I think a lot of it has to do with what point of life you are at and how your experience went in past market turmoils. If you are younger and newer to it all, there is plenty of time to ride it out.

For those nearing retirement age, they may look at it differently and not want to wait another ten to twenty years to get back what can disappear basically overnight. That's the thing to remember, the market goes up slowly but can come down very, very fast. But in the long term it usually always goes up.

You got it, you should always invest appropriately for your GOALS in life, risk tolerance and age. Long term, not short term trading

My favorite Buffet saying, "Don't RISK what you have and what you need for what you DON'T have and DON'T need". The older you get the more you understand what it means.

Mine is...

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Sure I have lost a lot in the last several weeks, but I also have a mother load of cash and I have been waiting for a pull back for a while now. Drop it more boys and bring on the doom and gloom, there are so many great stocks to shop........I feel like a kid in a candy store!

Looking at my balances.. I’ve now dropped back almost the exact balance I had at the end of Dec 31st... so basically January got wiped. Good thing I don’t pay much attention to the news, I might think I had gone bankrupt or something.

January needed to get wiped out. DJIA went up too fast from 24k to 26k.

If we didn't have this correction now, then in another month or 2, it would be the DJIA going from say 28k down to 24k.

IMO, the press just hates Trump...therefore, they will spin it whichever way to make him look bad.

This economy is getting ready to take off. Employees are getting raises & bonuses, will have more money in their checks with new tax laws, and companies are committing to invest billions upon billion of dollars into the economy.

I agree, one thing is people in America (by and large) like to buy shit. Not everyone saves money, like if they say look I’m getting $5000 extra this year maybe I’ll put it in an IRA, no they’ll more likely buy a jet ski or a trip to Disney World.

Likely with the tax cuts and the corporate tax breaks and being able to repatriate money more free money to spend which should equal more buying of cars, vacations, jet ski, second homes etc..

This stock market effects the top 20% who are really saving money but the majority of America is not effected by the stock price. Not counting 401K pension plans, only 20% of Americans own stocks directly.

I just saw Verizon is giving every worker 50 shares as a bonus, I think that’s great just wonder if people will keep the shares or sell for a quick $2500 cash.

By and large Americans are not really a country of savers, here is an interesting chart excluding home value how little we have saved.

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Precisely, which is why reporting on this is so idiotic. I think the press is so eager to jump on things like this for three reasons:
a) it appears to bleed when you look at it with no perspective.
b) They are not trained to look past the current news cycle so yeah, from their perspective it is a massive bleeder.
c) it can be made to appear to fit nicely into their popular recurring thead of the evil fat cat corporations stepping on the average person.

Sad thing is I have met people who were in the past were actually harmed by the fear that type of reporting fueled leading them to pull out at the bottom of a market. I tried to explain how that just converts theoretical and temporary losses into actual and permanent losses. I guess they had no business in the market to begin with.

Anyway plan for me this year remains the same as last.... stashing as much as I can in and rebalance at end of year.

This market is so oversold right now.

I am so tempted to move some of my money in index funds to a safe harbor until the bleeding ends. Is anybody else doing this or just holding on to the wheel tight?

Hold tight or buy more is the correct answer.

https://www.google.com/amp/s/moneybadger.stocktwits.com/market-crashes-stock-sell-off/amp/

https://www.investopedia.com/articles/investing/021116/3-reasons-not-sell-after-market-downturn.asp

Did you not see the article I posted a few days ago said the average investor only makes around half of what the market actually returns? It’s because they try to time the market and wind up selling low and buying high.

I agree with this but don’t have a crystal ball.

This is not 2000 or 2008 this is a panic for nothing imo.

or buy a NIB Stern Pro...

I like to buy when things go on sale!

I did read it and the other articles. However, it's a thinking/feeling disconnect that I have. I don't like to fly even though I realize it's far safer as a mode of transportation than driving. It's difficult when you lose the equivalent of your salary within a few days.

Sometimes I sell puts on stocks and they get put to me if the price falls too low, I have to buy them (or pay not to buy) so I’m forced to buy low.

Some of those buys have been the best prices I’ve ever bought, I would not have bought if I wasn’t obligated to.

You probably have an incorrect asset allocation for your risk tolerance.

They say you need to have the allocation that will allow you to sleep at night. If 100% stock is too much you shouldn’t be 100% stock.

Lots of people say ‘age in bonds’ or whatever you like.

Currently at I’m half my age in bonds, as stocks were going up I didn’t have enough bonds so I was selling as stocks were going up. It doesn’t make sense to sell as stocks are going down.

There are risk tolerance questionnaire

https://personal.vanguard.com/us/FundsInvQuestionnaire

Exactly. That’s how you should feel right now

When you have dry powder to deploy with these fundamentals in tact we can back up the truck on great names we love and it will be some of the easiest money ever made when it snaps back

As we get into the next two quarterly cycles it will be about how great the economy is, GDP growth and the effect of tax cuts working through the system.

We are getting to the capitulation point of this panic selling

I’m buying more Apple today. They will reauthorize their stock buyback program next month to increase the amount from current levels which is $34 bill

Repatriation is bringing back $250 billion roughly

And Apple said they want to go cash neutral. That’s dividend increases, acquisitions and stock buy backs

Happy trading!!!

Holding tight I think is the best answer. Get ready for some tough weeks ahead though, but trying to time the market coming and going is too tough.

Recall, two years ago we had the same thing happen stocks had a correction, that was January 2016 and guess what it wasn’t the end of the world. S&P was up 16% by the end of 2016

Corrections happen people.

Read this article, take out the oil crash but just look at the sky is falling the Dow dropping xyz in a few trading days. It could have been written today.

http://money.cnn.com/2016/01/15/investing/stocks-markets-dow-china-oil/index.html

I lost $xxx in the Great Recession but didn’t sell a cent just kept buying and the recovery was super charged because I had bought hell low prices

You can never know when it will stop falling so I just keep buying every month. This is for retirement money so it’s 10 years off plus another 10-30 years in retirement. Looking back 30 years you won’t believe how cheap stocks were and 20-30 years from now these prices will seem cheap as well.

And hopefully you will have 20-30 years of dividends as well, assuming you focus on dividend generating stocks.

I don’t mean to give any stock picking advice but I own thousands of shares of Altria for the last decade, the dividends alone have covered the cost I paid. Paid less than $30/share and they pay something like $2.6 a year / share.

Dividends are not a sure thing, look at GE but I like dividends, I also like growth stocks like GOOG and recall growth stocks can mature and give dividends like AAPL and MSFT.

Basically my advice is low cost index funds which own everything growth and income but you can select a more income version if you like.

I own some stocks but my main holding is

Total US index
Total international index
Total Bond Fund (or intermediate corporate bond fund)

All from Vanguard.

Why would you own a "total bond fund"? It gets hammered too with rising interest rates. Floating rate and high yield Vanguard options are better choice imo.

I think we might have hit the capitulation point. Not that timing it is possible but using Apple as a bellweather for the market it bounced off KEY support levels of $150 and bounced right back up to $155 along with the market.

I'll keep buying more on dips

Of course LMT and LLL held firm with the massive defense spending increase just approved.

BND is intermediate bond fund, it’s 5-7 year duration, if it does lose it’ll make up in 5-7 years Plus will be yielding more as interest rates go up so net not loss.

I put a chart up earlier, BND is not really for me to make money it’s to not lose money.

BND is just a Steady Eddy.

I’m not really interested in making money on bonds just keep what I got plus interest which should be better in the future as rates rise..

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I lost 50 k easily in 2008.... guess what.... I got it all back X3. Buy now, you'll be glad you did!

That's not true. You lose the opportunity cost of buying new bonds that pay a higher interest rate.

If i own a 7 yr. bond that pays 5% today and rates continue to rise this year further then that same 7 yr bond 1 yr from now might pay 6.5%

You can hold your bond to maturity versus selling it at a discount and receive 5% while new money is getting a much higher rate potentially and of course the impact of inflation.

It's called "interest rate risk". Read up on it. High yield, preferreds and floating rate bonds do much better in rising rate environment

That graph you show is in a period of DECLINING interest rates where the price of bonds go up. That happened for the past 25 years!

That trade is long gone and that graph is going in the other direction because of rising rates.

And the YTM yield to maturity in that graph is a pitiful 2.21%, which won't even keep up with inflation.

Here you go HYG

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Ice my bonds are for lessening the risk of my stocks as was showing in that graph.

Other bonds may pay more interest but may also crash at the wrong time when stocks are crashing.

We may view bonds differently, I’m using them as ballast to lessen the rocking of the total portfolio.

I hear you, just point out a potentially better alternative for the "ballast" in this new world of interest rates going forward. Every point or two matters. Some people might be better off in cash versus short term bonds waiting for interest rates to stabilize before you go back in. Either way good luck to you.

You think this is the bottom? A good time to buy? I'm vacillating on buying or waiting. I feel like it could go lower, but cant say ive ever been good at market timing. I did pick up some shares of Apple today though.

Encouraging, 10yr stable at 2.85%

Market turned on a dime when Apple hit $150. High volume as well on a friday afternoon. Good sign.

Apple will close around $157

I'll hope for more dips to buy. Market selling looks tired! Boom boom

Sold 5 Disney April 110 calls @ $1.20

I don't think Disney will be above $110 come April.

I do think by summer it will be over $115.

I have recovered about 60% of all my losses during the meltdown a week ago. Thank God, the market is going back up.

I held everything I had and contributed a lot more than usual during the recent meltdown. Seems like I timed most of it it pretty well as I got most of the extra contribution at the bottom. The way my managed investment account work if I put money in, it doesnt go into play until the next business day. I kinda bet on valetines day and it panned out.

I'm also down about 4% from the peak. Also a bit too tech-heavy, so was hit harder than the indices.

Sold 5 NBIX May 90 Calls @ $5.79

Not sure if I listed the purchase of the stock. 500 shares in May @ $54.

We are back to a buy on the dips market. Apple touched $150 that turn around Friday and now back to $173. Berkshire (Buffet) added more Apple stock in the 1st quarter.

We haven't seen the end of the volatility. Don't fall asleep on that 10yr treasury rate and Fed

this is why I said don't go crazy worrying about the dips.

If you guys are living by what a day or two dip you are going to go crazy. It's pointless, I think that I talked someone off the ledge who was thinking he should sell out at the bottom because he didn't want to lose any more money. I said that's not the way to do it. I don't have any information that the market would recover instantly but I have been investing for 20+ years so I've seen a lot. I was not deep in when the dot com bubble burst, but the Great Recession was very scary and I was not really adequately diversified. It's best if you guys look at some risk assessment questionnaires to see if you want to be 100% in stocks or rather to be somewhat in bonds/cash. 100% stocks probably have the highest return rates, but it's not always smooth sailing.

I was reading about how people can't time the market. When is it in recovery etc.. For example the last recovery has been quite strong but there were times during the recovery that the market might have lost 10-15% in a month. Bear in mind this is during the way up. But if people were getting spooked and worrying about every little hiccup they would have got in too late on the way up and may have got out again every little correction.

Basically if you are saving for retirement, that can be 10,20,30 years away and if you may be retired another 10,20 years after that (IOW you are going to be investing for the next 40 years) you don't (shouldn't) care about a little dip or such. I said above 2016 had the same thing where people were freaking out and selling while 2016 was really a good year.

Don't invest 100% if you are uncomfortable with a potential 40-60% loss in a downturn/crash. I am not saying we will see that but those years do happen, you can't say when the drop will stop and when to re-enter the market.

Some of you guys may be too young (really) to remember the 2007-9 market could have lost $tens of thousands a day for days on end. But this bull market has got people to think that the market doesn't go down. That is not the case, but the important fact is to just relax and not worry about every little day up or down.

IMO

I had sold a lot of low out of the money puts on APPL that were deep in the money for a while (I mean $160/share) puts but I wasn't too worried worse case I had to buy more shares (at a bit of a premium to the selling price) but I was not too worried about Apple.

Same here, Andrew. But when my techs started coming back up on NASDAQ, they came up strong. Now, I'm only down about 30%. If it keeps going like this for a few days, I'll be right back where I started. And when I say 'down', I mean on my 'profit' part of the stocks. Not talking for the stock as a whole. Like I told you before, sometime this year when it all looks good, I'm going to cash it all out, pay off my one big debt and hopefully be debt free and can breathe easily until my body expires! I read this morning that the next downturn will probably be in 6 months, so I'm gonna try and time it just before then.

This would mean we'll live on the income from my business until I can't run it anymore, plus have my military retirement check, social security check, and my wife's social security check to live off of. We will be totally debt free!!!! You know what THIS means now, dontcha? When you visit with us again we can give you a LARGE glass of water instead of that small one! It will be a time to SPLURGE!!!

I have been 'playing' my stocks a hell of a lot better than Kentucky and Kansas are playing basketball!!! This has been one of the strangest and disappointing seasons you and I have experienced since we've known each other! Still . . . I wouldn't be surprised if either team gets in the tournament and plows through like champions. You never know with our two bunches!!!

Lastly. Would you charge me gas and mileage to be a pallbearer at my funeral?

I, for one, really appreciate your posts on here. I believe you have the experience to know what you are talking about. I read your every post. In fact, you are one of my favorite posters on Pinside . . . along with 6,000 others. Haaaaaaaaaaaaaa!

Regards,

Mike in Kentucky

Likewise and thanks Mike, we've been around here together for the last 7 years or so! Hopefully for many more years to come.

Been a terrible year for Kentucky hoops, not much better for my Tarheels and Longhorns though. I hate Duke!!!!

Back to where I was before the start of the correction. Mid January I had rebalanced which protected about quarter of my profits from last year. Went ahead and threw it all back to stock just after things started going back up so that helped me recover a bit faster. I’m not all the way up yet as I had been adding through that time but not worried, just steadily putting in.

I have also lately been thinking about opportunity cost in terms of the market vs interest rates on loans out there (for me personally)....

This year we pay off our primary house which turns out to be pretty good timing considering tax changes. I was thinking about doubling up payments on our rental property to get myself free and clear of everything but then a thought occurred to me...
- Interest rate on the rental is just under 4% and is deductible still (as an investment property)
- Market is earning strongly (lets say target 8% for the year)
- Doubling payments in a way is earning(saving) me 4% on that (which I get to keep instead of paying to the bank)... however it also reduces (slightly) the tax deduction.
- If I were to put that same money in the market, over the long term (who know if I would be ahead this year or not - but should be)... i’m thinking that same money pays a good amount more in the market than it would going to the interest on the rental.

Anyway... just a thought I was thinking on my personal situation with morgage rates vs market performance.

As an aside, I was listening to a couple local advisors talk about the recent correction. Their opinion was that its a sign the market is healthy and with strong growth comes volatility. Gotta be able to stomach the dips while continuing to invest.

I’d typically be worried about such a long Bull market which we are currently in, but the Great Recession was so bone crushing and thorough that is like once a generation. We didn’t live during the Great Depression but the Great Recession was scary stuff especially if you had a lot of money in the market at the time. I think our current valuations are healthy. Stocks like US steel (X) went from $186 all the way to $18 in one year.

Both events were monumental and didn’t just effect people in the stock market. It was all walks of life the entire economy was on the razors edge.

Anyway to me 10-20% corrections happen all the time not really a big deal and is helpful because it lowers the price of stocks so you can buy more for your money.

https://en.m.wikipedia.org/wiki/Comparisons_between_the_Great_Recession_and_the_Great_Depression

This chart is only the DOW but all stocks were effected even great stocks. Anyway this is why I own some bonds, some bond funds were like a straight line or up during the stock blood bath.

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Here is an Apple chart, if you were to freak out every time it lost 10-30% it would have been a hard ride. You’d have done well buying on the pull backs.

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I wanted to start a new post specifically to discuss Apple. I have so much it’s like a plague of locusts. I’m not too concerned currently but I’d imagine that at some time it will reach a tipping point where there will be no growth in iPhone market or shrinkage as Costanza would say.

So I’m curious what’s the end game? Will Apple become a stable money making company like Microsoft where you may not see a lot of growth but you can depend it’ll make a steady $20B profits every x many months?

Or will it become something else like they say other phone companies have crashed down like Nokia or Blackberry, but I’d add Apple is a lot more than just phones, they sell Billions and Billions of dollars of computers, tablets and services.

So what do you guys see Apple like in 5-10 or 20 years from now?

Apple is a company that never should be sold.

Look at the amount of cash they accumulate every year.

Wonder if they should branch out like buy another company like Netflix or Disney or just buy back shares? They can’t really sit on $200B that was more so when the money was locked overseas.

The face of Apple's company IS iPhone. Historically, its been over 50% of it's hardware sales for a long time. Hovering around 50-60% for the last few years.

That iPhone statistic does not include all of the after purchase $ either. Like the Apple iStore purchases in the iTunes store, iCloud storage and paid Apps+in App purchases. If you include all the revenue from those and add it to ONLY iPhone sales, JUST the iPhone likely generates 70-80% of Apple's total yearly sales in one way or another.

Don't overlook online stats either. 50.3% of ALL WEB TRAFFIC is now on "smart devices". The service providers are rolling in $.