Warning

 

Close

Confirm Action

Are you sure you wish to do this?

Confirm Cancel
Member Login

Site Notices
Posted: 3/5/2013 12:24:53 PM EDT
questions to ask yourself or others:

why is the market so high right now?

how long will it last?

are we about to see another crash?



im seriously debating "cashing out" of all of my stocks tomorrow morning. ive had a very strange feeling about the market for a few months now and i cant seem to figure out why exactly the market is performing as "well" as it has been. i dont by any means have a fortune invested in the market but i do have a sizable amount in various stocks. I also have another few thousand that has literally just been sitting uninvested in my scottrade account waiting for a sign for a month or so now.

i really feel like we're about to see another downturn and i'd like to "get out" before that happens, then reinvest once it settles down at a much lower price


thoughts?
Link Posted: 3/5/2013 12:26:37 PM EDT
tomorrow morning might be too late, why didn't you cash out this evening? Makes no sense.
Link Posted: 3/5/2013 12:30:20 PM EDT
TAG for interest.....no pun intended.
Link Posted: 3/5/2013 12:44:06 PM EDT
Originally Posted By 4thbreak:
tomorrow morning might be too late, why didn't you cash out this evening? Makes no sense.


b/c its a big move and ive been second guessing myself all day.....

Link Posted: 3/5/2013 12:52:30 PM EDT
[Last Edit: 3/5/2013 12:53:08 PM EDT by rdove]
NOBODY can predict the market, so anyone telling you to say or leave is completely acting on gut instinct and no facts. Either way, make your decision and deal with the consequences or 'profits'.
Link Posted: 3/5/2013 12:56:34 PM EDT
I am staying the course. I gave up trying to time the market after getting my butt kicked too many times. Now I just invest a set amount each month regardless if it is up or down.

I think a lot of the rise is due to the Fed's monetary policy. They keep printing money it has to go somewhere.

Another way to look at it is yes the DOW is high but it is devalued dollars so it really isn't that high.

Bottom line is who knows. If you did know what it was going to do you would be the richest person on earth. If you think you can outsmart it you are fooling yourself.
Link Posted: 3/5/2013 1:07:08 PM EDT
Honestly all I have done over the past few weeks is move into more of a cash/dividend play in my retirement accounts and online accounts for the next few weeks/months. The way I see it is I am protecting my gains and while preventing a big loss. Even if the market did take a big spike upward, it would only be a few percent and I would rather deal with not having made a little extra versus a big loss.

Link Posted: 3/5/2013 1:19:25 PM EDT
Got out at about 13.1, kinda wished I had stayed in but with the fed ending QE3 and sequestration causing undue panic and a LONG OVERDUE correction in the neighbor hood of 4-5K points I woudl rather be safe than sorry.
Link Posted: 3/5/2013 1:56:02 PM EDT
Originally Posted By pdimaio:
Honestly all I have done over the past few weeks is move into more of a cash/dividend play in my retirement accounts and online accounts for the next few weeks/months. The way I see it is I am protecting my gains and while preventing a big loss. Even if the market did take a big spike upward, it would only be a few percent and I would rather deal with not having made a little extra versus a big loss.



This is what the Mrs and I did yesterday and today. Protection mode.
Link Posted: 3/5/2013 5:47:01 PM EDT
Nobody here can successfully time the market. If you could, you wouldn't be on this website, you'd be on some panel on CNBC blowing minds.

If it makes you feel better, why not take a partial approach? Increase your cash position to 25% and ride it out. If the market corrects in a big way, you can buy cheap with that 25%. If it doesn't, you won't miss all the appreciation and dividends that you would being completely out.

Going whole hog one way or another is foolish. We had threads of people back in 2008 who sold everything at the bottom because they figured the end was neigh and I'm sure there were threads back in 2000 of people who dumped everything into high flying tech stocks.

Same shit, different day. Keep a level head and make small incremental moves if you must scratch that market timing itch.

I have the same feeling you do. I'm looking at some of my large cap dividend stocks trading at P/Es of 20+ and feeling that they are getting a bit top heavy but I'm not going to go crazy and bet the farm on a correction. At best, I'll take SOME profits and increase my cash position.
Link Posted: 3/6/2013 9:14:23 AM EDT
No one knows what the market will do. No one. Trying to predict the market is a path to disaster.
Link Posted: 3/6/2013 2:08:58 PM EDT
If you time it right - your friends call you a genius.

If you time it wrong, you are an idiot.


It all comes down to perspective.
Link Posted: 3/7/2013 5:00:01 PM EDT
I screwed up and moved my money to the money market when it was at 11,xxx. That is the last time I'll try to time the market as the stock market doesn't make much sense. As others have said, with the fed pumping billions into the economy each month, people are going to put it somewhere. I still doubt it can go much higher so I'm not putting any more in right now. I'm just sitting in my MM and in ING just in case it does fall. I lost a lot of growth from pulling it out though.
Link Posted: 3/7/2013 6:22:14 PM EDT
Originally Posted By woodsie:
Going whole hog one way or another is foolish. We had threads of people back in 2008 who sold everything at the bottom because they figured the end was neigh and I'm sure there were threads back in 2000 of people who dumped everything into high flying tech stocks. Same shit, different day. Keep a level head and make small incremental moves if you must scratch that market timing itch.

OP: subscribe to this newsletter ^^^.

ar-jed

Link Posted: 3/7/2013 6:23:17 PM EDT
Link Posted: 3/8/2013 6:42:17 AM EDT
Originally Posted By Chadnutz:
I screwed up and moved my money to the money market when it was at 11,xxx. That is the last time I'll try to time the market as the stock market doesn't make much sense. As others have said, with the fed pumping billions into the economy each month, people are going to put it somewhere. I still doubt it can go much higher so I'm not putting any more in right now. I'm just sitting in my MM and in ING just in case it does fall. I lost a lot of growth from pulling it out though.


You have to be prudent, and cautious, listening to the doom and gloomers around here, especially silver/gold bugs. Their mind is made up, its all coming crashing down, metals are the ONLY safe play in their mind, and get completely out of the stock market.

I have family members who have been preaching this since the DOW was at 10,000.

Of course, those same family members were preaching silver and gold.


If you invested $1000 in Oct 2009 in the market, you have roughly a 40% return.
If you invested $1000 in Oct 2009 in silver, you have roughly a 55% return.
If you invested $1000 in Oct 2009 in gold, you have roughly a 50% return.

If you believe that the price of silver and gold is more aligned to the real value of the dollar, then the stock market equities are merely showing dollar inflation, and actually not growing based on strength or earnings.

Realistically, since the last crash - the only mistake you could make, was pulling back to cash.
Link Posted: 3/8/2013 6:45:36 AM EDT


Just that simple eh?

That's simply a measure of a generally declining market, or a generally improving market, based on 20, 50, and 200 day avg?
Link Posted: 3/8/2013 9:23:20 AM EDT
Originally Posted By woodsie:
Nobody here can successfully time the market. If you could, you wouldn't be on this website, you'd be on some panel on CNBC blowing minds.

If it makes you feel better, why not take a partial approach? Increase your cash position to 25% and ride it out. If the market corrects in a big way, you can buy cheap with that 25%. If it doesn't, you won't miss all the appreciation and dividends that you would being completely out.

Going whole hog one way or another is foolish. We had threads of people back in 2008 who sold everything at the bottom because they figured the end was neigh and I'm sure there were threads back in 2000 of people who dumped everything into high flying tech stocks.

Same shit, different day. Keep a level head and make small incremental moves if you must scratch that market timing itch.

I have the same feeling you do. I'm looking at some of my large cap dividend stocks trading at P/Es of 20+ and feeling that they are getting a bit top heavy but I'm not going to go crazy and bet the farm on a correction. At best, I'll take SOME profits and increase my cash position.


I generally agree with everything Woodsie posts in the business & investing forum. Noone can predict or time the market. If they did, they'd be billionaires and they wouldn't be handing out free advice on the internet.

Don't pull all your cash from the stock market. The market is not a race with a fixed end point. Dips and crashes happen, as do recoveries and rapid growth. The bulk of your money should remain invested throughout your investing lifetime. Work with small portions of your portfolio to increase your cash on hand. If you see a crash, you can take advantage of lower prices. If we don't see a significant drop in prices, you aren't left regretting your decision to sell off a bunch of stocks and miss out on potential returns.

Emotional, knee jerk reactions are the most common return killer in the stock market. People love to buy when prices are high because they're chasing returns, and they love to sell when prices are low because they're afraid of losses. Don't sell all your stocks off simply because you're afraid you'll see a correction next week, and don't invest every penny you own just because you think there's no limit to stock market returns.
Link Posted: 3/8/2013 1:25:47 PM EDT
Originally Posted By Chadnutz:
I screwed up and moved my money to the money market when it was at 11,xxx. That is the last time I'll try to time the market as the stock market doesn't make much sense. As others have said, with the fed pumping billions into the economy each month, people are going to put it somewhere. I still doubt it can go much higher so I'm not putting any more in right now. I'm just sitting in my MM and in ING just in case it does fall. I lost a lot of growth from pulling it out though.


You admit that your mistake was trying to time the market and then right there you go on to say that you are once again going to try and time the market. I can understand not wanting to go all in today but I'm going to reiterate some of my previous advice in this thread.

How about instead you pick a period of time over which you'll dollar cost average your way into the market and then make incremental purchases over that period?

Let's say you've got $100k in MM and let's say your time frame for getting back in is 2 years. That should be enough time to encompass any pending correction, should it not? Divide that 2 years into 8 quarters. Divided your $100k into 8 parts ($12.5k each). Now buy back into the market according to this schedule.

April 1st, 2013 -> $12.5k
July 1st, 2013 -> $12.5k
October 1st, 2013 -> $12.5k
January 1st, 2014 -> $12.5k
April 1st, 2014 -> $12.5k
July 1st, 2014 -> $12.5k
October 1st, 2014 -> $12.5k
January 1st, 2015 -> $12.5k

Tada! You've inched your way back into the market. If there is a big correction in 6 months, you'll still have tons of cash on the side to take advantage of it. If there is a big boom in 6 months, you'll at least have something in to take advantage of it.

This is the best way in my mind to unfuck your market timing conundrum systematically with confidence. Otherwise you are stuck trying to market time the unfucking of your previous market timing mistake.

You don't necessarily have to do it over 2 years or in increments of 4 times per year. That is just an example to illustrate. You could do it monthly over the next 12 months if you want. The primary goal is to try and make your investments over the course of a period long enough to give you a chance to take advantage of any correction with at least SOME of your money while not sitting on the sidelines indefinitely waiting for a train that never comes.
Link Posted: 3/9/2013 8:50:22 AM EDT
[Last Edit: 3/9/2013 9:04:02 AM EDT by hicap]
I am fully invested and have it all on black

Seriously, my gut feel is this market will continue higher for a couple more years, once the Fed starts raising interest (after unemployment gets to 6.5% as their target for doing so) the market will take a pretty good hit, but not like '08

i have been investing in the stock market since 1981 and there have been numerous crashes over the years, the market always come back and i am better off each time,



Link Posted: 3/10/2013 7:32:48 AM EDT
How far are you from retirement?

I'm anywhere from 30-40 years from retirement, depending on how my career goes. So for me it doesn't make any sense to be pulling money out of the market right now. I'm going to keep putting the same amount in every month, reinvesting dividends, and keep buying consistent dividend payers with good P/E ratios.
Link Posted: 3/10/2013 6:55:16 PM EDT
Called inflation.
Link Posted: 3/11/2013 7:13:41 AM EDT
[Last Edit: 3/11/2013 7:17:57 AM EDT by LuckyDucky]
Most of the advice here is based on the mantra that the market always goes up in the long run.

That hasn't really been true except in the last 100 years and even then, it hasn't been true in the whole world.

What happens to all the people here heavily invested in stocks when we have a Japan stock market?

If the FED continues to massively inflate our economy, I guess we have no choice but to stay in stocks.

ETA: I'm pretty new to having skin in the game and if you can't tell, I'm uneasy about the whole situation.
Link Posted: 3/11/2013 7:58:26 AM EDT
Originally Posted By LuckyDucky:
Most of the advice here is based on the mantra that the market always goes up in the long run.

That hasn't really been true except in the last 100 years and even then, it hasn't been true in the whole world.

What happens to all the people here heavily invested in stocks when we have a Japan stock market?

If the FED continues to massively inflate our economy, I guess we have no choice but to stay in stocks.

ETA: I'm pretty new to having skin in the game and if you can't tell, I'm uneasy about the whole situation.


Not really that the market always goes up in the long run but rather that the market always generates returns in the long run. The part that I think (maybe) you and a lot of other people miss is that the total return from being invested in the market is a combination of appreciation and yields.

It is intuitive that the market will deliver a total return over the long run because why else would any business turn the lights on in the morning? Every single capitalist enterprise on the planet is based on the notion of taking capital and deploying it to some productive end in order to generate a return.

The stock and bond markets are just a means for organizing highly fractional sources of capital and deploying it to various enterprises to generate a return. If the stock and bond markets didn't make sense long term then it would imply that every bit of capital investment those investments represent also doesn't make sense. Coke would stop making cokes, Kimberly Clark would stop making toilet paper, Ford would stop making cars, because why would any of those companies continue to put their capital at risk if there was no expectation of a return?

The Japanese stock market is an interesting case but it has to be put in the context of two things:

1) How overvalued was it at it's peak? If people were paying 100x earnings for Japanese stocks then the high share prices we are using as a baseline were fictitious to begin with so any comparison should instead be made with index prices when earnings multiples were historically reasonable.

2) What yields has that market delivered along the way? This will greatly affect the total return and would go a long ways to explain why there's still money in a declining market in the first place.

Even when the market suppressed during and after the Great Depression, the average yield of the Dow Index was between 3%-6% for the duration meaning there was still goods rolling out the door and money being made and paid to investors.

Appreciation isn't everything and there are even entire classes of stocks devoted to the notion of churning a tried and true business models to generate cash for investors rather than appreciation. Power companies are a great example.

Link Posted: 3/11/2013 8:02:36 AM EDT
I've been trying to find some good dividend graphs
Link Posted: 3/11/2013 8:53:24 AM EDT
Originally Posted By LuckyDucky:
I've been trying to find some good dividend graphs


Here's a good one. It's interesting to note that yields were at one point more highly emphasized over appreciation in the first half of last century. Compare to the long term chart below it and note that yields were highest when appreciation was slowest and vice versa. This reflects the fact that appreciation and yields are two components of total return and you often trade one for the other therefore you have to look at them both in combination when talking about the market being a good deal over the long term.



Link Posted: 3/12/2013 5:59:58 PM EDT
Originally Posted By pdimaio:
Honestly all I have done over the past few weeks is move into more of a cash/dividend play in my retirement accounts and online accounts for the next few weeks/months. The way I see it is I am protecting my gains and while preventing a big loss. Even if the market did take a big spike upward, it would only be a few percent and I would rather deal with not having made a little extra versus a big loss.



That's kinda where I am at too, at least with my retirement account(s).
My regular brokerage account is sucking hind tit as usual due to my over-confidence in timing trades.


Link Posted: 3/14/2013 7:38:19 AM EDT
Appreciate any additional advice from the investment folks in regards to cashing out of the market right now.....well really just moving all my stuff to cash preservation or bond indexes. I just don't see how this bubble can last.
Link Posted: 3/14/2013 3:05:45 PM EDT
Originally Posted By badeffect10:
Appreciate any additional advice from the investment folks in regards to cashing out of the market right now.....well really just moving all my stuff to cash preservation or bond indexes. I just don't see how this bubble can last.


On what basis do you figure it's a bubble? Not a rhetorical question but sometimes a lot can be learned by fleshing these things out.

The S&P 500 sits at about 16 time earnings right now so it's not a valuation bubble by any stretch of the imagination. There are other thoughts which could have merit.

Either way, you should never be "all in" or "all out" except when it's plain stupid obvious and that's only happened TWICE in my lifetime.

1) In 2000 when blue chips were trading at 50+ times earnings before the dotcom crash.
2) In late 2008 when blue chips were trading at 5 times earnings after the financial crisis.

Those were obvious situations where it made sense to be all in or all out. Those times don't come often and we certainly aren't in one right now. Make your moves in small increments if you feel that you must. There's nothing wrong with going from 80% equities to 60% equities because you have some trepidation but going from 100% to 0% or 0% to 100% in anything is a fools game. Nobody makes out doing. I've watched people do this in person over the course of a decade and do nothing but lose their ass on bad timing.

Link Posted: 3/19/2013 6:27:53 AM EDT
[Last Edit: 3/19/2013 6:29:10 AM EDT by billhw1]
^ ^ ^

I sold all stocks positions about 2 years ago when the DOW was at 12,200. I thought it came back too fast and expected a pull back to about 10,500 which was my buy in point... Israel was talking about Iran's nukes, Syria was starting to blow up, Europe's issues started getting some press and our economy wasn't looking pretty. I missed the 10,500 point and have missed what would have been a nice gain. If I had it to do over again I would have sold about 50% and let the rest ride. I missed the Bernanke bubble in my thought process. That, and the fact that Cd's "currently" don't pay jack so where else are people going to get a return on their money other than the market and cheap home foreclosures. Don't sell at a low and don't wait to go all in at the top of a bubble, cost average your money. Pay attention to sentiment and what the Fed is doing. The world isn't going to end even though it does look like it sometimes.
Link Posted: 3/19/2013 3:33:05 PM EDT
[Last Edit: 3/19/2013 3:34:03 PM EDT by ARfanboy]
Do you not have enough bonds in your portfolio? What is your risk tolerance? Did you have a similar feeling when the market started up swinging in 2009?

"It's not about market timing, it's about how much time you are in the market."
Link Posted: 3/20/2013 11:00:26 AM EDT
Originally Posted By Chadnutz:
I screwed up and moved my money to the money market when it was at 11,xxx. That is the last time I'll try to time the market as the stock market doesn't make much sense. As others have said, with the fed pumping billions into the economy each month, people are going to put it somewhere. I still doubt it can go much higher so I'm not putting any more in right now. I'm just sitting in my MM and in ING just in case it does fall. I lost a lot of growth from pulling it out though.


You said it exactly, all that money being pumped into the system has to go somewhere and where it ends up is invested in the stock market with hopes of getting a ROI thats equal to or greater than the rate of inflation. Does that mean the economy is strong? no, just means the fed is printing and your dollars have less value. My guess if the dow will continue to go up for awhile as people are desperate to protect what assets they have. Im young though so if i take a hit i have 30 years to recover from it before i retire, the stock market would be a bad idea right now for those who are nearing retirement.
Top Top