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View Poll Results: What would you do in the next crash?
Buy..buy..and buy more... 15 57.69%
Sell..and run for the sidelines 2 7.69%
Buy and sell aka rebalance 5 19.23%
I'll sit tight since believe my investments will pay to hold 4 15.38%
Voters: 26. You may not vote on this poll

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Old 11-03-2014, 06:37 PM
 
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there is a difference between sticking to a plan vs reacting to what markets are doing. regardless if we we were up or down my plan stays the same.

i may nudge things like steering a big ship so it stays on course but the overall plan stays in place.

i set my plan of reducing equities down in motion 7 years ago . i set a goal of about 30-40% based on income needs if i retired since we were origonally planning on retiring earlier when we had the 2nd home in PA.

my equity level is based on my needs and my comfort level. what is not based on is whether we are up or down nor is it based on putting the carrot on a stick and chasing higher returns and higher volatility levels than i need..

extra gains from here would not change or alter our lifestyle at all , but a major drop for an extended period of time sure would. my plan mitigates down side risk in exchange for giving up more upside potential early on.

Last edited by mathjak107; 11-03-2014 at 06:45 PM..
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Old 11-03-2014, 06:42 PM
 
5,365 posts, read 6,302,917 times
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LOL @ being prepared for such a crash.
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Old 11-03-2014, 06:50 PM
 
2,236 posts, read 2,961,761 times
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I guess some people like to wear belts, some people like to wear suspenders, and some people like to wear belts with suspenders.
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Old 11-03-2014, 07:14 PM
 
Location: Los Angeles
2,914 posts, read 2,671,194 times
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If due to you financial situation you can't handle the volatility of the stock market then diversify into bonds. Rebalance as needed. 2009 was a GOLDEN opportunity of a lifetime to rebalance (bond money into stocks).
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Old 11-03-2014, 07:44 PM
 
26,149 posts, read 21,383,244 times
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Quote:
Originally Posted by Big-Bucks View Post
If due to you financial situation you can't handle the volatility of the stock market then diversify into bonds. Rebalance as needed. 2009 was a GOLDEN opportunity of a lifetime to rebalance (bond money into stocks).

Moving from equities to bonds isn't going to shelter an investor from volatility if we hit a run of a bear market for bonds. Most people haven't seen one but they are just as nasty as an equity meltdown
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Old 11-03-2014, 07:57 PM
 
919 posts, read 843,443 times
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Quote:
Originally Posted by Lowexpectations View Post
Moving from equities to bonds isn't going to shelter an investor from volatility if we hit a run of a bear market for bonds. Most people haven't seen one but they are just as nasty as an equity meltdown
If we go back to 1980s interest rates, sure, and only in long bonds. Otherwise, bonds are far quiter than stocks.
See 30-Year Treasury Bond (1978 - Present Monthly) - Charting Tools - StockCharts.com
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Old 11-03-2014, 08:05 PM
 
Location: Under a bridge
2,420 posts, read 3,830,509 times
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Certainly I would buy stocks if we have another correction. I bought stocks and added to my IRA after that brutal 2008 correction. You have to take advantage of opportunities especially when it relates to money.

-Cheers.
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Old 11-03-2014, 08:06 PM
 
26,149 posts, read 21,383,244 times
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Quote:
Originally Posted by cfa-ish View Post
If we go back to 1980s interest rates, sure, and only in long bonds. Otherwise, bonds are far quiter than stocks.
See 30-Year Treasury Bond (1978 - Present Monthly) - Charting Tools - StockCharts.com
Hence me saying a bond bear market
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Old 11-03-2014, 10:48 PM
 
Location: moved
13,574 posts, read 9,590,473 times
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There's a huge difference between planning around personal life-event/life stages, and planning for broad economic events. I should change my portfolio allocation depending on whether I'm still a young guy just starting out, middle-aged and at peak earnings, nearing retirement, getting married or staying single, and so forth. I can plan depending on health insurance and rainy-day funds. How a hypothetical crash affects me, depends strongly on whether I'm 20, 40 or 60.... and my portfolio should reflect that.

But can I plan for, say, the aging of the Baby Boomers triggering a stock market crash in 2017-2020 because of a mass stampede of withdrawals? Or Germany exiting the Euro in 2016? Or a new President and Congress raising capital gains taxes in 2019? Can I plan for business cycles, or even secular bull/bear cycles?
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Old 11-04-2014, 06:02 PM
 
472 posts, read 512,858 times
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Quote:
Originally Posted by debtmonger View Post
You can't predict the next crash, so you can't go to the sidelines. The investments should be long term, so when a crash or correction happens, it means stock prices are now on sale. You buy and buy some more. Selling after a crash is just plain crazy. Time is the one thing in your favor. If you don't have the time, don't get into the market in the first place. Patience and dollar cost averaging is the best long term way to invest, but you always want to take advantage of the sale prices.
A little off topic but given that every correction/bear market is a buying opportunity does a investor ever 'truly' exit the market if s/he keeps buying on every buying opportunity? The reason for my question is an outcome of how I'll react to a bear/correction market when I'm in my retirement.
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