Gyroscopic Investing

That feeling of elation when stocks are only down 250 pts at the end of the day.

dualstow wrote: ↑Fri Mar 06, 2020 2:54 pm That feeling of elation when stocks are only down 250 pts at the end of the day.

lol

Are you kidding? I LOVE it when stocks go down. Tax loss harvesting, rebalancing/buying opportunities galore. Of course, I would't be quite as happy if not for the gold and bonds.

Not to mention mortgage refinancing...I'm starting to see the rates drop already! They've gone from 3.875% to 3.375% just in the past few days.

sophie wrote: ↑Sat Mar 07, 2020 9:48 am Are you kidding? I LOVE it when stocks go down.
...

You're absolutely right. Psychologically, it feels better when stocks go up. However, I always tell the wife, "We actually want stocks to go down, because we can buy them cheaper." And when they go down in the way they've gone down late February/early March, she starts to ask, "Are we ok?" And I repeat that it's good for stocks to go down while we're relatively young.

Like Warren Buffett said recently, as long as I don't have to sell shares.

well never forget those who retired in 1964 had flat markets for 20 years .... 2000 took 13 years to get back inflation adjusted .

so unless you have little accumulated the damage is greater in lack of compounding then one may gain ...

in the end that little bit you buy on sale in comparison may be like peeing in the ocean .

a mere 7% drop today represents 10 years of maxing out my 401k at catch up ...

so be careful what you wish for ... i rather not have the dips then have the sales.

sell or not those numbers now are what our yearly safe withdrawal rate is based on so these numbers always count , you just may not care at that point .

an asset based loan , retirement draws , estate taxes both state and federal , getting a mortgage in retirement , and your net worth all hinge on those values , whether you sold or not .

well never forget those who retired in 1964 had flat markets for 20 years .... 2000 took 13 years to get back inflation adjusted .

I'm younger than you are and therefore need to keep a stockier allocation.
I'm not a daytrader, and need to not miss the best ten days of market rises.

I was 100% equities up until I prepared for retirement. Mitigating temporary short term dips with bonds and permanently hurting long term returns as a long term investor made no financial sense to me in my accumulation stage

If anyone wants to feel a bit better about the stock selloff the last couple weeks, this is a great video: https://www.youtube.com/watch?v=ddTRrc0A7Vo

He looks back historically since the VIX was first started in 1990 at each of the 10 times that we had a VIX spike similar to what we have experienced the last few weeks. This data includes the financial crisis, the tech bust, the European debt crisis, the asian crisis, Russian debt crisis, amongst others. So some pretty scary times are included here. The TLDR is that it's likely to be volatile for a few months, and in most cases the market did print a lower low in the coming weeks (average additional drawdown of ~3.5%), but there was only 1 single case (Sept 2001) where the market was lower 1 year out. The average gain 1 year out from the VIX spike? 18%. Median gain 1 year out? 23%. Even in the worst spike in history (one that makes the current one look like a walk in the park), Oct 2008, 1 year out the market was up 25%. So based on history, the probability looks good that the next year will be very volatile, but have good gains when it's all said and done.

pmward wrote: ↑Sat Mar 07, 2020 2:34 pm If anyone wants to feel a bit better about the stock selloff the last couple weeks <snip>

I don't know why anyone would need to feel better about it. With the performance of gold and LTT lately, my portfolio's at an all-time high.

I'll take this performance any day of the week, and twice on sunday!

> well never forget those who retired in 1964 had flat markets for 20 years .... 2000 took 13 years to get back inflation adjusted

What was going wrong in the real economy to cause this.

nflation was 2.50% -3.50% . who would have guessed in 3 years time it would have doubled and by 1974 it would be 11%. it was crushing , but with inflation so low who ever expected a 4x increase coming .

business week did their famous death of equities as an asset class headline

So the Fed was accurately reporting inflation through the 60s-80s? Then they cranked up rates...so they did everything right?

drumminj wrote: ↑Sat Mar 07, 2020 4:20 pm

pmward wrote: ↑Sat Mar 07, 2020 2:34 pm If anyone wants to feel a bit better about the stock selloff the last couple weeks <snip>

I don't know why anyone would need to feel better about it. With the performance of gold and LTT lately, my portfolio's at an all-time high.

I'll take this performance any day of the week, and twice on sunday!

Ditto, I hit an all-time high despite the massive sell off. March 9, 2009 (11 years ago to the day) was the stock market bottom from the 2007 crisis. Fast forward 11 years and March 9, 2020 is Black Monday with oil dropping 30% and stock markets across the world crashing. There is fear in the streets......feels like it could be another bottom.

With today's futures pointing to a 5% drop, my stock allocation may hit a trading band.....now the hard part, unemotionally buying stocks when the band is hit and "catching a falling knife".

boglerdude wrote: ↑Mon Mar 09, 2020 12:46 am So the Fed was accurately reporting inflation through the 60s-80s? Then they cranked up rates...so they did everything right?

i don't want to go off on a tangent but the cpi is more accurate today then back then ... it will never be a cost of living index ... it is only a price change index taking the temperature of the 1500 mini economies that make up this country .

our personal cost of living is unique to us and where we live ... it involves our personal choices of what we buy x how many times we personally buy it x some quality factor . as higher cost goods tend to see more price inflation but tend to last longer .... we also have our own personal substitutions we will do when something gets to high ..


another factor is retirees with discretionary income tend to spend in a smile shape ...they spend more in the go go years early on , then we have the slow go years where as we age spending falls off a cliff ...that we no longer do or buy tends to cover increases in what does go up , so inflation is very different than someone raising a family .... then we hit the no go years where health care costs ramp up .....

so no cpi is a measure of anyone's personal cost of living

BREAKING Stock trading halted as market tanks 7%. Circuit Breakers in effect.

Holy crap it really is our generations Black Monday. I am looking at harvesting my losses in ITOT by shuffling into VTI, but I'm going to wait until we have at least a 30 minute period with stocks not being halted, as I don't want to be selling into a liquidity squeeze.

VIX is at 61.62. HOLY %@#*!

VBR is back go ~July 2016 levels. Ouch.

Does anyone have comments on ETF spreads?

dualstow wrote: ↑Mon Mar 09, 2020 12:53 pm Does anyone have comments on ETF spreads?

This is something I'm worried about, and why I haven't pulled the trigger yet on my ITOT to VTI tax loss harvest shuffle today.

Also, VBR is down 9.28%. Are we going to hit -10% in one day? I literally just tax harvested IJS losses into this last week. Almost time to harvest this again... any other recommendations on worthwhile SCV ETF's that can be shuffled into if we continue to plunge?

pmward wrote: ↑Mon Mar 09, 2020 1:01 pm Also, VBR is down 9.28%. Are we going to hit -10% in one day? I literally just tax harvested IJS losses into this last week. Almost time to harvest this again... any other recommendations on worthwhile SCV ETF's that can be shuffled into if we continue to plunge?

VB is a good option. It's small caps without the value tilt, and usually moves similarly to VBR while avoiding any wash sale issues. I avoid trading in volatile markets, but when things calm down I'll do some TLH as well. The losses will come in handy to rebalance all of these bond gains.

Dang, I just did TLH and have to wait a month for the next opportunity...

However, my Google sheets ETF simulation of my portfolio came up with the answer to Rebalance Now:

Last rebalance 1/1/20. All assets started at 20% of portfolio. Unfortunately, interest/dividends not counted (couldn't figure out how to do that). My rebalance bands are 14%/26%.

Current asset proportions:
Total stock market (VTI) 16.7%
Small cap value (IJS) 14.7%
Long bonds (TLT) 26.7% <-- this is the rebalance tripwire
Gold (GLD) 22%
Cash (SHV) 20%

Gratifyingly, despite today's drop the portfolio has decreased only 0.48% since Jan 1.

So...rebalance now (tonight/tomorrow AM more likely) or wait?

Tyler wrote: ↑Mon Mar 09, 2020 1:10 pm

pmward wrote: ↑Mon Mar 09, 2020 1:01 pm Also, VBR is down 9.28%. Are we going to hit -10% in one day? I literally just tax harvested IJS losses into this last week. Almost time to harvest this again... any other recommendations on worthwhile SCV ETF's that can be shuffled into if we continue to plunge?

VB is a good option. It's small caps without the value tilt, and usually moves similarly to VBR while avoiding any wash sale issues. I avoid trading in volatile markets, but when things calm down I'll do some TLH as well. The losses will come in handy to rebalance all of these bond gains.

Yeah I was also thinking about maybe IJS. My luck is I would shuffle and suddenly the value factor goes gangbusters, haha. But I'm already timed out for another 20 some days on going back to IJS. I'll probably sit on my hands for the small caps a bit longer and harvest my large caps first.

sophie wrote: ↑Mon Mar 09, 2020 1:21 pm Dang, I just did TLH and have to wait a month for the next opportunity...

However, my Google sheets ETF simulation of my portfolio came up with the answer to Rebalance Now:

Last rebalance 1/1/20. All assets started at 20% of portfolio. Unfortunately, interest/dividends not counted (couldn't figure out how to do that). My rebalance bands are 14%/26%.

Current asset proportions:
Total stock market (VTI) 16.7%
Small cap value (IJS) 14.7%
Long bonds (TLT) 26.7% <-- this is the rebalance tripwire
Gold (GLD) 22%
Cash (SHV) 20%

Gratifyingly, despite today's drop the portfolio has decreased only 0.48% since Jan 1.

So...rebalance now (tonight/tomorrow AM more likely) or wait?

Flip a coin, seriously. Any decision you personally make is suspect to emotion or prognosticating. If you are supposed to rebalance, do it. Only caveat is your bands are tighter than mine.

My closest rebalance item is VBR. Target 5%, bands 3-7%, currently 3.65%

Well the bell has rung. The DOW had it's #11 worst single day percentage drop, and it's #1 worst point drop per https://en.wikipedia.org/wiki/List_of_l ... al_Average

VBR didn't quite hit that -10%, but it sure tried! -9.62% is the ending damage. WOW is all I have to say to that.

Also, the 5% intraday fade on TLT shows that the selling truly was indiscriminate today.