Thoughts on possible stock market drop

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wickedDUDE

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Jun 25, 2006
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I'm debating about putting money in the stock market but I don't know if I should wait until a significant market drop happens. Lots of web sites "predict" this will happen in 2013-2014 but nobody knows shit really.

I would hate to put a significant amount in now (over six figures) only to see it drop and then wait 5-6 years just to break even again. I'd rather wait for a drop of 20-40% then pile in.

I plan on investing in low cost index fund ETFs that cover the whole u.s. market, the international market, and total bond market for less risk and more diversification.
 


The market has dropped some over the last couple of weeks, so now might be a good time to buy. But it is still way up over the last few years.

You may want to put in 1/2 now and then wait. Or 1/3 now and then another 1/3 if it drops more, etc. But then there is the possibility that it just keeps going up and never gives you a chance to get in.

If it were me, I'd put it all in at once right now. The economy has been picking up quite a lot recently. But that's just me.
 
Nothings ever a sure thing but the market does often follow trends. And the longer term trends are often followed more than the shorter-term trends. If you pull the market out to 15-20 yrs of data you'll see one big ass trend.. and if that trend holds out it could be the start of a new bear market in 0-2 years.

Most bear markets last only 1-2 years and most bull markets last only 4-5 years. We're on our 4th year of bull market right now.. and once the S&P hits 1550 or so people will really be looking for that new bear market which if the trend holds out could take stocks down 50% or more.

Since we're near that 1550 point in the trend many people are already looking for the next 'black swan' event that could cause the next bear market. And since they're looking hard for it they might find it in this whole fiscal cliff debacle or more European shit. Remember that the value of the stock market is psychological.

Add to that the possibility that US markets will never be the same again due to the fact that demographics are changing so drastically and I would not really recommend the market to anyone right now except traders. It's possible the historic trend of 9-11% in the market will be undone by the fact that people' aren't reproducing as much anymore so they don't have progeny to pump value into the system as much anymore. Many examples across the world do show a correlation in population growth reduction and market value reduction.

Moral of story. I recommend bonds for now.. and not Bond Funds.. there's a big difference. But as always anything can happen. There's a chance the market will be inflated to new highs past 1550 because of the extra money being printed as well.
 
wickedDUDE said:
I'm debating about putting money in the stock market but I don't know if I should wait until a significant market drop happens. Lots of web sites "predict" this will happen in 2013-2014 but nobody knows shit really.

I would hate to put a significant amount in now (over six figures) only to see it drop and then wait 5-6 years just to break even again. I'd rather wait for a drop of 20-40% then pile in.

I plan on investing in low cost index fund ETFs that cover the whole u.s. market, the international market, and total bond market for less risk and more diversification.
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WickedJoe said:
Nothings ever a sure thing but the market does often follow trends. And the longer term trends are often followed more than the shorter-term trends. If you pull the market out to 15-20 yrs of data you'll see one big ass trend.. and if that trend holds out it could be the start of a new bear market in 0-2 years.

Most bear markets last only 1-2 years and most bull markets last only 4-5 years. We're on our 4th year of bull market right now.. and once the S&P hits 1550 or so people will really be looking for that new bear market which if the trend holds out could take stocks down 50% or more.

Since we're near that 1550 point in the trend many people are already looking for the next 'black swan' event that could cause the next bear market. And since they're looking hard for it they might find it in this whole fiscal cliff debacle or more European shit. Remember that the value of the stock market is psychological.

Add to that the possibility that US markets will never be the same again due to the fact that demographics are changing so drastically and I would not really recommend the market to anyone right now except traders. It's possible the historic trend of 9-11% in the market will be undone by the fact that people' aren't reproducing as much anymore so they don't have progeny to pump value into the system as much anymore. Many examples across the world do show a correlation in population growth reduction and market value reduction.
Click to expand...

I think WickedIce should weigh in on this one too.
 
stock market is a place where things happen we never expected. It completely depend on you'r luck and expectation. this is good time to buy as market is droped because of frankenstorm....
 
I'm dealing with a similar dilemma and to be honest, the risk vs. reward ratio doesn't seem attractive.

Take a look at how the S&P 500 performed over the past 15 - 20 years... I dunno.

XxHsY.png


I'm not a trader, I'm very good at this Internet thingy (investing in domains and building online businesses) but my experience with offline investments is limited. Maybe some of you are better at stock market analysis than me but personally, I think the risk of another crash seems high and the potential upside limited.
 
We're in the middle of a worldwide recession. I'd think it over very well. Real stuff and commodities seem a safer option to me.
 
You can either trust your money in the stock market (fate dictated by the emotions of traders and speculators) or you can build a product (fate dictated by market demand). My feeling is that with a web product or app that doesn't generate a sufficient return you can potentially sell it on flippa for more than you invested - if it's an app you can rebrand it several times and see if that helps things.

With stocks that sink in price, there's nothing you can do to salvage it. You can sell it or hold onto it for a few more years and hope that traders eventually deem it more valuable again.

I'm not a trader, but I figured I'd put in my $.02 for what it's worth.
 
charlie.simm said:
I'm dealing with a similar dilemma and to be honest, the risk vs. reward ratio doesn't seem attractive.

Take a look at how the S&P 500 performed over the past 15 - 20 years... I dunno.

XxHsY.png


I'm not a trader, I'm very good at this Internet thingy (investing in domains and building online businesses) but my experience with offline investments is limited. Maybe some of you are better at stock market analysis than me but personally, I think the risk of another crash seems high and the potential upside limited.
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Seems like a good time to sell stuff short.
 
WickedJoe said:
Moral of story. I recommend bonds for now.. and not Bond Funds.. there's a big difference.
Click to expand...

Btw, I don't recommend bonds if you're going to try selling them on the secondary market. If you buy them then hold them to maturity.. because then bond price fluctuations won't impact them. Because there's no question that bond prices will be plummeting as soon as the FED stops holding interest rates artificially low. This is the 'bond bubble' that has not yet broken but likely will.

Bond interest rates will rise much more soon which means the value of previous bonds issued with an artificially lower percent interest rate will plummet in the secondary market.

You can also consider Peer to Peer lending or holding your money for a big market drop then putting it in. Both of those options have their own risks of course.
 
VinBed said:
You can either trust your money in the stock market (fate dictated by the emotions of traders and speculators) or you can build a product (fate dictated by market demand).
Click to expand...

You're always in a far better position to generate a great return when investing in your own business or businesses since you have an edge.

But the thing is, at least a little bit of diversification can't hurt and it's only a matter of time until you'll end up exploring investment opportunities that aren't related to making money on teh Interwebz.

It's what I've been doing over the past couple of months (in other words ok, I'm obviously investing in my businesses as well as in domains but aside from that, I'm also exploring other options) and lemme tell you, being a newb again is a very humbling experience.
 
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That's the S&P vs. GLD over the last ten years. Expect this trend to continue. Expect to see another big ass dip in the blue line soon, like that one beginning in late 2007. Expect to see one of the biggest financial and economic dislocations in history some time this decade.

We are at the tail end of a massive, decades long credit and monetary expansion, which will end with the demise of the dollar as the reserve currency, skyrocketing precious metals, and extreme episodes of incredulous whining by the self-entitled American people.

Buy gold, silver, arable land, productive businesses, etc. Please do not buy a stock market index fund or bonds of any kind. Buy tangible assets that people need, like a scrap metal business or a copper mine. Also, invest in your own life skills, energy independence, community, security, mobility, etc.

I'm not even that savvy, but this shit is the biggest no brainer investment of all time, and probably one of the most profitable.

Read and listen to people like Doug Casey, Eric Janszen, and Chris Martenson. Avoid CNBC and their ilk at all costs, as they are propagandist hacks and lackey stooges of the financial parasite class.

That is all.

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