Managing investments in a downturn - No politics!

alfadriver said:

Kreb (Forum Supporter) said:

If I could do it again, 4 words would really have helped: Never sell real estate. With the exception of a house in Akron, every one that I sold appreciated hugely after I got rid of it. But that's nether here nor there. 
So I guess that it's hold on for the ride time. If I bought Euro military stocks I can pretty well guarantee that the war would end the next day.

One downside of real estate is property taxes.  Here in Michigan, the property that isn't your primary residence gets taxed at a higher rate than your home, which really is tough.  Every 1% in taxes takes away from the value growth- but has to be paid live as opposed to realizing real estate gain only when you sell.

As an income source, that can easily be dealt with, though.  Given that many rentals are owned by large corporations, it does show that it's a good income source.

Fellow Michigander here and you hit the nail on the head.   Real estate is far from a sure bet and can bleed you dry if it isn't generating income in some fashion.  I think it does make sense in a truly diversified portfolio, but it is an asset that comes with some liabilities and is often the antithesis of a passive investment.

In regard to the original question, I would hold the line and resist any panic selling for all of the reasons outlined by others above.  

I recently started my ROTH and am seeing the opportunity to buy more while the price is lower. I gotta stop buying car crap though and commit to a long term strategy.

Unless you have a time machine and can go back a couple months, it's too late to do much about financial investments besides hang on for the ride.  Sooner or later the markets will rebound, they always do.  The only question is when.

I keep hearing about it, but I didn't notice anything. So this morning I did the math and I'm down 2%, which is a normal fluctuation for me.

What are you guys seeing?

I have a long term outlook, dollar cost average, buy an hold. Everything is on sale right now, but it might be more on sale tomorrow. Who knows? Continue investing... The market has been inflated for several years and was overdue for a correction. 
 

As far as the "physical assets are the only way, it's all coming down, man" type thinking, I don't think any of us really want to hang around to experience that level of trauma. That means every company on the US stock exchanges has a zero value along with companies on the rest of the world markets. That's dinosaur sized meteor, nuclear war, or COVID version Z.  Everyone is pretty well dead at that point so... A localized natural disaster or something, yeah I am prepared to survive that, but a complete global market collapse. That would be beyond the Great Depression. Nope. Nobody's getting through that one because something much worse will have triggered it. LOL

In reply to tester (Forum Supporter) :

If we get that far, gold will be useless, too.  Just food, water, and shelter will have value.

alfadriver said:

In reply to tester (Forum Supporter) :

... Just food, water, and shelter will have value.

Guns and ammo too. They are also non-perishable and if bought well, appreciate in value whether in a downturn or booming economy.

The only thing useful in that level of collapse is fitness and a skill set. Anything you "own" will belong to the next stronger person that comes by you. That includes your real property, food, and precious gold. If the paper saying you own your house and land is still worth anything then the stock market will still have value. 

In reply to Peabody :

We're still up for the year... by 0.12%.

AAZCD-Jon (Forum Supporter) said:

alfadriver said:

In reply to tester (Forum Supporter) :

... Just food, water, and shelter will have value.

Guns and ammo too. They are also non-perishable and if bought well, appreciate in value whether in a downturn or booming economy.

Good if you can make your own ammunition, otherwise it's is like that Chris Rock bit about ammo control.

I've had a significant cash windfall recently due to inheritance, but am planning to use it within a year for a new home. I'm leaning into some treasury bond ETFs to get more interest than most high yield savings accounts, and more security than a market index.  Holding it all in cash seems stupid. I've dabbled a bit with some of it in stocks, but keeping the bulk in a way that will keep my money making money while not losing value.  If I had a different timeline I'd have a totally different strategy.  
 

Still have our usual 401k and Roth which are pretty well diversified and on track for our retirement long term, but dealing with the windfall for the short term is a whole problem.  

In reply to Sonic :

A mix of CDs, bond ETFs and an online money market would be my choice. From my research MM has the best rate but changes quickly.  Just make sure the CD is non callable.  A callable CD means they can decide to end it at any point.  And they do, with interest only given for the time they have the money.  Right now a 12 month cd or MM are about 4.5% which is not huge but it is safe.  

In reply to Sonic :

Right now I have short term cash in a high yield savings account. Huntington and Fifth Third both pay about 4.5% if you bring new money in when opening the account. I think the upper limit is $1mm. I'm sure the rate will adjust down the road. 4.5% isn't bad for easily accessed money with no risk. 

So one of the most important things everyone is saying- don't do what frenchy did- sell low when the market sees a big dip.  In fact, do the opposite of that if you can.  The real question right now is if there will be an actual correction that people think will happen, and how much that should be.  

This does seem like a good time that stocks that are incredibly high with no real justifiable reason get corrected.  More than one stock that has a value really high when they are still barely making money.  Just like the tech bubble in the 90s.  These are the true gambling funds (or manipulated funds).  There are plenty of steady earning profitable companies that back the actual structure of the market, so there is that.

I've never stressed on the ups and downs that are natural and happen.  I took nuclear weapons to debt over the last years and now have none.  I haven't given myself a raise in 10yrs as we're good at living below our means.  This has meant a significant increase in what gets put away every year and it tumbles nicely towards a bigger nest egg.  I live by low cost ETF's that read the broad market.  I did diversify into a few iterations of gold over the last two years that have really paid off as a stabilizing factor. YMMV.

Am I annoyed with the recent change of events, yes.  It happens though.

One of my favourite long term investment sayings is "you didn't look at this long term enough". Volatility is your friend to actually make money in the longer term, so I tend to ignore the short term brouhaha so beloved of the meejia.

My general retirement investments are broadly diversified (albeit probably a little too aggressive for my age, but whatever) and I've probably still got a decade to go with this work thing anyway, so I'll just keep the autopilot autopiloting. I do have a fair amount of our not worth in stock options from my employer from a time before we had stock grants, so it's actually beneficial from a tax perspective to maybe exercise a few more before I absolutely have to.

I did notice that with the overall economy not looking too hot, more toys seem to be coming on the market for what looks like reasonable prices. There might be a bargain or two to be had, so I'm keeping some easily accessible cash around just in case.