Are you acting on the market turmoil?

[spotty_dog]

Or are you following a plan that requires you not to act/not to peek?

We're down about $15k in under two weeks. Easy come, easy go! I'm kind of dollar-cost averaging, because we had a big chunk-o-change to drop into the market several weeks ago and I've been waffling about the purchases. So every few days I check to see how our stock/bond balance is faring, and drop some more into the asset class that needs shoring up. A bit of a stock-buying day today!

[Sheherezade]

Thanks for the heads up. We are generally steady as she goes types, but I did very well throwing most of our cash in to the market when it bottomed out in 2007. Be brave when others are scared; be scared when others are brave.

[MAPPLEBUM]

Just going along as usual. My bond fund has made a profit for the first time in months. Besides that I'm not paying much attention. Are they expecting it to get worse? Is there something going on politically?

[SoonerTexan]

I'm just pissed because my stock option value is wayyyy down right now :/

[spotty_dog]

ST, do you usually cash out your company stock as soon as limitations are met?

As for whether this is really a noticeable or important or long-lived downturn, I don't know anything anybody else doesn't. Ebola, Hong Kong, ISIS, there's lots of reasons for uncertainty right now and a bit of wiggling in prices isn't unexpected. Anyway if you look at the last couple of years of stock market values (http://finance.yahoo.com/echarts?s=%...EGSPC;range=2y), well, for me, the phrase "what goes up must come down" runs through my head. So this might get worse before it gets better. But if our economy is going to survive at all, prices are eventually going to come back up here and higher, and in the meantime I'm gonna get me some stocks on sale.

That said, if we had a steady paycheck and a steady deduction automatically investing, I'd just shut my eyes and let that continue on except for maybe a pre-determined annual rebalancing. I'm pretty sure there's no need to go Chicken Little at this point.

[spaz]

Nope, staying with the plan. The stock market normally does poorly in October every year. We always wait and buy when things have come close to bottoming out.

[spotty_dog]

Nope, staying with the plan. The stock market normally does poorly in October every year. We always wait and buy when things have come close to bottoming out.

Sell in May and go away? The last two times the market did anything like bottoming out were January 2003 and January 2009.

[SoonerTexan]

ST, do you usually cash out your company stock as soon as limitations are met

Yes, assuming things have been relatively steady stock price wise. My company's stock tends to not be too volatile in either direction. I'm not viewing it as a long term investment because if I leave/get layed off before it is exercised it is gone.

There's not much I can do, though, because I have 1.5 years before "the big one" vests. I just hope it really doesn't tank because then I have to make some tough decisions about how long I want to continue working after that point

[MsSassyBaskets]

Wish I had some money to throw at it right about now. Most of my tiny portfolio is down, except for one magical mutual fund I managed to pick up when it dipped early last year. It's still up 60%! Not really sure what I would buy if I could though.

[spotty_dog]

Do you have an Investment Policy Statement? That can help guide you on the what-whens. My IPS says to stick as close as I can to 70% stocks/30% fixed-income investments (with other sub-categories specified), to diversify widely, and to minimize costs. So I buy mostly index funds. Vanguard's VTSMX is a good, cheap choice if you need to boost your equity exposure right now.

DS just sent almost half of his October paycheck to the brokerage firm...

[MAPPLEBUM]

Talked to husband, think we will. His dad sent him a text saying to invest this week. But I was *kind of* planning to do that anyway.

[spaz]

Sell in May and go away? The last two times the market did anything like bottoming out were January 2003 and January 2009.

Yeah, we bought quite a bit of stock in January of 2009. They have done quite well!!!!

[spotty_dog]

So, I guess the Bogleheads would ask, if you're buying now based on current affairs -- what are you buying *with*? Keeping "dry powder" (money that's earmarked for investment but waiting for an opportunity to come along) is a drag on your potential returns. And spending money that's earmarked for other stuff just because you think you see an opportunity and know better than the PhDs on Wall Street can be as bad as gambling -- sometimes.

As for me, I am indecisive and was holding on to my cash because it should have been invested in fixed income, and when I couldn't make up my mind what to buy, I decided that cash is technically a fixed-income investment. And the reason we're putting a chunk in from this month's paycheck is because it's a big check and we don't have anything else to save for at the moment. But it's not all going into equity either, it'll be invested just like every other month -- I just expect equities to need a little more boosting than bonds this month!

[metroguy]

i think if you start worrying about the market, you have too much invested in the market. in theory, the fixed income (bonds) funds should have done well--and should offset the decline equity market. anyway, easy for me to say this stuff now that i have very little equity in the market. i done horrible on individual stocks. i still have the gambling itch--it's in the genes (father,grandfather, great grand father--all lost their shirt in gambling). recently i put some money (30%) in the market. from reading everyone's comments, i think the equity market has a way go down. way too much optimism.

[spotty_dog]

i think if you start worrying about the market, you have too much invested in the market. in theory, the fixed income (bonds) funds should have done well--and should offset the decline equity market. anyway, easy for me to say this stuff now that i have very little equity in the market. i done horrible on individual stocks. i still have the gambling itch--it's in the genes (father,grandfather, great grand father--all lost their shirt in gambling). recently i put some money (30%) in the market. from reading everyone's comments, i think the equity market has a way go down. way too much optimism.

Agree with the bolded! Sometimes when the market was on fire and going up, I felt silly with my 30% bonds, but now it's a reassuring ballast -- it's not offsetting anything per se, as I naively thought when I first learned about asset allocation, but it's at least protecting some of my capital. And if you look at the Bogleheads comments or the ones here, nobody's actually scared. If I lose 50-60% of my equity allocation with such a big portfolio, I'm not gonna lie, I'm going to be scared. That's a shit-ton of money. But I'm going to stay the course. What else is there to do?