This probably isn't the bottom. Wait a little while longer and when things start picking back up, dump in as much as you can afford.
That's pretty bad advice.
Dow Falls 2997 points worst drop since 1987 crash
141–150 of 499 posts
Re: Dow Falls 2997 points worst drop since 1987 crash
#142Earlier quoted context omitted.
Great point, all the "big boy" traders who have been raking in profits on put options, VIX volatility, and leveraged inverse etf's eventually will switch their trades to bull. However, keep in mind, a market down 30% requires a 43% gain to break back even.
Sorry for a maybe dumb question but what is the logic for 43% gain needed?
Math: 30% drop means going from 100 to 70. Now to get back up to 100, you need a 43% gain (30/70).
Re: Dow Falls 2997 points worst drop since 1987 crash
#143I’m buying S&P index every day at this point, trying to drive my average down without trying to find the bottom. ...with that being said, I feel really worried about American economic stability long term now. Governors are closing restaurants and businesses leaving tons of folks out of work while providing minimal safety net coverage. Even liberal states like New York are ignoring the downstream economic effects thes…
Every time I see this, I fail to grasp the logic. So you had money sitting on the sidelines for safety during boom times, and you elect to put it in a riskier asset class during a panic? I'm not saying this isn't likely the most profitable action, I just don't see how the principles are consistent with each other. The former is conservative; the latter is wildly speculative and risky.
Market has been hot so far this year, so the wise thing to do has been to slowly trim holdings for cash - i.e. up to 30% of your portfolio - so that you can buy on the dip. The correction has been a long time coming but the pandemic is making it even worse.
Re: Dow Falls 2997 points worst drop since 1987 crash
#144This probably isn't the bottom. Wait a little while longer and when things start picking back up, dump in as much as you can afford.
I'm going to trickle cash in to total market index funds each week going forward. I'll just keep adding on the way down.
Re: Dow Falls 2997 points worst drop since 1987 crash
#145I'm quite surprised by this because it was my understanding that companies were doing us a favor by employing most people. That they were forestalling replacing us with robots by paying us near subsistence wages. I'm very confused. On the one hand I have all the things I've been reading in the papers about workers being superfluous. But yet on the other hand when I just look at the evidence, it seems like companies r…
Jobs that were economically beneficial to replace with machines or outsource were replaced with machines or outsourced. People with jobs now have them because they are needed now, even if not in ten years. How is that hard to understand?
Re: Dow Falls 2997 points worst drop since 1987 crash
#146SPY puts printed today. Up 110%, sold before Trump had his press conference.
I think there's going to be a little bit of a bounce tomorrow and then resume drilling.
Re: Dow Falls 2997 points worst drop since 1987 crash
#147Earlier quoted context omitted.
Great point, all the "big boy" traders who have been raking in profits on put options, VIX volatility, and leveraged inverse etf's eventually will switch their trades to bull. However, keep in mind, a market down 30% requires a 43% gain to break back even.
Sorry for a maybe dumb question but what is the logic for 43% gain needed?
1 * (1 - 0.3) = 0.7
0.7 * (1 + 0.43) ~= 1
It might be more intuitive with round numbers. If you lose 50%, you need to double (+100%) to get back to your original value.
Re: Dow Falls 2997 points worst drop since 1987 crash
#148To put it into perspective, the last time the market behaved like (multiple drops of this magnitude) this was 90 years ago, in 1929, and it was at the start of the Great Depression. Today was the second largest percentage drop for US Markets in history. Now is not a good time to sell your stock holdings (at least not anymore). This smells of a panic right now. I think a severe recession is all but guaranteed at this…
No one knows. You have the entire world working (mostly together) on ending this. I'm optimistic things will get much better in a month or so.
What? We just had our national day of prayer, that seems to be the main response. How on earth can you be optimistic in the face of all available evidence? What are you basing this month timeframe on, did you just completely invent that number out of thin air?
Re: Dow Falls 2997 points worst drop since 1987 crash
#149Earlier quoted context omitted.
Your first two paragraphs are severe contradictions. If this is anything like 1929, the bottom will be around 340, after retesting highs from 1987. In that case, 2400 SPX is a bargain sell and still getting out near the top in the scheme of things. Even if this is only a relatively mild recession like 2000 or 1973, we'll be seeing 1600 - 1700 SPX or at least 30% below today's close.
Goldman Sachs already said they expect a further drop of 20%. Of course, this is just the beginning.
Others have already forecast a drop of at least 60%. 20% is definitely only the beginning.
Re: Dow Falls 2997 points worst drop since 1987 crash
#150Earlier quoted context omitted.
Great point, all the "big boy" traders who have been raking in profits on put options, VIX volatility, and leveraged inverse etf's eventually will switch their trades to bull. However, keep in mind, a market down 30% requires a 43% gain to break back even.
Sorry for a maybe dumb question but what is the logic for 43% gain needed?
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