Wow... bad day for the market.

tonyb

cfrizz wrote: »

Yes Tony, my 401k probably took a hit, but since I'm not going to be touching it for at least 7 years, checking it every day to see where it's at is simply going to drive me crazy why would I do that to myself?

As for the rest, I can't do anything about it, so again why drive myself crazy.

All I can do is make sure I'm contributing to my 401k, make sure that all my investments are well diversified, check in with my FP once a year, live within my means and ignore everything else that alludes to un-necessary drama that would just raise my blood pressure.

I hear ya Cathy, and honestly that is probably the going mentality for most.....but also the mentality that the market loves. Nothing wrong with moving things around to offset losses and jumping back in when prices are low.

You know why rich people are rich ? Because they don't have that leave it alone mentality. Your seven years out you say ? How about at 6.5 years the market takes another dump, then what ? The leave it alone philosophy works probably more so in the big cap stocks....but lots of people are invested in other areas, emerging markets/financial instruments/ smaller tech companies/ etc.

Also, the leaving it alone theory depends on your faith in the American economy and it's government to run the joint, keep it's financials in order. Would you say that faith is at all time highs....or lows ?

Blind faith is a slippery slope and increases your chances of seeing your money go Poof.

sucks2beme

The market is over valued. Has been for a while. So this is no surprise.

tonyb

sucks2beme wrote: »

The market is over valued. Has been for a while. So this is no surprise.

Very true, and a 10% correction was expected, which is about where we are now off the yearly highs.

So the market may rebound some.....but imho, it still has legs to go south going into next year. Globally, everyone is in trouble and that's no surprise either. You have China somewhat on the ropes, South American countries are rocked, Europe is still dragging on with Greece and loads of debt, middle eastern countries are up for grabs and Russia isn't exactly on top of it's game either.

Granted the American economy is more resilient than most others, but it's been 7 years now and we have yet to experience better than 2% growth. That's the 2nd worst record since the great depression. Add in our own growing debt and the picture isn't all rainbows and Unicorns as some would have you believe.

cnh

I agree. The things companies do to inflate their figures for more profit are legendary. Taxes. Hey, if you can go overseas and PAY NOTHING, how will lowering taxes here help?

One thing is for sure; another CRASH will certainly make the upcoming election more interesting because it will give a pseudo wind to any candidacy that is full of jobs and economic rhetoric about lower taxes, smaller gov't and fewer regulations (sort of like crack for the Big Boys, a mantra of sorts that "manifests" more and more wealth for some, lol). Unfortunately, the Chinese have our number because they control certain things and are less subject to any rhetoric outside the Party? It's much more difficult to BS Beijing than it is to lobby congress and line its pockets with cash. This is NOT an endorsement of the PRC but just a statement of fact, they can act swiftly, and we are a jumble of diverse and confused and uninformed voices most of the time. Special interests paralyze Washington as much or more than Gov't!

OK, no more on this because the authorities don't like it! My what a world we live in! Stick a fork in me, I'm done!

cfrizz

tonyb wrote: »

cfrizz wrote: »

Yes Tony, my 401k probably took a hit, but since I'm not going to be touching it for at least 7 years, checking it every day to see where it's at is simply going to drive me crazy why would I do that to myself?

As for the rest, I can't do anything about it, so again why drive myself crazy.

All I can do is make sure I'm contributing to my 401k, make sure that all my investments are well diversified, check in with my FP once a year, live within my means and ignore everything else that alludes to un-necessary drama that would just raise my blood pressure.

I hear ya Cathy, and honestly that is probably the going mentality for most.....but also the mentality that the market loves. Nothing wrong with moving things around to offset losses and jumping back in when prices are low.

You know why rich people are rich ? Because they don't have that leave it alone mentality. Your seven years out you say ? How about at 6.5 years the market takes another dump, then what ? The leave it alone philosophy works probably more so in the big cap stocks....but lots of people are invested in other areas, emerging markets/financial instruments/ smaller tech companies/ etc.

Also, the leaving it alone theory depends on your faith in the American economy and it's government to run the joint, keep it's financials in order. Would you say that faith is at all time highs....or lows ?

Blind faith is a slippery slope and increases your chances of seeing your money go Poof.

I'm not leaving it alone Tony, nor do I have blind faith. I have a Financial Planner who monitors my investments, and will call me when he thinks he needs to rearrange things for my benefit. He called me a month or so ago to do just that. He explained why he wanted to make some changes and explained what he was going to change got my approval and did so.

He has been managing my investments and 401k from both MetLife & my current job (he picked which Fidelity funds I use.) since 2004. He checks in with me every year, to tell me how things are going, he made big changes to my investments for more safety when I hit 50.

When he called last year I told him I wanted to get out at 62 and to please see if that was possible. He had me fill out a packet giving him all the info he needed to check it out and sent back the final evaluation showing I was on track to do so.

I KNOW I don't have the knowledge or skill to do this kind of thing. That is why I let a professional do it. I found out about him through a neighbor of mine when I lived in Boston who said he had done very well by him. He has turned out to be well worth it and my portfolio has been steadily growing ever since.

I never go into anything blind, and I don't have a problem with hiring a professional to help me out when I don't have the knowledge to do things by myself.

Most things in life can be handled by using common sense, and not being intractable in ones beliefs. And doing ones best to ignore all un-necessary drama others try to involve you in just for their own amusement or who want to make you a miserable as they are.

Joey_V

cfrizz wrote: »

Joey, you are still young and have years of work ahead of you. If your FP has been doing his job, he has you well diversified. And as I've said you have more than enough time to recover from whatever happens.

Cathy -

We are very well diversified, but an impact like 2008 will remove a lot of principal. Our FP was specifically hired for the strategy they adhere to, and that is to minimize risk in bear markets. We go full cash while the market is down but when the indicators are there, even if the market appears down, we go full 100% in.

https://moneymatters.net/news-media/strategy-videos/129-the-buy-and-hold-disaster.html

We don't subscribe to buy and hold.

This only works for my liquid assets.

It does not work for my 401K... it remains in the market regardless.

Joey_V

halenhoang wrote: »

I do not view today's drop of over 500 points to be "the end of the world" as some may allude to. I was very active in the market for many years, nothing was more crushing then 2007 - 2008. If you know what you are doing, hopefully, you will see the silver lining of opportunities amid this artificial chaos.

Joey, if your financial planner recommends a complete sell off. I recommend you a different financial planner. If all your eggs were placed into one basket, you lack diversity and the ability to hedge. Which, in that case, sell off the company of your financial advisor as well.

Halen

Not that easy my friend. No matter how diversified you are... you will feel this.

The key is not to sell and remove yourself from the market indefinitely, the key is to sell when you feel like you are going to go lower and buy back even when the market is low but have some indicators of improvement.

Meaning that we can get the trigger to buy back next week or next month. We jump in. We don't pull out for years waiting for the market to hit 18000 again. Even if the market were at 16500 6 months from now but it looks like there is a silver lining, we go back.

Joey_V

When my FP says buy back, we have literally 6h to buy back. All our funds needs to be 100% liquid. We buy back generally right before a spike/rebound.

It's not a perfect strategy, but it helps in our opinion.

We get a buy signal... it's not like oh lets sit and wait a couple weeks before buying back. We get a buy signal... all funds are ready to go, we buy same day.

tonyb

You mean you buy the dips and sell the highs ? lol

That's the name of the game isn't it ?

Polkie2009

tonyb wrote: »

You mean you buy the dips and sell the highs ? lol

That's the name of the game isn't it ?

Spot on Tony, always has been , always will be. Buy when there's blood in the streets. The thing is, this Ponzi scheme is rigged now more than ever. People who did the buy and hold and just stay in through the up and down cycles would be better off getting out on top and buying back in at the bottom. Yes, a friend of mine lost his a** on his 401K back in 2001 with the dotcom. bubble burst. He never got back in , he had had enough and decided to invest in other things.

[Deleted User]

Joey_V wrote: »

halenhoang wrote: »

I do not view today's drop of over 500 points to be "the end of the world" as some may allude to. I was very active in the market for many years, nothing was more crushing then 2007 - 2008. If you know what you are doing, hopefully, you will see the silver lining of opportunities amid this artificial chaos.

Joey, if your financial planner recommends a complete sell off. I recommend you a different financial planner. If all your eggs were placed into one basket, you lack diversity and the ability to hedge. Which, in that case, sell off the company of your financial advisor as well.

Halen

Not that easy my friend. No matter how diversified you are... you will feel this.

The key is not to sell and remove yourself from the market indefinitely, the key is to sell when you feel like you are going to go lower and buy back even when the market is low but have some indicators of improvement.

Meaning that we can get the trigger to buy back next week or next month. We jump in. We don't pull out for years waiting for the market to hit 18000 again. Even if the market were at 16500 6 months from now but it looks like there is a silver lining, we go back.

Nothing is that easy, else we would not be the fly on the horses a$$. Haha.

I do not subscribe to the notion of formulas or predictors as an assessment to buy, sell, or hold. So, what exactly is this trigger? I could care less where the market sits, riding the wave to long a stock low and sell high to short a stock low and recover is hardly anything new. You have sectors that move opposite of other sectors and you have bear stocks in a bull market.

I lived and breathed this for many years and one would not have an in depth understanding otherwise. In this case, taking the words of an FP as the holy grail and act like we are smarter because of that is foolish. I use to have my series 7 and if the objective is to charge for services and comm, I would sell numbers too. I would also show the pretty graphs, formulas, and fancy charts to support my reasoning.

What I did and still do is have my spreads and positions in different sectors. Some are long term, some are short term (the wave) and some are daily (many waves). Regardless of a 500 point drop, when you have investments that goes for over $100 per, it's daily and normal fluctuations will be felt; much more so to the yuppies. I was there once. I picked up some Netflix the past couple days, ohhhh... the law of averages..

So, among my core group of friends in the market, our neighborhood is thriving. At the end of the day, we all try our best to invest our cash to make more cash. Fact is, 99.99 % are still just the fly on the horses a$$. Haha

Cheers to a healthy portfolio!

halen

tonyb

Amen bro....the markets are so convoluted and manipulated now, it's no different than putting your money down on the roulette wheel and hoping for the best. While all those financial planners still collect their fee's.

Speaking of fee's.....any of you guys see this ?

http://finance.yahoo.com/news/why-you-ll-be-paying-a--netflix-tax--soon-161951515.html#

Hate to say I told ya so but....
When you get enough of the masses moving in one direction, taxes are bound to follow. Figures Chicago will start the ball rolling too. Even music services like Spotify. Can you imagine your Spotify bill looking like a cable bill with all the added taxes ?

afterburnt

Dude we are like so doomed

cfrizz

Everyone always gets wrapped around an axle with regard to fees, I used to be this way, but when I objectively looked at where I was when I started and where I am now, the fees that I'm paying come nowhere close to what I have gained.

Sometimes you have to spend money to make money. paying a few fees for the kind of expertise that my FP has is worth it to me.

And once again the endless perpetual *itching about taxes comes into play. If you don't want to pay them then drop the services that are being taxed. You will survive without watching Netflix. Pick up a book and start reading or go back to renting DVDs.

cfrizz

Joey_V wrote: »

cfrizz wrote: »

Joey, you are still young and have years of work ahead of you. If your FP has been doing his job, he has you well diversified. And as I've said you have more than enough time to recover from whatever happens.

Cathy -

We are very well diversified, but an impact like 2008 will remove a lot of principal. Our FP was specifically hired for the strategy they adhere to, and that is to minimize risk in bear markets. We go full cash while the market is down but when the indicators are there, even if the market appears down, we go full 100% in.

https://moneymatters.net/news-media/strategy-videos/129-the-buy-and-hold-disaster.html

We don't subscribe to buy and hold.

This only works for my liquid assets.

It does not work for my 401K... it remains in the market regardless.

I understand Joey, If you are comfortable trying to time the market more power to you. I understand why you are doing it since you have a family and thinking about college costs which puts you in a bit more of a time crunch then me.

That video I found to be very misleading. He was talking about a retiree on a fixed income not a young person with years to go before needing those funds. Now if the retiree has common sense, they will look at all of his expenses and determine if they actually needs to continually take 4% out every year or if they can make do with less. Being flexible is the key to surviving.

MrBuhl

I'm with Cathy. I don't ignore it, but generally, trying to time the markets is considered folly IMO. I've been lucky doing so at times, but I don't plan on being able to, and I don't plan to need mine anytime soon. The closer I get to needing it, the more conservative my FP will handle things. It's a marathon, not a series of sprints, though you could try do it that way I understand. I just choose not to.

kevhed72

I completely agree with Tony that the markets are....far from a pure supply demand model for stocks, bonds and commodities. The two main reasons are speculation/futures markets and computers which basically by/sell millions of shares within seconds or even milliseconds of indicators within the market. What is scary is that these programs can drop the market in minutes automatically due the high volumes of stocks they buy / sell. Then you have day traders buying and selling the same shares within the same day, which also increases volatility. I guess...whatever to make a buck days,right?

cfrizz

This is what I can't be bothered with. I don't drive myself crazy worrying about what the markets are doing to the exclusion of what is happening in my portfolio and what I need to accomplish. I can't do anything about the markets, nor do I worry about what anyone else is doing or their choices. They have NO impact on me.

Nor do I worry or watch speculation/future markets/day traders. I can't do anything about these things.

Stop complaining about things you can't change, and worrying about what is wrong with whatever the "masses" are doing and just focus on you.

Or to put it bluntly, stop minding everyone elses business, and just focus on taking care of your own business!

cfrizz

Speak of the devil, I just got this message from my FP this afternoon.

"Hi Cathy,

I hope you’re well. I’m on vacation this week but just wanted to let you know that I’m monitoring the situation with the economy and stock market. If I feel that there are any moves to make, please know that I will reach out to you over the next week.

I will be with my family at the cape this coming week but if there is an urgent question, please feel free to email me.

I’ll be back in the office on 8/31. Thanks. Mike"

This is why I don't flip out with these kinds of things!

[Deleted User]

Try for fun.. Have a financial advisor and a risk accessor come for dinner... I have nothing against either and respect their professions. But damn... Soap Opera at its finest....

Halen

mrbigbluelight

tonyb wrote: »

Amen bro....the markets are so convoluted and manipulated now, it's no different than putting your money down on the roulette wheel and hoping for the best.

RE: market manipulation. BINGO

September 13.

Joey_V

tonyb wrote: »

You mean you buy the dips and sell the highs ? lol

That's the name of the game isn't it ?

Bahahaha.....

tonyb

Cath, wasn't talking driving yourself crazy at every 100 point move in the market, that I agree with. A 2000 point move though deserves some attention.

Again, all depends on your motives and what your invested in. When the markets move like this, that spells opportunity in my book. Wanna buy some oil ? lol

cfrizz

If my FP says he wants to make some changes due to this drop he will let me know and tell me what he wants to change and why I will take it into consideration.

Would I ever take it upon myself to do it myself? Hell no! I don't have the knowledge to do so and would just make things worse.

I tried doing it myself years ago when I first got into mutual funds. I picked 4 TR Price funds, and while I didn't lose any money they didn't really grow either. It wasn't until I had Mike look over what I had and got new recommendations that things truly took off.

Mike knows what I want to accomplish, he knows my risk tolerance, and he keeps track of my age and market swings and makes adjustments accordingly. I can't ask for more than that. I have no doubt that I'm doing a lot better than a good chunk of people out there who think they can do it themselves or simply don't think it's worth the risk at all.

I'm not looking to become a multi-millionaire, I simply want enough so that when I retire, I can maintain my lifestyle in comfort and security. It's what I have been working towards for over 30 years, and I'm doing it by investing with both my 401k & outside mutual funds, but most especially living within my means so that I have the money to invest.

afterburnt

@cfrizz I no longer use mutual funds. I can accomplish the same thing with ETF's for a lot less expense.

tonyb

Nothing really wrong with mutual funds, you just have to watch the fee's. If the fee's are eating up a good portion of profits, then it isn't worth it. Same can be said for any investment managed by someone else.

Remember the days of savings accounts that paid 3-5% interest ? Good for you, bad for the banks. People left their money in the bank. Now, your forced to invest in riskier markets where it can go Poof at any given moment.

afterburnt

Tony I am sure that the banks were loaning ijt out at more than they were paying you to save.

afterburnt

All mutual funds are expesive compared to ETF's even the index mutual funds.. They are good for the people that sell them.

tonyb

afterburnt wrote: »

Tony I am sure that the banks were loaning ijt out at more than they were paying you to save.

Sure they were, that's how they made money. Nobody swaps dollars and stays in business.

In spite of the almost free money today and low interest rates for so long, home ownership is at it's lowest levels since probably the 60's.

See, that lends itself to another problem with the markets. More debt is being used today to invest with....RED FLAG. Companies are buying back their own stock to keep prices up.....RED FLAG. P/E is getting out of hand too.....another red flag. Growth is stagnant, wages are stagnant.....red flag. I could go on, but at some point you have to start paying attention to all the red flags popping up instead of the manipulated information fed you by deceitful people.

If some where to tell you the truth, that we are in some troubling times, would you be more apt to invest more......or put those funds in a holding pattern ? The economy doesn't turn without people spending money or sitting on it. Wall street doesn't care for what reasons, be it truthful or deceitful, doesn't matter....as long as your spending.....AND when the truth doesn't work then they resort to deceit. Gimmicks in financials, stock buy backs, anything to make it appear things are rosey.

Thing is, when they start resorting to deceit, that's when you should worry and pay attention to the red flags.

afterburnt

I am trying to spend all of my money while it is still worth something!