Ask ANY financial advisor what to do. They will ALL tell you to keep your money where it is, keep adding money, and remember the statements you open up , are just paper.
Election years are for the most part up years. This year IDK.
We came into this year at a high. Valuations were stretched. Then a lot of bad things happened. The continuing trade war. The corona virus. The oil price war. And now, the machinery of the markets is seizing up. Thus the drastic fed action today. The trade war is the only thing we can get rid of easily. The oil price war is beyond our control. The corona virus is an unknown. I doubt it will come and go quickly. If it lingers and becomes the new normal, that will have a dampening effect on the economy. People won't travel as much. People won't eat out as much. People won't spend as much.
I don't think we'll see a v-shape recovery this time. Too much damage has been done. Too much is uncertain. It's going to be a u-shape. How long the bottom of that U is the question.
My financial advisor said keep putting money in. It will rebound eventually. It always does. Just hang tight. Unless you are 95 years old, you don’t need all of your money right now.
All of a sudden, it's 2008 again. The financial markets are seizing up. The FED announced that it would pump $1,000,000,000,000 into the market A WEEK from now on. A trillion dollars a week! The market was not impressed. It bounced slightly for a few minutes and then traded right back down. Currently down almost 9% today.
I put more money in last week. I don't have any more money to put in. Well, not any more investing money. I do have a couple of years worth of living expenses in a savings account. I guess I could shave some of that down temporarily. Get in, get out.
I should have when I started this thread. That would have been the wise move. In general you can't time the market, but you can definitely time black swan events. Just like Lehman Brothers was a signal to get out, so was the world's second largest economy shutting down for a month. That was bound to have ripples. Those ripples have become a tidal wave.
The don't sell mantra that many "experts" feed retail customers is ironic since many of them don't follow that advice. When many pros are asked what they did, they respond that they sold. It's common to set a trailing stop to sell automatically to limit the downside. Take care of the downside and the upside will take care of itself. That's the real mantra.
I don't understand why so many people think that selling is bad. People think selling means selling forever and putting the money in the mattress. People think that holding is always better than selling. That's wrong. When there's clearly a exogenous event it's wise to sell and sit on the sidelines to wait for the dust to clear. I did that with Boeing last year. I got out the day after the big fall. I hopped back in lower. I'm down from there but I will forever be better off than all those people that held. Money saved is money earned. More importantly that money saved will compound.
Aren't L funds part of TSP? The L2020 fund had about a 7% yearly return over the last 10 years. That's about a 100% gain in those 10 years. So a $100 in 2010 is worth about $200. Over the same 10 years, my portfolio has gone up about 400%, even with the heavy losses in the last couple of weeks. The price of safety is low returns. At some point I'll definitely want that safety. Like I said, I thought about selling everything a couple of weeks ago and living off of 4% forever.
I'm not sure what a financial advisor would do for me. They would just try to hide the volatility by saying to hang in there. I rather know what's going on.
As bad as it looks for the US open. The UK open is worse. The FTSE futures are down over 7%. Sorry people in the UK.
Needtowashhair, we have bounced back since 2008. Put your money in Lfunds. I have a thrift savings plan at work. L2020 will turn into 74 percent G fund which is a safe fund and 26 percent is in the stock market. The experts handle the L funds. I don’t lose any money in my G fund.
I have my money in different L funds. I have L 2020 and L2025 funds. Let the experts take care of your money in the stock market. It will correct itself. Don’t panic. Don’t worry.
If you have money in the stock market, close your eyes tomorrow. Don't watch TV, listen to the radio or check online. The little drops were a prelude. Unless something changes in the next few hours, it gets serious tomorrow. Circuit breakers have already kicked in to halt trading in markets overnight. The last time I remember that happening was 10 years ago.
I should have sold. Instead I put more money in. That was a mistake.
Today is the intraday reversal I was waiting for as the buy signal to put the money I have on the sidelines back in. It was down over 1000 pts early in the day and then it turned around and charged up. All my accounts are up today. I'm in. I'm not saying that we might not go down from here, but I think the bulk of the selling is over. Can't pick the very bottom, it's close enough for me.
You do lose if you don't sell. Look at your balance. A $100,000 saved is a $100,000 earned.
I think the people that are advising not to sell see it as a one time event. You sell and then never get back into the market. That's a mistake. But selling into these events and then buying back in lower is not. If I had sold on Tuesday when I really wanted to hit that sell button and bought back today I would be much better off then I am now. I actually do that a lot with individual stocks. I sold Boeing the day after the big drop and then bought back in much lower. Saved a lot of money versus holding.
The lesson I'll add to my life lessons is that, like Lehman Brothers going under in 2008, when the world's second largest economy and the world's factory shuts down for a month then sell. We got complacent. I got complacent. The market ignored that fact and kept on sailing. There's no way that China shutting down for a month would not tank the global economy. Even when it was clear as other countries announced that they had to shutdown their factories due to lack of parts from China, the stock market kept going up. And I kept going along with the ride. I should have hopped off.
I'm going to take a chance that folks will get mad and throw paper dollar bills at me, but I don't think the calculations are that simple.
If you're selling stock, it's not just the share price at which you sell. It's also an issue of the cap gains that might be taxable, as well as the ordinary and qualified dividends and how they might offset the cap gains enough to lower your taxable income.
When the market tanked in 2008 my 401k was balanced between stocks and money market/bonds. My coworkers panicked and many of them took all they could out of their 401ks and swallowed the loss. I didn't really have that much accumulated at that time, or I might have panicked, too. Instead, I redirected all new contributions to stocks. By the time the market recovered I had earned a very nice return. When the market settled down, I redirected contributions back to a more conservative bond-heavy balance, where I have kept it. I've taken a hit this week like everyone else --- but not that bad so far.
I have to check. I actually have a fairly large sum of money that I've been waiting to put into the market. The remainder of what I pulled out at the start of the fall of 2018. I already nibbled a couple of days this week. Clearly that was early. I'm waiting for another intraday reversal day after Turnaround Tuesday failed. Hopefully the next one won't.
I feel pretty optimistic about the market. I think it will continue to do well for at least several more years. After the fear of the virus settles down, and when a vaccine is developed, the market will bounce back up. That's my belief.
We came into this year at a high. Valuations were stretched. Then a lot of bad things happened. The continuing trade war. The corona virus. The oil price war. And now, the machinery of the markets is seizing up. Thus the drastic fed action today. The trade war is the only thing we can get rid of easily. The oil price war is beyond our control. The corona virus is an unknown. I doubt it will come and go quickly. If it lingers and becomes the new normal, that will have a dampening effect on the economy. People won't travel as much. People won't eat out as much. People won't spend as much.
I don't think we'll see a v-shape recovery this time. Too much damage has been done. Too much is uncertain. It's going to be a u-shape. How long the bottom of that U is the question.
Before I was nervous. Now I am scared.
The don't sell mantra that many "experts" feed retail customers is ironic since many of them don't follow that advice. When many pros are asked what they did, they respond that they sold. It's common to set a trailing stop to sell automatically to limit the downside. Take care of the downside and the upside will take care of itself. That's the real mantra.
I don't understand why so many people think that selling is bad. People think selling means selling forever and putting the money in the mattress. People think that holding is always better than selling. That's wrong. When there's clearly a exogenous event it's wise to sell and sit on the sidelines to wait for the dust to clear. I did that with Boeing last year. I got out the day after the big fall. I hopped back in lower. I'm down from there but I will forever be better off than all those people that held. Money saved is money earned. More importantly that money saved will compound.
"Time is your friend - impulse is your enemy" Jack C Bogle
Barb, I am a big fan.
(Although if a Covid-19 vaccine is announced I may be tempted to buy!)
No selling.
I'm not sure what a financial advisor would do for me. They would just try to hide the volatility by saying to hang in there. I rather know what's going on.
As bad as it looks for the US open. The UK open is worse. The FTSE futures are down over 7%. Sorry people in the UK.
I should have sold. Instead I put more money in. That was a mistake.
I think the people that are advising not to sell see it as a one time event. You sell and then never get back into the market. That's a mistake. But selling into these events and then buying back in lower is not. If I had sold on Tuesday when I really wanted to hit that sell button and bought back today I would be much better off then I am now. I actually do that a lot with individual stocks. I sold Boeing the day after the big drop and then bought back in much lower. Saved a lot of money versus holding.
The lesson I'll add to my life lessons is that, like Lehman Brothers going under in 2008, when the world's second largest economy and the world's factory shuts down for a month then sell. We got complacent. I got complacent. The market ignored that fact and kept on sailing. There's no way that China shutting down for a month would not tank the global economy. Even when it was clear as other countries announced that they had to shutdown their factories due to lack of parts from China, the stock market kept going up. And I kept going along with the ride. I should have hopped off.
If you're selling stock, it's not just the share price at which you sell. It's also an issue of the cap gains that might be taxable, as well as the ordinary and qualified dividends and how they might offset the cap gains enough to lower your taxable income.
JMHO...