Markets might drop by 50%?

[saveliberty]

As far as yanking money in and out of the market, brokerage houses do it everyday in fractions of a second trades. These same people tell you to let it ride. Might want to think about that.

What on earth are you talking about? Brokerage houses don't tell me to let it ride, they only make money if I trade.

Ask them what to do when your stock loses 20%.

It is the pat answer every broker uses.

 

[SteadyMercury]

Odds are they'd be correct. Again, studies show the majority of people who try to time the market consistently underperform the market, but of course on message boards everyone is a big winner.

I'm sure there are people who do well, but I'm sure not impressed with someone patting themself on the back for doing well during a 5 year bull market.

 

[saveliberty]

Again, you have totally failed to understand this is a risk reduction strategy, not a return maximizing one. By the way, all your profit is on paper until you sell.

 

[SteadyMercury]

Nope, you fail to understand you aren't reducing risk by yanking all your money in and out of the market on certain days.

By the way, regularly rebalancing tends to move a lot of that profit into non-equity asset classes after a long bull market.

 

[saveliberty]

Nope, you fail to understand you aren't reducing risk by yanking all your money in and out of the market on certain days.

By the way, regularly rebalancing tends to move a lot of that profit into non-equity asset classes after a long bull market.

Interesting, so I didn't really protect my money by being out of the market this last week?

 

[SteadyMercury]

Interesting, so I didn't really protect my money by being out of the market this last week?

This week you did, but for a given year moving it all in and out nope.

Sounds like all you've been doing is underperforming the market, while keeping all the risk.

But what gives why didnt you buy on the dip on July 30?

 

[william the wie]

Nope, you fail to understand you aren't reducing risk by yanking all your money in and out of the market on certain days.

By the way, regularly rebalancing tends to move a lot of that profit into non-equity asset classes after a long bull market.

Interesting, so I didn't really protect my money by being out of the market this last week?

A balanced portfolio forces the investor to buy low and sell high within his portfolio. It's a different way of reducing risk.

 

[Politico]

What do you markets guys think of this story?

Not gonna happen.

 

[sameech]

As far as yanking money in and out of the market, brokerage houses do it everyday in fractions of a second trades. These same people tell you to let it ride. Might want to think about that.

What on earth are you talking about? Brokerage houses don't tell me to let it ride, they only make money if I trade.

Ask them what to do when your stock loses 20%.

It is the pat answer every broker uses.

perhaps, but since my portfolio as a whole is up almost 25% on the year on a cost basis, a 20% loss in value would still be a return on investment better than the .45% APR banks are offering on savings accounts these days.

 

[SteadyMercury]

The whole concept of someone thinking they are reducing risk by being in the market for only x number of days per year is just silly, dips tend to cluster and many of the larger single day dips in the market happen within a week of another one. The only way you're reducing risk of stocks in a given year is to not invest in the stock market for that year.

It is almost like hearing someone saying they figured out a betting system to beat Vegas, you just have to roll your eyes and smile at them.

 

[william the wie]

The whole concept of someone thinking they are reducing risk by being in the market for only x number of days per year is just silly, dips tend to cluster and many of the larger single day dips in the market happen within a week of another one. The only way you're reducing risk of stocks in a given year is to not invest in the stock market for that year.

It is almost like hearing someone saying they figured out a betting system to beat Vegas, you just have to roll your eyes and smile at them.

It depends on taxes. 5/1-10/31 average total equity returns over a decade rarely exceed 2%. The better arguments:

Balanced portfolios work in all markets. Modigiliani, the one with the Nobel, back tested his commodities, real estate, bonds and equities portfoilio over several decades and it outperformed the alternatives. I much prefer the AAII system that is based somewhat on his system but it does work and it is simple.

Low beta issues tend to go up when the market goes sideways and option premiums are nearly as high as high beta issues. Being the house is a betting system that does work in Vegas, it also works on Wall St.

 

[Zander]

What do you markets guys think of this story?

Not gonna happen.

That's what they were saying in 2008 too...

 

[Politico]

Yeah I would put that pipe down son.

 

[Toro]

Markets could also go up 50%.

 

[william the wie]

Markets could also go up 50%.

I don't like the implied equivalence. The current Dow PE is 16 vs. an average of 15 since 1929. Net revenues are increasing fast enough to go up 50% with a reduction in PE by the end of the year. Without a third qtr. earnings disaster across the board a 50% decline is unlikely in the extreme. A 10% correction to get some more bear action on the other hand does seem quite likely and probably necessary to maintain the wall of worry.

 

[jwoodie]

The Market is about future expectations, not past performance. We are circling the drain but, like in the days before the housing crash, we keep doing the Greenback Boogie. Everyone should have their Sell orders in place.

 

[Toro]

Markets could also go up 50%.

I don't like the implied equivalence. The current Dow PE is 16 vs. an average of 15 since 1929. Net revenues are increasing fast enough to go up 50% with a reduction in PE by the end of the year. Without a third qtr. earnings disaster across the board a 50% decline is unlikely in the extreme. A 10% correction to get some more bear action on the other hand does seem quite likely and probably necessary to maintain the wall of worry.

I think stocks are quite expensive here. However, the market could still go up 50%. I don't think it will over the next few years, but it could.

My guess is that the market will go up by 50% over the next decade or so.

 

[jwoodie]

A wise investor once told me his secret: Always sell too soon. Those who try to time the market are either gamblers or fools.

 

[sjay]

A wise investor once told me his secret: Always sell too soon. Those who try to time the market are either gamblers or fools.

I know some one who sold too soon dec.2012 to be exact, kicking his behind ever since.So much for that expert advice.

 

[TruthSeeker56]

There will be a 50%+ stock market correction by the end of 2015.

And please, DON'T take that to the bank.