4 ms·

So should I pull out on all my stocks and stuff everything into bonds then?

by Vysero 7y ago

noja 7y ago
Yes. The only remaining question is when.
- Vysero 7y ago
  Within the year of 2020? Do you think? I really don't know... suppose you don't either.
  - TacticalTable 7y ago
    If somebody could tell you when, they would be able to massively profit from this. Current thought from finance industry are leaning towards a crash next year, but I don't think anyone would bet the farm on it.
partiallypro 7y ago
Anyone that tells you to pull all of your money out of stocks and into another asset is an idiot. Bonds have outperformed stocks in the past few years. You missed the ride, just average down if stocks suffer any serious correction.
llamataboot 7y ago
As always, depends on your appetite for risk and your timeframe for using the money. Personally, I don't see much upside left in equities for next year or two, but I'm a perma-bear and have been wrong many times before :D Plus there's not a lot of easy places to stuff money at the moment, hence big investors sitting on piles of cash.
- Vysero 7y ago
  I have only been investing for 2 years I am currently 32. So I think most investors wouldn't mind me keeping my stocks but I saw my mother and father loose hundreds of thousands of dollars back in 09 and I am not about to bite that bullet.
  - xwdv 7y ago
    Take advice from someone who has been investing for the past 10 years and has made ridiculous money while these perma-bears are still poor. You can’t time the market. Keep buying stocks like they will continue to go up, at the end of the day, if the market crashes and values tank, it’s no big deal. Keep holding your stocks, they will recover, in fact buy while everything is super cheap. If you would have bought back in 09-10 when everything was cheap you would have made mad money like me. If you are hoarding cash right now, do so with the intent to buy in the next major crash, whenever that is. Just keep investing, entering at age 30 you are late to the game and need to make up for lost time. You don’t “lose” until you sell, even if your parents lost value in 09 they would have recovered it all and more after a few years.
    - bryanlarsen 7y ago
      > "they will recover" If you invested in 1914 German stock market, it didn't recover until 2014.
      - harimau777 7y ago
        Wasn't that more or less a societal collapse situation? I'm not sure that almost any investment vehicle is going to be reliable through two world wars.
        bryanlarsen 7y ago
        There are a non trivial number of people predicting American societal collapse. They're probably wrong, but...
        llamataboot 7y ago
        Yes, I mean at some point you have to just accept you are in the same boat as everyone else with or without investments in that situation
    - YourMatt 7y ago
      It seems like this time around, everyone's on edge about a coming crash, and they've already cashed out a good amount, with intent to buy back in when everything's on sale. Wouldn't this have the effect of turning a would-be crash into a minor correction, because there'll be so many people ready to buy? I'm one of these people that's sitting on more cash than stocks at this point, by about 4x, but I'm starting to question this choice.
maximente 7y ago
since jan 2 2019 S&P 500 is up from 2510 => 3074 so if you read a doom porn article and liquidated on 12/30 you missed out on insane growth spurt this is no different. you have to factor in potential lost growth when you go risk averse mode; it's against our loss aversion bias but has to be done when thinking long term.
- Vysero 7y ago
  I think the general trend has been an increasingly healthy stock market since around 09 correct? That was 10 years ago, how much longer can this balloon rise? Currently I am about 70/30 stocks/bonds perhaps I should just stay put considering I really don't know.
  - refurb 7y ago
    Timing is the market is a luck play. You might be right and avoid a loss or you might be wrong and miss out on big returns. Easier to stay invested. That way you’re fully in whenever the bottom comes.
  - maximente 7y ago
    don't take this personally, but you don't sound ready to invest in stocks. losing huge amounts of money is going to happen. there's nothing you can do to avoid it, other than not invest in stocks. the tradeoff is that it always comes back higher. being risk averse will actually cost you hundreds of thousands of dollars in the long term. research cFIRESim and plug the numbers in yourself: the portfolios most likely to survive long retirements with money left are those with higher stock %s (i'm talking 90% plus). you can't get enough growth with materially high bond %s to survive long periods of withdrawing. satisfying your risk averse reptile brain will actually generally lead to you drawing 100% of your savings down, which isn't great if you aren't earning via something else. if you are interested in material long term growth, e.g. enough to outpace inflation, you have to accept the fact that you will lose enormous amounts of cash virtually overnight. your other options are to lose your wealth due to inflation/aversion to risk. it's regrettable, but that's the situation we are in with targeted 2%+ inflation. best of luck!
roenxi 7y ago
There are still risks. The money to pay for the 2008 recession was ultimately assembled from taxpayers and people who hold their savings in fixed income (like bonds) who have basically just lots purchasing power for a decade; especially relative to stocks. Depending on the exact strategy it might go well or poorly.
downrightmike 7y ago
no, read if you can; free pdf of the book here: http://efficientfrontier.com/ef/0adhoc/2books.htm http://efficientfrontier.com/ef/0adhoc/2books.htm
ta0xdeadbeef 7y ago
I'm waiting until shit hits the fan to put all my cash into the market, personally.
koonsolo 7y ago
I think it is pretty clear by now that nobody can predict the market. Hence the nice returns on index funds. Stocks are pretty low risk if your investment time is long (>10 years)

So should I pull out on all my stocks and stuff everything into bonds then?

by Vysero 7y ago

So should I pull out on all my stocks and stuff everything into bonds then?

noja 7y ago

Yes. The only remaining question is when.

Vysero 7y ago
Within the year of 2020? Do you think? I really don't know... suppose you don't either.
- TacticalTable 7y ago
  If somebody could tell you when, they would be able to massively profit from this. Current thought from finance industry are leaning towards a crash next year, but I don't think anyone would bet the farm on it.

partiallypro 7y ago

Anyone that tells you to pull all of your money out of stocks and into another asset is an idiot. Bonds have outperformed stocks in the past few years. You missed the ride, just average down if stocks suffer any serious correction.

llamataboot 7y ago

As always, depends on your appetite for risk and your timeframe for using the money. Personally, I don't see much upside left in equities for next year or two, but I'm a perma-bear and have been wrong many times before :D Plus there's not a lot of easy places to stuff money at the moment, hence big investors sitting on piles of cash.

Vysero 7y ago
I have only been investing for 2 years I am currently 32. So I think most investors wouldn't mind me keeping my stocks but I saw my mother and father loose hundreds of thousands of dollars back in 09 and I am not about to bite that bullet.
- xwdv 7y ago
  Take advice from someone who has been investing for the past 10 years and has made ridiculous money while these perma-bears are still poor. You can’t time the market. Keep buying stocks like they will continue to go up, at the end of the day, if the market crashes and values tank, it’s no big deal. Keep holding your stocks, they will recover, in fact buy while everything is super cheap. If you would have bought back in 09-10 when everything was cheap you would have made mad money like me. If you are hoarding cash right now, do so with the intent to buy in the next major crash, whenever that is. Just keep investing, entering at age 30 you are late to the game and need to make up for lost time. You don’t “lose” until you sell, even if your parents lost value in 09 they would have recovered it all and more after a few years.
  - bryanlarsen 7y ago
    > "they will recover" If you invested in 1914 German stock market, it didn't recover until 2014.
    - harimau777 7y ago
      Wasn't that more or less a societal collapse situation? I'm not sure that almost any investment vehicle is going to be reliable through two world wars.
      - bryanlarsen 7y ago
        There are a non trivial number of people predicting American societal collapse. They're probably wrong, but...
      - llamataboot 7y ago
        Yes, I mean at some point you have to just accept you are in the same boat as everyone else with or without investments in that situation
  - YourMatt 7y ago
    It seems like this time around, everyone's on edge about a coming crash, and they've already cashed out a good amount, with intent to buy back in when everything's on sale. Wouldn't this have the effect of turning a would-be crash into a minor correction, because there'll be so many people ready to buy? I'm one of these people that's sitting on more cash than stocks at this point, by about 4x, but I'm starting to question this choice.

maximente 7y ago

since jan 2 2019 S&P 500 is up from 2510 => 3074 so if you read a doom porn article and liquidated on 12/30 you missed out on insane growth spurt this is no different. you have to factor in potential lost growth when you go risk averse mode; it's against our loss aversion bias but has to be done when thinking long term.

Vysero 7y ago
I think the general trend has been an increasingly healthy stock market since around 09 correct? That was 10 years ago, how much longer can this balloon rise? Currently I am about 70/30 stocks/bonds perhaps I should just stay put considering I really don't know.
- refurb 7y ago
  Timing is the market is a luck play. You might be right and avoid a loss or you might be wrong and miss out on big returns. Easier to stay invested. That way you’re fully in whenever the bottom comes.
- maximente 7y ago
  don't take this personally, but you don't sound ready to invest in stocks. losing huge amounts of money is going to happen. there's nothing you can do to avoid it, other than not invest in stocks. the tradeoff is that it always comes back higher. being risk averse will actually cost you hundreds of thousands of dollars in the long term. research cFIRESim and plug the numbers in yourself: the portfolios most likely to survive long retirements with money left are those with higher stock %s (i'm talking 90% plus). you can't get enough growth with materially high bond %s to survive long periods of withdrawing. satisfying your risk averse reptile brain will actually generally lead to you drawing 100% of your savings down, which isn't great if you aren't earning via something else. if you are interested in material long term growth, e.g. enough to outpace inflation, you have to accept the fact that you will lose enormous amounts of cash virtually overnight. your other options are to lose your wealth due to inflation/aversion to risk. it's regrettable, but that's the situation we are in with targeted 2%+ inflation. best of luck!

roenxi 7y ago

There are still risks. The money to pay for the 2008 recession was ultimately assembled from taxpayers and people who hold their savings in fixed income (like bonds) who have basically just lots purchasing power for a decade; especially relative to stocks. Depending on the exact strategy it might go well or poorly.

downrightmike 7y ago

no, read if you can; free pdf of the book here: http://efficientfrontier.com/ef/0adhoc/2books.htm http://efficientfrontier.com/ef/0adhoc/2books.htm

ta0xdeadbeef 7y ago

I'm waiting until shit hits the fan to put all my cash into the market, personally.

koonsolo 7y ago

I think it is pretty clear by now that nobody can predict the market. Hence the nice returns on index funds. Stocks are pretty low risk if your investment time is long (>10 years)