...and yet another all time high for the dow today
...and yet another all time high for the dow today
agip wrote:
...and yet another all time high for the dow today
Meaningless if you are still in for the next crash. Which will almost certainly be worse than 2000-2002 and may be worse than 2008. And is not far off. Take heed.
About Time wrote:
agip wrote:...and yet another all time high for the dow today
Meaningless if you are still in for the next crash. Which will almost certainly be worse than 2000-2002 and may be worse than 2008. And is not far off. Take heed.
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thanks.
Anyway, klondike says the game was til the end of November. that is only around 11 trading days away. Will the market dive over the next 11 trading days?
agip wrote:
About Time wrote:Meaningless if you are still in for the next crash. Which will almost certainly be worse than 2000-2002 and may be worse than 2008. And is not far off. Take heed.
__
thanks.
Anyway, klondike says the game was til the end of November. that is only around 11 trading days away. Will the market dive over the next 11 trading days?
The game ends when you exit the market for good whether for death, retirement, or any other reason. If you get out with the Dow at its current 15,700 and then re-enter at a materially lower number, you have won a battle. If you re-enter at a materially larger number -- or if you never re-enter and the market goes up, you have lost the battle.
A material difference to me might be 15%.
Depending on your financial position, you may be able to afford to lose some possible future earnings but be unable to afford to lose a major amount of your nest egg.
I think now is a good time to show caution with the market. A serious "correction" a la 2008 or earlier in the decade would wipe out all gains and then some. And, if recent history is any guide, along with the regulators inability to put any serious brakes on Wall Street's reckless behavior, this seems a distinct possibility.
But who knows.
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if 15% is your threshold for materiality, we are 61% there already - a global stock index (ticker:VT) is up 9.2% since the day this thread started.
If you have a US only portfolio, the number is actually bigger: 9.8% (ticker VTI)
my point has always been that since buy and hold works so well, delivering 10% per year performance if you have the time to wait...why try to outsmart the market and leave yourself vulnerable to missing huge runups? why?
A: fear and hubris
(if you don't have the time to wait, then buy + hold doesn't work of course)
A little unclear to me why you think buy and hold works so well.
Works well for the Mutual companies, sure.
And sometimes for investors. Lots of periods, however, where it is a disaster.
When the market is as high as it is, bought and held looks good on paper. Keeping it longer out of hope or greed, and/or lack of recognition that no data for market value increases exists beyond this point, is very silly. Sell, wait for the crash, then buy back in.
You are welcome.
About Time wrote:
A little unclear to me why you think buy and hold works so well.
Works well for the Mutual companies, sure.
And sometimes for investors. Lots of periods, however, where it is a disaster.
sure, for five years and fewer, the stock market can be a disaster. but if you have 10+ years...if history is a guide...buy and hold has worked, even through 2000-2002 and 2008.
Not sure if this link will work, but check out the vanguard funds' performance since inception.
https://personal.vanguard.com/us/funds/vanguard/all?sort=name&sortorder=ascfor funds open more than 15 years, all up around 10%, for broad diversified indices.
heck, even the timing disasters they opened in 2000 at the peak of the tech boom are up 5% per year or thereabouts. And that was an epochal bust, when valuations were 2+x what they are today.
but yeah, it's all about how patient you are and how much time you have.
(please don't cite the 1929-1954 hiatus for the Dow - most stocks recovered from the depression by 1940. The dow is a crap index)
agip wrote:
...and yet another all time high for the dow today
The DOW is a very weak indicator of the strength/weakness of most portfolios.
At Or Near All Time Highs wrote:
When the market is as high as it is, bought and held looks good on paper. Keeping it longer out of hope or greed, and/or lack of recognition that no data for market value increases exists beyond this point, is very silly. Sell, wait for the crash, then buy back in.
You are welcome.
Unless the crash doesn't happen for another 10 years. Then you are hosed.
agip wrote:
At Or Near All Time Highs wrote:When the market is as high as it is, bought and held looks good on paper. Keeping it longer out of hope or greed, and/or lack of recognition that no data for market value increases exists beyond this point, is very silly. Sell, wait for the crash, then buy back in.
You are welcome.
Unless the crash doesn't happen for another 10 years. Then you are hosed.
But if it happens tomorrow, you are hosed.
Both are gambles.
Love your term "epochal bust." It reminds me of the 100 year floods or 500 year floods that come every four or five years. Misnaming the flood does not hold the water back. Misnaming the bust will not postpone it. It was recent, followed by another one 8 years later in a broader collection of sectors, and conditions are arguably more ripe for a bust than they were in either 2000 or 2008. "Epochal"? How could you even type that as the proper adjective for the second most recent bust we've had in the short lives of current high school juniors and seniors?
sure, for five years and fewer, the stock market can be a disaster. but if you have 10+ years...if history is a guide...buy and hold has worked, even through 2000-2002 and 2008.
That is not what history teaches us. The Dow Jones did not get back to its 1929 peak until @ 1956. That is a helluva long period to get a zero % return. And even then you were out 27 years of inflation/interest returns.
More recently, the 2000 Dow peak in January of that year was higher than the Dow was at in autumn of 2011. A period of 11 + years of zero return using buy and hold.
Markert disasters can last decades.
Thank you for some good facts to help dispel the "buy and hold," claptrap. It's overstated, overpromised, and calculated to enrich the interests of people who work in the financial industry, or who themselves own stocks and want a steady stream of unquestioning buyers, year after year.
Sell now people, before the crash.
inquired mind wrote:
agip wrote:Unless the crash doesn't happen for another 10 years. Then you are hosed.
But if it happens tomorrow, you are hosed.
Both are gambles.
True. But only one side has the odds in its favor. I'd rather bet on the side that wins 70% of the time.
agip wrote:
...and yet another all time high for the dow today
About Time wrote:
Meaningless if you are still in for the next crash. Which will almost certainly be worse than 2000-2002 and may be worse than 2008. And is not far off. Take heed.
Trying to predict the market is a fool's game.
Stater of the obvious wrote:
agip wrote:...and yet another all time high for the dow today
About Time wrote:
Meaningless if you are still in for the next crash. Which will almost certainly be worse than 2000-2002 and may be worse than 2008. And is not far off. Take heed.
Trying to predict the market is a fool's game.
Ignoring patterns and facts would seem to be more foolish.
Panic early rather than late
About Time wrote:
sure, for five years and fewer, the stock market can be a disaster. but if you have 10+ years...if history is a guide...buy and hold has worked, even through 2000-2002 and 2008.
That is not what history teaches us. The Dow Jones did not get back to its 1929 peak until @ 1956. That is a helluva long period to get a zero % return. And even then you were out 27 years of inflation/interest returns.
More recently, the 2000 Dow peak in January of that year was higher than the Dow was at in autumn of 2011. A period of 11 + years of zero return using buy and hold.
Markert disasters can last decades.
you know, this does not tell the real truth. I'm looking at a chart right now with different indices. small caps recovered by 1938. Large caps by 1940. Balanced portfolios by 1937 or so. And investors would have recovered much faster if you had bought at lower prices with new money.
the dow is a crap index. it is a crap index. it is a crap index. I will keep saying it on lrc as long as people keep citing that phony 1929-1954 stat.
as for the recent debacle...more of the same. Small caps recovered by 2005. Emerging markets by 2004...balanced portfolios by 2004.
really - I am not exagerating here. the dow is a crap index and not representative of the stock market.
so...no. you are wrong. if you have a diversified portfolio...market disasters have not lasted decades.
Stater of the obvious wrote:
Trying to predict the market is a fool's game.
About Time wrote:
Ignoring patterns and facts would seem to be more foolish.
Panic early rather than late
Patterns like the ones that show buy and hold works? Like the ones that show the market is up 80% of the time? Or maybe the ones that show predicting the market is a fool's game?
S&P 500 returns (dividends included): Jan 1, 1929- Dec 31, 1956 : "Average" return: 11.08%; Annualized return
(= True CAGR): 8.07%: Standard Deviation: 25.01%; $1.00 grew to: $8.79 . (Side note) Net Corporate Dividends averaged 3.5% of GDP 1929 to 1956.
http://research.stlouisfed.org/fred2/series/B056RC1A027NBEA?cid=33035