Is the stock market going to tank?

[dschane]

I question your premise that the world is now stable. I get your point, of course, but the stock world seems frothy as fuck. Brock is right, it might burst in 4 years after rising 60%. It also might burst in September. And the burst may be 15-20% correction. But, personally, I'm not following the textbook here. I'd figure out what your comfort level is for getting back and put that comfort-level to work now, i.e., make a one time investment of 100%, 75%, 50%, etc. of your stash. FWIW, I'm 50% in a dozen or so stocks and 50% govt bonds.

[Hopeless Sinner]

If you've got 5 or more years before needing the money chances are good that dumping it in is the way to go unless you're one that will let a 20-30% correction eat at you for a long time. Based on your pulling the money out in the first place you may be one of those people. If that is the case perhaps putting $5000 in monthly or bi-monthly would minimize your anxiety. If there was a correction before putting all the money back in you would have an opportunity to complete the re-investement at lower prices.

[Brock Landers]

Danno that vtinx fund is real conservative. A typical correction likely would hit you to the tune of -3 to -6% tops. Looks like it dropped 8% during the depths of the Covid bottoming. Dump it in.

[CovertM]

I question your premise that the world is now stable. I get your point, of course, but the stock world seems frothy as fuck. Brock is right, it might burst in 4 years after rising 60%. It also might burst in September. And the burst may be 15-20% correction. But, personally, I'm not following the textbook here. I'd figure out what your comfort level is for getting back and put that comfort-level to work now, i.e., make a one time investment of 100%, 75%, 50%, etc. of your stash. FWIW, I'm 50% in a dozen or so stocks and 50% govt bonds.

What’s your investing time horizon? When have markets corrected/“burst” and not returned to previous highs? Is a 50/50 allocation in line with your risk tolerance&risk capacity and long term goals?

Or are you invested based on geopolitical rumor/sentiment that you have no control over?


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[CovertM]

Danno that vtinx fund is real conservative. A typical correction likely would hit you to the tune of -3 to -6% tops. Looks like it dropped 8% during the depths of the Covid bottoming. Dump it in.

I read Danno’s question as he had parked assets in VTINX and was now trying to get “back in” to the market or his previous investment goals. VTINX was his safe haven.

Correct Danno?


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[Brock Landers]

I’m an idiot. Duh.

[Tips^Up]

Do as much pre-tax stuff as you can. I'm young with a hopeful long horizon, so my risk tolerance for my taxable account is:
2.5% VBTLX
30% VTIAX
67.5% VTSAX

I put $5k into Robinhood last November for "entertainment". I was highly entertained riding GME from $100 to $1200. Somehow (because I'm a moron), even taking that profit, my account is currently about $4300. I have spent a lot of time in the last few months to earn -$700. In conclusion, put it in Vanguard and don't worry about it.

[dschane]

What’s your investing time horizon? When have markets corrected/“burst” and not returned to previous highs? Is a 50/50 allocation in line with your risk tolerance&risk capacity and long term goals?

Time horizon - 20 years, give or take.
Burst and return - yes, it has always come back.
50/50 is exactly where my risk tolerance is for the present to near future. I'm cheap and save. I was basically 100% in SP500 index between 2000 and mid-2019. If I earned 2% between now and 20 years, I'd be fine. And like many, I gambled this past year on things like Nio (got in at $6 and 1/2 out at $13 and then all out at $57). I have three shorts that are balancing that out though. It's easier to do all that when 50% of the stash is secure.

Or are you invested based on geopolitical rumor/sentiment that you have no control over?

Isn't everybody?

[rod9301]

The us market is vastly overpriced.
Emerging markets are cheap.
Investing when it's cheap is not market timing, it's just common sense

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[El Chupacabra]

The us market is vastly overpriced.
Emerging markets are cheap.
Investing when it's cheap is not market timing, it's just common sense

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Obligatory reminder that the US market is near an all time high.... Which is where it usually is. That's because it is usually going up.

If you don't believe this, and believe it is overpriced, that suggests that some "real" price is a lower number that it will return to and stay there. Which also suggests a belief that the market will not return to today's pricing for some extended period of time. 5 years? 10 years? More?

Danno, just dump it all back in, into your usual investments, per your established investment strategy. If you don't have an investment strategy, think about that first.

Another way to look at the question of "should I dump it all in right now" - I assume you have more money currently invested. Would you withdraw it all right now, turn it all to cash? If not, why not? It's the same question as "should I dump all this cash in right now."

[Danno]

I read Danno’s question as he had parked assets in VTINX and was now trying to get “back in” to the market or his previous investment goals. VTINX was his safe haven.

Correct Danno?


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That is correct.

And thanks all for the advice. Between the fear of god knows what over the last 4 years, and the fear of a pandemic crash the last year, it's hard to decide "ok, I'm ready to get back in" and then just dump it all back in, that's why I've been looking at doing it over time.

[rod9301]

Obligatory reminder that the US market is near an all time high.... Which is where it usually is. That's because it is usually going up.

If you don't believe this, and believe it is overpriced, that suggests that some "real" price is a lower number that it will return to and stay there. Which also suggests a belief that the market will not return to today's pricing for some extended period of time. 5 years? 10 years? More?

Danno, just dump it all back in, into your usual investments, per your established investment strategy. If you don't have an investment strategy, think about that first.

Another way to look at the question of "should I dump it all in right now" - I assume you have more money currently invested. Would you withdraw it all right now, turn it all to cash? If not, why not? It's the same question as "should I dump all this cash in right now."

Not sure what you're trying to say, but it's possible that you will lose money over the next 10 years in the us stock market, but probable you'll make money in emerging markets.

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[LeeLau]

I put $5k into Robinhood last November for "entertainment". I was highly entertained riding GME from $100 to $1200. Somehow (because I'm a moron), even taking that profit, my account is currently about $4300.

Yeah!!! GME gang represent

Sold UAVS 10C to try to leg into a short.

Closed out TLRY short for profit

Closed out QS short flat

Sold some RIOT 70C to try to take profit

Bought some GME 70C yesterday as a yolo hoping DFV effect would make the stock go the moon. It didn't really. Looks like that expires worthless

[CovertM]

Time horizon - 20 years, give or take.
Burst and return - yes, it has always come back.
50/50 is exactly where my risk tolerance is for the present to near future. I'm cheap and save. I was basically 100% in SP500 index between 2000 and mid-2019. If I earned 2% between now and 20 years, I'd be fine. And like many, I gambled this past year on things like Nio (got in at $6 and 1/2 out at $13 and then all out at $57). I have three shorts that are balancing that out though. It's easier to do all that when 50% of the stash is secure.


Isn't everybody?

I hope everybody isn't!

Investment choices, asset allocation, risk tolerance, financial plan, etc., should all be developed based on personal goals and time horizon of your individual situation. Attempting to create a financial plan tied to world events out of your control and market disruptions is a sure way to be scared into either doing nothing or doing too much while you try and swerve out of the way.

Last year is a great example/lesson...Let's say you were absolutely spot on and pulled your money out at the top before the "Covid Crash" (I think it was actually this date last year). When would you be comfortable enough to put it all back in? When did things get substantially better to make you comfortable with global markets again? How many people are still not comfortable and missed out on massive recovery followed by gains? I still meet with people who are hanging onto too much cash from pulling out investments in '08/'09, have things gotten better since then?

Very conservative portfolios that did nothing but rebalance into the dip last March had double digit returns last year. If you watched the news and waited for the all clear to reinvest your money, you lost your ass.

*Obligatory Not Financial Advice

[LeeLau]

I will say this. 95% of my net worth is in boring stocks and bonds. Things like GE XOM IRM MSFT TIPS RY LMT SU. My trading spray is confined to the trading account which is small and where damage is contained.

To mitigate against a large market downturn I would put of the money ( well below the market SPY puts). It wasn't a perfect strategy and I eventually abandoned it as the pain of having those puts expire worthless month after month was too great. In hindsight that would have worked out well for March 2000 as the one time profit from those puts would have shielded me from the -30% downturn in portfolio during the Covid crash. Obviously ymmv

[rod9301]

I hope everybody isn't!

Investment choices, asset allocation, risk tolerance, financial plan, etc., should all be developed based on personal goals and time horizon of your individual situation. Attempting to create a financial plan tied to world events out of your control and market disruptions is a sure way to be scared into either doing nothing or doing too much while you try and swerve out of the way.

Last year is a great example/lesson...Let's say you were absolutely spot on and pulled your money out at the top before the "Covid Crash" (I think it was actually this date last year). When would you be comfortable enough to put it all back in? When did things get substantially better to make you comfortable with global markets again? How many people are still not comfortable and missed out on massive recovery followed by gains? I still meet with people who are hanging onto too much cash from pulling out investments in '08/'09, have things gotten better since then?

Very conservative portfolios that did nothing but rebalance into the dip last March had double digit returns last year. If you watched the news and waited for the all clear to reinvest your money, you lost your ass.

*Obligatory Not Financial Advice

Well, you looked for stocks that were really cheap, like oil stocks.

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[rod9301]

Or Russia, china Poland Spain Italy korea Malaysia Singapore Brazil Greece.

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[Danno]

I question your premise that the world is now stable. I get your point, of course, but the stock world seems frothy as fuck. Brock is right, it might burst in 4 years after rising 60%. It also might burst in September. And the burst may be 15-20% correction. But, personally, I'm not following the textbook here. I'd figure out what your comfort level is for getting back and put that comfort-level to work now, i.e., make a one time investment of 100%, 75%, 50%, etc. of your stash. FWIW, I'm 50% in a dozen or so stocks and 50% govt bonds.

Yeah, perhaps "stable" wasn't the right word, lol. But it *feels* more stable, and I feel less stressed and more optimistic. Such that I feel like I should return to my "normal" investment strategy such as it is. I just am wary of snapping my fingers and putting it all back in now, precisely because it doesn't truly feel stable. But I realize now that the data suggests I put it all back in (or back in to my "normal"). I won't do it, though, I will put it back in bit by bit, I was just wondering if there was some conventional wisdom on that but it seems like the CW is "put it all in now!"

[CovertM]

Yeah, perhaps "stable" wasn't the right word, lol. But it *feels* more stable, and I feel less stressed and more optimistic. Such that I feel like I should return to my "normal" investment strategy such as it is. I just am wary of snapping my fingers and putting it all back in now, precisely because it doesn't truly feel stable. But I realize now that the data suggests I put it all back in (or back in to my "normal"). I won't do it, though, I will put it back in bit by bit, I was just wondering if there was some conventional wisdom on that but it seems like the CW is "put it all in now!"

If you must...
Put half in now, then 25% in a month, last 25% a month later. Make a schedule and stick to it, regardless of what you think is going to happen.
Piddling it in $2-$5k at a time is a waste of time and depending on your BD may incur costly trade/commissions.

[Timberridge]

Here's an exercise if you think you can time the market. Have a friend grab a historical chart of the S&P or your favorite stock from a 2 yr period in the last 20 yrs, clip off the the dates, a portion of the right side of the chart, and hand it to you. Predict the next part of the chart and see if you're right.

[El Chupacabra]

Not sure what you're trying to say, but it's possible that you will lose money over the next 10 years in the us stock market, but probable you'll make money in emerging markets.

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I'm saying fear of investing in the US market, where such fear is driven by a belief that the market is too expensive at any given point in time, is not valid.

Fear of investing based upon the fact that markets do go up and down, and it is possible to sustain losses, is valid.

I am and always will be a buy and hold, long term investor. Broad market funds only.

[rod9301]

I'm saying fear of investing in the US market, where such fear is driven by a belief that the market is too expensive at any given point in time, is not valid.

Fear of investing based upon the fact that markets do go up and down, and it is possible to sustain losses, is valid.

I am and always will be a buy and hold, long term investor. Broad market funds only.

If the market is expensive it means that the future returns will be very low.

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[Danno]

If you must...
Put half in now, then 25% in a month, last 25% a month later. Make a schedule and stick to it, regardless of what you think is going to happen.
Piddling it in $2-$5k at a time is a waste of time and depending on your BD may incur costly trade/commissions.

I will be putting it in an index fund with Vanguard, so there are no issues of cost.

[CovertM]

If the market is expensive it means that the future returns will be very low.

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So when the market is at all time highs it is expensive? Therefore, every previous ATH was predicting low future returns?

When do we revert to FMV and have HIGH future returns?

[rod9301]

Look at cape

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