I'm going to mostly cash in Long-Term portfolio
- Thread starter qlai
- Start date
AT&T is a shit stock. I've had it for nearly 2 years. F that POS. What is the point of a high-yield stock that doesn't go up in value, but down? If you want to get out of the thing, you will give up all the yield gains on the stock sale at a loss.
Since going to cash in early November, my 401k fund is down 4.25%. This isn't the expected 25-30% crash, but it's symptomatic of a challenging year. Then again, my only other reference point is 2020 which was exceptional, so many of you may see 2021 as a good year. Let's see what December looks like...
If you are in cash, how is your fund down? Should it not be the same as when you went to cash?
How many 25-30% crashes have we had since 2009 ? Dial it back to 10-15% corrections that are more common. How many 10-15% corrections have we had since 2009, and on average how much time between each one ?
My point is the chances of 25-30% crash less then two years after the last one is very small. There are reasons for that. For starters, every weak hand that sold off in March 2020 and was very late to rebuy after isn't going to be prone to panic sell now. It's too fresh in the memory bank. Remember, every move down requires sellers that have other plans for their money. Bonds are going to suck for years. Even the most aggressive rate hikes cash will only pay 2-3%. Most quality real estate markets already got bought up.
Now consider the earnings story. Earnings are growing fast. Dividends are growing fast. Share buy back programs suggest companies value themselves more then many retail investors do. Many short term traders aren't keeping up they are still thinking earnings are the same as 2019 or even worse October 2020.
My point is I'm not discounting the possibility of a mild correction at any point based likely on profit taking. My forecast remains no correction at all in 2021 ( I made that forecast a long time ago ), and I'll guess one correction will occur in 2022. No 25-30% crash will occur. If I'm wrong I'll live with it, and certainly the virus could derail markets if we can't control it at all. I just doubt we are unable to control it.
I look forward to hearing about you guys rebuying at the new floor, whatever that is. I'm not saying you won't succeed, but I used this technique a lot from 2009-2019 and on one year I never got back in for most of the year. From a capital preservation point of view, I did amazing. But that one year I missed out on a huge gain.
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The Russel is in a correction atm. What, small caps index doesn't count? They're real people, too! Heh
I meant the overall market; plenty of corrections at various points in 2021 already in certain sectors and yes many small caps.
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It's a Fidelity fund I can track on my former company's portal.
Ah; If you had held the fund you would have been down? Is that it?
So in reality you are ahead by being in cash.