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Time to get out of the market

8K views 23 replies 16 participants last post by  mooneyflyfast 
#1 ·
Over the years I have made a few good calls and a few bad ones.

Several weeks ago I totally revamped my portfolio and went into conservative mode. First and foremost I would like to say it's been one heck of a good run. Almost a decade of good growth.

All Bull Runs come to an end and I am taking profits.

I don't like the storm clouds on the horizon.

Trade wars are not good and markets don't like them. I'm worried about the President openly criticizing the Fed Chairman. And now the dreaded inverted yield curve.

In addition we are headed into the time of year where crashes tend to happen.

You heard it here first. Take some profits and move to protect mode...
 
#2 ·
If you can’t handle volatility your taking to much risk...

Not sure there is a time of year where crashes happen?

And I would be surprised if 1% here can explain why an inverted yield curve is bad....
(Explained in the 2nd paragraph- https://www.barrons.com/articles/yield-curve-inversion-stocks-recession-history-51565840376 )

This has been a buying opportunity for me..... I like companies who have fallen more than their peers who’s dividend is over 6% now ....

All my cash has been allocated.... and I’m hoping my alternatives do their job
 
#3 · (Edited)
I can handle volatility. There is a big difference between volatility and a Bear Market.

As for the markets and its history of crashes. It's called the October Effect. It may be a little bit overblown psychologically but much of the market is "psychological". Some of the biggest crashes in market history have happened in October.

https://www.investopedia.com/articles/financial-theory/09/october-effect.asp

With that being said every dip in the last decade has been a buying opportunity so recent history is on your side. This is just one mans opinion. Go with your gut...
 
#4 ·
Inverted yield curve by itself isn’t bad. If you look at the numbers, the yield curve change over the past week is extremely minor.

When yield curve reverts from inverted to positive as Fed drop short term treasury rates to stimulate economic growth signals an economy in recession conditions.

I already portioned in safer investments.
US Market is oversold, corporate earnings are flat, Germany already had one negative quarter, China economy is flat.
China has the cards they need to screw with the US economy during Trumps re-election year until he will back down in the trade war.
Stocks are gonna significantly readjust lower, I’m not gonna try to time when.
 
#18 ·
Had our annual meeting with our broker on Thursday, up double digits plus on both accounts this year, averaging 9.5% over the last 18 years. We leave the heavy lifting to him, we work on the principle that his job is NOT to lose our money, working well for us.
I know I couldn’t have done as well if I managed my own money plus all the time and worry it would have caused.
 
#20 ·
S&P 500 index is up 14% since the original post. As others have stated, no one can successfully time the market. Also, very few investment advisors or mutual funds can consistently beat the indexes. Buy a low cost diversified index fund (S&P 500, Russell 3000, total market, etc.) and hold it thru thick and thin. It will go down and it will go up, but long term you will do well. And remember: you haven't made or lost any money until you sell. (and if you made money you will pay capital gains tax).
 
#21 ·
Buying an index has its down falls as well

S&P 500 or the etf SPY is heavily weighted to the top 50 names

So heavy that those mega-cap names make up 1/2 (50%) of the index

Guess who takes the hit on the corrections- over valued huge companies that have crazy valuations on earnings- that’s who!

The smart advisors know this- the avg. Joe trying to mange his/her money generally does not

YES there are better ways to use etf to follow indexes but giving financial advice on a web board is a poor way of conveying that information

I am not giving any advice here. Please seek professional financial advice on your own.
 
#22 ·
I'm not saying there is no place for investment advisors but I think my advice was pretty good. It's not rocket science and you dont need a professional to tell you what index to buy. However it is weighed, the S&P 500 performance over the last 1,5, 10 year periods has been good. I also mentioned Russell 3000 and total market indexes if you want less weighing on large caps.

I speak from experience since I used some pretty sharp fee based guys who had me in individual stocks for 10 years. At the end I put a pencil to it and realized that I would have substantially more in my portfolio if I had invested in indexes. I now have 500, Russell 3000 and total market indexes and have been happy with the results.

As you pointed out my advice is worth what you paid for it.
 
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