Invite ye felawes and frendes desirous in gold to enter the gates of Shrewd'm, for they will thanke ye later.
- Manlobbi
Halls of Shrewd'm / US Policy
No. of Recommendations: 9
No. of Recommendations: 5
I'm still in the market and things appear bullish.
However I'm really fighting the urge to just go to cash and sit on the sidelines until the next downturn.
We've been meeting with a financial advisor (since we get one for free through my wife's job) and he does not really see the concern.
"just be diversified ..."
No. of Recommendations: 7
It always depend on your horizon when you will need to use the money, and your risk-tolerance. I lost 70% in the tech crash, and 50% twice more, and 30% a few times, but never wavered; I am not most people. I also didn't need to use all the money right away.
If you don't need the money for 10 years being fully invested is more logical than if you need it in 3 (but it still will test your patience as soon as the next crash).
So check your other sources of income and when you will need the money, in addition to your wife's and your risk-tolerance for crashes; I had a partner whom was only invested during crashes since he would sell as soon as there was a crash, then stay out of the market for the next 3 years, be lured back in by good years the market had had, then lose again in the next crash.
This is a different type of "market timing"!
No. of Recommendations: 17
I'm still in the market and things appear bullish.
However I'm really fighting the urge to just go to cash and sit on the sidelines until the next downturn.
Meh, don't sweat it. Both approaches can work. The only thing to remember about moving to cash is that it works extremely well, if and only if you have the nerve to deploy it when there is a rich opportunity set.
Imagine someone who bailed and went to cash the day of Mr Greenspan's "Irrational Exuberance" speech in December 1996. That was a full 3.3 years before the index peaked (in real total return terms), a lot of FOMO. That's justifiably a market call about which some would say "being too early is the same as being wrong".
Yet the market was back at the December 1996 level again in 2002 after 5.8 years, and 14.5% lower than the December 1996 level as late as the 2009 bottom after 12.3 years, again in real total return terms. Lots of opportunities to get in at a better level, if you are the sort to avail yourself of them. And that's just the broad index: if you consider all the myriad individual good opportunities you might reasonably pick along the way, there's nothing wrong with cash. Provided, of course, you can spot and act on some of those opportunities.
Jim
No. of Recommendations: 7
The only thing to remember about moving to cash is that it works extremely well, if and only if you have the nerve to deploy it when there is a rich opportunity set.
The people who go to cash when they get scared, and then sit out the crash .... also stay scared at the bottom and don't get back in for the boom.
In a long ago thread on an old TMF board, somebody said "Nobody will stay invested during a 50% downturn." That was in a debate/discussion about Indexed Universal Life insurance.
About a dozen people commented back "No, I sat tight through two 50% loss bear markets."
No. of Recommendations: 5
The only thing to remember about moving to cash is that it works extremely well, if and only if you have the nerve to deploy it when there is a rich opportunity set.
Yep I get it. This is how I imagine it would work.
- go to cash whenever, like now
- wait for the next crash or significant downturn
- re-enter when there is blood in the streets, defined by very poor breadth and posts here about either short or long-term bottom detectors signaling.
In my own case, I'm sitting in a decent spot regarding "retirement" which is coming up, I suppose.
Just have this nagging feeling that there is likely to be some significant downturn in the next year or three given the macro factors at play.
How nice it would be, for once, to have significant dry powder to deploy.
No. of Recommendations: 3
The only thing to remember about moving to cash is that it works extremely well, if and only if you have the nerve to deploy it when there is a rich opportunity set.
Yep been one of those without "the nerve", now I find it better to stay invested 50%, hold longer and time the trading.
GD_
No. of Recommendations: 4
If you have been on this board for decades you will recall a long time ago people advising getting out of the market, followed by the market having multiple bang-on years including as high as 30%, which is exactly what you need to make up for the inevitable crashes. If you are correct, you save a fortune; but if wrong you massively under-perform the market. There is a reason Warren Buffet warns against market timing; he has lost 48% before and kept going anyway. And he can't buy the tiny stocks you can.
No. of Recommendations: 4
An interesting while highly unusual development in one sentiment indicator: CNN´s Fear & Greed Index peaked in July at 75 (with practically all components at "Extreme Greed"), which was perfectly in line with a rising market.
But since then it went continually down, opposite to the further and further rising market. With 33 it´s now clearly in the "Fear" zone --- while the market was rising all the time since, and still is.
The for me only explanation for this completely contradictory developments of the last 2 months: FOMO. Everybody still holds on --- but feels more and more uncomfortable in doing so. Now even holding on while feeling not just "uncomfortable" but while being outright scared. Looks like an elastic band which is more and more pulled at on both ends --- until it snaps.
No. of Recommendations: 3
P.S.: As I just convinced myself that something has to snap the gambler in me is tempted to finally buy some Nvidia/Palantir/Apple puts :)
No. of Recommendations: 2
No. of Recommendations: 2
I am 50% in fixed income and cash. I don't care if I will miss some gains.
