Bear Market -- When's a good time to buy and what?
 

Totally off topic, but I'm always looking for new insight. I'm trying to invest some of my money into the stock market, and I have a feeling that the best insertion time is still not now. I have a feeling like most others will say, wait until the coronavirus is under control/not promoting as much fear in the media.

With that established, do you guys have any suggestions on some good buying opportunities when premium stocks are at a low. I'm thinking Microsoft, Starbucks and still feeling really optimistic about Uber, maybe Carnival too (after virus disruptions are over).

Obviously I'm going to do my due diligence, but like I said, I enjoy hearing other people's thoughts. Thanks!

Wazoo

You are a young guy, right? With decades for your money to grow, you are overthinking this. Buy a broad index (Vanguard's Total Stock Market Index and Total International Stock Market Index, as examples) and don't touch it. Over the course of several decades, what happens in the short term will be just a blip.

As for waiting until the virus is "under control" and less fear in the media, one of Warren Buffett's most famous axioms is "Be greedy when others are fearful and fearful when others are greedy."

Catching the absolute bottom of a bear market is impossible to predict, even for the best money managers.

Yes, I am a young dude. 23. And I totally agree with you. Thank you for the response. That has been essentially the bulk of my investments to date is rocking these index funds, but just in terms of individual stocks. I would hate to miss out on a great opportunity to buy some previously unaffordable stocks and really ride the upward momentum. Obviously a small percentage of my portfolio.

I keep my 401k invested in a mix of index funds and rebalance every couple months to force the account to buy high and sell low. Given it represents a more significant portion of my retirement would never consider putting any of it into individual stocks. My Roth IRA is where I let myself take some risk and make individual stock purchases. I usually pick up stocks with good dividend yields and reasonable P/E ratios when the market turns down, and then hold them until I get my targeted return. When the market tanks like it is now the majority of stocks are good options as they will rebound eventually. No one knows when the market is at the bottom so try to make the best timing decision and then hold until the market returns. Often times if I buy and the market continues to drop then I buy more of the stock I am invested in to improve my position. Good luck to you!

+1

You need to invest now. Maybe not everything at once, in case it keeps going down, but start immediately.

I'm going to suppose you are not day trading. That would require different thinking.

So supposing you are buying to keep for a long time and get the dividends and stock splits, etc, buy continuously. Buying constantly is called averaging. In the long run it makes the stocks that you bought at a higher amount cheaper.

That's what others are talking about telling you to invest in funds constantly. The share price changes, but it averages out. Same with stocks. Buy now. If prices drop more, invest next Monday. If prices continue to drop, buy buy buy.

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As for what to buy, in the last recession some of the best performing stocks were sin stocks. Cigarettes, alcohol, casinos, etc. The other choices are good because they will eventually turn around. But if you are looking for short term performance bad habits increase in a down economy. If the market becomes bear, or worse, keep that in mind.

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Im waiting until the Dow is at about 20,000...then i think you are just shooting in a barrel if you are willing to wait a few years..versus getting a percent in a CD etc..

I'm waiting until 52t mantles are no longer called his rookie card and they go to 5k

Joshua,

I'll say the same thing that i tell my son who is a few years older than you, go with an index fund.

One of the best investments out there now that you're entering the work force . . . put enough in your 401k to maximize the employer match.

If you're looking to buy a stock low though, Enron is at an all time low!

With that said, asking relative strangers for financial advice is a questionable approach for success.

i once had a stranger tell me to buy a stock called google in 2004...should of listened to him....stock was at about 101 dollars.. i remember doing a buy order and cancelling it cause why listen to a stranger (full disclosure..stranger knew one of the founders)

If you're starting a retirement fund it is best to buy index funds and sit on them forever. The biggest mistake you or anyone else can make is turning a retirement fund into a day trading account. The object of a retirement fund is to make as much money as you can over a long period of time with minimal risk, which of course can sometimes mean a smaller reward. But that should be the goal, really. You're making a 30 year investment and it's best to simply tune out the day to day of the market.

If you're looking to make some money, then it's going to be a bumpy ride. Start with blue chip stocks. Friday would have been a great time to buy Apple and Amazon. By now you've missed the boat. Though there should still be some room to grow on Apple. I've been making a nice return on it since I bought in at around $200 a share. Before the crash it was up over $320.

Sounds like we have some Bogleheads on the forum! YAY!!

Totally understand. And yes, I'm entering the workforce coming June, with full intentions to maximize my return through profit-sharing and 401k match. No doubt.

My intentions may not have been as clear, but I kinda just wanted to pick some "stranger's" brains. I may have missed the Apple train, but who knows what's next.

And that's why I added that I will do my own due diligence. Not trying to make any blind investments in the foreseeable future.

I agree. Thanks for the advice.

Ain't that the truth. Definitely trying to build the nest egg, but also a little "fun" never hurt...or did it. Blue chips are solid...guess I was a little too ambitious about wanting to catch the next Tesla or Amazon...

The problem is, are you "smart" enough to choose the next Apple over the next Enron?

I've always heard when your young choose a few riskier pools for your money, as you have time to hit that next tesla. When you are old, dividends and steady appreciation are a necessity since retirement is in sight.

If I had decent money and was still young...

The index funds are the smart long term play.

If you want to do some day trading type stuff, or more mid range, treat it like a casino, and put aside only as much as you're willing to lose. Consider it "play" money.
A friend who ran computers in the financial sector told me every day trader will eventually lose a lot. The financial places automate the buying and selling, and turn huge volume based on pre set numbers for particular stocks. If it goes below a certain number, buy say 10 million shares. If it goes up by some amount, like one cent, sell it all. Same if it goes lower by a certain amount, sell to limit losses.
All that can happen in under a second.

Some "play money" ideas.
Look into some energy stocks that may have seasonal price swings that are predictable. For example suburban propane usually has a low early in the year, then rebounds over the summer. Maybe not bad for a 3-4 month flip, but then again, they've been generally downward since 2011 with some decent spikes both ways along the way. The difference this past year was only about $4 a share though. Plus you have to remember to pay yourself for the time spent keeping track.
From what I've seen, international unrest usually is good for gold and silver. Especially gold. And is generally not good for stocks.
That's something you cans see right now, gold was around 1500 but was already having a start at a spike when the coronavirus was first detected around Jan 1.Big spike jan 7,the day it was recognized as a coronavirus, settled around 1550, gradually to 1550 is early February, over 1650 feb 4, down to 1580 by the end of Feb, then back up to 1631 today.
Some wild swings, and the biggest gains are probably already gone. Unless the news gets worse.
Again, it's pretty risky, if you bought in oct 2011, you still aren't at beak even.. I'm not sure how fast commodities get sold, but you can see with a near hundred solar swing in the last few days that if it takes much time at all to process, it would all depend on when the price got determined.
The coin dealer I hung out at years ago would sell bullion type stuff at the price that day, and would buy for I think that less 10%, so after that you'd have to be up at least that much to sell.

In the 80's before instant info, I wrote my economics paper on the lag time between gold prices raising and dealers changing the price tags on collector type coins where there was numismatic value too. Gold would go up, but most would only reprice at most once a week. When gold went back down, there was a similar lag time, as many only even looked at spot price weekly.
The prof didn't understand it but figured It was too short to get an A but too long and maybe actually smart, so not a C. I took my B on a poorly researched and documented paper and was pretty happy. I didn't have enough money to try it, but the dealer did, made a few bucks by buying during the upswing lag and gave me a few bucks in free stuff. Which I probably spent on something dumb that hasn't gained in 30 years...

So take that as a big caution about the above ideas. You might make a little, you might lose almost all of it.

Buy QQQ at these levels and watch the ride over the next 20 years.

right..i am waiting for dow to get to 19000...even if goes down to 14000 etc..in next 10 years..you figure will get over 19000

The airlines sure look mighty discounted right now...

I don't comment much on these type of threads but buying QQQ is a great way to start, especially at it's current level. I have several thousand shares, most of which I bought at about $50-60 :)

Right now it's about $55 off it's high of $237, and should rebound and exceed that as the tech sector comes back.

Good call. Congrats on the early buy in. Seem like a solid ETF to track.

+1

almost there...

Going to offer a contrary point of view that I rarely see: be very cautious of the standard advice that the US stock market can always be counted on for a 9% per year return in the long run, you can't lose if you stay invested long enough, and similar assumptions.

This assumes that everything will work out similar in the next 50-100 years here as it has for the last 50-100, and it just doesn't work that way. Especially for a country that's only been around for 244 years and didn't start its massive economic boom until the last 100.

Our nation's GDP is now around 40 times what it was in the early 1960s, and we were already the globe's biggest superpower back then. How much more explosive economic expansion can really be expected from here?

Dynasties rise and fall, and when you're the current cream of the crop, it always seems like you'll shoot to the moon and your country's dominance will never end. I'm not saying that will happen (or even come close) during the lifetime of someone who's 23 now, but it's a reminder to keep any can't miss views in perspective.

All that being said, any 401k employer matching does give you a consistent small leg up. But even with that, you can't count on your 401 k to no doubt provide some huge retirement egg for you. Boring ol' principal-protected investments and savings may become a lot more necessary for the eventual golden years of anyone who just got out of college

Anybody else notice the only 5 states now with Stay at Home Orders, California, New York, Illinois, Penn., and Mass. all have a Democratic Governor.

I'm not saying I'm just saying.


Current breakdown of Governors is 24 are Democratic, 26 are Republican. Yet the 5 states shutdown are again run by Democratic Governors. Just find that not to be a coincidence and somewhat interesting.

I'm currently neither a Republican or a Democrat, so have no agenda, but find it interesting every story on CNN is doom and gloom, and they are obviously a Democratic station, and now the ONLY states with shutdowns, are ALL Democratic, the shutdowns also fuel the fire of FEAR.

I find that Illinois has a whopping total of 5 deaths, and they shut the state down. And that is 5 TOTAL deaths since this broke in the US which was what maybe mid February. Regardless of when it started there can be 20 murders over any given weekend in Chicago. A car accident could have 5 deaths.

All this over 5 deaths????

7,700 people die every day in America, Natural Causes, Heart Disease, Cancers, other diseases, accidents, murders. 7700 a day!

We have had what 200 from the Corona Virus TOTAL.

I honestly think we may have cured cancer with all the money lost in the stock market and resources being spent on the stop of a virus that has killed 200 people out of 327 million Americans.

200 people die in a plane crash.

Yet the economy is being destroyed, jobs lost, retirement savings wiped out, college funds wiped out, massive layoffs, oh yah kinda redundant, but all this hysteria and chaos over 200 deaths? Again over 7000 Americans die any given day. And I know yes it could spread and we need to stop the spread but was mass panic and hysteria fueled by CNN and others really necessary. And even if it did spread it's pretty much under a 1% death rate, cancer and other diseases are higher then that. CNN & other news channels ratings have skyrocketed and will keep this going as long as possible which sucks for the US, but great for their ratings.

But playing the devils advocate, if we didn't do much and it spread more rapidly then it obviously will now, then you "could" have 20,000 die b4 there is a cure. At the rate its increasing (fairly slowly mind you, we won't get close to 20K deaths by the time this is over) And 18,000 died from the Flu just in 2018 (look it up), but nobody called that out or panicked, not sure why.

According to the American Cancer Society, in the U.S., an estimated 606,520 people will die from cancer in 2020.  This equates to 1,660 people dying of cancer each day in 2020. 20-40 dying each day to the Virus. Just wish we had put all this effort/money/concern into Cancer research and stoppage.

You're missing the point of the panic. The panic isn't the 200 deaths. The panic is that our hospitals can't operate that many patients on respirators. So if my little town in washington gets hit, we only have a handful of respirators available. So then they have to fly out people to another hospital, using up resources elsewhere. This is the problem in Italy. They don't have enough respirators for everyone and so doctors are choosing who has the best chance to survive.

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Ok, not arguing. I love to be educated. And I hear you. The overwhelming of the hospitals and their staffs. But the FEAR is in part causing them to be overwhelmed, everyone now thinks they have it, if they cough, gotta get a test.

And yes the ventilators, etc. Get that too, but maybe get some of these city folk out to the suburb hospitals.

And Italy, you can't really compare the US to Italy, Their country is the size of one of our states and all their people are near each other. And guessing they don't have a 10th the hospitals we have. The US is so spread out. I'd guess 90-95% of the US is not overwhelmed. I could be wrong. I am a lot. But I'm just outside of Chicago, and nothing. 1 person a few towns over has it. Another person a few towns the other way. Minnesota, the entire state ZERO deaths.

Too much panic. At least too much to ruin an economy.

Nice job China. Boy did they get even with Trump.

Ford, Tesla and GM all got the green light to start manufacturing ventilators. Hoping we see promising news in these uncertain times...keeping our first responders, healthcare workers, law enforcement and others in my thoughts.

The overall number of cases was up by roughly 11,000 between the 22nd and 23rd. That's about 25% (33,000 to 44000) 10 days ago it was only about 2000.
https://www.cdc.gov/coronavirus/2019...ses-in-us.html
That sort of increase is what people who know what's up are concerned about. Along with it being more dangerous if you do get it, about 2% fatalities compared to something like .5% for the regular flu.
It's also much easier to catch.

Some areas will see less trouble from it, others more.