Author Topic: What just happened??? Anyone else freaked out about the markets???  (Read 25889 times)

AccidentalMiser

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #50 on: April 11, 2014, 10:34:25 AM »
I'll be too scared to look at my retirement funds tonight. 

Anyone else sad about today's plunge?

How long have you been in this game?  In 2008/2009, we took a 50% haircut!!  In 2000, we took a 60% haircut!!! Guess what, our hair, eventually, grew back twice as long. 

What's the long-term trend?  Up.  Is the Fed still pumping money into the economy?  Yep.  Near-Zero interest rates?  Check.  Where's all that money going to end up?  Under Warren Buffet's matress?  I don't think so.

It'll probably get worse before it gets better, so hang on.  Stop checking your bright red daily investment value changes, it'll just make you sick.  After you've been sick for several months, you'll sell everything and breathe a sigh of relief.  That sigh of relief will be the signal for the markets to begin the next leg of it awesome 200-year climb.

Hang on, Sloopy.  It'll all work itself out in the end. 

I have to go buy some stocks now, some of my favorite companies are ON SALE TODAY!

hodedofome

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #51 on: April 11, 2014, 10:52:11 AM »
If you have a well thought out plan, then nothing the market does should surprise you or cause you to do something stupid. Have a plan, stick to the plan. Easier said then done. And finally, the hardest of all: know when to change the plan.

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #52 on: April 11, 2014, 11:28:12 AM »
I do understand about long-term versus short term, as I said in my original post.  Is there no room here for someone to say yikes, I just lost $5000 overnight without being told they are being stupid?  Yes, I do understand enough about investing to know that, should the markets come back up, all we be well--and that I will actually be better off because I continued to invest when the markets were down.

I think I'll go back to the Journals section now.  Sheesh.

I think most people here are just trying to be reassuring by joking with you, sort of trying to say that it's silly to be worried because this is the nature of equity markets. I hope you don't take offense; intentions are good over here.

Richard3

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #53 on: April 11, 2014, 04:21:18 PM »


I'm freaked out I don't more cash available to buy shares :)

Roland of Gilead

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #54 on: April 11, 2014, 04:44:45 PM »
I just checked my accounts and one is down 0.41% for April but up 10.12% this year while the other is up 3% for April and 14% for the year.

Heck, I should just go all cash, those are good returns for a year.

jnik

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #55 on: April 12, 2014, 06:45:21 AM »
So, fun thing. Type "DJIA" into google. It'll bring up the one-day line. OH SHIT! Click on 5-day. Hmm, still looks pretty bad. Click on 1-month. Wow, that's steep, but we're about where we were a month ago. Click on 6-month. Kinda flat? Click on 1-year. Yeah, maybe growth is slowing? Click on 5-year. What were we talking about again?

warfreak2

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #56 on: April 12, 2014, 06:57:52 AM »
So, fun thing. Type "DJIA" into google. It'll bring up the one-day line.
I find this ridiculous. Is the one-day line really what most people are looking for?

MountainMan

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #57 on: April 12, 2014, 08:04:48 AM »
So, fun thing. Type "DJIA" into google. It'll bring up the one-day line.
I find this ridiculous. Is the one-day line really what most people are looking for?

It is ridiculous.

The one-day line is what all the TV talking heads talk about.  Wall Street traders trade on hourly, daily, weekly, or monthly time scales.  And that's what the talking heads are talking about.  No wonder regular people get spooked by the market.

But the long view is a much more appropriate view of the market, for regular people.  Especially if you're trading on long time scales.

KBecks

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #58 on: April 12, 2014, 11:21:39 AM »

A 2% drop (hopefully) shouldn't freak you out.

And then you can combine it into some sweet stoicism negative visualization being happy when the market didn't drop that 40% (or whatever you're visualizing).


And, if you have some cash on the side, you can buy low.  That sounds like fun. 

I am also learning about hedging, but I have not tried this yet. (I am paying for investment advise where they suggest that you can hedge, or hold some fairly serious cash, or both).  As I understand it, a hedge is a short position.  Ideally you want a hedge that doesn't cost much and doesn't drag your portfolio much.  (This is for a not-too-small port).  But if the market goes up, your hedge loses money, but if the market goes down, the hedge makes money and makes the drop less painful, and your results smoother sailing.

The goal of the model portfolio that I am watching / building toward is 7% + inflation with no loss of capital over a 3 year rolling period.  Fairly conservative.   I truly also want to get into real estate as soon as I have enough free cash / cash cushion safety net / market knowledge to be smart about that kind of investment.  This is also some diversification / cash flow machine type of business.  Gotta like that.

KBecks

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #59 on: April 12, 2014, 11:27:14 AM »


I have to go buy some stocks now, some of my favorite companies are ON SALE TODAY!

Are they on a big sale?  I am going to wait and look for a massive mega blowout sale and then buy quality stuff on the cheap.  I'm not ready to buy yet, but it's fun to look around.

anisotropy

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #60 on: April 12, 2014, 11:49:18 AM »
ya...after the wonderful 6months or so we've had, last few days kinda sucked.

arebelspy

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #61 on: April 12, 2014, 11:50:57 AM »
ya...after the wonderful 6months or so we've had, last few days kinda sucked.

If you aren't FIRE'd, you need to reframe your viewpoint.

After the disappointing rise in prices of the past six months, we finally have a sale.  Hurray!  :)
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spoonman

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #62 on: April 13, 2014, 06:10:43 PM »


+1!

When everyone else freaks out, I buy.  Meanwhile, my dividends keep coming in just as they always have.

forward

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #63 on: April 14, 2014, 10:35:17 AM »

I check my net worth once a month.  I have to admit its a little bothersome in months when my NW has not increased by the same amount that I have saved and invested in a month.  Clearly it is actually a good thing when investing in equities.  Maybe I should, as mentioned above, track shares but it would take me longer and I have better things to do.

Ftao93

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #64 on: April 14, 2014, 11:55:27 AM »
I noticed the market went back up over 100 pts already.  we'll see how the day closes out :P.    hopefully we can have a few lower days before my next payday on Friday, I like getting them on sale!

MooseOutFront

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #65 on: April 14, 2014, 12:36:48 PM »
I saw this thread and got my hopes up that were were having a flash crash.  Instead, nope, nothing.  Not even a dip really.  Still wanting that buy opportunity to show up that has me wanting to take loans out on my cars to buy more shares.

Roland of Gilead

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #66 on: April 14, 2014, 02:54:36 PM »
I saw this thread and got my hopes up that were were having a flash crash.  Instead, nope, nothing.  Not even a dip really.  Still wanting that buy opportunity to show up that has me wanting to take loans out on my cars to buy more shares.

Biotech is down about 25%, a bit lower and I will take out loans to buy a lot.

DoctorOctagon

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #67 on: April 14, 2014, 04:54:20 PM »
The recent correction brought a couple of businesses into the 'cheap' range.  Wells Fargo for a P/E under 12?  Lots of Business Development Companies for under a P/E of 10?  Lots of companies still selling for way way under book value and the market corrects down??!?!?!  Awesome.  Buy time

Roland of Gilead

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #68 on: April 14, 2014, 04:56:11 PM »
The recent correction brought a couple of businesses into the 'cheap' range.  Wells Fargo for a P/E under 12?  Lots of Business Development Companies for under a P/E of 10?  Lots of companies still selling for way way under book value and the market corrects down??!?!?!  Awesome.  Buy time

Apple is selling for about P/E 8 when you back out the cash.  And people say the market is overvalued lol.

daverobev

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #69 on: April 15, 2014, 09:07:47 AM »
The recent correction brought a couple of businesses into the 'cheap' range.  Wells Fargo for a P/E under 12?  Lots of Business Development Companies for under a P/E of 10?  Lots of companies still selling for way way under book value and the market corrects down??!?!?!  Awesome.  Buy time

Apple is selling for about P/E 8 when you back out the cash.  And people say the market is overvalued lol.

My issue with Apple is that they are luxury items. See that $2k MacBook, see that $350 Dell. Ditto iPad, iPhone. If people get over that, Apple can fall far, fast.

arebelspy

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #70 on: April 15, 2014, 09:16:21 AM »
My issue with Apple is that they are luxury items. See that $2k MacBook, see that $350 Dell. Ditto iPad, iPhone. If people get over that, Apple can fall far, fast.

bahaahahahaha
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MountainMan

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #71 on: April 15, 2014, 09:21:13 AM »
My issue with Apple is that they are luxury items. See that $2k MacBook, see that $350 Dell. Ditto iPad, iPhone. If people get over that, Apple can fall far, fast.

Apple has deliberately marketed itself to be something more than "just another computer, the same as any other computer."  You're right, if Apple comes to be percieved that way, they will have serious problems.  But Apple is well aware of the issue, and in fact, their product design, marketing and so on is intended to position their computers as a completely different computing experience. 

That's what people believe they are buying when they buy Apple.  If you want something "functional," any device will do.  If you want something that'll "take it to a new level of experience," buy Apple.  As long as Apple maintains this perception, they will probably be fine.  As soon as they lose it and become perceived as just another computer manufacturer making the same products as everyone else, they will start to hurt.

However, Apple is sitting on a lot of cash.  Like Google and Facebook, they have the option of using it to diversify away from their original business model.  That could change their entire picture of profitability into the future.

innerscorecard

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #72 on: April 15, 2014, 10:13:27 AM »
Apple phones are the only phones that run iOS. Macs are the only machines that run OSX. Some people don't get why that's a differentiator. But it is.

daverobev

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #73 on: April 15, 2014, 04:03:46 PM »
"Sure". I get all that. I have owned Macs, a number of them, both new and used. To some degree I get it, and to some degree I don't.

But that is (always) the thing with single stocks. What happened to BlackBerry? Lots of people LOVE their FaceTime, iMessage, whatever - and it's doing *that* that keeps people hooked on Apple, because their whole family is on it. And yes they have shitloads of cash so they can buy out whatever looks like a competitor - for a while.

Don't get me wrong, I don't think Apple is a bad investment, really. I get that people will pay 4, 5, 6.. well, whatever times "bill of materials" cost for something seen as luxury or more stable.

I find iOS horrible, actually horrible. OSX not so much, but certain things I never figured out the keyboard shortcuts for. And I abso-fucking-lutely despise this "walled garden" stuff. Makes me angry - same with what Sony did with Linux on the PS3.

Anyway.. enough offtopic. Apple will do ok until they don't :)

thesinecure

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #74 on: April 15, 2014, 04:05:09 PM »
people always get nervy when things aren't going straight up

using the VTSAX, which I think is a favorite of the FIRE crowd, it's lost 20 cents since 12/31 - 46.69 to 46.49
i have FXSIX in my 401k (it's a fidelity fund), it's lost 9 cents - 65.49 to 65.38

so, in summary, i'd say not much has happened in 3 and half months

i don't know that anything is actually "on sale" at the moment either, but that's another discussion for another day

happy investing!

danclarkie

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #75 on: April 16, 2014, 05:41:24 AM »
people always get nervy when things aren't going straight up

using the VTSAX, which I think is a favorite of the FIRE crowd, it's lost 20 cents since 12/31 - 46.69 to 46.49
i have FXSIX in my 401k (it's a fidelity fund), it's lost 9 cents - 65.49 to 65.38

so, in summary, i'd say not much has happened in 3 and half months

i don't know that anything is actually "on sale" at the moment either, but that's another discussion for another day

happy investing!

Forgive me, but that is a dumb thing to say.

Comparing it to the start of the year and concluding "not much has happened" is a silly thing to say.

The investor that bought in on the 10th April is down 1.84% on VTI.

The investor that got in 17th april 2009 is up 122%.

You cant take an arbitrary point in history and conclude from that date "not much has happened"

tomsang

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #76 on: April 16, 2014, 07:47:09 AM »
It sounds like you have 5-8 years to adjust your viewpoint on investments.  If something like this is getting you riled up with a five year FIRE, then that says you need to create an environment when 20% corrections creates either positive excitement or a meh moment. You probably need to look at your asset allocation and create one that has less volatility which may push back your FIRE date, but will also create less market stress.

The idea of FIRE is to be financially free. If relativity small changes in the stock market are creating stress, then that is a great indicator that you have a ways to go in this one area.  I believe that you will have this down in the 5-8 year timeframe that you are shooting for. For all of us we are learning how to FIRE.

Investment volatility is comical to some and a challenge to others, just like getting my food budget below $1,000 a month is a challenge for me and comical to others. I hope to make progress in this and many other categories.

Good luck in your progress,

Tom

golfer44

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #77 on: April 16, 2014, 08:38:59 AM »
To those buying extra than they normally would, where is this money coming from?

Theoretically you should be investing a predetermined amount of money regardless of market conditions, and some cash set aside for emergencies. Where's the money coming from? Shouldn't it have already been invested?

Just food for thought!

thesinecure

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #78 on: April 16, 2014, 08:47:26 AM »

Forgive me, but that is a dumb thing to say.

Comparing it to the start of the year and concluding "not much has happened" is a silly thing to say.

The investor that bought in on the 10th April is down 1.84% on VTI.

The investor that got in 17th april 2009 is up 122%.

You cant take an arbitrary point in history and conclude from that date "not much has happened"
[/quote]

how much dumber is it than the wonderful stats you've put together here?

jeez - get a grip

danclarkie

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #79 on: April 16, 2014, 09:22:52 AM »

Forgive me, but that is a dumb thing to say.

Comparing it to the start of the year and concluding "not much has happened" is a silly thing to say.

The investor that bought in on the 10th April is down 1.84% on VTI.

The investor that got in 17th april 2009 is up 122%.

You cant take an arbitrary point in history and conclude from that date "not much has happened"
[ /quote]

how much dumber is it than the wonderful stats you've put together here?

jeez - get a grip

I'm sorry that you were not able to understand my post.

arebelspy

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #80 on: April 16, 2014, 09:36:49 AM »
how much dumber is it than the wonderful stats you've put together here?

lol, I think you missed his point.

The stats he put together was meaningless - and that's it exactly.  They have the same meaning as your stat. In other words, your arbitrary date of "beginning of the year" is and his dates are both equally useless.
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Ottawa

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #81 on: April 16, 2014, 09:43:43 AM »
Here is proof that freaking out about the markets is not useful. 
A steady hand with a steady plan will prevail the day, week, month, year, decade...

thesinecure

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #82 on: April 16, 2014, 10:00:38 AM »
i did understand it guys, are you sure you understood mine?

1)  people always get nervous during corrections (if that's what we want to call the last couple weeks?), however slight they might be

2)  reading the other posts about things being "on sale", i'm simply challenging that - are the indexes really on sale right now?  what qualifies as a "sale", 1%, 5%, 15% reduction from whatever "the price" should be?  20% premium to FV because it really should go up and hasn't yet?

YTD change is a pretty common reference point as you would both know, so not sure it's "arbitrary".  that and 1 year return are probably the most commonly quoted reference points on funds when you start researching such things

i'm certainly glad to see the forums living up to their reputation, though - "dumb", "silly", "can't understand"

Dan - you win the smart guy contest, congratulations  ;)

how about if you think those things are "arbitrary" and that there's a better way to assess these current "sale" prices, suggest what evalation criteria you prefer, i would certainly be interested in that and i think others would as well

danclarkie

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #83 on: April 16, 2014, 10:14:09 AM »
how about if you think those things are "arbitrary" and that there's a better way to assess these current "sale" prices, suggest what evalation criteria you prefer, i would certainly be interested in that and i think others would as well

I made no such claim that I think there is a better way to asses that the funds/stocks are currently on sale.
I never suggested the prices were now "on sale"

Personally if I was willing to buy a stock/fund at $50 and then a correction brings the fund down to $40, provided the basis on which I had initial priced it remains true, I would consider it on sale.
The market, by very definition, considers it fairly priced.

VTI
12th October 2007$77.54
25th January 201377.51

ergo: between October 07 and Jan 13
"nothing much has happened"

You cannot tell the investor that entered the market on the 10th April, and has since lost 2%, that "nothing much has happened".

What you perhaps mean is, "I invested on or before the 1st January 2014, for me not much has happened"

arebelspy

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #84 on: April 16, 2014, 10:30:59 AM »
thesinecure, you seem to take posts questioning you as a personal attack.

Understand here that it's not about "winning" anything.  We question ideas and promote discussion to learn and grow.

Dan was specifically questioning your "not much has happened" line in order to hopefully have you, and others, reconsider that perspective.

Nothing about it was personal, IMO.

:)
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thesinecure

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #85 on: April 16, 2014, 10:55:44 AM »
ok, but didn't you collect a dividend/distribution of some type during that 5+ years?  and isn't that virtually THE POINT of these sorts of funds, the compounding of those returns over time?  it's not just the price appreciation, which depending on "timing" is going to be different for everyone.

so maybe i don't understand your point then, unless it's just to call what i said "dumb", and then adding more dumb analysis to it - if so mission accomplished?

and i would actually tell the investor who is off 2% that not much has happened - if 2% is the measuring stick, reassessment might be in order

Reb - i'm not taking anything personal, i don't know him, he doesn't know me, you know you've been helpful directly to me recently which i appreciate and find as the potential biggest benefit to the forum - i don't know everything and would like to be challenged by some different ways of thinking or looking at investments, expenses, etc.

but calling things "dumb" without an alternative is a total punt, and it absolutely is either aggressive or "dumb" in its own rite, even if just a poor choice of words

arebelspy

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #86 on: April 16, 2014, 11:16:45 AM »
ok, but didn't you collect a dividend/distribution of some type during that 5+ years?  and isn't that virtually THE POINT of these sorts of funds, the compounding of those returns over time?  it's not just the price appreciation, which depending on "timing" is going to be different for everyone.

Indeed.  One should calculate the total returns, including dividends, when throwing around numbers (presumably CAGR).

but calling things "dumb" without an alternative is a total punt, and it absolutely is either aggressive or "dumb" in its own rite, even if just a poor choice of words

Absolutely agree, that was probably a poor choice of words.
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Ottawa

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #87 on: April 16, 2014, 11:39:07 AM »
2)  reading the other posts about things being "on sale", i'm simply challenging that - are the indexes really on sale right now?  what qualifies as a "sale", 1%, 5%, 15% reduction from whatever "the price" should be?  20% premium to FV because it really should go up and hasn't yet?
...how about if you think those things are "arbitrary" and that there's a better way to assess these current "sale" prices, suggest what evalation criteria you prefer, i would certainly be interested in that and i think others would as well

Sale...doesn't matter to me.  When people say they are going to buy lots of stuff when it is on sale is irrational to me (except if you suddenly have a lump sum perhaps...come into your life).  I say this because I don't have money sitting around in an account waiting for this 'market timing' venture.  Rather, I invest the day after I get paid regardless of the market.  This is detached, unemotional DCA...according to the research - this is the best long term stategy.

griffin

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #88 on: April 16, 2014, 12:20:38 PM »
I'm pretty new to this whole thing, but are 1-2% fluctuations abnormal? It doesn't look like anything out of the normal has happened recently - as far as I can tell there are have been larger dips in 2014 already...http://quote.morningstar.com/fund/chart.aspx?t=VTSAX&region=usa&culture=en-US .
I'm a bit confused by the "buy stocks on sale" mindset. The (admittedly few) things I've read seem to say that over the long term immediately investing any extra cash you have is the most effective strategy. Or do you tighten your budget/push back expensive purchases when the stock market dips?
« Last Edit: April 16, 2014, 12:24:31 PM by griffin »

DoubleDown

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #89 on: April 16, 2014, 12:55:43 PM »
how much dumber is it than the wonderful stats you've put together here?

lol, I think you missed his point.

The stats he put together was meaningless - and that's it exactly.  They have the same meaning as your stat. In other words, your arbitrary date of "beginning of the year" is and his dates are both equally useless.

I think thesinecure's point was evident (or should have been), in relation to the whole basis of this thread. It's titled "What just happened???  Anyone else freaked out about the markets???" That is, it's about very recent history, and whether we should be freaking out about a few days of dips in the market. Thesinecure points out that even within a narrow time frame (the last 3-4 months), the market is not really down at all. I'd say he/she understood the arbitrariness of looking at one week's worth of data, and pointed out that slightly expanding to YTD (a common benchmark) makes recent market performance very much a "meh" non-event.

Anyway thesinecure, I got what you were saying and I agree. I also agree about viewing the last week's temporary dip as "an opportunity to buy" as dubious. Like another poster said, where's this extra money just sitting around waiting to pounce on these so-called buying opportunities??

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #90 on: April 16, 2014, 01:04:15 PM »
I'm a bit confused by the "buy stocks on sale" mindset. The (admittedly few) things I've read seem to say that over the long term immediately investing any extra cash you have is the most effective strategy. Or do you tighten your budget/push back expensive purchases when the stock market dips?

It's a way to re-frame your thinking so that you're not scared to invest when the market is dropping.  When the market is down 20% or more, it can be hard to keep shoveling your money into it and immediately see it drop more.  Therefore, if you think of those drops as a "sale", it's easier to ignore the urge to change your investing patterns or stop investing all together.

thesinecure

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #91 on: April 16, 2014, 02:00:40 PM »
It's a way to re-frame your thinking so that you're not scared to invest when the market is dropping.  When the market is down 20% or more, it can be hard to keep shoveling your money into it and immediately see it drop more.  Therefore, if you think of those drops as a "sale", it's easier to ignore the urge to change your investing patterns or stop investing all together.

exactly, and this is partly what i'm trying to work myself through mentally (i actually think we could be seeing some topping right now, but that's a different conversation really)

i've been holding a ton of cash the past two years, partly because i was lazy, but mainly because we were moving and bought the new house (which needed some work first) before we sold the old one (which we ended up holding for a year after multiple failed contracts fell through), and i just needed the cushion for mental stability  :)   Glad I did, because otherwise I probably would have lost my mind with two mortgages, etc. and only the regular minimal cash in my bank account (i usually managed that to within $500 or less of next two week expenses after each paycheck)

now, i have the equity from the old one PLUS the cash i was already holding and want to put it back to work - but obviously don't want to do it all at once within 5% or whatever of the recent highs (which is why i was originally challenging the "sale" comments)

i'm not scared per se, just trying to develop my non-emotional plan of how to reinvest - not to mention i'm out of my job in 2 weeks so again trying to balance out what i need to live and safety cushion versus pace of reinvestment since i won't have a paycheck coming in until i find new employment

it's a great position to be in of course, but that hasn't made shedding the "fear of losing money immediately" any easier to tame, at least for me

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #92 on: April 16, 2014, 02:07:33 PM »
I'm a bit confused by the "buy stocks on sale" mindset.

It's a way to re-frame your thinking so that you're not scared to invest when the market is dropping.  When the market is down 20% or more, it can be hard to keep shoveling your money into it and immediately see it drop more.  Therefore, if you think of those drops as a "sale", it's easier to ignore the urge to change your investing patterns or stop investing all together.

This, a thousand times. I wish we had a "like this post" button so that I wouldn't feel compelled to spam a response just to agree with someone.

EDIT:

Here's some additional content: I actually did have some cash (less than $10k, if you're curious) sitting around in my personal savings account, and the latest dip motivated me to open up an individual brokerage account and get those little Ben Franklins working for me. Admittedly, I probably should have *already* had them working for me but I didn't.
« Last Edit: April 16, 2014, 02:14:48 PM by Winston »

griffin

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #93 on: April 16, 2014, 04:41:31 PM »

It's a way to re-frame your thinking so that you're not scared to invest when the market is dropping.  When the market is down 20% or more, it can be hard to keep shoveling your money into it and immediately see it drop more.  Therefore, if you think of those drops as a "sale", it's easier to ignore the urge to change your investing patterns or stop investing all together.
Hmm, never really thought about it in more emotional terms. That makes a lot of sense!


Quote
now, i have the equity from the old one PLUS the cash i was already holding and want to put it back to work - but obviously don't want to do it all at once within 5% or whatever of the recent highs (which is why i was originally challenging the "sale" comments)
Is this not market timing? Wouldn't the optimal non-emotional response be to invest all surplus cash immediately?

Edit: Just wanted to clarify that I don't mean this as an attack or anything - I'm legitimately curious! As I said before, I'm very new to this and just trying to understand it all better! :)
« Last Edit: April 16, 2014, 04:43:13 PM by griffin »

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #94 on: April 16, 2014, 04:50:27 PM »
Yes, you're right griffin, the EV is positive (or has been, historically) on investing right away, because the market is more likely to go up than down at any blind random point chosen, since it goes up overall over time.

Some people DCA, or try to invest on dips, or whatever, because they either believe they can time the market, or for emotional reasons (they don't want to invest a lump sum and then see it fall and regret doing so).  But you have the logical side correct.
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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #95 on: April 16, 2014, 04:54:26 PM »
I like this thread for perspective on investing at the "top of the market":

http://www.mrmoneymustache.com/forum/investor-alley/i-think-i%27m-going-to-take-the-plunge-into-vanguard-have-questions/

Pay close attention to the dates of the posts.

thesinecure

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #96 on: April 16, 2014, 07:04:27 PM »
Some people DCA, or try to invest on dips, or whatever, because they either believe they can time the market, or for emotional reasons (they don't want to invest a lump sum and then see it fall and regret doing so).  But you have the logical side correct.

you got it.  everybody is different, but one of the most important things to do when investing is try to make sure you're managing any emotions out of it.  i struggle with that at times, especially depending on amount.  if i was investing $1,000 at once, and it dropped 10%, not that big of a deal (this just happened to me actually).  if i was investing $10,000 at once and it dropped 10%, that would be different psychologically for me.  maybe it shouldn't be, but it is.  but i know it is, so i try to adjust my plan to deal with it.

i'm looking to dollar cost average into the position i want, partly as a way to deal with my own psychology but also to control my risk if my investment thesis doesn't really play out like i think it should.  it's one of the things i like about 401k plans, i'm buying the same $ amount every 2 weeks, fits my individual psychology.

thesinecure

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #97 on: April 16, 2014, 07:17:10 PM »
I like this thread for perspective on investing at the "top of the market":

http://www.mrmoneymustache.com/forum/investor-alley/i-think-i%27m-going-to-take-the-plunge-into-vanguard-have-questions/

Pay close attention to the dates of the posts.

so they were looking at investing in early october 2012, and some felt things were a little expensive.  turns out, at least in this case, they were right.  VTSAX declined roughly 5-6% through to mid november, and didn't go past the october high until january 2nd.

over the "long run", that difference is negligible as the market goes up over time, sure.  but note there were also plenty of people saying to go in over time, and they probably would have been right as least in this example.

this just further supports for me that you've got to do what you're comfortable with, and manage your own psychology.  if you get to the end and retirement or whatever your goal is, it won't matter whether you were right or wrong at each of those different points.  but it does make the path easier to travel if you know how you react to certain situations.

thesinecure

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #98 on: April 17, 2014, 07:56:56 AM »
a vote for dollar cost averaging, if you think things might decline in the short run

long run, unlikely to matter too much, but ultimately comes down to risk tolerance and psychology

http://www.mrmoneymustache.com/forum/ask-a-mustachian/what-if-stocks-go-nowhere-for-10-years/
« Last Edit: April 17, 2014, 07:58:51 AM by thesinecure »

Ohio Teacher

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Re: What just happened??? Anyone else freaked out about the markets???
« Reply #99 on: April 17, 2014, 08:17:39 PM »
So the market goes down about 5% over the course of a few days (which has now been erased) and we get a thread with 6 (SIX!!!!!!) question marks in the title.  I am being completely honest and not condescending at all when I say the OP not only does not have the right mindset, but may never have the right mindset for long-term investing. 
« Last Edit: April 17, 2014, 08:26:24 PM by Ohio Teacher »