The emergency actions the FED took on Sunday, March 15th did little to stop this market sell off. The coronavirus is obviously putting massive pressure on the equities market and there is real questions if there is enough liquidity in the markets. That said, when is a good time to buy back into the markets? This is the fastest the market has ever shed 30% of its value but nothing goes straight down. Even during the great depression there was a significant bounce-back rally once the market dropped 40%. If the market drops 40% from its top in mid-February that would equate to DOW 17,700 (which happens to be a good support level).
(https://i.imgur.com/CGNURzI.png)
Sell. Even if you buy when it bounces back after dropping 40%, how do you know when to sell it before it goes down further?
Stay in if you can afford to ("if being the operative word" ). This is why it's a good idea to have a mix of; stocks, bonds, and cash assets.
Quote from: Max Rockatansky on March 16, 2020, 12:36:21 PM
Stay in if you can afford to ("if being the operative word" ). This is why it's a good idea to have a mix of; stocks, bonds, and cash assets.
I've been too highly allocated in cash assets, so even if i believe the market is going down I'm starting to buy at these levels.
Quote from: 1 on March 16, 2020, 12:27:22 PM
Sell. Even if you buy when it bounces back after dropping 40%, how do you know when to sell it before it goes down further?
There is no guarantee that the market will roll over once it does experience a bounce-back rally. In December 2018 it was a V-shaped recovery and we never retested the lows (until now of course). Buying into a market at a 40% discount is significant.
I'm staying in and holding- I don't love it but am just trying to remain calm and not even look at my accounts. I have enough cash on hand to get through 6-12 months if it comes to it and I lose income and tighten up my belt. Beyond that I expect the market to crash and rebound multiple more times between now and retirement.
BUY. The basic economic condition of the world is no different than it was 3 months ago, before 0.00000000001% of the population caught this virus. When the powers that be decide that the "epidemic" is over, the basic economic condition will still be the same. You get the unique opportunity to get all of the last few years gain all back in a few months.
Now, the airlines are all going to go broke. Which is why I don't buy airline stocks, they live on debt and go broke every time things go downhill, wipe out the debt and start again. The airline suppliers are in trouble (Boeing). The cruise ship industry is looking at four or five bad years due to bad press. Everything else travel related is looking at a bad year (hotels, casinos, any form of public entertainment). Exotic travel is out for more than a decade.
I'm holding, but I have no choice since I have a trust account I can't touch.
Stocks? Who can afford to buy stocks?
I am staying in. Have around 15 years before I retire.
Without a means of production, the stock market is a house of cards built on thin air. Financial products are just abstractions of the value that is created by other businesses producing something that contributes to the economy. If they stop producing for health reasons, no amount of juicing the markets or playing games with "support levels" or invertebrate trapeze pennants on the graphs are going to help. If this continues for an extended period of time, there is not going to be a bad economy, there is going to not be an economy. No supply or demand.
Sell and stay sold until supply chains and production come back online.
Quote from: Scott5114 on March 16, 2020, 05:29:23 PM
Without a means of production, the stock market is a house of cards built on thin air. Financial products are just abstractions of the value that is created by other businesses producing something that contributes to the economy. If they stop producing for health reasons, no amount of juicing the markets or playing games with "support levels" or invertebrate trapeze pennants on the graphs are going to help. If this continues for an extended period of time, there is not going to be a bad economy, there is going to not be an economy. No supply or demand.
Sell and stay sold until supply chains and production come back online.
How are supply chains not online right now?
Quote from: Rothman on March 16, 2020, 05:36:47 PM
Quote from: Scott5114 on March 16, 2020, 05:29:23 PM
Without a means of production, the stock market is a house of cards built on thin air. Financial products are just abstractions of the value that is created by other businesses producing something that contributes to the economy. If they stop producing for health reasons, no amount of juicing the markets or playing games with "support levels" or invertebrate trapeze pennants on the graphs are going to help. If this continues for an extended period of time, there is not going to be a bad economy, there is going to not be an economy. No supply or demand.
Sell and stay sold until supply chains and production come back online.
How are supply chains not online right now?
Because they can't keep up with panic buying?
Quote from: US71 on March 16, 2020, 05:56:41 PM
Quote from: Rothman on March 16, 2020, 05:36:47 PM
Quote from: Scott5114 on March 16, 2020, 05:29:23 PM
Without a means of production, the stock market is a house of cards built on thin air. Financial products are just abstractions of the value that is created by other businesses producing something that contributes to the economy. If they stop producing for health reasons, no amount of juicing the markets or playing games with "support levels" or invertebrate trapeze pennants on the graphs are going to help. If this continues for an extended period of time, there is not going to be a bad economy, there is going to not be an economy. No supply or demand.
Sell and stay sold until supply chains and production come back online.
How are supply chains not online right now?
Because they can't keep up with panic buying?
Overconsumption doesn't mean the supply lines aren't online.
Wait it out.
Soon you can buy the entire stock market for just a couple of bucks, and still feed the parking meter.
Buy Low and Sell High (BLASH)
I don't need to roll my mutual funds over until age 70.
I liquidated my entire stock portfolio back at the end of November in order to make a downpayment for my wife and I to buy our first home. It does look like we chose a good time to do that.
I've been tempted to get back in the game and try to make some money off the current situation, either through short sales or through attempting to buy low for future gains... but I've refrained because, honestly, the last thing I need for the sake of my own mental health right now is something else to be subject to uncertainty by.
It's actually kind of refreshing to, for the first time in years, be able to watch the stock market as an outside observer with no personal stake in what it does.
Quote from: Rothman on March 16, 2020, 05:36:47 PM
Quote from: Scott5114 on March 16, 2020, 05:29:23 PM
Without a means of production, the stock market is a house of cards built on thin air. Financial products are just abstractions of the value that is created by other businesses producing something that contributes to the economy. If they stop producing for health reasons, no amount of juicing the markets or playing games with "support levels" or invertebrate trapeze pennants on the graphs are going to help. If this continues for an extended period of time, there is not going to be a bad economy, there is going to not be an economy. No supply or demand.
Sell and stay sold until supply chains and production come back online.
How are supply chains not online right now?
Many components are sourced from other countries that are being hit by the covid worse than the US is. Even if the source country is all clear or recovering, overseas components and products still have to make it to the US through ports that are at reduced manpower. That will lead to delays in receiving shipments.
Additionally, though China is slowly coming back online now, they now have a backlog of orders placed while China was down, but before the destination countries were affected by the covid. So even if your company is somehow operating at 100% capacity amidst the pandemic, you are still going to be unable to replenish stock of items manufactured in China, until the factories can catch up with all of the stuff that wasn't made while they were down. That can hurt revenue too.
The company one of my friends works for is having to ask their clients for deadline extensions because they physically cannot get the products manufactured and to the US in time. You have to imagine some of those clients will just cancel their orders, especially if their revenues are also down due to covid impacts. That sort of thing has more of an impact on the economy than hoarding.
Quote from: Beltway on March 16, 2020, 10:24:53 PM
Buy Low and Sell High (BLASH)
Many years ago, my Dad was in a stock club, and they called it BLASH. They did pretty well over the years.
In all seriousness despite my flippant comment about my own personal financial situation above, most people would recommend staying in if you're in for the long haul, as the market will rebound. If you're going to buy, if you want to wait for bargains, that would be understandable too, but now might be a good time to buy. It may get worse before it gets better, but it will rebound.
My only involvement in the stock market is my pension's investment. But count me as among those who see little correlation between the stock market and the real economy. The stock market has no effect on my personal income or my purchasing power.
Quote from: hbelkins on March 17, 2020, 12:50:01 PM
In all seriousness despite my flippant comment about my own personal financial situation above, most people would recommend staying in if you're in for the long haul, as the market will rebound. If you're going to buy, if you want to wait for bargains, that would be understandable too, but now might be a good time to buy. It may get worse before it gets better, but it will rebound.
My only involvement in the stock market is my pension's investment. But count me as among those who see little correlation between the stock market and the real economy. The stock market has no effect on my personal income or my purchasing power.
A friend of mine who is somewhat savvy suggests the Recession/Depression might last 8-12 months, but since the market was doing well before now it
may come back sooner.
Quote from: Duke87 on March 16, 2020, 11:51:36 PM
I liquidated my entire stock portfolio back at the end of November in order to make a downpayment for my wife and I to buy our first home. It does look like we chose a good time to do that.
I've been tempted to get back in the game and try to make some money off the current situation, either through short sales or through attempting to buy low for future gains... but I've refrained because, honestly, the last thing I need for the sake of my own mental health right now is something else to be subject to uncertainty by.
It's actually kind of refreshing to, for the first time in years, be able to watch the stock market as an outside observer with no personal stake in what it does.
I'm going to anoint you as the winner of the day. What might be decent advise, since we don't know exactly the point at which this is going to bottom out for awhile or know which specific stocks are truly going down (I'm glad to say I sold my cruise line stock in February before this occurred), is to buy a ETF covering most of the market with perhaps deductions from your paycheck. That way, you won't be making a big splash at any price point (dollar cost averaging they say), and when stocks eventually go up, you will enjoy some of the ride up.
Quote from: US71 on March 17, 2020, 04:23:44 PM
Quote from: hbelkins on March 17, 2020, 12:50:01 PM
In all seriousness despite my flippant comment about my own personal financial situation above, most people would recommend staying in if you're in for the long haul, as the market will rebound. If you're going to buy, if you want to wait for bargains, that would be understandable too, but now might be a good time to buy. It may get worse before it gets better, but it will rebound.
My only involvement in the stock market is my pension's investment. But count me as among those who see little correlation between the stock market and the real economy. The stock market has no effect on my personal income or my purchasing power.
A friend of mine who is somewhat savvy suggests the Recession/Depression might last 8-12 months, but since the market was doing well before now it may come back sooner.
I suspect how long this downturn lasts will depend on how long/severe of a shutdown we have to endure. The more businesses go under and people end up long-term unemployed, the longer/harder a recovery will be. Not to mention that the economy would be even more dominated by large corporations than now, since they're in the best position to weather the storm (and to lobby the government for bailouts).
This is really just the beginning of a bear market. The Feds lowered interest rates, the White House wants to inject money into the market by issuing more bonds, and the indices are swinging wildly each day. A smart investor would wait a reasonable amount of time, until right before the market corrects positive again, to buy.
I make small weekly contributions to my brokerage account. $25 every other week goes into my VFIAX fund. $25 each opposite week goes into my money market account to buy ETFs. I don't plan on changing that.
Don't try to time the market. If you won't need the money for decades, be glad every time it goes down, because then every dollar you put in will buy more. If you're into stock picking, the rules are the same. If it's a good long-term investment, then you stay in. If that changes, then you get out. It isn't a get-rich-quick scheme. Day trading and short selling are for the pros, and the idiots those pros take money from.
Quote from: wxfree on March 18, 2020, 02:05:46 AM
Don't try to time the market. If you won't need the money for decades, be glad every time it goes down, because then every dollar you put in will buy more. If you're into stock picking, the rules are the same. If it's a good long-term investment, then you stay in. If that changes, then you get out. It isn't a get-rich-quick scheme. Day trading and short selling are for the pros, and the idiots those pros take money from.
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