HODL, buy the dip, or wait for the crash?
By - may_2nd_2021
No one knows when crashes will happen.
No one knows when dips will happen
No one knows if a crash is a dip or vice-versa.
Just choose a resilient investment strategy that can take a a few dips/crashes without self-destructing
So GameStop it is! Thanks bro! We’re going vacationing in Tahiti together in February, flying first class! See you then!!!!!
Actually, Bogdanoff knows ;)
Sayin Dey gonna beat dem saints?
The secret ruler of the world, manipulating the markets at will but especially to annoy the average Joe if he buys:
Don't try to time the market. The cost of waiting for a crash might cost you a lot more than the potential gains. If you are that scared about putting all your money now, you should dollar cost average. The point of passive investing is to not care about timing the market.
From my experience, the best time to buy is 24-48 hours after I have made a lump sum purchase. I will give y'all a heads up next time I fund my Roth IRA.
We be twinning in this regard. I'm constantly reminding myself of the fact that as a kid I could play Monopoly by myself, cheat and still lose the friggin game.
Absolutely. Invest however you want as long as you have a solid cash position on the side.
It is a confirmation bias. If you google when market will crash, you will get all the doom and gloom articles that a crash is coming. Then you believe a crash is coming.
Do the opposite. Google market is in a bull run, you will get all the news how this bull run will continue.
If you can get over your confirmation bias, then you will realize no one knows what is going to happen to the market in the short term.
What we know, a healthy market will have a 10% correction every now and then. But it is amazingly difficult to guess which day it will happen.
this is 100% on the dot, deleted Instagram and Facebook because of this/other topics i am in too, forgot that with a google phone i am probably being bombarded with confirmation bias
Just buy buy and buy all dips and every dip
More money is lost preparing for market crashes then from market crashes.
Why are you looking at me when you say that? It was only twice.
What would warren do?
Warren would and does always ask wall street bets before any and all transactions.
Keep the money in the market.
I stopped trying to time the market. Like just this week I said a crash is coming, and we recovered. It's true that the market is very emotional right now, and almost seems like it's looking for any little reason to correct. But we just haven't had bad enough news yet to push it seems.
I would say just start buying in but spread it out and buy on red days.
People are looking for reasons to correct but at the same time there's $1 Trillion in cash waiting on the sidelines. I think any dip will be bought instantly and won't dip very far.
Lot of cash to be holding given inflation eating away at it. If you are young and good finances I believe boglehead method suggests buy total market index fund like vti and just keep throwing money at it as you can. Especially if you have a longer time horizon. I like schd btw, have a decent chunk myself. Psychologically difficult to just push all the chips in on vti/swstx when market is high so maybe put 20% cash in then dca the rest over some type of timeline framework?
With 80% cash, I would probably deploy 10% into VTI every month till my cash position is down to \~25% and leave it till 'the crash' and then go all out
80% cash is a lot.
Although I will say that you want to have about 6 months of your gross revenue saved up for your emergency fund.
But after that… get it working in the market. Because with inflation that 80% is losing at least 2% per year in value.
I do believe that we have a correction coming in the next 6 months or so. But I could be right or wrong.
If you are afraid of throwing all of it in the market at once then setup a schedule and just invest on that schedule.
That could be 5% each week or 5% each month.
QQQ went down 81.08% in naughtiest crash but that is because it is Expanded Tech Sector ETF pretending to be index.
Yea, I don’t consider QQQ an index. I actually didn’t even know some people tried saying it was an index. Lol
The dot com bubble def burst big. And then since then tech has been on a massive bull run. It’s up close to 570% since 2000, right?
Somewhere around there.
Last decade has been gold for Large Cap as they benefited from near Zero interest rates.
It helped turn Netflix into a powerhouse. Didn’t they recently pass $10B in debt on the books?
It’s going to be interesting to see how the next 2-3 years shake out.
I feel like Netflix has next Yahoo written over it. One of the legacy tv companies will buy them.
Haha, that’s funny. I compared Netflix to AOL a few weeks ago.
Back in the day AOL was on top of the world. They were “the first” to sort of get it right and went gangbusters.
I could totally see Netflix falling into that within the next decade. Their market share is getting eaten up fast with all the legacy companies incorporating streaming services now.
And then all the twitch and newer content creator models are eating up even more.
Still makes me laugh when I remember that Blockbuster could have bought them for $15mil and it was Netflix who were the ones who made the offer.
I dunno if any of them have the cash liquidity to buy Netflix, that market cap is still pretty damn big. But I do agree that an M&A of some sort could def happen.
I haven’t thought about who would be the most likely option. It would be interesting to see a giant like google try to acquire them in order to add a steaming option to their divisions to continue competing with the likes of apple and Amazon. And they are big enough to afford it.
I remember the glory days of America Online. We dumped them in 2004.
Netflix cap will not be same after crash. That will be the time to buy it. Their video gaming plan are pipe dream as that market owned by Japanese & Microsoft.
God, I completely forgot about the Netflix plan to expand into gaming… such a bad idea. Lol
Like.. hey Netflix how about first you worry about bringing down your customer acquisition costs before trying to expand into one of the most competitive and difficult industries out there. Haha
It is a terrible index.
So when is this crash that you read about going to happen? Where did you read about this crash that's guaranteed to happen? How will you know it's /the/ crash and not a large dip when it does happen?
I mean a crash WILL happen, it’s a certainty. But when and where and how much… who the hell knows. Lol
I was asking this myself on January. I do not regret lump sum investing in my ETF’s back then
How long have you been 80% cash?
I sold AMZN and AMD when they were up last month and that was a solid 80%+- of my portfolio, then I bought a little more SCHD and been sitting since, thinking about buying only or mostly ETFs from here
Just split the baby and DCA your position on red days. If it makes you feel better hold 20% cash for the big one
10/10 times I go to cash for a crash, I lose out on significant gains.
If you want to buy a dip/crash, keep 5-10% of your account in cash so you can scoop up deals. Time in the market always beats timing the market.
Keep 50% in world equity and 50% either in cash or in bonds. When market crashes, sell bonds and average down. Over the last 25 years 50/50 portfolio had almost the same annualized return as 100% equity, and equity is growing much faster only recently. Not an advice, but if you feel like crash is coming, this would be best strategy.
5.97% for 100% bonds
6.71% for 50/50%
7.05% for 100% equity
You would lose only 0.34% if past trend continues (assuming we ignore the last 1.5 years of bull run)
First off, thank you for spelling HODL correctly
Secondly, thanks to ETF mods for not auto-banning even mentioning crypto. That gets so annoying and when I see it, looks like an aging establishment that is scared and not modernizing.
To answer your question, you've probably read this a million times on cryptocurrency.
The best answer is to Dollar Cost Average and just auto-buy every week, and then don't pay too much attention to your holdings.
It is good to also keep a stash of cash around to take advantage of catastrophic dips, but the best way to do it is just autobuy and put it on autopilot.
So much easier on your time and emotions and a great way to build wealth without having to look back and constantly question your decisions.
Jesus you missed so many gains
We have similar set ups. Me SCHD/VUG.
I am doing DCA bro...buy...80% in cash ia to much.
You are losing tons of compounding.
I was like you. 15% is a lot. I try to keep 10% .
80% ...is waiting for a 20% dip I guess.
But seriously. You are missing time there.
If I were you I wait for a 3% decline and dump 70%. Build more cash and wait for the big dip.
Recently I wrote a small program in R that would calculate if it's better to dollar cost average, buy a X% dip or do both where you dollar cost average a certain amount and save part of the money to buy any X% dip
Irregardeless of any % you defined as a dip, dollar cost averaging every 15 days beats all strategies, when buying into a SP500 indexed ETF at least for ten years (and we had some dips this last 10 years)
So, on a personal level, that's the strategy I'll follow.
I wouldn’t wait. If you want to feel more secure, you could DCA 5-10% on red days rather than going lump sum.
Even if the correction is coming, it bounces back. 2008 took awhile but we had a dang *global pandemic* spreading across the world last year and we recovered in, what, 5.5 months? Do I wish I bought more at any point in March-July 2020? Sure do, but hindsight is 20/20.
One middle ground option is to drop down to 10-20% cash, DCA into the market and hold that cash until the correction. You’d potentially be missing out on more gains if the run up continues, but maybe you’d feel more secure if you knew you’d be ready to buy that big dip.
The annoying thing is, of course, no one knows. No one knows if or when a crash will come or how deep that crash will be. Personally, I keep tossing money in the market. Been doing more sectors than VTI for extra spice though.
Stop saying HODL. You sound like an idiot
Do the homework before you buy anything then hold it until retirement.
If you have money to invest, keeping it in cash which earns negative real returns, is always the wrong choice. All. Ways.
I try to do it all. I DCA, have limit orders and have a small amount saved for a serious dip. Time in the market beats timing the market.
The USD is in an uptrend, meaning it’s safer then investments at the moment. Keep an eye out on it and when it starts coming down hard buy the stocks/crypto. You can see BTC climbing massively when it went down. And when it had peaked in may BTC came crashing down.
go in balls deep as soons as you get
Use of the term 'HODL' makes me assume you're an idiot
My wife’s boyfriend said if I hodl all my stonks I’ll get a free trip to the moon… or something like that.
You will get one way ticket to Mars as you will die on the spot miserably.