How's the market treating you?

[Anonymous]

I am a big dummy when it comes to the stock market. I have a 401K that I contribute 15% to (increases by 2% every year) & I opened a Roth IRA a few years ago that gets a few hundred a month. This year I am focusing on ramping up my savings and supplemental accounts. 

I've been contemplating opening an investment account for years but was hesitant just due to lack of knowledge and, frankly, fear of losing all my money. 

Soooooo naturally I opened one last month and funded it literally last Friday. The first trades happened the past Tuesday. There is not much in there thankfully. I just wanted to test it out and see what happened for a year or so. Of course, I also have it set to very aggressive. I know not to panic but I will be changing it to a more conservative profile. Luckily I'm about 25 yrs from retirement but it's still just really frustrating. The exact thing that I was afraid of happened literal days after I finally broke down and opened an investment account. 

So, basically everyone has me to thank for the stock market crashing. Sorry guys! 

[dragontears]

I am thinking hard about taking money out of my HYS to invest in the downturn. I am 20+ years from being able to touch retirement funds, the market will go up before then so any market wide losses doesn't matter much

[Andypanda]

Don't care about the drop, it will go back up. Using the drop as a time to buy a bit more investment.

[Revelate]

Pretty much what iced said.

It would have been a dumb decision for me to sell a bunch of appreciated equities last week, still a dumb decision now... and one of my larger positions just reported fantastic earnings last night so I am not running for the hills yet.  

I had a run up of ~125k YTD as of last week (and kinda knew it was a small bubble but two jobs and California taxes = dumb to sell right now) and now down ~100k since then.  Yeah it is a large amount of money to me and probably most people but it's just on paper: it makes no difference to my current financial life, and I wish I had more money sitting on the sidelines for the buying opportunity.

I have to play tight with my finances right now going through a pair of mortgage applications, but ultimately corrections happen and long-term my investment thesis doesn't change at all.

End of the day, as of 20 minutes ago back to $0 revolving debt with 5k sitting in my checking account.

I'm OK.

[Citylights18]

I'm a trader with deep trading experience so I'll tell you how I set up my 401k.

My plan requires that I keep 1/2 in a money market fund while the other half I can buy equities with. I can buy options or short within my equity portion so further limits what I can do.

For the money market portion, since September I have kept it in the bonds funds. My thinking here is that I didn't trust the market to climb higher (admittedly I was wrong after the trade deal).  But what I did trust is the global downside pressure on treasury rates and all the cuts central banks were making. What that meant to my bonds fund however the risk of downside in the 12 month horizon was next to zero. The 10 year treasury rate moved from 1.6 to 1.9 but that only cost me 2% of my bonds position and I knew it couldn't go higher from the central banks. Now they 10 year is sitting at 1.17 which is a new low so we aren't going to see 2.0+ anytime soon.

I put money a few weeks ago into inverse natural gas because 1) its long term bear market and 2) peak consumption season for natural gas has ended. Now we also have sell off putting pressure on demand. I believe however there is going to be a bottom in price by about April 1st and that is when I exit my position.

With this selloff what I did is closed out my tech stocks and bought an inverse ETF position. What happens usually in these situations is that tech values ultimately come down pretty hard but they take a while to recover. The next earnings is April/May. Let's figure a choppy March with value of tech stocks right where they are now. We go into April/May and depending if these stocks have forward guidance they get an earnings beat. COVID-119 might be at its peak so hurting number, hurting sales they may still drop after earnings. A few may experience beats and shoot up 10%. But it might take a few quarters for some of them to come back to their Q1 earnings highs. No reason to get back into them at all until they are overdue. 

For instance Amazon I picked up last year at 1740 as its price was lagging from earning misses. It didnt make sense for them to be down 20 percent from high when the phase one trade deal was signed. I sold them last quarter for 2050 and took the profit.

I would keep an eye on the market to see if we bottom out the next couple of days. Don't go back in with any stocks until the market comes back 5% off whatever its low is. Right now its about 24,750. Until it closes a few days above 26,000 I would avoid going back in. If it goes down to 23,500 then wait until 24,750.

[Anonymous]

About 3.5 yrs ago, I switched my portfolio to low volitility so I am not getting as hammered as the next guy.

It has been a long time coming, the market/fed has been in manipulation mode since 2016, coupled w/ the virus debacle, it will probably get worse.

[sccredit]

While I am down overall this week (like everyone else) I am not taking any action.  Whether this is simply a correction due to the virus or it goes deeper into a bear market I will hold.  I have plenty of time and am okay just sitting and waiting.  I figure I will see plenty of ups and down before I retire.  I can be patient.  

[iced]

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@sccredit wrote:

While I am down overall this week (like everyone else) I am not taking any action.  Whether this is simply a correction due to the virus or it goes deeper into a bear market I will hold.  I have plenty of time and am okay just sitting and waiting.  I figure I will see plenty of ups and down before I retire.  I can be patient.  

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Indeed. None of this is going to matter to anyone on a 10+ year plan.

On the other hand, I won't be surprised when I get the phone call from my parents telling me they pulled the ripcord and bailed out at a loss because this one's the Big One. Just like they did in 2009. Sigh.

[Nomad3]

I'm a rookie when it comes to stocks, I invested in an Australian company that found a huge oil deposit years ago then they withdrew from NYSE and moved to SGX. Haven't really played the stocks since I got burned by that one lol.

On a more current note my 401k is pretty diversified, +4%-7% yields on some. ESOP was up +34% last year tho so I'm happy about that lol

[Revelate]

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@Nomad3 wrote:

I'm a rookie when it comes to stocks, I invested in an Australian company that found a huge oil deposit years ago then they withdrew from NYSE and moved to SGX. Haven't really played the stocks since I got burned by that one lol.

On a more current note my 401k is pretty diversified, +4%-7% yields on some. ESOP was up +34% last year tho so I'm happy about that lol

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Yeah ESOP plans if designed remotely well are basically free money and if I get one I may actually have to learn some fancier tricks than my typical buy and hold for 5+ year strategy.

That is an interesting perspective CityLights, appreciate your sharing it.  Out of curiosity who's your 401k provider?  Mine have all sucked over the years and I didn't have that flexibility with those accounts until I got them rolled over.

I may actually see if I can do an in-service rollover the one I am in now is particularly lackluster for anything more fancy than dumping it into Vanguard funds and it would free up some liquidity for buying the dip.