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Bowl Leader
Almost bought this today.
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Mentor
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Thoughts on Allen & Ovary M&A NY?
I work with a bunch of shitheads. Am I alone?
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Subject Expert
If you have years until retirement, don’t try to time the market. You’ll lose.
I feel ya. Debated it myself. But, if I do, I’m sure this would happen shortly after:
“In a miraculous turn of events, the DJIA has rocketed above 40k points for the first time.”
So please take one for the team and let us know when you do! TIA
5% isn’t worth the capital gains tax, is it?
Let’s assume you take out $1000, up from $.01. You pay 20% cap gains, meaning you now have $800. The market falls 5%. You would have $950 had you stayed in, but now you have $800. You buy in and the market rises 10% again. You now have $880, but you could have had $1045. You are $120 down from where you started and realized an opportunity cost of $165.
However, let’s test this another way. Let’s say you have $1000, up from your $800 investment. Now the 20% cap gains only applies to $200 of your portfolio. You pay $40 only in taxes. Now, the market falls 5%. You have $960 and you buy in. You would have had $950 had you stayed in. The market rises again 10%. You have $1056 instead of $1045.
So as long as cap gains<correction, then yes. Else, no.
Subject Expert
Except it’s virtually impossible to time the market and buy back in at the correct date. It’s FAR more likely that you would miss the gain and end up worse off than if you’d stayed in originally. Market data over decades shows that the bulk of gains over time are lost if you missed individual dates over those time period, and those individual dates usually follow loses in the market.
Subject Expert
No. Don’t do this. I have done it before (e.g., early Covid) and always lost out.
The reverse play, however, of “stocks are on sale! Now’s the time to buy!” has worked out well for me (e.g., 2015 “Black Monday”). You can’t time the bottom of the market either but chances are if you buy right now you’ll see some good increases in a few years imo.
Time in market is better than timing the market
Mentor
Do it once, lose some money, then never do it again. This is what happens to most of us. Worst case scenario you time the market well this time and thereby come to believe you know what you’re doing, which then leads you to repeat the doomed strategy with more money later on. Good luck!
What you really need to do is put more money in. I’m serious. This is a great time to take advantage of other people’s panicking and not panic yourself, if you don’t need the money now.
Exactly. It's like you're getting discounted prices. Buy more.
Coach
My friend who is an excellent economist saw all the warning signs of an overheated market and pulled out his money into cash— in late 2019, missing a few years of historic gains. He’s right- in the long run, but, you can’t time the market. Just make sure you are diversified and stick with the plan. If you make regular contributions you’re going to get the benefit of buying low when it bottoms out.
Someone once told me: invest when the market is up, invest when the market is down, invest when the market is steady. Don’t pull out your money. It is often times not a good idea.
Lol, no. Set it and forget it.
Can someone explain the dynamic between the federal reserve, bond markets and the impact it’s having right now? Seems like whatever the fed does, it will either negatively impact inflation or the stock markets.
Don't do it!!! The long term trend is always UP!
Do not do this.
Larger point: If you feel the need to liquidate your stocks during a correction, you should reevaluate whether you can handle the risk tolerance that comes along with investing in equititiss in the first place.
Nope. Regular investment schedule. Buy on the way down.