Should I sell my index funds?

Yeah, me too .... wrote:

I'm down $19,000 this year, but about the same as I was 18 months ago.

Hopefully this is the bottom and it will go back up again soon.

But in any case, I'm definitely not selling any of it in the meantime.

Loser strategy wrote:

You're going to follow the S&P 1500 down 50%? Do you think the Rothschild's did that or do that silly strategy? Vanguard has raised a herd of obedient sheep.

To use your stupid analogy, why would I sell, instead of increasing by 1000%?

To make even more obvious how stupid you are, I have never used Vanguard, don't invest in an SP500 fund, and the 19k is only a small percent of my holdings.

The Rothchild's of course run the markets, so they don't need more use any other strategy.

Wall Street is a veritable den of thieves, I joined the wrong Mob.

Michael Burry beat the stock market over and over again because he invested in bargain cheap stocks, stayed away from the market noise and big time trends, as well as known stocks. He focused on small cap stocks, got in when they were at a low or considered to be dead, and got out right before they hit the ceiling.

Nothing special. Just simply having great risk management, not losing too much, but gaining a lot. In every scenario, HE KEPT THE MAJORITY OF HIS CAPITAL.

When he shorted the housing market, he had done his home work on every mortgage back bond, and he knew that the majority of those bonds consisted of sub-prime mortgages ( basically, s h i t loans), so it was just a matter of time that the whole market would crash. He DID NOT HOPE for a crash. HE KNEW THAT THERE WOULD BE ONE.

Hoping, guessing, believing, and praying for a turn around is not how the market works. Study these companies, look at what they do, understand their revenue and operation cost, P/E Ratio, and are they viable in the market that they are in.

If the numbers make sense, invest, but control your risk. If the numbers don't make sense, then don't invest.

Michael Bury was a hedge fund manager, which no doubt, afforded him great amounts of time and untold resources to do the extensive research you advocate. Where does that leave the rest of us?

Gold research wrote:

https://www.marketwatch.com/investing/future/gold

Too add to this

Gold is definitely a good short to mid term investment right now while the market is unstable.......but watch those pullbacks. Gold is very volatile. example: one of the gold stocks is up by 5.33 %. IN the next 3 months it is predicted to be up by 27%, but by the end of the year it is predicted to be down by 12 %.

And we can be just like him with the same strategy and patience. lack of patience and terrible risk management are what kill most traders. I firmly believe that. Dude lost money in the beginning, especially while he was waiting for the housing market to hit rock bottom. A lot of his investors sued him at the time, and he had to sell a lot of his long positions in order to pay the premiums on his credit swaps.

He started off giving stock picks on a blog while he was in medical school....nothing major. just picking stocks.

Scorpion_runner wrote:

seattle prattle wrote:

Michael Bury was a hedge fund manager, which no doubt, afforded him great amounts of time and untold resources to do the extensive research you advocate. Where does that leave the rest of us?

And we can be just like him with the same strategy and patience. lack of patience and terrible risk management are what kill most traders. I firmly believe that. Dude lost money in the beginning, especially while he was waiting for the housing market to hit rock bottom. A lot of his investors sued him at the time, and he had to sell a lot of his long positions in order to pay the premiums on his credit swaps.

He started off giving stock picks on a blog while he was in medical school....nothing major. just picking stocks.

Yes, we could "be just like him." The extent to which he was willing to dedicate his time to investment research lost him his career as a surgeon and risked the safety of his patient. Do you consider that an exemplary role model? I hope my surgeon doesn't chose to be just like him.

He also had studied Economics at Univ. of California, and assuming most of us here missed that opportunity, one might question just how well most of us could duplicate his investing acumen.

Ummmm no. Started investing in the summer of 87-4 months before Black Friday. Dow was at 2600. Now it’s 21,000. 30 years from now it will be 200,000. Don’t worry. Timing the market is impossible. Buy and hold is easy. Just remember to hold right now and keep buying. Stocks are on sale!!!

All the buy and hold suckers ... wrote:

All the buy and hold suckers are telling you to continue to buy and hold. The financial advisors are saying buy and hold unless they recommend their clients sell. Stock market is a racket. A sucker is born every day.

I only read the first 2 pages of this thread because I couldn't handle the enormous amount of bad advice you are getting. Hopefully somebody told you what I am about to tell you in the remaining 2 pages I didn't read.

But in case nobody did ...

You now have $58,000. The $7,000 loss is irrelevant because you can't change the fact that it is gone (it's a sunk cost), so quit worrying about it.

Since this money is for buying a house in 2020, sell your index fund tomorrow and put it into an interest bearing account. You can't lose money in an interest bearing account, so you won't be losing sleep at night worrying about losing your house down payment. Keep adding to it like you have been doing and whatever you have in 2020 is what you can use to buy a house.

I don't care what the market does between now and 2020. Absolutely positively DO NOT put this money back into the stock market (or bonds, or gold, etc.). This isn't meant as an insult, but you obviously do not know what you are doing when it comes to investing. Until you do, stop putting your money into any investments except interest bearing such as a money market or a CD.

I saw at least one person tell you to put your money into a bond fund. When interest rates are going up, bonds lose money. Interest rates are going up and will continue to go up. DO NOT BUY BONDS FUNDS NOW!

As far as the money in your retirement accounts are concerned - If you are not interested in learning how to invest intelligently then just buy and hold. Buy an S&P-500 Index fund or ETF and hold it until you plan to retire. This next part is crucial - make sure you reinvest dividends. The majority of your gains over the next 20, 30, 40 years will come from the growth of those reinvested dividends. If you do this one thing then you will outperform 80% of professional money managers in the long run.

A lot of people will tell you to diversify into bonds, gold, oil, real estate, etc. This is stupid. The S&P-500 is already diversified into every aspect of the US economy. If you own an S&P-500 index fund then you are already fully diversified. No amount of bonds, gold, etc. will make you more diversified.

Stay away from gold (unless you really know what you are doing). Long term it is the worst investment out there.

If you do want to educate yourself then google "trend following". It is an investment technique that tells you what direction the market is moving in allowing you to know when to buy and sell. Buy a bunch of books on the subject. Get historic market data from Yahoo Finance and backtest the techniques you learn. The trend following indicators I use started giving sell signals at the beginning of November and the main one I rely on gave a sell signal last Friday. I sold everything Monday morning (except for my Tesla puts which made $2,000 as it crashed).

For what it is worth. I have an MBA in finance, I trade stocks for a living, and I wrote the book Five Ways to Beat the Market (shameless plug). I do know what I'm talking about.

If you made it this far ... Good Luck!

Smart post. I suggested that he put the majority of it in a simple savings account of 2 percent interest to protect his money, and put the rest in an ETF, something around 10,000.

I'm going to check out your book for sure.

Hey, what is your perception on weed and water stocks?

The cannabis market is in a very infantile stage, but has potential for massive growth. I believe their will be a weed war like we had cola wars and burgers wars, but which companies will come out on top? Weed needs water, and with countries having issues with getting access to clean water, clean water is becoming more and more of a demand. However, I think that is more of a long, long term situation, but a huge one.

Buy and hold Millionaire wrote:

Ummmm no. Started investing in the summer of 87-4 months before Black Friday. Dow was at 2600. Now it’s 21,000. 30 years from now it will be 200,000.

Don’t worry. Timing the market is impossible. Buy and hold is easy. Just remember to hold right now and keep buying. Stocks are on sale!!!

I made a spread sheet of all the stocks that I'd purchased, ignoring sales, and the present status was quite nice.

Blowing Rock Master you sold everything Monday.

What do you think of the buy back that happened Wednesday December 26?

Would you have thought that the Dow would rise 1086.25 (4.98%)?

Gold is volatile with an intra-day high of 1280.70 to close at 1267.50.

The market seems very up and down at the moment.

I think gold will increase to 1360 within the next three months; by the end of March.

What do you think about gold in the next three months?

My thought is that the market will continue to go down and the price of gold will increase.

Thank you for any insights you have the time and interest to share.

Blowing Rock Master, I appreciate your response. I would like to get in touch with you if possible, do you mind sharing your email or website?

I actually didn't read your post until now (the market has closed for the day already) so I didn't take any action. My acct is +$2580 today (I was over -$9k on Monday) however it is still -$6883 overall. Do you still think I should sell ASAP or try to wait for a small rebound like today? Some people suggested to wait after Q4 earnings are reported, what are your thoughts on that?

Thank You I appreciate all advice.

+1.

Freaking Out wrote:

Blowing Rock Master, I appreciate your response. I would like to get in touch with you if possible, do you mind sharing your email or website?

I actually didn't read your post until now (the market has closed for the day already) so I didn't take any action. My acct is +$2580 today (I was over -$9k on Monday) however it is still -$6883 overall. Do you still think I should sell ASAP or try to wait for a small rebound like today? Some people suggested to wait after Q4 earnings are reported, what are your thoughts on that?

Thank You I appreciate all advice.

In all due (or not due) respect, at this time, Blow Master's advice would have yielded you the absolute worst outcome at the present time, yet you are asking for more? Did he not advise you to sell at what has been thus far the market low? And if you had, would you not be $2500 poorer?

Dude, let me make it simple for you. You go shopping for investing strategies and the worst thing you can do is to start flip flopping along the way. If you are uncomfortable with your level of market exposure, don't bail out like the self proclaimed blow master said, and the reason is becuase you will probably pull the trigger at exactly the wrong time - as proven by his foolish advise. The thing to do is to sell a little of it. Don't make big moves. If you still feel like you are losing your basis a few days or weeks from now, sell a little more. Adjust your position.

Do you absolutely know that you made a bad investment? If so, sell all of it at once. But you don't know that, you only know that you weren't prepared for this possiblity that it would temporarily lose value. So lighten your position. And if you regain confidence, feel free to buy it back.

And for what it's worth, I have been doing this for weeks and it's working okay so far.

I don't know what happened to LRC but I definitely did not expect to see several posts with polite responses. Somebody needs to tell me I'm the biggest idiot who ever lived so I can be sure I'm on the right website.

But to answer your questions - my name is Wayne Middlesteadt and you can find me on Facebook, so just send me a message.

Today's dramatic rally is probably a "dead cat bounce". All those guys who were telling you that it is a great time to buy because prices are down were buying today. I have a short term system that actually had me buying today but it will probably tell me to sell tomorrow or Friday. All my long-term money is sitting in a money market account and will stay there until I get a long-term buy signal.

As far as your home saving account, I would still sell it as soon as possible. Since the market closed strongly today it will probably open up, which makes it an excellent time to sell. Since you plan to spend this money in a year it is more important to preserve what you have rather than risk losing a big chunk hoping you will get a big gain. If you are determined to have something in the market then do what Scorpion Runner suggested and put $10,000 into an S&P-500 Index Fund or ETF (SPY is the stock symbol for the largest S&P-500 ETF).

I have no idea what will happen to the market in the short run or long run. Anybody who tells you that they know what stocks, bonds, gold, real estate, etc. will do is either delusional or lying. There is no investment system in the world that can predict the future. All they can do is tell you clearly what is happening right now or tell you when conditions are right to take a calculated risk.

The systems I use aren't always right. In fact, I'd say they're only right about half the time. But when they are wrong they tell me pretty quickly either getting me back into the market after missing a small part of the gain, or getting me out with a small loss. When they are right they get me on-board for big gains and get me out when things crash hard. The real secret to making a lot of money in the market isn't finding a string of individual stocks that hit homeruns, because it is the very rare (and very lucky) person who ever pulls this off. The secret is to ride the market when it is going up and get out when it is going down. Avoiding losses should always be your #1 priority.

I wouldn't wait for Q4 earnings. All they do is tell you what happened 3-6 months ago. And if the news is not great then the market will drop even more.

My last comment is an opinion and not based on anything my systems tell me - this market is looking very ugly. Historically the stock market goes up November-January. As you've noticed it has really sucked lately. It's down 9% since the beginning of November. This is not normal behavior for a healthy market. This is how it behaved in late 2000 and late 2007, right before the market fell 50%. I wouldn't put money into this market based solely on hope.

Fell free to contact me on Facebook.

"Hey, what is your perception on weed and water stocks?"

I don't actually follow individual stocks. I'm a big believer in KISS (Keep It Simple Stupid - which is why my go-to track workout was always 16x400), so I've studied the S&P-500 index in depth and make investment decisions based on it, usually using SPY or UPRO.

But coincidentally, it looks like I will soon own a hemp stock. There is a bar (Appalachian Mountain Brewery) my running group meets at on Tuesday nights and I bought stock in the place just so I could go in there and say "I own this place!" Well the bar's assets were just bought by the Craft Brew Alliance so AMB stock is now just a shell company. The majority stock holder is starting a hemp business and is going to operate it under the AMB shell. So now I own a hemp company.

To actually answer your question - I don't know anything about weed and water stocks, but you're right, there is a lot of potential there. The secret is to pick the big winner.

A quick reply to some of your questions:

What do you think of the buy back that happened Wednesday December 26?

My short term system had me buy this early this afternoon. It's already gone up enough to lock in a profit unless there is a big gap down open. I expect a sell signal tomorrow or Friday. But this one day (or even a couple of weeks) isn't enough to give me a long-term buy signal.

Would you have thought that the Dow would rise 1086.25 (4.98%)?

Nope. I have no idea what will happen in the future.

What do you think about gold in the next three months?

Again, I have no idea. I'm not a gold speculator (not that there is anything wrong with that). All I know is that you don't want to use gold for buy & hold because the long run return is awful. There used to be a guy named Coach D who posted on LRC and traded gold. I think he was really good at it. You might try searching for some of his posts.

I don't know if I helped you any but good luck and make a pile of money!