flight to safety - coronavirus version

[kenmoremmm]

well, i just pulled the trigger on one of my accounts (roth).
i sold my money market position and will be getting back into VTIVX, where i previously was.
i liquidated that account previously at a share price of 23.06. as of tonight, it's price is 20.20. we'll see what it is at closing tomorrow when the transaction goes through.
on feb 12, the tipty top forever top of the market, the price was 25.40. so:
23.06/25.40 = 9.3% loss
23.06/20.20 = 14.2% gain
(i think this methodology is correct - please let me know if not)

my other acct (401k, about 2.5x the size of the roth) is still in bonds. this one is at breakeven. i guess i'm optimistically bearish on this, so i'm holding out, but figured i'd hedge with the roth to salvage some relative gain.

[kenmoremmm]

closing price today 20.70. therefore:
23.06/20.70 = 11.4% gain locked in

[MustacheAndaHalf]

my other acct (401k, about 2.5x the size of the roth) is still in bonds. this one is at breakeven. i guess i'm optimistically bearish on this, so i'm holding out, but figured i'd hedge with the roth to salvage some relative gain.

If you're bearish in the sense of a bear market - it ended Thursday, April 10.  Stock prices are now within 20% of their Feb 19 peak as of yesterday's close.

[Wintergreen78]

closing price today 20.70. therefore:
23.06/20.70 = 11.4% gain locked in

11.4% of that particular account. You said your other account is 2.5 times bigger. So, if those two are all your assets it’s more like 3%.

That’s the issue I always run up against when I start thinking about doing some short term speculation. Unless you are making bets with a significant portion of your net worth any gains are going to be insignificant.

Edit: I see in your earlier post you asked about methodology, so let me clarify. I would always look at these kinds of things as to how they impact your net worth, not just the portion you bet. I’d also look at two scenarios: what would your net worth be if you’d done nothing, what is your net worth after moving out then back in.

[kenmoremmm]

i fully understand that i can't just look at a single account and that any gains need to be weighted. i was just posting info for the record since others had criticized earlier in the post.

[Wintergreen78]

So this may be a bit of a thread hijack, but hey, I’ve got lots of free time right now. Another way to look at this is in absolute dollars. If you take the 4% rule (which only holds if you buy and hold an index fund with a significant portion of your net worth) then $25,000 dollars invested supports $1,000 per year of spending. For me, that’s a pretty good measure of whether or not a return is meaningful.

So, if I was trying to decide whether or not to make a speculative bet, unless it would earn at least $25,000, I don’t really see the long-term benefit.

[kenmoremmm]

well, finally got out of my other position and am now back in. too late of course for the big runup. so it goes.

in that account, i ended up down 1.4%
other account, i was up 11.4%
net gain comes out to $9788

yes, not big numbers in the grand scheme of things.

better than nothing. could've been much better had my ego to go for a home run when the dow was at 18k wasn't as strong. i didn't know that rick ankiel was in the outfield that day.

i suspect the market will eventually drop bigly in the next 2 months when the reality of economic impacts becomes more pronounced or when the economy 'restarts' but then shuts down again after cases explode. i didn't like the idea of stomaching a loss. the "gains" (i.e. not losing money) felt ok, but the stress was starting to build for me as markets started to reach breakeven point relative to the time i moved part of my 401k account.

[Jack0Life]

well, finally got out of my other position and am now back in. too late of course for the big runup. so it goes.

in that account, i ended up down 1.4%
other account, i was up 11.4%
net gain comes out to $9788

yes, not big numbers in the grand scheme of things.

better than nothing. could've been much better had my ego to go for a home run when the dow was at 18k wasn't as strong. i didn't know that rick ankiel was in the outfield that day.

i suspect the market will eventually drop bigly in the next 2 months when the reality of economic impacts becomes more pronounced or when the economy 'restarts' but then shuts down again after cases explode. i didn't like the idea of stomaching a loss. the "gains" (i.e. not losing money) felt ok, but the stress was starting to build for me as markets started to reach breakeven point relative to the time i moved part of my 401k account.

I can totally relate.
Everyday I wake up hoping for the market to tank so I can put more money back in the market and then my mood turn sour when it does not.
I trying to hit that home run too when I should have been happy with a bunch of singles.
The only difference with me is that I got out near the top so I have a lot of flexibility to get my money back in. I got $200k out @Dow 29400 and the rest $100k @Dow 26700. Dow is sitting @24000 but I'm still ahead relatively.
My biggest problem is that I too impatient. I've been in such a rush to take the gains and cash out.
- I reallocate $35k @18400 and took a huge gain and got back out.
- I did the same $15k @21000 and $10k 21500 and took the gains and got out again.
Should have gotten more back in(like my wife told me) and left it alone.
- Bought 100 shares of Delta @$22. Heard Buffett sold a bunch of Delta and I sold them all @22.30. Its close to $27 now.
- Made a huge mistake and bought 100 shares of ABT stocks @$83 when I did a "market" buy instead of "limit'. My mistake turned out to be pretty good. Sitting >$89 now.

I'm just a newbie investor being very cautious and having some interesting experience along the way. At least I'm not losing anything along the way. I'm just not gaining a whole lot when I should be.
But watching the market every single day is very stressing. I still have a lot of money sitting out on the sideline waiting to get back in. I still believe the market has some "lows" left. Just waiting for that one bad week to go back all in...LOL