4 ms·

At what point do you plan to reduce holdings?

refurb 10y ago
When I retire? I've always had a buy and hold mentality. When the market crashed in 2009, I lost almost 33% of my portfolio value. However, I had no intention of using that money for decades. As a result, I was 100% in the market when things picked up a few years later. When the market was going up 20-30% a year, I made up the lose within 2 years. Overall the market is up 3.5x since the bottom. Annualized return even pre-crash have been 7%+.
- ant6n 10y ago
  You probably would've made more money with some bond allocation and re-balancing
iaw 10y ago
This is the critical questions. I'm betting on an implosion and saving a ton of cash + a little extra bonds for the fire-sale.
- refurb 10y ago
  This is agree with. I'm not pulling money out, but I'm keeping some cash in reserves when the correction does come.
- paulpauper 10y ago
  consider selling put options ...get paid to wait
- WalterBright 10y ago
  The people I know who are waiting for the big correction to invest, lose their nerve when the corrections happen, and don't invest then, either.
- shostack 10y ago
  So your investment strategy is trying to time the market?
  - virmundi 10y ago
    Timing the market doesn't mean pin point, cracker jack timing. Just not bay of pigs timing. I pulled 25% my 401k out in 2008 into bonds and a money market. Saved a good 15%. Then re-invested towards the bottom. Not perfect bottom to get back in. Not perfect top to get out. But 15%.
    - shostack 10y ago
      False. Timing the market means trying to make investment decisions because you think the market is "high" or "low" or that it will move up or down in a certain time-frame. The only remedy for that is dollar-cost averaging over a long period of time.
  - iaw 10y ago
    See virmundi's comment. I've been able to make sizable returns by not buying when things were overpriced and then buying when they are under priced. This doesn't mean all of my money, but enough that it's worth the time. The Brexit was a fantastic opportunity, I got in way late and still bought in at a 10% discount. Historically when the market looks like this there's going to be a correction in the near term. With the pace of this bubble I'll be able to buy good companies at a massive discount.
    - shostack 10y ago
      The whole point of "timing the market" being bad is that you can't know what the future holds, so while you can try to model things to determine whether they are under or overpriced, unless you pick stocks like Warren Buffet, you are best off dollar cost averaging into index funds because you will net net come out ahead when you factor in fees. >"Historically when the market looks like this there's going to be a correction in the near term. With the pace of this bubble I'll be able to buy good companies at a massive discount." Past performance is not an indicator of future results.
paulpauper 10y ago
There is no optimal point at which to sell...there is no evidence the market exhibits any sort of path dependency whereby selling could consistently yield an optimal outcome. Going as far back as the inception of the S&P 500, it has returned 9% a year (including the dividends)...when plotted logarithmicaly, it appeals like an almost strait line.
hasbot 10y ago
I retired early and have stocks, real estate, and cash. I'll reduce holdings when my cash runs low. Until then, I'm making no changes come hell or high water. I'm not financially savvy and would probably sell at the wrong time anyway. I have more cash than I need (3 - 4 years worth), but I'm fiscally conservative and the extra buffer eliminates stress.
nodesocket 10y ago
I use stop-loss orders to protect again downside at this point since everything I own is in the green.
- chollida1 10y ago
  Ohhh boy, hopefully some of my older comments can save you from a world of hurt. https://news.ycombinator.com/item?id=12912781#12913058 https://news.ycombinator.com/item?id=12912781#12913058 https://news.ycombinator.com/item?id=10590448#10590496 https://news.ycombinator.com/item?id=10590448#10590496 Stop loss orders, not even once!! I mean I say this in joke form but I mean it in all seriousness. Using stop loss orders is a sign of someone who doesn't know what they are doing. They just aren't suitable for markets anymore. Well they haven't really been suitable for the past 10 years but atleast now the major markets are finally no longer allowing retail investors to use that order type. Please don't ever use stop loss orders.
  - nodesocket 10y ago
    I'm not buying your conclusion that stop-loss orders don't work and a sign of somebody who doesn't know what they are doing. Sure, assuming there is a flash crash your stop-loss will convert to a market order and if you are using a big name brokerage you order will get filled (maybe delayed, and most likely at a lower price than institutions, but it will get filled). What is your background if you don't mind me asking? Do you work in finance or in the market?
    - hughdbrown 10y ago
      It's right there in his profile (https://news.ycombinator.com/user?id=chollida1 https://news.ycombinator.com/user?id=chollida1): > Former compiler writer, currently head of algorithmic trading for a hedge fund, still write code for 80% of my day.
      - nodesocket 10y ago
        My bad/fault, I didn't look. I wasn't trying to be rude or condescending, just curious his background.

When I retire? I've always had a buy and hold mentality. When the market crashed in 2009, I lost almost 33% of my portfolio value. However, I had no intention of using that money for decades. As a result, I was 100% in the market when things picked up a few years later. When the market was going up 20-30% a year, I made up the lose within 2 years. Overall the market is up 3.5x since the bottom. Annualized return even pre-crash have been 7%+.

ant6n 10y ago
You probably would've made more money with some bond allocation and re-balancing

iaw 10y ago

This is the critical questions. I'm betting on an implosion and saving a ton of cash + a little extra bonds for the fire-sale.

refurb 10y ago
This is agree with. I'm not pulling money out, but I'm keeping some cash in reserves when the correction does come.
paulpauper 10y ago
consider selling put options ...get paid to wait
WalterBright 10y ago
The people I know who are waiting for the big correction to invest, lose their nerve when the corrections happen, and don't invest then, either.
shostack 10y ago
So your investment strategy is trying to time the market?
- virmundi 10y ago
  Timing the market doesn't mean pin point, cracker jack timing. Just not bay of pigs timing. I pulled 25% my 401k out in 2008 into bonds and a money market. Saved a good 15%. Then re-invested towards the bottom. Not perfect bottom to get back in. Not perfect top to get out. But 15%.
  - shostack 10y ago
    False. Timing the market means trying to make investment decisions because you think the market is "high" or "low" or that it will move up or down in a certain time-frame. The only remedy for that is dollar-cost averaging over a long period of time.
- iaw 10y ago
  See virmundi's comment. I've been able to make sizable returns by not buying when things were overpriced and then buying when they are under priced. This doesn't mean all of my money, but enough that it's worth the time. The Brexit was a fantastic opportunity, I got in way late and still bought in at a 10% discount. Historically when the market looks like this there's going to be a correction in the near term. With the pace of this bubble I'll be able to buy good companies at a massive discount.
  - shostack 10y ago
    The whole point of "timing the market" being bad is that you can't know what the future holds, so while you can try to model things to determine whether they are under or overpriced, unless you pick stocks like Warren Buffet, you are best off dollar cost averaging into index funds because you will net net come out ahead when you factor in fees. >"Historically when the market looks like this there's going to be a correction in the near term. With the pace of this bubble I'll be able to buy good companies at a massive discount." Past performance is not an indicator of future results.

paulpauper 10y ago

There is no optimal point at which to sell...there is no evidence the market exhibits any sort of path dependency whereby selling could consistently yield an optimal outcome. Going as far back as the inception of the S&P 500, it has returned 9% a year (including the dividends)...when plotted logarithmicaly, it appeals like an almost strait line.

hasbot 10y ago

I retired early and have stocks, real estate, and cash. I'll reduce holdings when my cash runs low. Until then, I'm making no changes come hell or high water. I'm not financially savvy and would probably sell at the wrong time anyway. I have more cash than I need (3 - 4 years worth), but I'm fiscally conservative and the extra buffer eliminates stress.

nodesocket 10y ago

I use stop-loss orders to protect again downside at this point since everything I own is in the green.

chollida1 10y ago
Ohhh boy, hopefully some of my older comments can save you from a world of hurt. https://news.ycombinator.com/item?id=12912781#12913058 https://news.ycombinator.com/item?id=12912781#12913058 https://news.ycombinator.com/item?id=10590448#10590496 https://news.ycombinator.com/item?id=10590448#10590496 Stop loss orders, not even once!! I mean I say this in joke form but I mean it in all seriousness. Using stop loss orders is a sign of someone who doesn't know what they are doing. They just aren't suitable for markets anymore. Well they haven't really been suitable for the past 10 years but atleast now the major markets are finally no longer allowing retail investors to use that order type. Please don't ever use stop loss orders.
- nodesocket 10y ago
  I'm not buying your conclusion that stop-loss orders don't work and a sign of somebody who doesn't know what they are doing. Sure, assuming there is a flash crash your stop-loss will convert to a market order and if you are using a big name brokerage you order will get filled (maybe delayed, and most likely at a lower price than institutions, but it will get filled). What is your background if you don't mind me asking? Do you work in finance or in the market?
  - hughdbrown 10y ago
    It's right there in his profile (https://news.ycombinator.com/user?id=chollida1 https://news.ycombinator.com/user?id=chollida1): > Former compiler writer, currently head of algorithmic trading for a hedge fund, still write code for 80% of my day.
    - nodesocket 10y ago
      My bad/fault, I didn't look. I wasn't trying to be rude or condescending, just curious his background.