The Stock Market's Perpetual High (aka elephant in the room)

[Deleted]

I am surprised that we aren't getting more posts about how someone just surpassed XYZ milestone.

I am surprised because I seem to be earning mega $$$ every day. By the end of the year, I should have over $500,000, and I had less than $300,000 when I first noticed this run-up.  I am exaggerating, but it keeps going up, up, up.

It just frightens me. I expect steady growth, but this seems really odd. It makes my monthly purchases really expensive.

Yet there is no chatter on this message board about it.

Is anyone as "discombobulated" (I hate that pretentious word) as much as I am?

Damn it!  I want cheap stocks until I decide to retire!

[ilovedolphins]

I decided to sell out stocks from a company that I bought several years ago that has just gone down and down. I took a $4000 loss but now that I have bought into some solid companies I am hoping to earn some of that loss back.

[gacpa]

Thank you for bringing this subject up.  I have the same reaction.   I like the market to go up as much as anybody, but this rapid ascent is sort of scaring me.  I mean, sooner or later, what goes up has to come down.  I don't want the down side to be as violent as the up side. 

I was thinking of buying some stock this summer as I try to buy some every year, but everything seems too expensive.  Hate to sit on cash, as it won't earn anything.   Stuck between a rock and a hard place

Is this another "asset bubble" forming?  I am still recovering from the housing bubble that burst, thank you very much.

Poison ivy is keeping me up and I can't sleep.

[Tiny]

I'm getting close to the 1 million net worth (if I include houses, retirement, my car, and the change in the pockets of my coats....) which frightens me, too. I didn't think I'd get there - atleast for another 7 or 8 years. I'm maybe only 18 - 24 months away if the Bull market keeps going... It really kinda frightens me.

I'm not doing anything special investment wise (following the general rules of thumb for someone who's ok with some risk) and I own Slums! Slums I say - without granite countertops or SS appliances!!! I'm not that smart... so my guess is the smart people are all rolling in $$$ and doing blow and hookers.
It frightens me because I think of myself as 'average' - if I'm doing this well... shouldn't there be more, I don't know, optimism from the rest of the average and above average people? I'm feeling like there's a bit of disconnect and maybe the 'smarter than me people' are preparing for something bad to happen? But I don't seem to see this happening... The housing bubble was kinda easy to see as it was happening (how can you NOT see the problem when your city's median income is 55K - but yet houses are selling like hot cakes and none of them for less than 225K (no matter what shape they are in) For example the forclosure I purchased for 78K was mortgaged for 250K and didn't have a working kitchen or bathroom when is sold for 250K - did I mention it's an 850 square foot house that if it was in pristine condition with granite counters and SS appliances a new roof/furnace/AC and landscaping would probably sell in the 100K to 110K range?  realistically in comparison to the rest of the housing stock available it's at the bottom of the value scale.   That 250K is so wrong it's painful. I have no idea how a bank ok'd that mortgage).

Meant to ADD: I'm not sure how to protect the gains I've made... I don't want to back out of the market (go to safer investments) too soon. To be honest I'm not really even sure what 'safer investments' would be at this point. I'm 75% risk 25% 'preservation' in my Retirement account allocations.   I had about the same mix back when the market dropped and while my balances did drop it wasn't anything like people who were saying they lost 50% or more.  

I'm not sure if this time around I'll be as 'lucky' with my diversification? It frightens me.

 

[resolution]

I am fairly certain that we have passed a milestone, but I let my DH take my laptop with him to his temporary job, so I lost access to my budget and asset spreadsheet. I know he could email them to me, but I think it's good for me to disconnect from them for a while.

Stocks have definitely overshot where I thought they would be at this point, so I am a combination of happy and nervous. I have stopped my monthly contributions for a few months to build up cash, but it was due to DH's job situation rather than concern about a stock crash.

Also my rent house value is up about 80% from where it was a few years ago, which makes me concerned about another local housing bubble. Granted it had dropped to about 40% of its prior "value" which I had felt was overcompensating from the prior run up.

[resolution]

Jun 6, 2014 23:17:41 GMT -5 Tiny said:

It frightens me because I think of myself as 'average' - if I'm doing this well... shouldn't there be more, I don't know, optimism from the rest of the average and above average people? I'm feeling like there's a bit of disconnect and maybe the 'smarter than me people' are preparing for something bad to happen? 

You are nowhere close to the median, unless you take ten median families in and adopt them...

[plugginaway22]

Yes, well it gets pretty scary when you are suddenly about 10 years from retirement and you started your retirement savings later than the recommendations!

[buystoys]

I agree with @wxyz that we are overdue for a correction.  Having said that, DH and I are doing nothing different other than retiring.  LOL

We have about three years of expenses in cash, I'll start having our dividends go to a MM account at the beginning of 2015, but that's about all we're planning to change.  Our allocation is a bit heavy on the stock side, but we're both comfortable with that. We'll start pulling from DH's IRA in year four, so a correction soon wouldn't hurt our feelings.  We both did VERY well during this last recovery. 

[Nazgul Girl]

   We're waiting for Jim Stack to say "sell" ( Investech ), and then we sell !   But that's only for the funds invested in his stock picks.   We rolled my 457b $$ (everything we could get out - some my employer wouldn't release until I retire in 2.5 weeks ) into my roth because it's in balanced funds that get redistributed every time the market hiccups, and the base level guarantees that we will never lose our contribution.   I will have the rest transferred out of my employers' control in about 3-4 weeks, since I'll be terminating on 6/26/14.   

   We stay in the stock market in some form, at all times, but with the strategy of preventing losses when it falls.   We just save up our $$ and buy when prices are low, on the next crash.   It's like buying 10 for $ 10 at Kroger, although most people don't see it that way.

[Deleted]

Naz, I heard a lecture once that compared stock drops to a tuna fish sale... 'When tuna goes on sale you don't panic and sell all your stored up tuna fish... You stock up on tuna fish'...

[Deleted]

Jun 7, 2014 7:15:39 GMT -5 @wxyz said:

The market will continue to go up until it has a correction.  We are past due for a correction.  Corrections are a normal part of the market process.  They key is investing for the LONG TERM.  Time cures all in the markets.  I would NOT be in this or any market with short term money. 

Look at a 50 year chart of the DOW and you see a steady upward line.  Look at one year charts and you see all sorts of crazy collapses, stagnant periods, etc, etc.  If you are an investor compared to a trader or speculator you will be just fine if you have the years to smooth things out over the LONG TERM.

I agree- I had almost $1 million evaporate on paper during the financial crisis.  I recovered nicely because all along I'd done regular pruning of the portfolio, weeding out what wasn't working, and had maybe 40% in fixed income.  I was also working and kept investing during those years so picked up good investments at bargain-sale prices.

Since I retired a month ago, it's been wonderful to see the market keep going up but I know we're overdue for a correction.  There's enough cash sitting around to meet our needs for awhile and we'll just stay the course.

[Nazgul Girl]

Jun 8, 2014 7:03:38 GMT -5 Ratchets said:

Congratulations on your retirement, Nazgul Girl !

Do you have any other investment advice for us young'uns that has served you well over the years?

   Thanks, Rachets.   Sorry I didn't answer earlier, but we were out and about for a good bit of yesterday.   I'm really excited about having my time and mind free after 2.5 more weeks.

   I always try to keep substantial "back money" which we can access should we need to.   Right now, we have a substantial CD at 5.4 % which will be expiring next year (sadly), some cash in our safe deposit box, a stock trading account, plus a small checking/savings account set-up.   We could live for a long time from just that money.

   I always contributed much more in optional 457b accounts than just the basic.   Some employers don't allow this, but mine does.   For many years, my take home pay was $ 450 a week, because so much was being shoveled into my retirement accounts.   We did losen up this last year, to make sure that repairs were being done, pay down zero percent debt taken out for the reno we did last year on our Hud repo hut (rental now ).

   I believe in trying to develop several income streams, so that I am not just dependent on my job to live.  Jobs can go away.   Sometimes, getting other income streams going is not easy, but right now we have DH's S.S., his pension from his first wife ( she passed away a good many years ago and she had it set up so that he would get her pension under a provision that her employer had ), rental $$ from two houses that we own outright, income from a land contract on a property we sold to a dr. ( office condo ), and about a half million or better in Roths and IRA's.   That makes six income streams, or potential income streams ( drawing down our retirement funds if need be ) after I retire from my job in 3 weeks.   We will also have my S.S. starting on 12/1/14.

   I believe in variety in investments.   Cash, CD's, stocks, mutual funds, precious metal or precious metal funds, real estate, etc.  But, a middle-class person can't do all categories at once.   You have to choose what you want to build up first.   Logically, maxing out all retirement account opportunities and having a 6-month emergency fund are the best places to start.  

   Best wishes.  
   

[Bonny]

Jun 6, 2014 22:10:59 GMT -5 @southernsusana said:

I am surprised that we aren't getting more posts about how someone just surpassed XYZ milestone.

I am surprised because I seem to be earning mega $$$ every day. By the end of the year, I should have over $500,000, and I had less than $300,000 when I first noticed this run-up.  I am exaggerating, but it keeps going up, up, up.

It just frightens me. I expect steady growth, but this seems really odd. It makes my monthly purchases really expensive.

Yet there is no chatter on this message board about it.

Is anyone as "discombobulated" (I hate that pretentious word) as much as I am?

Damn it!  I want cheap stocks until I decide to retire!

LOL, apparently you don't visit @wxyz's "Long Term Investor" Thread on the Investing Basics and Beyond board. On Thursday I posted about DH and I being about to pass a milestone in our taxable brokerage account. Great minds must think alike!

FWIW, I fully expect to see a correction at some point. It's the nature of the beast. As long as our dividends keep paying I can stay focused on the long-term.

ETA: You might want to move this thread over to the "Money" side vs OT in order to get more responses.

[tallguy]

I am surprised that we aren't getting more posts about how someone just surpassed XYZ milestone.

Okay, fine. My retirement accounts just passed half a million on Thursday.  Are you happy now?

Damn it! I want cheap stocks until I decide to retire!

Exactly.  When it crashed a few years ago, people I talked to were panicking.  My thought was, "Are you crazy?  I want it to go damn near zero!  I'm still BUYING!  Why would I want to buy expensive stocks?  Let it go back up later!"    

(I could understand that sentiment from older people, but younger ones?)

[Tiny]

Here's todays article about the 'bull run'...

finance.yahoo.com/blogs/talking-numbers/we-are-about-to-enter-the-greatest-bull-market-in-85-years-225051152.html

We are about to enter the greatest bull market in 85 years

The market may be near record highs, but price isn't the only record it's breaking.

At 62months and counting, the S&P 500 index is thisclose to its longest bull run since 1994 to 2000. Should it continue rallying for just two months more, it will be the longest bull market run in over 85 years.

According to Ari Wald, head of technical analysis at Oppenheimer & Co., there may be some near- and intermediate-term downside, though he doesn't recommend trying to time corrections.

The article goes on to site both sides for why the "Bull Market" will continue and why it's at it's end.

Maybe this is why some of us are feeling alittle 'funky' about the what the stock market is doing... it's been going on for a lot longer than we are use to, and we're feeling like a drop is surely on the horizon...

[tskeeter]

I think the recent media blitz about the market being over heated is largely media hype to fill publication space.

Consider these facts:

Employment levels are slowly creeping up and unemployment claims are declining.

Personal spending is increasing as people feel more secure about their jobs and are returning to work.

Tax collections are increasing.

Property values in most parts of the country are increasing, which will have a favorable impact on real estate tax collections.

Increased tax revenue will allow for more hiring by governmental agencies.  This will have a favorable impact on employment and personal spending.

Home building in some of the hardest hit markets has increased significantly over the last year or so.  Providing jobs and increasing spending.  (In my neighborhood of roughly 400 homes, about 50 new homes have been built, or are under construction, in the past year.  About a 12 percent increase in the housing stock.  And the developer bought an additional 41 lots in the neighborhood that they will finish developing and build on during the next year.)

Credit markets have loosened and home prices have recovered to the point where people can sell their homes and move.  (We're seeing a lot of this in my neighborhood, as people relocate from CA.)  When they move, they hire movers and often buy at least some new furnishing for their new home.  More spending and jobs.

Many businesses are holding unprecedented levels of cash.  This is a massive economic driver that can be used to invest in new buildings and machinery, or to hire additional employees.  Increasing emplyment and spending.

All in all, I see an environment that is positioned for additional growth.  Not an environment on verge of collapse. 

  

  

[cronewitch]

My investments are up but I took out some to spend so no new milestones. I took out about 25K to get a boat so only have about 965K left, trying for first million. Might need to wait until mom's house sells I should get around 60K.

[justme]

I'm sure there will be a correction soon. But I'm young so there's not really anything I can do about it. Only thing I might do is I do have some money that I might decide to finally invest if the market does take a nose dive. Buy low and all that jazz. But the contract I'm on ends before the end of this year so I might not invest and keep the money liquid in case I need it.

[Bonny]

We're within $6,500 of our milestone and the markets are correcting. LOL, always happens!

[Bonny]

We WERE within $6,500 and now it's $10,700!

Darn you @southernsusana it's all your fault!

j/k

[Deleted]

Jun 13, 2014 19:32:00 GMT -5 Bonny said:

We WERE within $6,500 and now it's $10,700!

Darn you @southernsusana it's all your fault!

j/k

No, no, it is. I "lost" $1000 today. I told myself I jinxed it, and I was doomed to cat food for life.

[Bonny]

Jun 13, 2014 20:04:28 GMT -5 @southernsusana said:

Jun 13, 2014 19:32:00 GMT -5 Bonny said:

We WERE within $6,500 and now it's $10,700!

Darn you @southernsusana it's all your fault!

j/k

No, no, it is. I "lost" $1000 today. I told myself I jinxed it, and I was doomed to cat food for life.

Well you couldn't keep us down for long; hit our milestone today in the taxable brokerage account.

Like I said on the Long Term Investor thread we must be ready for a correction.

[tallguy]

Like I said on the Long Term Investor thread we must be ready for a correction.

Almost certainly.   I know that because I have given up waiting for it and am planning to put about 60,000 in soon.  Just trying to figure out how to play it.

Historically, they usually come about two years after I expect them to. 

[Bonny]

Jun 25, 2014 21:19:50 GMT -5 tallguy said:

Like I said on the Long Term Investor thread we must be ready for a correction.

Almost certainly.   I know that because I have given up waiting for it and am planning to put about 60,000 in soon.  Just trying to figure out how to play it.

Historically, they usually come about two years after I expect them to. 

That's what I'm guessing on the real estate side. About 2-2.5 more years and we'll hit our previous highs. Then about a 20% correction as people start doing the math and realizing it's cheaper to rent again.  And stock market corrects and real estate corrections typically go hand in hand as they are income generating equities. But each correction is a little different. You either love the roller coaster ride or !

[Nazgul Girl]

Jun 9, 2014 14:27:24 GMT -5 Ratchets said:

Jun 8, 2014 9:16:53 GMT -5 Nazgul Girl said:

   Thanks, Rachets.   Sorry I didn't answer earlier, but we were out and about for a good bit of yesterday.   I'm really excited about having my time and mind free after 2.5 more weeks.

   I always try to keep substantial "back money" which we can access should we need to.   Right now, we have a substantial CD at 5.4 % which will be expiring next year (sadly), some cash in our safe deposit box, a stock trading account, plus a small checking/savings account set-up.   We could live for a long time from just that money.

   I always contributed much more in optional 457b accounts than just the basic.   Some employers don't allow this, but mine does.   For many years, my take home pay was $ 450 a week, because so much was being shoveled into my retirement accounts.   We did losen up this last year, to make sure that repairs were being done, pay down zero percent debt taken out for the reno we did last year on our Hud repo hut (rental now ).

   I believe in trying to develop several income streams, so that I am not just dependent on my job to live.  Jobs can go away.   Sometimes, getting other income streams going is not easy, but right now we have DH's S.S., his pension from his first wife ( she passed away a good many years ago and she had it set up so that he would get her pension under a provision that her employer had ), rental $$ from two houses that we own outright, income from a land contract on a property we sold to a dr. ( office condo ), and about a half million or better in Roths and IRA's.   That makes six income streams, or potential income streams ( drawing down our retirement funds if need be ) after I retire from my job in 3 weeks.   We will also have my S.S. starting on 12/1/14.

   I believe in variety in investments.   Cash, CD's, stocks, mutual funds, precious metal or precious metal funds, real estate, etc.  But, a middle-class person can't do all categories at once.   You have to choose what you want to build up first.   Logically, maxing out all retirement account opportunities and having a 6-month emergency fund are the best places to start.  

   Best wishes.  
   

I bet you are excited about it!  I like your advice, and appreciate you taking the time to answer...it's nice to see a success story, and how you got there.  It gives hope that us folks still drudging through the daily grind will too, if you take the correct steps.  For what it's worth, we've been doing the same basic things - there are some minor differences, but overall it's following the same path.  So was happy to see what you wrote!

  Thanks, Rachets !   Sorry I didn't answer right away, but I've been trying to get everything cleared up at work before my last day on Wed.   

  I appreciate your good wishes.   I think that planning is the key, and everyone can develop at least two income streams, such as work and selling things on ebay, or fulltime work and part-time work, or a job and part-time writing, or baby-sitting, writing, and selling things on ebay, etc.   Every bit helps.   Not everyone can be a landlord, but they can still do more than sit in front of the tv.