Down goes the Dow

Seattle,

What is your annualized return including cost and dividend? Just curious.

Igy

Ghost of Igloi wrote:

Buy signal wrote:

Remember what happened the last time you tried to bury FB prematurely? You could not have been more wrong. Chances are good that you are wrong again.

Bury FB, huh did not know I had that power. Oh by the way the stock is lower than last discussed.

The stock is actually still above the point where you tried to bury it, but not by much.

Buy signal wrote:

Ghost of Igloi wrote:

Bury FB, huh did not know I had that power. Oh by the way the stock is lower than last discussed.

The stock is actually still above the point where you tried to bury it, but not by much.

What day did I try as you say “bury” FB and can you post the comment?

Ghost of Igloi wrote:

Buy signal wrote:

The stock is actually still above the point where you tried to bury it, but not by much.

What day did I try as you say “bury” FB and can you post the comment?

Wait. Are you saying you pulled your previous statement out of your jester? I KNEW IT!

Ghost of Igloi wrote:

Seattle,

What is your annualized return including cost and dividend? Just curious.

Igy

I bought and sold PGX in a few different accounts several times, especially this year, and my general sense is that I am generally up a little bit on stock appreciation and did well with the dividend. It was and continues to be the safe play in my portfolio. I have about half of what i had at the start of the year.

Ghost of Igloi wrote:

untaming the troll wrote:

So Mr. Ghost, what is your advice for investing for those of us not near retirement?

Make sure your allocation is aligned with your risk tolerance and time horizon.

I assume, anticipating a drop of 60% coming soon, no matter what your risk tolerance or time horizon is, you would not advocate any allocation in stock right now. Wouldn't it make sense to wait for it to bottom out and then get in.

mellon wrote:

Ghost of Igloi wrote:

Make sure your allocation is aligned with your risk tolerance and time horizon.

I assume, anticipating a drop of 60% coming soon, no matter what your risk tolerance or time horizon is, you would not advocate any allocation in stock right now. Wouldn't it make sense to wait for it to bottom out and then get in.

That’s what he said.

mellon wrote:

Ghost of Igloi wrote:

Make sure your allocation is aligned with your risk tolerance and time horizon.

I assume, anticipating a drop of 60% coming soon, no matter what your risk tolerance or time horizon is, you would not advocate any allocation in stock right now. Wouldn't it make sense to wait for it to bottom out and then get in.

No, as I have posted before I would never advise not being allocated to stocks. Now making a judgment about the performance of asset classes over the next ten years is a valuation question. A 60 year old with a $500,000 portfolio needed for retirement and a 30 year old with a $20,000 should have a different view of what should be prioritized capital preservation or capital growth. Really a pretty simple choice.

Cassius King wrote:

mellon wrote:

I assume, anticipating a drop of 60% coming soon, no matter what your risk tolerance or time horizon is, you would not advocate any allocation in stock right now. Wouldn't it make sense to wait for it to bottom out and then get in.

That’s what he said.

“One of the questions we often hear is, “If you had to choose stocks or bonds for a T-year investment horizon, and you couldn’t change your position, which would you choose?” Presumably, the requirement that you can’t change your position implicitly says that the question is about expected return, not potential volatility.

Historically speaking, the answer has generally been “stocks,” particularly when T is greater than 3-5 years. But once valuations move into the top 20%, the answer generally favors bonds, especially in periods where market internals have deteriorated. Moreover, if the yield-curve is rather flat (so you don’t earn much extra return for extending your maturity), cash actually becomes the preferred asset. If one allows for the possibility of changing the investment position in response to market fluctuations, cash becomes even more dominant. That’s because when valuations are high and market internals are unfavorable, the ability to respond to steep market declines by shifting from cash to stocks can be enormously useful.”

—John Hussman, September 2018 Market Commentary

Ghost of Igloi wrote:

No, as I have posted before I would never advise not being allocated to stocks. Now making a judgment about the performance of asset classes over the next ten years is a valuation question. A 60 year old with a $500,000 portfolio needed for retirement and a 30 year old with a $20,000 should have a different view of what should be prioritized capital preservation or capital growth. Really a pretty simple choice.

I’m curious as to what percentage equity allocation you would recommend for that 60 year old given an expectation of living into his 90s.

Ghost of Igloi wrote:

mellon wrote:

I assume, anticipating a drop of 60% coming soon, no matter what your risk tolerance or time horizon is, you would not advocate any allocation in stock right now. Wouldn't it make sense to wait for it to bottom out and then get in.

No, as I have posted before I would never advise not being allocated to stocks. Now making a judgment about the performance of asset classes over the next ten years is a valuation question. A 60 year old with a $500,000 portfolio needed for retirement and a 30 year old with a $20,000 should have a different view of what should be prioritized capital preservation or capital growth. Really a pretty simple choice.

Well, your risk tolerance is way higher than mind. If I felt as strongly as you do about this big drop about to happen, there is no way I would be putting a dime in the market right now. No matter what my age.

This is actually quite funny. Hussman offers a hypothetical question, then offers answers as if they were gospel. Who falls for this shite?

Body weight wrote:

Ghost of Igloi wrote:

No, as I have posted before I would never advise not being allocated to stocks. Now making a judgment about the performance of asset classes over the next ten years is a valuation question. A 60 year old with a $500,000 portfolio needed for retirement and a 30 year old with a $20,000 should have a different view of what should be prioritized capital preservation or capital growth. Really a pretty simple choice.

I’m curious as to what percentage equity allocation you would recommend for that 60 year old given an expectation of living into his 90s.

Life expectancy of a 60 year old male is 23 years. One needs to consider when they expect to draw on their retirement account, at that point one faces sequence of return risk. That is, distributions into a period of fallling principal. That risk is elevated in a market with high valuations. So considering a shorter life expectancy than your assumption, and record stock valuations: conservative = 20-30%, moderate = 30-40% and aggressive = 40-50%.

I would assume a retireee on March 2000 has had a tough go assuming a 4% withdrawal rate. Similar issues faced by the October 2007 retiree, less so on the stock side, but more so on the bond side. I would mode lighter returns than standard metrics of 130 years.

Igy

mellon wrote:

I assume, anticipating a drop of 60% coming soon, no matter what your risk tolerance or time horizon is, you would not advocate any allocation in stock right now. Wouldn't it make sense to wait for it to bottom out and then get in.

60%? After the next crash you will wish the fall was only 60%. 2000-2002 and 2008 will look like minor dips.

You wishes wrote:

mellon wrote:

I assume, anticipating a drop of 60% coming soon, no matter what your risk tolerance or time horizon is, you would not advocate any allocation in stock right now. Wouldn't it make sense to wait for it to bottom out and then get in.

60%? After the next crash you will wish the fall was only 60%. 2000-2002 and 2008 will look like minor dips.

And when will that be exactly?

Ghost of Igloi wrote:

Body weight wrote:

I’m curious as to what percentage equity allocation you would recommend for that 60 year old given an expectation of living into his 90s.

Life expectancy of a 60 year old male is 23 years. One needs to consider when they expect to draw on their retirement account, at that point one faces sequence of return risk. That is, distributions into a period of fallling principal. That risk is elevated in a market with high valuations. So considering a shorter life expectancy than your assumption, and record stock valuations: conservative = 20-30%, moderate = 30-40% and aggressive = 40-50%.

I would assume a retireee on March 2000 has had a tough go assuming a 4% withdrawal rate. Similar issues faced by the October 2007 retiree, less so on the stock side, but more so on the bond side. I would mode lighter returns than standard metrics of 130 years.

Igy

I asked about someone living into their 90s.

Players position wrote:

You wishes wrote:

60%? After the next crash you will wish the fall was only 60%. 2000-2002 and 2008 will look like minor dips.

And when will that be exactly?

How would I know? I don't run Goldman Sachs.

As a guess -- within three years.

You wishes wrote:

mellon wrote:

I assume, anticipating a drop of 60% coming soon, no matter what your risk tolerance or time horizon is, you would not advocate any allocation in stock right now. Wouldn't it make sense to wait for it to bottom out and then get in.

60%? After the next crash you will wish the fall was only 60%. 2000-2002 and 2008 will look like minor dips.

Even more reason for concern. That's why I questioned him saying he would never advocate not having an allocation in stock.

Anticipating more than a 60% drop within the next 3 years. I think I would be sitting out of stock totally right now.

Body weight wrote:

Ghost of Igloi wrote:

Life expectancy of a 60 year old male is 23 years. One needs to consider when they expect to draw on their retirement account, at that point one faces sequence of return risk. That is, distributions into a period of fallling principal. That risk is elevated in a market with high valuations. So considering a shorter life expectancy than your assumption, and record stock valuations: conservative = 20-30%, moderate = 30-40% and aggressive = 40-50%.

I would assume a retireee on March 2000 has had a tough go assuming a 4% withdrawal rate. Similar issues faced by the October 2007 retiree, less so on the stock side, but more so on the bond side. I would mode lighter returns than standard metrics of 130 years.

Igy

I asked about someone living into their 90s.

I answered your post appropriately. The life expectancy of a 60 year old male is 83 not 90. Additionally there is greater short term portfolio risk at high valuations. I am probably one of the few posters here that actually has some real life experience managing retirement distributions for a diverse population over several complete market cycles. In summary I gave you the responsible response.