Author Topic: buying the dip  (Read 14001 times)

sol

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buying the dip
« on: July 31, 2014, 09:34:26 PM »
The Dow dropped over 300 points today, erasing all gains thus far this year.  The S&P500 fell almost 40 points. 

Tomorrow could be a good rebound, or the day the expected "correction" really gets going. 

How many of you market watchers are selling?  How many would sell if tomorrow is another 2% drop, or another 5%?

Me, I'm buying tomorrow.  And hoping to buy all the way down.

Greystache

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Re: buying the dip
« Reply #1 on: July 31, 2014, 09:56:57 PM »
I have been expecting a rather large correction for a while now.  Maybe this is it.  The timing is very lucky for me.  I just closed out an IRA at Morgan Stanley (something I should have done a long time ago-the fees were stupid high). Anyway, in preparation for the move, I put all $350K into cash on Monday.  So now that it is in my Vanguard IRA, I get to put it to work.  Even though I will be buying the dip, I will probably be relatively conservative with about a 60/40  mixture of stocks and bonds.  I am retiring in 5 months and my tolerance for risk is not what it used to be.

RapmasterD

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Re: buying the dip
« Reply #2 on: July 31, 2014, 10:19:44 PM »
I don't care about the Dow. It comprises 30 stocks. The S&P 500 is still up 5.5 percent Y/Y. If we tanked further and ended up flat for the year that would be fine given last year's huge gain.

I'm not buying the dip. I'm not not buying the dip. I'm not selling the dip. I'm not watching CNBC. I don't give a shit about Argentina.

I lost $83,000 this past month. I don't care. And here's my point. OF COURSE I CARE! IT'S A SHIT LOT OF MONEY. But your opportunity is not to care. It's to separate emotion from decision making.

You're welcome.
« Last Edit: July 31, 2014, 10:25:41 PM by RapmasterD »

iris lily

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Re: buying the dip
« Reply #3 on: July 31, 2014, 10:34:26 PM »
Hey, I'm just glad we did our net worth calculation in June, we hit a milestone. We may be under that milestone, now. Don't know.

Will continue to dollar cost average buying, won't be paying much attention to where the market is going because it will do what it will do and frankly I was creeped out by it being above 16,000 anyway.

johnny_b123

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Re: buying the dip
« Reply #4 on: July 31, 2014, 10:52:59 PM »
in the last two months, i've been looking for deals but they are just not there. everything seems to be over priced and many things unreasonably overpriced. this made me really cautious so i've previous to today sold all but one position.

i think the market was a little un-sane and a correction was needed. i strongly doubt the correction was bang on in a single day and we're all rosy now. august and september are historically bad months.

given that this has impacted the entire world, europe, asia, americas in just a single day, i'd guess we're in for a bumby end of summer and a worse fall.

for me, now is going to be a great time to sit back with my cash, watch, learn as much as i can and hopefully find good companies at bargains prices.... and do it all again in another few years when the market tops again.

doing the opposite of everyone else, it's almost guaranteed mustachianism.... or at least buffetism: "when others are greedy, i am fearful. when others are fearful, i am greedy."

GGNoob

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Re: buying the dip
« Reply #5 on: July 31, 2014, 11:38:03 PM »
Its not much, but I invested about $800 today and have my Roth IRA contributions investing tomorrow. So I'm hoping the market doesn't rebound too early tomorrow.

sol

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Re: buying the dip
« Reply #6 on: July 31, 2014, 11:48:38 PM »
My vanguard mutual funds only transact at the end of the following business day.  I would have had to buy before 1pm west coast time to get today's closing price.  Buying now will buy at the tomorrow's closing price, and we can't know what that will be.  Basically I only make manual contributions at 12:55pm when I think I have some idea of what I'm actually buying.

I guess I could buy ETFs instead.  Don't those transact immediately at intraday prices?

milesdividendmd

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Re: buying the dip
« Reply #7 on: August 01, 2014, 12:43:19 AM »
Sol.

I'm interested in your thinking.

Are you playing a hunch?  Is your next action written into your investment policy statement?

For trend followers out there, now would be a particularly bad time to buy in (and a good time to sell given that the S&P closed below its 200 day moving average god the first time this year. )

Personally, I'm just sitting still. (Boring .)


pom

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Re: buying the dip
« Reply #8 on: August 01, 2014, 01:36:01 AM »
I guess I could buy ETFs instead.  Don't those transact immediately at intraday prices?

Yes they do.

As for me, bad luck ... got my bonus Tuesday and immediately bought an European ETF. Such is life!
« Last Edit: August 01, 2014, 04:23:33 AM by pom »

RapmasterD

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Re: buying the dip
« Reply #9 on: August 01, 2014, 03:02:17 AM »
a) Closed below 200 day moving average? http://finance.yahoo.com/q/ta?s=%5EGSPC&t=1y&l=on&z=l&q=l&p=m200&a=&c=

What am I missing?


b) Aren't there multiple other price measures one could look at such as 50 versus 100 EMAs?

brooklynguy

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Re: buying the dip
« Reply #10 on: August 01, 2014, 05:26:00 AM »
My vanguard mutual funds only transact at the end of the following business day.  I would have had to buy before 1pm west coast time to get today's closing price.  Buying now will buy at the tomorrow's closing price, and we can't know what that will be.  Basically I only make manual contributions at 12:55pm when I think I have some idea of what I'm actually buying.

I guess I could buy ETFs instead.  Don't those transact immediately at intraday prices?

Sol, that doesn't sound right.  You should be able to buy at the same day's closing price if you invest before the market closes (4pm my time, 1pm your time).  That's how it works for me with my Vanguard investments.  Are you sure you aren't getting the same day closing price?  (It is true that the transaction doesn't show up in your account until the following business day.)

But I'm surprised to see that someone as intelligent and experienced in FI matters as you is trying to engage in market timing. 

[EDIT:  Nevermind (with respect to my first paragraph).  I read too quickly and thought you were saying you get the following day's trading price even when you transact before 4pm Eastern / 1pm Pacific.]
« Last Edit: August 01, 2014, 07:12:40 AM by brooklynguy »

aclarridge

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Re: buying the dip
« Reply #11 on: August 01, 2014, 05:59:20 AM »
I guess this is another market timing thread - my 2c is I'll continue to invest blindly each quarter as I intended when I wrote my investment policy statement. I certainly hope the market will be cheap next time I buy, but I know I can't control it so whatever.

Rickk

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Re: buying the dip
« Reply #12 on: August 01, 2014, 06:31:28 AM »
This is all of your opportunities - and it is all my fault - I have no doubt that this is "the big one" that has been brought up over and over lately! 
I just moved 80K into the market this week that we had in cash for way too long (missing all of the run up last year as a matter of fact). 
I just knew that once I moved it into index funds we would get a big correction just to irritate me.
Sorry for not notifying everyone before hand so you could benefit from my misfortune ;-)

SnpKraklePhyz

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Re: buying the dip
« Reply #13 on: August 01, 2014, 07:29:11 AM »
Rickk - and here I thought it was my fault.  I moved money into an S&P index fund last week.  Money that I've been planning to move for over a year.  Thanks for taking the blame off me...

Jack

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Re: buying the dip
« Reply #14 on: August 01, 2014, 07:41:45 AM »
I had been focusing on paying off some debt, after which I'll be switching focus to my IRAs. Although I'm not changing any plans because of this, I'm pleased that this correction is conveniently timed for me.

birdman2003

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Re: buying the dip
« Reply #15 on: August 01, 2014, 07:52:11 AM »
I normally try to invest my monthly Roth IRA contributions on the 3rd to last trading day of each month.  This time I was too busy and forgot to set it up until yesterday morning.  I guess I lucked out and bought my funds at a price a bit lower than if I had kept my usual pattern of the 3rd to last trading day each month.

soccerluvof4

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Re: buying the dip
« Reply #16 on: August 01, 2014, 07:57:11 AM »
I added to my index funds before the close yesterday and would do the same on the next drop. Today my automatic 401k contribution goes in so would like to see further correction.  I too will buy the dips.

Rebecca Stapler

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Re: buying the dip
« Reply #17 on: August 01, 2014, 07:57:28 AM »
Another convenient correction for us! Well, as long as it lasts a few weeks -- that's when we plan to roll over a 403(b) from a high-fee fund (we didn't have many options at my husband's company) and into VTSAX.

TheSimpleLife

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Re: buying the dip
« Reply #18 on: August 01, 2014, 08:10:11 AM »

I've been looking for deals....  This made me really cautious.... I've sold all but one position.....

I think the market was a little.....  I strongly doubt.....

I'd guess.....

.....hopefully find good companies at bargains prices.  Do it all again in another few years when the market tops again.....

Doing the opposite of everyone else, it's almost guaranteed mustachianism.... or at least buffetism: "when others are greedy, i am fearful. when others are fearful, i am greedy."

Sorry to single you out on your first post, but take some time to read the above portion of your post and ask yourself these questions:

1.  What information do I have that isn't available to every other person in the investment world?  If nothing, then why has the market unfairly priced (whether it's a 'bargain' or 'overpriced' doesn't matter) these securities?

2.  It is definitely not "Mustachian" to sell when the market drops and then buy back in once it's at it's peak.

3.  Buffett would tell you you're a fool.  He'd tell you to invest in index funds and worry about maximizing your personal utility to increase income and decreasing your expenses to have more money to invest in said index funds.

4.  A very, very small number of days account for ALL stock market growth.  Better not be out of the market during these days!  I don't have a crystal ball, but maybe you do!

5.  If professional mutual fund managers cannot outperform a comparable index with comparable risk, what makes you think you can?  They have access to the best software and brains in the business.  Maybe you do too, but I highly doubt it or else you would be busy working on the Street and not posting to the MMM forums.

I know this comes across as me being a prick, but I'm just trying to help you and the rest of the readers out.  Market timing, stock picking, individual security investing and a million other strategies that all have elements of active investing are a loser's game.  I don't want you to lose, I want you to get to FIRE ASAP!

Here is a good article with plenty of academic research cited about why you can't win with timing the market.

http://cashcowcouple.com/investing/market-timing-always-losing-game/

Good luck!   

vivophoenix

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Re: buying the dip
« Reply #19 on: August 01, 2014, 08:39:38 AM »

I've been looking for deals....  This made me really cautious.... I've sold all but one position.....

I think the market was a little.....  I strongly doubt.....

I'd guess.....

.....hopefully find good companies at bargains prices.  Do it all again in another few years when the market tops again.....

Doing the opposite of everyone else, it's almost guaranteed mustachianism.... or at least buffetism: "when others are greedy, i am fearful. when others are fearful, i am greedy."

Sorry to single you out on your first post, but take some time to read the above portion of your post and ask yourself these questions:

1.  What information do I have that isn't available to every other person in the investment world?  If nothing, then why has the market unfairly priced (whether it's a 'bargain' or 'overpriced' doesn't matter) these securities?

2.  It is definitely not "Mustachian" to sell when the market drops and then buy back in once it's at it's peak.

3.  Buffett would tell you you're a fool.  He'd tell you to invest in index funds and worry about maximizing your personal utility to increase income and decreasing your expenses to have more money to invest in said index funds.

4.  A very, very small number of days account for ALL stock market growth.  Better not be out of the market during these days!  I don't have a crystal ball, but maybe you do!

5.  If professional mutual fund managers cannot outperform a comparable index with comparable risk, what makes you think you can?  They have access to the best software and brains in the business.  Maybe you do too, but I highly doubt it or else you would be busy working on the Street and not posting to the MMM forums.

I know this comes across as me being a prick, but I'm just trying to help you and the rest of the readers out.  Market timing, stock picking, individual security investing and a million other strategies that all have elements of active investing are a loser's game.  I don't want you to lose, I want you to get to FIRE ASAP!

Here is a good article with plenty of academic research cited about why you can't win with timing the market.

http://cashcowcouple.com/investing/market-timing-always-losing-game/

Good luck!   




this i needed. i just waddled into work and saw that everything was down. i saw it as an opportunity but not sure what type so i went to this forum to get advice.  esp since two very awesome things just occurred:

1) i was paid today
2) this is the month of the three paychecks.

i budget every month based only on two so i have more money to put in than usual. but i wont try and do any silly timing.

the problem is I have some good mutual funds. Im just not comfortable buying index funds. maybe to day is the day!

sol

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Re: buying the dip
« Reply #20 on: August 01, 2014, 08:43:45 AM »
Sol.

I'm interested in your thinking.

Are you playing a hunch?  Is your next action written into your investment policy statement?

I'm not really playing anything, I'm restarting my regularly scheduled weekly buys that were temporarily put on hold last month while we made a large purchase.  Purely fortuitous timing that we pulled out at a high point and are getting back in right after a bit of a drop. 

Personally, my hunch is that yesterday's 2% drop was just jitters and today will be flat or slightly positive.  But I'm not acting on that hunch.

But I'm surprised to see that someone as intelligent and experienced in FI matters as you is trying to engage in market timing. 

Not timing the market, just pointing out that the market took a dive while I continue on my usual path.  It would be nice if it would get any coming decreases out of the way sooner rather than later, but I'm not actually changing my investment plan because of anything the markets are doing.

Franklin

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Re: buying the dip
« Reply #21 on: August 01, 2014, 08:59:29 AM »
I haven't seen any of the stocks on my watchlist drop to an attractive price.  So no activity there.  My taxable index funds invest automatically on the same day each month no matter what, and my 401k happens automatically 26 times per year.  By Monday I will have forgotten that yesterday even happened.

frogger

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Re: buying the dip
« Reply #22 on: August 01, 2014, 09:03:33 AM »
Rickk - and here I thought it was my fault.  I moved money into an S&P index fund last week.  Money that I've been planning to move for over a year.  Thanks for taking the blame off me...
No, it's my fault. I calculated my net worth for the race to 100k thread a day early and then had to go back and adjust it at the end of yesterday. I will let you all know the next time I buy gasoline, though, if your tiny Mustachian tanks are getting too close to E. Gas prices will drop the next day. And stay out of any checkout line I pick.

I'm doing nothing...or rather, nothing different. I don't have the spare cash to add to my IRA right now, and I was planning to start monthly contributions in September with my new job, so that's what I'll still do.

Frankies Girl

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Re: buying the dip
« Reply #23 on: August 01, 2014, 09:21:47 AM »
Not doing anything different. If I have a scheduled buy-in during this dip, awesome, but I have nothing else planned other than to watch the hysteria.

I do have the possibility of a chunk of money freeing up (house up for sale) if the darn thing ever sells, but doubtful I'll hit the timing right to get the $ in the market to take advantage of any downturn if it is just a few days' worth of "Chicken Little" bluster.

It's amazing how knowing how all of this works means I'm not panicking. Sure, it will suck if I lose half or more of my investment value in the short term... but it will come back up eventually and doing nothing (other than buy-ins if possible) ensures I don't lock in any losses.

TheSimpleLife

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Re: buying the dip
« Reply #24 on: August 01, 2014, 09:23:23 AM »

the problem is I have some good mutual funds. Im just not comfortable buying index funds. maybe to day is the day!


I'm not a die-hard indexer like some even though my entire portfolio is made up of index funds,  but I fail to see why you aren't comfortable buying index funds but you would be comfortable buying mutual funds?

See this article in the NYT from a few years ago:  http://www.nytimes.com/2008/07/13/business/13stra.html?_r=0

In short, actively managed mutual funds VERY RARELY out perform a comparable index.  Since we have no idea which mutual fund managers will be the lucky few going forward, it is even harder to convince yourself that a mutual fund manager will do better than an index fund.

If you have trouble thinking about the fact that your investments can and will go down in value, then it is the market risk that is the problem, not the mutual fund vs index fund debate.  If that is the case, you would need a much less aggressive asset allocation (more towards fixed income, bonds, etc, less towards equity/stocks) as a successful passive strategy requires the fortitude to ride out downturns in the market.

Hope some of this helps!

brooklynguy

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Re: buying the dip
« Reply #25 on: August 01, 2014, 09:31:04 AM »
Not timing the market, just pointing out that the market took a dive while I continue on my usual path.  It would be nice if it would get any coming decreases out of the way sooner rather than later, but I'm not actually changing my investment plan because of anything the markets are doing.

Got it.  I'm hoping for decreases sooner rather than later as well (since I'm also still in the accumulation phase), but I don't get as hung up about it as some others on this board.  If the market continues its run-up for the next few years causing me to hit my FIRE number earlier than expected, I'm still pulling the FIRE trigger rather than continuing to stick it out because a correction may be just around the corner.  I'd rather definitely retire with a possibility of having to return to work for a few years than definitely keep working to decrease the likelihood of having to return to work after that.  (That said, because I'm a wuss, my FIRE number already includes a pretty substantial cushion.)

Cpa Cat

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Re: buying the dip
« Reply #26 on: August 01, 2014, 09:39:41 AM »
I don't sit on cash. I buy always.

vivophoenix

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Re: buying the dip
« Reply #27 on: August 01, 2014, 09:55:13 AM »

the problem is I have some good mutual funds. Im just not comfortable buying index funds. maybe to day is the day!


I'm not a die-hard indexer like some even though my entire portfolio is made up of index funds,  but I fail to see why you aren't comfortable buying index funds but you would be comfortable buying mutual funds?

See this article in the NYT from a few years ago:  http://www.nytimes.com/2008/07/13/business/13stra.html?_r=0

In short, actively managed mutual funds VERY RARELY out perform a comparable index.  Since we have no idea which mutual fund managers will be the lucky few going forward, it is even harder to convince yourself that a mutual fund manager will do better than an index fund.

If you have trouble thinking about the fact that your investments can and will go down in value, then it is the market risk that is the problem, not the mutual fund vs index fund debate.  If that is the case, you would need a much less aggressive asset allocation (more towards fixed income, bonds, etc, less towards equity/stocks) as a successful passive strategy requires the fortitude to ride out downturns in the market.

Hope some of this helps!


right after this conversation I went to my investments and realized I was already invested in an index fund. i think the problem occurred while I was doing research.

it seems alot of people mix up mutual fund vs index fund and index fund vs etf. so i was interested in exploring more about etfs.

from my understanding a regular mutual fund tries to beat an index by being actively managed. while and index just tracks and is passively managed. an etf is traded like stock but is taxed in a more favorable manner.


so you can have index mutual funds and index etfs. but not just an index fund. 

i hope i got that right

Cheddar Stacker

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Re: buying the dip
« Reply #28 on: August 01, 2014, 10:00:17 AM »
So I know there are other business owners here, but maybe I'm in a slightly unique position and I'm curious what you all would do in my situation.

I'm a part owner of a business.
I take a nice draw paid out semi-monthly.
I receive a sizeable bonus at year end when we determine our exact pre-bonus profit.
An increase in my draw simply reduces the year end bonus.
Our business needs cash (and borrows some) the first few months of the year, becomes cash heavy in the summer, and pays the cash out to owners at year end.

So I'm not sitting on cash, but I have quick access to cash via a salary draw from my business if I want/need it.

So, if the market drops another 3-5% this week/month and you were in my position would you consider taking a $10K bonus now and dumping it in your 401K to max out EE contributions?? It's not front-loading (maybe mid-loading?), but I typically back-load about $7K into my 401K due to the year end bonus.

Why should I not do this? Yes it's market timing, but I like sol's description of "buying the dip" a lot better. My only risk is a further drop sometime before year end. Am I missing something here? What would you do?

soccerluvof4

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Re: buying the dip
« Reply #29 on: August 01, 2014, 10:04:56 AM »
I own my own business (23 years now). If i didnt have cash sitting on the side lines as I do ( i recently for taxable accounts have reduced my contributions for the last couple months) I would bonus myself the money and add on dips. BUT, if you are waiting for another 5% than maybe do half and than another half. Kinda trying to find the bottom.

I still have quite a bit of cash to add on dips but I would do the same if I run out since I have cash over an beyond in my cash flow in the business that I too usually bonus out at year end.

vivophoenix

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Re: buying the dip
« Reply #30 on: August 01, 2014, 10:05:44 AM »
Cheddar stacker

I am trying to do the same thing. but i think the fact that we accept that it may fall more and wont panic, makes it not timing a the market per se.

we both know that it will go up . the market always rises. but we arent trying to flutuate in and out to make fast money. and you dont have cash sitting somewhere being eaten at by inflation while you try to time the market.


but doesnt that just prove the rule, invest early and invest more? because we are trying to take advantage of a dip. but really we would be long term  investing any way, not just because of this dip?


this reminds me of so many business that are cash poor but balance their debt in a beneficial manner

MidwestGal

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Re: buying the dip
« Reply #31 on: August 01, 2014, 10:07:22 AM »
I freed up more money than usual to throw at Vanguard, but that would have happened whether or not this correction was present.  As I'm an early 30s indexer, I'm hoping for one (or two) but it won't change anything.  The same amount of money gets thrown in at regular intervals either way.  Maybe if my life weren't such a balancing act daily, this would pique my interest more.

milesdividendmd

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Re: buying the dip
« Reply #32 on: August 01, 2014, 10:47:05 AM »
Sol.

I'm interested in your thinking.

Are you playing a hunch?  Is your next action written into your investment policy statement?

I'm not really playing anything, I'm restarting my regularly scheduled weekly buys that were temporarily put on hold last month while we made a large purchase.  Purely fortuitous timing that we pulled out at a high point and are getting back in right after a bit of a drop. 

Personally, my hunch is that yesterday's 2% drop was just jitters and today will be flat or slightly positive.  But I'm not acting on that hunch.

But I'm surprised to see that someone as intelligent and experienced in FI matters as you is trying to engage in market timing. 

Not timing the market, just pointing out that the market took a dive while I continue on my usual path.  It would be nice if it would get any coming decreases out of the way sooner rather than later, but I'm not actually changing my investment plan because of anything the markets are doing.

That makes sense.  Boring like me.

And from the looks of your hunch, equally adept at predicting the market.  :)

MooseOutFront

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Re: buying the dip
« Reply #33 on: August 01, 2014, 10:47:30 AM »
We're still only talking about a few percent off the high.  I have monthly contributions that I put in ETFs so they have to be done manually.  I typically wait for some random day during the month when the market goes down to buy.  Since this fell on the end of the month, I have a bunch of automated payroll contributions buying stocks today anyway so I don't feel compelled to take further action.

My IRA contributions for the year are still in cash and this isn't enough of a drop to compel me to deploy those.  I also have HSA cash that I'm completely cool with moving into stock at some point (wish I had of as soon as I could of, but the fees kept me out.)  Again, I need the drop to be more significant than this to get me motivated.

Cheddar, in your case if it's no difference to you then I may go ahead with some of that 401k money, but not all.

Mr Mark

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Re: buying the dip
« Reply #34 on: August 01, 2014, 10:47:44 AM »
I figure if you are a long term buy and hold dca investor anyway, changing your timing a few days either side of your usual buying date is ok.

But beware the "dip" assumption.  Sometimes it turns out to be a cliff...

I wouldn't act wrt market timing, ie changing my allocation temporarily to buy stock on sale, unless it was a 10% + drop. After a 30% drop I'm selling grandma to put that cash into the market... ;-)

Rural

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Re: buying the dip
« Reply #35 on: August 01, 2014, 11:12:30 AM »
I didn't even know there was a dip until you guys started posting about this, but since you brought it up, today is probably a good day to finally get around to the lump-sum HSA contribution I've been putting off for a few weeks.

brooklynguy

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Re: buying the dip
« Reply #36 on: August 01, 2014, 11:17:17 AM »
Cheddar, if you can take the money out of your business sooner rather than later with no ill effects on the business, the answer is that you should do it.  The better question is why not do it all the time (regardless of what the market is doing)?  The consensus among the FI cognoscenti is to throw your money into the market as quickly as you get it (and the quicker you can get it, the better).  Of course, you will be kicking yourself if you do it now and it turns out the market continues to decline for the rest of the year, but in the long run you are usually better off not keeping cash on the sidelines.

Cheddar Stacker

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Re: buying the dip
« Reply #37 on: August 01, 2014, 12:21:11 PM »
Cheddar, if you can take the money out of your business sooner rather than later with no ill effects on the business, the answer is that you should do it.  The better question is why not do it all the time (regardless of what the market is doing)? 

Good question.

First, this is non-conformist. No one has done it before here as an owner. There is a system and you don't deviate (not my rules). I'm shaking up the structure here a bit with this among other things.

Second, we need to get to a cash positive position first, and we have.

Third, we need to get to mid-year before we have some indication of how the P&L might play out for the year. This is important because my total compensation is very dependent on the profitability.

I was already considering doing this a week ago, now it just makes more sense. I discussed it with my partners over lunch today and there were no objections, so it may happen. Ironically though, one of my partners said "so your timing the market huh?"

brooklynguy

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Re: buying the dip
« Reply #38 on: August 01, 2014, 12:37:36 PM »
I was already considering doing this a week ago, now it just makes more sense. I discussed it with my partners over lunch today and there were no objections, so it may happen. Ironically though, one of my partners said "so your timing the market huh?"

Then I would do it.  If you were planning on doing it anyway, then decided not to based on your perception of where the market was heading, then lTHAT would be market timing.

tesuzuki2002

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Re: buying the dip
« Reply #39 on: August 02, 2014, 01:22:30 AM »
My vanguard mutual funds only transact at the end of the following business day.  I would have had to buy before 1pm west coast time to get today's closing price.  Buying now will buy at the tomorrow's closing price, and we can't know what that will be.  Basically I only make manual contributions at 12:55pm when I think I have some idea of what I'm actually buying.

I guess I could buy ETFs instead.  Don't those transact immediately at intraday prices?

Sol, that doesn't sound right.  You should be able to buy at the same day's closing price if you invest before the market closes (4pm my time, 1pm your time).  That's how it works for me with my Vanguard investments.  Are you sure you aren't getting the same day closing price?  (It is true that the transaction doesn't show up in your account until the following business day.)

But I'm surprised to see that someone as intelligent and experienced in FI matters as you is trying to engage in market timing. 

[EDIT:  Nevermind (with respect to my first paragraph).  I read too quickly and thought you were saying you get the following day's trading price even when you transact before 4pm Eastern / 1pm Pacific.]

 I do the same thing but I wouldn't exactly call it market timing... I invest a couple hundred every few weeks in index funds whether the market is higher or lower.   However, I do so in the last closing minutes of the day and attempt to make my purchases when we have a big down day.. The extra 1/2% the market does down and swings on a daily basis isn't much but I'm sure it's helping...

milesdividendmd

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Re: buying the dip
« Reply #40 on: August 02, 2014, 09:44:27 AM »
My vanguard mutual funds only transact at the end of the following business day.  I would have had to buy before 1pm west coast time to get today's closing price.  Buying now will buy at the tomorrow's closing price, and we can't know what that will be.  Basically I only make manual contributions at 12:55pm when I think I have some idea of what I'm actually buying.

I guess I could buy ETFs instead.  Don't those transact immediately at intraday prices?

Sol, that doesn't sound right.  You should be able to buy at the same day's closing price if you invest before the market closes (4pm my time, 1pm your time).  That's how it works for me with my Vanguard investments.  Are you sure you aren't getting the same day closing price?  (It is true that the transaction doesn't show up in your account until the following business day.)

But I'm surprised to see that someone as intelligent and experienced in FI matters as you is trying to engage in market timing. 

[EDIT:  Nevermind (with respect to my first paragraph).  I read too quickly and thought you were saying you get the following day's trading price even when you transact before 4pm Eastern / 1pm Pacific.]

 I do the same thing but I wouldn't exactly call it market timing... I invest a couple hundred every few weeks in index funds whether the market is higher or lower.   However, I do so in the last closing minutes of the day and attempt to make my purchases when we have a big down day.. The extra 1/2% the market does down and swings on a daily basis isn't much but I'm sure it's helping...

Unless the market goes up one percent while you're waiting for it to drop half a percent, right?

nordlead

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Re: buying the dip
« Reply #41 on: August 04, 2014, 10:45:53 AM »
I bought on the dip, only to have it go lower on the 1st. I bought because I was considering buying anyways, and the 2% drop just motivated me to get it done that day. I still have another $11k that I'm considering putting in the market (IRA), but I'm considering keeping it liquid until we get closer to the contribution deadline (i.e. April).

FIRE_HELP!

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Re: buying the dip
« Reply #42 on: August 04, 2014, 11:01:50 AM »
is 3% off of the all-time high (after a massive 5yr runup) really a 'dip'?

vivophoenix

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Re: buying the dip
« Reply #43 on: August 04, 2014, 12:07:52 PM »
its a dip because the idea is that you can artificially take advantage of the lower prices(~-2% ) under the historically-based assumption that the market will continue to go up.

i say artificial because if you intend to invest long term,  the market will go up and down

Scandium

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Re: buying the dip
« Reply #44 on: August 04, 2014, 06:34:46 PM »
is 3% off of the all-time high (after a massive 5yr runup) really a 'dip'?
It's "a dip", just not "The Dip"

pdxvandal

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Re: buying the dip
« Reply #45 on: August 04, 2014, 10:45:45 PM »
Definitely plowed more money into the market the past few days. I've been DCA'ing for most of the year, but have no regrets putting extra into it recently. If it goes down more, oh well. In the long-term, it will be fine.