Anybody Buying Yet? Where’s the Bottom?

[rogerthat]

@SAJ-99 makes a very valid point in that if your sitting with a large cash stash you want to have a plan for it. Sitting in cash has been good for the last 6 months but that won’t last forever and over the long term it’s a mistake. The bright side is that coming up with a plan right now is much easier than 6 months ago when everything looked over priced.

 

[SAJ-99]

...therefore encouraging new long positions right now

Not exactly. The problem with perma-bears is they put more value on being right than they do on making money. @BigHornRam has a lot of energy, which has worked out for him. But mostly the curmudgeons just sit on cash.

For a long term investor, I would say yes, keep DCAing and don't worry about predicting market prices and trends. However, we are in a bear market. You may see a few 10% rallies. For a trader, this is opportunity.

 

[huntandfly]

For a long term investor, I would say yes, keep DCAing and don't worry about predicting market prices and trends. However, we are in a bear market. You may see a few 10% rallies. For a trader, this is opportunity.

I 100% agree with this. I am betting that the opportunity may get even slightly better, but it’s purely a bet, and maybe I’ll be the one that ends up paying. That’s the risk I take

 

[SAJ-99]

I 100% agree with this. I am betting that the opportunity may get even slightly better, but it’s purely a bet, and maybe I’ll be the one that ends up paying. That’s the risk I take

All of us are taking some risk. As long as we understand it we should be fine.

The trader in me says never buy on a big down Friday. Even during this run we have seen Mondays are usually red too. Next week is big option expiration, so dealer vanna hedging will decline, which is negative. Add a Fed meeting that is clearly not going to be bright and cheery and the past sell-off reactions to JPoww and Co, and next week looks like cloudy with a chance of a hurricane. That said, the market knows all of this and likes to front-run. We get too negative or oversold and I will be buying.

 

[LopeHunter]

I have yet to meet a short-term trader that does better than a strategic long term investor that stays the course through thick and thin. Yet I’ve met plenty of traders that have done much worse than long term investors. I guess we have some exceptions on here…

Absolutely there are some astute and lucky traders on here, just are there are astute and lucky gamblers in Vegas.

I was likely lucky at to this point over the past 28 months though every trade was based on pre-set drops or rises in stock values.

I dumped Bonds the third week of February 2020 when were 35% of my tax-advantaged portfolio. I never thought I would be without bonds and likely I would be increasing my bond allocation as am almost at retirement but stocks were falling in February 2020 so my intent was to hold cash so sold bonds. February 2020 appeared to me to be the start of a panic much as I had seen as the markets fell post 9/11/2001 for a few days then snap back. I was sitting on the cash to pay for 6 years of college so loaded up on stocks as the markets finally reopened post-9/11 then sold a few days later. The income tax hit was harsh but made some money after the dust settled for the risk I took.

So, sold the bonds in February 2020 and used proceeds from those bond sales to buy stocks via VTI ETF. Stocks bounced several weeks later, sold and expected to dollar average back in stocks from cash but stocks fell again a couple of weeks later so bought into stocks over the next two weeks. Stocks popped up again. Sold again. Fell again. Started buying individual stocks that were higher P/E than VTI EFT as the swings in the market were exaggerated even more as P/E was higher. I only bought individaul stocks which I was willing to hold a decade in case market fell 50% after I was 100% in stocks. I was only buying then did the same buy low/sell high a half dozen times or so. was virtually 100% stocks as headed into the mountains for a hunt in October 2020. No trades the next four months.

Dumped almost all the stocks in early February 2022 when seemed only a matter of days until soil froze allowing Russia to invade Ukraine, inflation appeared to me to not be transitory and Fed Rates were needing to go up multiple times and the Fed was going to have to dump assets by summer. Am dollar averaging back in though no hurry to go 100% stocks. At some point, will sell some stocks to get back towards 40% bonds. Why cash? Neither Bonds nor stocks seemed likely to prosper then next 6 to 12 months. Nor REITS. I already have two homes and did not feel adding another made sense as suspect housing in AZ is overheated. So, cash.

Am dollar-averaging back into the VTI ETF. Hope to be back to 100% invested in stocks in the tax-advantaged portfolio by January 2023. Then, will at some point in 2023 hopefully get back to holding 40% bonds. Then, hopefully the stock market, bond market and economy behave in a typical historical manner so I make no trades for years as has been the case in most of my past 4 decades of holding investments.

I do not buy options. I don't chase crypto in a meaningful amount. I buy big buckets of stocks or blue chip individual stocks. My downside is limited but is there. Missing the upside is also a risk. Has played out well so far.

 

[BigHornRam]

Not exactly. The problem with perma-bears is they put more value on being right than they do on making money. @BigHornRam has a lot of energy, which has worked out for him. But mostly the curmudgeons just sit on cash.

For a long term investor, I would say yes, keep DCAing and don't worry about predicting market prices and trends. However, we are in a bear market. You may see a few 10% rallies. For a trader, this is opportunity.

My wife is one of those curmudgeons that likes to sit on cash and she has more of it than both you and me.

 

[TheGrayRider]

Cash is king or cash is trash!

 

[SAJ-99]

Absolutely there are some astute and lucky traders on here, just are there are astute and lucky gamblers in Vegas.

I was likely lucky at to this point over the past 28 months though every trade was based on pre-set drops or rises in stock values.

I dumped Bonds the third week of February 2020 when were 35% of my tax-advantaged portfolio. I never thought I would be without bonds and likely I would be increasing my bond allocation as am almost at retirement but stocks were falling in February 2020 so my intent was to hold cash so sold bonds. February 2020 appeared to me to be the start of a panic much as I had seen as the markets fell post 9/11/2001 for a few days then snap back. I was sitting on the cash to pay for 6 years of college so loaded up on stocks as the markets finally reopened post-9/11 then sold a few days later. The income tax hit was harsh but made some money after the dust settled for the risk I took.

So, sold the bonds in February 2020 and used proceeds from those bond sales to buy stocks via VTI ETF. Stocks bounced several weeks later, sold and expected to dollar average back in stocks from cash but stocks fell again a couple of weeks later so bought into stocks over the next two weeks. Stocks popped up again. Sold again. Fell again. Started buying individual stocks that were higher P/E than VTI EFT as the swings in the market were exaggerated even more as P/E was higher. I only bought individaul stocks which I was willing to hold a decade in case market fell 50% after I was 100% in stocks. I was only buying then did the same buy low/sell high a half dozen times or so. was virtually 100% stocks as headed into the mountains for a hunt in October 2020. No trades the next four months.

Dumped almost all the stocks in early February 2022 when seemed only a matter of days until soil froze allowing Russia to invade Ukraine, inflation appeared to me to not be transitory and Fed Rates were needing to go up multiple times and the Fed was going to have to dump assets by summer. Am dollar averaging back in though no hurry to go 100% stocks. At some point, will sell some stocks to get back towards 40% bonds. Why cash? Neither Bonds nor stocks seemed likely to prosper then next 6 to 12 months. Nor REITS. I already have two homes and did not feel adding another made sense as suspect housing in AZ is overheated. So, cash.

Am dollar-averaging back into the VTI ETF. Hope to be back to 100% invested in stocks in the tax-advantaged portfolio by January 2023. Then, will at some point in 2023 hopefully get back to holding 40% bonds. Then, hopefully the stock market, bond market and economy behave in a typical historical manner so I make no trades for years as has been the case in most of my past 4 decades of holding investments.

I do not buy options. I don't chase crypto in a meaningful amount. I buy big buckets of stocks or blue chip individual stocks. My downside is limited but is there. Missing the upside is also a risk. Has played out well so far.

I like when people follow a plan. Congrats.
Can I ask, what yield level would make bonds interesting to you again? For reference 10yr at 3.15% and corporates about 4.5%.

 

[Irrelevant]

Yet I’ve met plenty of traders that have done much worse than long term investors.

ooh ooh pick me pick me

 

[Sytes]

I've done good both TSP and day/swing trading. Money made is money - green.
Shorts, longs, puts, and calls. Strangles, straddles and iron condors... Quick RSI buy/sell, play the ichimoku cloud, flip a coin... Lost big (SENS though not too big a loss) made big-ger green. Losses come with gains, nature of stock play. Short AND long term.

The difference, knowing a budget, not interfering with 401/TSP's... Making sure not to play the market w/ $$$ that holds, "needs".

It's simple really. Win, lose. It's great listening to earning calls, greater to be on the right side of a play and have easily made 5x's over... paid my hunt toys and travels.

 

[BigHornRam]

Looking like everything is on sale today.

 

[rogerthat]

Yeah rough day when bonds and stocks are going down the toilet in unison. The mantra is cash is trash but it hasn’t been

 

[rogerthat]

I like when people follow a plan. Congrats.
Can I ask, what yield level would make bonds interesting to you again? For reference 10yr at 3.15% and corporates about 4.5%.

Why buy a 10 year when a 2 year is the same yield?

 

[Flatrock]

Looking like everything is on sale today.

Until the Fed pivots (which I don't think is soon), I don't know that the general downtrend stops. Might not be til 2023. My guess is they'll be forced to hike us into a pretty good recession.

Everyone with a time horizon of more than 5 years should be excited about this new bear market. The longer the S&P stays under 4,000 and the lower it goes, the better.

 

[SAJ-99]

Why buy a 10 year when a 2 year is the same yield?

Because I get that yield guaranteed for 10yrs, rather than 2. 2yr is more impacted by Fed funds than 10yr. 10yr is more a bet on inflation and economic growth. I’m trying to think at what level I take the bet and buy bonds again. If I can get AAA MBS at 6% it would be hard to pass up.

 

[rogerthat]

Because I get that yield guaranteed for 10yrs, rather than 2. 2yr is more impacted by Fed funds than 10yr. 10yr is more a bet on inflation and economic growth. I’m trying to think at what level I take the bet and buy bonds again. If I can get AAA MBS at 6% it would be hard to pass up.

Gotcha. Your thinking about what long term yield starts to look attractive. That’s a tough question to answer without knowing where inflation is headed and what real yields will be. Inflation is going to stickier than people think. The RVs rolling down the road is telling me that

 

[stealthy_bowman]

Until the Fed pivots (which I don't think is soon), I don't know that the general downtrend stops. Might not be til 2023. My guess is they'll be forced to hike us into a pretty good recession.

Everyone with a time horizon of more than 5 years should be excited about this new bear market. The longer the S&P stays under 4,000 and the lower it goes, the better.

Agree. In short run, the Fed is pretty much forced to destroy the economy in order to save it. Only problem is, until the supply chain issues are resolved, rate hikes won’t really do what they’re supposed to do.

 

[Dave N]

OK, possible dumb question at this point but are there any recommendations on where to put my 401 money to TRY and reduce the bleeding? I'm not very market savvy! Looking like this will continue and I would like to lose as little per day as possible. Thinking whenever things turn around I would reallocate to more profitable things then. Retirement? Yeah, right. Seems like a dream now.

Thanks.

 

[BigHornRam]

OK, possible dumb question at this point but are there any recommendations on where to put my 401 money to TRY and reduce the bleeding? I'm not very market savvy! Looking like this will continue and I would like to lose as little per day as possible. Thinking whenever things turn around I would reallocate to more profitable things then. Retirement? Yeah, right. Seems like a dream now.

Thanks.

Gold's up today.

 

[Chama Grande]

Everyone with a time horizon of more than 5 years should be excited about this new bear market. The longer the S&P stays under 4,000 and the lower it goes, the better.

Golden opportunity to reduce cost basis and I'm here for it

LFGGGGGGG