Stocks closing out 2022 with more losses, S&P 500 worst year since 2008

[Jingthing]

31 minutes ago, spidermike007 said:

I hope I am wrong, but I think 2023 will not be a good year for many stocks. Nor real estate. Best to sell now and wait. Likely will be bargains within the next year or so. 

That's fine but history shows that most people that cash out (generally locking in a loss) waiting for their bottom guesses miss out on historic surges which are often very brief but very big and then they aren't bargains anymore. 

Again, NOBODY can pick bottoms. 

If you're talking about new money in the market the best odds are buying in smaller chunks over time -- dollar cost averaging. Again, not being so silly as to think you can pick the bottom. 

[nigelforbes]

18 minutes ago, Jingthing said:

That's fine but history shows that most people that cash out (generally locking in a loss) waiting for their bottom guesses miss out on historic surges which are often very brief but very big and then they aren't bargains anymore. 

Again, NOBODY can pick bottoms. 

If you're talking about new money in the market the best odds are buying in smaller chunks over time -- dollar cost averaging. Again, not being so silly as to think you can pick the bottom. 

Very few people have a clear definition of what constitutes timing the market.There is a huge difference between selling assets in the expectation that markets will fall, in the hope of buying them back when it rises, and, changes in strategy based on economic data, to reduce risk. Selling high risk equities because the yield curve has inverted and rampant inflation is almost certain to follow, is not timing the market. Switching out of high risk assets at such times and buying into low risk or wealth protection funds is also not market timing. Both those actions represent prudent risk aversion. Selling assets in light of a market downturn, in the hope of repurchasing them later, is market timing and is foolish. The determinator is not whether a loss has been crystalized whilst making the trade but in the motive.for making it in the first place. This is an important distinction to understand because many people fear doing anything when markets head South and often that's the wrong thing to do.

 

[cdemundo]

I confess that I am wondering if I contributed to the S&P disaster this year.

Early in the year I took some money that was just non-invested cash set aside for paying taxes and invested half of it in an S&P index fund.  The next week the S&P started a period of its worst performance in over 10 years.

Was it just my bad luck that caused this?

(Shouldn't be needed to say but hereabouts.. JK).

[nigelforbes]

14 minutes ago, cdemundo said:

I confess that I am wondering if I contributed to the S&P disaster this year.

Early in the year I took some money that was just non-invested cash set aside for paying taxes and invested half of it in an S&P index fund.  The next week the S&P started a period of its worst performance in over 10 years.

Was it just my bad luck that caused this?

(Shouldn't be needed to say but hereabouts.. JK).

So it was you was it. Stay right where you are, I'm sending the boys round. ????

[save the frogs]

 

[wordchild]

FWIW I think most of the damage to markets in 2022,  was caused by the air coming out of what had been clearly overvalued  US tech stocks. Added to this was the war in Ukraine which gave confidence another kicking and also pushed up the price of oil (and the USD initially)  and therefor led to higher inflation expectations around the world.

 

Staying away from the US and tilting your portfolio toward value and dividends worked  ok in 2022, it was hard to make money (esp against the USD) , but it kept you out of serious trouble.  I feel the same approach will work even better in 2023.

 

Plenty of cheap , good quality companies, paying reasonable dividends to be found in markets around the world eg Europe (incl UK), Australia, NZ, China, HK, Singapore and even in Thailand!

 

Many commentators seem to be taking a cautious view of the year ahead.

The more evidence i see of  prevailing bearishness the more optimistic i find myself  feeling.        

[Chivas]

15 hours ago, nigelforbes said:

That's only useful if you know where the bottom is, do you know where bottom is?

You scale in your purchases on the down trend.....Never all at once

[jaywalker2]

17 hours ago, Jingthing said:

You're thinking short term.

I'm 70. I think short-term for everything.

[Jingthing]

1 hour ago, jaywalker2 said:

I'm 70. I think short-term for everything.

Yeah well that points out that there isn't a one size fits all best plan for all. You always have to consider your own situation, your investment goals, your risk tolerance, your psychological ability to stomach paper downturns, your ability to eat losses if you sell, your current positions, where you got in to those positions, etc.

Personally I believe in equities into old age.

[2009]

18 hours ago, save the frogs said:

I didnt come here for investing advice.

I came here to paint a negative picture of the stock market.

I don't believe in investing in the stock market.

I believe it's too corrupt and/or cryptic and the average person is mostly getting screwed over.

And I am not going to engage in endless debate.

I've met stock brokers who will argue their point for decades insisting that stock market investing is great.

I don't buy it. 

 

Jingthing admirably tried to give you good advice.

 

But you can only bring a buffalo to water, you can't force it to drink.

[2009]

5 hours ago, Chivas said:

You scale in your purchases on the down trend.....Never all at once

But, we need to put it in language these folks can understand.

 

When your dry and crabbit 45 year old wife is laying on the bed, spread eagled, you don't jump at her like a Sweden death diver-- that's a good way to burst your bungee.

 

You have to ease into her, slowly.

 

In the industry, it's called dollar cost averaging.

[BostonJoe]

14 hours ago, vangrop said:

figures please

First property I have cost just 1050000 15 years ago  it's paid off rents are $16250 per month the second one I paid 850000 10 years ago that's paid off rents are $12500 per month operating costs for both property's is 1k per month all triple net cam leases strong tenants with renewable  leases every 10 years  Hope that helps 

[jaywalker2]

11 hours ago, nigelforbes said:

Very few people have a clear definition of what constitutes timing the market.There is a huge difference between selling assets in the expectation that markets will fall, in the hope of buying them back when it rises, and, changes in strategy based on economic data, to reduce risk. Selling high risk equities because the yield curve has inverted and rampant inflation is almost certain to follow, is not timing the market. Switching out of high risk assets at such times and buying into low risk or wealth protection funds is also not market timing. Both those actions represent prudent risk aversion. Selling assets in light of a market downturn, in the hope of repurchasing them later, is market timing and is foolish. The determinator is not whether a loss has been crystalized whilst making the trade but in the motive.for making it in the first place. This is an important distinction to understand because many people fear doing anything when markets head South and often that's the wrong thing to do.

 

In addition, there is the question of valuation, which everybody ignores nowadays, despite the fact that we've had two bubbles burst in the last 20 years. Even with the 19 percent fall in the S&P last year, stock valuations remain in the highest percentile in history.

 

There is ingrained belief among many that valuations don't matter thanks to the FED continually propping up the stock market. Tesla and Facebook (Meta) were supposed to keep growing to the stars despite the fact that they were wildly overvalued. Now they're down about 70 percent. Elon Musk has lost US200 billion.  Cathy Woods was buying "disruptors" with no attention to value. How's she doing?

 

There's also the belief that stocks always do better than bonds over the long run. That isn't true. The S&P 500 lagged Treasury bills from 1929-1947, 1966-1985, and 2000-2013. 50 years out of an 84-year period.

 

My point is that investing is hard. If it weren't, everybody would be rich. You can make a lot of money in the stock market but you ignore risk at your peril.  There's a reason the  best investors always talk about a margin of safety.

 

 

[nigelforbes]

22 minutes ago, jaywalker2 said:

In addition, there is the question of valuation, which everybody ignores nowadays, despite the fact that we've had two bubbles burst in the last 20 years. Even with the 19 percent fall in the S&P last year, stock valuations remain in the highest percentile in history.

 

There is ingrained belief among many that valuations don't matter thanks to the FED continually propping up the stock market. Tesla and Facebook (Meta) were supposed to keep growing to the stars despite the fact that they were wildly overvalued. Now they're down about 70 percent. Elon Musk has lost US200 billion.  Cathy Woods was buying "disruptors" with no attention to value. How's she doing?

 

There's also the belief that stocks always do better than bonds over the long run. That isn't true. The S&P 500 lagged Treasury bills from 1929-1947, 1966-1985, and 2000-2013. 50 years out of an 84-year period.

 

My point is that investing is hard. If it weren't, everybody would be rich. You can make a lot of money in the stock market but you ignore risk at your peril.  There's a reason the  best investors always talk about a margin of safety.

 

 

Yes, absolutely agree. I don't know what others do but I wont touch anything with a P/E more than 25. But there again I'm not a young guy so my time horizon is more limited. I'm holding CGT and RICA, both wealth preservation funds which are 9 and 8 respectively, 20 is a risky day out for me. :))

[Thailand J]

S&P 500 closed on Dec 31 2022 at about the same level where it was in March 2021.

Not much of a setback, considering how high the inflation was at it's peak and how many times the Fed had raised rate.

 

The index had almost tripled since DEc 31 2012 10 yrs ago.

 

The lower your risk tolerance the smaller portion of your retirement money should be in stocks.You cant afford not to invest, if stock is not for you find some where else to invest , never let you money sit still and let inflation erode it's true value.

 

Stay away from single stocks such as Tesla and facebook , investing in single company is a "high risk high reward game", i hear moarning and groaning lately about Tesla and facebook stocks but dont forget how much those stocks had soared since IPO.

 

If someone tells you stocks investment comes with any guarentee and you belive it, the joke is on you. On the other hand I believe US economy is growing and S&P 500 will continue to be profitable in the long run. Buy into Index funds. Focus on the long run.

 

 

 

 

 

 

 

 

 

 

 

 

[save the frogs]

6 hours ago, 2009 said:

Jingthing admirably tried to give you good advice.

 

But you can only bring a buffalo to water, you can't force it to drink.

good luck silencing dissenting viewpoints. 

[persimmon]

12 hours ago, Thailand J said:

S&P 500 closed on Dec 31 2022 at about the same level where it was in March 2021.

Not much of a setback, considering how high the inflation was at it's peak and how many times the Fed had raised rate.

 

The index had almost tripled since DEc 31 2012 10 yrs ago.

 

The lower your risk tolerance the smaller portion of your retirement money should be in stocks.You cant afford not to invest, if stock is not for you find some where else to invest , never let you money sit still and let inflation erode it's true value.

 

Stay away from single stocks such as Tesla and facebook , investing in single company is a "high risk high reward game", i hear moarning and groaning lately about Tesla and facebook stocks but dont forget how much those stocks had soared since IPO.

 

If someone tells you stocks investment comes with any guarentee and you belive it, the joke is on you. On the other hand I believe US economy is growing and S&P 500 will continue to be profitable in the long run. Buy into Index funds. Focus on the long run.

 

 

 

 

 

 

 

 

 

 

 

 

Just looking at the chart , 3500 would seem about right to be on the long term trend line . So another 5-10 % fall before it reaches " fair " value .

[Neeranam]

On 12/31/2022 at 7:43 PM, still kicking said:

And who keeps telling us to invest in crypto 

Look at BTC over the last 10 years and stock, no comparison. 

[Thailand J]

19 hours ago, Neeranam said:

Look at BTC over the last 10 years and stock, no comparison. 

Your chart shows S&P 500  with 11.22% 10-year compounded annual growth rate.  I can live with that.

 

 

 

 

 

[nigelforbes]

5 minutes ago, Thailand J said:

Your chart shows S&P 500  with 11.22% 10-year compounded annual growth rate.  I can live with that.

 

 

 

 

 

When adjusted for inflation the amount is only 8.6% pa, but that assumes average or normal rates of inflation. The return under current levels of inflation would be negative.

[Neeranam]

2 hours ago, Thailand J said:

Your chart shows S&P 500  with 11.22% 10-year compounded annual growth rate.  I can live with that.

 

 

 

 

 

Do you think it can go up continually? I expect a bear market for 10 years in the traditional markets.

[Thailand J]

I am going to make an altar with my 10 years Vanguard statements and pray to John Bogle. ????

[StayinThailand2much]

On 12/31/2022 at 11:24 PM, Mac Mickmanus said:

Who was the poster on here who told me that I would be guaranteed a 10 % return if I invested in the S&P ?

A return can be positive or negative... ????

[nigelforbes]

21 hours ago, Neeranam said:

Do you think it can go up continually? I expect a bear market for 10 years in the traditional markets.

I think the markets may surprise and I'm definitely not a contrarian..