Dailey seasonal in a crash?

[Bobo1712]

2008 is my yardstick for how bad things can get. Banks were broken, the stock market was in absolute free fall, the newspapers were filled with stories of people losing their homes, and one Russian newspaper was predicting that the United States would cease to exist as a Nation - and one point that I vividly remember was that New England would secede and join the EU. Crazy stuff. And after all that, if you stayed put (unlike me) you recovered almost all of your losses in 2009.

[TSPking]

I'd like to be a prudent investor (google prudent speculator). For Non-TSP, I have a fee-based adviser who has done very well for me.

For TSP, 50% is always G/F fund and the other 50% is L2050. I'm late in my career and need to tone it down.
Annually, I reconcile and re-balance it so that it starts anew...50% is G/F fund and the other 50% is L2050. I don't react to these fluctuations and I'm sure others do better than I. For TSP, I have very limited risk and this approach is sufficient for me.

I do enjoy seeing some of the remarkable returns we see here and some of the impressive concepts we see at TSPCalc....

[XAMOTOMAX]

Let's put a few things into perspective. The crisis of 08 was actually a prolonged decline of roughly 50% over a period of almost a year and a half. There was plenty of time for those of us that were paying attention to move our money to safety while the crisis played out and then buy back into the market for far cheaper. Waiting it out was simply a missed opportunity to increase returns and make a ton of money. Even Cramer went on live TV and told everyone to sell everything very early in the crash. Yes, you got your money back in 2009. Those that played their cards right, not even perfectly but just pretty good pocketed 20-30% gains from selling high and buying back low during the time the buy and holders broke even. So while I will concede that some aren't comfortable or skilled enough to pull off such a move and will be perfectly fine long term leaving everything alone, I won't agree that was the best play during that situation. It didn't take a ton of skill to get out and get back in for less.

A 50% decline from our recent high would put the SP500 in the neighborhood of both the peak of the .com bust and the financial crisis...the peaks mind you.

A 25% decline from the recent highs would put us right in the middle of the 2000-2100 trading range that seemed like a market top just 2 short years ago right before the China devaluation flash crash.

There has been speculation for several years that QE and near zero interest rates have artificially inflated equities and when those rates normalized and the money faucets turned off, there would be a day of reckoning for the markets. I'm not sure that's what is happening now but it surely could be. A 25% drop could surely be considered severe but seeing where the market would be after such a drop makes it seem a lot less doomsday. Was anyone calling the market dirt cheap 2 years ago in the 2000-2100 range? No way. On the contrary, many were calling it a top and predicting a major pull back from those levels.

Lastly, bulls make money, bears make money, but pigs get slaughtered. Moving to cash to protect your assets in times of uncertainty isn't foolish, it's wise...especially after such a meteoric rise in the markets. Such a run that's never been seen before also makes a massive pull back much more likely.

[Bobo1712]

If you thought that the stock market decline in 2007-2008 was easy to spot then you are in the wrong business - you should be managing money on was street because almost all of them got it wrong (and I know a few in the business). As far as Cramer is concerned, I find him to be entertaining and a good source of information. However, he can talk out of both sides of his mouth in any given week.

I remember the excesses leading up the crash. The housing bubble was in full swing here in northern Virginia. Speculators were lining up on weekend mornings to buy contracts on condos that they flipped for a nice profit before they were even built. same thing for the new housing in the ex-burbs of the DC metro. The talking heads and most everyone else was talking about a "soft landing" in the housing market instead of a crash that eventually destroyed the economy.

The only person in my office that ducked this crash was someone that had a few friends in the mortgage industry. They had been telling him of the crazy mortgage products out there (i.e NINJA loans -No income No proof of income) and more importantly how these toxic loans were being packaged and sold as investment grade vehicles and, as a result, he moved to 100% G six months before the crash. Unfortunately, he didn't share this with me until the damage was done.

And throughout this nearly ten year bull market there were plenty of warning signs of a retracement to the old lows that never occurred. Again, congratulations if you managed to avoid those step losses- you were certainly in the minority.

[Bobo1712]

*wall

[BYK777]

Some of you saying that this not 2008 and we don't have this kind of problems. In my opinion 2008 problems were never fixed. Banks and government kicked can down the road so all those problems will eventually come back or they coming back as we speak. This can get very ugly. Time will tell?

[jdw8xb]

2008 was a bear market. This is a correction. When the market drops you want out. And when it goes up you want to buy. Buy high and sell low. Recipe for disaster. If you cannot control your emotions put your money in the G fund.

[GoRedSox]

It's already been posted that most professional traders couldn't identify 2008 for what it was and went down with the ship. Yet, people were so sure this was a pull-back at first, then just a correction, analyst said it was bottomed out on Monday, and so what is next? We have had a 600 and two 1,000+ losses in just 5 trading days. I hope this is a much needed correction, but we can't know what we don't know.

[XAMOTOMAX]

No way to know. It's just a bet. I bet on Tuesday at 11:30am that the market was going to go down further. I was very uneasy. It sucks to bail to G after taking a down day only to watch it bounce without you. I was on the fence Tuesday and it's down a lot since. I wouldn't sell now if I didn't get out Tuesday. That doesn't mean that's the right call. This could still be a good time to sell before more pain. Place your bets.

As for 2008, it went straight down for a year straight. There were a couple head fakes that tricked folks into thinking it was over before it was but I have a completely different recollection of those days. Everyone knew there was a crisis and everyone saw stocks getting crushed. Foreclosures everywhere, jobs were drying up, it was brutal. Pro traders didn't go down with the ship. They were the ones bailing and causing prices to drop so drastically. You think it was amateurs driving that collapse? Most TSP/401k folks just rode it out. Some bailed too late and stayed out during the bounce. That's the worst thing you can do obviously and a real risk for the lazy or uninformed.

The SP500 is down 10% over the last 4 trading days. Funny how that's just sort of meh in this day and age of cryptos and 25% annual returns. There's going to be a V here once we find bottom. Finger is on the trigger ready to place my bet lol. Won't be before Monday though. I won't trust an AM rally tomorrow enough for a Friday IFT.

[TSPNerd]

And we're up 1% at open. Exactly. Like. 2017.
Of course, I may be singing a different tune next week if this is just a dead cat bounce.