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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Rarebird who wrote (1037754)	11/9/2017 6:20:22 PM
From: RetiredNow	Read Replies (2) \| Respond to of 1574028

You act as if being bearish for two to three months is a big deal. The SP500 has gone up about 4.5% during that time and my bond mix has gone up around 2%. So at most, I've missed about 1-2% based on the delta between my former and current allocations. Big deal. It's not enough to upset me at all. As to my prediction on how far it could fall? I have no idea, but if the last two times are any indication, then it could fall 50-60%. As you pointed out, the volatility has been extraordinarily low. Your conclusion is that it will continue to be low. My conclusion is that when you see a chaotic system with low volatility for a long period of time, that is not natural and not a coincidence. Outside forces are acting on it. In this case, the Fed. When outside forces work to tamp down volatility for a long time, the system builds up explosive forces that will eventually mean revert both in terms of volatility as well as in terms of movements back towards and below the long term averages. This system is fragile. What is my plan? I have markers and alerts that will tell me when the SP500 drops 10%, 20% 30%, 40%, 50% and 60% from recent highs. At each of those inflection points, I take 1/7th of my cash and invest it in stocks, so that my stock allocation goes up by increments of 5% as each of those triggers are hit. I have a 35% allocation to cash right now. So the market would have to lose 70% for me to spend all my cash. That's the high level plan. There are nuances in there, because I am invested across many segments and asset classes and I'd have to also rebalance among those. Anyway, I'm not taking guesses. I just have a fairly programmatic plan and have locked my gains in. So I am more than happy to leave the last crumbs to folks like you who want to capture another 5-10% while risking 50-60% of your whole portfolio. These bubbles NEVER end well.