Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics > Investing
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 09-01-2015, 11:30 AM
 
4,196 posts, read 6,273,001 times
Reputation: 2835

Advertisements

Quote:
Originally Posted by Phil P View Post
But why is that so? From my standpoint, the marginal utility of my cash to me is similar whether it goes up or down. It's not like I will be losing more value if I lose $400 vs the value I will gain if I gain $400. In other peoples circumstances this may not be true though... And the probability the market goes up is greater than the probability it goes down, so why does the time horizon matter, except for that I won't be guaranteed positive values that I would be if I lengthened the horizon to 20 years? From a purely mathematical stance, I don't see why time horizon matters.
well, i guess it depends on how much we're talking about.....
what he's saying is that if you need the money in just a few months, you shouldn't risk in a volatile market because you could lose principle that you're going to depend on in a few months, and in a market such as this, you don't know what's going to happen short term. you could lose half your money or 20% or 30%, or you might end up in the positive. the point is that if you're going to depend on the money in the short term, it's not (for most people) worth taking the risk of putting it in a volatile market.

it's kind of like if i had 10k and was planning on buying a house in 3 months, and i took the 10k to the casino. yeah, i could leave with 15 or 20k, but it's also possible that i will leave with 8k, and if buying the house means i need to have 10k, then i won't be able to buy the house in the original time frame (simplified of course).
Reply With Quote Quick reply to this message

 
Old 09-01-2015, 11:32 AM
 
105,888 posts, read 107,860,524 times
Reputation: 79490
Quote:
Originally Posted by Thinking-man View Post
that may be, but the reality is that in your example, even those who bought at -10% (and missed the additional x% drop) did better than those who stayed the course, or did not buy until years later.

wouldn't you agree with that?
Timing you win battles not wars. There is not a long term investor who has not called it lucky at some point and got out and in and picked up some dough.

But what happens is usually that taste propells you in to doing it again and again only each time you are not so lucky as markets do not go lower but higher.
In the end study after study shows the same thing , doing nothing ends up being better than trying to outsmart things.

Think about this very carefully . You will save yourself from beating yourself up later when it goes against you .
Reply With Quote Quick reply to this message
 
Old 09-01-2015, 11:48 AM
 
Location: Tip of the Sphere. Just the tip.
4,540 posts, read 2,744,388 times
Reputation: 5277
Quote:
Originally Posted by mathjak107 View Post
Timing you win battles not wars. There is not a long term investor who has not called it lucky at some point and got out and in and picked up some dough.

But what happens is usually that taste propells you in to doing it again and again only each time you are not so lucky as markets do not go lower but higher.
In the end study after study shows the same thing , doing nothing ends up being better than trying to outsmart things.

Think about this very carefully . You will save yourself from beating yourself up later when it goes against you .
That there's a mighty fine high-horse.

If you reckon a feller ought not buy into the market when it's down 12% from the high... pray tell when WOULD you have him buy into the market?

Reply With Quote Quick reply to this message
 
Old 09-01-2015, 11:50 AM
 
2,170 posts, read 1,932,773 times
Reputation: 3832
We're young and have time on our side. If you're just investing money you can live without it honestly shouldn't matter if it has further to drop, that just means theres even more to buy at cheaper prices. Yes had you waited it would have equaled a bigger return in the long run but its almost impossible to time the market. The closest I think you can come to timing the market is adding some extra $ to your investments whenever the dow drops below 30 on the RSI, it almost always guarantees you're adding during a discount followed by a quick bounce back.

With that having been said.. The Dow RSI has gone lower in the past week than it has in the past 5 years. With today's down day its a pretty ugly chart.
Reply With Quote Quick reply to this message
 
Old 09-01-2015, 11:54 AM
 
4,196 posts, read 6,273,001 times
Reputation: 2835
Quote:
Originally Posted by mathjak107 View Post
Timing you win battles not wars. There is not a long term investor who has not called it lucky at some point and got out and in and picked up some dough.

But what happens is usually that taste propells you in to doing it again and again only each time you are not so lucky as markets do not go lower but higher.
In the end study after study shows the same thing , doing nothing ends up being better than trying to outsmart things.

Think about this very carefully . You will save yourself from beating yourself up later when it goes against you .
Yes, and i can agree with that.
I think there may be some indicators that might make a potential correction more obvious than other times, but i'd agree than timing the market consistently (and being correct) is very tough to do.

but what i was talking about is the $ that one already has in cash.....whether in cash or in bonds, as part of a balanced portfolio. I feel like buying into S&P while the market is down, using those bond/cash funds that didn't lose a lot of value due to a correction, is a good strategy if you're in it for the long run. because if i turn my 20k bond in my 401k into s&P today, even if DOW dips another 10-20% before climbing back to 18000, i'm still ahead of someone who held on, waiting for the rebound. do you know what i mean?
Reply With Quote Quick reply to this message
 
Old 09-01-2015, 11:59 AM
 
Location: Taos NM
5,324 posts, read 5,051,317 times
Reputation: 6698
Quote:
Originally Posted by Thinking-man View Post
well, i guess it depends on how much we're talking about.....
what he's saying is that if you need the money in just a few months, you shouldn't risk in a volatile market because you could lose principle that you're going to depend on in a few months, and in a market such as this, you don't know what's going to happen short term. you could lose half your money or 20% or 30%, or you might end up in the positive. the point is that if you're going to depend on the money in the short term, it's not (for most people) worth taking the risk of putting it in a volatile market.

it's kind of like if i had 10k and was planning on buying a house in 3 months, and i took the 10k to the casino. yeah, i could leave with 15 or 20k, but it's also possible that i will leave with 8k, and if buying the house means i need to have 10k, then i won't be able to buy the house in the original time frame (simplified of course).
Well, here's my situation, I have about 14K, with $4000 in savings the rest has been in VTI since May 2014. I'm figuring I'm going to spend about 80K on my first house/condo. I'm not going to make the 20% down ($16000), so I'm going to have to get mortgage insurance, but I'll be able to make the at least 5% down, even if the market goes down 30% (worst case scenario). So I'm fluctuating between like 10% or 15% down payment. My current income covers my expenses and my credit rating is approx 762 and I factored about 2-3K for moving expenses. I'm graduating in Dec and starting to look for jobs this month.
Reply With Quote Quick reply to this message
 
Old 09-01-2015, 12:03 PM
 
4,196 posts, read 6,273,001 times
Reputation: 2835
Quote:
Originally Posted by Phil P View Post
Well, here's my situation, I have about 14K, with $4000 in savings the rest has been in VTI since May 2014. I'm figuring I'm going to spend about 80K on my first house/condo. I'm not going to make the 20% down ($16000), so I'm going to have to get mortgage insurance, but I'll be able to make the at least 5% down, even if the market goes down 30% (worst case scenario). So I'm fluctuating between like 10% or 15% down payment. My current income covers my expenses and my credit rating is approx 762 and I factored about 2-3K for moving expenses. I'm graduating in Dec and starting to look for jobs this month.
too much risk for me. keep your 4k liquid. (400 gains won't make a difference in your purchase power, but a 2k loss will hurt)
save up and make a 20% down payment. your future self will thank you later!

PMI is a waste of money!
Reply With Quote Quick reply to this message
 
Old 09-01-2015, 12:40 PM
 
105,888 posts, read 107,860,524 times
Reputation: 79490
[quote=Thinking-man;41042998]Yes, and i can agree with that.
I think there may be some indicators that might make a potential correction more obvious than other times, but i'd agree than timing the market consistently (and being correct) is very tough to do.

but what i was talking about is the $ that one already has in cash.....whether in cash or in bonds, as part of a balanced portfolio. I feel like buying into S&P while the market is down, using those bond/cash funds that didn't lose a lot of value due to a correction, is a good strategy if you're in it for the long run. because if i turn my 20k bond in my 401k into s&P today, even if DOW dips another 10-20% before climbing back to 18000, i'm still ahead of someone who held on, waiting for the rebound. do you know what i mean?[/

QUOTE]

If you have the cash than do it.

I put money in today and each time we fall 2% i will add some more . This is going in to fidelity balanced fund.

I already have a lot comitted to equity's so i will add to fidelity balanced fund every time we fall 2% .

I am not concerned as to whether it all makes it in or not in this case.


I
Reply With Quote Quick reply to this message
 
Old 09-01-2015, 02:47 PM
 
4,196 posts, read 6,273,001 times
Reputation: 2835
Quote:
Originally Posted by mathjak107 View Post

If you have the cash than do it.

I put money in today and each time we fall 2% i will add some more . This is going in to fidelity balanced fund.

I already have a lot comitted to equity's so i will add to fidelity balanced fund every time we fall 2% .

I am not concerned as to whether it all makes it in or not in this case.
Yeah, same here. I bought 12k worth of VOO today.

Last edited by Thinking-man; 09-01-2015 at 02:55 PM..
Reply With Quote Quick reply to this message
 
Old 09-06-2015, 11:09 AM
 
30,864 posts, read 36,783,047 times
Reputation: 34421
Quote:
Originally Posted by Thinking-man View Post
True, but if the assumption is that markets always increase over time, then you are essentially buying at a discount (from where they were 2 months ago). if one's assumption is that the markets will never reach or exceed 18k however, then one shouldn't be in the market in the first place.
The thing is, if you believe the general consensus, the stock market valuation is either still overvalued or only modestly undervalued. It's certainly not selling at a large discount.

The folks at Morningstar, for instance, say, the market is about 10% undervalued as of the market close on 9/4/15.

Market Fair Value by Sector, Industry, Super-Sector, Index | Morningstar
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics > Investing

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top