Worry market crush, selling 50%, but increase buying 100%

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WhiteMaxima
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Worry market crush, selling 50%, but increase buying 100%

Post by WhiteMaxima » Fri Oct 20, 2017 1:15 pm

I did some AA this month, move AA to 50/50. However, I did 401k purchase allocation to 100% into equity. US/Intl 50/50. Yes, I am more comfortable. I will capture 50% of market gain but limit 50% loss. In case of crash, I will be all in again. This year is good for me. I am up 18.8%.

Olemiss540
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Re: Worry market crush, selling 50%, but increae buying 100%

Post by Olemiss540 » Fri Oct 20, 2017 1:19 pm

Are you looking for feedback or just letting us know so we can get out before the selloff effects the market price?

Wasn't clear from the OP what you were looking for.

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Re: Worry market crush, selling 50%, but increae buying 100%

Post by kathyauburn » Fri Oct 20, 2017 1:56 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 1:15 pm
I did some AA this month, move AA to 50/50. However, I did 401k purchase allocation to 100% into equity. US/Intl 50/50. Yes, I am more comfortable. I will capture 50% of market gain but limit 50% loss. In case of crash, I will be all in again. This year is good for me. I am up 18.8%.
Sounds like you've reached a more comfortable asset allocation for now. I would suggest sticking with that for the long haul rather than imagining you can properly time a "crash." Better yet, pick a fund that does your rebalancing for you automatically.

After 2008, I imagine there were more than a few people who made "please god" promises of getting out or getting sensible if their money ever "came back." I wonder whether they kept those promises?

WhiteMaxima
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Re: Worry market crush, selling 50%, but increae buying 100%

Post by WhiteMaxima » Fri Oct 20, 2017 2:28 pm

I think my permanent AA would be 80/20 Stock/Bond. I don't believe timing the market BTW.

PFInterest
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Re: Worry market crush, selling 50%, but increase buying 100%

Post by PFInterest » Fri Oct 20, 2017 2:44 pm

Aren't you market timing right now?

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by z3r0c00l » Fri Oct 20, 2017 2:47 pm

I feel better at times like these because most of my stuck buying is in the 401K, money I can't touch for decades and anyway, half of those equities are international which are not so hot. But don't delude yourself into thinking this is some kind of strategy or system. If you go 50/50 you may never get a chance to get back in. Stocks could be up 50% this time next year and then what?

WhiteMaxima
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Re: Worry market crush, selling 50%, but increase buying 100%

Post by WhiteMaxima » Fri Oct 20, 2017 2:49 pm

I am staying neutral now: 50/50. I don't call it timing. I see risk ahead.

Sidney
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Re: Worry market crush, selling 50%, but increase buying 100%

Post by Sidney » Fri Oct 20, 2017 3:03 pm

Market timing is the strategy of making buy or sell decisions of financial assets (often stocks) by attempting to predict future market price movements.
I always wanted to be a procrastinator.

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by LadyGeek » Fri Oct 20, 2017 3:09 pm

Where is the fixed income (bond side) part of your 50% held? Tax-deferred or taxable?

My point is that you can swap funds all day long in a tax-deferred account (e.g. 401(k)) without regard to taxation. IOW, you don't pay taxes on the gains to do the fund exchange. On a taxable account, you do.

Also, you are paying more in taxes if the bonds are in a taxable account. See: Tax-efficient fund placement
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Re: Worry market crush, selling 50%, but increae buying 100%

Post by letsgobobby » Fri Oct 20, 2017 3:18 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 2:28 pm
I don't believe timing the market BTW.
Yeah, you do.

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Re: Worry market crush, selling 50%, but increae buying 100%

Post by JBTX » Fri Oct 20, 2017 3:20 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 2:28 pm
I think my permanent AA would be 80/20 Stock/Bond. I don't believe timing the market BTW.


Based upon this advice I'll buy some puts today, and some calls on Monday.


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Re: Worry market crush, selling 50%, but increase buying 100%

Post by flyingaway » Fri Oct 20, 2017 3:26 pm

This is similar to the glide up strategy.
There is no best strategy, just the one that you are comfortable with.
I can say the market will not crash tomorrow. But I don't know about next year.


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Re: Worry market crush, selling 50%, but increase buying 100%

Post by Tyler Aspect » Fri Oct 20, 2017 3:36 pm

Based on your portfolio changes, I would guess your true risk tolerance is around (60% stock / 40% bond) to (50% stock / 50% bond). You just have to admit your original asset allocation of 80% stock / 20% bond was too aggressive.
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Re: Worry market crush, selling 50%, but increase buying 100%

Post by KlangFool » Fri Oct 20, 2017 3:38 pm

OP,

What are you AA?

A) 80/20?

B) 50/50?

Regardless of your answer, you are marketing timing before and you are marketing timing now.

1) If your AA is 50/50, why are you putting 100% of your money into stock now?

2) If your AA is 80/20, why do you switch to 50/50?

KlangFool

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Re: Worry market crush, selling 50%, but increae buying 100%

Post by Artsdoctor » Fri Oct 20, 2017 3:39 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 2:28 pm
I think my permanent AA would be 80/20 Stock/Bond. I don't believe timing the market BTW.
By definition, this is market timing. If you're permanent AA is 80/20 and you're now at 50/50 because you see a crash coming, you'd presumably go back up to 80/20 "at the right time."

WhiteMaxima
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Re: Worry market crush, selling 50%, but increase buying 100%

Post by WhiteMaxima » Fri Oct 20, 2017 3:45 pm

I was 100% until last couple of month. I was 100% during 2008 because I have no time to escape then. This time I am leaving the theater earlier. Don't want to wait for exit.

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by Sidney » Fri Oct 20, 2017 3:48 pm

Should we leave when the fat lady comes on stage, when she inhales or when she actually belts out a note?
I always wanted to be a procrastinator.

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by KlangFool » Fri Oct 20, 2017 3:50 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 3:45 pm
I was 100% until last couple of month. I was 100% during 2008 because I have no time to escape then. This time I am leaving the theater earlier. Don't want to wait for exit.
WhiteMaxima,

What is your permanent AA? If it is 80/20, why are you 50/50 now? You are market timing.

KlangFool

WhiteMaxima
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Re: Worry market crush, selling 50%, but increase buying 100%

Post by WhiteMaxima » Fri Oct 20, 2017 4:01 pm

KlangFool wrote:
Fri Oct 20, 2017 3:50 pm
WhiteMaxima wrote:
Fri Oct 20, 2017 3:45 pm
I was 100% until last couple of month. I was 100% during 2008 because I have no time to escape then. This time I am leaving the theater earlier. Don't want to wait for exit.
WhiteMaxima,

What is your permanent AA? If it is 80/20, why are you 50/50 now? You are market timing.

KlangFool
My permanent AA will be 80/20. Now 60/40 to be exactly down from 100/0. 40% in FDIC insured CD. Bond is no safe if the interest rate back to norm.

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by KlangFool » Fri Oct 20, 2017 4:26 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 4:01 pm
KlangFool wrote:
Fri Oct 20, 2017 3:50 pm
WhiteMaxima wrote:
Fri Oct 20, 2017 3:45 pm
I was 100% until last couple of month. I was 100% during 2008 because I have no time to escape then. This time I am leaving the theater earlier. Don't want to wait for exit.
WhiteMaxima,

What is your permanent AA? If it is 80/20, why are you 50/50 now? You are market timing.

KlangFool
My permanent AA will be 80/20. Now 60/40 to be exactly down from 100/0. 40% in FDIC insured CD. Bond is no safe if the interest rate back to norm.
WhiteMaxima,

Another market timing statement. You have not reached the stage where you know that you know nothing.

Anyhow, all of us have to go through this stage and pay the price in real money before we wise up.

KlangFool

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by smitcat » Fri Oct 20, 2017 4:42 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 3:45 pm
I was 100% until last couple of month. I was 100% during 2008 because I have no time to escape then. This time I am leaving the theater earlier. Don't want to wait for exit.

You were 100% in until a couple of months ago so you have called the market top there.
What is the exact market level when you will be buying back into the market 100%?

WhiteMaxima
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Re: Worry market crush, selling 50%, but increase buying 100%

Post by WhiteMaxima » Fri Oct 20, 2017 4:45 pm

smitcat wrote:
Fri Oct 20, 2017 4:42 pm
WhiteMaxima wrote:
Fri Oct 20, 2017 3:45 pm
I was 100% until last couple of month. I was 100% during 2008 because I have no time to escape then. This time I am leaving the theater earlier. Don't want to wait for exit.

You were 100% in until a couple of months ago so you have called the market top there.
What is the exact market level when you will be buying back into the market 100%?
I didn't call it market top. It might go up but the risk is high. It is supported by low interest and tax cut hope.

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by smitcat » Fri Oct 20, 2017 4:46 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 4:45 pm
smitcat wrote:
Fri Oct 20, 2017 4:42 pm
WhiteMaxima wrote:
Fri Oct 20, 2017 3:45 pm
I was 100% until last couple of month. I was 100% during 2008 because I have no time to escape then. This time I am leaving the theater earlier. Don't want to wait for exit.

You were 100% in until a couple of months ago so you have called the market top there.
What is the exact market level when you will be buying back into the market 100%?
I didn't call it market top. It might go up but the risk is high. It is supported by low interest and tax cut hope.
At what level of the S & P or whatever will you go back in then at 100%?

rkhusky
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Re: Worry market crush, selling 50%, but increase buying 100%

Post by rkhusky » Fri Oct 20, 2017 4:52 pm

It is a good idea to write down your strategy and then stick with it. For example, when will you go back to your preferred AA? When the S&P drops by 20%, 30%, 50%? Will you stay at 50/50 until the drop happens, even if the market continues to go up, for example doubling in the next 2-3 years? It is better to think about one's strategy, and then write it down, rather than just reacting to some news article and deciding to make major changes in your AA based on a feeling.

WhiteMaxima
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Re: Worry market crush, selling 50%, but increase buying 100%

Post by WhiteMaxima » Fri Oct 20, 2017 4:52 pm

I won't go 100% next time. My risk tolerance is lower than 2008. We are pure luck during last 10 years. I would go mostly 80/20 if market correct itself. If black Monday event happened again, I might go 100/0.

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by smitcat » Fri Oct 20, 2017 4:57 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 4:52 pm
I won't go 100% next time. My risk tolerance is lower than 2008. We are pure luck during last 10 years. I would go mostly 80/20 if market correct itself. If black Monday event happened again, I might go 100/0.
At what level will you switch to 80 / 20 then?

I hope you can do this much better than I have in the past - never worked for me anyway.

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by RudyS » Fri Oct 20, 2017 5:01 pm

Ok folks, I have sat through all the changes since I first started investing in 1964 (I'm 80). Never sold at lows. Just kept investing. Still invested at 65/35. Not going to sell now. I'm dealing with the kids' inheritances since we are fortune to be well covered for our own needs. I believe the level of resources and pension/ss income should be a big factor in what's a reasonable AA. As well as how you deal with the emotional issues of big changes.
Last edited by RudyS on Fri Oct 20, 2017 5:02 pm, edited 1 time in total.

WhiteMaxima
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Re: Worry market crush, selling 50%, but increase buying 100%

Post by WhiteMaxima » Fri Oct 20, 2017 5:02 pm

Wait until both interest rate and CAPE ratio back to history norm.

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by Artsdoctor » Fri Oct 20, 2017 6:24 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 5:02 pm
Wait until both interest rate and CAPE ratio back to history norm.
I would love to have interest rates "back to history norm." The problem is, what rate are you talking about and when might that be? Ranges are really all over the place:

http://observationsandnotes.blogspot.co ... story.html

And you could be waiting an awfully long time for "reversion to the mean," whatever that is. Most here would have never thought that rates would have remained this low for this long, but if we would have sat on the sidelines for all these years, there would have been a lot of money left on the table.

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by ThePrince » Fri Oct 20, 2017 11:16 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 2:49 pm
I am staying neutral now: 50/50. I don't call it timing. I see risk ahead.
You are timing the market—end of story.

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by Tyler Aspect » Sat Oct 21, 2017 6:30 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 4:01 pm
My permanent AA will be 80/20. Now 60/40 to be exactly down from 100/0. 40% in FDIC insured CD. Bond is no safe if the interest rate back to norm.
Make sure your CD investment is limited to $250,000 per bank; that is the FDIC limit.

If you do increase your portfolio aggressiveness again I would caution going up to 80% stock / 20% bond, since it was not sustainable for you. Going up to 60% stock / 40% bond would be a modest and gentle increase.
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Re: Worry market crush, selling 50%, but increase buying 100%

Post by TheTimeLord » Sat Oct 21, 2017 7:22 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 1:15 pm
I did some AA this month, move AA to 50/50. However, I did 401k purchase allocation to 100% into equity. US/Intl 50/50. Yes, I am more comfortable. I will capture 50% of market gain but limit 50% loss. In case of crash, I will be all in again. This year is good for me. I am up 18.8%.
Apparently one man's market timing is another man's risk management. Sounds like you are realizing you don't need to be taking the same level of risk you have in the past due to the growth of your portfolio.
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Re: Worry market crush, selling 50%, but increase buying 100%

Post by sambb » Sat Oct 21, 2017 7:40 pm

nothing wrong with taking some money off the table if you are uncomfortable with the risk at your allocation.

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by MrJones » Sat Oct 21, 2017 8:29 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 2:49 pm
I am staying neutral now: 50/50. I don't call it timing. I see risk ahead.
Sounds like you have your own definition of neutral. What is it and why?

Also, do you have a question? Is this thread actionable?

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by aqan » Sat Oct 21, 2017 8:35 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 1:15 pm
I did some AA this month, move AA to 50/50. However, I did 401k purchase allocation to 100% into equity. US/Intl 50/50. Yes, I am more comfortable. I will capture 50% of market gain but limit 50% loss. In case of crash, I will be all in again. This year is good for me. I am up 18.8%.
In my experience you will see many 1-2% a day moves before the market crashes (5% or more). Excluding the extreme events like terror attacks, declaration of war etc. the market could easily keep going up till the end of the year. I’m saving money so that i can buy the dips. Not sure if this will be called market timing.

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by BogleBoogie » Sat Oct 21, 2017 8:37 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 1:15 pm
I did some AA this month, move AA to 50/50. However, I did 401k purchase allocation to 100% into equity. US/Intl 50/50. Yes, I am more comfortable. I will capture 50% of market gain but limit 50% loss. In case of crash, I will be all in again. This year is good for me. I am up 18.8%.
Please keep me posted on when to buy and when to sell. If I can beat the market average I'm up for that!

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by BogleBoogie » Sat Oct 21, 2017 8:38 pm

ThePrince wrote:
Fri Oct 20, 2017 11:16 pm
WhiteMaxima wrote:
Fri Oct 20, 2017 2:49 pm
I am staying neutral now: 50/50. I don't call it timing. I see risk ahead.
You are timing the market—end of story.
"This time it is different" (there is risk ahead)

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by TresBelle65 » Sat Oct 21, 2017 8:40 pm

Apparently one man's market timing is another man's risk management. Sounds like you are realizing you don't need to be taking the same level of risk you have in the past due to the growth of your portfolio.
+1 :) but apparently there'll always be those who call it a timing move, regardless.

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by LadyGeek » Sun Oct 22, 2017 6:32 pm

WhiteMaxima - Did you have a specific question on your asset allocation?
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Re: Worry market crush, selling 50%, but increase buying 100%

Post by WhiteMaxima » Mon Oct 23, 2017 12:07 pm

LadyGeek wrote:
Sun Oct 22, 2017 6:32 pm
WhiteMaxima - Did you have a specific question on your asset allocation?
I am using 2 fund concept 50/50 USA/Intl. Don't like bond, prefer CD. So 50/50 Equity/Cash

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by HomerJ » Mon Oct 23, 2017 12:15 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 1:15 pm
In case of crash, I will be all in again.
Market timing is a bad idea.

If you're getting close to retirement, then switching to a 50/50 portfolio is smart. Need to protect your money and lower risk if you are close to retiring. But you don't switch back to 100% in that scenario

If you're young, then it looks like you are just trying to time the market. You are trying to avoid the crash, and then jump back in. This is a bad idea.

How much crash before you go back to 100% stocks? 10% crash enough? 20% crash? Or are you waiting for a 50% crash?

What happens if the market keeps going up? Doubles again and then crashes 30%? You going to buy back in then? You'll still be buying back in higher than today.

What if the market crashes tomorrow 15%, you decide that's not enough, and then the market grows 40%, then crashes another 15%, you still decide that's not enough, then grows another 40%, and now you're just stuck.

Pick an AA, and stay the course. Change it as you get older, and closer to retirement, but don't change it because you think the market is going to crash.

You know those excellent historical long-term returns from the stock market? Those INCLUDE the crashes. You don't have to jump in and out to make a lot of money in the stock market. But jumping in and out, more often than not, will cost you money. And it's certainly harder and more frustrating.

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Re: Worry market crush, selling 50%, but increae buying 100%

Post by HomerJ » Mon Oct 23, 2017 12:17 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 2:28 pm
I think my permanent AA would be 80/20 Stock/Bond. I don't believe timing the market BTW.
Umm... what? You are absolutely timing the market.. What exactly do you think you are doing?

"In cash of a crash, I will be all in again".

Permanent means not-changing on a whim. If your permanent AA is 80/20 then change to 80/20. It's not "permanent" if you are currently 50/50 because at THIS TIME you see a lot of risk, and at A LATER TIME, you'll switch to 100/0 because you'll see less risk.

It's like you are just making up your own language here. "Market timing" and "Permanent" have actual definitions. They don't just mean whatever you want them to mean.
Last edited by HomerJ on Mon Oct 23, 2017 12:23 pm, edited 3 times in total.

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by ThriftyPhD » Mon Oct 23, 2017 12:17 pm

TheTimeLord wrote:
Sat Oct 21, 2017 7:22 pm
WhiteMaxima wrote:
Fri Oct 20, 2017 1:15 pm
I did some AA this month, move AA to 50/50. However, I did 401k purchase allocation to 100% into equity. US/Intl 50/50. Yes, I am more comfortable. I will capture 50% of market gain but limit 50% loss. In case of crash, I will be all in again. This year is good for me. I am up 18.8%.
Apparently one man's market timing is another man's risk management. Sounds like you are realizing you don't need to be taking the same level of risk you have in the past due to the growth of your portfolio.
He went from a AA of 100/0 to 50/50, but plans on buying only equities going forward until his AA is 80/20, or if there is a crash he will be 'all in' (switch back to 100/0?). This isn't a matter of reaching a number where the need for risk is lower, and therefore a planned adjustment to a less aggressive AA. The OP is changing his AA and making purchase decisions based on assumptions of near-future changes in market prices and short term speculation. Hence, market timing.

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by EnjoyIt » Mon Oct 23, 2017 12:39 pm

WhiteMaxima wrote:
Fri Oct 20, 2017 2:28 pm
. . . I don't believe timing the market BTW.
WhiteMaxima wrote:
Fri Oct 20, 2017 2:49 pm
I am staying neutral now: 50/50. I don't call it timing. I see risk ahead.
WhiteMaxima wrote:
Fri Oct 20, 2017 3:45 pm
. . . This time I am leaving the theater earlier. Don't want to wait for exit.
WhiteMaxima wrote:
Fri Oct 20, 2017 4:01 pm
. . . Bond is no safe if the interest rate back to norm.
WhiteMaxima wrote:
Fri Oct 20, 2017 4:45 pm
. . . It might go up but the risk is high. It is supported by low interest and tax cut hope.
WhiteMaxima wrote:
Fri Oct 20, 2017 4:52 pm
I won't go 100% next time. My risk tolerance is lower than 2008. We are pure luck during last 10 years. I would go mostly 80/20 if market correct itself. If black Monday event happened again, I might go 100/0.
WhiteMaxima wrote:
Fri Oct 20, 2017 5:02 pm
Wait until both interest rate and CAPE ratio back to history norm.
WhiteMaxima,
I pulled a conglomerate of your posts here and they all point to market timing except the one comment that you do not market time. What I see is that you are taking your own previous history mixed with everything you see and read in the media and have decided on some decision process which involves many If/then statements. It is your money and you should do with it whatever you please, but don't delude yourself that this is not an attempt to time the market. My only advise for you is to create an investment policy which will dictate what you do regardless of your emotions and stick with it.

Good luck with whatever you decide to do in the future. I truly hope it works out for the best for you.

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Re: Worry market crush, selling 50%, but increase buying 100%

Post by Hyperborea » Mon Oct 23, 2017 12:50 pm

HomerJ wrote:
Mon Oct 23, 2017 12:15 pm
WhiteMaxima wrote:
Fri Oct 20, 2017 1:15 pm
In case of crash, I will be all in again.
Market timing is a bad idea.

If you're getting close to retirement, then switching to a 50/50 portfolio is smart. Need to protect your money and lower risk if you are close to retiring. But you don't switch back to 100% in that scenario
Actually, people can and do increase the percentage in equities during retirement. This is part of a group of strategies called glide path. One can reduce from a high equity allocation before retiring and then increase again after retiring over a period of years.

Kitces - https://kitces.com/blog/should-equi ... ly-better/
Early Retirement Now - https://earlyretirementnow.com/2017/09/ ... lidepaths/

However, a rising equity glidepath in retirement is for the purpose of reducing sequence of return risks. It lifts the lower end of possible returns but it also reduces the higher possible returns and so reduces the average returns.

WhiteMaxima
Posts: 516
Joined: Thu May 19, 2016 5:04 pm

Re: Worry market crush, selling 50%, but increase buying 100%

Post by WhiteMaxima » Mon Oct 23, 2017 1:11 pm

EnjoyIt wrote:
Mon Oct 23, 2017 12:39 pm
WhiteMaxima wrote:
Fri Oct 20, 2017 2:28 pm
. . . I don't believe timing the market BTW.
WhiteMaxima wrote:
Fri Oct 20, 2017 2:49 pm
I am staying neutral now: 50/50. I don't call it timing. I see risk ahead.
WhiteMaxima wrote:
Fri Oct 20, 2017 3:45 pm
. . . This time I am leaving the theater earlier. Don't want to wait for exit.
WhiteMaxima wrote:
Fri Oct 20, 2017 4:01 pm
. . . Bond is no safe if the interest rate back to norm.
WhiteMaxima wrote:
Fri Oct 20, 2017 4:45 pm
. . . It might go up but the risk is high. It is supported by low interest and tax cut hope.
WhiteMaxima wrote:
Fri Oct 20, 2017 4:52 pm
I won't go 100% next time. My risk tolerance is lower than 2008. We are pure luck during last 10 years. I would go mostly 80/20 if market correct itself. If black Monday event happened again, I might go 100/0.
WhiteMaxima wrote:
Fri Oct 20, 2017 5:02 pm
Wait until both interest rate and CAPE ratio back to history norm.
WhiteMaxima,
I pulled a conglomerate of your posts here and they all point to market timing except the one comment that you do not market time. What I see is that you are taking your own previous history mixed with everything you see and read in the media and have decided on some decision process which involves many If/then statements. It is your money and you should do with it whatever you please, but don't delude yourself that this is not an attempt to time the market. My only advise for you is to create an investment policy which will dictate what you do regardless of your emotions and stick with it.

Good luck with whatever you decide to do in the future. I truly hope it works out for the best for you.
Thanks for your comments. I learned my lesson twice. 1st is Y2K dot.com bust, 2nd is 08 housing bust. I didn't suffer too much because in Y2K I bought my 1st new house, all the money went to downpay, not much to bust by dot.com. in 2000, anything IPOed with .com will become instant millionare. in 2008, I have some money in stock market when the market crushed. I have no time to escape. So I just do nothing. The Fed come to rescure and through these 10 years I accumulate my hard earned money for my retirement. It's just insane lucky and artifical because of QE and low interest. US real economy is still growing slowly without major tech break through. We are late economy cycle. interest is creeping up, balance book is going to shrink, CAPE is high, aging population (people will buy less when they getting older), also babyboomer is going to take the profit to finance retirement. All these factor tells that for equity market to move ahead, it has to be priced at more reasonable level. So take 50/50 at currently situation is the choice I would feel comforable. I still enjoy 50% market gain but avoid a lot down risk. I will only go shopping when there is value.

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Pajamas
Posts: 2780
Joined: Sun Jun 03, 2012 6:32 pm

Re: Worry market crush, selling 50%, but increase buying 100%

Post by Pajamas » Mon Oct 23, 2017 1:13 pm

WhiteMaxima wrote:
Mon Oct 23, 2017 1:11 pm

I will only go shopping when there is value.
Would you please PM me at that time? Thanks in advance! :moneybag :moneybag :moneybag

WhiteMaxima
Posts: 516
Joined: Thu May 19, 2016 5:04 pm

Re: Worry market crush, selling 50%, but increase buying 100%

Post by WhiteMaxima » Mon Oct 23, 2017 1:20 pm

Pajamas wrote:
Mon Oct 23, 2017 1:13 pm
WhiteMaxima wrote:
Mon Oct 23, 2017 1:11 pm

I will only go shopping when there is value.
Would you please PM me at that time? Thanks in advance! :moneybag :moneybag :moneybag
I tell you now: when everyone is bearish, people are losing jobs and money is tight and the whole investment community is depressive. W Buffet is good shopper. Now it's the time to preserve your asset.

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HomerJ
Posts: 10386
Joined: Fri Jun 06, 2008 12:50 pm

Re: Worry market crush, selling 50%, but increase buying 100%

Post by HomerJ » Mon Oct 23, 2017 1:21 pm

Hyperborea wrote:
Mon Oct 23, 2017 12:50 pm
HomerJ wrote:
Mon Oct 23, 2017 12:15 pm
WhiteMaxima wrote:
Fri Oct 20, 2017 1:15 pm
In case of crash, I will be all in again.
Market timing is a bad idea.

If you're getting close to retirement, then switching to a 50/50 portfolio is smart. Need to protect your money and lower risk if you are close to retiring. But you don't switch back to 100% in that scenario
Actually, people can and do increase the percentage in equities during retirement. This is part of a group of strategies called glide path. One can reduce from a high equity allocation before retiring and then increase again after retiring over a period of years.

Kitces - https://kitces.com/blog/should-equi ... ly-better/
Early Retirement Now - https://earlyretirementnow.com/2017/09/ ... lidepaths/

However, a rising equity glidepath in retirement is for the purpose of reducing sequence of return risks. It lifts the lower end of possible returns but it also reduces the higher possible returns and so reduces the average returns.
Yes, during retirement, one can slowly increase equities, as you get past those first early dangerous years. I have read those articles, and they are interesting. But I was talking about before retirement and approaching retirement.

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