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I'm glad I only own bank stocks and ETF"S. But even those are in a sharp decline. My 130 grand two months ago is now at 110 and descending. Dividends haven't changed (yet). Of course, I'm staying put. Who sells at a loss? Is this headed towards a full recession? Well, I'm not an economist but things look pretty shaky with the high inflation and the cost of everything skyrocketing.
 

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I'm glad I only own bank stocks and ETF"S. But even those are in a sharp decline. My 130 grand two months ago is now at 110 and descending. Dividends haven't changed (yet). Of course, I'm staying put. Who sells at a loss? Is this headed towards a full recession? Well, I'm not an economist but things look pretty shaky with the high inflation and the cost of everything skyrocketing.
If 20% is a sharp decline, maybe you should consider something less volitile than equities.

20-30% swings over a few days are a completely normal and expected part of stock investing. With the hyperactive and overleveraged markets today I think they should be a bit more frequent.

Also I wonder what your portfolio is. My favourite bank is TD and it's up nicely over the last year, and quite nicely over 5 years, if you include dividends it's even better.
I consider anything less than 5 years too short for equities.

My personal opinion is that most of the people talking about the "bad performance" "crashes" of the market are looking at the data inappropriately. They're stocks, up and down is NORMAL!!!

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Discussion Starter · #23 · (Edited)
Dropping from $130K to $110K in two months is not normal or trivial.

Stocks retracing back 4 or 5 years, carves out a big chunk of investment time necessary to accumulate wealth for retirement during the working years.

Maybe the markets will bottom out and swiftly rise again, or maybe they will take decades to recover.

Some basic math is in effect.....a 10% decline from $100,000 leaves $90,000.

Rising 10% from $90,000 would only generate $99,000.....a $1,000 shortfall. A gain of 11% would be necessary to recover all the capital.

Declines of 20%, 30% of stock values amplify the amount of shortfall and raise the % increase to fully recover the capital.

It can take a long time for stock markets to fully recover from crashes.
 

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Dropping from $130K to $110K in two months is not normal or trivial.
Yes it is normal. Trivial? well that's a judgement, but I'd say when you're up 50%in TTM instead of up 70%, that's no big deal.

Stocks retracing back 4 or 5 years, carves out a big chunk of investment time necessary to accumulate wealth for retirement during the working years.
I agree retracing back 4 or 5 years does carve a big chunk out, but that isn't what is happening.
But if that's a concern, make sure you have an appropriate asset allocation.
 

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I agree retracing back 4 or 5 years does carve a big chunk out, but that isn't what is happening.
But if that's a concern, make sure you have an appropriate asset allocation.
What I held has retraced back a few months to a year. Back to early pandemic levels at worst so far. I de-risked last fall so this is great for me and I have decades of time to wait

I don't think sags trades at all and it shows. He just reads headlines and types. No action just talk
 

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Are you shorting here sags?

Unless you're putting your money where your mouth is talk is cheap

I know people who shorted the pandemic crash and got rekt
I can't speak for sags, of course, but I never short the market. I have, however, built a substantial cash position over the past year. That hasn't been from selling, just kept accumulating dry powder because the markets were so frothy.

I'm getting tempted to start wading in a little bit at a time since the last few months have brought fairly steep declines and today is another bloodbath.
 

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I can't speak for sags, of course, but I never short the market. I have, however, built a substantial cash position over the past year. That hasn't been from selling, just kept accumulating dry powder because the markets were so frothy.

I'm getting tempted to start wading in a little bit at a time since the last few months have brought fairly steep declines and today is another bloodbath.
I think lots of people have dry powder

We might over correct but people like sags who don't short or trade real money would get humbled if they actually tried so their words are worthless

Nobody knows were the bottom is but you miss 100% of the shots you don't take if you do like sags
 

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There's a quote from Peter Lynch that I really like: "Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves".
It takes a specific type of person to not respond defensively but the most profitable approach is to buy and hold a broad index without flinching during rough patches, like now.

Extreme few people are capable of leaving their portfolio alone after watching the news.
 

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Discussion Starter · #29 ·
I think lots of people have dry powder

We might over correct but people like sags who don't short or trade real money would get humbled if they actually tried so their words are worthless

Nobody knows were the bottom is but you miss 100% of the shots you don't take if you do like sags
Shorting is gambling. Trading is gambling. Buying crypto is gambling. You should consider you might have a gambling problem.
 

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It takes a specific type of person to not respond defensively but the most profitable approach is to buy and hold a broad index without flinching during rough patches, like now.

Extreme few people are capable of leaving their portfolio alone after watching the news.
I think it's due to our very poor financial literacy, realistically risk tolerance is a more advanced topic.

But every KYC questionaire has a graph on risk/return.

Also it's important to note the correct investment for time period.

For short periods, stocks are the wrong choice. I think a period like this really shows that, they're up a LOT over every time period, except the recent few weeks.

Shorting is gambling. Trading is gambling. Buying crypto is gambling. You should consider you might have a gambling problem.
Shorting isn't gambling, it's just risky.

Trading, depending on your definition may or may not being.

Buying crypto, well that matters on your intent.
If you're buying it to use it for something else, it might not be. If I write a dAPP, I need to buy crypto to run it. No gambling, I'm simply paying for a service.
Just like filling your car with gas, whle you're technically purchasing a commodity, it isn't gambling.
 

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Shorting is gambling. Trading is gambling. Buying crypto is gambling. You should consider you might have a gambling problem.
I get no enjoyment from casinos or lotteries

I like owning things that generate yield from the traders and gamblers. My yields on liquidity is up during these times of high volume and volatility. I buy when everyone is panicking and hold. You just watch and talk

Enjoy your lotto tickets, gambler sags
 

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Many financial watchers are suggesting we are headed into a recession.
For the average recession, most indices drop around -35% to -38% from their highs, and bottom around 8 months from the onset.
That would mean the TSX would bottom around 16,500, sometime in late Fall...
but who knows how much confidence to place in that bit of trivia....
I have some powder dry and ready to put back out there. I haven't bought much in 1.5 years.
Tech stocks like Lightspeed have really plummeted over the past month. Quite a spectacle.
 

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It takes a specific type of person to not respond defensively but the most profitable approach is to buy and hold a broad index without flinching during rough patches, like now.

Extreme few people are capable of leaving their portfolio alone after watching the news.
IMO ... it's more than you think. AFAICT - the key issue limiting the number who are willing to stay the course is that most don't follow the market beyond a few talking heads and/or reacting to news snippets with no context like "markets down 20%" with no mention that there's years of growth before that. :rolleyes:

It also helps to pay attention through previous downturns/crashes.


Cheers

PS
It also helps to know one is covered so that a forced sale near the bottom is not likely.
 

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If a person is a cautious, conservative investor who buys the index, they would experience the more benign declines of the indexes, but I am thinking a lot of people must have been buying stocks like Netflix, Paypal, Moderna and the others to drive the prices to such lofty levels.

Those people may already be experiencing a "crash", so I guess it all depends on how people were invested.
if you own a broad based US index you own a lot of this type of stock. Apple,Microsoft, Alphabet and Amazon and a few other Mega Techs make up % of the S&P 500 index. Energy makes up about 4% of that index so you missing out on the bull market in oil stocks. Have been focused on energy, materials, insurance and health and I am up 1% ytd. It would have been higher if 25% of my holdings weren't in VTI. I have sold my VTI and will be focused on sectors until the fed is close to its tightening cycle. By then there will be a lot of great opportunities. I can see bonds being a great investment in a year from now.
 

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Many financial watchers are suggesting we are headed into a recession.
For the average recession, most indices drop around -35% to -38% from their highs, and bottom around 8 months from the onset.
That would mean the TSX would bottom around 16,500, sometime in late Fall...
but who knows how much confidence to place in that bit of trivia....
I have some powder dry and ready to put back out there. I haven't bought much in 1.5 years.
Tech stocks like Lightspeed have really plummeted over the past month. Quite a spectacle.
My wife, whose investment approach was GICs and indexing decided to start a fun portfolio at Questrade this year. She bought TSM near peak and bought LSPD around $26 in March to watch it run up to $42 and come back down to $21. The amount invested is infinitesimally small and she is prepared to lose the whole works. I think people like to test themselves at times. She has reconfirmed indexing is best for her but will still have some fun money. I think it was important as she is now prepared to keep DIY and realized that giving a MER to a fund manager is a waste of money when she can purchase the likes of VGRO. A portion of that MER now goes towards speculative plays. More importantly, when I pass she will be able to handle converting my portfolio over to an index products as planned. I hope to handle most the bulk of that work during RRSP wind down.
 

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I would be nervous about utilities like Fortis. If corporate bond yields reach the 5 or 6% level and GIC get into the 5% plus range many investors will sell their utility stock for the safety of a bond or GIC. Another problem for the utilities is they carry very levels of debt and higher interest rates mean higher costs. So far it doesn't seem to have affected the utilities . I am fairly certain it will.
 

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I would be nervous about utilities like Fortis. If corporate bond yields reach the 5 or 6% level and GIC get into the 5% plus range many investors will sell their utility stock for the safety of a bond or GIC. Another problem for the utilities is they carry very levels of debt and higher interest rates mean higher costs. So far it doesn't seem to have affected the utilities . I am fairly certain it will.
It's a matter of "when" and not "if".
 

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Is now a good time to "get into bonds"? If so, what's a good way to "get in"....ETFs...or what?
... even it is, why get into it or make things complicated for yourself? Aren't you in the "decumulation" stage at this point (ie. do you need the $).? Or just that you're alarmed from reading the prior 2 posts gabbing on Fortis?
 
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