Correct on the buy but when you decide it's time to go to cash, then move immediately
Market Crash Looming?
- Thread starter UNC71-00
- Start date
Correct on the buy but when you decide it's time to go to cash, then move immediately
People just don't understand why the market is where it is, It damn sure isn't fundamentals.
The older I get the more I move into less risky investments. You have to judge when you will need that money. 30 years ago I couldn't care less what an investment done in one year or 5 years as long as I thought it was a good long term investment. For a few years now I have been moving more and more to less risky investments because at my age I may need that money in a shorter time frame.
Two excellent choices of funds.
Well, yes. I forget the exact stats, but they're something along the lines of, if you miss out on the 5 biggest gain days in a year you'll miss out on 90% of the growth for a year.
A lot of places do both, transaction based and fee based. There are plenty of places where you can pay no transaction fees though, if moving between their own funds. The key is to get something where your total fees are lowest, however they're accrued.
I'm gonna leave this link here. Any of the Vanguard fans out there should check it out. All about low cost investing, mostly buy/hold/rebalance. Based on the investing advice of Jack Bogle (founder of vanguard). It's a message board with some really smart posters. Taught me a lot of what I know about personal finance. There are some less financial posts popping up there nowadays but if you can wade through and get the good threads it's very informative.
Www.bogleheads.org
As a licenced advisor for over 18 years and the 3rd generation advisor in my family, I know the markets pretty well, although cannot give advice on a message board. Generally, caring if the market is "high" or "low" for the long term investor is pretty stupid. If you got more than 15 years, it does not matter. Also, a market crash is always looming. We have had 2 this year that folks have already forgotten about. Trying to predict when and how much and how long is impossible.
I have seen more people lose money for poor timing than just riding out the volatility.
If you need money within 1- 5 years, don't be in the market unless you don't care about having less at time of need.
Also, the markets always rebound higher. After a crash, the highest and majority of positive return is on the initial move up of the market. Most investors timing the market miss this, thus have sub par returns.
The first question one should ask when exiting the market is, specifically, when and how to get back in. If you can't answer that, it is irresponsible to get out.
article
Investors may not be as stupid as some researchers think, but they still need to fight their own fear and greed.
A new study finds that the average investor in all U.S. stock funds earned 3.7% annually over the past 30 years—a period in which the S&P 500 stock index returned 11.1% annually. That means stock-fund investors underperformed the market by approximately 7.4 percentage points annually for three decades, according to Dalbar, a financial-research firm in Boston that has updated this oft-cited study each year since 1994.
I have seen more people lose money for poor timing than just riding out the volatility.
If you need money within 1- 5 years, don't be in the market unless you don't care about having less at time of need.
Also, the markets always rebound higher. After a crash, the highest and majority of positive return is on the initial move up of the market. Most investors timing the market miss this, thus have sub par returns.
The first question one should ask when exiting the market is, specifically, when and how to get back in. If you can't answer that, it is irresponsible to get out.
article
Investors may not be as stupid as some researchers think, but they still need to fight their own fear and greed.
A new study finds that the average investor in all U.S. stock funds earned 3.7% annually over the past 30 years—a period in which the S&P 500 stock index returned 11.1% annually. That means stock-fund investors underperformed the market by approximately 7.4 percentage points annually for three decades, according to Dalbar, a financial-research firm in Boston that has updated this oft-cited study each year since 1994.
As a licenced advisor for over 18 years and the 3rd generation advisor in my family, I know the markets pretty well, although cannot give advice on a message board. Generally, caring if the market is "high" or "low" for the long term investor is pretty stupid. If you got more than 15 years, it does not matter. Also, a market crash is always looming. We have had 2 this year that folks have already forgotten about. Trying to predict when and how much and how long is impossible.
I have seen more people lose money for poor timing than just riding out the volatility.
If you need money within 1- 5 years, don't be in the market unless you don't care about having less at time of need.
Also, the markets always rebound higher. After a crash, the highest and majority of positive return is on the initial move up of the market. Most investors timing the market miss this, thus have sub par returns.
The first question one should ask when exiting the market is, specifically, when and how to get back in. If you can't answer that, it is irresponsible to get out.
article
Investors may not be as stupid as some researchers think, but they still need to fight their own fear and greed.
A new study finds that the average investor in all U.S. stock funds earned 3.7% annually over the past 30 years—a period in which the S&P 500 stock index returned 11.1% annually. That means stock-fund investors underperformed the market by approximately 7.4 percentage points annually for three decades, according to Dalbar, a financial-research firm in Boston that has updated this oft-cited study each year since 1994.
I agree with this. Which is why I said I will get back in after the Fed meets after inauguration day assuming the markets aren't in a free fall at that point.
It's fine if the market stays stagnant. If I took short positions I would be cheering for a tank.
It is good to have a strategy. Although, What makes you think the Fed will have a different stance after election day and why do you think it will have a bearing on stocks? The Fed is autonomous to the executive branch and rarely if ever changes stances after elections.
The Fed bought 6 trillion dollars of bonds in their quantitative easing. They have let some mature without replacing, but still have about 4 Trillion or so. They will not jack up bank rates until they sell those bonds. Also, the fed funds rate is a target rate. It has been so low, so long that even if they raise the target rate, it could take months/years for rates to move up through the banking system. Proof: Rates actually have gone down since they raised target rate last December. Because Japan,etc went to negative rates and $ poured in to US treasuries.
Now if the Fed tells us they are going to start selling bonds, watch out.
