NSNP: Market "crash"
- Thread starter BamaNation
- Start date
Cutting interest rates right now was a mistake. This will not move any money because supply chains are still disrupted and people are still not traveling. No one is borrowing money right now.
All this cut did was panic people.
Fed caved to Trump
Dow drops nearly 800 points after the Fed's surprising news about the economy | CNN Business
Stocks went on a wild ride Tuesday after the Federal Reserve slashed interest rates by a half-point to help insulate the US economy from the global coronavirus outbreak.www.cnn.com
An unscheduled rate cut.
Anyone feeling better or are you getting fitted for a neck brace due to whiplash effects? 
Well, at least gas should be cheaper for a while 
'
Again with some perspective: The market is about where it was after Christmas 2018.
There will be volatility like this until and unless there is evidence of coronavirus being stopped or slowed. Supply chains are crimped now and entire regions of countries grinding to a halt. Worse before better.
My thoughts: Could be a while of experiencing days like this, but IF you're not retiring in next 3-5 years, keep DCA'ing into your 401k / IRA at your asset allocation and risk tolerance level and reap the "cheap" prices. Don't look at the market or statements except for verification purposes. Definitely don't sell a bunch of stuff just because market is tanking unless you absolutely need it or have clearly decided you need to reassess risk profile, lower your risk (your sleep number) and rebalance. If you do rebalance you'll most likely be buying bonds at all time highs. But that may be preferable to not sleeping.
Remember, if you do decide to reassess and rebalance, there's no penalty for rebalancing inside 401ks / tax deferred accounts. If you sell and withdraw, you will pay a 10% penalty if you're not at the 401k/457/403 age for no penalty (generally 59.5 with a few caveats for early withdrawal).
Could also be a good time to tax loss harvest (TLH) in taxable (brokerage) accounts! But you need to put that money immediately back to work ... and it will be at a lower cost basis.
Good luck everyone.
'Again with some perspective: The market is about where it was after Christmas 2018.
There will be volatility like this until and unless there is evidence of coronavirus being stopped or slowed. Supply chains are crimped now and entire regions of countries grinding to a halt. Worse before better.
My thoughts: Could be a while of experiencing days like this, but IF you're not retiring in next 3-5 years, keep DCA'ing into your 401k / IRA at your asset allocation and risk tolerance level and reap the "cheap" prices. Don't look at the market or statements except for verification purposes. Definitely don't sell a bunch of stuff just because market is tanking unless you absolutely need it or have clearly decided you need to reassess risk profile, lower your risk (your sleep number) and rebalance. If you do rebalance you'll most likely be buying bonds at all time highs. But that may be preferable to not sleeping.
Remember, if you do decide to reassess and rebalance, there's no penalty for rebalancing inside 401ks / tax deferred accounts. If you sell and withdraw, you will pay a 10% penalty if you're not at the 401k/457/403 age for no penalty (generally 59.5 with a few caveats for early withdrawal).
Could also be a good time to tax loss harvest (TLH) in taxable (brokerage) accounts! But you need to put that money immediately back to work ... and it will be at a lower cost basis.
Good luck everyone.
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I got out last Tuesday. Moved everything to a money market fund within my 401k. I have 30 days to see how everything shakes out. I am still buying every pay check in my standard target date fund. When I make an in-401k trade, they require a 30 day wait before another exchange so I have at a minimum until then to figure out what to do. With all the uncertainty surrounding the election and coronavirus, coupled with the knowledge that DJT is going to do everything he can to artificially prop up the market going into the election, its unclear whether I want to try and take advantage of him throwing free money at the market, or be more risk averse until I know what is going on after the election.
I am down 12k from 3 weeks ago. I feel sick. I hope this doesn't start hitting banks hard. That will eventually effect my job. Basically if banks stop giving loans, people stop building.
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The difference, so far, between now and 2008 is that markets of all types appear to be functioning. Could change rapidly if fed spends all its ammo too soon or incorrectly. So long as rates can stay low AND there’s no illiquidity crunch, we might get out of this thing ok. The risk is if companies lay-off or reduce headcount for long periods.
what’s interesting to me are all the people who were complaining about the S&P being too expensive a month ago are the same ones who are begging for intervening action now. This is how you know who not to listen to.
Find an allocation you can live with high or low. If you are 100% equities then you are -16% from peak . BND (bond index etf) is up +4% over same period. So, 80/20 puts you at -12%. 70/30 at -10% and so forth. (Obviously if you kept investing during the down period you might even be up on those buys.)
Consider this: you are only down permanently if you sell now. Everything else is noise. If you’re continuing to put money in 401k at least up to your company match, that’s a 100% (or whatever match is) gain!
may want to add to your emergency funds which should be in stable, liquid assets like savings/CDs. Get it up to 6+ months if possible.
what’s interesting to me are all the people who were complaining about the S&P being too expensive a month ago are the same ones who are begging for intervening action now. This is how you know who not to listen to.
Find an allocation you can live with high or low. If you are 100% equities then you are -16% from peak . BND (bond index etf) is up +4% over same period. So, 80/20 puts you at -12%. 70/30 at -10% and so forth. (Obviously if you kept investing during the down period you might even be up on those buys.)
Consider this: you are only down permanently if you sell now. Everything else is noise. If you’re continuing to put money in 401k at least up to your company match, that’s a 100% (or whatever match is) gain!
may want to add to your emergency funds which should be in stable, liquid assets like savings/CDs. Get it up to 6+ months if possible.
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just another reminder about the resources I’ve put together. These are as much a reminder for me as everybody else. The 3 Boglehead’s books, and books by Jack Bogle, Rick Ferri, William Bernstein, Burton Malkiel, and Larry Swedroe are particularly readable, insightful and actionable.
news.tidefans.com
news.tidefans.com
one of the biggest benefits of finding an appropriate asset allocation is to counter individual behavioral mistakes (selling low / buying high, FOMO, daytrading, etc.). MOST of us are terrible “traders†and “market timers.†Find an allocation you can live with, set it, and forget it except to rebalance according to a pre-stated plan.
One thing this tanking has confirmed for me is I’m comfortable with our allocation as articulated in our ISP (75% equity index/25% bond index with 70% domestic/30% international. Everything in passive total market index funds for that asset class. ( we do have a small tilt in small cap value index because we believe Fama & French’s factor research points to this as having outsized returns relative to risk over the long term (20+ years) but this may change as Mrs Bamanation’s ESPP is an SCV firm ). My overall expenses are < 0.10% of assets. I sleep well knowing I don’t need to fidget with my accounts or worry about individual stock or industry performance.
Investing Resources
I am in no way a financial adviser (see caveat emptor here). However, I have assembled many resources below based on the Bogleheads.org website and books (see below). FIRST, go here to see my Re…
news.tidefans.com
Invest for Retirement
Caveat Emptor! I am in no way a financial adviser. However, I have assembled many resources based on items mentioned in the Boglehead’s Guide to Investing (2e) book. I recomm…
news.tidefans.com
one of the biggest benefits of finding an appropriate asset allocation is to counter individual behavioral mistakes (selling low / buying high, FOMO, daytrading, etc.). MOST of us are terrible “traders†and “market timers.†Find an allocation you can live with, set it, and forget it except to rebalance according to a pre-stated plan.
One thing this tanking has confirmed for me is I’m comfortable with our allocation as articulated in our ISP (75% equity index/25% bond index with 70% domestic/30% international. Everything in passive total market index funds for that asset class. ( we do have a small tilt in small cap value index because we believe Fama & French’s factor research points to this as having outsized returns relative to risk over the long term (20+ years) but this may change as Mrs Bamanation’s ESPP is an SCV firm ). My overall expenses are < 0.10% of assets. I sleep well knowing I don’t need to fidget with my accounts or worry about individual stock or industry performance.
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They can only bounce so many times before they are just mush. Looking pretty mushy right now.
So, the DOW is now down 6000 points in the last month - more than 20%. We are officially in a bear market.
Perspective: From day I graduated at 'Bama until now
Dow has given back almost all gains since Christmas 2018.
Dow has given back almost all gains since Christmas 2018.
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I am still far enough away from retirement not to be worried about this, but folks who are close to retirement are now going to have to work a little longer. That has broader economic impacts as it has a top down impact on the entire job market.
I'm almost out of the equity market and have been for some time, given my age. However, I'm trustee over accounts for my grandchildren, heavy in equities. OTOH, at their ages, there's time to recover...
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