(03-12-2020, 09:51 AM)Kerim Wrote:(03-12-2020, 09:12 AM)fenders53 Wrote:(03-11-2020, 05:12 PM)MikeWa Wrote: I've heard a theory that you should invest 30% of your cash with a 10% drop, next 30% after next 10% drop and another 30% after yet another 10% drop.
Nothing wrong with that plan for an extended bear market. You have to consider your age, your personal risk tolerance,a and your best guess where we are in the business cycle. It's easy to over think it.
I don't think a young investor should have much cash. It's a lost opportunity longterm. Practically zero coming out of the bear, 10% if the bull is years old and valuations stretched. It really stinks to have no money when the market gets crushed. I'm close to retirement. I'll push my luck some at a time like this, but it would be nuts for me to not have enough cash for the first few years of retirement should I need it. I want 4-5 years to ride out a beat down so my stocks can recover. That is usually more than sufficient time.
I agree completely, but also have to factor in your own personality and comfort. I'd be worth a lot more right now if I didn't keep such a large amount of my assets in cash. My depression-era father still lurks in me I guess, but I just sleep a lot better with a big cash cushion. And it does come in handy for moments like these!
(03-12-2020, 09:53 AM)Kerim Wrote: I'm going to keep buying slowly. Definitely feeling like it is going to get worse before it gets better, but we humans are terrible at these sorts of predictions.
Just added a little DIS, OHI, and RDS.B
Yes, your personality (personal risk tolerance is huge). It's easy to talk a good game, but you have to be disciplined. You don't know what you'll really do until you experience your port in free fall for the first time. I know that I won't sell out, I know that I'll buy in too soon, every damn time! I keep cash around for this reason. I'm about out of cash that I will invest short of a 50% pullback. I know myself well. My next trick will be to start re-arranging chairs on the Titanic lol. I'll start looking for a holding that is only down 15-20%, then peel off a few shares and add it to a holding that is down 50%+ if the market is completely over-reacting short-term. DOW might be an example. Down about 60%, 10% yield is well covered. They weren't supposed to grow earnings until 2021 anyway. Not rational, and neither is major restaurant chains trading for half off because business might be slow for three months. Pretty sure their not actually going out of business if they survived 2008 well enough.