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It's always funny how these questions of "how much lower will it go" usually surface after the market has already gone down 15-20%. I remember in Oct 2002 when market was at it's bottom, many people were coming out of the woodwork saying how the DOW would fall below 5000.
As Buffet once said, Be fearful when others are being greedy, and be greedy when others are being fearful.
I have a 25 yr time horizon and as long as I keep pumping $$ in my 401k and IRA's into a diversified portfolio I'll be fine even if it goes to 8 or 9K.
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,259 posts, read 24,784,250 times
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Quote:
Originally Posted by CouponJack
Personally, I don't know and I really don't care.
I have a 25 yr time horizon and as long as I keep pumping $$ in my 401k and IRA's into a diversified portfolio I'll be fine even if it goes to 8 or 9K.
Who knows? the DOW could be at 13K next month....
What you should have done was to move it all to a bond fund when the DJIA hit 14,000 and sit the bear market out until it gets to about 11,000 and then move back into stocks.
What you should have done was to move it all to a bond fund when the DJIA hit 14,000 and sit the bear market out until it gets to about 11,000 and then move back into stocks.
That's exactly what I did and will do. I don't care what anyone says ... waiting out a bear market and watching gut wretching drops in your portfolio isn't much fun ... and not very profitable.
It's always better and much more profitable to buy at or near the bottom ... rather than waiting for stock prices to recover to previous levels, which can take years.
So ... I got out of stocks last summer and invested in bond as well as conservative funds with a combination of bonds, money markets, etc.
I figure the Dow may get as low as 10,000 but ... what I'll really look for isn't so much the number (which is really hard to predict anyway) but, how pessimistic people are.
When the bad news hits unprecedented levels and pessimism seems to be at it's peak ... that's usually the best time to buy stocks.
Since the bad news started last summer, and these bear markets usually take two years ... I figure we have about 18 months to go before we hit bottom ... whatever number that might be.
2. most market timers don't realize their rate of return because they blow out of positions and tracking performance becomes very difficult/manual process
2. most market timers don't realize their rate of return because they blow out of positions and tracking performance becomes very difficult/manual process
You don't need to time the market long term
You need to wait for a tiny bit of optimism from the market before jumping in. Catching a falling knife is no fun. The credit markets have just started to unravel and no one is really certain the extent of the damage. It ranges from mild recession to a crash worse than 1929 and possibly deeper depression than the 30's.
I'm fully confident we're not even close to the bottom of the Dow. The "party" has just begun and most of the guests haven't even arrived yet.
Also, you need to price it in relation to something like gold and/or silver (maybe a basket of commodities). Since the dollar is moving target (mostly downward), its almost pointless to price the Dow in dollars when looking for a bottom.
Dunno on those numbers. Don't mean much to me -- as I would rather invest in drunken racehorses, rather than enrich the parasites by sending them money.
And like someone else noted -- since they are denominated in dollars they mean even less.
But THIS part >>>
Quote:
Originally Posted by questioner2
Our economy has serious problems that are long term and no connected with a short term economic cycle. I suspect most of us will be living with a significantly lower standard of living in 10 years than we have now. We are entering a period of small wage increases due to a world economy and high inflation due to energy costs and a weak dollar. It was good while it lasted.
Gotta say that sounds like a very fair and concise evaluation of the situation and not a bit overstated.
All it lacks is "So long and thanks for the fish."
What you should have done was to move it all to a bond fund when the DJIA hit 14,000 and sit the bear market out until it gets to about 11,000 and then move back into stocks.
LOL, its easy to say that in HINDSIGHT. Tell me w/100% accuracy what the dow will be in June?
If you could, you'd be making 8 figures on wall st.
Nobody's crystal ball is clear enough.
I'm fine w/a boring, low cost, low turnover portfolio. A portfolio that outpaces a large majority of mutual fund managers, who get paid alot of money to fail miserably.
I'm fully confident we're not even close to the bottom of the Dow. The "party" has just begun and most of the guests haven't even arrived yet.
It's a losers game to time the market. Majority of fund managers get paid rediculous sums of money and they can't even do it. Problem is everyone thinks their smarter than the market. I can name you several fund managers who've had successful runs, but can you name me the ones who will outperform for the next 15-20 years? You can't.
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