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Mon Feb 27, 2017, 11:39 PM

Should I sell all my investments before Trump stuns the nation...

With the stupidest, craziest, most incomprehensible address to a joint session of Congress tomorrow?

24 replies, 2293 views

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Reply Should I sell all my investments before Trump stuns the nation... (Original post)
Rollo Feb 2017 OP
drray23 Feb 2017 #1
GP6971 Feb 2017 #3
True Dough Feb 2017 #2
fNord Feb 2017 #6
Mendocino Mar 2017 #10
True Dough Mar 2017 #12
Mendocino Mar 2017 #13
yeoman6987 Feb 2017 #4
progree Feb 2017 #7
fNord Feb 2017 #5
Rollo Feb 2017 #8
2naSalit Feb 2017 #9
Metsie Casey Mar 2017 #11
BainsBane Mar 2017 #14
Rollo Mar 2017 #15
progree Mar 2017 #16
Rollo Mar 2017 #17
progree Mar 2017 #23
Rollo Mar 2017 #24
A HERETIC I AM Mar 2017 #18
progree Mar 2017 #19
Rollo Mar 2017 #22
TrackFan12 Mar 2017 #20
Rollo Mar 2017 #21

Response to Rollo (Original post)

Mon Feb 27, 2017, 11:45 PM

1. i dont think so.

Unless you are about to retire tomorrow, selling your investment because of a temporary setback always backfires. Remember, until you sell it, no losses are realized. If you have time before retirement, leave it there and it will go back up over time.

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Response to drray23 (Reply #1)

Mon Feb 27, 2017, 11:50 PM

3. I'm retiring in the next 6 months

and I'm week to week. I have my "break point" at which I will sell though.

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Response to Rollo (Original post)

Mon Feb 27, 2017, 11:46 PM

2. I would recommend going with the major

pharmaceutical companies that produce anti-depressants!

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Response to True Dough (Reply #2)

Mon Feb 27, 2017, 11:59 PM

6. That's less of a joke than you think..........n/t

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Response to True Dough (Reply #2)

Wed Mar 1, 2017, 11:25 PM

10. Private prison stocks.

I got this tip from AG Sessions.

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Response to Mendocino (Reply #10)

Wed Mar 1, 2017, 11:37 PM

12. Sessions?

You must be Russian?

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Response to True Dough (Reply #12)

Wed Mar 1, 2017, 11:48 PM

13. Dah

Trump he goodnik.

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Response to Rollo (Original post)

Mon Feb 27, 2017, 11:52 PM

4. No. I've been in the stock market since June 1987

 

Guess what? My high school graduation money took a hit but I didn't sell and to this day never sold. It will grow but the ones who lose are the one who sell because of compounding.

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Response to yeoman6987 (Reply #4)

Tue Feb 28, 2017, 12:28 AM

7. Hmm, since then, the Vanguard S&P 500 index fund (VFINX) has gone up 14.967 fold

which over those 29.744 years, is an average annualized growth rate of 9.524% (on average such a growth rate doubles the invested amount every 7.619 years)

VFINX performance figures are total returns (i.e. includes reinvested distributions). From June 1, 1987 to February 27, 2017. And they are after-expenses returns.

The Vanguard S&P 500 index fund (VFINX) is not some "hot fund" that I cherry-picked with 20-20 hindsight. I picked it because the S&P 500 companies have about 75% of the entire U.S. stock market's capitalization, and has been tracked that long by a mutual fund (VFINX) -- a real fund with real expenses that ordinary people can and could invest in. So it's the closest investable thing that represents the entire U.S. stock market and goes back that far. If there was a total U.S. stock market index fund that went back that far, I would use that instead.

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Response to Rollo (Original post)

Mon Feb 27, 2017, 11:57 PM

5. That would depend.....

On the current rubble to renminbi exchange rate

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Response to Rollo (Original post)

Tue Feb 28, 2017, 01:50 AM

8. oh, yes, I've been invested in Vanguard's S&P 500 fund for many years...

Except in the Admiral version, VFIAX (lower expenses)... It's done well, as have some other VG funds.

But I well remember how my investments lost big bucks back in 2000, and, later, in 2008. My retirement will probably come early next year.

If not sooner. Depends on how much longer I can put up with the BS at work

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Response to Rollo (Original post)

Tue Feb 28, 2017, 01:50 AM

9. One thing to consider...

why is the market so high right now?

I suspect that FOP have been investing to prop up the puppet and make him look better than is real. Aside from the bragging rights, it also puts a "for sale" sign on lots of assets that will become problematic as international interests when the crash comes... all in the name of "it's the economy , stupid." Too many clueless Amerkins only think that high market value is all it takes for the country to be okay.

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Response to Rollo (Original post)

Wed Mar 1, 2017, 11:34 PM

11. No

 

Be patient. I invest on a daily basis. It will get better and be OK. My educated opinion.

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Response to Rollo (Original post)

Thu Mar 2, 2017, 12:48 AM

14. You can't let your personal feelings influence your investing

Keep a diversified portfolio and don't act emotionally or impulsively.

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Response to BainsBane (Reply #14)

Fri Mar 3, 2017, 10:35 PM

15. Yes and no...

Generally good advice, however, I remember watching my balanced investments hit the toilet in 2000 and 2007 while I stood by calmly and unemotionally.

Sometimes a hunch or intuition pays off... especially if it comes on the heels of long term observation/appraisal.

Equities tend to climb slowly, and plunge quickly. Ever noticed that?

But nobody has a fool proof formula for investing success. Well, if they do, they aren't sharing it, because then it would be self-defeating.

What's that they say? You can't really beat the indexes. But you can loose the farm when the indexes crash.

Speaking of which, I read recently that 1%'rs and agribusiness is busy buying up small farms across the nation, turning them into factory farms. Or maybe trying to build new towns and cities, ala the failed Chinese gambit.

But even Scarlett O'Hara knew that, "The land is the only thing in the world worth working for, worth fighting for, worth dying for, because it's the only thing that lasts".

Except in the case of landslides, earthquakes, floods, direct asteroid hits, and nuclear Armageddon.

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Response to Rollo (Reply #15)

Sun Mar 5, 2017, 11:26 PM

16. One loses the farm when indexes crash, only if one sells before the recovery

Last edited Mon Mar 6, 2017, 09:46 AM - Edit history (2)

[font color = blue]>>I remember watching my balanced investments hit the toilet in 2000 and 2007 while I stood by calmly and unemotionally.<<[/font]

Well, I wasn't calm, nor was I unemotional. But I knew that the stock market always recovers. I knew that the stock market periodically sets new highs. And I knew that it never, ever, sets new lows. I also knew that earnings drives the market in the long-run. The rest is statistical noise and the ebb and flow of emotions.

Looking at the Vanguard Total (U.S.) Stock Market Index Fund, VTSMX -- and using price values adjusted for distributions (so we're talking about total return, not just prices) --

As for the 2000 crash -- It peaked in 3/27/2000, and then fell far, but it reached its peak value again on 10/4/2006 and went on to set new all-time highs. [font color = red] On Edit -- so that's about a 6 1/2 year recovery time measured from the peak. For someone buying at the very peak, that is. For others, the recovery time is less[/font]

As for the 2007 crash -- it peaked on 10/9/2007, and fell way way down, but it reached that peak level again on 3/3/2012, and went on to set new all-time highs. [font color = red] On Edit -- so that's about a 4 1/2 year recovery time measured from the peak[/font]

Since its inception 4/27/92, through 3/3/17 close, it has gone up 9.517-fold during those 24.85 years, which is an average annualized growth rate of 9.491%.

[font color = blue]>>What's that they say? You can't really beat the indexes. But you can loose the farm when the indexes crash. <<[/font]

Only if you sell before it inevitably recovers. Until then, it is just a paper loss.

A sell decision is really two decisions -- when to sell, and then when to buy again.

Very few people are good at timing the market. For the rest of us, time in the market is more important than trying to time the market.

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Response to progree (Reply #16)

Mon Mar 6, 2017, 03:06 AM

17. OK, sure, five or six years for the markets (and one's investments) to recover...

Or 15 years in the case of the Great Depression.

That's all well and good. But what about retirement? One will be selling more than buying, then. One doesn't want to sell in a low market, but one might have no choice.

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Response to Rollo (Reply #17)

Tue Mar 7, 2017, 11:58 AM

23. Sell bonds to meet living expenses in down markets

[font color = blue]>>OK, sure, five or six years for the markets (and one's investments) to recover...
Or 15 years in the case of the Great Depression. <<[/font]

Yup. Equities are risky. Can't get the rewards without taking some of the risk. I figure if I've quadrupled my investment, and then for a short time it is cut in half, I'm still ahead by double.

It's also risky to accept low returns (by investing mostly or entirely bonds at today's pathetic yields and risk of capital losses as interest rates rise) and run out of money in retirement.

There are innumerable studies of asset allocations for retirees. For example, assuming one withdraws say 5% of their nest egg in the first year of retirement. Each year that withdrawal amount grows with inflation. Various portfolios with different equity-bond allocations are tested against historic data. The portfolios that survive the longest are ones that are heavy on equities -- like 80% equities 20% bonds -- and even higher. Since my main goal is to outlive my savings, this is the key thing for me.

I have long been retired and in the net withdrawal stage. My life expectancy is close to 20 years, so I expect my equity investments to recover and beat the crap out of bonds in that period. If I expected to drop dead in 5 years, I might think about a much more conservative portfolio allocation.

On having to sell equities during a relative low point in the market to meet living expenses in retirement -- I figure that the opposite happens too -- having to sell equities during a relative high point in the market to meet living expenses -- so I figure it all kind of evens out. But actually, I have a mixed allocation of equities and bonds. I sell bonds during low points in the stock market for living expenses.

My equities are all in equity mutual funds and ETFs (with one small exception), and the majority of that in equity index funds . I don't do individual stocks (with one small exception) because I don't kid myself that I have the ability to run what is in effect an active mutual fund that can beat index funds. Since a large majority of professionally actively managed equity funds underperform index funds, then why should I think I can do better than the majority of professional active fund managers? And as a somewhat risk-adverse investor, I observe that individual stocks are much more volatile than most any mutual fund, as are just about any collection of 10 or 20 stocks.

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Response to progree (Reply #23)

Wed Mar 8, 2017, 02:11 AM

24. The problem is that even bonds are no longer a safe haven...

They are predicted to fall in value as interest rates rise. They had a good run up to a couple of years ago, though.

They are less volatile than stocks, true, but they don't necessarily go up when stocks are down.

And yeah, I'm about 50/50 equities/bonds+cash.

I know there's lots of criticism of annuities out there, but... they are starting to look more attractive. They will probably get even more attractive as interest rates rise.

My ideal retirement doesn't revolve around managing my investments. Rather, I'd like to do something creative.

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Response to Rollo (Reply #15)

Mon Mar 6, 2017, 03:38 AM

18. "But nobody has a fool proof formula for investing success."

Sure they do. Just ask Warren Buffet if he has a formula.

BainsBrain and Progree make valid points, the most important one in my mind is the old axiom;

TimING the market is not nearly as important as time IN the market.

However, one should invest in such a way that they can sleep at night. If you don't have the stomach or perhaps the investment horizon to calmly weather storms, then reallocate toward safer securities.

I was a broker from late '06 through mid '09 and I can count on one finger the number of my clients that were burning up my phone after March of '09 (when the market bottomed and started back up) with buy orders. Those were the days BTW, that you could buy Ford stock for $2.00/share and General Electric for less than $10

If you liked a stock at $20, why in the hell wouldn't you like it at $10?

Giving specific investment advice to total strangers on an internet message board is unethical to say the least, and could be catastrophically damaging at the most, so I won't do it, even though I held the licenses to do so, had you been my client.

So it is best to say, assess once again your tolerance for risk, adjust your portfolio to suit that tolerance and relax. Things are never as bad as they might seem and are rarely as good as they appear.

Best investment advice I ever heard;

"Sell what's expensive, buy what is cheap"

Another good one;

"Never invest in anything that is not easily explainable to a 5 year old."

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Response to A HERETIC I AM (Reply #18)

Mon Mar 6, 2017, 09:17 AM

19. Back in '08 and '09 -- Actually I was buying like crazy

(and selling too, since I didn't have much "new money"

[font color = blue]>>I can count on one finger the number of my clients that were burning up my phone after March of '09 (when the market bottomed and started back up) with buy orders.<<[/font]

I had inherited a lot of stuff in late '05, and along with my own stuff I had accounts at about 6 different brokerages at least. It was in the '08 and '09 period when I got around to consolidating and simplifying all that -- selling what I didn't want and using the proceeds to buy, yes, gasp, equities (equity mutual funds).

The nice thing with the selling of what I sold at the bottom is that I had lovely capital losses (for tax purposes) that I'm still using up ($3,000 / year offset my regular income, plus offsetting the inevitable forced capital gains distributions). So it was a lovely lovely time to do the consolidation / simplification / cleaning (while still maintaining my overall equity allocation by buying replacement equities).

I even set up margin accounts at the 3 financial institutions I retained, and was thinking of buying equities via margin loans in the '08 - '09 period, but the margin loan disclosure stuff was so scary that I didn't. Drat drat drat. But at least, on net, I hung on to my equity allocation at a very scary time.

[font color = blue]>>TimING the market is not nearly as important as time IN the market. <<[/font]

Timing would be a fabulous tool, but I don't know anybody who has done it consistently well (aside claims in investment newsletters which I ignore, where they are all sterling geniuses). The vast majority of investors -- as shown by studies by Dalbar and others -- get it backwards -- selling after say a 20%-30% drop, and not buying again until the market has recovered and gone way above its old peak. A big loss compared to investors who just held on.



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Response to progree (Reply #19)

Mon Mar 6, 2017, 10:41 PM

22. In 2009 I watched a stock I owned dip down to the price I'd paid for it 10 years earlier

When it first went public. I resisted the urge to sell, that wasn't too difficult. But I failed to buy more, which was a mistake.

A lot of non-finance/non-real estate equities got hammered at that time, in retrospect it was thru no fault of their own. It was just the contagion of the general meltdown. Today that stock is selling for 20 times its 2009 low... I finally bought back in last spring at another low. But it's "only" doubled since then, LOL.

I still think Trump is going to be bad news for the markets, eventually. We've already seen how it reacts negatively to his shoot from the hip style. I don't know if "sell on the tweets" is good advice yet, but it just might be for day traders (which I'm not). On the other hand, Trump's mental illness is not directly related to the health of our economy. So even his worst meltdowns will eventually be shrugged off by markets that are otherwise healthy.

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Response to Rollo (Original post)

Mon Mar 6, 2017, 11:19 AM

20. Not so fast my friend

No. I would not think about selling all.

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Response to Rollo (Original post)

Mon Mar 6, 2017, 09:47 PM

21. Obviously it's a good idea to sell SOME (sell high) at the peaks in order to accumulate

...cash or other easily liquidated assets that can be used to take advantage of the next slump and buy low.

During the lows I imagine "cash is king".

Last spring I picked up more shares of my favorite tech stock when it dipped down to less than 30% of its recent (2 year) highs. Sure enough, recently, it climbed back up to more than twice its former value. I sold off what I bought and retained my longer term shares (acquired for a song when the company first went public). Bird in hand, and all that. This gives me a cash cushion for other purposes, either to buy up more shares when the market dips again (and it will!), or pay off the mortgage (leaning more towards that).

Yes, market timing is a hit or miss kind of thing. But I've learned that if one sells at the start of a dip, when prices are still relatively high, and then buys back in when the market starts to recover from a new record low, it seems to work out OK. Of course not just any old stock, but one that's been researched and verified as a well run company with a product in demand.

I figure any time you sell for more than you paid, and buy for less than you sold, it's got a good chance of playing out.

One bit of advice that seems sane is not to speculate with more than 10% of one's assets. It's tempting to fantasize along the lines of, "If only I'd gone all in on XYZ back in 1975 I'd be a billionaire today"... and forget that XYZ could have bit the dust in the interim.

I am not a broker and none of this should be construed as investment advice.

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