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re: Anyone else currently sitting on the sideline in the stock market?
Posted on 9/1/16 at 8:51 am to Northwestern tiger
Posted on 9/1/16 at 8:51 am to Northwestern tiger
I recently retired and moved from 401K to IRA. I am presently near 90% cash because I am looking for a correction. I will continue to dollar cost average back into the market with my goal being 60% stocks, 30% bonds and 10% cash over the next 12 months. I will buy more on weakness and less on strength monthly for the next 12-24 months.
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Posted on 9/1/16 at 9:01 am to Omada
quote:
They make me think that this market has more downside risk than upside potential. So I'm out, just watching and waiting for a favorable opportunity instead of trying to force something.
There's literally been reasons to say this every single day. I don't understand guys like you at all, one bit. Even in the best bull markets there's someone calling for a bubble, which is usually true.
The fact is, people are working for all these companies every day to make a living. Life will move forward. We'll take our lumps occasionally and move on. I can understand moving 10-20% in and out, but any more than that is just crazy.
The market has never not rebounded in 3 years. Keep out 2-3 years worth of living expenses in cash if necessary, and have the rest invested always. Beyond that, you just are looking to live a miserable life instead of trying to enjoy it.
Posted on 9/1/16 at 9:47 am to baldona
quote:
baldona
I'm not a pessimist or perma bear like you may think. I'm a realist, but even that is considered offensive at times to the perma bulls who can't understand why someone would want to sit out for a bit.
If I'm playing poker, I won't play a hand if I don't like what I see. Of course, economies and markets grow over the long run while the poker pot doesn't, and I fully acknowledge that. But right now I see mixed signals, so I don't know which way to go. So I'm sitting on cash. I lean a bit bearish right now, but not enough to take up any short positions.
Besides, I'm young, so sitting 100% in cash for me means sitting on some amount that is less than $50k in my trading account. My 401k is fully invested, and I don't touch that.
As is, I'm in an excellent position to take advantage of any opportunity I see. New bull run? I can make money. Bears win for a bit? I can profit from that, too. I'm not concerned about missing out. I'm concerned about playing one way or the other and losing money. Listen to any great trader or investor, and they'll say that the most important rule is to preserve your capital. After that, it's about taking the really great opportunities when they appear. Right now, I follow Rule 1 so I can then follow Rule 2.
Posted on 9/1/16 at 9:55 am to Omada
I have zero market investments and am all cash. Just hoping interest rates can pick up after the election. I don't have much stomach for risk when it comes to my money. I would hate to be the one to waste an inheritance on a gamble.
Posted on 9/1/16 at 9:58 am to geauxnc0308
quote:
Care to share the ones you like?
I don't have any particular 2x ETF/N's I really like. I would go with one for the S&P 500 and then one or more of the Russell indexes, if I can find such a fund. Other than that, I tend to avoid Direxion's leveraged offerings because they don't always seems to follow the underlying as well as, say, Credit Suisse.
Whenever there's a dip in the market, I'll try to post a thread of the research that 2x leverage outperforms and what ETF/N's I'm looking at. By the way, I believe the research showed that 2x leverage outperformed the underlying index by a net 1.5x or so. Maybe a bit less.
Posted on 9/1/16 at 10:00 am to bayoudude
This guy's been waiting 
Posted on 9/1/16 at 10:06 am to bayoudude
quote:
I have zero market investments
so:
no mutual funds?
no ETF?/ETN?
no individual stocks in a brokerage account?
So nothing stock market related?
WTf do you do? DO you:
trade commodities? (this is good if you do it)
invest in real estate? (this is good if you do it)
secured or unsecured private lending? (this can be good)
buy CD's? (not a fan)
if you have no chest for calculated risk you do realize you will have no gains right?
Posted on 9/1/16 at 10:09 am to Fat Bastard
I was doing CD's till they basically went to zero. Never worked for a company that offered a 401k or retirement related anything. Sitting on a substantial pile of cash but things or so bad in my industry (marine construction) i hate to spend any of it since the paycheck right now won't allow for replacement.
ETA: I also know several people that haven't been able to retire due to stock market crashes.
ETA: I also know several people that haven't been able to retire due to stock market crashes.
This post was edited on 9/1/16 at 10:11 am
Posted on 9/1/16 at 10:14 am to bayoudude
All those waiting on a correction had 2 shots at it this year, and likely missed both. Market timing doesn't work consistently, and most people do the exact opposite of what they should
Posted on 9/1/16 at 10:17 am to bayoudude
You could buy some quality municipal or corporate bonds with shorter maturities in case of interest rate increases. So long as you bought something with a positive yield and you hold to maturity, your risk of real loss is low. Just don't buy Puerto Rico or Detroit debt.
Posted on 9/1/16 at 10:19 am to Thib-a-doe Tiger
I have friends that does similar things as OP.
They take out all their investments and wait for a correction.
I personally think it's the wrong approach.
They take out all their investments and wait for a correction.
I personally think it's the wrong approach.
Posted on 9/1/16 at 10:59 am to Omada
omada we were having a discussion on the tech board the other day, I know you always analyze stocks. Have you ever analyzed tesla? It got destroyed this week down from $228 to $202 in a short time frame of a few days and was curious what your take on it was if you'd ever looked at it.
Posted on 9/1/16 at 11:10 am to bayoudude
quote:
ETA: I also know several people that haven't been able to retire due to stock market crashes
The only people that lost in the market during the recent crash were those that sold everything went it crashed. If you disappeared for 5 years before it happened and came back 2 years after it happened and didn't touch your money you'd be better off then when you left. That's a fact.
The market will always go up. Always. It just takes dips occasionally. The S&P market year to date has returned over 5%. So by not being in it this year you've lost 5%.
I'm not bullish short term at all, I just don't pull out just because I see a slight correction or modest gains in the future.
Posted on 9/1/16 at 11:22 am to baldona
quote:
So by not being in it this year you've lost 5%.
a couple stocks i bought the other day have nice capital gains already and i only bought them for the dividends.
Posted on 9/1/16 at 11:26 am to dabigfella
I've taken quick glances, but never anything in-depth on Tesla. It's talked about for its growth potential, but at the same time, the existing automakers aren't just going to roll over and die. They're working, researching, and developing what Tesla is. They may or may not be behind Tesla in research and brains, but their developments aren't being constantly announced like Tesla, so they may take the market and Tesla investors by surprise one day.
Now, paying a bit of premium for growth in a company is normal. But Tesla is currently losing like $8.50 a share. If TSLA had a 25x P/E, it would have an EPS of +$8 a share. At 30x, they would need EPS of $6.70+. I'm not sure paying that much for growth is worth it, especially since TSLA is priced at 60% of the market cap of Ford and GM each.
It's possible to make money on TSLA, but I'm not confident enough to invest. I'd rather take F or GM with nearly 5% dividend yields.
Now, paying a bit of premium for growth in a company is normal. But Tesla is currently losing like $8.50 a share. If TSLA had a 25x P/E, it would have an EPS of +$8 a share. At 30x, they would need EPS of $6.70+. I'm not sure paying that much for growth is worth it, especially since TSLA is priced at 60% of the market cap of Ford and GM each.
It's possible to make money on TSLA, but I'm not confident enough to invest. I'd rather take F or GM with nearly 5% dividend yields.
Posted on 9/1/16 at 11:55 am to Omada
Omada Im not really a believer in that bc these "green" people they're never going to support these big auto oil based companies like ford,gm etc. Anyways read this its very long and let me know what you think if you've got time. Its a very detailed analysis, actually the best Ive read on why tesla is so incredibly disruptive and poised for a huge future
LINK
LINK
Posted on 9/1/16 at 12:24 pm to baldona
quote:
The only people that lost in the market during the recent crash were those that sold everything went it crashed. If you disappeared for 5 years before it happened and came back 2 years after it happened and didn't touch your money you'd be better off then when you left. That's a fact.
I have been in the market since 1980, other than a few stocks I bought in the early years have only mutual funds. I never time the market, do very little research, and try to remember to rebalance things every 6 months. I rode out all the crashes from 1987 through the present, and it has still provided a great return on the investments.
Posted on 9/1/16 at 12:35 pm to dabigfella
quote:
these "green" people they're never going to support these big auto oil based companies like ford,gm etc.
These companies have been constantly improving mpg for oil based vehicles and have released some hybrid and electric cars. Those are things green people are interested in during a time when electric vehicles' capabilities are still pretty limiting. Currently electric vehicles aren't something most Americans can drive a round trip in and out of their state on one charge.
I'll try to read the article, but I may not have time until the weekend. But at first glance, it seems to be an academic (computer?) physicist trying to argue the economic and business capabilities of Tesla. Kinda seems like a biased person is talking outside their area of expertise, though I have no doubt the writer is quite intelligent. I'm bookmarking it.
Posted on 10/24/16 at 3:00 pm to Northwestern tiger
Neither here nor there, but this morning I moved 50% of my gains in my retirement investments to cash. I also bull spread a $20 / $30 VIX and am looking at other lower cost methods to buy volatility as far out as I can reasonably get. At a minimum I want to go out to at least January 2018, one year after the new POTUS, and preferably 18 mos. into the new administration.
I'm at a loss how to buy VIX this far out. I don't really think I can, and I'm not a fan of VXX and all the other levered notes and exchange traded derivations.
I'm at a loss how to buy VIX this far out. I don't really think I can, and I'm not a fan of VXX and all the other levered notes and exchange traded derivations.
Posted on 10/24/16 at 5:36 pm to Omada
Nothing crazy.
We are putting 13 percent into cash for the time being in all our retirement accounts. But if things don't go haywire by March, I'll start DCA that money back in while still having around 7 percent of our money go into cash.
We are putting 13 percent into cash for the time being in all our retirement accounts. But if things don't go haywire by March, I'll start DCA that money back in while still having around 7 percent of our money go into cash.
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