Yippie, the futures indicate that we enter officially into a bear market today. That is the only time I do (or try to) time the market.
A bear market is special in many ways. Correlations change, everything seems to be correlated. This time even the Dollar index.
I stop buying stocks altogether until some signs of reversal occur. I don’t care if the prices then are higher or lower than now. Market timing does not mean automatically bottom fishing. I don’t care for the past, I care for the future.
I use a few standard gauges to declare a “reversal”. And I may be wrong. Market timing is very difficult and the toolset of a private investor is kind of limited.
This is the 4th bear market that I use market timing. Last time the timing was not perfect, I had to suffer a lot. But at the end of course I made a shitton of money; more pain more gain.
BTW: I’m investing in stocks since the early 80s. This appears to be my 10th bear market.
I will miss the action, as investing is the only “work” I do since more than 11 years. For now I just lean back and watch with a smile how the “shaky hands” sell their stock at discount prices.
Here a brief history of bear markets around the world:
This time could be better for me than last, as interests are tending down. I use margin credit at IBKR to finance my “crash recovery plan”. I buy dividend stocks with higher dividend than my margin credit rate, so I am still OK with the Swiss non-professional state. And it does not cost me a penny.
The most difficult part is now, the waiting period. This is boring. But as the saying goes, one makes more money in the stock market with the a.. then with the head.
I’m not sure the stocks are at discount prices yet. I think if people are nervous, then even if they sell now at, say, 10% down, they are still getting a good price for their stocks and might save themselves from panicking and selling later one if stocks fall further.
I’d also remark that this time it is different. While previous market crashes maybe triggered some kind of response to rectify matters, this time, the market crash is a result of purposeful policy to re-shape global trade structures.
So in a sense, the markets are re-pricing (from what were already very high valuations) to a new world where there are 10% tariffs on all incoming goods to the US and much higher reciprocal tariffs which may get negotiated down. It’s a perfect storm.
However, this isn’t fully re-priced as there is some scepticism as to whether Trump can really deliver this baby given the economic pain and the political pushback he will get. However, if he stands tough, there’s a bigger adjustment to come.
Actually I cannot remember any bear market that this statement wasn’t made.
I don’t want to draft to political discussions, but as fast as tariffs got in place as fast they can be removed. Probably the bear market lasts a few years, but it has an expiration date.
Agree with this. I guess the question is whether they will be removed. Let’s say all reciprocal tariffs are dropped and we are left with just 10% tariffs. The world can live with this, but it would represent some hit to earnings.
Yes. Every time is different. Although my point is that it wasn’t the government policy to try to infect everyone with Covid, even if at times it felt that way.
Yes, as I said, every bear market had that statement made. With Covid it was a very easy decision: buy on credit as much as you can, if you gonna die anyhow it doesn’t matter.
Again danger to drift to politics. I think it was the government(s) policies to hinder world trading that made a big part of the mess we had then.
But let’s concentrate on market timing. I don’t care for the reasons of a bear market. I don’t care for the reasons it will be over. I just care for the timing, the moment my system tells me it is a good idea to buy on credit now. And then I will do that, without hesitate.
Do you invest long-only? At times like this I sometimes wonder if it is better to short and ride it down - but I usually refrain as it is psychologically difficult to maintain that strategy given the there can be huge bear market rallies in between.
People in r/investing discovered SQQQ last week. People got burnt by SQQQ yesterday and are now whining about it. I get that “people” are a handful of reddit posters but believe it’s likely more widespread in reality.
This sounds very reasonable. I had a look at saw what looks like very niche products, with very high TERs, low AUM, though. Do you suggest any products to look into (no financial advice and all), just for education purposes.
Been reading since last summer about 200SMA, 50SMA, golden/death crosses and thinking to start a leveraged bet with little money and experience the excitement of trading, minus champagne, drugs and ladies of loose morals as the last two are not my thing.
Seriously though, it’s gotten me itchy for a fairly long time now, but wondering if the bull market of 2012-2024 really makes this strategy hallucinate.
At the moment everybody feels like being in a candy store, cheap stocks after such a long time of high prices. As long as this feeling prevails there is still space to go down.
When the last finance influencer dies of hunger and all newspapers first-page-publish that stocks are devils instruments probably it will change.
I’m prepared to do for a very long time what I do best: nothing.
Not everybody (I do feel this way though), not even in this and other finance-related fora. It seems many are in panic mode. Not everyone is Zen Master Guru Ninjas like us here
I agree with what you wrote, though. Coming back to my point: it seems there’ll be a death cross very soon on the S&P500, NASDAQ100, VT - patience would be key indeed, as if someone follows the gold/death cross strategy they’d be locking in losses BUT before a possible bigger sell-off down the road, which would both protect some assets as well as being an opportunity to be taken advantage of.
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