# Dow falls 1,191 points -- the most in history



## Robert59 (Feb 27, 2020)

https://www.cnn.com/2020/02/27/investing/dow-stock-market-selloff/index.html


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## mathjak107 (Feb 27, 2020)

By itself , Points mean little ...percentages tell the story ...this was nothing compared to  the 26% drop in one day in 1987 ...... let that sink in .

I started investing in 1987 too .... if I didn’t tell this story I wouldn’t even remember it happened .

I started using the fidelity insight growth model back then ...a hypothetical 100k without a penny added is 3.4 million


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## Robert59 (Feb 27, 2020)

Maybe the prices per stock will come down so we can afford it like Amazon and Google.


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## Gardenlover (Feb 27, 2020)

As I mentioned in another strip around here somewhere - It's just paper until you have the gold in hand. I know some disagree, but stocks will rise again, don't freak out and sell it low.


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## mathjak107 (Feb 27, 2020)

Gardenlover said:


> As I mentioned in another strip around here somewhere - It's just paper until you have the gold in hand. I know some disagree, but stocks will rise again, don't freak out and sell it low.


Nothing could be more false . You may not care at the moment what it it is worth but whether you sell or not that is all it is worth ...we only hope it goes back up for when we care.

I certainly care ...my draw in retirement is based on each years value ...anyone retiring has their safe withdrawal rate based on that snap shot .

My success rate in retirement is based on that value 

estate taxes are based on that value

asset based loans are based on that value

IT COUNTS


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## Gardenlover (Feb 27, 2020)

mathjak107 said:


> Nothing could be more false . You may not care at the moment what it it is worth but whether you sell or not that is all it is worth ...we only hope it goes back up for when we care


Sorry but I disagree - freaking out and selling low is rather dumb IMHO. I always get a chuckle out of people who attempt to discredit other's experiences by stating it's a false dichotomy. It's been working for me for over 35 years. I'm glad you found something else that works for you. Dividends don't lie.


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## mathjak107 (Feb 27, 2020)

Gardenlover said:


> Sorry but I disagree - freaking out and selling low is rather dumb IMHO. I always get a chuckle out of people who attempt to discredit other's experiences by stating it's a false dichotomy. It's been working for me for over 35 years. I'm glad you found something else that works for you.


Your personal experience does not negate all the research and studies on individual investor behavior ....try reading even the vanguard investor study and they are the grand pappy of do it yourself investing . Investor behavior is a big factor

https://www.morningstar.com/articles/582626/mind-the-gap-why-investors-lag-funds

https://advisors.vanguard.com/iwe/pdf/FASQAAAB.pdf


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## Gardenlover (Feb 27, 2020)

mathjak107 said:


> Your personal experience does not negate all the research and studies on individual investor behavior ....try reading even the vanguard investor study and they are the grand pappy of do it yourself investing .


Yada, yada, yada - Spin it any way you like my friend. And please don't assume to tell me what to read.


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## mathjak107 (Feb 27, 2020)

Gardenlover said:


> Yada, yada, yada - Spin it any way you like my friend. And please don't assume to tell me what to read.


Close your eyes to learning.. just go along believing your own bull ....

want more facts

https://www.vanguardinvestments.com...ary/investment-principles/why-returns-lag.jsp


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## treeguy64 (Feb 27, 2020)

Gardenlover said:


> Yada, yada, yada - Spin it any way you like my friend. And please don't assume to tell me what to read.


The Ignore File works very well for those who try to lecture others without knowing what they're talking about.


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## Gardenlover (Feb 27, 2020)

mathjak107 said:


> Close your eyes to learning
> 
> want more facts
> 
> https://www.vanguardinvestments.com...ary/investment-principles/why-returns-lag.jsp


You really crack me up. Try and label me, it shows you ignorance. Sorry but I'm not a sheep. I have no more to say to you. Please ignore me, please.


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## mathjak107 (Feb 27, 2020)

treeguy64 said:


> The Ignore File works very well for those who try to lecture others without knowing what they're talking about.


I may not , but those who produce the data and facts  I post sure know what they are doing


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## mathjak107 (Feb 27, 2020)

Gardenlover said:


> You really crack me up. Try and label me, it shows you ignorance. Sorry but I'm not a sheep. I have no more to say to you. Please ignore me, please.


Well when you argue without looking at facts and data and then say you don’t want to read the facts  I call that wanting to remain financially ignorant


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## Gardenlover (Feb 27, 2020)

mathjak107 said:


> I may not , but those who produce the data and facts  I post sure doc


I give most people amble opportunity, but son you just made my ignore list. It's pitiful to think there is only one way to invest. You can't disprove proven results. Thanks for playing.


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## mathjak107 (Feb 27, 2020)

Gardenlover said:


> I give most people amble opportunity, but son you just made my ignore list. It's pitiful to think there is only one way to invest. You can't disprove proven results. Thanks for playing.


I never said there is one way ...I said as a group the majority of small investors hurt their own performance. Fact.

that does not mean EVERYONE but it does mean most ...most investors stay put and do well when the trend is going higher and higher .buying high and selling higher makes a lot of money ...small investors tend to try to buy low in sell offs and end up bailing when the trend is down lower and lower


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## treeguy64 (Feb 27, 2020)

I made a great deal in the market. Those who panic sell, as a mass selloff occurs, should not be in the market, in the first place. If you have enough cash to comfortably do so, be like a kid in the candy store, and buy up all of the bargains, at the bottom, brought about by foolish people panic selling. Never went wrong doing so. 

Of course, if you have some market smarts, you can make some more off the herd panic mentality by shorting a number of stocks.

Good luck!


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## mathjak107 (Feb 27, 2020)

treeguy64 said:


> I made a great deal in the market. Those who panic sell, as a mass selloff occurs, should not be in the market, in the first place. If you have enough cash to comfortably do so, be like a kid in the candy store, and buy up all of the bargains, at the bottom, brought about by foolish people panic selling. Never went wrong doing so.
> 
> Of course, if you have some market smarts, you can make some more off the herd panic mentality by shorting a number of stocks.
> 
> Good luck!


Many of us did well , but unfortunately the masses do not ....I have been an investor since 1987 in equities and loads of commercial real estate ..but I am not representative of what the masses do and likely you are not either ...


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## Gardenlover (Feb 27, 2020)

treeguy64 said:


> I made a great deal in the market. Those who panic sell, as a mass selloff occurs, should not be in the market, in the first place. If you have enough cash to comfortably do so, be like a kid in the candy store, and buy up all of the bargains, at the bottom, brought about by foolish people panic selling. Never went wrong doing so.
> 
> Of course, if you have some market smarts, you can make some more off the herd panic mentality by shorting a number of stocks.
> 
> Good luck!


Exactly!


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## fmdog44 (Feb 28, 2020)

mathjak107 said:


> Nothing could be more false . You may not care at the moment what it it is worth but whether you sell or not that is all it is worth ...we only hope it goes back up for when we care.
> 
> I certainly care ...my draw in retirement is based on each years value ...anyone retiring has their safe withdrawal rate based on that snap shot .
> 
> ...


The market has ALWAYS made the come back. Always.


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## fmdog44 (Feb 28, 2020)

mathjak107 said:


> By itself , Points mean little ...percentages tell the story ...this was nothing compared to  the 26% drop in one day in 1987 ...... let that sink in .
> 
> I started investing in 1987 too .... if I didn’t tell this story I wouldn’t even remember it happened .
> 
> I started using the fidelity insight growth model back then ...a hypothetical 100k without a penny added is 3.4 million


The largest point drop in history does have meaning especially when it may indicate more trouble worldwide could be on the way. Granted other worldwide virus threats have damaged the stock markets but nothing rattles investors more than the unknown.


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## fmdog44 (Feb 28, 2020)

mathjak107 said:


> I never said there is one way ...I said as a group the majority of small investors hurt their own performance. Fact.
> 
> that does not mean EVERYONE but it does mean most ...most investors stay put and do well when the trend is going higher and higher .buying high and selling higher makes a lot of money ...small investors tend to try to buy low in sell offs and end up bailing when the trend is down lower and lower


So you will wait until the market is in full recovery and going higher before you execute your strategy of "buying high". Question: At what point in your theory of buying high do you actually move back in after you have witness a total recovery while sat on your money? What is your trigger point in this theory of yours? What elements of the individual stocks do you review to decide to go back in? You are saying you can time the market while you know no one can. You and I bought 100 shares XYZ @ 100. It fell to 50. I bought 100 more shares at 50 while you waited for a phantom number that is greater than the original price of 100. Now explain why your theory is better than every living person in the world.


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## fmdog44 (Feb 28, 2020)

mathjak107 said:


> Many of us did well , but unfortunately the masses do not ....I have been an investor since 1987 in equities and loads of commercial real estate ..but I am not representative of what the masses do and likely you are not either ...


Define "masses" and what stats do you have to back that statement up say over the past 70 years? You will learn in that time frame the average investors or "masses" as you refer to them have faired quite well.


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## mathjak107 (Feb 28, 2020)

fmdog44 said:


> Define "masses" and what stats do you have to back that statement up say over the past 70 years? You will learn in that time frame the average investors or "masses" as you refer to them have faired quite well.


read the studies


fmdog44 said:


> So you will wait until the market is in full recovery and going higher before you execute your strategy of "buying high". Question: At what point in your theory of buying high do you actually move back in after you have witness a total recovery while sat on your money? What is your trigger point in this theory of yours? What elements of the individual stocks do you review to decide to go back in? You are saying you can time the market while you know no one can. You and I bought 100 shares XYZ @ 100. It fell to 50. I bought 100 more shares at 50 while you waited for a phantom number that is greater than the original price of 100. Now explain why your theory is better than every living person in the world.



i don't time things ... i buy when it is part of the plan or i have the money ....i dont try to catch a low . most successful investors are long term investors and they  get a portfolio to match their goals and needs until it no longer does .

but many investors don't do this , they try to time their buys or their exits and market timing does not work  well .

read the links i posted , it tells you what i mean by masses ..... the masses means the investor money as a group  moves in and out of funds at the wrong time and investor returns as a group are wrong enough to constantly get a big difference in return between what they get and the fund gets .

this is the best it gets , as this is a 10 year bull market .. the more downs we have the worse the small investor numbers get .


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## Aunt Bea (Feb 28, 2020)

I remember Black Monday on that day, October 19, 1987, I learned the value of having cash on hand.

I had pulled out the money to buy a house a week before the dip.  

At the time that one week made all the difference in the world to me.

On another note when I read the bickering on this thread and others I think of this quote from Winston Churchill.

_*“You will never reach your destination if you stop and throw stones at every dog that barks.”*_


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## mathjak107 (Feb 28, 2020)

Aunt Bea said:


> I remember Black Monday on that day, October 19, 1987, I learned the value of having cash on hand.
> 
> I had pulled out the money to buy a house a week before the dip.
> 
> ...


basic investing rules are that only long term money should be in stocks , not money you need in the short term ....mismatching money to time frames  , next to  trying to time markets is likely the 2nd biggest cause of investor losses


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## mikermeals (Feb 28, 2020)

*Down more than 10%*
It is scary out there and everyone is expecting the worse…schools and factories closed, no one going work…no goods from China…no one even shopping in China. There are no guarantees but I see some green shoots…

Starbucks is opening 85% of their stores in China

A couple of firms have vaccines in the pipeline

Very few cases in US…I am not a doctor but there would be widespread visits and illnesses reported from hospitals. 

My biggest concern is there are very few test kits and I hope there is a “moon shot” approach to producing and distributing these. US needs to spend as much as possible to get this done.

I was on public transportation and went to see fantastic Beethoven symphonies in a packed concert hall last night and thought about the virus but no one seemed to be concerned.

I would hold tight or even put money to work.

When “there is blood in the streets” and the largest fear…this is the time to invest.


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## rkunsaw (Feb 28, 2020)

The drop in stock prices is just one effect of the coronavirus. Shortages of parts and materials can cause a loss of production which will mean a loss of sales.

Most of my investments are in dividend stocks or mutual funds. If companies lose sales they may have to reduce or eliminate dividends. That will certainly affect my income no  matter the price of the stock.


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## oldmontana (Feb 28, 2020)

*Dow falls 1,191 points -- the most in history*

The thing I do is make sure we have enough money in cash or CD's to live on for two years, witch we have.  Our stocks pay good dividends which will keep coming ... some might reduce their payouts but not many and not that much.


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## mathjak107 (Feb 28, 2020)

we can go a long long time just rebalancing from bonds if need be .... i just rebalanced my long term  treasury bond fund . it was up 30% over the last 1 year period so i raised cash. in fact it is up 2.50% today ...not bad for a gov't bond fund


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## Camper6 (Feb 28, 2020)

The lesson is how fragile is the stock market when it reacts so quickly.. Maybe it was seeking a correction and this was an excuse.


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## Ladybj (Feb 28, 2020)

fmdog44 said:


> The market has ALWAYS made the come back. Always.


And they always will.


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## Ladybj (Feb 28, 2020)

Robert59 said:


> Maybe the prices per stock will come down so we can afford it like Amazon and Google.


Very good point... I may have to look at the current stock prices for Amazon


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## Catlady (Feb 28, 2020)

Gardenlover said:


> As I mentioned in another strip around here somewhere - It's just paper until you have the gold in hand. I know some disagree, but stocks will rise again, don't freak out and sell it low.



I didn't freak out, I bought a few shares at their 52 week low.  I am one of the few who likes market crashes.



Aunt Bea said:


> I remember Black Monday on that day, October 19, 1987, I learned the value of having cash on hand.
> I had pulled out the money to buy a house a week before the dip.


That was excellent timing, Bea!



treeguy64 said:


> If you have enough cash to comfortably do so, *be like a kid in the candy store,* and buy up all of the bargains, at the bottom, brought about by foolish people panic selling. Never went wrong doing so.


I LOVE that kind of candy!  Yummy!


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## Catlady (Feb 28, 2020)

Ladybj said:


> Very good point... I may have to look at the current stock prices for Amazon


Lady, one of my biggest regrets in life was selling 50 shares of  Amazon at $50 early this century (forget the year).  I had bought at $16 and thought I was being a genius making all that profit.  I'm still trying to kick my ass, but I can't reach it.


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## Ladybj (Feb 28, 2020)

Catlady said:


> Lady, one of my biggest regrets in life was selling 50 shares of  Amazon at $50 early this century (forget the year).  I had bought at $16 and thought I was being a genius making all that profit.  I'm still trying to kick my ass, but I can't reach it.


 
LOL about kicking your ass but can't reach it.. I wish I would have gotten a few shares way back when....Whewwww!!!!


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## Catlady (Feb 28, 2020)

Ladybj said:


> LOL about kicking your ass but can't reach it.. I wish I would have gotten a few shares way back when....Whewwww!!!!


Well, the 52 week high was $2186, I like to buy them at 50% off or less, so I'll buy ONE share when it gets to $1100, that's all I have the money for it.  Wish I had more spendable income, but beggars can't be choosers, eh?  At least I'll have my toe in the door.


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## fmdog44 (Feb 28, 2020)

Catlady said:


> Lady, one of my biggest regrets in life was selling 50 shares of  Amazon at $50 early this century (forget the year).  I had bought at $16 and thought I was being a genius making all that profit.  I'm still trying to kick my ass, but I can't reach it.


But at least you _made_ money.  I sold Netflix years ago a week after it soared 150+ points in one day. Should have held but that big of a one day gain was good enough for this boy. NOTE: six *trillion* dollars lost this week


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## Catlady (Feb 28, 2020)

fmdog44 said:


> But at least you _made_ money.  I sold Netflix years ago a week after it soared 150+ points in one day. Should have held but that big of a one day gain was good enough for this boy. NOTE: six *trillion* dollars lost this week


Yeah, but I sold 50 @ 50- = $2500, today at 50 @1884 would have been $94,200!  Grrrr!

Some poster at Yahoo said he paid $70k for Netflix and sold at $140k, and if he had held on to it would have been $3.4 million.  I guess I shouldn't complain about my nickel and dimes, eh?


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## mathjak107 (Feb 29, 2020)

Catlady said:


> I didn't freak out, I bought a few shares at their 52 week low.  I am one of the few who likes market crashes.
> 
> 
> That was excellent timing, Bea!
> ...


for most investors who have modest portfolio's to large ones , the little bit of buying at these lower prices we do  is like peeing in the ocean compared to what now has taken a hit down and any further growth needs to make up the loss before you can move forard .

so all things being able i don't want a downturn even though they are inevitable . so i certainly don't wish for them .. it is like paying 4 dollars additional in tax to get back 1 dolllar


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## OneEyedDiva (Feb 29, 2020)

So far I'm only down about 12% which means I really haven't lost money (as far as cost basis goes). I used the drops to buy some stuff three days in a row. I wish I'd waited until Friday to place my buy order but as we know....can't time the market. As expected, the utility funds held up better than my other investments.


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## mathjak107 (Feb 29, 2020)

OneEyedDiva said:


> So far I'm only down about 12% which means I really haven't lost money (as far as cost basis goes). I used the drops to buy some stuff three days in a row. I wish I'd waited until Friday to place my buy order but as we know....can't time the market. As expected, the utility funds held up better than my other investments.


overall  i am down down 3%  since my high as  i was running an all weather portfolio  ... not bad , but a lot in dollars .

You also have to consider the dollars invested ...I am looking at being down 100k as of  yesterday  from the high yet I am only 25% equities and while I am down very little percentage wise , in dollars I am down more than many others with 2 to 3x the equities I do.

Dollars are dollars and what those dollars represent is the same no matter what your balance is .... no matter how big the portfolio that down represents about 5 years of 401k contributions at catch up so the point is lower allocations to equities can be just as painful to see as higher equity allocations would be on smaller portfolios...


Our brains tend to work in dollars not percentages when we associate a loss


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## OneEyedDiva (Feb 29, 2020)

mathjak107 said:


> overall  i am down down 3%  since i was running an all weather portfolio  ... not bad , but a lot in dollars .
> 
> You also have to consider the dollars invested ...I am looking at being down 100k as of  yesterday  from the high yet I am only 25% equities and while I am down very little percentage wise , in dollars I am down more than many others with 2 to 3x the equities I do.
> 
> ...


What I like about Schwab MJ is that they show you your gains and losses in both dollars and percentages.  Not all my investments are there though. I calculate the overall percentages of gains or losses annually on my Mutual Fund Quarterly Values spreadsheets. Last year's gain was 22.8%. So are you saying you only have 25% invested in stocks and mutual funds?


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## mathjak107 (Feb 29, 2020)

OneEyedDiva said:


> What I like about Schwab MJ is that they show you your gains and losses in both dollars and percentages.  Not all my investments are there though. I calculate the overall percentages of gains or losses annually on my Mutual Fund Quarterly Values spreadsheets. Last year's gain was 22.8%. So are you saying you only have 25% invested in stocks and mutual funds?


most brokerages give both .


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## mathjak107 (Feb 29, 2020)

OneEyedDiva said:


> What I like about Schwab MJ is that they show you your gains and losses in both dollars and percentages.  Not all my investments are there though. I calculate the overall percentages of gains or losses annually on my Mutual Fund Quarterly Values spreadsheets. Last year's gain was 22.8%. So are you saying you only have 25% invested in stocks and mutual funds?




i have been reducing the equities over the  last year after 11 years of a bull . however the supporting assets i bought are as volatile as stocks ,  TLT  my long treasury bond fund is up 30% over the 1 year ... my gold  is up over 20% over the one year .

so while i reduced equities i bought more of these other assets which soared instead .

now i will start to take profits in gold and long term treasuries and go back to my typical growth and income model  pocketing multiple 6 figures in profit based on what i can buy it back for now.

typically i run 40-50% equities but i was not comfortable with a non defensive portfolio  with china and the chaos in washington so i started to shift to an all weather model pre the drop .

the model was 25% in a  total market fund

25% short term treasuries

25% long term treasuries TLT

25%  GOLD SGOL OR GLD

plus i use a 25% equity model that is geared for income and is 67% less volatile then the s&p 500.

the two stood up very well and held the drop so far to a mere 3%


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## OneEyedDiva (Feb 29, 2020)

mathjak107 said:


> i have been reducing the equities over the  last year after 11 years of a bull . however the supporting assets i bought are as volatile as stocks ,  TLT  my long treasury bond fund is up 30% over the 1 year ... my gold  is up over 20% over the one year .
> 
> so while i reduced equities i bought more of these other assets which soared instead .
> 
> ...


3% is great.  Have you been adding to your gold over time or did you buy all at once? In what form is your gold and how/where do you sell? I'm asking because twice I considered buying gold then changed my mind.


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## mathjak107 (Feb 29, 2020)

OneEyedDiva said:


> 3% is great.  Have you been adding to your gold over time or did you buy all at once? In what form is your gold and how/where do you sell? I'm asking because twice I considered buying gold then changed my mind.



when i make changes i do it all at once .. for gold i use the etf sgol ... i used to use gld but i don't like hsbc bank who baby sits 40 billion in gold for them.    sgol is stored in swiss banks . both are etf's traded like stocks


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## OneEyedDiva (Feb 29, 2020)

mathjak107 said:


> when i make changes i do it all at once .. for gold i use the etf sgol ... i used to use gld but i don't like hsbc bank who baby sits 40 billion in gold for them.    sgol is stored in swiss banks . both are etf's traded like stocks


Okay...thank you.


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## Pecos (Feb 29, 2020)

Dear Stock Market,

ENOUGH ALREADY 

You made your point!

Pecos
A Loyal Participant for Many Decades


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## Catlady (Feb 29, 2020)

Pecos said:


> Dear Stock Market,
> 
> ENOUGH ALREADY
> 
> ...


No, we need to hit 20% down for a while, to officially make it a bear market, so we can start all over and soar again.    Most people, me included, are nervous about this OLD bull at 11 years.  We NEED a new bull!


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## mathjak107 (Feb 29, 2020)

Catlady said:


> No, we need to hit 20% down for a while, to officially make it a bear market, so we can start all over and soar again.    Most people, me included, are nervous about this OLD bull at 11 years.  We NEED a new bull!


we had a 20% decline just about in 2018


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## Catlady (Feb 29, 2020)

mathjak107 said:


> we had a 20% decline just about in 2018



According to this article in the Washington Post, only the Nasdaq was in bear market territory, the others were in correction.  Not sure, but I think the definition of *bear market is 20% correction for all THREE and for at least 3 months*. I could be wrong. Dow was ''only'' down 18.7% and S&P 19.8%, so not officially a bear market at the end of 2018.
~~~~~~~~~~~~~~~~~~~
https://www.washingtonpost.com/busi...df9dc8-0d32-11e9-8938-5898adc28fa2_story.html

The three-month slide included a dramatic drop in the  FAANG stocks — Facebook, Amazon, Apple, Netflix and Google parent Alphabet — and culminated in the worst Christmas Eve market drop in history.
The Christmas Eve sell-off came on the heels of phone calls from Treasury Secretary Steven Mnuchin to major U.S. banks. Instead of calming markets, the unorthodox phone calls worried investors and the Dow dropped 653 points, or just under 3 percent.

When markets opened Dec. 26, the *Nasdaq was deep in bear-market territory* and the S&P was close behind. Bear markets are generally measured as a 20 percent retreat from recent highs. *All three indexes had descended into a correction, which is a 10 percent decline.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
https://www.cbsnews.com/news/whats-a-bear-market-and-how-long-might-it-last/

All told, the Dow closed in holiday-shortened Christmas Eve trading at 21,792. That's 18.7 percent below its record close of 26,828.39 on Oct. 3. The S&P 500 index ended at 2,351. It's now down 19.8 percent from its high of 2,930.75 on Sept. 20. The Nasdaq has dropped to 6,193, or 23.6 percent below its peak of 8,109.69 on Aug. 29. *


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## fmdog44 (Feb 29, 2020)

If memory serves me right previous virus scares pushed the markets down around 13-15%.


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## oldmontana (Feb 29, 2020)

mathjak107 said:


> i have been reducing the equities over the  last year after 11 years of a bull . however the supporting assets i bought are as volatile as stocks ,  TLT  my long treasury bond fund is up 30% over the 1 year ... my gold  is up over 20% over the one year .
> 
> so while i reduced equities i bought more of these other assets which soared instead .
> 
> ...


Good for you.  

If you want to be safe you could buy CD's and Government treasure bonds and hold them to maturity..a safe and boring way to invest but you will not make the money that you do with good divided paying stocks over the years.


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## mathjak107 (Feb 29, 2020)

oldmontana said:


> Good for you.
> 
> If you want to be safe you could buy CD's and Government treasure bonds and hold them to maturity..a safe and boring way to invest but you will not make the money that you do with good divided paying stocks over the years.


I never hold them until maturity, nor do I buy individual bonds .i trade bond funds like Tlt for big profits ... stop with your nonsense ...dividend stocks are stocks ,,when discussing the fixed income side of a balanced portfolio they have nothing in common .

you do understand the difference between the use of stocks and bonds in a diversified portfolio I hope.        they don’t replace one another .


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## Aunt Bea (Feb 29, 2020)

The drop in the market doesn't bother me as much as the increase in capital gains generated by the mutual fund managers selling to lock-in gains.

The gains get automatically reinvested in the fund but I have to reach into my pocket and pay taxes on them, it's like getting kicked twice.


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## mathjak107 (Feb 29, 2020)

Aunt Bea said:


> The drop in the market doesn't bother me as much as the increase in capital gains generated by the mutual fund managers selling to lock-in gains.
> 
> The gains get automatically reinvested in the fund but I have to reach into my pocket and pay taxes on them, it's like getting kicked twice.


ETF’s don’t have that problem .....

but the flip side is these mutual funds will have plenty of losses to as theystill trade in and out of everything , not just winners ....we could assume they are doing tax loss harvesting as well


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## OneEyedDiva (Feb 29, 2020)

Aunt Bea said:


> The drop in the market doesn't bother me as much as the increase in capital gains generated by the mutual fund managers selling to lock-in gains.
> 
> The gains get automatically reinvested in the fund but I have to reach into my pocket and pay taxes on them, it's like getting kicked twice.


And this is why I'm glad that 62% of my portfolio is in a Roth. I remember that financial advisors used to recommend that Roths and Roth conversions were for people who made X amount of dollars (more than I made) or expected to have as much or more income in retirement. That never made sense to me.  People who will have less income in retirement certainly need to have tax free distributions just as much or more than those with higher incomes.


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## mathjak107 (Feb 29, 2020)

OneEyedDiva said:


> And this is why I'm glad that 62% of my portfolio is in a Roth. I remember that financial advisors used to recommend that Roths and Roth conversions were for people who made X amount of dollars (more than I made) or expected to have as much or more income in retirement. That never made sense to me.  People who will have less income in retirement certainly need to have tax free distributions just as much or more than those with higher incomes.


it can work both ways .....while Roth’s have other perks ,   from strictly a tax stand point they may not work as well in some cases .

for someone who writes off those traditional ira and traditional 401k  deductions at high tax levels working while they have maybe two paychecks coming in , the tax gods give us all a big benefit ..

If they are delaying social security and have non taxable sources of retirement income for a few years like cash set a side , over funded life policies , the zero capital gains bracket in a taxable account ,some roth  money , they can draw out up to 24k a year totally tax free as a couple using just the standard deduction as a couple ...

delaying to age 70 can see  8 years of tax free withdrawals of up to 24k a year tax free or up to 40k a year at less than 5% tax ....that is money written off at not only peak earning years  but possibly two checks coming in .

that beats a Roth any day that has taxes paid and the use of the tax money paid up front gone forever and no longer generating gains for what could be decades .

so it is not a slam dunk with a Roth ..it varies case by case 

most people don’t really know how to compare properly


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## mathjak107 (Feb 29, 2020)

Roth’s are a slam dunk when those with normal glide paths in their job or career start very early on .
Typically unless you have a non normal glide path in pay like a doctor,lawyer ,etc  who come in at high levels of pay we typically ramp up over decades .

we start very low and go up over 30-40 years ....starting early on with a Roth will have your overall tax rate average lower than your final years pay ....

most people compare wrong ..they look at their highest levels of pay in the final years and go we will be in a lower tax bracket in retirement...the reality is for most of us our average tax bracket spanning decades will actually be lower than our retirement bracket more often than not .

Conversions bypass those decades of doing Roth’s early on and you lose the ability to have that lower career average tax bracket going in a Roth 

to bad we did not have Roth’s early on in our careers ..most of us would have done very well with them .....now it is variable from situation to situation for us as to what will be better


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## OneEyedDiva (Feb 29, 2020)

mathjak107 said:


> it can work both ways .....while Roth’s have other perks ,   from strictly a tax stand point they may not work as well in some cases .
> 
> for someone who writes off those traditional ira and traditional 401k  deductions at high tax levels working while they have maybe two paychecks coming in , the tax gods give us all a big benefit ..
> 
> ...


And your second to last sentence can be said for so many things MJ. When I first started investing in a Roth, 401Ks weren't around and if they were, my job didn't offer them because we had pensions. I actually did both...I contributed to a traditional IRA for awhile. I did not delay, nor would I have delayed taking my SS until age 70.  Truth be told, I didn't think I'd live this long (health issues, same as what killed my sister at age 63....and she was waiting until 66).


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## oldmontana (Feb 29, 2020)

mathjak107 said:


> I never hold them until maturity, nor do I buy individual bonds .i trade bond funds like Tlt for big profits ... stop with your nonsense ...dividend stocks are stocks ,,when discussing the fixed income side of a balanced portfolio they have nothing in common .
> 
> you do understand the difference between the use of stocks and bonds in a diversified portfolio I hope.        they don’t replace one another .


"... stop with your nonsense ...dividend stocks are stocks ,,when discussing the fixed income side of a balanced portfolio they have nothing in common "

nonsense?  Only in your opinion which after reading your posts I question your ability to understand others.

FYI I stated...If you want to be safe you could buy CD's and Government treasure bonds and hold them to maturity..a safe and boring way to invest but you will not make the money that you do with good divided paying stocks over the years. 

Yes,  stocks are stocks you are correct on that. 

 I do know the difference between stocks and bonds

And you can have a  fixed income portfolio with stocks.


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## mathjak107 (Feb 29, 2020)

OneEyedDiva said:


> And your second to last sentence can be said for so many things MJ. When I first started investing in a Roth, 401Ks weren't around and if they were, my job didn't offer them because we had pensions. I actually did both...I contributed to a traditional IRA for awhile. I did not delay, nor would I have delayed taking my SS until age 70.  Truth be told, I used to never think I'd live that long (health issues, same as what killed my sister at age 63....and she was waiting until 66).


If  you are going to do comparisons and compare apples to apples  the individual what if’s have to be eliminated .... not everything will ever apply to every body .....each situation is unique to you ....but once you have a check list you can see what applies and what doesn’t.

none of us older folks even had 401ks until the late 1980’s if we had them at all.

but people today have a lot more choices than we did


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## OneEyedDiva (Mar 2, 2020)

mathjak107 said:


> If  you are going to do comparisons and compare apples to apples  the individual what if’s have to be eliminated .... not everything will ever apply to every body .....each situation is unique to you ....but once you have a check list you can see what applies and what doesn’t.
> 
> none of us older folks even had 401ks until the late 1980’s if we had them at all.
> 
> but people today have a lot more choices than we did


Yes they do. Too bad many aren't taking full advantage.  Re: "...each situation is unique to you" Well I know *that*!


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