Dow Crash Coming To Your 401k

[Montague]

Grab yourself the age-old classic The Intelligent Investor, move into an index, cheaper than in Graham's time.

Prescribe to Taleb's idea of barbell investing: 85-90% in rock sold index funds. The rest in stupid high-risk speculatives...because you never know. Think of bitcoin when it was 5c a coin.

Thanks for the recommendation!

I like your formula above. The best-performing portfolios out there are divided by risk/volatility. The returns usually aren't dramatic, but they "can" be sometimes (as you mentioned above). Most importantly, they're steady, often decent, and NEVER DEVASTATING to the point you lose your ass.

I know a couple who - at the time of the 2008 crash - had most of their money invested in Vanguard's Wellington fund, which is a low-risk, well-diversified, and historically decent-performing fund. They didn't earn any money from it during that time, but they also didn't lose anything, either. Considering the deleterious effects of that crash, breaking even was pretty good for a couple of "average" investors.

[IroNat]

Market-based Index funds will also lose money during a crash.

Th advantages of these funds are (if you pick the right ones) low expenses, low turnover (minimal capital gains income), and they closely track the market index (you get the return of the index minus minimal expenses).

You still need to use asset allocation (dividing your funds between for example bonds, cash and equity index funds).

For example if you are 40 years old:

60-70% Stock market index fund
30-40% Bond index fund

In addition you should have some cash readily available for liquidity.  Say 6-12 months living expenses.

[loco]

Market-based Index funds will also lose money during a crash.

Th advantages of these funds are (if you pick the right ones) low expenses, low turnover (minimal capital gains income), and they closely track the market index (you get the return of the index minus minimal expenses).

You still need to use asset allocation (dividing your funds between for example bonds, cash and equity index funds).

For example if you are 40 years old:

60-70% Stock market index fund
30-40% Bond index fund

In addition you should have some cash readily available for liquidity.  Say 6-12 months living expenses.

Eggxactly!

[loco]

Bogle: "Nobody knows nuttin'."

Eggxactly!

[loco]

Loco, you consistently post quality content, and this post is no exception!
That video was very insightful.


I've read of Buffett's pro-stance on index funds twice before, and am considering expanding my portfolio in that direction even more, given the way the market has been lately. The only reason I've put it off is because I was averaging over 14% for so long since the 2016 election. (And, I'm not crediting Trump for that. It's merely a reference point.)

Lately, that percentage has dropped enough (10.5%) that I'm now considering tweaking my strategy some - especially given the direction of things analysts like Dalio are predicting.

Thanks, Montague!

Because "Nobody knows nuttin"...nobody knows what the market will do or when it will do it, and because nobody knows which US stocks will do well and which will do poorly, buy them ALL on a regular basis by investing in a US TOTAL stock market index fund.  The same goes for international stocks and US bonds.

[Hypo]

Market-based Index funds will also lose money during a crash.

Th advantages of these funds are (if you pick the right ones) low expenses, low turnover (minimal capital gains income), and they closely track the market index (you get the return of the index minus minimal expenses).

You still need to use asset allocation (dividing your funds between for example bonds, cash and equity index funds).

For example if you are 40 years old:

60-70% Stock market index fund
30-40% Bond index fund

In addition you should have some cash readily available for liquidity.  Say 6-12 months living expenses.

Agree with this. You can still lose in a meltdown but not as bad. You can also still win with standout companies that break through in an index without being a direct investor.

[loco]

Agree with this. You can still lose in a meltdown but not as bad. You can also still win with standout companies that break through in an index without being a direct investor.

Correct!  With broad, low cost index funds you won't lose as bad, and might actually come ahead, simply because of their very low fees and because they're very well diversified.

Actively managed funds on the other hand always charge high fees, on top of your losses, and most of them are very poorly diversified.  And if they get lucky and do well or break even, the high fees negate all that and you still lose, while the fund managers always win because they get to keep your money no matter what.

[loco]

Dow surges 500 points after midterms, Trump signals bipartisan cooperation

U.S. stocks rose broadly on Wednesday after the midterm election results came in about as expected, lifting a cloud of uncertainty that was weighing on the market.

The major averages hit their session highs after President Donald Trump indicated he is willing to work with Democrats on policy initiatives that would help the economy keep growing.

The Dow Jones Industrial Average rose 501 points, led by gains in UnitedHealth and Microsoft. The S&P 500 gained 1.9 percent as the health care, tech and consumer discretionary sectors all rallied more than 2.5 percent. The Nasdaq Composite rose 2.4 percent.

https://www.cnbc.com/2018/11/06/stock-futures-open-flat-as-investors-await-midterm-elections-results.html

[Neurotoxin]

Stocks are DOOMED w/ Fed raising rates.

Tech stocks most vulnerable.

Currentl position: Short ALL indexes.


Enjoy the show!


-NT

[Montague]

Stocks are DOOMED w/ Fed raising rates.

Tech stocks most vulnerable.

Currentl position: Short ALL indexes.


Enjoy the show!


-NT

If you're honestly not a gimmick or troll, I'm willing to bet you don't even invest.

In fact, I hope you DON'T.
You're better off hiding your money under a mattress.


Regardless, I hope you see some decent gains somehow.

[chaos]

Stocks are DOOMED w/ Fed raising rates.

Tech stocks most vulnerable.

Currentl position: Short ALL indexes.


Enjoy the show!


-NT

All Trumps fault right?

[Coach is Back!]

Stocks are DOOMED w/ Fed raising rates.

Tech stocks most vulnerable.

Currentl position: Short ALL indexes.


Enjoy the show!


-NT

lol

[Dos Equis]

Stocks are DOOMED w/ Fed raising rates.

Tech stocks most vulnerable.

Currentl position: Short ALL indexes.


Enjoy the show!


-NT

Mons Venus posting?  The market must have had a down day.  I tell you this dude is a prophet . . . .

[Montague]

Mons Venus posting?  The market must have had a down day.  I tell you this dude is a prophet . . . .

Oh, shit...
Is that really who NT is?

I remember Mons. Was he banned under his "MV" handle, or did he CHOOSE to no longer post from it - presumably from sheer humiliation and embarrassment?

[Neurotoxin]

All Trumps fault right?

No, not at all.

In fact, Hussein was given an 8 year gift of ZIRP from the Fed. Zero Interest Rate Policy triggered housing market surge & stock market levitation. Since Hussein had no economic policies, Fed policy allowed him to focus on 8 yrs of Identity Politics, as ZIRP worked it magic.

 As soon as Trump took office, The Fed ended ZIRP. Coincidence?

Position: Short ALL indexes, heavy Tech stocks.

- NT

[Dos Equis]

Oh, shit...
Is that really who NT is?

I remember Mons. Was he banned under his "MV" handle, or did he CHOOSE to no longer post from it - presumably from sheer humiliation and embarrassment?

Yes that's who it is.  I'm not sure why he changed his name.  Maybe it was all those 9/11 Troofer posts? 

[Neurotoxin]

No, not at all.

In fact, Hussein was given an 8 year gift of ZIRP from the Fed. Zero Interest Rate Policy triggered housing market surge & stock market levitation. Since Hussein had no economic policies, Fed policy allowed him to focus on 8 yrs of Identity Politics, as ZIRP worked it magic.

 As soon as Trump took office, The Fed ended ZIRP. Coincidence?

Position: Short ALL indexes, heavy Tech stocks.

- NT

Dow down - 400 points

Nasdaq down - 220

Enjoy the show!


-NT

[Dos Equis]

Dow down - 400 points

Nasdaq down - 220

Enjoy the show!


-NT

What kind of show is it when the market increases?  And how come you never post about the "show" when the market goes up? 

[Montague]

What kind of show is it when the market increases?  And how come you never post about the "show" when the market goes up? 

 

[IroNat]

Dow down - 400 points

Nasdaq down - 220

Enjoy the show!


-NT

Points is meaningless.

Talk %.

The Dow is 25,000.

400 is 1.6%.  Meaningless.

Tell me when it drops 20% (5,000 points).

[Neurotoxin]

40% of S&P stocks are DOWN over 20%, we’re just getting started!

 Enjoy the show!


-NT

[IroNat]

40% of S&P stocks are DOWN over 20%, we’re just getting started!

 Enjoy the show!


-NT

Meaningless unless you own those stocks.

[Neurotoxin]

No, not at all.

In fact, Hussein was given an 8 year gift of ZIRP from the Fed. Zero Interest Rate Policy triggered housing market surge & stock market levitation. Since Hussein had no economic policies, Fed policy allowed him to focus on 8 yrs of Identity Politics, as ZIRP worked it magic.

 As soon as Trump took office, The Fed ended ZIRP. Coincidence?

Position: Short ALL indexes, heavy Tech stocks.

- NT

Read and learn children.

Another GREAT money making day! 🤑🤑

Position: SHORT all Market indexes.


- NT

[loco]

http://www.getbig.com/boards/index.php?topic=620698.msg8619951#msg8619951

[IroNat]

There's a comet heading towards Earth right now with your name on it.

Have that extra drink before it hits.