It’s not wise to ONLY use the logic buy because it’s down, there’s a lot more that should be considered. I’ve had friends say that every day for the past few days and they would’ve taken a big hit if they did that. I always tell them the same thing… You should wait for clear signs of a reversal before you blindly buy with the only reason being because the market is down.
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It’s easy to say buy when you see “clear signs of a reversal” but to know exactly what that looks like is impossible. I can point back to “clear signs of a reversal” in 2000, 2001, 2008 etc. because we have all the data but calling reversals, bottoms, tops etc. live is a fools game.
The bottom line is that generally speaking the S&P500 today is comprised of the same 500 companies, with the same underlying profits, with the same long term prospects that it was last week except they are at a ~10-15% discount due to the long term fears being priced in at the moment. All you have to do is ask yourself if in years (set your own time horizon) will people still be drinking Coca-Cola, washing their laundry with Tide, eating Mcdonalds, shopping at Wal-Mart, buying Nike athletic wear etc. or do you think all these companies will crumble and cease to exist?
It’s crazy to me that some people see the stock market as this complete crapshoot and don’t see the underlying productive assets constantly churning out return and excess profits year after year. I am mainly invested towards companies referred to as “dividend aristocrats” which are companies that have increased their annual dividend consecutively for 25+ years, some even 50+ years. The inflation of the 70’s, the dot com burst of the 00’s, 9/11, swine flu, bird flu, 2008 housing crisis didn’t slow them down enough and nor will anything in my lifetime IMO.
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@gottaketchumall nobody said it would be easy lol. I’m still advocating for buying the dip in general of course, but buying solely because it’s down while the market has been coming down with momentum is unwise. Sounds like u have some good experience trading and I also like strong dividend bearing stocks. I also trade every day and work in finance as well (not trying to sound like a douche lol, just saying I’m sure we both have experience trading) and before this Coronavirus panic there was no recession being projected in the next year according to the analysts from different firms we’ve talked to and various economic indicators. Obviously the issues in China can have a large impact on the global economy due to their massive production. Also, technical indicators don’t matter nearly as much when the market is coming down like this because people start trading based more on emotion rather than reason. But yeah, there’s no magic predictor and when people ask me how much more will the market come down my answer always is that I don’t know because there is no way to know lol. All of this becomes a lot easier if you just invest for the long term because this is all normal in the grand scheme of the market so I definitely agree in that respect with your long term outlook. And hopefully in X years I won’t have eaten McDonald’s in X years lol
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I’ve sold off 75% of my stocks this week
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Invest in physical items like pokemon WOTC Holo’s!
If you’re looking for short term gains, sure. Personally I’m in it for the long haul. There is no way to time the market, and waiting for a reversal can mean missing out on cheaper prices and potential gains. I’m just saying if you consistently buy on the way down, the lower your cost basis will be when it turns around.
If there’s one thing I know about the stock market, it’s that you always win when you try to time it. Look for the scariest headline and sell as close to 6 hours after it publishes. Then no matter who gets elected, buy back in 3 months afterward.
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I just moved a few thousand from bond to stock funds to execute at today’s market close. I recognize the market could go lower, but seems a good buying opportunity.
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@originalera sure, there is no way to time the market. All I’m saying is if you buy ONLY because the market is down it isn’t the most ideal method but it can absolutely still be profitable by allowing you to purchase securities at a discount and they go up in the long term. Yes, you’ll lower your cost basis and that’s what some of my friends did a few days ago and since then they’ve lost significant portions of their new money that they put in and they bought using the same logic. There are a lot of different investment strategies and different ways to make money and if you’re buying just because the market is down with a long term investment horizon you’re most likely still going to make money so I agree with you in that respect. And that’s also why I tell people to not freak out about everything that’s going on. Significant pullbacks are normal, especially after large bull runs. That being said, you still could be costing yourself some money, especially when the US market and most of the global markets are coming down with strong momentum. Being honest, I thought everyone was overreacting at first to the Coronavirus but there are so many things that you originally don’t consider being that the global economy is so complex. However, this isn’t projected to be a long term issue at all. Just be careful using the mindset, “Oh, the stock is down? I think I’ll buy it.” I guess what I’m saying is please do your due diligence lol. I want all of you to make money 
Being bearish these last couple of weeks has earned some new cardboard to the collection
Unless you are bottom fishing.
I mean, technically they haven’t lost that money yet, unless they sell 
@originalera lmao true. Let me choose my words more carefully then. They lost out on additional buying power and a lower cost basis. The more important question is how do we use Coronavirus to instill fear into those holding high end pokemon collectibles so I can get a psa 10 1st ed base charizard for $20k. I’ll try using the classic eBay tactic of saying how much I personally think the card is worth while ignoring any contradictory sales data and say how I’m doing them a favor by “taking it off their hands” for X dollars.
If you were selling this week and locking in losses you are doing it wrong.
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So I shouldn’t have sold TSLA at $836?
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Which means you sold Monday yeah? With how this week concluded, despite the fact that you sold on the first day with a large drop vs last Friday, it was probably a good idea. The question, do you plan to buy back in? That’s where the difficulty comes is buying in at the start of the next rally, but how will we know the rally started and not just a dead cat bounce?
I think individual stocks are a different story when people talk about locking in losses, my guess is you still made money compared to the original share price(s) you purchased at.
I work for a 401k recordkeeper and what pains me is people with a 20+ year retirement horizon trading into cash today. That’s just not the way to react to this for something you don’t need to touch for decades. It’s like, do you really think you’re smart enough to know when this decline will stop and when to buy back in? Time in market is > timing the market.
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Iv’e been waiting for months for a break like this to buy some things I’ve had my eye on! Really is amazing the situation in China. I kept seeing a market rally last week and thought it was crazy. No matter how little the threat here, China is where it matters. I honestly think if the US has a mass outbreak like China, death rates at best would be similar to the flu. Regardless China’s seriousness and lock downs are big enough to really bring us all down. It’s not going to change for a good while I’m afraid. IMO we never really see a bonce back until after a strong earning season. Turns out we just had one of the best two earnings quarters in a long time, so this couldn’t have landed at a worse time. I’ve found it is only after a strong earnings season/quarter where fears are shrugged off after something like this. People need to see it has had no effect. In this situation I think there is a large factor though. We are seeing strong downsides that WILL in fact hurt business… so it may take 2 plus neutral earning periods to shake.
This week we have had a perfect storm of fear news. Apple said in a conference call that their supply lines are taking a hit enough to tell investors, CDC drops multiple statements targeted at the spread in the US, many places declaring state of emergency, etc… Going to be an interesting few months to say the least! I bought in to some stuff today but for the most part still holding out. I think the tech sector could really the zero to hero scenario in something like this. The work environments over there are going to be insane to try to catch back up for their reports. This is where the old timeys tell you to grab that gold! Oh wait look at the precious metals, down also.
Grab the CARDBOARD!
Sold late Monday when I noticed everything was dropping significantly, originally bought my shares around $220. We will see what Monday brings, I really want to buy them back.
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Nice profit there! Well, I wish you all the best on your buy-in, it’s basically gambling, but you got this!
I did the same thing earlier this year, I had 16 shares of Netflix and I only paid a total of $340 over the period I purchased them from 2010-2014 several years ago. I decided to sell at about $310 per share when it was dropping last year after they missed their earnings report marks. Now it’s back up to like $370 per share and I’m kicking myself a little, but I needed to pay something off so I didn’t have much of a choice.
This sort of thing worries me for 2 reasons.
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My parents 401K is taking a hit and they are out of work, so this scares the crap out of me…
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I have holdings in stocks for my future house purchase and it’s not ALL my money, but it’s a nice chunk, so to see my holdings drop 6k in a week definitely sucks. Good news is that my retirement accounts have 30+ years to rebound lmao
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