cancel
Showing results for 
Search instead for 
Did you mean: 
     
Highlighted
Frequent Contributor

Re: What to do now


@yeanling2020 wrote:

R48,

What is suggestion for me to do at this time? I do not hold a lot of cash, tie most of $ in stock. 60%, Bond 35%.  thanks.

 


Hi yeanling...I saved your post for last this morning.

Perhaps I can get you to relax.

Here's what I posted on another thread...investing when in a bear market, defined as down 20% or more.  note the part about do not sell, do not sell.  Enjoy:

--------------------------------------------------------------------------

(I am now in 27th year of retirement)...posted this on another forum.

Briefly: When I start re-buying will be awhile.  I do not catch falling knives; no guessing on a bottom; NO AVERAGING DOWN.  I want to be buying in UPTRENDS.  Usually means when stock fund prices are ABOVE their moving averages.  I use my Pyramid Up technique (which means folks should not have been buying any stock funds in last month).  I change from 200 day Moving Average to 100 dayMA, to assist in identifying uptrends quicker.  However, FIRST BUYS will be when a COMPELLING VALUE is reached to buy anything...and pyramid up from each fund first buy.  I apply this to each fund, not the overall market.

-----------------------------------------------------------------------------------------------------------------

So, I am spending time on what specific stock funds to buy or keep accumulating, what is the "compelling value price" for each to consider getting started, and what market dynamics will tell me about when to start.  The market will tell me when.

BTW #1: I have been through several bear markets.  I am immunized.  However, this is the first one where I am simultaneously making significant changes, exiting some long held bond funds, into money market funds, to be re-deployed later.  The bond market is the overpriced and "not worth the risk" culprit to me

BTW #2:  When into bear markets (down 20% or more), like now, I have three mantras for action:

--Do Not Sell

--DO NOT SELL

--DO NOT SELL!

(Any selling I do is done in the down 8% to down 20% range).  Then I hunker down and weather the storm.

Disclosure...In bear markets, I do hedge some with buying a fund called PSTIX that performs the inverse of the stock market, thus neutralizing some of my equity allocation.  (Not for everyone).  And same-day stock fund switching, permitted.  

----------------------------------------------------------------------------------------------------

Final comment:  I consider the Do Not Sell...and DO NOT AVERAGE DOWN, the two most important suggestions for anyone, at this time.

Best wishes to all.

R48

0 Kudos
Highlighted
Participant ○○○

Re: What to do now


@retiredat48 wrote:

@jmrdnc wrote:

FD, ironic that you are promoting the use of buckets and having cash now in the middle of a market crash when for years you 'knocked' both ideas.

 


The majority of posters buy in buckets...such as dividing into five buckets, the amount you want to invest in a stock or fund., then buy in five increments  TV's Cramer buys in buckets.  Former poster Capecod buys in buckets, and actually pyramid up's most of his accumulation buys...and he pyramid downs sells.

It is the best way there is to meet Warren Buffetts two investing rules :#1 Do not lose money   #2 Reread rule 1.

R48


The bucket system as described by M* Christine Benz, is not what you describe above, but rather a way to compartmentalize your entire portfolio into different strata based on short term, medium term, and long term needs. Short term - cash, medium term - bonds, and long term - stocks.  This is the general idea.

Buying in buckets is not the portfolio bucket system.

Highlighted
Frequent Contributor

Re: What to do now


@jmrdnc wrote:

FD, ironic that you are promoting the use of buckets and having cash now in the middle of a market crash when for years you 'knocked' both ideas.

 


buckets in my OP are different than the bucket system which is usually 3 bucket consisting of ST needs, medium and LT.

CASH-I posted many times why most should not hold CASH LT, no need to repeat it.

=============

My style is to be flexible, watch markets at all times and make big decisions based on what I see.  In about 10-11 years, I was in cash 3 times.  About 3 weeks in 2013, 3 weeks in Q4 of 2018 and since 2/28 but I also made several trades since 2/28 and in one point I was at a very high % invested). So, 8 weeks in cash out of 66 (10.5 years) means I was invested in the market at 88% of the times at 99+%.

If markets turn around I will be very quickly out of cash.

0 Kudos
Highlighted
Frequent Contributor

Re: What to do now


@jmrdnc wrote:

@retiredat48 wrote:

@jmrdnc wrote:

FD, ironic that you are promoting the use of buckets and having cash now in the middle of a market crash when for years you 'knocked' both ideas.

 


The majority of posters buy in buckets...such as dividing into five buckets, the amount you want to invest in a stock or fund., then buy in five increments  TV's Cramer buys in buckets.  Former poster Capecod buys in buckets, and actually pyramid up's most of his accumulation buys...and he pyramid downs sells.

It is the best way there is to meet Warren Buffetts two investing rules :#1 Do not lose money   #2 Reread rule 1.

R48


The bucket system as described by M* Christine Benz, is not what you describe above, but rather a way to compartmentalize your entire portfolio into different strata based on short term, medium term, and long term needs. Short term - cash, medium term - bonds, and long term - stocks.  This is the general idea.

Buying in buckets is not the portfolio bucket system.


Yes, this is true.  

But I have been describing my "bucket system" long before Christine ever did.  I'm way older than her!  (BTW I have dined with Christine)

It is a nomenclature thing.  She is referring to buckets used for withdrawing from IRAs and how to manage ones retirement spending.  I'm surely OK with that.

I am referring to buckets (for clarity) in dividing ones money to invest.  I went to calling it buckets years ago as people then understood it better.

R48

 

0 Kudos
Highlighted
Follower ○○○

Re: What to do now

R48,

What do you mean, do not average down, I passed the 8-20% down market, now it seems silly to sell, but I am afraid my stock maybe worthless in the future.  I do not own individual stock, I only owned mutual fund, most of index fund.  

Now sit in the market is nerve wrecking.  

thanks for your reply 

0 Kudos
Highlighted
Frequent Contributor

Re: What to do now

"Why is so difficult with you :-) "

Nothing difficult.  You either buy and hold and, if so, rebalance or not.  If not, you attempt to buy low sell high.  It's a matter of opinion as to what is high and what is low!  This thread is entitled, "What to do now?"

Here is what you posted in your OP: "This is just another opinion for anybody with flexibility:", followed by 7 well thought out points and 3 Technical analysis charts.  8-))

ElLobo, de la casa de la toro caca grande
0 Kudos
Highlighted
Explorer ○○

Re: What to do now

Bill Ackman is saying right now on CNBC what to do with this virus. 30 day shut down. Go home! Ya gotta kill this virus before the markets and business will recover. 

Highlighted
Participant ○

Re: What to do now


@ElLobo wrote:

In general, ifn you are all cash, you wait until the markets turn and pyramid up, or you dollar cost average, or both.  Ditto ifn you have a cash cache.

Easy peesy!


Text me when the markets turn please ElLobo..   1-319-CLU-LESS 

Highlighted
Frequent Contributor

Re: What to do now


@yeanling2020 wrote:

R48,

What do you mean, do not average down,

 

thanks for your reply 


Averaging down (or not) is investing when you want to buy something.  You make a buy...then buy more if it goes down lower...then buy more if it goes down lower.  We see examples of this on the forum monthly.  Most Wall Street pros do not do this.  It avoids losing big time.  For instance, many posters averaged down GE stock, when it came off highs in $50/share range, they bought shares in the $40 price range.  Then many threads discussed buying in the  $30's...then in the $20's.  Posts began to dry up when GE got into the teens.  Now at way below $10/share, no threads on GE.  Some lost a lot, averaging down.

A poster stated he averaged down buying Maser Limited Partnerships a few years back and had the courage to post that he lost >#250,000 on it.

It sounds like you are not buying at this time, yeanling, so not applicable to you...yet.

R48

 

0 Kudos
Highlighted
Frequent Contributor

Re: What to do now


@dbcooper93 wrote:

Bill Ackman is saying right now on CNBC what to do with this virus. 30 day shut down. Go home! Ya gotta kill this virus before the markets and business will recover. 


That is somewhat my opinion as well. This is a completely irrational market and will remain so as long as the extreme fear that currently exist continues. Normal will not return until the virus is under control. The ultimate effect of this on the world's economies will not be known until months after it is over.

Capital
Highlighted
Frequent Contributor

Re: What to do now


@Spazatac wrote:

@ElLobo wrote:

In general, ifn you are all cash, you wait until the markets turn and pyramid up, or you dollar cost average, or both.  Ditto ifn you have a cash cache.

Easy peesy!


Text me when the markets turn please ElLobo..   1-319-CLU-LESS 


That request should be made to FD1001, not me.  I am buy and hold, always fully invested, never 'rebalance' to maintain any particular asset allocation, and, as a retiree, have a portfolio where its cash flow (diveys and distributions) more than adequately covers my retirement withdrawals!  8-))

ElLobo, de la casa de la toro caca grande
Highlighted
Participant ○○○

Re: What to do now

FD, your style is not appropriate as a recommendation for others. FA's know that investors need a portfolio plan, they can live with and prosper by over the years without total panic in a correction or crash. Your strength has been in analyzing bond mutual funds, as a guide to others, But even that is historically based, so walk softly in telling the 'worried' what to do now.

 

0 Kudos
Highlighted
Frequent Contributor

Re: What to do now


@Capital wrote:

@dbcooper93 wrote:

Bill Ackman is saying right now on CNBC what to do with this virus. 30 day shut down. Go home! Ya gotta kill this virus before the markets and business will recover. 


That is somewhat my opinion as well. This is a completely irrational market and will remain so as long as the extreme fear that currently exist continues. Normal will not return until the virus is under control. The ultimate effect of this on the world's economies will not be known until months after it is over.


I think the virus is the excuse for a market selloff that I see as a massive deleveraging of funds and teaching newbies/millenials about the bad effects of margin, in a taxable account.  Ditto for short selling, driving it all.  Market/economic fundamentals haven't changed over the last 3 weeks?

ElLobo, de la casa de la toro caca grande
0 Kudos
Highlighted
Contributor ○○

Re: What to do now


@retiredat48 wrote:

         Hi Sophia

Also (for all), if it appears money market funds based on corp short term loans develop a credit risk, you can have Fidelity and Vanguard keep your money in a standard bank account.  No interest is paid, BUT YOU GET FDIC INSURANCE.  I did this during the financial crisis.  Note also gvt set up a credit facility to keep mm funds OK.

Bye Sophia...

R48


FYI, at Fidelity, for example, you can apparently set up an FDIC insured cash option only in your IRA account. At least that's my understanding based on a conversation I had recently with a Fidelity representative.

However, if you want more/total safety than you get from a prime MM fund, Fidelity offers a Treasury Only MM fund, FDLXX. It will also act as your settlement fund.

Fred

0 Kudos
Highlighted
Frequent Contributor

Re: What to do now


@yeanling2020 wrote:

R48,

I passed the 8-20% down market, now it seems silly to sell,

R48 in bold: We have all passed the down 8-20% range. And yes, I agree, it is silly to sell.  That's what my investing model says. Learned from having endured several bear markets.

but I am afraid my stock maybe worthless in the future.  I do not own individual stock, I only owned mutual fund, most of index fund.

Great, you own only mutual funds.  I have not owned an individual stock since 1972.  Don't have to worry about specific companies.  BTW I have owned a mutual fund, Vanguard's Wellington Fund, VWELX, since 1953!  It has endured many bear markets.  But check out the performance chart since 1953!  But if your funds get worthless, it means business has collapsed.  Who will be paying interest, or returning money, on your "safe" bond funds??

 

Now sit in the market is nerve wrecking.

Yes, it is nerve wracking for all of us.  I am sure my portfolio is down more in dollars than the total of many readers portfolios.  When societies collapse, such as Germany after WW II, the things that emerged first were the people, and businesses...the means of production.  Bonds were wiped out.

One can write a book about this, but consider this real type of example:

You decide to sell your $200,000 house, and schedule an open house for Saturday.  Saturday comes, except a massive snow storm hits.  No one shows up...no buyers.  Now what is your home worth?  Zero, because no buyers?  Of course not.

But wait, someone in your community had to sell , and sold a house for $150,000...Do you mark to market and say your house is now worth $150,000?  If even one seller keeps lowering the price, your house is technically worth nothing.  But in selling homes you do not have to "mark to market".

In stocks, you do.  If just one person sells out very low, the entire universe of that stock is marked down.  We live with that dilemma.  Can't tell where the bottom will be.

The best you can do is HUNKER DOWN...both financially and physically.  And to help, my youngest daughter manages a winery in NAPA Valley, CA, and they have kept the on-line buy service open (working from home).  I'll have her send you a bottle to help.  Cabernet OK?

Good luck

R48 

 

thanks for your reply 


 

0 Kudos
Highlighted
Explorer ○

Re: What to do now

R-48

 

Thanks again for your input above. Your thoughts on the AGG or Total Bond funds in this environment?

 

Thanks

 

DGC

0 Kudos
Highlighted
Frequent Contributor

Re: What to do now


@jmrdnc wrote:

FD, your style is not appropriate as a recommendation for others. FA's know that investors need a portfolio plan, they can live with and prosper by over the years without total panic in a correction or crash. Your strength has been in analyzing bond mutual funds, as a guide to others, But even that is historically based, so walk softly in telling the 'worried' what to do now.

 


I have been saying it for years...what I do is what works for me and no one should follow it...but most/all my posts/opinions are for generic investors unless I specifically mentioned my style.

I don't understand why many posters can't accept it.

BTW, when I helped many over the years I never promoted my style and always a generic portfolio tailor to someone's goals and style.  

0 Kudos
Highlighted
Participant ○○○

Re: What to do now


@FD1001 wrote

I have been saying it for years...what I do is what works for me and no one should follow it...but most/all my posts/opinions are for generic investors unless I specifically mentioned my style.

I don't understand why many posters can't accept it.

BTW, when I helped many over the years I never promoted my style and always a generic portfolio tailor to someone's goals and style.

 

Your disclaimer doesn't make an ounce of difference. Half of readers don't believe what you claim to have done because you don't post in real time  and the other half want to imitate what you claim to have done. The claim in and of itself promotes imitation. In the popular press, they are known as 'influencers' and may have large followers and make money promoting products.

I like to read your bond analyses, and some of what you say affects my decisions or sometimes, I have done before or as you have done (e.g., selling bond funds). 


 

Highlighted
Frequent Contributor

Re: What to do now


@jmrdnc wrote:

@FD1001 wrote

I have been saying it for years...what I do is what works for me and no one should follow it...but most/all my posts/opinions are for generic investors unless I specifically mentioned my style.

I don't understand why many posters can't accept it.

BTW, when I helped many over the years I never promoted my style and always a generic portfolio tailor to someone's goals and style.

 

Your disclaimer doesn't make an ounce of difference. Half of readers don't believe what you claim to have done because you don't post in real time  and the other half want to imitate what you claim to have done. The claim in and of itself promotes imitation. In the popular press, they are known as 'influencers' and may have large followers and make money promoting products.

I like to read your bond analyses, and some of what you say affects my decisions or sometimes, I have done before or as you have done (e.g., selling bond funds). 


 


Here is another "fake" trade I made today.

The buy was around 2:30 PM ET. Bought PCI at 14.13

Fidelity time below is 3 hours behind

pci-1.PNG

The sell was just before 3 PM ET and I made 5% and thousands in profit on my 13K shares

pci-2.PNG

 

Note to myself: @jmrdnc goes on my "special" list.

0 Kudos
Highlighted
Participant ○○○

Re: What to do now

Suggestion, post buy, sells, and why on the Buy, Sell, Why thread, where they can remain visible to be checked, not buried in this thread.

Probably good investors on your "Special List." 

0 Kudos
Announcements

Morningstar is here to help you respond to the Coronavirus crisis.