As the stock market slides, remember long haul victory

11 thoughts on “As the stock market slides, remember long haul victory”

  1. I personally try to only buy any investment when it is on sale. Down days are the best time for me to buy. Where most see market declines as something to fear, I have changed my natural psyche to be greedy when people are fearful and fearful when people are greedy.

    A huge 46% pop in the VIX also helps when you like to sell options like I do. Premiums get bloated as fear levels rise in the market. I took this weeks downturn to deploy a little of the the massive and growing cash stash by selling put options on the SPY etf. If exercised they would give me an effective price around $179.50 or about 16% cheaper than the all time highs put in this year.

    I have literally been preparing for a market correction all year. My hope and investment thesis is that prices will continue to get slashed, making for even better prices than this week. Yesterday was just step 1 of my plan to deploy the capital I have built up and freed up at the beginning of the year (and continue to do so).

    Making steps to front load our retirement accounts by maxing them both out in January of 2016.

    If it gets really bloody, I would even consider diverting the extra cash we are throwing at the mortgage into more investments. But I would need to see markets down by at least 25%, which I do think is a huge possibility in 2016. But only time will tell.

    Cheers!

    1. Hey Dominic!

      I think this market downturn is truly happening at the best possible time. With our planned retirement for the end of next year, this is the year that we want the market to “correct itself”, making prices low and stocks ripe for the buying, and expectations for a subsequent recovery – or at the very least, stability – a reasonable expectation for the first year that we slip into our new retirement lifestyle.

      It might turn into a perfect situation. 🙂

  2. I’m in it for the long haul baby! I definitely notice, but do I care??? NOOOOOO. Well sort of. Makes me feel better when my biweekly 401k contributions get invested on the cheap, or I send a little more money into the IRA or brokerage account since I feel like I’m getting a deal. But overall, we know that markets go up over time, so when it goes down, you have to take advantage. I should have a fairly nice income month in September so I’m hoping for investors to stay “scared” and let me put that money to work at nice prices.

    Do you follow Downtown Josh Brown on twitter? If not, highly recommended. Love his commentary making fun of the news stories.

    1. Hey Fervent!

      Right on man, that’s the way to do it. In it to win it, over the long haul.

      And yes, I am following Downtown Josh Brown – NOW. 🙂

  3. I agree it’s time to buy, but I don’t have much cash on hand at the moment to do so. I put a few thousand in the market last week which turned out to be bad timing. I did have a 401k contribution due to my paycheck on Friday – not sure the timing of it but I hope it was EOD!

    I hope the market doesn’t bounce right back. If it stays down for a few months, I’ll have more time to get money in the market and capitalize.

  4. We for sure *notice* what the market is doing (good morning, more declines!), but we try not to react much to it. We’re index investors, so we basically have no plan to sell a darn thing until we actually retire, and even then we won’t sell for at least a year in, because we’ll have a cash cushion to get us through the first bit. At times like right now, we’re tempted to buy more, but we do our best to stick to the long-term plan and keep making scheduled investments. We have learned the hard way that trying to time the market is not a good strategy!

  5. It is hard to predict if we reached a bottom, but I also stepped in last Monday with 10% of my Cash, and if a new bottom starts to appear in September, I will buy more. My strategy is to have a Cash-buffer for 3 years, so if my early retirement starts (end of 2015), i can survive a crash, and wait for better times to tap into the funds. Next to this, like you see on ERE forum, I also broaden my skills in being self-sufficient, so if we really hit a bad period (let’s say 10 years of decline), I can survive on less money per Month, and still be happy.

Leave a Reply