Funds seem to be the general consensus. That, and staying away from commodities for the time being. Also, the bottom seems to be close (if not already here if the S&P futures +3.2% is any indication), so I'll be acting quickly while things still bounce around a bit. Thanks for the replies.
Don't let the fake bounce today fool you into thinking the bottom hit yesterday. I'm expecting a lot of short covering today and then the market to burn off another 200+ points by the end of the day. When money pools into one section of the market too quickly, like yesterday when bonds went through the roof in volume, there is a general liquidity problem in the overall market. This means HFT algorithms completely take over and you are going to get these false bounces when people try to manipulate the futures markets to cover their shorts and try to get them out of their long plays with a profit. It doesn't take much to drive huge swings in the futures market to set this up. If you want to know how big funds and big traders make their money, the past few days are prime examples of it. See that there are some big issues in the overall market, slowly bleed out a week or two worth of down days to sell some long profits and set up shorts. Let the market actually run without big funds holding it up, which is when you see the HFT algorithms burn down 1000pts in about 6 minutes of a day. Short cover to make a profit and have a "recovery", and then re-short all your positions again because you know the actual market is not in good shape and if left to run on it's own is going to drop 10-15% in a very short period of time.
PC, what would you suggest for investing at this time then? I have some extra funds sitting in a holding account and want to buy some more stock in Tesla (currently own 12 shares). Do I put it in when the market is expecting to continue the decline, where we're not sure of the bottom, or wait until it shows signs of recovery? Goal is a slow return on the stocks as I own some of Boeing, First Solar, GoPro, etc, what I deem to be long term companies. This extra money is collecting dust in the holding account, so it's not losing or making me anything. Also, I've always been a consistent investor in my retirement, put in a set amount every paycheck no matter what.
Honestly, there isn't a bottom just yet and with a possible rate cut decision sometime in September from the Fed, it's anyone's guess as to where that bottom may find itself. If you are looking for long term investments as opposed to just day trading, I'd closely watch the $SPY and use that money you have saved up when it gets somewhere close to the $165-172 range. There have been numerous resistance points in that particular ETF that have been taken out the past few days. $160 is basically the next major resistance point and I don't think the market is going to crash and burn, even though things don't look overly rosy right at this moment. Reinvesting when that fund gets somewhere in that range is where you should be buying if you want to get close to the expected bottom. It obviously goes without saying that depending on the Fed announcement about interest rates and whether or not there is a big liquidity problem in the market like there was before the 2008 crash, that $160 resistance point might get blown through and we will see some huge fireworks. That's very unlikely, but still a possibility.
Why do you think that SPY is one of the key indicators? Assuming that it roughly mirrors S&P 500 performance, are you insinuating that we should expect to see another 10-15% drop before we hit bottom (assuming that whatever announcements the Fed makes don't have further impact)? Also, what, if anything, sets SPY apart from SWPPX, an index fund?
I like tracking the $SPY price movements because it's more interconnected to the bond market and I think it tracks the actual health of the overall market much better. I also track the $IWM and the $IBB for their respective sectors. Yeah I think the S&P drops another 10%-15% at least before we start to make a huge move back to the positive. I think the next month or so is going to be just up and down churning without much overall movement in either direction, followed by a huge drop, and then a rocket ship to new highs. I'm looking to get back in heavily once I see the bottom start to form on the downswing. I think late September early October there is going to be the final shakeout of this correction. This is very dependent on the Fed not throwing a wrench in everything, but I think they play it pretty standard.
Granted, I don't know your age, family, and job situations, but I feel like most people on this board fall into a general demo where that would be a surprisingly conservative portfolio (at least in terms of equity/bond percentages). Any particular reason for that?
It's safe. Safe is good. Some people can't afford a 10%-20% loss in a year, or, understandably, get freaked out and sell everything. However, if anyone has money put in anything, they should be doing their research. Doesn't take long to read a handful of things every week. People should be good picking something with a nice balance sheet and room to grow in a "safe" industry, keeping an eye on it, but holding long term and just leaving it the F alone. Even something like Walmart though is going to have its problems; so it has to be a company that has the ability to innovate. Bonds are comparatively safe, even accruing growth, and pay 3-4%. No bank account has done that since 1990. Straight index also looked real good the past 7 years. Past 5 years saw the S&P put on 86%, the Dow 64%. Hell, you probably will weasel 5% by this year's end. The Asian markets are (probably) going to rebound in the next couple years; the Nikkei was up 15% already before the Chinese debacle. If anyone noticed, U.S. revised it's GDP outlook for the year. Conveniently for the better. Hmmm indeed.
I readjust the percentages quarterly, this is just what it is currently. Usually its much more aggressive/higher risk. But for someone that doesnt know much about investing, conservative strategies are the way to go.
Gotcha. Not sure I always agree but that's definitely a valid way to go. Anyway, I have to spend the next few days calling clients and telling them not to panic. Woo.
I actually know someone who recently won a lottery. Forget the exact amount, but with a cash payout and after takes the take away was between $10-20m. They're retired and old, so they got an RV and went cruising around the country. Their two kids didn't see a cent of it nor did they ask for it. Best case scenario. I imagine the grandkids and great grandkids have a good future though. At any rate, the husband who won just got diagnosed with a form of terminal cancer and now has to stay close to his doctors. The win couldn't have come to a more deserving family; the cancer is just absolutely shit luck for anyone, though he did make jokes after his diagnosis about using up all his luck on that ticket.
This thread has been fallow for a solid six months, I thought a bump and some conversation might be just the thing. Is anyone doing well in the market? Where are you guys seeing growth or gains? What is everyone experiencing? Personally, my little brokerage account isn't seeing much change right now. I have been doing local real estate transactions lately instead, but still hold some good long term growth stocks. At some point, though, I think that I would be foolish to not move some of the gains from my day to day stuff into the market. Diversification, all that.
You guys REALLY have nothing to say. However, I think that your lack of enthusiasm is well considered, the market is at a record high. The smart play for a cash heavy, hands off investor might just be to wait for the next real correction, and treat it as a buying opportunity for blue chips. Sure, you could elect to short some things, but that means trying to time the correction. Easier to take advantage of low prices after it occurs.
Ultimately, market timing is a full time job that most people are bad at. I tend to keep things in long term mutual funds, though I'll use automatic quarterly rebalancing inside certain kinds of products to take the emotion out of buying into funds when they're low. Though I definitely plan to build up a cash reserve to use to buy in the next time we have a really big drop, though a new baby makes that a little tough. I do tend to have it a little easier in that my main investment goals are for retirement so I have a very long time horizon in the first place and can afford to not monkey around with things constantly. I think more about the type of vehicle (Roth, VUL, VA, IRA, 401k, etc etc) than I do about the specific funds at play. The tax issues are a bigger deal than performance at any given moment.
This is really the only way most people can money in the market. Very people have the knowledge (or luck) to be a trader. Same here. I rebalance my Roth and 401ks quite often, its really just a matter of "Do I want to pay taxes now or in 30 years?"
Yeah. And for most people, paying them now is generally best. Though some edge cases do exist. Personally, I find that even if I were in that edge case, I'd probably still want to pay them now because as I get older the hidden cost of hassle goes up and not dealing with the hassle of taxes is worth a lot to me. 'course I'm also lucky in that I have a Roth 401k and work in the industry to boot. Btw, may be of interest to you, I've seen at least a few articles describing the results of rebalancing frequency that say quarterly is optimal. Though pretty much any frequency is better than not doing it at all.
Hey, smart people, I've got a money question: Let's say (hypothetically speaking, of course) that I was going to come into some money soon, like $100,000 or so. How do I keep the government from getting their hands on it (or at least severely limiting how much they take)?
Spend it on hookers and blow before they know about it, so there's nothing left for them to take. You're welcome.