I received an email from MFO that Mindy had commented on a discussion I started well over a year ago. Lots of very fond memories emerged and I wanted to at least let my friends here know that I haven't died yet (I still think of Fundmental and how crushing it was to just lose him all of a sudden with no explanation).
I am copying my response to Mindy below since that post was so old. I think of many of you often and hope that your Portfolio's are, if not thriving, at least surviving. Catch 22's bond funds, high gold portfolios, etc. seemed likely the most to suffer.
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@Mindy: Hi, Mindy.... thanks for thinking of me. I've made a new post to let everyone know I'm still alive as I have such fond memories of everyone here at MFO - and am ashamed I haven't kept up more. Cathy
After this last June+ drop in all my bond funds due to the whisper of taper pullback and higher interest rates, it really did seem to confirm what most people said.... the 30 year bond bull market is over. Even though we have had a few respites here and there since then, the pull-out of tapering is inevitable... if not next year, then soon after (as long as the astonishingly stupid Congress faction doesn't destroy us all).
So, since my entire "crash course" knowledge was in Mutual Funds... especially the lowest volatility bond-type funds which I had the majority of our investments in... I felt it crucial in July to learn more about stocks and etf's (separately, and in relation to stock MFs), which is not a basic part of MFO discussions.
What a ride this has been. I switched from 80% bonds/20% stocks to now 70% stocks or stock funds and 30% bond funds. My portfolio has surged, and is getting close to what I feel is a good allocation (considering there is almost no diversity anymore). But what a shock to watch DAILY gains/losses of 1%-6% at some times for some stocks (especially before and after earnings reports - which, incidentally, seem to create buy/sell reactions totally in opposition to earnings like NFLX).
If fundamentals prevail, I fully expect a substantial downturn... any day now. But I've been expecting a crash for months now and found that logic, valuations, reasoning seem to have nothing to do with the market.
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As to ... "If fundamentals prevail, I fully expect a substantial downturn... any day now. But I've been expecting a crash for months now and found that logic, valuations, reasoning seem to have nothing to do with the market." --- Cathy, I think you hit the nail on the head here. For those of us who remember the horrific state of nearly every investment just a little over 4 years ago, it does kinda seem too good to be true.
I'd say: "Expect the unexpected" is probably the best advice for anyone with significant market exposure. Things happen, both good and bad, when we least expect them. I have found in the past that when I act solely on my expectations (by either taking on more risk or curtailing it sharply) it has generally gotten me in trouble. On the other hand, many appear to do well by observing market related barometers (PE ratios, interest rates. moving averages, etc.) and making carefully calculated adjustments based on these. Suspect the trick here is maintaining consistency. If you're going to reduce market exposure when PEs reach certain levels, you'd better darned well be prepared to add when they go the opposite way. Change barometers mid-stream or ignore them Willy-Nilly and you've hung yourself out to dry. Keep in mind market trends often take years or decades to play out.
As you note, gold's taken a drubbing the past couple years. But the early birds who were long 5-10 years ago are still laughing all the way to the bank. Truly, most risk assets are "unknowns" - and gold ranks high among them. Also, I wouldn't dismiss bond investors outright. Bonds haven't performed along with equities --- but since when were they supposed to? Still, many bond markets, like high yield, have enjoyed great runs. And good bond managers have had an uptick in rates recently to work with, so may have been able to capture some short term gains. Thanks for checking in. Regards, hank
Love the internet! Easily found reasons why stocks would go up/down in opposition to earnings reports.
So much information to pack in this getting older mind... but fascinating.
So far, this has been a very positive learning experience for my portfolios. And hopefully they will weather the next downturn better than the average market.
P.S. I'm planning to get back in some of my favorite bond funds after much of the taper has been removed, but am still keeping decent percentage in a few bond funds that will, hopefully, lose less when interest rates go up.
Hi Cathy. Thanks for the note. It's nice to see you back again. I must say I do believe it was Blackdiamond and michiganinvestor who first brought your Raymond James back to life. It must be very rewarding to know your post still receives attention after so much time. Most of mine I fear go straight to the dust bin. Must have wrote my silly comment near bedtime and surely after a second or third glass of Pinot Noir. Because I didn't even remember it until now. OMG, I'm sorry. It was so silly of me.
I do think your investments have done umptious well over the months you've been away. Maybe even better than hoped for. I don't invest much. Hubby's been doing it very well for many years, but he wants me to learn in case anything happens to him. A couple years ago I started depositing money in a gold fund every month. Was supposed to be for Christmas shopping. But when Christmas rolled around so much of it had had evaporated. Poof! Would have done better putting it under my pillow.
I enjoy reading the board every now and then. Everybody's so very interesting. And Charles sounds like a real sweetheart. I miss you a lot. And I wish Rono and Catch would post more too. All for now. Best wishes, Mindy