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Stock Market

3

37chief

Well-known Member
Location
California
Anyone else watching the stock market? One of the smart things I did when I worked in my factory job was putting a little money away ever week. After a while I had a fair amount in a 401K. Every thing I gained last year is gone. This happened a few months back, and I took my money out of the market (mistake) then in a few days it turned around I got back in. Now it's down again. I guess I will just ride it out this time. Some of you probably feel the same way. Not ready to jump off my barn roof yet. Stan
 
Hang in there and ride it out. The market can be volatile but 9ver time it has an upward trend. Dont expect a 10 or 20 % return over time. Most advisors seem to use around 6 to 8 % for projections.
 
Well I'm on the other side of things. Put money in an IRA account the last few years at the advice of my accountant. I never bought anything with it though because I kept telling myself " Stocks are hitting record highs every day, you dont buy at the highs". So it's just sitting in an account. But the dang market kept going and going! Made it really hard not to jump in. Im going to wait a bit yet and then pull the trigger.

I figure you'll never pick the exact bottom, or peak. Stay in long term and it should even out. So they say.

Meanwhile, I've found tractor weights seem to hold their value well. So I have that. Ha!
 
Historically, the best time to own stocks is the winter after mid-term elections. Of course that's no guarantee, but odds are the next few months should be good.
 
in a 401 k you have not lost what you have not pulled out, stocks go up and down,market has gone up 8000 points in 2 years ride the trend , just my 2 cents
 
Stan,
If you leave your money in an FDIC insured bank and make .25% interest in a passbook savings, you are loosing money because of inflation.

If you pull 'Qualifying Investment'(401k) out of the market you will have a tax obligation. You can roll it over into another 'Qualifying Investment'. You can't touch the money.

About 1/3 of my market investment is 'Qualified money.
2/3 of my investment is unqualified money. Warren Buffet takes advantage of downturns. Sell your loss and take a capital lose. Reinvestment in a different stock.

In 2008 I lost 50% on unqualified stock. I sold my stock and took a capital lose. For the next 15 years I don't pay income tax on $3K of my income, about a $1k savings for me each year.

If sell off my real-estate investments, I'll put it in the market and DO NOTHING.

When the market goes south, it's time to jump in.

People who are jumpy about a little hiccup in the market may want to put his money under the mattress or bury it in the backyard.
 
Buy low, sell high. It's easy to say, harder to do.

The reason you did well with your 401k is you were cost-averaging. If you put in a fixed amount each payday, your cost is cheaper than if you bought all your shares at the average price per share. That's because you bought fewer shares when prices were up and more shares when prices were down.

The other way to beat price swings is balancing: Decide how much risk you can accept and maintain a ratio of stocks to bonds based on that risk. If you're young and can take a lot of risk, the ratio should be around 75/25 stocks to bonds. For older investors, it should be closer to 50/50. As stocks go up and down, move money between stocks and bonds to maintain the balance at the ratio you picked. This will force you to sell stocks when prices go up, and buy them when prices go down.
 
> I never bought anything with it though because I kept telling myself " Stocks are hitting record highs every day, you dont buy at the highs". So it's just sitting in an account. But the dang market kept going and going! Made it really hard not to jump in. Im going to wait a bit yet and then pull the trigger.

Ya gotta be in the market. The stock market moves in leaps in bounds; if you're not in the market when it jumps, you lose.
Cost of missing the ten best days
 
I also am entertained by the downturn. Talk about it again in another 2 months. I should be more worried about it that I am. I retired this year and the last check is running out. Oh well. I'll stay home more if the accounts go to zero.
 
Best thing to do is ride it out. It'll come back.

I'll admit, I haven't looked at my mutual funds for a month.
 
I watch the market but do not attempt to time it.

No one knows what the market will do.

Dean
 
When the stock market goes down I think of it as my 401k withholdings going towards buying stock that is on sale. Since I'm 20+ years from retirement I don't worry at all about the downturns. It is the total number of shares purchased that is important to me at this point and when the market is down each dollar I put in buys more shares. Nothing with the stock market is a sure bet (no type of investment is) but history shows that if you're in it for the long haul it is does well. I've been contributing towards 401k high growth potential funds consistently for over 20 years and definitely have no regrets. As I get closer to retirement this will gradually get shifted into less volatile types of investments but for right now I see no reason not to be in the game.
 
Everyone should have a ROTH IRA or ROTH 401K if their employer offers it or they can set up their own if self employed, that tax free money can't be beat. With a ROTH, if a person does not trust the stock market thay can buy rent houses and collect the monthly rents tax free for the rest of their lives or buy cows and sell the calves tax free or any number of other investments which generate regular income.
 
LAA,
I thought I would take advantage of tax sheltered IRA's, qualified money. At the time it sounded good. Now I wish I would have had a ROTH. My SS pushed my top income into the 25%, a few points lower this year.

My advice is to check into Annuities. They offer a fixed income regardless what the market does. I have 3 different annuities in the market. I like them better than picking a stock and taking a chance on your hunch of making money. You can have both qualified and unqualified money on annuities.

Dollar for dollar, my annuities have out performed my real estate investments. Property taxes, insurance and maintained costs keep going up taking a bite out of the bottom line.

I've been retired for 15 years, so no ROTH in my future. Hind site is always 20-20.
 
To be a trader in the stock market you have to watch on monitors (all stocks ) every day all day long without long lunches. Giving all your attention to the monitors will still not keep you from losing from time to time. When the stock market goes down it is buying time not selling time. The stock market goes down but always goes up even farther.
 
Jack Bogle who founded the Vanguard Group advice is "stay the course".
I must be the only Boglehead on this forum.
Jim B
 
(quoted from post at 04:29:44 10/27/18) Everyone should have a ROTH IRA or ROTH 401K if their employer offers it or they can set up their own if self employed, that tax free money can't be beat. With a ROTH, if a person does not trust the stock market thay can buy rent houses and collect the monthly rents tax free for the rest of their lives or buy cows and sell the calves tax free or any number of other investments which generate regular income.
Click to expand...

There is no such thing as a "one size fits all" investment strategy. To say that everyone should go Roth ignores that fundamental principle. Everyone should consult an investment professional to tailor a plan specific to their needs.
 
I also have 3 annuities, the main one being my company pension plus two others which will be totally paid out in February of 2019, on my 65th birthday, I will draw my pension but I mostly consider it as management free security for my Wife when I croak. I started and funded ROTHS for both myself and my Wife several years ago, my ROTH owns Mama cows and a couple of pieces of rental equipment, a mini excavator and a rough terrain man lift, all proceeds from calf sales and cull cows are tax free, all rental income is tax free, don't even have to report it. My Wifes ROTH is in cash and I trade mostly natural gas etf's with it a few times a week. With the new tax laws people need to take a hard look at how much current tax their conventional IRA or 401K is saving them, in many cases its probably going to be little or none and consider converting to ROTH products and have a totally tax free retirement.
 
You might have read <a href="https://www.businessinsider.com/warren-buffett-berkshire-hathaway-cash-balance-should-worry-investors-2018-8">this article</a>

So Berkshire-Hathaway currently holds over $100 billion in cash. That seems like a lot, unless you consider the company's total worth is over 700 billion. So that works out to around 85/15 percent stock-to-bonds ratio. Investment advisors would consider that to be an EXTREMELY AGGRESSIVE mix for most investors. Of course Warren B. is not "most investors". But the same principles apply: He's taken advantage of historically high market valuation to lock in some gains by selling over-priced assets. And when the market falls, he'll swoop in and pick up some bargains.
 
Everyone should do as they see fit and best, a ROTH is only one facet of my retirement, as it would be for most people who actually make a retirement plan. The point I was making is that the majority of working
people fall within the income limits of a ROTH and could probably afford to fund one addition to a
401K. Tax free income is about as good as it gets, not to mention the overwhelming advantage of tax
free compounding of interest and the wide range of non conventional investment options.
Conventional means you eventually pay tax on the original contributions, plus the gains, a person
who retires in the 25% tax brackett will lose over 1/4 of the gains made by their investments where
as the ROTH retiree will realize all of their gains. It does not take a very sharp pencil to figure out that a ROTH is a good deal, anyone would come out on top tax wise unless they kick the bucket within a very short time after retiring, in which case their heirs would still benefit mightily from a ROTH.
 
I'm heavy into precious metals, I even have neighbors giving me theirs for FREE! You should see how many little cylinders of aluminum they toss out into my fields along the roads!. Here in Michigan each one is worth A DIME!! Like ten pennies from heaven. And all I have to do is pick them up, pour out the tobacco spit, slugs, etc, and take them to the store! What a deal.

I agree with timcasbolt, to each his own. Coworkers spend an inordinate amount of time telling each other what to do. I want to spend as little time on it as possible, and yet make reasonable returns. I don't care to maximize, just be steady and unburdening.
 
I'm more like set it and forget it. My stock account is aggressive for a much younger man but it keeps going up so I leave it alone. I also have a Roth IRA from 1999. I don't have time or patience to watch the market daily.
 
The best piece of investment advice I ever got, and I have passed it along as often as possible, is to not listen to what works for someone else and go out and hire a professional that's willing to look at the whole puzzle instead of just a few of the pieces.

There are two ways for an investment consultant to make a living: he can sell a product and receive a commission, or he can work by the hour. I want one who works by the hour because he has less incentive to try to sell me something that benefits him more than me.
 
Since this is supposed to be the root cause of the current "oh-my-gosh" might find this interesting: https://tradingeconomics.com/united-states/interest-rate
 

Notice the coincidence this occurred just prior to the elections . Also George Soros holds one of the world’s largest hedge funds.
 
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