Volatile Q1 expected?

[Scallywag]

maybe
I don't think we have found the bottom yet
after the Fed meeting tomorrow the markets might have a clearer picture of where to go

The bottom is yet to come, IMO.

I expect the Feds to annouce a rate hike, followed by a gradual tapering of quantitative easing. This is not totally unexpected. A rate hike could pummel stocks with fat / bloated P/Es, which are many many many stocks, unfortunately.

As an index fund investor, I will still not be immune to a massive downturn. I bailed from stocks last year, giving up some last minute growths but I'm also "less down" than individual stock investors. Now that my down payment is out of the market, I'm much more relaxed than I was even yesterday although I "lost" 5K. DH & I plan to purchase funds for our IRAs a little each week into next quarter, after we know where the Feds are headed.

I know we can't time the market but I really don't want to dump all the money into the funds just yet, so I'm convincing H to DCA this year's contribution over several weeks. May or may not be a good idea financially speaking, but will be priceless in terms of "peace of mind"

[corn18]

I don't mind if the markets are correcting or even bearing. IMHO, this is a good thing. I don't like seeing my balances drop, but it is built into my plan that they will, so pay me now or pay me later.

My bigger concern is the economy. Raising rates and stopping QE will impact the economy. If it slows down too much, we get a recession. Could be a bad one if the Fed does what they need to do which is stop QE and raise rates to 3%. If they do that too fast, it will be bad. Add high inflation to that and it could be a depression.

I do not equate the markets directly to the economy. The markets can drop 40% and the economy is just fine. The economy can slow down and the markets will still go up. But a 40% drop in the markets along with a recession/depression caused by fixing the Feds past policies will mean a long recovery.

I think the Feds will give it a go and then give up and go back to printing money so the market doesn't tank. I haven't read their bylaws, but I'm pretty sure there isn't anything in there about propping up the stock market.

[Scallywag]

I don't mind if the markets are correcting or even bearing. IMHO, this is a good thing. I don't like seeing my balances drop, but it is built into my plan that they will, so pay me now or pay me later.

My bigger concern is the economy. Raising rates and stopping QE will impact the economy. If it slows down too much, we get a recession. Could be a bad one if the Fed does what they need to do which is stop QE and raise rates to 3%. If they do that too fast, it will be bad. Add high inflation to that and it could be a depression.

I do not equate the markets directly to the economy. The markets can drop 40% and the economy is just fine. The economy can slow down and the markets will still go up. But a 40% drop in the markets along with a recession/depression caused by fixing the Feds past policies will mean a long recovery.

I think the Feds will give it a go and then give up and go back to printing money so the market doesn't tank. I haven't read their bylaws, but I'm pretty sure there isn't anything in there about propping up the stock market.

They'll do one of both but most likely both. And either one of those actions will burst the bubble that is the current market

[disneysteve]

Another nearly 1,000 point swing in the Dow today.

[Scallywag]

Another nearly 1,000 point swing in the Dow today.

Just checked and indeed, another 1000 point comeback! I think there is still hope among traders that the Feds will not let the market down.

Watch out for Thursday!!!!

[LivingAlmostLarge]

Just checked and indeed, another 1000 point comeback! I think there is still hope among traders that the Feds will not let the market down.

Watch out for Thursday!!!!

how much do you have invested that made you sell over $5k loss? Glad you don't have your home down payment invested.

[thegoldbering]

I am wondering if the combination of supply chain woes, limited / reduced growth, Fed action on inflation by rate hikes & pullback from any more QE & margin calls etc are all going to result in a highly volatile Q1, and maybe even Q2?

We're still invested, and staying invested in my IRAs. However, H & I liquidated the small portion of our downpayment that was invested in the market (DUH!). Took a beating in the downpayment fund to the tune of 5K (and absolutely pissed about that) but it was less stressful than the thought of potentially losing more

I'm more concerned about our ongoing investments for Q1. We normally just fund the Roth each Jan & buy for the year, and we've funded them this year also. However, I'm not certain we should buy yet. Yeah, I know you can't time the market but My God! All signs indicate a rate hike & more potential downside.

So, should we just DCA into the market? I know that NO ONE here has a crystal ball but somehow, the idea of lump sum buying just yet worries me.

What do you all think?

If you already fund it, I'd say just nibble here and there. I'm basing this in the philosophy of you cannot time the market, I too get the feeling of a longer red phase because interests/fed BUT I remember that in a way I'm trying to time the market. So far I have found vert true the phrase "It's more important time in the market than timing the market"

-The Goldbering

[Scallywag]

If you already fund it, I'd say just nibble here and there. I'm basing this in the philosophy of you cannot time the market, I too get the feeling of a longer red phase because interests/fed BUT I remember that in a way I'm trying to time the market. So far I have found vert true the phrase "It's more important time in the market than timing the market"

-The Goldbering

Yeah, going to start next Monday, and purchase a little at a time. By then, there should be some clarity of what the Feds are up to, or at least less drama. Granted, none of this makes a huge difference over the next 15 years but still... We're going to ease ourselves back in rather than jump in all at once even that makes no great difference, mathematically!

[kork13]

Anticipating the next number of months to be quite frothy.... I've adjusted my investment schedule (for my taxable investments...leaving retirement/529s/UTMAs alone) to a weekly purchase (vs. twice monthly), while increasing the amount significantly to progressively whittle down the excess cash I've got on hand. I've also stopped sending new cash into savings. Idea being to increase the frequency of my DCA sampling. Some buys will be high, others low, but figure I can DCA my way through whatever happens. I'm probably over-complicating it (this weekly thing definitely breaks my budget spreadsheet), since I still only get paid twice monthly... but we shall see.

[Scallywag]

Anticipating the next number of months to be quite frothy.... I've adjusted my investment schedule (for my taxable investments...leaving retirement/529s/UTMAs alone) to a weekly purchase (vs. twice monthly), while increasing the amount significantly to progressively whittle down the excess cash I've got on hand. I've also stopped sending new cash into savings. Idea being to increase the frequency of my DCA sampling. Some buys will be high, others low, but figure I can DCA my way through whatever happens. I'm probably over-complicating it (this weekly thing definitely breaks my budget spreadsheet), since I still only get paid twice monthly... but we shall see.

First world problems lol

But my biggest fear is MARGIN DEBT. I remember reading (need to find the source) that margin debt is very very high at this time because of a combination of FOMO and zero interest rates.

When the froth whips up, and stocks slide, I fear a collapse in prices due to sell-off resulting from involuntary brokerage liquidation of assets to pay off outstanding margin loans. It could all get real ugly real fast. Yikes!

[thegoldbering]

Yeah, going to start next Monday, and purchase a little at a time. By then, there should be some clarity of what the Feds are up to, or at least less drama. Granted, none of this makes a huge difference over the next 15 years but still... We're going to ease ourselves back in rather than jump in all at once even that makes no great difference, mathematically!

Yup, that's the spirit!

[LivingAlmostLarge]

i need to invest my roth ira contribution but it's been a pain trying to roll it and i'm going away for weekend so i'll get to it hopefully next week

[kork13]

Watching Russia invade Ukraine one news alert at a time is stressing me out more than it probably should... But in any case, it's also adding to the instability in the stock market, and in the last couple days I've already had 2 (of 6) "bad day" stock orders from over a month ago go through suddenly. The other 4 limit orders are pretty close to executing as well, so I had to bring in some extra cash to my brokerage to potentially cover the purchases in case they all happen to go through at the same time. Ugh.... What a mess.

[LivingAlmostLarge]

i think it's going down another 10-15%

[srblanco7]

I have no idea where the market will go over the next month or for the remainder of the year. Interested if the poor start to 2022 has made anyone question their asset allocation?