I'm really curious about this, but I fear it can't or won't be discussed rationally here.
When something potentially earth shattering occurs, like, say, next Tuesday, the stock market takes a horrible dump. Should I pull everything and put it in a sock under my bed for a week, and buy it all back at rock bottom prices? Am I going to waste my time if the status quo gets in? Is there any reasonable expectation of the election not cratering Wall Street?
The smart money always says to buy and hold. There are moments of course where the prescient investor will have sold off the week before 9/11 or similar but the overall trend will continue upwards. The true power (massive money) is simply too powerful to allow something as inconsequential as a presidential election to sway it from it's path of ever increasing riches.
tldr: relax, markets go up
My opinion is buy and hold. Trying to catch dips like that will end up with you losing money more often than not.
I believe in buy and hold.
Timing the market is for supercomputers and stupid people.
Stay the course.
I'm a buy and gold guy.
Now. If you want to talk about short selling that's another discussion and one I don't have dollars to gamble on yet.
In reply to Fueled by Caffeine:
I am assuming you meant "Buy and Hold" as opposed to "Buyin' Gold"! 
Casino
All in
Red or Black 
I know a guy that checks his net worth daily ... I wonder how many Valiums he plans on taking this week. 
I lost half my retirement in the last crash. It didn't come back. "Buy and hold" is a myth that companies who are in the fund investment business need to propagate to keep the free, easy money in the market to invest with for themselves. The government is in that business too.
If you aren't working for your money - it's probably working harder for someone else.
Watch out for the fees... Do your own homework and do what you think you should do with your money.
In reply to Huckleberry:
Huh. Just out of curiosity, was your portfolio well balanced, or was it heavy in riskier investments?
BTW, nobody mentioned taxes....
When you pull it out, you have to pay taxes on it. If the gain is not enough to offset the taxes, its a loss.
No reason to liquidate unless you're planning on bugging out for good. If possible, be ready to buy more when/ if it drops.
I have no faith in the stock market. For us regular people it is just a casino. The whole market has devolved into a mechanism to skim money off of the people to feed the pigs at the trough. It is not designed to enrich us, but as a way to take more from us.
That being said, I have some retirement funds in it, but those are just to hedge my bets in case I am wrong. For those I deposit some money every two weeks automatically and I check on my accounts a few times each quarter or so.
IMHO, the stock market is useful, but not something we need to be focusing on so very, very much. They cause as many problems as they solve, and the system needs to calm down.
The issue for the market is people chasing "value" since it's only as good as someone is going to pay for it- there's no inherent increase of actual value due to work someone did. Real value increase is when you take an object, work on it to transform it into something someone else will pay you for your work. Raw ore into metal, sand into silicon chips, resistors, chips and wires into computers- etc. The stock market should be there to provide money for those companies to do that work.
Not to make up ways to bet on if the value of a stock will go up or down, or to bundle hundreds of thousands of loans into many different bonds to pretend they are good things to spend money on.
The actual date of the election is when things will take a more steady course. It's the uncertainty surrounding the election that causes volatility. Regardless of who wins, good businesses will find a way to prosper.
SVreX wrote: BTW, nobody mentioned taxes.... When you pull it out, you have to pay taxes on it. If the gain is not enough to offset the taxes, its a loss.
Not an immediate concern. Mine is in a Canadian (RRSP) tax sheltered retirement fund, and as long as I just move it to a different RRSP taxes don't come into play. Take it out of the RRSP, taxes are due and payable in that tax year.
1988RedT2 wrote: The actual date of the election is when things will take a more steady course. It's the uncertainty surrounding the election that causes volatility. Regardless of who wins, good businesses will find a way to prosper.
Or bad business!
You know what Wells Fargo has been up to? That pretty much sums up Wall Street and its relationship with the retail investor.
NOHOME wrote: You know what Wells Fargo has been up to? That pretty much sums up Wall Street and its relationship with the retail investor.
Which is why you don't do business with a full commission stock broker unless you want to pad their retirement.
Huckleberry wrote: I lost half my retirement in the last crash. It didn't come back. "Buy and hold" is a myth that companies who are in the fund investment business need to propagate to keep the free, easy money in the market to invest with for themselves.
If you lost half your retirement and it didn't come back then you either didn't hold (ie, sold at the bottom) or didn't have a diversified portfolio. I'm not even aware of a way you could have had your retirement drop and not come back up but not go away entirely. What on earth did you have it in?
The stock market has had incredible returns since the last crash. It gained all it's losses back in a few years and then went well beyond them. The only people that lost money are the people that sold at the bottom or were poorly diversified by being invested in a very few select companies. And that's hardly the market's fault.
I strongly recommend this investing blog post series for people interested in investing or wanting an easy to read conservative (and by conservative I mean not "get rich quick" or "buy my product/system") investing primer:
Echo what others have said, including the jlcollins recommendation. Just hold the course!
dculberson wrote:Huckleberry wrote: I lost half my retirement in the last crash. It didn't come back. "Buy and hold" is a myth that companies who are in the fund investment business need to propagate to keep the free, easy money in the market to invest with for themselves.If you lost half your retirement and it didn't come back then you either didn't hold (ie, sold at the bottom) or didn't have a diversified portfolio. I'm not even aware of a way you could have had your retirement drop and not come back up but not go away entirely. What on earth did you have it in? The stock market has had incredible returns since the last crash. It gained all it's losses back in a few years and then went well beyond them. The only people that lost money are the people that sold at the bottom or were poorly diversified by being invested in a very few select companies. And that's hardly the market's fault.
Agreed. At the end of first year I worked at my company (2001) we received a "profit sharing" bonus added to our 401k accounts. Unfortunately, it was only for that one year. However, because that comes up as a separate entry on my quarterly 401k statement, I've been able to use it as an overall gauge on how well my portfolio is doing since inception (along with a rollover from my previous company that was added a year or so later). Both have more than doubled since.
It could be argued my portfolio isn't diverse enough - I basically have everything equally split into 4 funds of various risk levels - but it seems to have done well enough for me. Right now, I'm not terribly worried.
I'm a strong believer in holding a good investment. Hold it forever as long as it's performing. Sell it if it isn't. Simple. If it's growing and also paying a dividend, that's even better. That strategy has worked for me for the past 40 years. Now I'm retired, living off dividends. Living pretty well, in fact. But creating wealth is more than making good investments and holding them. You also need to live within your means for the forty or so years leading up to retirement. If you score big on an investment, reinvest the winnings instead of splurging on new toys. (Just my opinion based on experience).
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