Thoughts on the market sell off

[Renee]

What are your thoughts on the market sell off and impending Bear market? Is our retirement safe? I know most financial planners always tell us, stay diversified but I read where this market might not bottom out until January 2009.

[Hope2b]

When we retired my husband put almost everything in a safe place (dug a hole in the back yeard). No :) he was willing to make less but be sure he always had some money. He said risk was OK while he was working. We made less on our money but it is all still there plus a fairly good profit.

[l2ridehd]

If I could predict the market, I would already be retired and living there. The key is to be diversified. And at a time like now over weight into fixed income, perhaps as much as 60% fixed. In a bull market over weight in to stocks, 60% for us retired folks. at this point in my life I maintain a 60/40 split between fixed income and stocks. I maintain diversity in the stocks with some value, large cap, small cap and international. I use mutual funds mostly to spread the stocks even more. Vanguard and Fidelity are both good with low fees. Always re-balance at least twice a year and move in the direction the market is moving. Right now as I re-balance I move more into fixed income. when the market is moving up I will move more into stocks. Again maintaining a 60/40 split. Bull market 60% stocks 40% fixed. In a bear market 40% stocks, 60% fixed. Never try to time the market and always stay fully invested in something. Have patience. Over time you will maintain steady gains.

[JohnN]

I'm about 95% cash right now and have been since end of '07.

Too many bad things can happen, and precious little good.

Oil - prices - middle east
Terrorism
Iraq
Borders & Immigration
Social Security
Medicare
Jobs
worthless Congress & Presidency

US companies will maintain their financials based on world growth, but the US infrastructure is struggling as I see it.

I may go back into stocks after the first quarter, but.. cautiously.
I'll take a 4 or 5% guaranteed return vs. what??? I'm not greedy

Good luck....

[richman]

Since this is my business, let me just say: Don't panic gentlemen. It's going to get bumpy this year, but don't panic. Also, I have to say John that 95% cash is never a good idea. And do stay out of the bond market for the foreseeable future.

[Donna]

This market gets me very nervous, to say the least..What is going to happen in the near future?? Any predictions??

[samhass]

I see many buying opportunities and took advantage of some this AM. Yes, I think this year will be rocky..but interesting!!

[Donna]

Richman...Any good buying tips?? I'm listening.. :dontknow:

[handieman]

Since this is my business, let me just say: Don't panic gentlemen. It's going to get bumpy this year, but don't panic. Also, I have to say John that 95% cash is never a good idea. And do stay out of the bond market for the foreseeable future.

Mrs Handie and I have been in investments since 1990 and have seen a few rocky periods, however close your eyes temporarily and ride the Bear. After the smoke clears, all settles down to a friendly Bull
I hope cold
Handie :joke:

[richman]

Sorry Donna. I don't allow my people to do that contractually, so I cannot do it as well. I can point you generally to types of opportunities.

[Muncle]

Yes, as Margo Channing said, "Fasten your seatbelts, it's going to be a bumpy night." :yikes: I am super naive when it comes to the market. The only individual stocks I have are those I inherited. Everything else is mutual funds and CDs and groceries. But even as obtuse as I am, I know that two keys to riding out any recessionary period are diversification and patience. For market players, there are and will be opportunities to make money. But for those of us who live the buy and hold lifestyle, we just have to make sure we aren't heavy in a Lucent (hey, I watched mine drop from the $70's to about a buck) and that we don't panic. Assuming you are not buying on margin, nobody lost money in the market until they sold. Historically, those who manage to ride out the panic do pretty well --- unless they've got Enron.

[JohnN]

richman, respectfully differing on opinion

I've done pretty decent over the years investing,
spent many years in finance and I know the ins and outs enough to satisfy me.

I didn't initially plan to be that high in cash, but was making some year end moves, and decided to hold steady in mid-investment, I had a hunch.

I still think it's really ugly for a bit, and I'll stay on the sidelines,
4-5% guaranteed is a great deal right now from my vantage

happy trails!

[Donna]

Sorry Donna. I don't allow my people to do that contractually, so I cannot do it as well. I can point you generally to types of opportunities.


Richman..I would very much appreciate that...

[JohnN]

well, the market is down 15% from the high, and will be rocky for a few months.
If you're asking if you should "get out" well, it's too late now for the most part.
Things will be shaky for 6 months, and MAYBE stabilize and have a nice 2nd half 2008.

[Donna]

Thanks John..Now I feel a little better.. :o

[The Gray Hog]

For those of us whom got the 'hunch' and are sitting it out in cash, aren't we actually getting hit due to lower interest rates on our safe investments? In a way, we are paying for those whom enjoyed spending and playing. Sad to say, sadder to admit.

[nyclicker]

Here it is 14 months after the original posting by Renee and we are still in a free fall. Even those that have fixed investments such as CD’s are making almost nothing. Any one working with a financial planner that actually saw this coming 2 years ago and moved your money to protect you from loses? I see articles going back to the early 30’s (before my time) that mention the Dow losing 90% of its value. Never say never.

[billethkid]

Those younger or without immediate need for the money can be in the asset recovery mode. And those with no concerns can certainly benefit from the built in growth mode in the current pricing.

There are way to many sensible fixed income or other guaranteed fund investments to keep money in a shoe box (keeping cash). While investing includes ups and downs, the long term ALWAYS (historically) pays back.
Cash is a guaranteed loser!!!!! Comfort is a relative notion.....I suppose one could have so much cash they don't care.....really(?).

BTK

[billethkid]

at it's peak my distribution was 70% stock position.....today it is 25%.
Converted over an 18 period to fixed income investments. Not a guarantee but certainly allowed(s) for less volatility with some recovery capability.

A good example (I think) our portfolio at the current low point of the market is equivilent in value to it's October 2008 level which was then 1500 points higher.
If one works with an investment planner that knows what he is doing, you can be better off and they will not recommend....cash!!

Optimists would say we are closer to the bottom now than we have been!!!!!

It will come back.

BTK

[Boomer]

I am getting ready to do a little shopping as soon as I figure out about online trading. But I will not risk what I cannot risk. We are retired, and I do not hear anybody beating down our door to give us good jobs again.

I wonder what will happen to that relatively friendly cap gains tax on dividends and stock selling. It is set to expire at the end of next year I think it is. Are they stupid enough to raise it? (Ya think!!!)

Before I make an investment, I always ask myself two questions. Do I understand what I am buying? Will it let me sleep at night?

Boring Boomer

[rshoffer]

This isn't an "impending" bear marget. This is a historical bear market.
It seems to have it's own psyche now. Can you say FEAR and loss of confidence?

[billethkid]

a 20% drop has occurred since his inauguration.....30% drop since the day he won the election.

He didn't inherit the results...it happened on his watch!!!
Comes with the job.

BTK

[Boomer]

Re. the psychology of the market: All those stations dedicated to nothing more than talking and talking and talking about the market. Even though nobody knows. And they just start to babble. Frantic babbling.

But I have to tell you that this morning when I realized Mr. Buffet himself was on "Squawk Box" for the entire time today, I hit record. I do not mean Jimmy B. I am listening to him right now. W. Buffet -- I will catch him later when I can sit around on the couch for an hour or so.

Yeah, it's a mess. I pick and choose what I listen to and read. And sadly, I think they all know just about as much as I do.

But all this constant commentary is like never before. Remember when you used to have to squint at your stock closes in the newspaper. And maybe catch a little business news once a day on some regular television station. Not like now -- everything out there about business is in constant freeform babbling on Channel CTMI and all its counterparts. Fill the air. The name of that game. The reality of all this is not good. But the constant taking of the market's emotional temperature makes it worse. But that is not going to change. There is air to fill.

Boomer

[JohnN]

there is NO good news on the horizon, not any,

I'm skeptical and will keep in cash for at least another year or two, then reassess

[JohnN]

economy, war (which one, choose) , deficit, budget, social security, health reform , immigration, jobs , JOBS,

find one glimmer of hope?? and to me, saying the market can't go down farther, is a poor argument

[JohnN]

*slaps my head and tosses ENERGY onto the pile*

[Boomer]

The new Business Week arrived in the mail yesterday, and of course, this issue is on this very topic. When will the market recover? There are babies on the cover. That picture of those babies made me think about how it might be a good idea to start giving a few shares of stock as baby gifts.

Stock can make a great gift. I gave Mr. Boomer 50 shares of Harley for his 50th birthday. It was a while ago when the symbol was HDI. It has since changed to HOG. Along with the shares, I wrote a silly little poem about how when the stock went high enough maybe it could pay for a Harley.

Well, the stock jumped, split, went up more. And what happened was that even though just a hundred shares would never reach the price of a Harley, those shares did get sold in 2006 to cover the cost of adding an instrument rating to his private pilot's license. (Like I have said before, I keep trying to interest Mr. Boomer in cheaper hobbies, like carving polar bears out of soap. Oh well.)

Enough stories from me for today. But stock can make a good gift. Maybe they should add stock to the gift registry at Babies R Us.

Boomer

[billethkid]

to watch the market every day. Yes we are in information over load, significantly embedded with mis-information and purposeful omission.
It is well know the media is not in the good news business, first and foremost. Second the media is so blatantly biased; it borders being criminal what they exclude or do not include to keep their position and favor in place.
And of course it is in their best interest and the interest of the parties they represent/favor to induce fear. Fear, is what keeps people glued to their media source....so when they hear the sky is falling they can get an update how close it is to them.
You hear 8% unemployment sets a 25 year record low...OK...how about the 92% still working? Foreclosures are up 50% over last year...if true that could mean they are all the way up to 3%...what about the 95%+++that are doing just fine?
And on and on and on.
If ones information input is limited to network media, you are so very handicapped to not be able to conclude anything but bad.

For those in the minority numbers, they get the best coverage. For those in the majority as usual you wind up with squat.

Throw in a major dose of partisan political banter, which is nothing but bad and going to worse...which keeps people frightened and fear is the catalyst politicians work the hardest as it allows working their agenda.

Top it off with today's politically correct, permissive pacifist, don't upset any body or group and there you have it....GARBAGE!!!!!

Just like the out put of effort by our lawmakers in Washington. What a pity. Our proud America being led to decline...yes being LED to decline.
That is the only change I see.

BTK

[rshoffer]

to watch the market every day. Yes we are in information over load, significantly embedded with mis-information and purposeful omission.
It is well know the media is not in the good news business, first and foremost. Second the media is so blatantly biased; it borders being criminal what they exclude or do not include to keep their position and favor in place.
And of course it is in their best interest and the interest of the parties they represent/favor to induce fear. Fear, is what keeps people glued to their media source....so when they hear the sky is falling they can get an update how close it is to them.
You hear 8% unemployment sets a 25 year record low...OK...how about the 92% still working? Foreclosures are up 50% over last year...if true that could mean they are all the way up to 3%...what about the 95%+++that are doing just fine?
And on and on and on.
If ones information input is limited to network media, you are so very handicapped to not be able to conclude anything but bad.

For those in the minority numbers, they get the best coverage. For those in the majority as usual you wind up with squat.

Throw in a major dose of partisan political banter, which is nothing but bad and going to worse...which keeps people frightened and fear is the catalyst politicians work the hardest as it allows working their agenda.

Top it off with today's politically correct, permissive pacifist, don't upset any body or group and there you have it....GARBAGE!!!!!

Just like the out put of effort by our lawmakers in Washington. What a pity. Our proud America being led to decline...yes being LED to decline.
That is the only change I see.

BTKThe fear is a major factor but I can't blame it all on the media. When Warren Buffet says "the economy fell off a cliff" I am not reaassured. Our President changes focus everyday. it's like he's swatting at flies.Today it was education... yesterday it was stem cell research.... the day before it was healthcare reform... you can go back in the past 2 weeks and there was a different headline issue almost everyday. My fear level rises when The President appears out of control, lost, like he's flailing about in a sea of issues and he can't stay on the issue of the economy long enough to reassure anybody. Then there is the Secretary of the Treasury... now you know why we are scared. Last niight on CNN Lou Dobbs lost it... he had a major rant over this exact issue. It was not a partisan argument either. he hit the nail on the head.