Posted on 03/30/2019 7:44:39 AM PDT by CptnObvious
When Investing Seems to go down a Black Hole (Part 2).
Lately the market has been weird. The S&P went down 3% on some bad news last Friday and it still hasn't recovered yet. And my investments in our 403B seem to be going down a black hole.
Even though we are investing 24% it still seems like we can't get over the high water mark of last October. Is it time to make changes or even think of bailing out?
Well let's first take stock rather than do the worst thing and make financial decisions based on emotions.
1) Where are we at? Well, we are about 5 years till our planned retirement. If it were three, I'd be talking to my financial adviser.
2) How good are the funds? Well, since we invest the Dave Ramsey way; all have good 10 year track records. All have dividends with good consistency and none have closed to new investors.
3) None of the funds show strange fees or anything that could account for this.
So what's happening? I'm buying really low, Hallelujah!
Sometimes when investing seems to go into the black hole, it can be really good and it's not time to get spooked. And if I can't shake of that spooky feeling it is time to talk to my financial adviser.
Thank you, Dave Ramsey, for the good investment advice that undergirds my investing and for the Smartvestor Pro adviser that can keep me on track.
If you are watching the market minute-by-minute and making knee-jerk decisions based on noise, you will always buy high and sell low.
Invest in indexed funds and forget it about it.
Invest for the long-ish term, yes. But there are a gazillion funds that beat the S&P average returns.
Some years.
” Comments on similar investment feelings are welcome “
Consider all the money Congress has literally stolen from
the Social Security Fund over the past decades. Did Congress ever pay it back? NO. Did they steal from the Railroad Retirement Pension fund …. ? …. No, the Railroad guys were smart enough to make sure the Railroad Retirement Act was in place. The Railroad Retirement Act prohibited Congress from ever being able to get their hands on what the Railroad workers put away for retirement.
That’s why a Railroad Retirement monthly check is about double of a Social Security (monthly) check.
The plan was great, the money would be there , the problem is Congress has helped themselves to pilfer from working class people by outright stealing from the Social Security Fund. Amen.
If a 3% decline concerns you, you don’t have the risk tolerance for stocks.
Either develop tolerance, or get out of stock investing.
I have seen 50% declines in my portfolio, which has had over 300% returns since I started. Do you like 300% returns? Be prepared to (temporarily) lose your shorts.
The last ten years have not been “normal.” We are nearing the end of the cycle. Remember the swings back in 2007? They were crazy too.
The end of this cycle might be next week or two years. Slow and steady wins the race. But this is not a normal race.
Please briefly explain the Dave Ramsey method. I remember he was on Tv but I’m too lazy to search other than here on FR.
My dem wife has our IRA. We have ample pensions plus her required minimum distribution since age 71.We are both around 80 and retired over 20 years.
Her IRA in in T Rowe Price funds: Balanced, Health Science and the RMD goes into a non IRA tax free bond fund ( our travel pot)
Larry
Buy gold! The world is going to end, stock up on ammunition, guns, freeze dried foods, and geiger counters for your bunker. ;-)
It looks like you don’t have much appetite for risk. Perhaps you should look at target date funds. Lower returns, but lower risk. Most of the big fund companies will offer something like a Retirement 2025 fund (usually in 5 year intervals) that move an increasing portion of the money from growth funds to safety funds to take the worry out of re-balancing and shifting. You will still have fluctuations, but not as large. Disclosure - I avoid such funds since they don’t have as much upside benefit as the more volatile funds.
And remember, investment advisers are eating into your returns.
“But there are a gazillion funds that beat the S&P average returns.”
What??? That is not true. There is a mountain of evidence showing that over the long term, actively managed funds very rarely beat the index. This is especially true when factoring the effects of high fees and expenses which devastate your long term returns. Read pretty much anything by the late great Jack Bogle.
A small company will do well. One buys the stock. The company continues to do well and the stock rises. Then, suddenly, things don't supposedly go so well. The stock dives and the company files for bankruptcy (Chapter 11 style). The common shareholders are almost always completely wiped out (.01% left for them sometimes) and the bondholders or debtors take over the company. The company is reorganized, preferred shares are issued (only to the big boys) and the company is suddenly doing well again (Mirant and Envervest are two good examples) just like it was before. The big boys win again and the little guys who tried to invest lose everything.
The companies move on, are very profitable, and the whole thing starts all over again with little guys jumping in hoping to get a return. If the SEC would actually investigate this and report what is happening, well, some administrative folks would go to prison like they should, but the general public's confidence in the market would be destroyed, which would cause a financial catastrophe. So, we can't do that. What we can do is constantly investigate Trump, overlook Jussie Smollett's lies, claim all white folk are racist and try with all of our might to bring in illegal immigrants to vote this nation away from the people who actually grew up here. Right?
Gold is down about 2% for the month, over 3.5% for the year. S&P up 1.5% for the month, 7.3% for the year. (Up over 14% over the last 3 months.)
You know, looking at the numbers, someone whining about the S&P numbers probably should be laughted at.
try EGFIX
My theory is that the market is rigged, and individual investors get fleeced to enrich the big boys. You can mitigate this to an extent by investing in mutual funds and riding on the coattails - you’ll never get the returns they get, but they won’t wipe you out, either.
I own a dozen diversified funds. I check them every 2 or 3 months. Eventually they all go up. They are way up since Trump got elected.
I buy Blue Chip dividend paying stocks that pay over 3% when I purchase them and I use the Buffett method which is “The best time to buy is now. The best time to sell is never.”
You can’t beat the market by reacting to it. The internet makes day trading possible but it also makes it extremely dangerous.
Also invest in the things you like and use everyday. Chocolate not only tastes good, but my Hershey stock is up about 20% since January.
Have fun. It’s only money.
Investing is a long term deal. That means quit looking at it. Go talk to your financial guy. Maybe you need to make some adjustments maybe not
You needed a better strategy
I love Gold. It makes me money. Carefully pick your price points. It tops out, buy DUST. It bottoms out, you buy NUGT. It is very volatile. But as I said, pick your price points or you’ll be picking your nose. And you almost have to check the price hourly.
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