Damn Stock Market

[Midwest Player]

I decided after the over 1800 point drop in the Dow, I would lighten up on my equity holdings when the market rebounds. I wanted at least a one third rebound and we almost got that on Tuesday with a 567 point rebound.

Today, I checked the market around 3:20 pm and saw the Dow was up over 180 points. I had my one third rebound so decided to re-balance my 401(k). In order to get today's price this had to be done before 4:00 pm so I went right to my computer and went right to work.

Basically I went from 22% in Stable Value to 30% and increased my inflation adjusted bond holdings a little. I then adjusted my stock funds down some. When I was done I checked the market again and in that little while the market was only still slightly up. By 4:00 p.m. the market was actually down. I was surprised to see such a big swing.

I still have a lot of equity holdings, but at least my 401(k) is more in line now with what it should be for my age.

Everything I read says this is only a bump, I hope they are right. I got burned in 2008 and don't want it to happen again.

[COBeardown95]

Time to buy. It's a bit like this advantage play. Scary with the wild swings, but you have to be in it for the long haul to win.

[21forme]

Buy high, sell low - is that how it works?

[terry0222]

There is minuscule evidence that anyone can make trading decisions that allow them to outperform the major indices, e.g. S&P 500. Although money managers charge high fees and claim to be able to 'outperform the market', there is virtually zero evidence that this can be accomplished in the long term. Money managers basically have the legal right to steal money, because they bring NOTHING to the table.

Granted, a very, very few seem to be able to accomplish this, that is, outperform market averages over time. (Warren Buffet comes to mind). But I think that those few who actually out-perform the averages are like the professional baseball player. That is....so many aspire to greatness, but so few have the skills to actually achieve greatness. In general, the reports that you see and hear to explain (and predict) market moves is pure babble.

I would say that traders who look for pricing discrepancies to set up profitable hedge trades appear to be able to be profitable in the long term. But, that's a beast all to itself.

[Joe Mama]

so what grade do you give yourself for choosing the strategy that you used for the last 9 years?

I guess my approach is contrarian. In 2008-2009, I held on and watched my 401K go down ~50+%. It's tough to watch sometimes, but in the long run things have always rebounded. I also started putting a larger percentage of my savings each month into stock indices and REITs (real estate).

During the past year's stock market run up, I have pulled more and more out of stock indices and gradually transferred to "stable fund" even though return is quite low (more than I have ever done this before). My 401K is 4-5 X what it was 9 years ago.

Right now, I am holding on again.

[Joe Mama]

But what about 11 years ago. Plus how much new capital was invested in that time. Just wondering how misleading the time frame and contributions make the quote.

~2-3 X from then (10-11 years ago). Stopped adding $$ in when I retired 4 years ago, and have taken out some small amounts in last 4 years.

What I've added to "stable value" is probably more than I need for the rest of my life. The remainder is gravy for my heirs.

[DSchles]

There is minuscule evidence that anyone can make trading decisions that allow them to outperform the major indices, e.g. S&P 500. Although money managers charge high fees and claim to be able to 'outperform the market', there is virtually zero evidence that this can be accomplished in the long term. Money managers basically have the legal right to steal money, because they bring NOTHING to the table.

Granted, a very, very few seem to be able to accomplish this, that is, outperform market averages over time. (Warren Buffet comes to mind). But I think that those few who actually out-perform the averages are like the professional baseball player. That is....so many aspire to greatness, but so few have the skills to actually achieve greatness. In general, the reports that you see and hear to explain (and predict) market moves is pure babble.

I would say that traders who look for pricing discrepancies to set up profitable hedge trades appear to be able to be profitable in the long term. But, that's a beast all to itself.

Nice post. Agree with every syllable you've written.

Don

[ZenMaster_Flash]

RE: StockMarket Woes.

I am well-diversified Re: assets but I have been
stung for middle 5 figures in the last week. I hate
the stock market. Had I held my Apple Stock from
20 years ago I would have > $70,000,000 now,
instead of taking a small loss after years of no-gains.

[Freightman]

Nice post. Agree with every syllable you've written.

Don

Disagree. Last 8 letters. I think "all unto itself" would be more appropriate

[BoSox]

Had I held my Apple Stock from
20 years ago I would have > $70,000,000 now,
instead of taking a small loss after years of no-gains.

That also would have gotten you into the Hall Of Fame, instead of the hall of shame.

[DSchles]

Disagree. Last 8 letters. I think "all unto itself" would be more appropriate

There's something fiercely ironic about your giving language advice!

Don

[Freightman]

There's something fiercely ironic about your giving language advice!

Don