Markets taking a beating: time to buy?

[Bache Tehroon]

Or not yet?

I personally don't buy the whole doom and gloom story this time. Everything is pointing to this being a temporary hiccup.

The US economy is strong and getting stronger. That's all that really matters at the end.

There's still a lot of potential QE left in the Fed and funny enough, the dollar has only gotten stronger despite the massive influx of fiat money. That goes to show how dependent other economies (Europe and China) are on US money.

 

[ChaharMahal]

depends on your strategy.

do you want to preserve your nest-egg and marginally grow it?
Best pain free way to do this is every-time S&P500 or any other index that you care about
dips 5% spend 15% of your cash into an ETF that contains the entire market.
reserve that extra 25% of cash for huge panic that creates a huge opportunity.

or do you want to aggressively grow it.?
I have not idea how to do this.

 

[Playboy]

if you want to beat the markets consistently you are
advised to follow rule#69:

"buy by halloween,sell before april fools day"

 

[Bache Tehroon]

Aggressive short-term growth is a fool's game that rarely yields in the long-run.

Recent times have shown that it's wise to buy during market panics. It's just a matter of buying at the lowest point of panic. No one knows how to time these things. I think we'll see lower prices in the coming days but the long-term trend is definitely up.

Always have money ready to buy.

 

[ChaharMahal]

if you want to beat the markets consistently you are
advised to follow rule#69:

"buy by halloween,sell before april fools day"

those addages have been proven to be false. the average person has no chance
to actively trade the market.

the best you can wish for is to stay inline with the market.

 

[Flint]

I buy index and sleep like a baby. 10 years from now I am ahead of all of you.

 

[Bache Tehroon]

I buy index and sleep like a baby. 10 years from now I am ahead of all of you.

I think that's what most small investors do anyway. What I'm saying here is that there are potential buying opportunities (for index and individual stocks) due to an unfounded market panic.

 

[ChaharMahal]

I really have come to believe it is irrelevant whether one thinks the market is going up or down.

if you have the liquidity every year or every six month what ever fix interval you desire

buy the index or stocks you like.

this way you take the emotion out of it. of course one can always wait for the market to come down.

but sometimes like 1994-2000 the market can just keep going up.

 

[TeamMeli]

I personally don't invest in the stock market unless it is a company matching 401K program I would rather invest in long term real estate if your stock goes to zero you have zero but if your property burns to the ground you still have your land. If you want to invest go with an S&P 500.

 

[ChaharMahal]

I personally don't invest in the stock market unless it is a company matching 401K program I would rather invest in long term real estate if your stock goes to zero you have zero but if your property burns to the ground you still have your land. If you want to invest go with an S&P 500.

just make sure in your company 401K you never invest in the stock of the company you are working for.

in fact I pretty much try to avoid all technology in my retirement because I work in technology. my thesis being that if technology does ok hopefully my chance having a job is alright too. so that's how i am invested in my field

 

[Bache Tehroon]

just make sure in your company 401K you never invest in the stock of the company you are working for.

This is generally true, however there are cases where the company you work for offers discounted stock purchase programs. Those are excellent opportunities to make a quick buck (however small). I can't believe how many millions of employees don't take advantage of this 'free money'. Just like they don't take advantage of 401K or RRSP matchings.

 

[Playboy]

if you want to beat the markets consistently you are
advised to follow rule#69:

"buy by halloween,sell before april fools day"

rule#69 for the uninitiated by historical data.

[TABLE="width: 589"]
[TR]
[TH]
[/TH]
[TH]Current Value of $1,000 Invested in the S&P 500 Beginning on April 30, 1950*
[/TH]
[/TR]
[TR]
[TD]Sell in May, buy back in October**[/TD]
[TD]$75,539[/TD]
[/TR]
[TR]
[TD]Buy in May, sell in October[/TD]
[TD]$1,032[/TD]
[/TR]
[/TABLE]
Source: Ned Davis Research. *At March 31, 2012, does not include dividends. **Money is invested in stocks from Sept. 30 through April 30 annually and is in cash (no yield) during all other periods.

 

[ChaharMahal]

rule#69 for the uninitiated by historical data.

assuming the research is correct. you would have 7500% return.

now the S&P was at 20 in 1950. It is at 1900 right now.

if you just blindly bought S&P you would had a return of 9000%.

that is not event taking into account all the commission you are gone pay with constantly buying and selling.

 

[Bache Tehroon]

As of today, pretty much all gains of 2014 have been erased.

 

[OSTAD POOYA]

Markets are taking a true beating today. We have not seen this type of volatility in over 2 years. It has been time for some type of a correction but not in this severe matter but hey when do markets act rational???

 

[Flint]

The wheels are coming off. There is a feeling that nobody is in charge. Look at the Ebola fiasco here and ISIS over there. Rampant incompetence.

 

[ChaharMahal]

markets have been due for correction. it has been going up non-stop since 2011.

 

[ME]

markets have been due for correction. it has been going up non-stop since 2011.

I think it will melt even more before settling where it is not inflated. If this continues into late November and December, people will be afraid of shopping and that will be the real hit.

 

[Bache Tehroon]

I think it will melt even more before settling where it is not inflated. If this continues into late November and December, people will be afraid of shopping and that will be the real hit.

It won't go that far. The correction was indeed due, but it is now clear how dependent the market was on the Fed's QE money. The slightest hint of QE ending and look what the market is doing. This was a spoiled market.

One could say raising interest rates, as crazy as it may sound, could potentially force all these corporations to tap into their insane cash reserves instead of borrowing free money.

0% interest never looked like a good idea to me. It promotes stagnation more than stability.

 

[Flint]

0% interest never looked like a good idea to me. It promotes stagnation more than stability.

That's how bailed out companies were able to "pay back" their bailout money. They borrowed money from the lender(government) at 0% interest, lent it to people at 4% then turned around and repaid the same lender with that money claiming all the while that they have retired their loan. Anybody else would go to jail over this.