O.T.-Why is everybody so upset about the stock market?
- Thread starter RUhasarrived
- Start date
Honestly, it's working out well for me right now - looking to lock a mortgage rate in, and the rates have been gradually declining all week.
This is one of the biggest pullbacks since QE started, so people have forgotten what the market was like before that. Fundamentally, nothing has changed in the past few weeks. We know the fed wants to start raising interest rates soon, growth in China is still a question mark, Greece is still a black cloud, US economic stats continue to solidify, etc. When one of those statements isn't true anymore I'll change my mind but right now I don't see any reason to panic.
I hear ya - we were in that same boat of rooting for a global crash while shopping for a loan so our little mortgage could go down a 1/2% this summer. Unfortunately things fell through for a variety of reasons (not financial/mortgage related). You might want to look into Union County Savings Bank if you are in the central NJ area - they have a 3.75% rate for a 30 year fixed. Extremely old school - no website, but it was an extremely easy process and got our mortgage commitment pretty quick (as I said we didn't make it to close unfortunately for other reasons). They can offer such low rates because they have a ton of cash on hand - anyway I think they only do certain parts of NJ, do home loans only and only take 20% down. I know I sound like an ad, but I'm not - may be worth a look for you.
I am sitting waiting to pounce on a lot of stuff when I think it is ready to start a rebound whether slow or fast.
Heed the long term advice that no one can time the market. Those who try that strategy are often di$$appoined.
I cashed out some yesterday and just about everything today. I've learned to put on trailing stop limit %'s on everything. I'll get back in after we have a number of up days and I'm fairly confident the correction is over.
You sold on the biggest down day in 18 months? And you plan to buy in after things recover?
Sounds like my wife's strategy with the housing market. Buy at the peak and try to sell after the crash(Now renting). Hopefully our second home is just the opposite
First off, the trailing stop limit %'s kicked off sell orders for the most part and second my other sells were done when the Dow was down less than 200 pts in the morning. Should I have sold off 10 days ago? Sure, but I can't predict the future.
I personally think stop loss orders are dangerous in volatile markets. My main point is you are acknowledging you can't predict the future, yet you seem to think you will be able to successful buy back in at a better price then you sold at. This will not be a winning proposition for you the majority of the time. You may get lucky once or twice.
How concerned you are depends on your investment horizon. If you getting close to the end of your working days and see your nest egg taking such a hit you are more concerned than those who have many years to go and can just ride it out. Given that the extending length of retirement period it seems most advocate holding a fairly significant equity portfolio even after retiring. In that case I am sure less volatility would make for less sleepless nights. Still consider myself a long term investor even though the second act may not be far off. Alternatives don't look too good unless you recently got into gold.
I never fully understand who is doing all the selling and where they put their money after they sell. In a bank that pays 0%? It is almost guaranteed that next week the equities are going to climb and generate a lot more than 0% interest.
Retail investors are a relatively small percentage. Think pension funds, hedge funds, trading firms, etc. Also, if they bought on margin, where do you think sales proceeds go?
Best advice I ever got(at least I think it was..) was to ignore the daily market. Unless you are old and close to retirement your best bet is to just leave it alone. Don't try to time the market, don't believe the hype, and don't react. Put away what you can and bank in the fact that it will continue to grow over time.
agree but even if close to retirement i am not sure you should bail prematurely. you should not be all in equities anyway but if you have a diversified portfolio you may need to ride it out as well because going all bonds and treasuries in this interest rate environment just does not seem to make sense. REITS scare particularly if backed by commercial properties. The need for traditional office space is contracting.
I don't think it was much of a big deal and if you think it was, you've probably been spoiled in the run up since the crash where these type of corrections haven't happened too often. I kind of feel like it's short term a little oversold and a little bounce may happen soon and then again resume down but who knows.
Honestly, dealing with investing is knowing your own psychology and tolerance level of what lets you sleep at night peacefully. If you're someone who is comfortable handling everything yourself and dealing with the consequences both positive/negative then great. If you're someone who prefers passive investing in index funds and the like also great. If you're someone in between those 2 ends of the spectrum, like myself, also fine. To me it's about knowing yourself and what you can realistically handle, specifically the negative. Everyone is fine when things go well. It's when they go bad what is it that you can realistically stomach and deal with and have an idea of how to handle should it happen whether that means holding/selling/averaging down etc.
I have money sitting passively in index funds/mutual funds but I also like to trade myself and I've done pretty well I think. But one example where I've taken a hit recently is energy. I started a small core position in a couple of the big integrated oils XOM (80s)/CVX(90s). I've traded energy fine and done well but that core position obviously has taken quite a hit. But again I know my psychology and am okay with it and will deal with it. I'm just on the verge of starting to average down those positions after this precipitous drop and am willing to do so again if there's a drop further, which is very possible. I think the dividends are secure and the management has stated such, but you never know for sure specifically CVX. Again I'm prepared for that news if it ever happens. I'm comfortable building a position in energy for the long term (25-30yrs) and these are quality names that have weathered many storms before IMO.
Point is just to give an example of my own psychology of dealing with things if they take a turn for the worse. Part of it is also knowing what you might do should things go bad before you even enter the position and what's your plan of action either way good or bad (getting in/getting out/averaging down).
Honestly, dealing with investing is knowing your own psychology and tolerance level of what lets you sleep at night peacefully. If you're someone who is comfortable handling everything yourself and dealing with the consequences both positive/negative then great. If you're someone who prefers passive investing in index funds and the like also great. If you're someone in between those 2 ends of the spectrum, like myself, also fine. To me it's about knowing yourself and what you can realistically handle, specifically the negative. Everyone is fine when things go well. It's when they go bad what is it that you can realistically stomach and deal with and have an idea of how to handle should it happen whether that means holding/selling/averaging down etc.
I have money sitting passively in index funds/mutual funds but I also like to trade myself and I've done pretty well I think. But one example where I've taken a hit recently is energy. I started a small core position in a couple of the big integrated oils XOM (80s)/CVX(90s). I've traded energy fine and done well but that core position obviously has taken quite a hit. But again I know my psychology and am okay with it and will deal with it. I'm just on the verge of starting to average down those positions after this precipitous drop and am willing to do so again if there's a drop further, which is very possible. I think the dividends are secure and the management has stated such, but you never know for sure specifically CVX. Again I'm prepared for that news if it ever happens. I'm comfortable building a position in energy for the long term (25-30yrs) and these are quality names that have weathered many storms before IMO.
Point is just to give an example of my own psychology of dealing with things if they take a turn for the worse. Part of it is also knowing what you might do should things go bad before you even enter the position and what's your plan of action either way good or bad (getting in/getting out/averaging down).
Agreed. The way look at it when the market dips I'm buying more shares for the same money. This will be a benefit in the long run. Once I get to within about 5 years of retiring, principal preservation will be a priority.
The whole system is rigged and is held together by keeping rates low (and I would bet anyone that the fed does not raise rates in September); QE 1, 2, 3, (do I hear 4 anyone?) and manipulation of the precious metals market.
What we have seen this past week is not the market correcting itself but the beginning of the unraveling of our whole monetary system. Now the market may rebound in the coming weeks, but this is only temporary. Dig deep in the weeds and you will see everything points to it. For a real insight into the state of affairs I highly recommend John Williams Shadow Stats. Manufacturing is down, job loss is up, real estate is down and the jobs that are being created are almost exclusively in the service sector and of a part-time garden variety.
I pray to God that I am wrong, but this time next month (or October at the latest) we will be looking back at Friday as the good old days. I would recommend to all my fellow RU friends and fellow alum on this site to start doing the following if you haven't already:
-Stock up on at least three months of food and water;
-Have cash on hand in case there is a bank holiday;
-Buy as much gold and silver as you can afford as an insurance hedge;
-Have an alternative energy source;
-Get to know your neighbors;
-Have some means of protecting your home.
If I'm wrong, so what? You have some extra food and supplies and made friends with your neighbors. If I am right, it may save your life which is the only intention of this post. Not to scare people but to prepare them.
What we have seen this past week is not the market correcting itself but the beginning of the unraveling of our whole monetary system. Now the market may rebound in the coming weeks, but this is only temporary. Dig deep in the weeds and you will see everything points to it. For a real insight into the state of affairs I highly recommend John Williams Shadow Stats. Manufacturing is down, job loss is up, real estate is down and the jobs that are being created are almost exclusively in the service sector and of a part-time garden variety.
I pray to God that I am wrong, but this time next month (or October at the latest) we will be looking back at Friday as the good old days. I would recommend to all my fellow RU friends and fellow alum on this site to start doing the following if you haven't already:
-Stock up on at least three months of food and water;
-Have cash on hand in case there is a bank holiday;
-Buy as much gold and silver as you can afford as an insurance hedge;
-Have an alternative energy source;
-Get to know your neighbors;
-Have some means of protecting your home.
If I'm wrong, so what? You have some extra food and supplies and made friends with your neighbors. If I am right, it may save your life which is the only intention of this post. Not to scare people but to prepare them.
You still have that Obama bumper sticker on your car?
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Do you think they'll honor my RU tickets at the re-purposed High Point Solutions Thunderdome?
Thanks for the laugh.[roll] Albanyknight must be a doomsday prepare. Have one in our family out in western P.A. been spouting the same stuff for ten years now. By the way freeze dried food sucks.
Don't you mean where is the birth certificate sticker? I'm more worry about losing my priority points and have to park at the RAC.
Thanks for the laughs guys. I hope you are all still laughing this time next year. Carry on gentlemen.
Just curious, what's your prediction for RU this season?
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Retired not too long ago, and have been a mutual fund investor with most of what I have for close to 40 years
I rode out the last crash (2008?) and will do so through this correction
If the market is going to drop 10 to 20 percent I rather see it do so quickly, not over the course of years...get it over with, then hopefully resume an upward track
Only one thing is true in investing-- Past performance does not guarantee future results. This may be just another correction but I bet many Japanese investors thought that when the Nikkei stalled at 39,000. They have been waiting for a new high since 1989.
Well, maybe a second thing is true--Diversify your investments among 7 asset classes as you know not what might befall the world (Ecclesiastes).
Well, maybe a second thing is true--Diversify your investments among 7 asset classes as you know not what might befall the world (Ecclesiastes).
I hope you are right that we are still laughing. There is far too much complacency and belief in the Fed to do the impossible and levitate the market indefinitely.
If you have studied macroeconomics you know that it is assumed that the Fed can control our economy. Although that belief is widespread it is false.
Artificially low interest rates have created a huge amount of what some economists call malinvestment. The malinvestment will ultimately be liquidated and the result will be far more catastrophic then the 2008 crisis. When that period will arrive, of course, we don't know but the larger the manipulation of the financial markets the larger the economic catastrophe. Further credit expansion can only postpone – but not prevent – the liquidation stage of the business cycle.
Albert Einstein famously wrote, “The world we have made, as a result of the level of thinking we have done so far, creates problems we cannot solve at the same level at which we created them.” Applied to our current economic situation: Deficit spending and Fed manipulation has created a terrible mess, more spending and more manipulation will not solve our problems.
Historically, governments get out of economic mismanagement by starting wars, but as for Monday, my guess is that if China and crashing oil prices are the immediate worry, we will get an idea about Monday after 9:30 PM Sunday. Of course, Rodman's buddy is another wild card.
You dont actually have to own stock to sell it. Hedge funds and program trades can borrow shares and sell short. Drives the market down forcing people on margin to sell or post up more margin. Rebalanced two weeks ago, based on the assumption a rate rise or indecision maight increase volatility on the downside.
August into Sept has also been a horrible month the last 6-8 yrs. Lehman, loss of US triple Aaa etc. i hate this time of year jnthe market.
"It is almost guaranteed" Who do you think is doing the guaranteeing? Do you think the Fed has a miraculous power to prevent bear markets forever? Do you think that investors never collectively lose their nerve? From October 9, 2007 to March 9, 2009 the market lost over 50%. I'm not predicting a similar decline starting now, I'm just observing it is possible. 0% is better than -50%
