Will the stock market crash (June 24 2016 Update)?

[rocket surgeon]

  heisy-that was superb.  the point about being smug-it goes the same for golfers.  if you want to be good or just to enjoy the game, you have to have a bad memory, selective amnesia with one exception to your "basketball mentality".  and that is a dose of humility because just when ya think you've figured it out, hello water ball

    now, so much for the diet as i'm gonna go back to being fat happy and stupid-life can be so much simpler that way...Eyn'A?

[Tugg Speedman]

So, just because I'm curious, what would your financial advice be to an early 30s, single and no kids, healthcare professional with 100k student debt and little available cash? I do have a retirement account from a prior employer and some minimal savings (<10k).

Hold whatever you need in cash, and then ...

All of these are ETFs  Type in these tickers into your favorite investment site for details

I'm a HUGE fan of the RAFI indices from Research Affiliates in Newport Beach CA.  They are the inventors of "Smart Beta."   I'm also good friends with Rob Arnott, the founder.


Domestic Stocks - 30%
10% SPY - S&P 500
10% IWM - Russell 2000
10% PRF - RAFI US 1000

International 20%
10% PXH - RAFI Emerging Markets
10% PXF - RAFI Developed Markets (x-US)

Fixed Income - 30%
10% AGG - Core US Agg Bond
10% TIP - Inflation Protected Bonds
10% PCY - Emerging Market Debt

Commodities 10%
5% GLD Gold
5% SLV, Silver

Speculative 10% (pick two)
5% EUO - Short Euro
5% EWJ - Japan
5% NLY - Annaly
5% Your favorite stock(s)


The final question is how much risk to take.  I would do 66% to 75% of the total amount because of what I wrote above.  If I'm wrong about the end of globalization, I would go to 100% of the total amount.  If my worst fears of the end of globalization are beginning to happen, I would go to 66% to 50%, if not lower.

[forgetful]

Wow, there is a whole lot of craziness in this thread. 

Everyone needs to take a deep breath, let a few weeks pass and then re-evaluate the situation. 

[Benny B]

So essentially, Heisy comes to Scoop to... scare us into selling our stocks... so he can... buy... low?

At least it's not a pump and dump.

[Tugg Speedman]

Bernie Sanders Agrees With Me!!

http://mobile.nytimes.com/2016/06/29/opinion/campaign-stops/bernie-sanders-democrats-need-to-wake-up.html?referer=https://t.co/ywq46GeMt4

[MU82]

Bad news for Mr. Smuggles: Looks like another big day for the market, as U.S. investors yawn at Brexit again.

Even Nike is up fairly big premarket despite a mediocre (some might even say disappointing) earnings report after close yesterday. Which is too bad because I was planning to top off my position this morning. Instead, I'll just stay patient and wait for Mr. Smuggles' next cataclysmic event.

[GooooMarquette]

OK, Heisy, that last paragraph explains a lot.

Indeed.  But wise people learn from their mistakes - they don't just forget them and move on as though they never happened.

IMHO, of course....

[tower912]

Derrick Wilson kept shooting, too.   

[MU82]

Wait, did we rally back the 600 points we lost on Friday?  And the destruction of the European financial stocks, the worst two days ever recorded, has that been reversed?

Well, as I write this just after market close today, my portfolio is valued almost exactly $100 more than it was going into Friday's open. Yep ... one whole C-note! That doesn't count my funds, which take several hours to update, so it probably will register as a couple thousand higher by dinnertime.

In other words, it took me all of two Wall Street sessions to establish a new all-time portfolio high after the so-called most cataclysmic financial event in European history.

I am not saying this to prove I am an investing genius. Unlike you, Smuggles, I don't make such a claim. I own mostly brand-name, proven, blue-chip dividend growers -- no secrets, mostly household names. It's the kind of boring, conservative portfolio that many of our parents (and their parents) built way back when.

I'm saying this because I happen to believe that doom-and-gloom overreaction is not an especially good predictor of anything long-term when it comes to investing.

See ya, Smuggles!

[Tugg Speedman]

Well, as I write this just after market close today, my portfolio is valued almost exactly $100 more than it was going into Friday's open. Yep ... one whole C-note! That doesn't count my funds, which take several hours to update, so it probably will register as a couple thousand higher by dinnertime.

In other words, it took me all of two Wall Street sessions to establish a new all-time portfolio high after the so-called most cataclysmic financial event in European history.

I am not saying this to prove I am an investing genius. Unlike you, Smuggles, I don't make such a claim. I own mostly brand-name, proven, blue-chip dividend growers -- no secrets, mostly household names. It's the kind of boring, conservative portfolio that many of our parents (and their parents) built way back when.

I'm saying this because I happen to believe that doom-and-gloom overreaction is not an especially good predictor of anything long-term when it comes to investing.

See ya, Smuggles!

Congratulations on your shiny new C-note.  Spend it well.

And I'm glad to see everything now revolves around the lens of the S&P 500.  And two day moves is how you base your decisions.  Welcome to the world of short term speculation!  Hope your bragging after a two day move does better than Chicos bragging about Disney at $120 meaning my all the gloom and doom about the house of Mickey and ESPN cord cutters was wrong ($96 today) or JayBee bragging that Apple climbed off its four year low to $101 so all my gloom and doom calls that Apple is now a replacement cycle phone utility were equally wrong ($94 today).

Go back a few days and you'll see my betting was:

So yes, I'm in and out all the time and now I'm pressing my shorts (more UK stocks than US stocks but both, and a smaller position in China A-shares.  Biggest position is the short in the Pound, looking to cover in the lows 1.20s.).  I will until everyone gets that warm wet feeling in their pants.  My guess is that is in the next two weeks.

China, Pound Euro stocks ... and two I forgot two others, gold and bonds are all acting like their is a problem.. Collectively they have offset my US stock losses.  I've scratched the last two days.

And since you're now in the world of tick watching ... does the name Theresa May mean anything to you?  It should because depending on what she does tomorrow, and yes she will do something important tomorrow, all your gains could be running right back down your leg.

Since you have the awesome two day track record and are now a veteran speculator, I'll let you explain why she is so important to your portfolio tomorrow.

[Tugg Speedman]

[GooooMarquette]

Teresa May could be incredibly important if you own a lot of European stocks or have positions in the pound and/or euro. For those of us who invest mostly in the US, she is of modest importance in the long run.

[MU82]

Congratulations on your shiny new C-note.  Spend it well.

And I'm glad to see everything now revolves around the lens of the S&P 500.  And two day moves is how you base your decisions.  Welcome to the world of short term speculation!   

I'm not a short-term speculator at all. Very long-term. I also told you exactly what I invest in, and it's not the S&P 500. Patting oneself on the back is your deal, not mine. While you even admitted to being smug, I came right out and acknowledged I'm no investing genius and have no grand schemes; I simply buy great companies and hold them.

You would know all of that if you actually read what I said instead of being in such a hurry to chronicle (again) how great you are.

As usual, Smuggles, you are all bluster and self-aggrandizement.

Two days ago, I expressed a little optimism in the face of the Brexit panic. You immediately shot it down by huffing and puffing that the 600-point loss was not recouped. So all I did here is show you that, in one investor's portfolio anyway, the Friday-Monday loss indeed had been recouped. (Yep, there I go ... bragging again!)

I already have agreed with you and others that Brexit will cause some pain, perhaps even long-term, far-reaching pain.

But I also have said that intelligent, patient investors will overcome that over time -- just as we overcame Black Monday, the dot-com crash, 9/11 and the Great Recession.

Mr. Market is very resilient. Which, of course, you already know. But if you admit it's not all doom and gloom, you wouldn't get to argue for the sake of arguing and smugly showing the rest of us how smart you think you are.

[rocket surgeon]

Well, as I write this just after market close today, my portfolio is valued almost exactly $100 more than it was going into Friday's open. Yep ... one whole C-note! That doesn't count my funds, which take several hours to update, so it probably will register as a couple thousand higher by dinnertime.

In other words, it took me all of two Wall Street sessions to establish a new all-time portfolio high after the so-called most cataclysmic financial event in European history.

I am not saying this to prove I am an investing genius. Unlike you, Smuggles, I don't make such a claim. I own mostly brand-name, proven, blue-chip dividend growers -- no secrets, mostly household names. It's the kind of boring, conservative portfolio that many of our parents (and their parents) built way back when.

I'm saying this because I happen to believe that doom-and-gloom overreaction is not an especially good predictor of anything long-term when it comes to investing.

See ya, Smuggles!

sell sell sell

[MU82]

I just saw this table about how stocks have historically reacted to recent adversity ...


Market Shock   Stocks - Next 12 Months   Stocks - Next 3 Years   Stocks - Next 5 Years

Asian Financial Crisis (September 1998)   +24.9%   +23.4%   +53.0%
World Trade Center Attacks (September 2001)   -7.1%   +55.4%   +120.3%
Lehman Bankruptcy (September 2008)   -2.7%   +0.4%   +63.3%
U.S. Debt Downgrade (August 2011)   +9.7%   +70.6%   +65.8%
Boston Marathon Bombing (April 2013)   +23.3%   +25.7%

Brexit ???? We'll see.

Mr. Market is resilient. Patient, intelligent investors who own quality stocks (or funds) and don't panic are almost always rewarded handsomely long-term.   

[GooooMarquette]

Mr. Market is resilient. Patient, intelligent investors who own quality stocks (or funds) and don't panic are almost always rewarded handsomely long-term.

Yep.  Since this thread was started just about a year ago, we have been through numerous events that day traders have described as "potentially catastrophic" for the markets.  The default of Greece, numerous terrorist attacks, the rise of "anti-establishment" politicians, threats of Puerto Rican default, and now Brexit.  People who buy and sell frequently have had headaches galore, while those of us who buy and hold through dollar cost averaging have done just fine...without the daily headaches.

[MU82]

Yep.  Since this thread was started just about a year ago, we have been through numerous events that day traders have described as "potentially catastrophic" for the markets.  The default of Greece, numerous terrorist attacks, the rise of "anti-establishment" politicians, threats of Puerto Rican default, and now Brexit.  People who buy and sell frequently have had headaches galore, while those of us who buy and hold through dollar cost averaging have done just fine...without the daily headaches.

Congratulations to learning the "secret" to investors who are able to sleep well at night.

Of course, it's not a secret at all. It's common-sense investing -- the way folks from Warren Buffett to my grandma have been investing for generations.

[Tugg Speedman]

Yep.  Since this thread was started just about a year ago, we have been through numerous events that day traders have described as "potentially catastrophic" for the markets.  The default of Greece, numerous terrorist attacks, the rise of "anti-establishment" politicians, threats of Puerto Rican default, and now Brexit.  People who buy and sell frequently have had headaches galore, while those of us who buy and hold through dollar cost averaging have done just fine...without the daily headaches.

Dead Wrong.  See page 1, this thread was started on June 28, 2015.  Since that date (through noon today)

S&P 500 -1.46%
Russell 2000 = -11.58%
Dow Jones = -1.1042%

Made no money during the life of this thread.  Meanwhile if you were scared  ...

Gold = +12.65%
30yr Tsy = +24.89%
10yr Tsy = +10.91%
Cash = +0.22%
Agg Bond Market = 6.57%


Small cap stocks have been a disaster and every option, including cash, has beaten stock since this thread starts, and I'm including the 200 DJIA gain today.

Fact is if anytime in the last 3 5, 10, 15 year if you yanked your money out of stocks, and put it in bonds or gold, you won.  That is the problem.  The stock market is not a good performer.  The 1990s was 15 years ago and the stock market stopped being a superior investment.

[GooooMarquette]

Dead Wrong.  See page 1, this thread was started on June 28, 2015.  Since that date (through noon today)

S&P 500 -1.46%
Russell 2000 = -11.58%
Dow Jones = -1.1042%

Made no money during the life of this thread.  Meanwhile if you were scared  ...

Gold = +12.65%
30yr Tsy = +24.89%
10yr Tsy = +10.91%
Cash = +0.22%
Agg Bond Market = 6.57%


Small cap stocks have been a disaster and every option, including cash, has beaten stock since this thread starts, and I'm including the 200 DJIA gain today.

Fact is if anytime in the last 3 5, 10, 15 year if you yanked your money out of stocks, and put it in bonds or gold, you won.  That is the problem.  The stock market is not a good performer.  The 1990s was 15 years ago and the stock market stopped being a superior investment.

No, you are dead wrong...largely because you have no idea what I own.  My portfolio involves both stock and bond/treasury funds.  The former have been down slightly, while the latter have been up more than enough to make up the difference.  All through dollar cost averaging.

Sorry to burst your bubble...again.

[Tugg Speedman]

Congratulations to learning the "secret" to investors who are able to sleep well at night.

Of course, it's not a secret at all. It's common-sense investing -- the way folks from Warren Buffett to my grandma have been investing for generations.

Treasuries have beaten him for the last 15 years.

Things changed in 2000 and Buffett's method stopped working.  And he blew himself up in 2008 and the only reason he was not ruined was the bailouts.

How do I know this?  He said so in November 2010, he thanked the government for saving him so he continue to be the second richest man on the planet, while millions of others lost their jobs.

http://www.nytimes.com/2010/11/17/opinion/17buffett.html

[Tortuga94]

I assume that most people here are using some sort of asset allocation model. They are diversified in their investments.
Not all S&P 500 or DJIA and definitely not all small caps like the Russell 2000. Most people view stocks as a long-term investment so pointing out what they've done versus gold or bonds or cash in a one year time frame doesn't mean anything.

Here are the long-term annualized returns(15 years-2000-2015), so it includes catastrophic events like 9/11 and the dot com crash. BTW the numbers look even better if we go out to 20 years. From worst performer to the best.

Bloomberg Commodity Index - .8%
Cash - 1.8%
MSCI EAFE(International Stocks) - 2.8%
S&P 500(US Large Companies) - 4.1%
Barclays Aggregate(Bonds) - 5.4%
MSCI EME(Emerging Markets Stocks) - 5.9%
Russell 2000(US Small Cap Stocks) - 6.6%
S&P 400(US Mid Cap Stocks) - 7.2%
Barclays Global High Yield Index - 7.9%
NAEIT - 12.0%

A diversified asset allocation approach would have returned about 5.9% annualized.

[brandx]

Wow, there is a whole lot of craziness in this thread. 

Everyone needs to take a deep breath, let a few weeks pass and then re-evaluate the situation.

Weeks?

You're on the right path, but how about "days"?

[Spotcheck Billy]

So now Heisenberg is calling himself the Boy Plunger?

[MU82]

Dead Wrong.  See page 1, this thread was started on June 28, 2015.  Since that date (through noon today)

S&P 500 -1.46%
Russell 2000 = -11.58%
Dow Jones = -1.1042%

Made no money during the life of this thread.  Meanwhile if you were scared  ...

Gold = +12.65%
30yr Tsy = +24.89%
10yr Tsy = +10.91%
Cash = +0.22%
Agg Bond Market = 6.57%


Small cap stocks have been a disaster and every option, including cash, has beaten stock since this thread starts, and I'm including the 200 DJIA gain today.

Fact is if anytime in the last 3 5, 10, 15 year if you yanked your money out of stocks, and put it in bonds or gold, you won.  That is the problem.  The stock market is not a good performer.  The 1990s was 15 years ago and the stock market stopped being a superior investment.

Well, Smuggles, it's a good thing my wife and I don't own the S&P 500, the Dow Jones or the Russell 2000!

Our portfolio is about 75% proven, blue-chip, dividend-growing stocks; about 15% bond and bond-like investments; and about 10% cash. It is up about 12% through the first 6 months of 2016, about 13% the last 12 months and about 24% since June 30, 2014. Think of all the "events" that have happened these last couple of years ... and our simple, conservative portfolio of mostly brand-name companies is up 24%.

After losing 1.7% the first two trading days post-Brexit -- less than a third of what the "market" lost -- we have gained 2.9% in the three days since. Our portfolio now stands 1.2% above where it was before Brexit, hitting our all-time high.

You're gonna have to look for others to doom-and-gloom to oblivion, Smuggles. Patient, intelligent investors -- a group to which many Scoopers happily belong -- ain't buyin' the crap you're sellin'.

Don't worry, though, we know you'll always claim to be right about everything, no matter the subject.

As for your screen-name change, you'll always be Smuggles to me!

[Benny B]

Dead Wrong.  See page 1, this thread was started on June 28, 2015.  Since that date (through noon today)

S&P 500 -1.46%
Russell 2000 = -11.58%
Dow Jones = -1.1042%

Made no money during the life of this thread.  Meanwhile if you were scared  ...

Gold = +12.65%
30yr Tsy = +24.89%
10yr Tsy = +10.91%
Cash = +0.22%
Agg Bond Market = 6.57%


Small cap stocks have been a disaster and every option, including cash, has beaten stock since this thread starts, and I'm including the 200 DJIA gain today.

Fact is if anytime in the last 3 5, 10, 15 year if you yanked your money out of stocks, and put it in bonds or gold, you won.  That is the problem.  The stock market is not a good performer.  The 1990s was 15 years ago and the stock market stopped being a superior investment.

Well, if you want to measure 'investments,' the smart money is - and always has been - in "none of the above." 

I've already realized nearly a 100% return of capital on investments I made just over a year ago and am projecting for a leveraged IRR of 30%+ over a three-year horizon.  Fear, uncertainty, and doubt played absolutely no role whatsoever... just the knowledge that it's nearly impossible to make short-term money in an ultra-efficient market.

Incidentally, the US stock market didn't go ultra-efficient until about 15 years ago (thanks Al Gore!).  So Heisey's actually right on the stock market no longer being a superior investment... but that doesn't mean that one should start betting the Don't Pass Line.