Dumb to move investments into cash right now?

Discussion in 'General Discussion' started by Utumno, Mar 12, 2020.

  1. Utumno

    Utumno Administrator Staff Member

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    I know common wisdom is to not try to play the market, but it's sorta hard to just chill knowing that shit is going to keep dropping like a rock. I guess the danger is not figuring out when things will swing back up and missing that rise, but yeah - I'm antsy. I can't see any way the market won't keep sliding down much further.

    Record long bull run (with not a lot of real improvement or safety net for everyman) followed by pandemic w/a fucking buffoon running the ship, this seems like shit is going to drop much further.
     
  2. Sear

    Sear TZT Neckbeard Lord

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    I thought u sold before 2020? We even talked about it here.

    I moved into a money market account temporarily, but I moved the last of my shit out three weeks ago. SPY has taken a [checks notes] over 30% dive since then. I think anybody who is still in at this point is up a fucking creek for the short-term.

    My parents have been asking me about the long-term outlook and I just don't know. Nobody does. My guess is it could get even worse in the coming weeks, but will start a long and slow recovery after this virus reaches its inflection point here and starts trending downwards. Anyone who is trying to decide whether to sell should evaluate whether they believe their investments will only drop lower during the full term of [however many years they planned on investing]. So if you're in for 5 years and you believe we're currently at the high point for that time frame, then it would be the time to sell. What I wouldn't do is sell because of reactionary emotions or panic.
     
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  3. Agrul

    Agrul TZT Neckbeard Lord

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    Even in the event of a recession, I expect a large rebound about a month from now. Most of what we're seeing seems to be overreaction to COVID-19 -- which is bad, but not 214-to-155 small-caps-index bad (killing off even 5% of our population, esp older people, will not do that to productivity). But that advice is exactly trying to 'time the market'. I think by May 15 we're back to 90% of where we were a few months ago, in broad stock indices (barring a major recession sneaking in on the initial COVID drop, but this does not look like that so far).

    The usual advice to not time the market is based on: (1) it being really hard to do well (and certainly selling into a crashed price is unlikely to qualify as 'doing well'), and (2) stocks performing well barring a USSR-style revolution even if you braindead buy them at the trough of a recession and hold them forever. Unfortunately (2)'s gets less relevant as you become older, since it requires a time span of at least 20-30 years to be reasonable.

    I think right now is the ideal time to buy, not sell -- again, a market timing recommendation. Personally, I went crazy and threw $4K at call options, and may lose all of that, but I think it has a strong chance of paying off very well in 3-6 months time. A more conservative equivalent would have been just buying IWO/S&P 500 every time they drop another 10% in price or something.

    But I can't think of any good reasons to sell into this. Unless yer gonna die in like 2 weeks.
     
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  4. Fais

    Fais TZT Abuser

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    You missed the boat if your going to sell now. Might as well ride it out.
     
  5. Sear

    Sear TZT Neckbeard Lord

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    I'm planning on buying in tbh. I'm just not sure when exactly. I think a bear market that goes sideways for a while isn't out of the question, after it stops falling. But yeah it could have a sharp uptick and recovery.
     
  6. Agrul

    Agrul TZT Neckbeard Lord

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    Depends on how you buy in, yeah? If it goes sideways for a while, buying into stocks now is fine.

    Buying into options less so, since they require an explicit bet on time horizon.
     
  7. Sear

    Sear TZT Neckbeard Lord

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    I really think it's going to flatline for a while, though. There were already signs of the bull run ending before this panic gripped the world. This just expedited the process. So my dumb guess is that we'll be stuck in a bear market for a while.
     
  8. Fais

    Fais TZT Abuser

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    Yea, I doubled down at a good price on my GILD. But I am still sitting on probably 17% of our savings in Cash right now. Its getting close to time to reinvest the Cash and switch our 401k's ect... from Bonds to Stocks again. But I'm pretty sure this has not capitulated yet. Another 2 weeks maybe.
     
  9. Sear

    Sear TZT Neckbeard Lord

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    Too volatile for me right now. I don't think we've reached the bottom yet. I think it gets worse as more businesses are forced to close and the mass panic really sets in.
     
  10. Samassi Abou

    Samassi Abou TZT Abuser

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    It depends if you think you'll need the cash in the next few months or years. If not, you may as well ride it out.

    China was forced to go into full lockdown to stop the virus. Italy has done the same. The country's shops have been told to shut. I doubt it's under control in the US, so I wouldn't be surprised if the US had to do the same in the next few months. That will probably be the stage of peak stock-market panic in the States. The economic result of that lockdown will probably be a recession, and recessions usually feed on themselves, so who knows what happens after that.
     
    Last edited: Mar 12, 2020
  11. Vlaara

    Vlaara Maaruk the Mighty

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    Y'all are playing a different game than I am but I only invest in lead, preferably attached to cartridges.
     
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  12. Utumno

    Utumno Administrator Staff Member

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    Nah, only crypto. All my shit is in ETFs, and I've been pretty great at set-it-and-forget-it for the most part. I never even check, I have a pretty typical Domestic/International/Bonds split.

    God damn dude, you did well. Great time to dump everything.

    I guess y'all are right that I already missed the boat. Probably no point trying to fiddle, I'll almost certainly fuck it up.

    I'll just let it sit and ride.
     
  13. Sear

    Sear TZT Neckbeard Lord

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    Realistically, I think you have two options:

    1. Sell now and try to buy lower so you can still make a profit.

    2. Ride it out.

    and if you're really pressed for money now, there's also "take a loss and sell now but don't buy back in".

    Most people are going to fuck up the first option, and it's not a guarantee besides that (the market could recover on Monday - we don't know for sure). Riding it out is probably what I would do in that situation if I was in it for the long run. It's hard for me (albeit not impossible) to imagine a scenario where we're currently at a 3-5 year high.

    [​IMG]

    The worst modern recession was 2008, but it had mostly recovered by 2012. You have to go back to the Great Depression to find one that lasted longer.
     
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  14. Mern is Best

    Mern is Best TZT Addict

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    I'm all cash aside from my 401k. I guess it depends on when you bought and if you are still up or not but i feel like it's a little late to sell. Futures look good for tomorrow morning but that doesnt mean much. Might just be a small rally before taking a dump again.

    Really depends on how bad Corona Virus spreads and how long Russia and Saudi Arabia go at it in their oil war.

    Also with China returning back to normal, if they start having outbreaks again that will cause more panic.

    Ive been tempted to short or play options, or invest in some inverse etf's (might be to late on this as well). But nows the time to invest in big name stocks at a discount. I'll probably wait until around q1 reports before trickling money back in
     
  15. Kors

    Kors TZT Addict

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    Im invested in USSR style anarcho syndicalist/libertarian socialist revolution for awhile now.
     
  16. Mern is Best

    Mern is Best TZT Addict

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    Why dont you just move to Canada, hippy
     
  17. Mern is Best

    Mern is Best TZT Addict

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    With more test kits becoming available and the number of infected rising it's only going to add more to the panic. I dont think this is the bottom yet
     
  18. Sear

    Sear TZT Neckbeard Lord

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    Fed announcing that $1.5T injection might give the market a nice short-term bump today tho.

    WALL STREET BETS TIME (not rly but I am tempted)
     
  19. Sear

    Sear TZT Neckbeard Lord

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    in fact I'll b a lil surprised if it doesn't jump

    think it's gonna be short-lived if/when the outbreak keeps cascading here tho

    The # of reported total cases has been doubling every ~2.5 days. There's ~1800 right now. If it keeps going at that rate, we'll be at over 14,000 in a week.
     
  20. Mern is Best

    Mern is Best TZT Addict

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    Looking at the 2008 bail out (yeah not even close to the same situation, I know) it had a very small effect on the market free fall. It spiked upward and then dumped hard.

    If you look at the highest traded stocks in the pre-market for tomorrow most of them are cruise lines and petroleum company's. Long investors looking to buy premium stock at discounted prices or people trying to make a quick buck off of the "injection" that will prop up the markets.

    Should be interesting to see what happens in the following weeks
     
    Last edited: Mar 13, 2020