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sschullo

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5 hours ago, sschullo said:
5 hours ago, sschullo said:

I am happy I can feel fine when the market goes up and not so good during times like this. However, I am most jubilant about the extremely low costs of my portfolio and how much I have saved in those low fees for years!

And we still don't know how much farther this crash could go. I agree that for most young investors, and some older who are risk-tolerant and don't need the money, its a buying opportunity. 

 

I wonder if there is any precedent for our current situation. I can't think of one so this may be uncharted territory for the global economy and for us personally. 

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7 hours ago, tony said:

I wonder if there is any precedent for our current situation.

What do you think is unique about this? Seems quite standard to me.

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What are the best ways you've found to keep others calm about their investments and explain why doing nothing is recommended?

I've been an outspoken advocate for index investing for a few years, so a lot of coworkers and family are asking me what they should do right now. I could use some of your good one or two liners.

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It's easy  to think "you need to do something" when things are going south but if you "do something " like sell when markets are tumbling you are locking in your loss, otherwise it's only a paper loss. Tell your friends to do nothing other than do what they were doing before the panic, and hopefully that was investing in the market. Every investment made now buys shares at a lower price. Sure the market can go lower but doing nothing is in your best interest if you are investing for your distant  future. Also I would tell them to avoid investment news. Its all predictive and full of "what Ifs" . Truth is, nobody knows what the market will do. They can only speculate. Supposed  investment gurus are practicing witchcraft .

BUT the trend is always up over time. Now once this mess settles down, and it may be a while, your friends should evaluate if their temperament is suitable for the stock market. If they are not sleeping well, they should probably not be investing as much in stocks and perhaps a bit more in bonds. But without taking some risk in stocks you may very well underachieve your goals .

I'm old enough to have seen two major downturns and in the heat of the moment I made some mistakes because I felt the need to do something.  It taught me if nothing else that I had no business being in a 100% stock mutual fund portfolio in the first place. I now know to do nothing. I also know not to make changes in the middle of a downturn but to plan what I want my allocation to be once the downturn is over and stock regain their loses.

John Bogle has some good quotes on this. Maybe your friends will appreciate them.

 

The mistakes we make as investors is when the market's going up, we think it's going to go up forever. When the market goes down, we think it's going to go down forever. Neither of those things actually happen. Doesn't do anything forever. It's by the moment.

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15 hours ago, EdLaFave said:

What do you think is unique about this? Seems quite standard to me.

I'm not sure how to answer your question exactly . Yes market loses and corrections and recessions are standard. But the cause of these loses this time is somewhat unique or at least it feels that way to me. But we will have to see what happens next.  I go by  my intuition  which I trust and I 'm getting bad vibes at the moment. I pray for all those inflicted with this virus  which can be lethal and I'm not that worried  as much about my investments right now.

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4 hours ago, ScottO said:

What are the best ways you've found to keep others calm about their investments and explain why doing nothing is recommended?

I don’t try to convince anybody to do anything because in my experience 90% of the time it is wasted energy. However, when people ask me how I feel, I tell them how much I’ve lost (usually quite a bit more than them) and how calm I am about dumping my next paycheck into the market. I think people find that level of confidence and emotional stability to be reassuring.

2 hours ago, tony said:

But the cause of these loses this time is somewhat unique or at least it feels that way to me. But we will have to see what happens next. 

I know nothing and I don’t think anybody else does either.

For all I know the virus was just the spark that triggered the selling process on an already overvalued market rather than being the main driver behind the selling.

Let’s assume the sell off is 100% because of the virus. Financially speaking, it seems like a virus with a low mortality rate is less scary than a fundamentally and structurally unsound financial system where every institution is on the brink of collapse.

It wouldn’t surprise me at all if we bounce back from this within the next 12 months.

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I just deposited $12k ($6k for 2019 and 2020) into my roth ira account. gonna take advantage of this crash. I'll be putting $1k into an equity mutual fund each week over the next 12 weeks. if it goes down, great!! I get to buy low.

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42 minutes ago, DK said:

I just deposited $12k ($6k for 2019 and 2020) into my roth ira account. gonna take advantage of this crash. I'll be putting $1k into an equity mutual fund each week over the next 12 weeks. if it goes down, great!! I get to buy low.

obviously this downturn has influenced you to  " do something"  and   fortunately what you are doing is the right thing.

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1 hour ago, EdLaFave said:

For all I know the virus was just the spark that triggered the selling process on an already overvalued market rather than being the main driver behind the selling.

 

I have a theory that a  one time possible Bernie Sanders nomination, plus the Saudi Arabia- oil price war, plus the virus scare combined to create the drop. I also continue to believe that this market was looking for an excuse to pull back a bit. Its all good unless this virus scare is worse than anticipated. Then this free fall may continue. I read somewhere that the death rate among certain older populations could be quite high.  Make no mistake though everyone is vulnerable .At this point I think the market is looking for normalcy. Whether it finds that remains to be seen. 

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For perspective:  "bear markets" are often defined as a drop of 20% or more from the market peak (the S&P 500 is commonly used as proxy for "the market").  Since 1900, online sources indicate these declines occur an average of every 3.5 years or so.  Even after today's dramatic plunge (3/11), the S&P 500 has yet to reach "bear" status, though it is close to doing so.

My point being that this market volatility is not unusual, even though the moment we are living through feels very unusual.

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haha, I’m old enough to remember Q4 of 2018 when we were within a hair of a bear market when the world’s two largest economies were locked in a pointless trade war.

Nobody knows the future. I hope things get better quickly, but maybe they won’t. The huge market swings have really been something to see though. 

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43 minutes ago, EdLaFave said:

haha, I’m old enough to remember Q4 of 2018 when we were within a hair of a bear market when the world’s two largest economies were locked in a pointless trade war.

Nobody knows the future. I hope things get better quickly, but maybe they won’t. The huge market swings have really been something to see though. 

 Trump just banned travel from Europe (except for England for some reason) for 30 days and I suspect that includes cargo and trade. He may be criticized about that. If we are not in bear market territory  now we may be tomorrow. Hopefully the market will not react to that but how can it not? .I read however from some online  sources that we are in bear territory already. Trump seemed nervous tonight, almost shaken. Not his cocky self. What gives me investment hope is all the great comments from John Bogle about markets and the economy over the years. I wish he was with us still. I would bet every news media outlet would have him as a guest to calm the markets. 

I appreciate all the comments from you guys. I'm thankful to Steve for starting this discussion. So much can be learned by these discussions about the right way to proceed during times of investment adversity.

I went to the gym today but I think I'm staying away for a while going forward.  I think this may be a very boring spring for many Americans. I just heard the NBA season was just canceled. Our local universities today canceled all classes until further notice. Wow this really is getting serious.  Is it an overreaction?  I'm not so sure.

 

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36 minutes ago, tony said:

Our local universities today canceled all classes until further notice. Wow this really is getting serious.

Yep, I'm in all-day meetings and training tomorrow about switching to "remote learning" at my community college, starting next week, running at least through mid-April.  The major schools in this area: UCLA, UC Irvine, USC, CalArts, The Claremont Colleges, etc. have made similar moves starting this week or next.  This has happened very fast, I'm guessing that we'll hear a similar plan  from the local holdouts (like CalTech), as well as most colleges and universities across the country, within days.

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1 hour ago, tony said:

 

 What gives me investment hope is all the great comments from John Bogle about markets and the economy over the years. I wish he was with us still. I would bet every news media outlet would have him as a guest to calm the markets. 

They would do well to bring out some of his old video interviews about "Staying the course."  There are others who are well prepared to address this volatility cooly, but with the exception of Warren Buffett, the financial news media doesn't have much of a taste for long view, buy and hold philosophy.  Their bread is buttered by the financial services industry that sells active trading, options, etc.

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57 minutes ago, tony said:

Trump just banned travel from Europe

I didn’t know that.

I’m cheering for an immediate recovery. I don’t enjoy losing money, but I can think of one consolation prize of this well timed downturn 😁 😈 

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