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I began to sell slowly on limits about 2 years ago, as I could realize the prices I wanted. I have recently moved nearly all to cash. It has been a slow process. I may be early, but I believe it is better to be early than too late. There is always impressive gains prior to a crash, but it is a dangerous game of musical chairs. The first rule of making money is not to loose your money.
Thank you! I've been buying with both hands since forever, and can't lay my hands on enough money to buy as much as I would like to right now. New money is going into companies selling at a fraction of their peak prices of a few years ago, for the most part, with some going into great companies selling for a lot less than the market average valuation. I believe there is a big edge in buying companies that have already crashed.
I just wish that most of the comments in this thread were like yours--the greater the pessimism, the more I like it.
The first rule of making money is "don't try to time the market." But you go ahead and do it your way.
Precisely. Crashes and recessions are two different things. I think we are in a recession now. The reasons are different. Workers are not the ones feeling it for a change. Can't beat them down any further. If this is in fact a mild recession, it should come as no surprise. The timing is right.
I began to sell slowly on limits about 2 years ago, as I could realize the prices I wanted. I have recently moved nearly all to cash. It has been a slow process. I may be early, but I believe it is better to be early than too late. There is always impressive gains prior to a crash, but it is a dangerous game of musical chairs. The first rule of making money is not to loose your money.
Same here, summer of 2013 is when I started. Just playing the VIX, right now, and have been slowly selling plain-old stocks of mine for the last 9 months or so.
People need to remember that the further the markets rise, the further and harder they'll fall.
The Stock Market is on very unstable ground, even the Fed now admits that. Markets are driven by fear and greed, neither emotion lends to rational thought.
The one underlying factor in any economic recession is a study of investment in speculation vs. investment in productivity.
When speculation, debt, and margin become the engines of wealth, then the domino's are set to fall.
This statement is perfectly true, but also perfectly devoid of actionable content. All markets are driven by fear and greed, at all times, in all contexts. That there's much to fear is zero cause to either curtail one's investments, or to concentrate them. All human interaction is ultimately emotional, and in that sense it is irrational to expect the markets to be anything but irrational, quantitative schemes (computer-trading, options-pricing) notwithstanding. Somehow it all works, because the fears and greeds intertwine and juxtapose.
What we can however say is that occasionally the emotions of the various market participants don't counterbalance each other, but instead concentrate in one preponderance of direction. This is when dangers exceed their usual and expected levels. When are investments really just speculative posturing, instead of risky but ultimately useful allocation of capital? When does prudence yield to frenzy? How does one foresee such a time? Is the present such a time? There are compelling arguments pro and con. I could make the bullish argument that over the past 15+ years, market-return has been below the historical average, and we're due for an extended period of market ascent and high profit. I could also argue that the Great Recession accelerated painful global dislocations, so that in compensation we should expect above-average calm and prosperity. Am I wrong? Maybe. But how do we discern this?
Ultimately the argument against bearish aversion to the market, let alone a sudden bout of skepticism, is that such actions are as much emotional, as are the market-forces that we purport to anticipate and circumvent. It was wise to have sold in September 2007 and to have bought in March of 2009, but it was nearly as wise to have done absolutely nothing.
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