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Actions You Are Taking During This Bear Market...

This thread is to facilitate discussion on specific actions we are taking to adapt to THIS bear market, which undoubtedly is unusual due to its sudden onset where the market dropped 30%+ in 3 weeks and I do not believe any market segment was spared from the sudden loss.

For example, I am:

  • Redoubling my commitment to stick to my plan and be not tempted to sell at a loss since the positions I acquired were carefully selected to play a specific role in my portfolio. In spite of varying levels of loss, none of that changed.
  • Adding to my cash balance any additional money received from dividends/distributions
  • Reducing expenses (thankfully the Shelter-In-Place automatically helped in this area)
  • Be thoughtful about any purchases I am making - asking myself if I need that item now

Looking forward to your thoughts...

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Re: Actions You Are Taking During This Bear Market...

Sitting on about 70% cash and 30% intermediate bonds and waiting for a 20-30% crash.  Powell has thrown the ball to congress and congress is not putting it in play for the time being, so nothing left to hold the markets up, in my very very humble opinion.  #skyisabouttofall

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Re: Actions You Are Taking During This Bear Market...

            SteadyEddy -  I made all my investment moves the third week of March. I really just keep my eye on things until the next buying opportunity. Cash is accumulating. Same basic plan formulated after the flash crash of the late 80’s just different players.

             We’re set income wise for years though so we’re planning on probably a move in 5 years.  It’s interesting to know for sure what the basics really cost. For us it is about 20% less per month so far.

              My simple economic indicator, gas prices, tells me things are picking up. Each governor has the keys to what they open up though. That tells me the economy will progress in an unpredictable pattern as the smoke clears and will probably be slow going for awhile. 

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Re: Actions You Are Taking During This Bear Market...

  • Take tax losses to harvest on 2020 taxes
  • Make portfolio adjustments to anticipate some long-term changes in the world's economic landscape
  • Reduce equity exposure in Europe; increase in Asia
  • Use the opportunity to improve / optimize portfolio construction; review and eliminate under-performing assets; consolidate and simplify
  • Invest a 401K rollover and two pension payouts
  • Avoiding panic selling
  • Avoiding panic buying
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Participant ○○○

Re: Actions You Are Taking During This Bear Market...


@bilperk wrote:

Sitting on about 70% cash and 30% intermediate bonds and waiting for a 20-30% crash.  Powell has thrown the ball to congress and congress is not putting it in play for the time being, so nothing left to hold the markets up, in my very very humble opinion.  #skyisabouttofall


Powell said in a 60 mins interview that the Fed is not out of ammunition if necessary...

While a 20%-30% drop is possible, how long will you stay in a cash heavy position? Also, bill, did you get rid of wellesley?

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Re: Actions You Are Taking During This Bear Market...


@steelpony10 wrote:

            SteadyEddy -  I made all my investment moves the third week of March. I really just keep my eye on things until the next buying opportunity. Cash is accumulating. Same basic plan formulated after the flash crash of the late 80’s just different players.

             We’re set income wise for years though so we’re planning on probably a move in 5 years.  It’s interesting to know for sure what the basics really cost. For us it is about 20% less per month so far.

              My simple economic indicator, gas prices, tells me things are picking up. Each governor has the keys to what they open up though. That tells me the economy will progress in a unpredictable pattern as the smoke clears and will probably be slow going for awhile. 


good deal steelpony! I am accumulating cash too...

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Re: Actions You Are Taking During This Bear Market...


@chang wrote:
  • Taking tax losses to harvest on 2020 taxes

chang - if you don't mind me asking, how do you decide to sell positions at a loss? meaning, how do you know they will not recover?

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Re: Actions You Are Taking During This Bear Market...


@SteadyEddy wrote:
chang - if you don't mind me asking, how do you decide to sell positions at a loss? meaning, how do you know they will not recover?

In almost all cases I am essentially making a substitution. Not exactly like-for-like, of course; hopefully something better. If the sold assets recover, I hope the newly-purchased assets will have recovered more.

I won’t sell something at a loss that I want to own.

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Explorer ○

Actions You Are Taking During This Bear Market...

++  "Stay the course."  Having a long-term investment view 

++  Currently 20% cash.  Will put 10-12% cash into equity if market is significantly down from current level

++  Continue ROTH conversions (done yearly in the last 4 years)

++  Continue having dividends/distributions reinvested as we both (husband & wife) have generous pensions.  SS continues to be deferred until 70

++  Currently 20% in MF bonds, mostly core, core-plus.  Recent wild credit market fluctuation reaffirms our belief for investing in these conservative bond funds

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Re: Actions You Are Taking During This Bear Market...


@SteadyEddy wrote:

@chang wrote:
  • Taking tax losses to harvest on 2020 taxes

chang - if you don't mind me asking, how do you decide to sell positions at a loss? meaning, how do you know they will not recover?


I'm not chang but speaking for myself.  I sell something to harvest the loss and buy something else that is just as beat down/just as likely to recover or I like better.  My account balance doesn't change because I sold something, it's like moving money from my right pocket to my left pocket.

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Re: Actions You Are Taking During This Bear Market...

SteadyEddy,

When it became clear we were going down rapidly, I sold several of my bond funds to raise additional cash. Also, started reviewing my portfolio and came up w/ “buy prices” for some holdings I wanted to add to. Set some limit orders on strong dividend stocks, but was surprised that some of my stock purchases continued to drop further. Also had a few holdings which suspended dividends (HSBC, RDS.A), so I set “sell orders” for those.

I’m still positioned fairly aggressively- about 85% equity, 9% cash, 6% bonds. But, we’ve got a fairly large portfolio, both still working and won’t retire for another year and a half. Also, still saving aggressively from my work, and will be putting our old house on the market to sell w/in a few months. The proceeds will go into investment accounts, as we just moved not our new house which we paid all cash for. No debt, so we should be fine. Yes I’m bothered by the volatility at times, but we can live off our portfolio income pretty easily, so we’re OK. And I’m not about to panic sell.

Win
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Re: Actions You Are Taking During This Bear Market...

My actions have been reported in this thread Sold most of my portfolio to cash

I also started another thread of What to do now + more actions.

It's a bit too late to start thinking now. The time to think about a plan is when markets are calm and going up.

I have a written plan I made years ago and I have been following it.

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Re: Actions You Are Taking During This Bear Market...

We bought the BEAR. 29% more equities on Mar 31st. Over rebalanced from 35/65 to 45/55. Today at 47/53. 

We bought 50% EM (up 10%) and 50% World SCs (up 15%).

We want to be at 50/50 in early January.

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Re: Actions You Are Taking During This Bear Market...

 In mid-March, I rebalanced by selling a bunch of VBTLX and buying a bunch of VTI at 128. This action was dictated by my IPS which has been beneficial to date as VTI is now priced at 148.50. My IPS takes all the angst out of investing. It appears many are making portfolio adjustments on the fly and under stress which is non optimal IMHO.

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Re: Actions You Are Taking During This Bear Market...

I thought I had a plan....and then got punched in the mouth. 
During the summer of 2019 I moved equity funds from tax deferred TIAA accounts and rolled it over to Vanguard both for the lower costs and greater diversity of funds. In part I wanted to further reduce my exposure to equity, but also willing to take on some risk in the bond space and as you know JMUTX, PIMIX, PIGIX, DHEIX, and PCI were vulnerable to the CV-19 induced market drop.
 
I have not sold any equity funds but did sell the following bond funds for dry powder and future allocation:
JMUTX (sold in March) 
PIMIX (sold 50% in March) 
PIGIX (sold 10% in March) 
DHEIX (sold in May and ran away)
PCI (holding a sliver)
 
Some of the raised cash I’ve already invested in VDADX, VBILX, VSGIX, VSIGX, and VWAIX.
Brian
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Re: Actions You Are Taking During This Bear Market...

My main account balance reached an all-time high despite being in bond funds in (early) February. I began taking capital gains soon after and the most conservative ones at the beginning of March. Since then I did a few small speculative trades, but have been in money markets with ever falling yields. In my other brokerage accounts, on April 20th, I tax loss sold underwater CEFs and ETFs along with those that might not have been, out of frustration and desire to start over after the 30 day wash sale period. Meanwhile I purchased one CEF and several ETFs in one of those accounts. Not certain I should be fully invested or more than I am now. The risk of loss overpowers my thoughts of gains.

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Re: Actions You Are Taking During This Bear Market...


@SteadyEddy wrote:

This thread is to facilitate discussion on specific actions we are taking to adapt to THIS bear market, which undoubtedly is unusual due to its sudden onset where the market dropped 30%+ in 3 weeks and I do not believe any market segment was spared from the sudden loss.

For example, I am:

  • Redoubling my commitment to stick to my plan and be not tempted to sell at a loss since the positions I acquired were carefully selected to play a specific role in my portfolio. In spite of varying levels of loss, none of that changed.
  • Adding to my cash balance any additional money received from dividends/distributions
  • Reducing expenses (thankfully the Shelter-In-Place automatically helped in this area)
  • Be thoughtful about any purchases I am making - asking myself if I need that item now

Looking forward to your thoughts...


Everybody is taking an approach that fits their personal situation.  I am retired, and preservation of principal is crucial to me.  When the market started going down in March, I sold my worst performing funds first, and ultimately sold all of my funds by mid March.  As a result, I was in all cash by the third week of March, having a 1.25% YTD loss.  I then stayed in Government Money Market funds for a few weeks, and had an unsuccessful short term trading experience with Municipal bond funds, which increased my YTD loss to about 1.4%.  For about the last month, I have been involved in some short term "conservative" trades involving short term bond oefs. Intermediate Core and Core Plus Bond Oefs, Government Bond oefs, and more recently I have added some conservative nontraditional bond oefs.  I have been chipping away at YTD loss figures, but have decided to go relatively slow and cautious, in my fund selections. I now have about 7 funds, that I consider relatively conservative, which I hope continues to reduce my YTD losses.  As I become more comfortable with more risky asset classes, I will sell some of my more conservative current investments, and will reinvest in more risky investments.  I am not going to rush it, and will be very grateful at "slow and steady" improvements in my overall portfolio situation.  Everything is on a short leash and I am monitoring the market very closely, so if anything starts performing poorly, I will sell it, and build up cash as needed.

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Re: Actions You Are Taking During This Bear Market...

Thanks for the responses so far. Some had stuck to their plans, while some are focusing on capital preservation. The current market rally is as scary as the drop in Feb-March, not sure what to make of it.

I am increasingly becoming cautious and selling into the rallies some of the positions that have beneficial outcome.

Still holding on to some losses - not sure I want to realize those losses at this time since some are in IRAs. Even the taxable accounts, I am not sure I want to harvest the losses yet.

I feel that the main street and wall street are diverging once again... if you are in retirement or approaching retirement it is imperative to be extra cautious.

I am learning a lot from seasoned members of this forum - and I thank you!!

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Re: Actions You Are Taking During This Bear Market...


@SteadyEddy wrote:

@bilperk wrote:

Sitting on about 70% cash and 30% intermediate bonds and waiting for a 20-30% crash.  Powell has thrown the ball to congress and congress is not putting it in play for the time being, so nothing left to hold the markets up, in my very very humble opinion.  #skyisabouttofall


Powell said in a 60 mins interview that the Fed is not out of ammunition if necessary...

While a 20%-30% drop is possible, how long will you stay in a cash heavy position? Also, bill, did you get rid of wellesley?


If we get a 30% drop, I'll get back into, mainly growth.  Totally out of Wellesley at the present time.  I do expect that drop within several months.  It not, I'll re-evaluate.

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Re: Actions You Are Taking During This Bear Market...

I am sitting on some cash and working on my buylist. As I find companies I really like I put some limit buys in place for the price I like. Example I just picked up some Ally Bank @ 13.58.  I am trying to find companies that can rebound. I also upped my 401k contributions. Bear = Buy :)

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