03-13-2025, 08:47 AM
(This post was last modified: 03-13-2025, 09:20 AM by ken-do-nim.)
I'm 100% in cash now. The only funds I have invested in the stock market right now are my company stock options, the earliest of which expires in 2029, but the bulk of which expire in 2032, so I have plenty of time on those.
We're all very familiar with the 2021 runup and 2022 stock market correction due to raising rates. So where are we relatively? May 2021 was the first we heard of inflation, but the Fed said it was probably transitory, and the market rebounded. September/October were rough as I recall, but November and December 2021 the market irrationally surged before the huge drop of January 2022. Given yesterday's action, I think we are in the irrational November recovery from the Sep/Oct drop; i.e. we already know the writing's on the wall but people are still holding/buying. Soon we will be reading articles about the hardships caused by the tariffs, and the market will plummet precipitously.
So then comes the question of how long to bottom?
1929 crash - 30 months
2008 crash - 18 months
2022 crash - 10 months
My current plan is to get back into the market in 2026 if the Democrats look to be leading in the polls to take back Congress. But I will always get back in after 3 months of gains after the drop, because in my research that's the signal that a bottom was reached and the market is recovering. And it's hard to tell. Who knew in October 2022 we'd reached bottom? The Fed were still raising rates. It wasn't until the end of January 2023 that I realized we were in the recovery phase, when I looked at all my stocks and clicked the 3M button and saw growth across the board. But Jan 2023 was a monster month and ideally I would have noticed the bull run a bit earlier. If I had sold at the beginning of November 2021 when it became clear (I think) that inflation was real and waited until the start of Jan 2023 to reinvest I would have done great.
I sold everything back in Sep 2008 the day Lehman Brothers went bankrupt, and got back in March 2009. The bottom was in April, so I was pretty close to it. It's definitely an art form to figure out when to get back in.
We're all very familiar with the 2021 runup and 2022 stock market correction due to raising rates. So where are we relatively? May 2021 was the first we heard of inflation, but the Fed said it was probably transitory, and the market rebounded. September/October were rough as I recall, but November and December 2021 the market irrationally surged before the huge drop of January 2022. Given yesterday's action, I think we are in the irrational November recovery from the Sep/Oct drop; i.e. we already know the writing's on the wall but people are still holding/buying. Soon we will be reading articles about the hardships caused by the tariffs, and the market will plummet precipitously.
So then comes the question of how long to bottom?
1929 crash - 30 months
2008 crash - 18 months
2022 crash - 10 months
My current plan is to get back into the market in 2026 if the Democrats look to be leading in the polls to take back Congress. But I will always get back in after 3 months of gains after the drop, because in my research that's the signal that a bottom was reached and the market is recovering. And it's hard to tell. Who knew in October 2022 we'd reached bottom? The Fed were still raising rates. It wasn't until the end of January 2023 that I realized we were in the recovery phase, when I looked at all my stocks and clicked the 3M button and saw growth across the board. But Jan 2023 was a monster month and ideally I would have noticed the bull run a bit earlier. If I had sold at the beginning of November 2021 when it became clear (I think) that inflation was real and waited until the start of Jan 2023 to reinvest I would have done great.
I sold everything back in Sep 2008 the day Lehman Brothers went bankrupt, and got back in March 2009. The bottom was in April, so I was pretty close to it. It's definitely an art form to figure out when to get back in.