Author Topic: Signs of a Downturn in Stocks  (Read 19351 times)

tyleriam

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Signs of a Downturn in Stocks
« on: September 09, 2016, 11:23:43 AM »
I think most of us would agree that there is a day of reckoning in the stock market heading our way.

What do you think will be the signs/markers of the beginning of the downturn?

iris lily

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Re: Signs of a Downturn in Stocks
« Reply #1 on: September 09, 2016, 11:28:39 AM »
Wow, that sounds ominous.

I guarantee  the market will go down. That is its nature. Why be uber focused on that?
« Last Edit: September 09, 2016, 11:44:29 AM by iris lily »

TheAnonOne

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Re: Signs of a Downturn in Stocks
« Reply #2 on: September 09, 2016, 11:32:37 AM »
I think most of us would agree that there is a day of reckoning in the stock market heading our way.

What do you think will be the signs/markers of the beginning of the downturn?

When the stock market drops.

MustacheAndaHalf

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Re: Signs of a Downturn in Stocks
« Reply #3 on: September 09, 2016, 12:23:59 PM »
I think most of us would agree that there is a day of reckoning in the stock market heading our way.
Pretending to know what other people think, without asking them, doesn't seem like clear thinking to me.  And you're quoting no evidence for your claim.  Guessing when the market will suddenly go down is speculation, not investment.

chesebert

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Re: Signs of a Downturn in Stocks
« Reply #4 on: September 09, 2016, 12:27:15 PM »
I have already adjusted my AA in anticipation of a more volatile market. However, it appears all asset classes are moving in the same direction thanks to the effect of prolonged super low interest rate the central banks have been peddling.

Mr. Green

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Re: Signs of a Downturn in Stocks
« Reply #5 on: September 09, 2016, 12:29:20 PM »
If this year has taught us anything it's that you can't predict it. The bears were ringing the alarm bells in February and people who had exited the market were feeling vindicated. Then the market did an about face and all three major indices broken new all time highs this summer. If that wasn't a gut check for all those timers out there I don't know what is. Just dollar cost average and let it be one less thing on your mind. And my personal favorite nugget is that the market doesn't only move two ways. It could just stay sideways for a while. I wouldn't want to be sitting on the sidelines if that happened and then a quick jumpstart to moving higher cost me 5%.

Jack

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Re: Signs of a Downturn in Stocks
« Reply #6 on: September 09, 2016, 12:47:23 PM »
And my personal favorite nugget is that the market doesn't only move two ways. It could just stay sideways for a while. I wouldn't want to be sitting on the sidelines if that happened and then a quick jumpstart to moving higher cost me 5%.

Not to mention that sideways = up, because of dividends... if you're in the market.

grettman

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Re: Signs of a Downturn in Stocks
« Reply #7 on: September 09, 2016, 01:00:34 PM »
I love seeing that >1% drops spark these threads on MMM and Bogleheads.  Just like >1% increases generate "What are you up YTD?".


thd7t

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Re: Signs of a Downturn in Stocks
« Reply #8 on: September 09, 2016, 01:03:01 PM »
Oooh! Is it today? Do we win a prize? No?

Is it tomorrow?

chesebert

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Re: Signs of a Downturn in Stocks
« Reply #9 on: September 09, 2016, 01:09:06 PM »
What is causing the drop today? Are there loads of options maturing today?

SuperSecretName

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Re: Signs of a Downturn in Stocks
« Reply #10 on: September 09, 2016, 01:12:57 PM »
What is causing the drop today? Are there loads of options maturing today?
Fed.  market is spooked they might raise in Sept.

Timodeus

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Re: Signs of a Downturn in Stocks
« Reply #11 on: September 09, 2016, 01:25:36 PM »
I think most of us would agree that there is a day of reckoning in the stock market heading our way.

What do you think will be the signs/markers of the beginning of the downturn?

I have no idea if this day of reckoning you speak of is upon us, but I do have angst for an economy that hasn't had a recession in at least 7 years, and is showing signs of a slowdown. While these various signs have come and gone over the last few years and we could just be in a slowing period that's a part of a much larger expansion (see Australia), I do think the unusual monetary policy of the central banks, general world trade slowdown, and oil market turmoil may be the recipe that finally does this bull market in. That's a complete guess though, based on "feelings" and all that.

As for my portfolio strategy, I'm not changing anything. I regularly buy stock and bond index funds once the paycheck hits the bank, and will try to buy even more if/when the market drops. I do keep an emergency fund of cash unlike some on this forum (even a teeny-tiny amount of physical gold/silver, again unlike many on this forum), that gives me confidence of weathering economic storms, I'd suggest you do the same if you have any financial worries. Given the odds though, it's really just a psychological aid so I wouldn't over do it. 
« Last Edit: September 09, 2016, 01:28:42 PM by Timodeus »

TheAnonOne

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Re: Signs of a Downturn in Stocks
« Reply #12 on: September 09, 2016, 01:48:47 PM »
I love seeing that >1% drops spark these threads on MMM and Bogleheads.  Just like >1% increases generate "What are you up YTD?".

Yea... in June we had everyone scared, in March, in Jan...

For a forum of 'buy and holders' we sure sweat a lot.

Jack

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Re: Signs of a Downturn in Stocks
« Reply #13 on: September 09, 2016, 01:55:51 PM »
For a forum of 'buy and holders' we sure sweat a lot.

IMO, the silly people who hang out in "Investor Alley" aren't necessarily representative of the forum as a whole.

dividendman

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Re: Signs of a Downturn in Stocks
« Reply #14 on: September 09, 2016, 02:22:32 PM »
Woot, I love when the market drops on Fridays. It makes me feel like I got a better deal on my investments that go in on Fridays after the close.

PharmaStache

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Re: Signs of a Downturn in Stocks
« Reply #15 on: September 09, 2016, 03:02:42 PM »
I just sold 80k worth of index funds earlier this week (transferring to another broker), so I wouldn't mind if the markets went down a bit more while they are in limbo.  I doubt I will be that lucky though- I predict the markets going up again in time for me to buy.

sirdoug007

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Re: Signs of a Downturn in Stocks
« Reply #16 on: September 09, 2016, 03:12:01 PM »

frugledoc

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Re: Signs of a Downturn in Stocks
« Reply #17 on: September 09, 2016, 03:17:28 PM »
My IPS has a formula in it:

I am feeling nervous about a crash + internet forums are full of market timers predicting a crash = nothing actionable, carry on.

dragoncar

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Re: Signs of a Downturn in Stocks
« Reply #18 on: September 09, 2016, 03:23:38 PM »
What is causing the drop today? Are there loads of options maturing today?
Fed.  market is spooked they might raise in Sept.

AKA "market tantrum"

FWIW days like today set me back months at this point.  Boooo

Mr. Green

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Re: Signs of a Downturn in Stocks
« Reply #19 on: September 09, 2016, 03:50:19 PM »
Ironically I'm doing a 401k rollover so I have 210k that was sold last Friday. I thought I might catch a little dip but Vanguard said it will take them about 3 weeks to get that check into my rollover IRA so who knows what the market will be doing that. Hah!

Spork

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Re: Signs of a Downturn in Stocks
« Reply #20 on: September 09, 2016, 03:54:08 PM »
Ironically I'm doing a 401k rollover so I have 210k that was sold last Friday. I thought I might catch a little dip but Vanguard said it will take them about 3 weeks to get that check into my rollover IRA so who knows what the market will be doing that. Hah!

I recently did one.  They gave me the ~3 weeks, too.  It was under a week and a half.  I believe they're quoting worst case scenario because it is dealing with another entity that is not under their control.

Travis

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Re: Signs of a Downturn in Stocks
« Reply #21 on: September 09, 2016, 04:11:13 PM »
Repent!  The end is near!

http://thereformedbroker.com/2016/09/09/dow-decline-signals-end-of-western-civilization/

I didn't even know something happened today until you mentioned it.  At first I thought this thread was about the half percent drop yesterday due to Apple saying they weren't going to release weekly sales figures for the Iphone 7 because they already knew they were going to sell them all. Even Jim Cramer gave the nervous nancies on Wall St. a raspberry at that reaction.  Too bad I was busy doing something useful this afternoon. Sometimes we turn on CNBC in the office to get a laugh out of the talking heads finding things to reaction to.

Retire-Canada

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Re: Signs of a Downturn in Stocks
« Reply #22 on: September 09, 2016, 04:46:49 PM »


I got really scared. Then I realized I had some money in my brokerage account I hadn't invested yet. So I bought some stocks with it.

And then I felt better. Whew! Disaster averted. I'm glad the markets are closed for the weekend. I don't think I could take this kind of excitement two days in a row.


dividendman

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Re: Signs of a Downturn in Stocks
« Reply #23 on: September 09, 2016, 05:07:01 PM »
Dare I say it??

Here it comes,  red dow!!!

SwordGuy

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Re: Signs of a Downturn in Stocks
« Reply #24 on: September 09, 2016, 05:16:57 PM »

SwordGuy

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Re: Signs of a Downturn in Stocks
« Reply #25 on: September 09, 2016, 05:20:36 PM »
Prices down?  Just in time for my semi-monthly paycheck purchase!  Woot!

Drop, baby drop!

I would be thrilled with a 20% drop for the next 9 months or so.   It would be great to get that big a discount on my new purchases before I retire!

Shor

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Re: Signs of a Downturn in Stocks
« Reply #26 on: September 09, 2016, 05:23:18 PM »
And my personal favorite nugget is that the market doesn't only move two ways. It could just stay sideways for a while. I wouldn't want to be sitting on the sidelines if that happened and then a quick jumpstart to moving higher cost me 5%.

Not to mention that sideways = up, because of dividends... if you're in the market.
No, No! Dividends destroy jobs, and tear apart families! Or something... *hand wavey* :P

Retire-Canada

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Re: Signs of a Downturn in Stocks
« Reply #27 on: September 09, 2016, 05:44:01 PM »
Dare I say it??

Here it comes,  red dow!!!

Yes!

We are at 18,085 today. If we drop another 1000 points we'll be back to Brexit territory and if we drop sub-17,000. I expect to smell dry powder being fired and folks sleeping more comfortably now that the cash is out of their mattresses!

One Noisy Cat

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Re: Signs of a Downturn in Stocks
« Reply #28 on: September 09, 2016, 06:35:21 PM »
Best way to tell is with a rear view mirror.

I suppose there are somewhat reliable indicators such as inverted yield curves, rising unemployment and inflation and interest rate hikes.   But my understanding people in September 1929 were pretty optimistic about such leading indicators of the day as sales of typewriters. Or when the markets surged upwards one week in the summer of 1982, it was dismissed as "one of those things" in the "NY Times" business section with inflation, unemployment and budget deficits being high.

Apparently today's downturn (and I haven't even checked out how big it was) was influenced by a bond watcher named Jeff Gundlach predicting Fed rate hikes higher and quicker than many are expecting.  But for the year the S & P 500 is up 5.7% and I certainly remember back in January it was "Worst four days of the new calendar year ever!!!! Run and hide!!! The end is nearly here!!!" for some hysterical internet sites.

frugalcoconut

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Re: Signs of a Downturn in Stocks
« Reply #29 on: September 09, 2016, 06:51:24 PM »
What do you think will be the signs/markers of the beginning of the downturn?

Various predictions are made every day ... only in hindsight are a few of them correct and finally considered credible.

Attempting to speculate is like playing a game of roulette ... where the house always has the advantage.  ;)

RangerOne

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Re: Signs of a Downturn in Stocks
« Reply #30 on: September 09, 2016, 07:08:11 PM »
The market crashing is never good. But as long as I don't lose my job I wont lose sleep over it.

That being said I would love for the housing market in San Diego take a hit so I can jump in now instead of waiting...

fattest_foot

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Re: Signs of a Downturn in Stocks
« Reply #31 on: September 09, 2016, 08:52:47 PM »
If this year has taught us anything it's that you can't predict it. The bears were ringing the alarm bells in February and people who had exited the market were feeling vindicated. Then the market did an about face and all three major indices broken new all time highs this summer. If that wasn't a gut check for all those timers out there I don't know what is. Just dollar cost average and let it be one less thing on your mind. And my personal favorite nugget is that the market doesn't only move two ways. It could just stay sideways for a while. I wouldn't want to be sitting on the sidelines if that happened and then a quick jumpstart to moving higher cost me 5%.

I feel like this year so far is probably one of the best indicators to me that I've got the right strategy. Trying to "predict" anything this year would have been a quick way to lose money.

MoneyCat

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Re: Signs of a Downturn in Stocks
« Reply #32 on: September 09, 2016, 09:24:26 PM »
Today was fucking awesome in the markets. Stocks are steeply discounted right now. If it stays this way, my dividends are going to be so valuable at the end of the month. Pop the bubbly, everybody!

Seppia

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Re: Signs of a Downturn in Stocks
« Reply #33 on: September 09, 2016, 11:59:52 PM »
Now on sale with the steep discount of 2%!

Retire-Canada

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Re: Signs of a Downturn in Stocks
« Reply #34 on: September 10, 2016, 07:24:28 AM »
Now on sale with the steep discount of 2%!

I know! I'm torn..do I rent out my underground bunker on Air BnB to generate some cash to invest while stocks are totally in the toilet? Maybe sell some of my guns and ammo as well? Then the zombie apocalypse happens and I have some German tourists sharing the bunker with me, eating my MREs and I'm low on ammo right off the bat.

Choices. Choices. This is why it's so hard to beat the market and be ready for zombies.

Travis

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Re: Signs of a Downturn in Stocks
« Reply #35 on: September 10, 2016, 09:38:37 AM »
Best way to tell is with a rear view mirror.

I suppose there are somewhat reliable indicators such as inverted yield curves, rising unemployment and inflation and interest rate hikes.   But my understanding people in September 1929 were pretty optimistic about such leading indicators of the day as sales of typewriters. Or when the markets surged upwards one week in the summer of 1982, it was dismissed as "one of those things" in the "NY Times" business section with inflation, unemployment and budget deficits being high.

Apparently today's downturn (and I haven't even checked out how big it was) was influenced by a bond watcher named Jeff Gundlach predicting Fed rate hikes higher and quicker than many are expecting.  But for the year the S & P 500 is up 5.7% and I certainly remember back in January it was "Worst four days of the new calendar year ever!!!! Run and hide!!! The end is nearly here!!!" for some hysterical internet sites.

Simply cut out that quote that called the market "one of those things" and go back to a restfull sleep. Your last quote there reminds me of the Tom Selleck movie Mr. baseball where tries to justify his poor performance "Hey, I led the league in ninth inning RBIs in the month of August!". Financial commenters on TV and daily print make some spectacular leaps to find something to turn into a headline.

Kaspian

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Re: Signs of a Downturn in Stocks
« Reply #36 on: September 10, 2016, 10:08:43 AM »
I think most of us would agree that there is a day of reckoning in the stock market heading our way.

What do you think will be the signs/markers of the beginning of the downturn?

Absolutely not!  I can't know this, you can't know this, and the professionals can't either.  Anyone who says this is a "sign of a downturn" is lying.

wenchsenior

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Re: Signs of a Downturn in Stocks
« Reply #37 on: September 10, 2016, 11:48:11 AM »
I think most of us would agree that there is a day of reckoning in the stock market heading our way.

What do you think will be the signs/markers of the beginning of the downturn?

Is this "most of us" you and the voices in your head?

Telecaster

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Re: Signs of a Downturn in Stocks
« Reply #38 on: September 10, 2016, 01:16:47 PM »
I think most of us would agree that there is a day of reckoning in the stock market heading our way.

What do you think will be the signs/markers of the beginning of the downturn?

Wars and rumors of wars, locusts, plagues, earthquakes, famine, and dogs and cats living together. 

davisgang90

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Re: Signs of a Downturn in Stocks
« Reply #39 on: September 10, 2016, 04:55:36 PM »
I'm convinced.  Liquidated my entire portfolio and put it all in hybrid seeds.

Monkey Uncle

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Re: Signs of a Downturn in Stocks
« Reply #40 on: September 12, 2016, 04:43:08 AM »
It's funny how all these gloom-and-doomers calling for the big crash totally ignore the fact that most equity markets (other than US large caps) have already experienced a garden variety bear market.  US small caps and most non-US markets experienced a >20% decline from early 2015 to early 2016.

Kaspian

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Re: Signs of a Downturn in Stocks
« Reply #41 on: September 12, 2016, 09:35:38 AM »
Wars and rumors of wars, locusts, plagues, earthquakes, famine, and dogs and cats living together.

Right?!  ....Exactly like the last 500 years.  Status quo, then.  :)

Much Fishing to Do

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Re: Signs of a Downturn in Stocks
« Reply #42 on: September 12, 2016, 11:38:04 AM »
Now on sale with the steep discount of 2%!
Shoot, I missed the big discount cause I was walking the dog this morning ....this is like work....

SuperSecretName

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Re: Signs of a Downturn in Stocks
« Reply #43 on: September 12, 2016, 12:07:14 PM »
...and we're coming back.

fed dove reaffirms dove position.  market says, "sike, just kidding about friday.  sorry for freaking out.  our bad"

Mr. Green

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Re: Signs of a Downturn in Stocks
« Reply #44 on: September 12, 2016, 03:31:18 PM »
Ironically I'm doing a 401k rollover so I have 210k that was sold last Friday. I thought I might catch a little dip but Vanguard said it will take them about 3 weeks to get that check into my rollover IRA so who knows what the market will be doing that. Hah!

I recently did one.  They gave me the ~3 weeks, too.  It was under a week and a half.  I believe they're quoting worst case scenario because it is dealing with another entity that is not under their control.
This was spot on. I got an email from Vanguard today that the money was in my account and I mailed the check Friday afternoon. I was like WTF? Awesome! I logged in to Vanguard and bought back in so I'm happy now.

LordSquidworth

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Re: Signs of a Downturn in Stocks
« Reply #45 on: September 12, 2016, 08:40:28 PM »
I think most of us would agree that there is a day of reckoning in the stock market heading our way.

What do you think will be the signs/markers of the beginning of the downturn?

The next downturn will come from China.

They're pace of growth was unsustainable and debt levels have reached levels that often point towards an impending downturn. They're showing symptoms that we've seen in Western nations leading up to recessions.

It being China will cause it to be large by itself. It'll be exacerbated by the failure that is the FED today. Ever since Greenspan lost his spine the institution has been a joke (they responded with the correct ideas in 2008, but their implementation was disgusting) and the gutlessness of the current FED leadership keeping rates where they are greatly reduces their ability to confront another large downturn.

Depending on where the UK is can add fuel to the fire. They've put themselves in an unpredictable position, which will lead to more volatility if the world markets roll over.

This doesn't mean people should be liquidating portfolios. If you're confident in your holdings, keep on holding. I'd hold off on adding to positions unless you find a really good deal somewhere. One should also be wary of holdings that are trading at a premium to their historical valuations. An example is something like XOM; currently trading at > 30 p/e while historically in the low teens. Something like that would get crushed in the next market downturn and likely won't return to its former valuation unless conditions of today end up again. Something like AAPL or HSY will get hammered, but will bounce back as the recession ends.

It's coming, this bull run has been unnaturally long. It's part of the market cycle. The sky won't fall for ever but all bull markets must end, only to be reborn soon after the bear departs. Cash will be king beforehand and those who can stomach it knowing it doesn't last forever will be the ones to profit.

** personally cashed out of market early this year to provide funds for two new businesses, not because the sky might fall. Funds will be returned to an equities account start of summer 2017 along with a sizable flow of new funds from the businesses. Will wait for lower valuations to put it back in equities because it will start with a lump sum and we are too far into a bull cycle. This could be tomorrow, next month, next year, in two years. Nobody really knows. Statistically though it's more close than far. In the mean time the funds were better utilized in a business in real estate and another in the fastest growing industry in America.

Kaspian

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Re: Signs of a Downturn in Stocks
« Reply #46 on: September 13, 2016, 09:42:40 AM »
Ha!  A downturn is coming sometime in the future?  Yep, and I think a bear might have shit in the woods today.  This is nonsense.


Retire-Canada

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Re: Signs of a Downturn in Stocks
« Reply #47 on: September 13, 2016, 09:50:23 AM »
Ha!  A downturn is coming sometime in the future?  Yep, and I think a bear might have shit in the woods today.  This is nonsense.

Thanks for the tip! I just went all in on bear shit! ;)

fattest_foot

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Re: Signs of a Downturn in Stocks
« Reply #48 on: September 13, 2016, 09:52:40 AM »
It's funny how all these gloom-and-doomers calling for the big crash totally ignore the fact that most equity markets (other than US large caps) have already experienced a garden variety bear market.  US small caps and most non-US markets experienced a >20% decline from early 2015 to early 2016.

Yeah, but it bounced back. That's like, not supposed to happen; it sure never recovered in 2008! Here we are, almost 9 years later, and the market is still sitting at like 600.

This new fangled 2016 market though, it's really high, and it'll surely crash like that one in 2008.

That's how these market things work, right?

TheAnonOne

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Re: Signs of a Downturn in Stocks
« Reply #49 on: September 13, 2016, 02:27:00 PM »
It's coming, this bull run has been unnaturally long. It's part of the market cycle. The sky won't fall for ever but all bull markets must end, only to be reborn soon after the bear departs. Cash will be king beforehand and those who can stomach it knowing it doesn't last forever will be the ones to profit.

** personally cashed out of market early this year to provide funds for two new businesses, not because the sky might fall. Funds will be returned to an equities account start of summer 2017 along with a sizable flow of new funds from the businesses. Will wait for lower valuations to put it back in equities because it will start with a lump sum and we are too far into a bull cycle. This could be tomorrow, next month, next year, in two years. Nobody really knows. Statistically though it's more close than far. In the mean time the funds were better utilized in a business in real estate and another in the fastest growing industry in America.

What if the market goes up 20% in two years and then drops by 25% and you buy in thinking you did a great job, but lost out on dividends, all the while inflation ate away as well? Is that a win for you? Technically, you lost money on that particular deal. That's why market timing is looked down on.