Author Topic: Coronavirus - what are you doing with your investments / 401ks?  (Read 50046 times)

MustacheAndaHalf

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #550 on: March 26, 2020, 03:16:32 AM »
Yup, VTSAX at 33% off is a damn emergency in my book.
The sale lasts until people start buying!
Literally owing to popular demand, VTI (Vanguad Total Stock Market ETF) is now just -25% off.
https://etfdb.com/etf/VTI/#performance
https://www.morningstar.com/etfs/arcx/vti/performance

dragoncar

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #551 on: March 26, 2020, 11:12:10 AM »
Yup, VTSAX at 33% off is a damn emergency in my book.
The sale lasts until people start buying!
Literally owing to popular demand, VTI (Vanguad Total Stock Market ETF) is now just -25% off.
https://etfdb.com/etf/VTI/#performance
https://www.morningstar.com/etfs/arcx/vti/performance

I might have caught the bottom for my wifes extra cash by sheer luck.  We will see if it goes lower. Y gut tells me its not over yet but I also dont tule the market except on a very basic level for fun (rarely profit) eg trying time grab an intraday low

Of course I want to do a little TLH and missed the best opportunity so far because I was too lazy to get it done

American GenX

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #552 on: March 26, 2020, 03:24:55 PM »
The S&P 500 never dropped quite low enough for me to rebalance, and now it's way too high for me to rebalance.  I'll just keep holding off until I think it reaches a realistic value considering the economic downfall and long recovery that we are headed for.

Huskers1

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #553 on: March 26, 2020, 04:29:41 PM »
First off let me qualify what I have done so far  with , I'm no expert and as a result of what I have and have not done so far through this crisis feel I may change my plan to manage my ownmoney.

I retired in January. Over the past year I swithed my investments to a 60/40 stock bond split. I have a strong  cash position in my porfolio.

Here is what i've have done so far.

1. I  pulled one entire 401K out of play the first week of this mess. Closing it down and moving it  to Vangaurd- it's not back in play yet
2. I have another  401K , still in the employer plan:  I pulled the bond mix and moved to cash when the bond market started to tank. strengthened by positions in the mid ,large, S&P 500, emerging markets options . I did this by pulling the retirement date investments for 2015 - 2020
3. I started buying stocks and found i did not have the stomach for it.

I left my other investments in the market . 
« Last Edit: March 26, 2020, 05:00:40 PM by Huskers1 »

BicycleB

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #554 on: March 26, 2020, 08:35:43 PM »
The S&P 500 never dropped quite low enough for me to rebalance, and now it's way too high for me to rebalance.  I'll just keep holding off until I think it reaches a realistic value considering the economic downfall and long recovery that we are headed for.

I once thought "rebalance" implied that an investor chose a permanent target % of various investments, so that rebalance meant mathematically adjusting the % to the target.

By "rebalance", do you mean that you change the target whenever you think the relative value of investments has changed, and then adjust your investments to match your new guess?


better late

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #555 on: March 26, 2020, 09:15:33 PM »
Got a big check and mailed it in to pay off our 401k loan. Seemed like the right thing to do while markets are cheaper. Used some unexpected money from reimbursed room and board from kids university closing dorms. We would have had to pay the loan off by the end of the year in all cases (or earlier if we lost that job) so we didnt see much downside to deploying cash now.. Paychecks will be bigger now that the loan is finally paid.

American GenX

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #556 on: March 28, 2020, 10:09:13 AM »
The S&P 500 never dropped quite low enough for me to rebalance, and now it's way too high for me to rebalance.  I'll just keep holding off until I think it reaches a realistic value considering the economic downfall and long recovery that we are headed for.

I once thought "rebalance" implied that an investor chose a permanent target % of various investments, so that rebalance meant mathematically adjusting the % to the target.

By "rebalance", do you mean that you change the target whenever you think the relative value of investments has changed, and then adjust your investments to match your new guess?

I've read that you shouldn't rebalance immediately when the AA gets out of whack and that portfolios actually do worse when rebalanceing frequently, so I'm just holding off while the market is doing some heavy zigging and zagging rather than a reflex action of rebalanceing due to short term market fluctuations.

dragoncar

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #557 on: March 28, 2020, 12:54:48 PM »
The S&P 500 never dropped quite low enough for me to rebalance, and now it's way too high for me to rebalance.  I'll just keep holding off until I think it reaches a realistic value considering the economic downfall and long recovery that we are headed for.

I once thought "rebalance" implied that an investor chose a permanent target % of various investments, so that rebalance meant mathematically adjusting the % to the target.

By "rebalance", do you mean that you change the target whenever you think the relative value of investments has changed, and then adjust your investments to match your new guess?

I've read that you shouldn't rebalance immediately when the AA gets out of whack and that portfolios actually do worse when rebalanceing frequently, so I'm just holding off while the market is doing some heavy zigging and zagging rather than a reflex action of rebalanceing due to short term market fluctuations.

Historically they do better rebalancing infrequently.  But that just means historically long term volatility is greater than short term volatility.  In the past week of 5-10% daily asset swings, one might have done very well with high frequency rebalancing.  Brokerages are making this easier now, some can do it with a click of a button

BicycleB

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #558 on: March 28, 2020, 02:38:31 PM »
The S&P 500 never dropped quite low enough for me to rebalance, and now it's way too high for me to rebalance.  I'll just keep holding off until I think it reaches a realistic value considering the economic downfall and long recovery that we are headed for.

I once thought "rebalance" implied that an investor chose a permanent target % of various investments, so that rebalance meant mathematically adjusting the % to the target.

By "rebalance", do you mean that you change the target whenever you think the relative value of investments has changed, and then adjust your investments to match your new guess?

I've read that you shouldn't rebalance immediately when the AA gets out of whack and that portfolios actually do worse when rebalanceing frequently, so I'm just holding off while the market is doing some heavy zigging and zagging rather than a reflex action of rebalanceing due to short term market fluctuations.

Dragoncar is probably right, but so far in practice I'm with you - avoiding too many rapid moves seems safe to me. Realistically, I'm listening and learning re the speed of rebalancing.

But my question is: Are you maintaining the same target %? Or are you changing your target %?

sehr

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #559 on: March 28, 2020, 04:57:28 PM »
Our 401k is automatically investing like usual, but I have a lump of cash I'm trying to move into the market and have set a bunch of limit orders cascading downward starting about 10% - 15% lower than they are now in various index funds. I think we're all still in denial and things are going to get a lot uglier, but then again I've made some mistakes trying to move in about 10% of that lump of cash so far. Hopefully I'll lucky and buy some bargains.

dragoncar

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #560 on: March 28, 2020, 06:14:47 PM »
The S&P 500 never dropped quite low enough for me to rebalance, and now it's way too high for me to rebalance.  I'll just keep holding off until I think it reaches a realistic value considering the economic downfall and long recovery that we are headed for.

I once thought "rebalance" implied that an investor chose a permanent target % of various investments, so that rebalance meant mathematically adjusting the % to the target.

By "rebalance", do you mean that you change the target whenever you think the relative value of investments has changed, and then adjust your investments to match your new guess?

I've read that you shouldn't rebalance immediately when the AA gets out of whack and that portfolios actually do worse when rebalanceing frequently, so I'm just holding off while the market is doing some heavy zigging and zagging rather than a reflex action of rebalanceing due to short term market fluctuations.

Dragoncar is probably right, but so far in practice I'm with you - avoiding too many rapid moves seems safe to me. Realistically, I'm listening and learning re the speed of rebalancing.

But my question is: Are you maintaining the same target %? Or are you changing your target %?

FWIW Ive personally been very slow and havent rebalanced yet. 

moneytaichi

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #561 on: March 28, 2020, 09:49:59 PM »
A thought-provoking and sobering article talking about how Coronavirus can evolve and end:
https://www.theatlantic.com/health/archive/2020/03/how-will-coronavirus-end/608719/


MustacheAndaHalf

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #562 on: March 28, 2020, 11:38:01 PM »
I rebalance often because I want my portfolio to reflect the risk I've picked.  If I let it drift for a year, the stock percentage would go up, and that would lead to a higher expected return.  What's actually going on is a "60% stocks" portfolio is being allowed to run between 60-64% stocks, so it's really a 62% portfolio over the year.  Meanwhile a portfolio rebalanced monthly would stick much closer to the actual 60%.

I returned to 70-75% stocks on March 19-20, and then over this week have gradually moved into the market.  So my portfolio as of Friday, March 27 was 100% equities.  I can't predict what happens after testing catches up, so I will hopefully stop market timing and just wait at 100% stocks.

Lady Stash

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #563 on: March 30, 2020, 02:10:51 PM »
I rebalanced my 401k to 80/20, but am wondering if I might as well go 100% equities until the market claws its way back into the black. I had decided on 80/20 several years ago to smooth the ride a little. I'm not sure that's as important when we're in a severe downturn and the only direction to go (eventually) is up. What would others do?

Quote from: BicycleB
But my question is: Are you maintaining the same target %? Or are you changing your target %?

Now that the market is down 20%-30%, I am being more aggressive with my AA.  It feels less risky to me to buy in now than it did a couple months ago at the end of a long bull run.

I got lucky with my Asset Allocation (AA) going into this.  I usually keep around 80% stocks/20% bonds but in December, I quit my job so my AA was more conservative than usual while I wasn't working.  I went into this mess with about 60% stock, 30% bonds, 10% cash. 

I've been buying stocks all the way down.  Every time the market drops 5% I move another 5% over to stocks.  By the bottom (so far) on March 23, I reached 75% stocks, 22% bonds and 3% cash.  My plan (if the market keeps dropping) is to slowly work up to about 90% in stocks. 

I'm pretty optimistic that the market is going to recover in the next few years.  We may even have seen the worst of it already.  Sure the market could tank another 30% but I think that's a lot less likely now than it was 3 months ago.
« Last Edit: March 31, 2020, 12:56:06 PM by Lady Stash »

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #564 on: March 30, 2020, 05:57:10 PM »
Here's what I'm doing:  Nothing.   

I'm in about 95% stocks.  I sleep like a baby. 

dragoncar

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #565 on: March 30, 2020, 06:07:35 PM »
Here's what I'm doing:  Nothing.   

I'm in about 95% stocks.  I sleep like a baby.

Im only down 12% at this point.  I do sleep very well but still worry about the economy when awake.  I guess thats why I need a conservative AA

talltexan

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #566 on: March 31, 2020, 07:51:32 AM »
I found a market timer!! See, folks, it is totally possible to time the market.

https://www.nytimes.com/2020/03/19/us/politics/richard-burr-coronavirus-stocks.html

Quote
Aides to Mr. Burr said that the decision to sell the stocks was a private one, which took place long before the stock market plunged and evidence of a widespread health threat emerged in the United States.

Yes. That's the point.

I was so angry when that news first broke.

But--imagine a 60-year old man came to you in Feb., and he said, "It's just getting so high, and I know I'm only going to have this job another two years; I think I'm going to take some money off the table."--would you have thought he was that weird?

BicycleB

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #567 on: March 31, 2020, 09:18:34 AM »
Sold brokerage fund (80% stock 20% bonds - VASGX) for a couple months' expenses. Earlier than normal for personal reasons, though the recent rise in S&P 500 made it easier to pull the trigger.

IIRC, this is the first sale since FIRE where (2014) where there was a loss instead of gain. If conditions remain the same through the rest of the year, it would cause me to increase the size of my late-in-the-year transfer from traditional 401k to Roth. I need positive income to retain ACA.

dreadmoose

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #568 on: March 31, 2020, 10:09:05 AM »
Being of sound mind and body I am doing the same thing I always do.

Investing all money I don't require every friday (Business collects weekly) into the same AA that I have always had.

If I had changed anything it would be breaking my IPS, and the back studies and investment math does NOT change when the market tanks over a month so there is no basis to change my IPS.

dragoncar

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #569 on: March 31, 2020, 04:15:21 PM »
I found a market timer!! See, folks, it is totally possible to time the market.

https://www.nytimes.com/2020/03/19/us/politics/richard-burr-coronavirus-stocks.html

Quote
Aides to Mr. Burr said that the decision to sell the stocks was a private one, which took place long before the stock market plunged and evidence of a widespread health threat emerged in the United States.

Yes. That's the point.

I was so angry when that news first broke.

But--imagine a 60-year old man came to you in Feb., and he said, "It's just getting so high, and I know I'm only going to have this job another two years; I think I'm going to take some money off the table."--would you have thought he was that weird?

Of course not.  Now if he mentioned privileged intelligence briefings he would have my attention

PDXTabs

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #570 on: March 31, 2020, 04:25:43 PM »
If only legislators were required to put all of their holdings into blind trust, this wouldn't be an issue.

Radagast

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #571 on: April 01, 2020, 09:10:13 PM »
Another limit order went through today, putting me (at the time) $12,000 of my target $40,000 back into stocks. In theory I should do that at every week end by setting a market order, but last week ended so high that I just let the order ride. But at this rate I will buy on my normal Friday schedule this week.

talltexan

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #572 on: April 03, 2020, 04:45:45 AM »
If only legislators were required to put all of their holdings into blind trust, this wouldn't be an issue.

I think they should have some kind of joint fund, something like a Vanguard Wellesly (40% stock, 60% gov't bonds) mix, and--when you join Congress--you have to sell every fucking thing you own except your primary residence and buy into that fund. I'm sure they could create a network of wealthy donors who could help with this in the short term.

Michael in ABQ

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #573 on: April 03, 2020, 06:54:12 AM »
If only legislators were required to put all of their holdings into blind trust, this wouldn't be an issue.

I think they should have some kind of joint fund, something like a Vanguard Wellesly (40% stock, 60% gov't bonds) mix, and--when you join Congress--you have to sell every fucking thing you own except your primary residence and buy into that fund. I'm sure they could create a network of wealthy donors who could help with this in the short term.

Or just make them all invest in the TSP.

Of course that doesn't avoid the fact that the family members of so many corrupt politicians (but I repeat myself) become wealthy by using that same insider access and influence.

Crease

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #574 on: April 03, 2020, 07:06:45 AM »
Continuing to max out deferrals into the Vanguard Target Retirement 2050 Fund. And ignoring market news. Thanks to this community and the recommended reading, I am a lot less stressed than I would have been just a few years ago.

ChpBstrd

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #575 on: April 03, 2020, 07:38:43 AM »
If only legislators were required to put all of their holdings into blind trust, this wouldn't be an issue.

I think they should have some kind of joint fund, something like a Vanguard Wellesly (40% stock, 60% gov't bonds) mix, and--when you join Congress--you have to sell every fucking thing you own except your primary residence and buy into that fund. I'm sure they could create a network of wealthy donors who could help with this in the short term.

Good idea. Heres another thought. If you want to be president, VP, a member of Congress, or sit on the Supreme Court, you must publicly declare every last dollar of your assets and publish your last 5 years of taxes for all to see and analyze. Any assets found to be undeclared after a certain point in an election can be seized by the federal government. Audits are done annually, and for 5 years after leaving ones position (in case future bribes were agreed to).

I think the risks of corruption justify this move. It would run off many of the dishonest people who steal in the easiest way possible- by cheating on their taxes. It would also open up national politics to the upper middle class, who could argue they are most like their constituents.

Radagast

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #576 on: April 03, 2020, 01:35:36 PM »
If only legislators were required to put all of their holdings into blind trust, this wouldn't be an issue.

I think they should have some kind of joint fund, something like a Vanguard Wellesly (40% stock, 60% gov't bonds) mix, and--when you join Congress--you have to sell every fucking thing you own except your primary residence and buy into that fund. I'm sure they could create a network of wealthy donors who could help with this in the short term.

Or just make them all invest in the TSP.
If only legislators were required to put all of their holdings into blind trust, this wouldn't be an issue.

I think they should have some kind of joint fund, something like a Vanguard Wellesly (40% stock, 60% gov't bonds) mix, and--when you join Congress--you have to sell every fucking thing you own except your primary residence and buy into that fund. I'm sure they could create a network of wealthy donors who could help with this in the short term.

Good idea. Heres another thought. If you want to be president, VP, a member of Congress, or sit on the Supreme Court, you must publicly declare every last dollar of your assets and publish your last 5 years of taxes for all to see and analyze. Any assets found to be undeclared after a certain point in an election can be seized by the federal government. Audits are done annually, and for 5 years after leaving ones position (in case future bribes were agreed to).

I think the risks of corruption justify this move. It would run off many of the dishonest people who steal in the easiest way possible- by cheating on their taxes. It would also open up national politics to the upper middle class, who could argue they are most like their constituents.
Very much agree with these.

Radagast

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #577 on: April 03, 2020, 01:40:32 PM »
In other news I bought more stocks today. I'm now $16,000 / 4 weeks into my $40,000 / 10 week program. (approximately).

effigy98

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #578 on: April 03, 2020, 04:06:14 PM »
Starting buy some KOL on downdays. These companies are debt free, pay huge dividends, and are very undervalued because they are anti fad stocks (coal is evil). Coal is not going away as an energy source.

Nick_Miller

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #579 on: April 04, 2020, 06:29:46 AM »
Roths were already maxed earlier this year. My wife's 401k contributions are on auto-pilot. We are also building cash stockpile (it's currently almost a year of expenses) so that we'll never be in a situation where we feel forced to sell low.

American GenX

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #580 on: April 04, 2020, 01:29:29 PM »
The S&P 500 never dropped quite low enough for me to rebalance, and now it's way too high for me to rebalance.  I'll just keep holding off until I think it reaches a realistic value considering the economic downfall and long recovery that we are headed for.

I once thought "rebalance" implied that an investor chose a permanent target % of various investments, so that rebalance meant mathematically adjusting the % to the target.

By "rebalance", do you mean that you change the target whenever you think the relative value of investments has changed, and then adjust your investments to match your new guess?

I've read that you shouldn't rebalance immediately when the AA gets out of whack and that portfolios actually do worse when rebalanceing frequently, so I'm just holding off while the market is doing some heavy zigging and zagging rather than a reflex action of rebalanceing due to short term market fluctuations.

Dragoncar is probably right, but so far in practice I'm with you - avoiding too many rapid moves seems safe to me. Realistically, I'm listening and learning re the speed of rebalancing.

But my question is: Are you maintaining the same target %? Or are you changing your target %?

My target is the same as it was at this point.  I do plan to increase my equity AA long term as part of a rising equity glide path.

FrugalSaver

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #581 on: April 04, 2020, 02:52:30 PM »
Starting buy some KOL on downdays. These companies are debt free, pay huge dividends, and are very undervalued because they are anti fad stocks (coal is evil). Coal is not going away as an energy source.

Now that takes some guts. Oil and natural gas dont even get allowed under the global warming alarmist and media propaganda. Coal is lowest in that totem pole. Best of luck

Ive been buying alternative energy individual stocks as they get the media benefit of the doubt. Even TSLA with all their planet earth destroying of rare assets for batteries is looked the other way because...electricity (which will overwhelmingly come from natural gas and coal for decades to come but doesnt matter)

Meanwhile XOM traded to lows not seen since the merger in the 90s and yields over 10%

MustacheAndaHalf

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #582 on: April 06, 2020, 12:41:40 PM »
Over the weekend, growth in new COVID-19 cases fell so far, that Sunday had fewer new cases than Saturday.  In Europe, the death rate is falling, which is also good news.  Overall, an optimistic outlook for COVID-19 ending earlier than expected, without millions infected.  But people need to stay indoors, away from each other, or the effort at social distancing will be wasted.  But right now, it seems to be working.

Over the weekend, I looked at various scenarios of how leverage impacts losses.  Much like a business losing money, if you don't cut costs the whole operation goes under.  Same with investing using leverage.  Per my weekend planning, I'm now holding 118% stocks / -18% bonds.

Right now markets are about -20% down YTD.  I'm guessing some of the recovery will be quick, as people see success in defeating the virus through testing and social distancing.  But then, how do people restart the economy without triggering new outbreaks?  I expect some delays and confusion there, but I'm hopeful the recovery takes months rather than years.

AdrianC

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #583 on: April 07, 2020, 06:03:50 AM »
Over the weekend, growth in new COVID-19 cases fell so far, that Sunday had fewer new cases than Saturday.  In Europe, the death rate is falling, which is also good news.  Overall, an optimistic outlook for COVID-19 ending earlier than expected, without millions infected.  But people need to stay indoors, away from each other, or the effort at social distancing will be wasted.  But right now, it seems to be working.
Millions are still going to be infected.
Quote
Over the weekend, I looked at various scenarios of how leverage impacts losses.  Much like a business losing money, if you don't cut costs the whole operation goes under.  Same with investing using leverage.  Per my weekend planning, I'm now holding 118% stocks / -18% bonds.
That's a gutsy move. How do you get -18% bonds?

talltexan

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #584 on: April 07, 2020, 06:34:13 AM »
leverage.

Taking on a debt position that is roughly 1/6 of the long position in risky stocks

vand

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #585 on: April 07, 2020, 06:38:15 AM »
Over the weekend, growth in new COVID-19 cases fell so far, that Sunday had fewer new cases than Saturday.  In Europe, the death rate is falling, which is also good news.  Overall, an optimistic outlook for COVID-19 ending earlier than expected, without millions infected.  But people need to stay indoors, away from each other, or the effort at social distancing will be wasted.  But right now, it seems to be working.
Millions are still going to be infected.
Quote
Over the weekend, I looked at various scenarios of how leverage impacts losses.  Much like a business losing money, if you don't cut costs the whole operation goes under.  Same with investing using leverage.  Per my weekend planning, I'm now holding 118% stocks / -18% bonds.
That's a gutsy move. How do you get -18% bonds?

He's not. He's in fantasy land where he thinks that selling 18% of your position is the same thing as going short by 18%. lol.

MustacheAndaHalf

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #586 on: April 07, 2020, 08:46:32 AM »
Over the weekend, growth in new COVID-19 cases fell so far, that Sunday had fewer new cases than Saturday.  In Europe, the death rate is falling, which is also good news.  Overall, an optimistic outlook for COVID-19 ending earlier than expected, without millions infected.  But people need to stay indoors, away from each other, or the effort at social distancing will be wasted.  But right now, it seems to be working.
Millions are still going to be infected.
The daily number of new cases in the U.S. for the last 3 days is: 33.8k, 26.6k, 29.0k.  With 29k cases per day it takes 3 weeks to reach 1 million cases, let alone more.  And the growth has been steadily declining.

Should millions stay at home and keep social distancing, yes - it's working.  People should be afraid of millions of cases, like you mention.  But by predicting it, experts can convince people to avoid that outcome.


Over the weekend, I looked at various scenarios of how leverage impacts losses.  Much like a business losing money, if you don't cut costs the whole operation goes under.  Same with investing using leverage.  Per my weekend planning, I'm now holding 118% stocks / -18% bonds.
That's a gutsy move. How do you get -18% bonds?
By opening a margin account, and buying on margin.  Existing equities act as collateral for the margin loan.  Most brokerages offer margin loans - but they are expensive.  I'm prepared to keep margin for 2 years, but I hope to only need it for months.

I am only using margin to invest for the recovery.  If I'm wrong, and stocks fall more than I expect, I will taper off my margin account (paying it off).  If I'm right, and stocks recover, I'll also taper off as stocks near recovery levels.

The best margin rates are at Interactive Brokers, but it's a very risky strategy that can lead to -100% loss of not just the loan, but all of your investments.  It's very important to accept losses, and pay off the loan if the markets take a turn for the worse.


He's not. He's in fantasy land where he thinks that selling 18% of your position is the same thing as going short by 18%. lol.
In case you missed it when I corrected you earlier:
"A short, or a short position, is created when a trader sells a security first with the intention of repurchasing it or covering it later at a lower price."
https://www.investopedia.com/terms/s/short.asp

vand

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #587 on: April 07, 2020, 09:01:01 AM »
Long
Flat
Short
Hedged

are all different things that you seem to be purposely mixing up to try convincing us that you know what you are doing.

VaCPA

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #588 on: April 07, 2020, 09:02:01 AM »
Long
Flat
Short
Hedged

are all different things that you seem to be purposely mixing up to try convincing us that you know what you are doing.
You're giving him a lot of credit assuming he's doing it on purpose

AdrianC

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #589 on: April 07, 2020, 11:52:16 AM »

Over the weekend, I looked at various scenarios of how leverage impacts losses.  Much like a business losing money, if you don't cut costs the whole operation goes under.  Same with investing using leverage.  Per my weekend planning, I'm now holding 118% stocks / -18% bonds.
That's a gutsy move. How do you get -18% bonds?
By opening a margin account, and buying on margin.  Existing equities act as collateral for the margin loan.  Most brokerages offer margin loans - but they are expensive.  I'm prepared to keep margin for 2 years, but I hope to only need it for months.

I am only using margin to invest for the recovery.  If I'm wrong, and stocks fall more than I expect, I will taper off my margin account (paying it off).  If I'm right, and stocks recover, I'll also taper off as stocks near recovery levels.

The best margin rates are at Interactive Brokers, but it's a very risky strategy that can lead to -100% loss of not just the loan, but all of your investments.  It's very important to accept losses, and pay off the loan if the markets take a turn for the worse.
Sure, we all get how margin works. Saying you're -18% bonds is a bit confusing. I expected it to be a HELOC or some such.

Best of luck, and keep us posted. Like I say, it's a gutsy move. Not one that I would ever do.

dragoncar

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #590 on: April 07, 2020, 06:30:15 PM »
Seems like hes saying hes short compared to his previous position.  But when people talk about short they are talking about net position

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #591 on: April 08, 2020, 12:13:51 AM »
To be clear, let me correct that previous description and put it this way:
118% stocks
   0% bonds
-18% margin loan


vand - In another thread you contradicted me and said a short position only exists with negative market exposure.  I quoted a definition twice showing you are wrong.  Now you're listing words I didn't use, rather than quoting me.  If you're not putting words in my mouth, quote my usage of the other terms you listed.

AdrianC - See above.  If things recover, or go worse than expected, I will unwind my leverage and accept the gain or loss.

dragoncar - See above.  A "short position" can refer to part of a portfolio, which was the topic of another thread.

dragoncar

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #592 on: April 08, 2020, 01:18:56 AM »
To be clear, let me correct that previous description and put it this way:
118% stocks
   0% bonds
-18% margin loan


vand - In another thread you contradicted me and said a short position only exists with negative market exposure.  I quoted a definition twice showing you are wrong.  Now you're listing words I didn't use, rather than quoting me.  If you're not putting words in my mouth, quote my usage of the other terms you listed.

AdrianC - See above.  If things recover, or go worse than expected, I will unwind my leverage and accept the gain or loss.

dragoncar - See above.  A "short position" can refer to part of a portfolio, which was the topic of another thread.

Interesting which thread?

IMO you are short cash not bonds because your liability is denominated in dollars.  Unless you actually borrowed bonds and sold them to finance the stock position (i.e. a covered short).  But then your assets would be:

118% stocks
-18% bonds (because you have a liability in bonds not cash)

MustacheAndaHalf

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #593 on: April 08, 2020, 08:34:50 AM »
dragoncar - The earlier thread was titled: how do you short?

And I agree I should not have used negative bonds, above, to represent the margin amount.  Your example of showing negative cash is a better approach (it's also how it's displayed in my margin account)  So this might be more accurate:

118% stocks
   0% bonds
-18% cash

MustacheAndaHalf

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Re: Coronavirus - what are you doing with your investments / 401ks?
« Reply #594 on: April 12, 2020, 11:11:10 AM »
I've got additional changes with my investments, but plan on posting updates in a new thread I created:
https://forum.mrmoneymustache.com/investor-alley/data-driven-investing/