DOW drops 1000 pts

[Robandcindy2]

DGI investors yawn....

(Cue the crickets)

Hope you all have a shopping list.

[hendi_alex]

Sure they do. Makes all feel so great, those shares that were bought 10%, 20%, 30% higher than today's price. A little sarcasm there, but I don't believe a second that DGI investors or anyone else will be very happy if the portfolio is 20% or 30% lower than it was at the start of the year. Maybe DGI investors have comfort in their plan, have confidence in the prospects for the long term outcome, but yawn? I hardly think so, not for most, not if they are remotely human.

Everyone wants to act like timing isn't possible, isn't desirable. I say bunk! Be patient, let the price come to you, always insist on value. Over time IMO that will lead to out performance, as opposed to acting like a kid in a candy shop, having to buy no matter what the price. When earnings are stretched and valuations are stretched, it is probably a time to preserve cash, waiting on a market shift back toward greater value. Then is the time to have accelerated accumulation.

[KenBob]

I don't think you can time the big dips, but agree that buying stocks over fair value is silly. The real advantage of DGI is that the dividends produced are cash that can be put to use during corrections, although not necessarily on a big dip day.

[hendi_alex]

What do you mean can time big dips? Cash is sitting in the account and a wish list of GTC buy orders are in the cue. About half filled today. Timing a big dip merely requires the investor to have cash available and orders ready to execute. If the market drops ten per cent tomorrow, I'll likely get some more fills. If not, everything is in the ready for next next time the opportunity does arise. If cash had not been available, then I would have had to just sit on my hands and watch today's drop. So no, you can't time big dips in the sense that the investor knows for certain when they will come, but you can time them by being ready any time that they do appear. Being fully invested, and buying pricey shares near market tops, in no way prepares the investor to take advantage of bargains as they appear. I always prefer a good sale, and most often am willing to wait for it, especially if near the top of a long, tired expansion phase that is being weighed down by many head winds.

[rayray]

There is a difference between trying to time the market and an investment style. Having a large cash position to purchase on the dips doesn't necessarily mean that person is trying to time the market, it could be just their investment style or comfort level to hold cash. The problem trying to time the market is that nobody and I mean nobody can buy at the bottom on a continuous basis over their investment accumulation years. Can someone get lucky? Yes. Can someone get lucky 100% of the time? No, it's impossible to buy at the bottom 100 percent of the time and that is a fact. What matters most to an investor in the accumulation phase is time in the market, time in the market is money in the bank. And never overpay for any stock even if it's the BEST producing stock in the market. If you take two people, person A invests monthly in properly valued dividend paying stocks for 20 years and person B only invests on market dips (and try's to hit the bottoms) for 20 years the difference would be, well, the difference between the two would not be that dramatic over a 20 year span.

[Kerim]

(08-24-2015, 10:36 AM)hendi_alex Wrote: Sure they do. Makes all feel so great, those shares that were bought 10%, 20%, 30% higher than today's price. A little sarcasm there, but I don't believe a second that DGI investors or anyone else will be very happy if the portfolio is 20% or 30% lower than it was at the start of the year. Maybe DGI investors have comfort in their plan, have confidence in the prospects for the long term outcome, but yawn? I hardly think so, not for most, not if they are remotely human.

All I know is that on days when the market is down 2 percent or more, I am happy as a clam, and when it is up 2 percent or more, I am despondent. I love when the market is going down because I am excited to buy, and want to buy at great prices. I rarely think about the effect on the overall value of my portfolio. Maybe that is because I am still a looong way from retirement, but for the time being, I'd like to see a nice bear market set in for a while.

[Dividend Watcher]

(09-01-2015, 10:37 AM)Kerim Wrote: All I know is that on days when the market is down 2 percent or more, I am happy as a clam, and when it is up 2 percent or more, I am despondent.

To be truthful, I've gone through those emotions lately myself. I keep reminding myself that September is a big reinvestment month and that keeps my spirits up. Now if only the dead cat bounce would hold off for a couple quarters.

[hendi_alex]

Two percent swings are meanigless, neither presenting particular value nor excess valuation. 15%-30% drops IMO will bother most any investor. However the most disciplined will be postioned to take advantage of the opportunity that such drops provide. For me keeping a decent sized cash allocation is part of that process of being ready and opportunistic. No one can predict the timing of the drop, but anyone can hold some opportunity cash for when the drop does come. I'm not a fan of systematic buying without reard to price, but there are times when that is likely the best approach.

[ronn38]

I don't feel I reacted well during Monday and Tuesday. I had accumulated about 10% of my equity portfolio in cash, ready to move oil. Then the drop came, and instead of takign the opportunity to ease into other positions as had been eyeing for years...I just kind of...well, looked on dumbfounded. I even stalled on energy!

I listened to the "doomsday hype" and kept waiting. Sure, I put limit orders on lots of things, but at doomsday prices... not at real-world dip prices.

On the positive, I lost no capitol--but I believe I missed some wonderful opportunities. So, lesson learned--$2500 of a great company at a great price is better than $2500 in the bank.

Ronn

[Dividend Watcher]

(09-01-2015, 09:30 PM)ronn38 Wrote: Sure, I put limit orders on lots of things, but at doomsday prices... not at real-world dip prices.

OK, so raise them a dollar or two today. If that doesn't work, add another 50 cents on Friday, etc. Bump it up a little at a time every so often until you reach your limit.

[rayray]

(09-01-2015, 09:30 PM)ronn38 Wrote: I don't feel I reacted well during Monday and Tuesday. I had accumulated about 10% of my equity portfolio in cash, ready to move oil. Then the drop came, and instead of takign the opportunity to ease into other positions as had been eyeing for years...I just kind of...well, looked on dumbfounded. I even stalled on energy!

I listened to the "doomsday hype" and kept waiting. Sure, I put limit orders on lots of things, but at doomsday prices... not at real-world dip prices.

On the positive, I lost no capitol--but I believe I missed some wonderful opportunities. So, lesson learned--$2500 of a great company at a great price is better than $2500 in the bank.

Ronn

Well, I would have had no problem going in and buying on this dip but since I'm in the middle of a new driveway/front walk way I just kind of sat there and thought son-of-a-gun now this dip happens? If I didn't hate loans so much I would have been able to allocate these funds, but hindsight being 20/20 those funds would have been allocated several moons ago since I'm not big sitting on cash. So, either way I was missing this dip, luckily I invest weekly no matter what the market does.