How low will it go? Stock market taking a dip

Discussion in 'The Okie Corral' started by RWBlue, Feb 24, 2020.

  1. F106 Fan

    F106 Fan

    Messages:
    9,842
    Likes Received:
    2,393
    Joined:
    Oct 19, 2011
    And if people hung in, it all worked out fine. The market is still up 40% over the last 3 years. Why on earth would I hold bonds? As to sitting out on the longest bull run in history? Maybe that’s not so clever.

    I’m happy with my strategy - hold equities or funds that hold equities.
     
    Last edited: Feb 24, 2020
    Cmacc, TheDreadnought and Patchman like this.
  2. mj9mm

    mj9mm

    Messages:
    9,476
    Likes Received:
    8,350
    Joined:
    Mar 17, 2011
    Location:
    WI, i want my Walker back...
    PPhhhtttt! they've done that already, and salivating at the ability to run the ads. whatever the markets don't give them, they will make up anyway... Russia anyone?
     
    larry_minn likes this.

  3. mj9mm

    mj9mm

    Messages:
    9,476
    Likes Received:
    8,350
    Joined:
    Mar 17, 2011
    Location:
    WI, i want my Walker back...
    the Dems have been working to defeat Trump from the start and this year will be no different. past elections are not indicative of this one. it's early, but Sanders rise is picking up and the logic is out the door.
     
  4. willie_pete

    willie_pete NRA Life Member

    Messages:
    26,558
    Likes Received:
    50,961
    Joined:
    Sep 11, 2000
    Location:
    Florida

    If you have to pay taxes, doesn't that mean you made money ?


    Everybody has to pay taxes.

    ;)


    View: https://www.youtube.com/watch?v=1aNdEaOAHfg
     
  5. JohnBT

    JohnBT NRA Benefactor

    Messages:
    6,923
    Likes Received:
    2,377
    Joined:
    Feb 24, 2000
    Location:
    Richmond, Virginia
    "If you have to pay taxes, doesn't that mean you made money ?

    Everybody has to pay taxes."

    Sure, but if I don't sell everything in the taxable account I don't have to pay the extra taxes in addition to the federal and state taxes. The net investment income, higher medicare premiums for both of us, the AMT, etc. Is the AMT still a thing? I lost track when I started paying a CPA outfit to do our taxes a couple of years ago.

    The long term capital gains taxes and dividend taxes are quite enough already.
    I suppose I never imagined I'd end up being in a high tax bracket. I guess we saved too much. Boo hoo. I bought my first stock with money I made at McDonalds when I was too young to hold the shares in my names. ;) Then the RMDs hit me in a year or so. She'll be 65 soon and wants to take SSA retirement at 66 & 2 months.

    And then what do we do with the money we've cashed out of the market, put it in CDs paying 2%? Or 1.5% locally. Buy a boat? A place at the beach?

    Oh well, too many good problems, but today I need to go clean out my old house because we want to close the deal in 3 or 4 weeks if not sooner. I'm selling to neighbors who want historic rental property, so I'm avoiding the realtor cut and paying my lawyer to herd me through the deal. And they have cash. Hmm, do I dare buy more equities? It's been paid off since '97 and I could blow it all on a bigger boat.
     
  6. JohnBT

    JohnBT NRA Benefactor

    Messages:
    6,923
    Likes Received:
    2,377
    Joined:
    Feb 24, 2000
    Location:
    Richmond, Virginia
    The trouble with attempting to time the market is that it requires two correct decisions.

    1. When to sell.
    2. When to buy back in.

    www.fool.com/investing/2019/04/11/what-happens-when-you-miss-the-best-days-in-the-st.aspx

    If you started with $10,000... and either stayed fully invested for the entire period or happened to get out at the wrong times and missed the 10 best days, 20 best days, etc.

    January 4, 1999 to December 31, 2018 Dollar value Annualized Performance
    Fully invested (S&P 500 index) $29,845 5.62%
    Missed 10 best days $14,895 2.01%
    Missed 20 best days $9,359 -.33%
    Missed 30 best days $6,213 -2.35%
    Missed 40 best days $4,241 -4.2%
    Missed 50 best days $2,985 -5.87%
    Missed 60 best days $2,144 -7.41%
     
    TheDreadnought and Cmacc like this.
  7. willie_pete

    willie_pete NRA Life Member

    Messages:
    26,558
    Likes Received:
    50,961
    Joined:
    Sep 11, 2000
    Location:
    Florida
    Looks like a bit of a bounce back this morning.
     
    catman71 likes this.
  8. Z71bill

    Z71bill

    Messages:
    23,548
    Likes Received:
    15,108
    Joined:
    Feb 19, 2007
    Location:
    Texas
    Selling everything now would most likely be a bad call. Unless you think we are heading into another GFC.

    But

    The decision to sell, hold or buy more is usually not about taxes.

    It is about what the future of the investment will be - or at least what you think it will be.


    Give me an example of when not selling a stock - that you have a 75% LTCG on - is the right call when you also think this stock is topped out / way above fair value and will go nothing but down over the next few years?

    I have a friend that owned Bear Stearns - he told me he didn't want to sell because he would have to pay taxes on the gain. He also use to say - it is not a loss until you sell.

    Guy has made money - so he gets more right than wrong -
     
  9. Z71bill

    Z71bill

    Messages:
    23,548
    Likes Received:
    15,108
    Joined:
    Feb 19, 2007
    Location:
    Texas
    So the guy sold every time the day before the - best XX day - and bought it back the day after the - best XX day?

    That would be one unlucky guy.
     
  10. Z71bill

    Z71bill

    Messages:
    23,548
    Likes Received:
    15,108
    Joined:
    Feb 19, 2007
    Location:
    Texas
    upload_2020-2-25_7-50-16.jpeg
     
    catman71 likes this.
  11. Z71bill

    Z71bill

    Messages:
    23,548
    Likes Received:
    15,108
    Joined:
    Feb 19, 2007
    Location:
    Texas
    Maybe he kept his Tesla short on and got carried out on his shield.
     
    catman71 likes this.
  12. Aurora

    Aurora

    Messages:
    2,326
    Likes Received:
    739
    Joined:
    Jul 29, 2003
    Not so. There should be no decision to be made at all.

    All trading/investing systems,.... from Darvas to Buffett,.... have strict, tested and logical criteria for entering and exiting a position. There's no decision to be made at all.

    If you're a value/401K investor, you should have a wish list of stocks you want to buy if the dip turns out to be significant (like late 2018).

    A trader's system should put him on the sidelines by some predetermined criteria. Likewise, reentering the market should also have rules for making a bullish move.

    The whole thing should be regimented.

    V.
     
    Flying-Dutchman likes this.
  13. ClydeG19

    ClydeG19

    Messages:
    7,329
    Likes Received:
    4,269
    Joined:
    Oct 5, 2001
    Location:
    Pennsylvania
    Open carry would’ve solved this.
     
  14. F106 Fan

    F106 Fan

    Messages:
    9,842
    Likes Received:
    2,393
    Joined:
    Oct 19, 2011
    Inside a 401(k), there is very little penalty for selling equities but when you're talking about a trading account, there's taxes to consider.

    Right out of the gate, I lose 15% of my LTCG to federal taxes and something to state taxes, probably 10%. So, call it 25% loss just for selling. I can take a pretty big hit in the market before I lose more than I will pay in taxes just for the privilege of selling. Besides, if I sell low, the .gov gets less money - that's a good thing, I suppose. Let them share in the pain.

    It annoys me to even have to take the mandatory distributions. Can you imagine how much money would be in a 401(k) in a couple of generations? Nobody in your family tree would ever have to work again. That's why the distribution concept came around! The politicians don't want the producers/savers to compete on a 'rich scale'. They might start to get ideas!

    Yes, a 10% correction can be breathtaking when there is a large amount of money involved. Somehow it all works out... You just need to think in terms of percentage and ignore the number of zeros.
     
    RWBlue likes this.
  15. Z71bill

    Z71bill

    Messages:
    23,548
    Likes Received:
    15,108
    Joined:
    Feb 19, 2007
    Location:
    Texas
    Will the PPT save the market?


    [​IMG]

    [​IMG]
     
  16. Z71bill

    Z71bill

    Messages:
    23,548
    Likes Received:
    15,108
    Joined:
    Feb 19, 2007
    Location:
    Texas
    Can't have a GT thread about the "market" without a few posts about diversification.

    So

    Are your investments really diversified?

    If you lost 3+% yesterday and are losing another 1% today - guess what - you are not diversified.

    This has been a public service announcement.
     
    catman71 likes this.
  17. reniram

    reniram

    Messages:
    1,163
    Likes Received:
    1,277
    Joined:
    Jan 28, 2011
    Most people can't really diversify according to permanent portfolio theory, and the few investment vehicles that use this approach are fairly illiquid with high expenses.
     
  18. Z71bill

    Z71bill

    Messages:
    23,548
    Likes Received:
    15,108
    Joined:
    Feb 19, 2007
    Location:
    Texas

    Don't make it any more complicated than it needs to be - my question is simple -


    Many on GT claim the key is to be diversified -

    When the market takes a beating - it is a good time to check and gauge if your investments are in fact diversified - or not.
     
    Csv and Cmacc like this.
  19. F106 Fan

    F106 Fan

    Messages:
    9,842
    Likes Received:
    2,393
    Joined:
    Oct 19, 2011
    And if you made 40% over the last 3 years, chances are you aren't holding bonds or CDs.

    Since I don't NEED my 401(k) money any time soon (we have other revenue streams), I can just stay where the investors are making money. The bond market isn't it! Fixed income is great as long as you don't expect any income!

    Diversification tends to flatten out growth. Sure, your money is 'safe' but you might as well hide it under your mattress for all the gains you'll see. The safer it is, the less money you make.

    Do you want 'safety' or growth! I'm all in for growth. BTW, my very conservative financial advisor disagrees with me every time we get together. I'm pretty sure there is a LAW that says he has to tout diversity and bonds for 'safety'. Professional responsibility and all that. Toe the common line!

    It's my money, I'll put it where I want! I'll take some lumps from time to time, now being one of them, but it'll all work out.
     
    Aurora and TheDreadnought like this.
  20. RWBlue

    RWBlue Mr. CISSP, CISA CLM

    Messages:
    23,964
    Likes Received:
    1,109
    Joined:
    Jan 24, 2004
    Run the numbers the opposite way. What happened if someone sold before the worst day and bought back in at the new low?
     
    BGDaddy, catman71 and Z71bill like this.