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Member Georgia Carry
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Discussion Starter · #1 ·
I just got completely out of the market. Don't know when I'll get back in, but plan to.

I got out another time when the Dow was around 29k, then bought back in at 26k. I thought it was on the way up then it dropped back way below that! Oh well, at least I didn't sell when it was low. I just stayed in until it built back up.

With everything going on now, getting out at 30k seemed like a good idea. There's bubbles everywhere or so I've read. Time will tell. If it drops low I'll buy back in again.

What is everyone else doing?
 

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Moved 50% to money market funds, 25% to bonds and the remainder split in mixed asset bond/stock funds. I'm too close to retirement to ride out a down market and, like you, I fully expect it to drop in the next 6 months.
 

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I'm completely out until the next 50% pull back in six months. Made good money on a March 2020 trade (after 4 months holding).
 

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I don't try to time the market - I dollar-cost average and rebalance once a year. As a "numbers guy", I like the idea of taking a more active role in portfolio management, but I'm a devotee of Burton Malkiel ("A Random Walk Down Wall Street"), who convinced me that, unless you're actually making a full-time job of trading, you're better off hitting the big, diversified funds and staying put.

I always have a fair piece of cash anyway, because I fund start-ups and other ventures as an angel investor - that's my version of speculative activity. Beats buying lottery tickets.

DH
 

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I don't try to time the market, either. My crystal ball is not that good. I just invest on time no matter which way the market swings. It is basically set on auto pilot. If it goes down, I keep buying right on time, but the shares are cheaper, so I get more of them.

If YOU are really that good at market timing, you ought to be a billionaire by now, or at least worth nine figures. If you can really time the market, for realsies, there is more than a trillion dollars of investment capital that would be beating down your door begging you to invest.

UPDATE: LOL! See the third quote below!
 

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"I do not know of anybody who has done it (market timing) successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently." - Jack Bogle

"Any investment method that relies on predicting the future is doomed to fail." - Chandan & Sengupta

"It must be apparent to intelligent investors-if anyone possessed the ability to do so (market time) he would become a billionaire quickly." -David Babson

"Only liars manage to always be "out" during bad times and "in' during good times. -Bernard Baruch

"There are two kinds of investors, be they large or small: those who don't know where the market is headed, and those who don't know that they don't know." -William Bernstein, MD

"If I have noticed anything over these 60 years on Wall Street, it is that people do not succeed in forecasting what's going to happen to the stock market." -Benjamin Graham
 

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Start writing down your predictions. Do it right now. Will the stock market finish higher or lower at the end of the year than it is right now? How about in 90 days? What will happen with real estate in your neighborhood over the next 5 years? Where will interest rates be in 90 days, 180 days, or a year from now? What about the value of a share of Apple in 6 months? Then keep track.

If you're like most of us, and you're completely honest with yourself, it won't take you long to realize you have no idea what the future holds. Even if you find out you're right about some things, you'll realize it probably had more to do with luck than any skill or superior knowledge. Larry Swedroe likes to keep track of the "sure things" that don't come to pass each year.

For example, in his 2012 "Sure Things" edition, he discusses how European stocks actually outperformed US stocks for 2012 and how investors who stayed in long-term bonds funds dramatically outperformed those who went short in order to be ready for the "sure-thing" of rising interest rates. (It's been a "sure-thing" for 3-4 years as near as I can tell.)

https://www.whitecoatinvestor.com/should-i-try-to-time-the-market-friday-qa/
 

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If I had asked you in April where the stock market would be at the end of 2020, what would you tell me?

Buying all the way down and all the way up netted me better than 24% for 2020.

I did not do that because I knew I would be up 24%. I did it because that is my investing plan, and I am sticking to it no matter what the stock market does.

Market timing is not a "plan" at all. You don't have one.
 

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Totally agree with Malum Prohiitum. Buy only Index Funds like S&P 500 or Total Market Index from Vanguard and hold them. Market Index Funds outperform managed funds over the long run, and have lower costs.
 

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A joke I used to tell employees of mine who bought lottery tickets was "there is ONE certain way to make money with the lottery, and that's to write a book titled "How to Beat the Lottery!" and sell it."

It applies equally well to investing.

DH
 

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I agree, no one can time the market. I am in the fortunate position though of being able to make my IRA contribution as a lump sum at a time of my choosing. So the question is, do I sit on that cash for now and wait for a dip in the market to buy? After all I have until April 2022 to make my 2021 contribution.

When I was not making as much money I was contributing throughout the year and dollar cost averaging like that does work well. I would never try to dissuade someone from continuing to buy on a regular basis, especially if you've got a long time before you retire.
 

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No one here can really answer that question because no one can predict the market any better than you can. I am not still working so can't make any IRA contributions, but if I was, I would still dollar cost average into Total Market Index fund on a monthly basis over that period.
 

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Member Georgia Carry
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Discussion Starter · #14 ·
I was right to get out awhile back at 29k. I just got back in too soon when it had a little bump up before dropping down even more again.
 

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Well if you are trying to hit the top peaks and bottom valleys, I predict you will not perform as well as if you just put in an index fund for the long term. Go look at long term performance of any managed fund and compare to the market index funds after you take into account fees and costs.

Good luck !
 

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Back in 2008, I recognized a “once in a lifetime “ opportunity to buy low. Only problem was, I was almost broke. I was able to open a fund for $300, and make periodic contributions of $50 or more.
The time to buy is when people are jumping out of windows and panicking.
I don’t know when it’s time to sell. At some point I will be able to convert my traditional IRA to a Roth, and not have RMDs.
Then I will take the money when I want.
 

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I was right to get out awhile back at 29k. I just got back in too soon when it had a little bump up before dropping down even more again.
Sometimes you will be right, and sometimes you will be wrong. If you knew ahead of time which was which, like I said in post # 6, it is utterly ridiculous that you are not a billionaire by now.
 
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Back in 2008, I recognized a "once in a lifetime " opportunity to buy low. Only problem was, I was almost broke. I was able to open a fund for $300, and make periodic contributions of $50 or more.
The time to buy is when people are jumping out of windows and panicking.
I don't know when it's time to sell. At some point I will be able to convert my traditional IRA to a Roth, and not have RMDs.
Then I will take the money when I want.
Be careful what you wish for. If you convert your IRA to a Roth, you will have to pay the taxes due on the conversion, and it will likely be at a much higher rate than you might be paying if you take the RMD's every year after you reach the age where those are required.

You gotta' do the arithmetic !
 
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