Down goes the Dow

Hunk wrote:

And dividends....you'll miss out on more dividends. That's not inconsequential given the amount you claim to have taken out of the market. Oh, and you have tax implications now that don't affect those who stayed in.

Yea right. Three to six months of dividends lost vs. possible 30% to 50% equity loss. Big concern.

I am talking about monies in a tax qualified pension plan (401(k)/Ps Plan) and so there are no tax implications.

Klondike5 wrote:

[quote]

In the end, I don't really care.

well, I care and I am going to be the yahoo who keeps bumping this thread.

Cause these kinds of emotion laden big moves are usually wrong.

And yes, if K does get it right then I will indeed say he was just lucky. Because that's the truth.

Klondike5 wrote:

I got out at the end of June with the Dow at @ 15,000.

You got out at the end of June and waited until the end of August to make a thread about it? What prompted your decision 2 months later?

midwestern life wrote:

Klondike5 wrote:

I got out at the end of June with the Dow at @ 15,000.

You got out at the end of June and waited until the end of August to make a thread about it? What prompted your decision 2 months later?

The title of the thread is "Down goes the Dow".

The thread was created in response to a dip in the Dow at the end of August.

agip wrote:

Klondike5 wrote:

[quote]

In the end, I don't really care.

well, I care and I am going to be the yahoo who keeps bumping this thread.

Cause these kinds of emotion laden big moves are usually wrong.

And yes, if K does get it right then I will indeed say he was just lucky. Because that's the truth.

The partial truth.

The whole truth is that all of us are guessing. You are guessing that the best move is to be in the market for the next few months in whatever you have elected to invest in: I am guessing you will be wrong

Hunk wrote:

And dividends....you'll miss out on more dividends. That's not inconsequential given the amount you claim to have taken out of the market. Oh, and you have tax implications now that don't affect those who stayed in.

And just the money during that time that could have been invested. I'm talking about the percentage of income going to that. BUT, he does have a pension that he contributes to, so at least that's good. As I said before, our thread starter doesn't have the stomach for the market, and his getting in and out is a risky venture. He should just stick to his pension and SS and not be in the market...it's not for everyone, and it's not for him.

Flagpole wrote:

Hunk wrote:

And dividends....you'll miss out on more dividends. That's not inconsequential given the amount you claim to have taken out of the market. Oh, and you have tax implications now that don't affect those who stayed in.

And just the money during that time that could have been invested. I'm talking about the percentage of income going to that. BUT, he does have a pension that he contributes to, so at least that's good. As I said before, our thread starter doesn't have the stomach for the market, and his getting in and out is a risky venture. He should just stick to his pension and SS and not be in the market...it's not for everyone, and it's not for him.

Since the mid 1990s I have been in the market for all but @ 4 years. Out form late 1999 until sometime in 2003 (I forget when I got back in) and then out in 2008 when the Dow had dipped from its high down to 12k plus and back in in 2009 when it returned to 9,000; then out again since June 2013. You can call that lack of stomach, risky behavior. I would call it educated guessing that has saved me several hundred thousand dollars.

Flagpole.

Advice from a guy who will argue that staying in the marker during the 2008 meltdown was a good thing.

What can you do with a guy like that?

Hunk wrote:

And dividends....you'll miss out on more dividends. That's not inconsequential given the amount you claim to have taken out of the market...

Are you folks for real? Concerning yourself with dividends for a few months as compared to K5's expected 40% market drop.

Well, I supposed your second statement pretty much explains your perspective. Anyone who considers that it is the absolute value of the dividends missed/received rather than the percentage has absolutely no clue what is going on.

Klondike5 wrote:

agip wrote:

well, I care and I am going to be the yahoo who keeps bumping this thread.

Cause these kinds of emotion laden big moves are usually wrong.

And yes, if K does get it right then I will indeed say he was just lucky. Because that's the truth.

The partial truth.

The whole truth is that all of us are guessing. You are guessing that the best move is to be in the market for the next few months in whatever you have elected to invest in: I am guessing you will be wrong

Klondike5,

1) I give you credit for making a claim that is easily determined to be either right or wrong, and it appears you don't care what others think about that. So, good show there, brother. I'm not one to rub people's noses in a bad move, but others here will. If the market (Dow) stays at 15,000 for a year, and you decide not to get back in, then I guess that means you lost a year of investing. Maybe you'll call that even, but to me, that's a huge loss. Statistically that's what people who get out of the market do...they don't invest in anything during that time. Again though, I know you have a pension that you contribute to.

2) You're wrong about agip though...he's not guessing it's best to be in the market for the next few months...he's KNOWING it's best to be in the market for the next decade plus. Little moves, and even big ones, are all smoothed out over the long haul, and in fact they end up higher.

3) Don't discount what dividends can do for you. The dividends I got in December 2012 were flat out RIDICULOUS! When that money gets reinvested and compounded, man, it's a great thing.

4) Studies continually show that those who go in and out of the market chasing peaks and valleys don't do as well as those who stay in. Those who go in and out lose out on dividends, lose out on investing their money at all during the time they were out, lose out on potentially a good buying opportunity if the market actually does go down.

Anyway, I hope no one raids your pension fund. You're not cut out for the stock market.

Flagpole.

You got it bad. You have so bought into the sales job of the investment industry that you actually think you put it together yourself.

Investing is gambling and you ain't the house. It's all a guess, all a gamble.

Klondike5 wrote:

Flagpole.

You got it bad. You have so bought into the sales job of the investment industry that you actually think you put it together yourself.

Investing is gambling and you ain't the house. It's all a guess, all a gamble.

Except for that part where you actually ARE the house.

Minor detail, I know.

Klondike5 wrote:

Flagpole.

You got it bad. You have so bought into the sales job of the investment industry that you actually think you put it together yourself.

Investing is gambling and you ain't the house. It's all a guess, all a gamble.

__

this is the nub that we keep coming up against. When a chart looks like this, I don't see it as a definition of 'gambling'

(that is the chart of the SP 500, starting in the lower left corner and moving up to the upper right corner. )

or this, which proves my point even more, although strictly speaking it is not an investible index

that's the value line index, in which every US stock is equally weighted. it is an even more impressive climb.

So the buy and add people are saying to you, Mr K, how exactly is this gambling? Gambling implies a 50% loss rate. This is not that. This is close to a sure thing, for the patient.

You will say 'but you can lose 50%!' and that is true for short periods of time...but when you start trying to dodge the potholes, you often don't get the full 10% per year return of the market.

Klondike5 wrote:

Flagpole.

You got it bad. You have so bought into the sales job of the investment industry that you actually think you put it together yourself.

Investing is gambling and you ain't the house. It's all a guess, all a gamble.

Your attitude about that is why you should not invest in the stock market. It's not gambling anymore that saying that if you go to college you will make more money and be more employable than if you don't. You don't KNOW for sure that that will be true, but history (even recent history) bears that out.

With the stock market, you invest based on your age and how close to retirement you are...period. No going in and out. You take several other steps in your financial life so that you aren't banking everything on how the stock market does.

The steps:

1) Get and remain debt free, and be sure to retire 100% debt free including owning your home outright.

2) When still working, put 15% or more into retirement accounts. 401ks and IRAs or their equivalents. These should be made up of mutual funds of the following types: Growth, Growth and Income, Aggressive Growth, International.

3) Have an emergency fund of 3-6 months of expenses minimum at all times, and if you have to use it, replenish.

4) When in retirement, either do a portion of your portfolio in bonds, or have 2-3 YEARS of expenses in cash or low-return vehicle that is used if the market dips.

Know that the stock market goes up 73% of calendar years and 11% annually on average. If you think the market might do worse than 11% (I always think it will do worse than I have done, but then over time it still does better than I think it will), then put in MORE of your income.

Cherry picking.

First off, you make the assumption that the future experience of the next 20 years or so will match the experience from 1955 thru today. All we can say for sure about this assumption is that it will be proved wrong (surely it will not exactly match past experience).

Second, you conveniently pick up at 1955, leaving out 1929 - 1955 which would give very different results.

It's like a religion for you guys and hence you cannot be dissuaded by common sense. In your religion, it is always the best thing to be in the market, current events and trends be damned.

Now I may very well have guessed wrong, but I am quite comfortable on the sidelines as I watch the puppets in Washington dance to their demented masters and launch yet another war in the Middle East.

current events? staying invested through ww2 was smart, staying invested thru the cold war was smart, staying invested thru the freaking cuban missle crisis, multiple recessions was smart...and I'm supposed to be worried about few missles dropped on dimunive syria? seriously? How old are you? And Rand Paul will be glad to get your vote.

sorry for the formatting issues - 5 yrs on lrc and I still haven't figured that stuff out. can someone help?

[quote]agip wrote:

[quote]Klondike5 wrote:

ok, true. I am basing expectations of future performance on past performance. But doesn't that describe science? basically, I am saying that assuming 100+ years of stock market history is a guide to the future is a pretty good bet.

100 years? 1955 - today is 58 years. You oddly left off the preceding 26 years. Why is that?

for pete's sake, the 1929-1955 flatline is a myth - it ignores dividends and follows the Dow, which was manipulated and played with, the average stock did fine over that period.

Now you are just in denial. It took @ 25 years for the Dow to get back to it's high in 1929 -- and that does not even take inflation into account. You are actually arguing it was a smart move to stay in the market for the next few years beginning in October of 1929. That's just plain stupid. A lot of rich smart guys did just that and ended up flat broke. Joe Kennedy did not and ended up the richest guy in the country

Why in the world would you look at 1929 through today? I can only think of one reason and that is to cherry pick your data set.

There is reliable information on the US stock market (including the Dow) since 1926. So, there is a very good reason to look at 1926 through 2013 - it is the most complete set of reliable data available. Hence, no cherry picking.

What does the data show? Lots of ups and downs but a very clear upward trend.

What is the implication? Being out of the market is a very dangerous thing to do.