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Market Meltdown...looks bad

ConnorEl said:
Shouldn't have money in the stock market that you have any need for for at least ~ five years. If you think the companies or funds you're in are good for the longer term, just stay put. If not, sell.

I try not to think short term with stocks.
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:werd:
 
I just don't get the "stay in" mentality of some brokers.

Common sense told everyone to get out a few weeks back. If nothing else just as insurance against a default. If the market kept marching, you just get back in a few weeks later and lose a tiny percentage gain.

But if you get out, and it tanks, you haven't lost anything. Then, if you can somehow figure out when to get back in, your entire original amount grows while everyone else who stayed in is in recovery. To me the decision went like this:

Would I rather A) stay in and risk losing a large portion of future retirement or B) get out and risk losing a tiny portion of future retirement.

You had to know the politicians would not come up with a solid, fiscally sound future for the country. It's just not dire enough yet. Therefore, confidence continually erodes, globally. Not the time to be in.

Simple moves like this early in life (IF SUCCESSFUL) could easily double, triple, or do even better on your retirement return 25-35 years down the road.
 
WhatUTalkinBout Willis said:
I just don't get the "stay in" mentality of some brokers.

Common sense told everyone to get out a few weeks back. If nothing else just as insurance against a default. If the market kept marching, you just get back in a few weeks later and lose a tiny percentage gain.

But if you get out, and it tanks, you haven't lost anything. Then, if you can somehow figure out when to get back in, your entire original amount grows while everyone else who stayed in is in recovery. To me the decision went like this:

Would I rather A) stay in and risk losing a large portion of future retirement or B) get out and risk losing a tiny portion of future retirement.

You had to know the politicians would not come up with a solid, fiscally sound future for the country. It's just not dire enough yet. Therefore, confidence continually erodes, globally. Not the time to be in.

Simple moves like this early in life (IF SUCCESSFUL) could easily double, triple, or do even better on your retirement return 25-35 years down the road.
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In retrospect, sure, you can argue common sense was to get out. But how many times have we see a dip in the market and though "oh crap, it's gonna get bad" only to have the market keep chugging upwards? Happened a lot during the '09-'10 rally.

You also are ignoring option C: you think things are going to plummet, you pull out, then the market takes off. When do you get back in? You may well wait 6 months while it appreciates 10%, looking for that dip that tells you to get back in. Then will that dip be temporary? Or the start of another bear market? Maybe you just sold low and bought high?

I don't recall the exact figures, but I read an article several years back that compared investors who stayed the course vs. those that jumped in & out of the market. On avg, those that stayed with it and didn't react to dips & bounces gained ~ 8% annually, vs. those that tried to time it gained ~ 3% annually.
 
Didn't a bunch of people get super rich by just plugging away when the market crashed in '29? I dont know.
 
Lonewolf10 said:
In retrospect, sure, you can argue common sense was to get out. But how many times have we see a dip in the market and though "oh crap, it's gonna get bad" only to have the market keep chugging upwards? Happened a lot during the '09-'10 rally.

You also are ignoring option C: you think things are going to plummet, you pull out, then the market takes off. When do you get back in? You may well wait 6 months while it appreciates 10%, looking for that dip that tells you to get back in. Then will that dip be temporary? Or the start of another bear market? Maybe you just sold low and bought high?

I don't recall the exact figures, but I read an article several years back that compared investors who stayed the course vs. those that jumped in & out of the market. On avg, those that stayed with it and didn't react to dips & bounces gained ~ 8% annually, vs. those that tried to time it gained ~ 3% annually.
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I definitely agree with you. Figuring out when to get back in (at the bottom of the trough) is paramount. It's no value if you just skip the dip all together. and I definitely see that staying the course is smartest overall. It would be crazy-town to skip in and out over and over again.

I'm saying my common sense told me to get out 3 weeks ago. Now I just have to figure out when to get back in. I don't think today's jobs report is good enough news. I'd like to see a better debt/deficit deal enacted, and more housing starts.
 
WhatUTalkinBout Willis said:
I just don't get the "stay in" mentality of some brokers.

Common sense told everyone to get out a few weeks back. If nothing else just as insurance against a default. If the market kept marching, you just get back in a few weeks later and lose a tiny percentage gain.

But if you get out, and it tanks, you haven't lost anything. Then, if you can somehow figure out when to get back in, your entire original amount grows while everyone else who stayed in is in recovery. To me the decision went like this:

Would I rather A) stay in and risk losing a large portion of future retirement or B) get out and risk losing a tiny portion of future retirement.

You had to know the politicians would not come up with a solid, fiscally sound future for the country. It's just not dire enough yet. Therefore, confidence continually erodes, globally. Not the time to be in.

Simple moves like this early in life (IF SUCCESSFUL) could easily double, triple, or do even better on your retirement return 25-35 years down the road.
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You also have to think about taxes. The moment you sell, BANG, you are hit with capital gains. If you do the "in and out" a couple of times a year, you can get screwed come tax season.
 
One of the problems is that you can't even have a market correction now without a gaggle of GlenBeckRonPaulPeterSchiffAustrianEconomicsGoldBug Chicken Littles preaching at the top of their lungs that the world is going to end.
 
InTheKnow said:
So what does losing out AAA rating mean for the stock market?
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I've heard it could have an impact on interest rates and cost everyone more money but I'll defer to the folks who are more informed. Anyway, Reuters is reporting:
FLASH: S&P downgrades U.S. credit rating to AA+ with negative outlook
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Stock market crash. Loss of any remaining confidence in the US economy. Recession. Higher loan costs will make recovery even more difficult. Baby boomers are going to be the death of us.
 
The stock market will be down initially. More importantly, when you submit a loan for a car or house and get a 9% interest quote, don't be shocked.


InTheKnow said:
So what does losing out AAA rating mean for the stock market?
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The key to investing is diversification.......therefore, you want to have a portion of your assets in things like real estate, autos, stocks, bonds, gold, money, beer etc.

Regarding stock market, remember to sell in May and go away, until after the fall crash...which seems to be a bit early this season.

Moderation is key, along with doing the opposite of everyone else. When the market rises, you should be selling small (or reasonable) positions and buying on dips like yesterday and today.

The downgrade will certainly help increase risk of inflation which is something our economy needs in order to avoid stagflation, provide additional incentive for the US Govt to pay down its debt and or prep everyone for QE4.

Interest rates for mortgages went up slightly today in anticipation of the downgrade, but yesterday were at record lows. This economy can't afford rates to be too high but they do need to eventually tick upward.
 
ITK,

They know not of what they speak, this downgrade will have little to no impact. This move has been bantered about for weeks.
 
Dented said:
man investment threads on the pit are just like car threads on the pit. why dont you guys stick to something you can competently speak on; like good music or picking up hoodrats? oh wait...
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Yeah, weird that everyone didn't go to Wake to be a grease monkey.
 
coredeac said:
The stock market will be down initially. More importantly, when you submit a loan for a car or house and get a 9% interest quote, don't be shocked.
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Japan's credit rating is lower than the US's and they have the lowest interest rates in the world. Mortgage rates are tied to Treasuries and Treasury rates are going lower because Treasuries are still viewed as a risk-free asset due to a lack of any other option.
 
S&P doesn't have nearly the credibility that they used to and this amateur hour analysis isn't going to help anything.
 
JGDeac said:
Yeah, weird that everyone didn't go to Wake to be a grease monkey.
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haha. you'd think some people did go to wake to learn about finance and capital markets though. based on this thread they didnt learn much.
 
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