply #39 on: February 27, 2020, 02:19:25 PM »
I'm of the opinion that fundamentals SHOULD matter. They don't right now and company earnings, debt, etc did not matter as the fed kept the markets nice and plump. My plan is when fundamentals start matching the stock price to start buying again no matter how gloomy the news is. These are still companies making profits and having a part of those companies is nice. This will pass eventually.

Jack0Life

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Re: Buying back in to the market
« Reply #40 on: February 27, 2020, 02:20:37 PM »
WOW. Just 2 weeks ago the Dow was at it's highest 29551. Now it's 25766. A drop of 12.8% in just 2 weeks.
If you're not afraid it's a big discount for stocks right now.

MrDelane

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Re: Buying back in to the market
« Reply #41 on: February 27, 2020, 02:23:36 PM »
I'm of the opinion that fundamentals SHOULD matter. They don't right now and company earnings, debt, etc did not matter as the fed kept the markets nice and plump. My plan is when fundamentals start matching the stock price to start buying again no matter how gloomy the news is. These are still companies making profits and having a part of those companies is nice. This will pass eventually.

I'm sincerely curious - what specific metric thresholds are you looking for before you buy back in?

waltworks

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Re: Buying back in to the market
« Reply #42 on: February 27, 2020, 02:34:37 PM »
I'm of the opinion that fundamentals SHOULD matter. They don't right now and company earnings, debt, etc did not matter as the fed kept the markets nice and plump. My plan is when fundamentals start matching the stock price to start buying again no matter how gloomy the news is. These are still companies making profits and having a part of those companies is nice. This will pass eventually.

If you're waiting for CAPE 16 or something, you might be waiting until you die, dude.

-W

frugaldrummer

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Re: Buying back in to the market
« Reply #43 on: February 27, 2020, 02:52:19 PM »
Just to be clear, I left half my money invested, as a hedge against the market irrationally continuing to go up after I went to cash. I was prepared to give up 50% of any potential upside over the next couple of months just for peace of mind.

I won't wait much longer before starting to put money back in, but won't put all of it right away, as I believe there are too many people out there blindly believing Rush Limbaugh that this is just a bad cold, who will start to freak out when their kids' schools close and quarantines start.

Due to some extenuating family circumstances I needed to draw out a small amount earlier this year and will need a little more. I plan to go to part-time work in probably 3-4 years but it's possible that factors outside my control could mean I retire completely at that point. Since I have longevity in my genes I am trying not to tap my Social Security for 6 more years, will have a pension soon that covers some but not all my retirement expenses, and am hoping that if I can make a chunk on this opportunity that I can pay off my mortgage before retirement. (Or have enough extra in my retirement account to cover my mortgage payments, I know that's a whole other conversation).

I did look at a couple of individual stocks I once wanted to own, to see if they were really on sale yet, but even with this drop, their valuations are ridiculous.


HBFIRE

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Re: Buying back in to the market
« Reply #44 on: February 27, 2020, 03:18:32 PM »
Oh and regards to coronavirus itself? The actual fatality rate per infected person (not per case identified right now) is likely 0.3 - 0.6% according to one study.

Link or citation?  I don't doubt it, I'd just like to read that study.

Buffaloski Boris

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Re: Buying back in to the market
« Reply #45 on: February 27, 2020, 03:29:24 PM »
Just to be clear, I left half my money invested, as a hedge against the market irrationally continuing to go up after I went to cash. I was prepared to give up 50% of any potential upside over the next couple of months just for peace of mind.

I won't wait much longer before starting to put money back in, but won't put all of it right away, as I believe there are too many people out there blindly believing Rush Limbaugh that this is just a bad cold, who will start to freak out when their kids' schools close and quarantines start.

I like the way you think. Yeah. Weíre not at full freak-out yet.

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Due to some extenuating family circumstances I needed to draw out a small amount earlier this year and will need a little more. I plan to go to part-time work in probably 3-4 years but it's possible that factors outside my control could mean I retire completely at that point. Since I have longevity in my genes I am trying not to tap my Social Security for 6 more years, will have a pension soon that covers some but not all my retirement expenses, and am hoping that if I can make a chunk on this opportunity that I can pay off my mortgage before retirement. (Or have enough extra in my retirement account to cover my mortgage payments, I know that's a whole other conversation).

Sounds like a reasonable plan. Letís hope it works out.

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I did look at a couple of individual stocks I once wanted to own, to see if they were really on sale yet, but even with this drop, their valuations are ridiculous.

Individual stocks? Market timing?!!!! Oh, the shame of it all.😆😆

The valuations on US stocks in my view have been out of line.  Take a look at historic CAPE and PE ratios. Theyíve got a ways to go before theyíre back to being within typical norms. This time is always different. Until it isnít.

frugaldrummer

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Re: Buying back in to the market
« Reply #46 on: February 27, 2020, 05:05:37 PM »
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Individual stocks? Market timing?!!!! Oh, the shame of it all

Lol - yes - which is exactly why I didn't buy AAPL at $85 2 years ago. And regretted it lol.  I've never actually bought individual stocks.

I will likely just put money into VTSAX and then funnel it gradually back into a balanced mutual fund.

frugaldrummer

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Re: Buying back in to the market
« Reply #47 on: February 27, 2020, 05:21:00 PM »
HB Fire:  Here's that link you wanted: 
https://www.mdpi.com/2077-0383/9/2/419

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Quote from: frugaldrummer on Today at 10:14:18 AM

    Oh and regards to coronavirus itself? The actual fatality rate per infected person (not per case identified right now) is likely 0.3 - 0.6% according to one study.


Link or citation?  I don't doubt it, I'd just like to read that study.

marty998

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Re: Buying back in to the market
« Reply #48 on: February 28, 2020, 12:50:09 AM »
Seriously doubt any of you guys advising to go "all in" right now would do so if you were in that position.

You might be inured to the daily ups and downs by virtue of already having a fully invested portfolio. OP isn't in that position right now.

How would you go buying $1m of VTSAX in the morning and watching $30,000 evaporate by mid afternoon? How would you tell your wives that at the dinner table?

@frugaldrummer - do what makes you sleep at night. I get it, I understand this is not an easy emotional call. Everyone says ignore emotion and follow the maths, but not everyone can act like a robot on every decision.

Perhaps a strategy to buy back in 10% per month will do. You may come out ahead, you may not. Who cares at the end of the day, you won't be waking up in cold sweats.

Dude I am literally "all in" right now.  I have the option to sell any/all of my stocks and I haven't done so because I would rather own those shares than have the cash.   Not selling is the same decision to buy.  If I had $600k cash right now and no investments, would I invest it all?  If not, then why would I continue to hold $600k in investments when I have the option to sell and convert it to cash?  I hold my investments precisely because I prefer that to cash.

Dude, you totally missed the point of my post. I said people like you fully invested are inured to the ups and downs. But if you have a very large pot of cash, your psychology about that pot of cash will most definitely change, especially if you see the value of it suddenly drop by $10,000 per hour the moment after you hit the buy button. You will question your decision, your sanity and your life choices - its basic human nature.

I agree that not selling is the same as buying, but most people are not going to see it that way when their finger hovers over the buy button.


Malcat

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Re: Buying back in to the market
« Reply #49 on: February 28, 2020, 04:52:08 AM »
Are you risk averse and trying to preserve wealth or are you risk seeking and trying to capitalize on market volatility, because you can't actually rationally be both.

If you are risk averse and trying to preserve wealth then I would recommend buying back into bonds and creating a bond tent to minimize SOR risk. In addition, consider keeping a chunk in cash. Whatever fits your risk tolerance best.

If you are risk seeking and trying to make a gain, congrats, buying all in now will give you that gain. You successfully market timed! Good for you.