RE:RE:So Where could the Market Go?newcoin wrote: You have to stay in the market so you don't miss the best market days. I will be owning the market constantly and buying on dips. I think this is a lifelong opportunity that we're being presented with.
Just curious
If you are in the market all the time then what money do you have to buy the dips? Seems to me that you must have some money on the sidelines like I do. Either that or you are like a Central Bank and can print money out of thin air...lol.
The other thing is - what do you mean by "the market". Do you mean just stocks or stocks and bonds?
The other question I have is how you can say this is a lifetime opportunity if you are fully invested and just followed the market down and back up? The only way it is a lifetime opportunity is if you have put some cash on the sidelines waiting to pounce when the time is right.
So for those who care to listen and not get bored, here is a real life example of what I did during the Great Recession before I retired from The Street.
At every meeting of the firm in 2008 and early 2009, there would be a presenter who was advocating not selling anything and staying the course using all kinds of what I would argue was bogus arguments. At the beginning, I would question the logic and eventually I stopped asking questions at the meetings since it was a waste of time.
I saw a big storm coming back then, just like I am now. I took my own money and millions of dollars of client money out of the stock market and bought of combination (depending on the client situation - risk and taxes etc) of cash, GICs and corporate and Government bonds.
While the market was going down, Central banks were cutting interest rates and the value of the bonds were going up as the stock market fell. The GICs made money based on the interest rate that was locked in. So while my colleagues on the Street kept beating their breasts and saying you can't miss the good market days and saw their client portfolio values plummet by as much as 50%, my clients' portfolio peformance ranged from slightly negative to positive.
Comversely, the market changed course in March 2009. I waited until early May to make sure things were real as to the market direction and sold my client's bonds and used their cash to buy back the stocks they owned before at fire sale prices and well below what they had sold them for.
Frankly I can see the history repeating itself. The only big difference between the situation now and back then is that buying bonds would be a bad investment because interest rates are going up not down.
Are there risks doing what I did?
For sure!!
If I was wrong about the storm coming my clients would have been worse off compared to those who didn't sell.
Time will tell if I am right this time.