A Perspective on the Stock Market in Challenging Days

After the crash of 1987 (for the youngsters, the market went down 22% in ONE day), there was a commentator named Louis Rukeyser, who gave the following quote that I like to remember in times like this.

Ok, let’s start with what’s really important tonight. It’s just your money. It’s not your life. Everybody who really loved you a week ago still loves you tonight and that’s a heck of a lot more important than the numbers on a brokerage statement. The robins will sing, the crocuses will bloom, babies will gurgle and puppies will curl up in your lap and drift happily to sleep; even when the stock market goes temporarily insane. And now that that is fully in perspective let me say, ‘Ouch’, and ‘Eeek’ and ‘Medic’.

 

What about people who only love us for our money?


But seriously. When the market tanked 2007, I knew people who were going to retire, and had to work 6 more years to get back to that point.

 

I caught a bit of buzz last night before watching the news. By the end, Norah O'Donnell had me paranoid and terrified.

Between the huge news item which shall remain anonymous, the incredible stock market dip, blizzards in New York state and a former television personality's daily exaggerations, I was scared shitless.

So I drank some beer, watched hockey and became drunk and buzzed while scared shitless.

To make things worse, the damn Rangers won.

 

As a member of Generation X, I’ve seen some of the crazy rides that the stock market can and does take. While I understand people get fearful about money, I think a lot of it has to do with hype and many afraid to discuss money in general. My investments are just that - investments. I know there will be good days and bad days. Right now, my investments are simply numbers on a page/screen. I have no intention to turn those numbers into liquid assets until retirement.

My parents have retired and put most of their retirement investments into secure (read savings and money-market funds) assets. Although they are not getting a real rate of return, they are content with their financial position.

I’ve given financial and investment advice to my kids so they understand how money works. The oldest (22) is starting himself into a career and I told him that it’s best to start saving early now while he won’t miss the money. He’s got something we as parents and grandparents don’t have, time. He does ask me about the market but doesn’t seem to let things faze him. Hope he’s finally “grown up” and the rest of them can learn to be responsible as they get older too.

 

Remember that the US stock market has never failed to recover from a slide, correction, recession, tumble, nose-dive or whatever in its history.

 

These “dips” create buying opportunities.

 

That is what Warren B always says!

 

Nibbled yesterday, did some more today. This is like the whole Oct - Dec 2018 slide in 5 days, it's extremely extreme. Some stuff finally came down to where I wanted, so I pulled the trigger, just like then.

It may still be early, but with the cash I have available, I'm looking to lock in dividend income, so I don't worry as much if there's more downside, I still have dry powder and I'm still years away from having to sell anything.

 

I'm sorry to hear about your friends who had to postpone retirement. Unfortunately, they were probably too fully invested in the market when it crashed, and cashed out near the bottom (within two years the market had fully recovered and hit new highs).

Humans sometimes seem to be hard wired to do the wrong thing at the wrong time, and our own human nature is one of the hardest foes to fight. I don't know how long this correction or whatever you want to call it, will last or how much worse it may get. I just know that panic never has been a constructive strategy, and at some point there will probably be a good buying opportunity.

 

That’s how I’m feeling about a few stocks. I have a hard time bringing myself to get into this one because I’m not a product user and not sure how I feel about their stuff, but hard to say no to nearly a 5-year low with an almost 8% dividend.

 

A wise man when it comes to money. We can all learn and maybe hope to be a percentage as lucky!

 

Somebody can correct me if I'm wrong, but I believe both the Dow Industrials & the SP 500 have never had any continuous 7-year period with a net-loss. Ever.
So, as bad as it can get sometimes, things will (eventually) recover.
I shouldn't be as heavily invested in stocks in my 401K, given my age, but the returns over the past 10 years have certainly been quite good.
If I have to give up some of that, I try to keep things in perspective - I look at my average annual yield... and things would have to drop a lot more than they have to even get me under 10% return for the last 10 years.

 

That's pretty tempting!
$3.36 dividend on a $38 stock? I'll be taking a closer look!

 

The level the market has “crashed” to was celebrated as an all time high less than a year ago. Let’s keep things in perspective.

 

I feel the same but have a hard time buying into what they sell. I sometimes think that if times get tougher, more people will turn to it. The return has me intrigued though. And how much more will they fall? I may really bite at 33-35.

 

Yeah MO here is really really hard to resist. I'm a user, but I'm staying away. Tobacco, mall REITs and energy are avoids for me, except for short term trades.

This is what I look at when I start thinking about buying MO because it has a high div:

 

You can't time the market!

 

Today I increased my positions in Duke Energy and GE. I also added Walmart as a new stock. I think the Walmart supply chain is going to be negatively impacted for the next few months and expect the Walmart share price to fall more. I plan to add incrementally to Walmart once a month then hold on for the long term with Walmart. Same strategy with Duke and GE. Seriously looking at PPT also but have not made a move on it yet.

 

PPT fooled me the first time I owned it. It's normally very sleepy and not volatile, but when the market gets violent, PPT does too, so be ready for that.

 

This is why we plan ahead. Try to invest as early as possible and slowly start switching to lower risk investments like bonds as you get closer to retirement.
I am mid 20's and it is hard to invest so much with lots of debt but these down turns or whatever you want to call them have me salivating at the long term (50 years or so) gains to be had out there.