Do you think we are due for a drop in the market?
Posted: Thu Sep 09, 2021 12:25 pm
Curious about what people are expecting regarding a coming pull back in the market.
Gyroscopic Investing
Permanent Portfolio Forum
https://www.gyroscopicinvesting.com/forum/
Do you think we are due for a drop in the market?
https://www.gyroscopicinvesting.com/forum/viewtopic.php?t=12280
Page 1 of 1
Re: Do you think we are due for a drop in the market?
Posted: Mon Sep 20, 2021 2:00 pm
BOOM, down 5% just like that, curious to see where this goes, my models are all close to going out of equities.
Re: Do you think we are due for a drop in the market?
Posted: Mon Sep 20, 2021 6:28 pm
Out of equities completely? What would your portfolio then look like? Just curious.StrategyDriven wrote: ↑Mon Sep 20, 2021 2:00 pm BOOM, down 5% just like that, curious to see where this goes, my models are all close to going out of equities.
Re: Do you think we are due for a drop in the market?
Posted: Mon Sep 20, 2021 7:53 pm
As long as printer go Brrr, Stonks go up 
Re: Do you think we are due for a drop in the market?
Posted: Mon Sep 20, 2021 8:35 pm
And when do you go back into equities? If ever.barrett wrote: ↑Mon Sep 20, 2021 6:28 pmOut of equities completely? What would your portfolio then look like? Just curious.StrategyDriven wrote: ↑Mon Sep 20, 2021 2:00 pm BOOM, down 5% just like that, curious to see where this goes, my models are all close to going out of equities.
I have a friend that foresaw the Covid crash in March 2020 by correctly speculating that it had to spread out of China. So he dodges the correction by "going to cash". He's still sitting in cash having missed the epic run-up and now feels equities are too expensive so can't justify buying in.
The double edge of market timing.
Re: Do you think we are due for a drop in the market?
Posted: Mon Sep 20, 2021 9:14 pm
I did the same thing. Went all cash March 2020. But I also made a plan to get back in. I bought back in at 10% per month for 10 months. It worked out OK.glennds wrote: ↑Mon Sep 20, 2021 8:35 pmAnd when do you go back into equities? If ever.barrett wrote: ↑Mon Sep 20, 2021 6:28 pmOut of equities completely? What would your portfolio then look like? Just curious.StrategyDriven wrote: ↑Mon Sep 20, 2021 2:00 pm BOOM, down 5% just like that, curious to see where this goes, my models are all close to going out of equities.
I have a friend that foresaw the Covid crash in March 2020 by correctly speculating that it had to spread out of China. So he dodges the correction by "going to cash". He's still sitting in cash having missed the epic run-up and now feels equities are too expensive so can't justify buying in.
The double edge of market timing.
Re: Do you think we are due for a drop in the market?
Posted: Tue Sep 21, 2021 9:49 am
Dual Momentum Systemsbarrett wrote: ↑Mon Sep 20, 2021 6:28 pmOut of equities completely? What would your portfolio then look like? Just curious.StrategyDriven wrote: ↑Mon Sep 20, 2021 2:00 pm BOOM, down 5% just like that, curious to see where this goes, my models are all close to going out of equities.
Check the Menu button top right, and look at the REPORTING page for a current report with historical returns and data.
Re: Do you think we are due for a drop in the market?
Posted: Tue Sep 21, 2021 12:06 pm
Specific to COVID dump, my strategies were out at the end of February and back in the 1st day of June. Here is the 2020 year end report, you can see which investments all the strategies were in on page 4.glennds wrote: ↑Mon Sep 20, 2021 8:35 pmAnd when do you go back into equities? If ever.barrett wrote: ↑Mon Sep 20, 2021 6:28 pmOut of equities completely? What would your portfolio then look like? Just curious.StrategyDriven wrote: ↑Mon Sep 20, 2021 2:00 pm BOOM, down 5% just like that, curious to see where this goes, my models are all close to going out of equities.
I have a friend that foresaw the Covid crash in March 2020 by correctly speculating that it had to spread out of China. So he dodges the correction by "going to cash". He's still sitting in cash having missed the epic run-up and now feels equities are too expensive so can't justify buying in.
The double edge of market timing.
What your friend did, I don't consider strategic timing, but rather running scared.
Re: Do you think we are due for a drop in the market?
Posted: Tue Sep 21, 2021 3:47 pm
You might be right. I happen to think this particular friend has a pessimistic bias that influences most of his investing decisions. Some people will go to great lengths to avoid one dollar in loss, even if the price is five dollars in upside.StrategyDriven wrote: ↑Tue Sep 21, 2021 12:06 pm
What your friend did, I don't consider strategic timing, but rather running scared.
I thought something bad might happen with Coronavirus. But my investing horizon is long term in nature, a decade or more, and my positions reflect it. So I consciously decided to just face whatever came and ride it down, and ride it right back up.
I just don't have any confidence in my ability to time a market re-entry and the recovery can happen quickly and unevenly. I never would have predicted the sheer scale of the Fed's actions and what those actions did to the markets. The aforementioned friend for example thought it would take years for the markets to recover.
Do your positions have built-up gain reflecting long holding periods? If yes, then there's a tax implication inherent in the bullet dodging game. In the long game, tax deferral is precious.
If you run the numbers, assuming a reasonable investing horizon, there are more things that can go wrong than go right with market timing IMO.
That said, I would definitely be wealthier today if I had timed out and timed back in on the perfect dates to do so.
Bottom line, I'm not telling you what to do, just expressing my personal bias and rationale against market timing.
Re: Do you think we are due for a drop in the market?
Posted: Tue Sep 21, 2021 6:40 pm
I'll take the tax hit on some short term gains to avoid drawdowns like 2007 - 2009. Here is a chart of the S&P and my The Russell strategy over that time period, the S&P had over a 51% drawdown and ended up down 20% over these two years, whereas The Russell less drawdown and ended up nearly 70%.glennds wrote: ↑Tue Sep 21, 2021 3:47 pmYou might be right. I happen to think this particular friend has a pessimistic bias that influences most of his investing decisions. Some people will go to great lengths to avoid one dollar in loss, even if the price is five dollars in upside.StrategyDriven wrote: ↑Tue Sep 21, 2021 12:06 pm
What your friend did, I don't consider strategic timing, but rather running scared.
I thought something bad might happen with Coronavirus. But my investing horizon is long term in nature, a decade or more, and my positions reflect it. So I consciously decided to just face whatever came and ride it down, and ride it right back up.
I just don't have any confidence in my ability to time a market re-entry and the recovery can happen quickly and unevenly. I never would have predicted the sheer scale of the Fed's actions and what those actions did to the markets. The aforementioned friend for example thought it would take years for the markets to recover.
Do your positions have built-up gain reflecting long holding periods? If yes, then there's a tax implication inherent in the bullet dodging game. In the long game, tax deferral is precious.
If you run the numbers, assuming a reasonable investing horizon, there are more things that can go wrong than go right with market timing IMO.
That said, I would definitely be wealthier today if I had timed out and timed back in on the perfect dates to do so.
Bottom line, I'm not telling you what to do, just expressing my personal bias and rationale against market timing.
I understand when a person says they have a long term time frame, personally, I can't eat shit in the form of a 50% drawdown over two years and just pray it comes back to me later. Just can't do it.
Re: Do you think we are due for a drop in the market?
Posted: Tue Sep 21, 2021 8:57 pm
I have a less alarmed view of a 50% stock drop because I’m only one third stocks. If I can’t take a 15-20% overall loss I shouldn’t be investing.
Re: Do you think we are due for a drop in the market?
Posted: Wed Sep 22, 2021 1:06 pm
Where are you allocated with the other 2/3rd?I Shrugged wrote: ↑Tue Sep 21, 2021 8:57 pm I have a less alarmed view of a 50% stock drop because I’m only one third stocks. If I can’t take a 15-20% overall loss I shouldn’t be investing.
Re: Do you think we are due for a drop in the market?
Posted: Wed Sep 22, 2021 4:05 pm
Gold, cash, long bondsStrategyDriven wrote: ↑Wed Sep 22, 2021 1:06 pmWhere are you allocated with the other 2/3rd?I Shrugged wrote: ↑Tue Sep 21, 2021 8:57 pm I have a less alarmed view of a 50% stock drop because I’m only one third stocks. If I can’t take a 15-20% overall loss I shouldn’t be investing.
Re: Do you think we are due for a drop in the market?
Posted: Wed Sep 22, 2021 5:19 pm
I Shrugged wrote: ↑Wed Sep 22, 2021 4:05 pmGold, cash, long bondsStrategyDriven wrote: ↑Wed Sep 22, 2021 1:06 pmWhere are you allocated with the other 2/3rd?I Shrugged wrote: ↑Tue Sep 21, 2021 8:57 pm I have a less alarmed view of a 50% stock drop because I’m only one third stocks. If I can’t take a 15-20% overall loss I shouldn’t be investing.
Re: Do you think we are due for a drop in the market?
Posted: Wed Sep 22, 2021 5:43 pm
We're overdue for a drop in real terms if not in nominal.
This stock bull market has it at the same relative price to gold as in late 2005, but the economy looks much worse as well as the inflation.
I'm talking about the S&P and my guess is gold beats it handily in the next 10 years but we'll see. This is a bull market for the history books.
This stock bull market has it at the same relative price to gold as in late 2005, but the economy looks much worse as well as the inflation.
I'm talking about the S&P and my guess is gold beats it handily in the next 10 years but we'll see. This is a bull market for the history books.
Re: Do you think we are due for a drop in the market?
Posted: Thu Sep 30, 2021 5:34 pm
As September comes to a close, it looks like the S&P is down almost 5.25% from recent highs. Not the 10% or more I have been expecting, but also one of the biggest pullbacks this year.