When do they start to buy the dip?

Jim Richardson said:
Taking a big picture view, Wall street got bailed out with low interest rates from the Fed, as well as TARP etc from Congress. The Fed now needs to raise interest rates to a point where it can again lower rates should monetary stimulus be needed. It needs to refill the expended bagpipe if you will. Ideally, Congress should have been tapering fiscal stimulus (spending) alongside the Fed's monetary tighening (raising rates), creating a public to private shift. Ideally.

I view this in total as the taxpayers getting hit to bail out Wall St in 2008, and now ten year later the equity holders are getting hit to reimburse the Fed, so to speak. Yes, the people riding nice mountain bikes are both taxpayers and equity holders, and pay twice.

The price of a stock does not reflect its value, but instead our collective hopes and fears as to its value. If we buy good stocks, the price today or yesterday are just noise. Data are the purchase price, the dividend, and the eventual sales price. ( I like to show investors the S&P 500 chart: first over 5 days, then one month, then one year, and finally over 20 years. The choppy ups and downs disappear over the long term. )

Now, as to when to buy on the dip? If we buy good stocks, we can buy any time. I already have some good stocks. I have some good stocks that are down from my purchase price. Some of those I have in IRAs. Should this rout continue, I will do Roth Conversions: essentially re-buying on the dip at a discounted tax cost. After all, they are good stocks.
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WOW!

Three great posts in a row in this thread.

@Santapez [transportation genius]Today.jpg

@rick81721 (from the assisted living facility)

@Jim Richardson {great having lunch @ CR}

I will drink to that, @mattybfat
 
[QUOTE=" Does anyone know a way to purchase SDR? .[/QUOTE]
H Peter Gray wrote he expects SDR will be the next reserve currency.
 
@Santapez - i'm assuming you are still "Saving" for retirement even if you aren't buying stock ?

the high yield funds are off about 10% but pay 6% or more. depending on the fund, it may be a return of equity, and the fund value drops - to be adjusted when sold.
disclosure: I have these.

ex: mhcax, vweax, bhyax
 
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fidodie said:
@Santapez - i'm assuming you are still "Saving" for retirement even if you aren't buying stock ?

the high yield funds are off about 10% but pay 6% or more. depending on the fund, it may be a return of equity, and the fund value drops - to be adjusted when sold.
disclosure: I have these.

ex: mhcax, vweax, bhyax
Click to expand...

In my retirement accoount I follow a plain 3-fund portfolio @ Vanguard. All funds in on Jan 2nd where I'll re-balance. Previously I kept it in a dated retirement fund, but figured the extra 5 minutes a year is worth breaking out into the 3 funds myself for the savings in fees, however minimal those fees are. (And just a note, man it looks bad when you swap over during 2018... and look at it now...)

In my regular account I'm tax harvesting a bit so I'm actually locked out of my 3 funds there for the next 30 days. My biggest reason for not investing right now also is I screwed up and did S&P500 for my main fund, not Total US stock. Figured I'd take money out for tax harvesting and I'll get back into regular automated investments at the end of the year or January.

"Cash" as much as possible is going into 1 year, mild-risk bonds in a ladder. I spend 5 minutes a month buying some. Much higher interest than CDs, a typical bond fund and doesn't have the interest rate risk of a bond fund that we have in this raising rate environment. I'm betting GE will pay their bills a year from now, but I won't make the bet they'll pay them 2 years from now for a minimal gain...

I'm far, FAR from having lots of money but I've learned I'm not a stock market genius nor plan to be one. By doing automated investments into a 3-fund portfolio it's easy to constantly be in the market, see the #s rise and not worry how the market is doing.

I've gotten burned by the high-yield funds before, just feel they are too risky for short term money. Plus there's capital gains issues when selling, if I buy a house I'll need the $$. Easier to deal with bonds maturing. For long-term money I'd go stock market 90% anyway.
 
Santapez said:
In my retirement accoount I follow a plain 3-fund portfolio @ Vanguard. All funds in on Jan 2nd where I'll re-balance. Previously I kept it in a dated retirement fund, but figured the extra 5 minutes a year is worth breaking out into the 3 funds myself for the savings in fees, however minimal those fees are. (And just a note, man it looks bad when you swap over during 2018... and look at it now...)

In my regular account I'm tax harvesting a bit so I'm actually locked out of my 3 funds there for the next 30 days. My biggest reason for not investing right now also is I screwed up and did S&P500 for my main fund, not Total US stock. Figured I'd take money out for tax harvesting and I'll get back into regular automated investments at the end of the year or January.

"Cash" as much as possible is going into 1 year, mild-risk bonds in a ladder. I spend 5 minutes a month buying some. Much higher interest than CDs, a typical bond fund and doesn't have the interest rate risk of a bond fund that we have in this raising rate environment. I'm betting GE will pay their bills a year from now, but I won't make the bet they'll pay them 2 years from now for a minimal gain...

I'm far, FAR from having lots of money but I've learned I'm not a stock market genius nor plan to be one. By doing automated investments into a 3-fund portfolio it's easy to constantly be in the market, see the #s rise and not worry how the market is doing.

I've gotten burned by the high-yield funds before, just feel they are too risky for short term money. Plus there's capital gains issues when selling, if I buy a house I'll need the $$. Easier to deal with bonds maturing. For long-term money I'd go stock market 90% anyway.
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Bonds look ready to tumble imo. Junk bonds really indicate that. I think we will see news bound drops everywhere. Perhaps a longer term bear market. The fed raising rates should help banks but they too will adjust and follow the markets.
 
David Taylor said:
Bonds look ready to tumble imo. Junk bonds really indicate that. I think we will see news bound drops everywhere. Perhaps a longer term bear market. The fed raising rates should help banks but they too will adjust and follow the markets.
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I agree the values of the bonds will possibly drop a lot more than where they are now. But I'm not speculating on the price of the bond, I'm buying them based on the interest rate and reliability of a payout. I'm holding them to maturity so the value doesn't matter to me. And they're all short term.

As a younger investor with no debt, I don't mind the higher interest rates as long as I'm on the right side of inflation...

I'm not trying to beat the market, I'm trying to get the long-term market returns...
 
so is the downturn a result of profit taking? Or required covering of puts/calls?
is this a bounce back after some short term clearing of the above?

or is it like climate vs the weather? one day is not indicative of change in any direction.

it was nice to see some green tho!
 
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