When do we reach the bottom of the dip? (2022-24 Edition)

[Patirou]

More interestingly I find that dividends are higher than before the whole Corona phase.

So businesses seems to be highly profitable but do not even have opportunities to invest in further growth ?

[dbu]

@TeaCup

Emergency Fund of 1 Annual Salary

Why that large?
Sounds like a lot of cash sitting aside.

I understand our “emergencies” might differ, but this is quite an amount.
Which ones can you envision?

I keep 3 months of expenses (not salary), but then again I live alone without any dependants yet.
I believe I’d at least double that if I had a family and if I was the only one earning.

[FIREstarter]

@TeaCup

60/40 Portfolio, whereas part of the shares are in alternatives like real estate and CHF Cash makes up a big part of the Non-Risky Assets

@TeaCup

So post a 30% loss, the 60/40 over a few months moves to a 72/28

Can you please elaborate a little bit on the bold marked words? You say that you held 60/40 portfolio, with CHF cash as a big part of the non-risky asset. But then you say this:

@TeaCup

If you however bought in additional cash you held on the side; that was a stupid move. Reason beeing is that you should never hold additional cash to buy the dip

Not sure if I understand your thoughts here. Didn’t you buy more stocks after 30% loss with CHF cash?

[rolandinho]

@TeaCup

3a at 35% Shares

I know you are getting a lot of questions to your post, but here’s more…
Have you reduced this to 35% recently in preparation for a bear market? As it’s very low for a long-term investment such as 3a is, no?
And the rest 65% in 3a, is that cash, or bonds, re, gold? Waiting to be deployed/ shifted back into shares within 3a near to a market-bottom?

[Barto]

I have a shopping list of 1 or 2 blue chip funds that I would have been happy to buy at ATH price and rules how much and when I will buy: at -5% vs ATH, -10%, -15%, -20%, etc…

My asset allocation will change as a result (will involve some incremental margin but to safe levels).

Without these rules I behaved sub optimally in past crashes

This is certainly not supported by efficient market theory, but during crashes rational behaviour seems to fly mainly off the edge off a cliff…

[dbu]

@Barto

rules how much and when I will buy: at -5% vs ATH, -10%, -15%, -20%, etc…

Similar to this, I built myself a tiny “dashboard” for a few tickers.
Looking forward to bit more reds.

[Giff]

@TeaCup

This is not a market timing approach as you at all times fully invest all your funds - as said, you should never have cash pockets that waits for a crash but always invest as per your Asset Allocation.

Except cash is also an asset class. Keeping a certain % of cash on the side can be a sound strategy.

[ItalianBiker]

A Guided Meditation for When the Stock Market Is Dropping

[wavemotion]

@Barto

My recollection of 2000 crash is that non-profitable tech started selling off discretely at first so it looked like a dip. Doesn’t look at all dissimilar now.

During tech bubble worthless companies skyrocketed…AMD, MSFT, APPL… are not going to disappear tomorrow

[Cortana]

Wondering what happens after the FED.

[nabalzbhf]

Unclear to me, are the market reacting to the FED or to the situation in Ukraine. I’d have thought the FED is already pretty well priced in, while Ukraine is more volatile.

[Giff]

When is the FED doing its thing?

[Wolverine]

My feeling, following daily charts for US stocks since a few months, is that institutions (or some big players) have started selling gradually some time ago. While there has been an upward trend during the days for some time (no idea who was buying “the dip”), it seems the volume of stocks waiting to be sold outclasses the volume participants are willing to buy.

My take is that big players didn’t want to crash the market by selling their stocks all at once but have tried to do it gradually to get the most value they could out of it. It fits with a narrative where they would be reacting to the policies anticipated from the FED but it’s taking time to get that (big) adjustment priced in. The situation in Ukraine may add another layer of pressure on that, especially today (and in recent times).

The issue with Evergrande is also coming to some potential effects, as defaults would have to be acknowledged and the balance sheets of the bond holders take a hit.

That’s just my read. Positive news on either the FED’s or/and Urkaine’s front could funnel a quick turn up. It’s still early to call a crash.

@Giff

When is the FED doing its thing?

Wednesday: The Fed - Meeting calendars and information

[mabi]

@Fliss

I thought it was the right time to do some buying

Precisely, and lucky tomorrow is pay day… Looking forward to buying some VT below 100$, longtime we didn’t see that now, and next month maybe even cheaper

[focus]

Hi @dbu

I’m intrigued by you excel table, but not sure I understand.

Could you explain a bit more?

Thanks

[dbu]

Not too complicated:

• at the top in blue is where the current LIVE prices sit
• each ticker has its own 2 columns
  • one relative to TOP (latest peak or ATH)
  • one relative to my AVG buy price
• each row is a calculation of -10%, -15%, -20% etc. drop from the respective reference point
  • as each threshold is breached, it turns red - so blood in the markets drips downwards

I use it for a quick sneak peek to see where we are at the moment, and to remind myself to buy as we reach certain “discounts”.

[2xA]

how to feed live values to xls?

still don’t get it. what is the condition for color change?
could you replicate a formula for -10 and -15? tx!

[Burningstone]

@2xA

how to feed live values to xls?

https://www.google.com/amp/s/www.thespreadsheetguru.com/blog/add-real-time-stock-prices-and-metrics-to-excel%3Fformat=amp

@2xA

what is the condition for color change?

If live price is lower than the value in the cell → red

@2xA

could you replicate a formula for -10 and -15?

0.9 * top value
0.85 * top value

[2xA]

thanks!

to the topic. - the dip is not even in the observed horizon.
What I don’t get is why Vanguard bonds drops along? should be vice versa, or regulators delay interest raise artificially?

[San_Francisco]

@TeaCup

I believe that a steady stream of monthly recurring investments over the long run are the best way of investing (…) from an emotional point of view - the steadier the better. (…)

Therefore, I use my emergency fund to not just fund investments but to as well account for the aging of my infrastructure. Yes, I am still greedy and sit on relatively old infrastructure; but the good thing is that I at least know by now that as I replace my TV - it will no longer impact my monthly investments but the money comes from my Emergency Fund

I’m also a believer in consistency.

That said, it’s the 25th of the month, and my day-to-day account’s balance has been down to 20 CHF for a week or so. I always keep 20 CHF as an emergency fund. I still have about about CHF 2500 in savings elsewhere, though those are fully earmarked for the upcoming tax payment.

Rather than keeping a big emergency fund, I’d just allow myself a “savings holiday”. A month (or the 13th salary) where I’d just save less, if I feel I need to take an expensive holiday or need to replace anything at home.