How should a small investor prepare for future falling markets?

One may use a strategy keyed off of tactical variables that are empirically derived, have produced repeatable results, and are mechanically and objectively implemented. In part 5 ( here tinyurl.com/znnqxdw , paste into browser address bar ), predictive analysis and deep research has uncovered "risk profiles"; variables that predict forward year returns with a reasonable degree of success. Designing asset allocation decision logic around these variables has help with "preparedness".
Additional things to watch for outside of the above variables can be the decline in the Leading Index of Economic Activity below .5 ( https://fred.stlouisfed.org/series/USSLIND/ ), an inversion of the yield curve, and the fall of market indices below their respective 10 period monthly moving averages ( http://mebfaber.com/timing-model/ )



- Don't quit your day job
- Don't use leverage
- Open a Roth IRA
- Sometimes money is made by sitting in cash
- Don't be a hostage to the markets
- let the markets, profitability of the world's economys work for you
 
Stockmarketmap said:
- Don't quit your day job
- Don't use leverage
- Open a Roth IRA
- Sometimes money is made by sitting in cash
- Don't be a hostage to the markets
- let the markets, profitability of the world's economys work for you
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I agree with all those, but question the roth IRA for young people. The US government is f***ing broke. 20T national debt and hundreds of trillions in federal unfunded liabilities...then there are state unfunded liabilities. Worsening balance of trade, terrible math SAT scores, rising unemployment, rising food stamps, automation...maybe I've been reading too much Zero Hedge, call it fake news if you want, but long term, I don't see how we get out of this mess. So if the government is that desperate for cash, what's the likelihood that they will honor tax free capital gains for wealthy individuals? Would it be better to keep the money liquid and easily transferable into another currency or other offshore store of wealth (such as bitcoin, physical gold, etc). Roth IRA probably still a good idea as long as it's possible to pull the money out at any time, but I'd rather pay taxes today than defer them into the future (401k, conventional IRA). No way I or most people who earn a living will be paying a lower tax rate in future than today.
 
How old is that small investor? If he is young he probably has a job and should keep buying every paycheck until he can see retirement on the horizon.
If he's got it all in the market and can see himself just living off the income or small withdrawals of capital in about ten years then he must start diversifying into income investments unless he has so much SPY he can just live off the dividends.
 
@lojze

With all due respect, if you have to ask the question then you have no business investing.

"Investing" is not a one way street !

You have taken responsibility for putting your money into the market.

You should take responsibility for knowing when to take your money out of the market.
 
Tim Smith said:
@lojze

With all due respect, if you have to ask the question then you have no business investing.

"Investing" is not a one way street !

You have taken responsibility for putting your money into the market.

You should take responsibility for knowing when to take your money out of the market.
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ah, ya mean I gotta sell everything because I still have questions?
 
java said:
ah, ya mean I gotta sell everything because I still have questions?
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Oh for heavens sake ! :banghead:

Any serious investor knows what is meant by "take money off the table", and that action does not necessarily involve taking ALL your money off the table ! You can take some profit !
 
Tim Smith said:
Oh for heavens sake ! :banghead:

Any serious investor knows what is meant by "take money off the table", and that action does not necessarily involve taking ALL your money off the table ! You can take some profit !
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After I take it off when should I put it back on again? Should I trade my money or just buy and hold? If I take it off and the market goes higher what should I do? See, I have a lot of questions. Maybe I shouldn't invest. I think I'll just stick to trading. Because if I was an investor with a job or a source of income I would just buy every month and hold. Could you please ask "any serious investor" if I have 100k in Spy that I bought in 2006 non tax sheltered so I will pay a cap gains tax on anything I sell how much should I sell and what should I do with the proceeds. And also when I should get back in. Thank you, good luck finding a serious investor on this site.
 
java said:
ah, ya mean I gotta sell everything because I still have questions?
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Not sure if you're referring to my earlier post or not. If so, I never advocated selling everything because of uncertainty. How did you infer that was my claim? I was simply asking if opening a Roth IRA locks up the funds until whenever the retirement age is. Is it possible to pull the money out earlier and at any time without penalty?
 
ET180 said:
Not sure if you're referring to my earlier post or not. If so, I never advocated selling everything because of uncertainty. How did you infer that was my claim? I was simply asking if opening a Roth IRA locks up the funds until whenever the retirement age is. Is it possible to pull the money out earlier and at any time without penalty?
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No, I was replying to Tim Smiths missing posts.
 
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