The market is getting crushed, all the themes I think are important for the next few years are really getting hit and I am hiding under my desk!
Well no, that is not right. I sold about half of what was left in the India Fund (IIF), after selling some in late April, for the clients that had that one, at the open.
If you don't know, India, much more so than China, depends much more on foreign stock market investment and so there is visibility for that to dry up for a while in a way I think is different than other emerging markets.
It looks as though the 200 DMA is 1257 so the will be the point where I start to reduce. I'll detail the "when" on the blog if not the "what."
Regardless of how significant or how important this turns out to be, it goes with the territory of owning stocks. I know from talking to a couple of clients that people are nervous but importantly for them I am not (emotionally). I am concerned this will be serious but we can't know yet.
The move to date is not new. If it turns out to be a serious decline, that won't be new either. If you are really sweating this move and can't overcome the worry, I'm not sure what to say.
Well maybe one thing. In 1973 the S&P 500 was down 17%. The next year it was down 29%. If you go to BigCharts.com and look at all data for the SPX, the forty whatever percent decline from those two years is barely visible. Here is another little fun fact. Did you know that there was a crash in 1989? The S&P 500 fell about 5.5% on October 13, 1989 when the UAL LBO failed. That caused a fair bit of panic and it literally invisible on a long term chart.
To repeat a theme from the last few days, stick your plan, calm down and know that your emotion plays no role in what the market will do.
Wikinvest Wire
6 comments:
Now is a time when its good to have ETF's.
Back in the Tech Boom I had all those carefully researched and emotionally involved Tech Stocks that I thought made up the world of tomorrow, so that they couldn't drop very far - - Wrong!
Now if an ETF looks funny, I take it out and shoot it. Nothing personal, just business.
With low commissions and low capital gains taxes these days, it makes sense to me to try and avoid the "holding too long risk."
OG
I'd be curious to know, if, in a portfolio of large, mid, and small cap stocks---fairly equally weighted, along with 30-40% International----curious if gauging the "lighten up point" on a cap weighted large cap index (SP500 ) works....with so many moving parts, I wonder if there is a way to get a 200 DMA of THE PORTFOLIO itself.
just thinking out loud.
g
George,
About 12 years ago I worked on a trading desk that used Bridge Info Services.
Creating a moving avg for a portfolio was possible on Bridge back then so I imagine it has to be possible somewhere but I don't know where.
well I guess I wish I had sold some, but I didn't.
I did sell in 2000 and do not view my self as a perma bull. I think we are in a long term bear market. But I still think this is most likely a long over due correction. We will see.
Roger is absolutely correct about taking the emotion out. In my younger days times like this (emotions) would lead me to sell low and buy high. I have learned a lot since then, but you can not learn when you are over come by emotions.
I could be wrong about the correction, I have been wrong before. I still think patience will lead me to new highs or a better exit point. Either way would be preferable to me.
Roger and everyone??,
REAL question. I own funds that have been killed in the last few weeks, as has everyone, BUT some of them like my Latin America, Russian and Emerging Market funds {All rated 5 stars} are down almost 20% in those few weeks. Is their a end in sight??? Why are these markets getting killed more then domestic? I am down 8% or so domestically, but nothing like what has happened with foreign. Thoughts and ideas???? Do I hold on all the Foreign funds or sell into the panic {which I know is stupid unless it keeps getting smashed}? For you info I have about 25% in Foreign funds.
Regarding selling foreign funds into a panic. I sold my latin america ETF in panic last sppring when it dropped from the 90's to the 70's. Never bought back in, and watched it recover to where it is now, currently $130-ish, even after the last 2 weeks. I had too much in it at the time. Since then, I've diversified and am much less uncomfortable with the action lately compared to last spring. Not comfortable with losses of course, but not feeling like puking either. Still watching it all very closely.
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