What Is Your Market Entry Point for Dow or S&P?

[CoastRange57]

As far as I am concerned I am at my bottom right now. I reinforced existing positions over the last week and I am going to just ride it back up I hope. If we even get back to half of what we were, my dollar averaging will give me some good gains. With the world geo unrest at this time it is just too crazy. I have cash reserves not in the market and want to hold those at the level they are at. The market is just too volatile and the inability to get reliable information from any source is a major factor.

 

[elitejake]

As a more novice investor I'd say a safe place would be -20% of pre election and where the country is w the virus. I don't know where it is currently. China said they are starting to hit declines of new cases. Mostly repatriation cases. When it gets to that point it might be a tighter play at the bottom. But I think you could still have a safe 7-15% pull back reliably right now.

 

[bbbass]

Also what silicon valley money is doing is very telling. When I was selling one of my houses, the co-founder of a major tech company everyone has heard of put in an offer from SF! His realtor did the walk through. I was shocked though to see a guy worth more than probably everyone on this forum combined buying houses, let alone up here (probably escaping the California investment market). Deal ended up falling through and I sold it to some Microsoft couple a week later but still...

That's what I've been saying... price doesn't matter if "investing"! Get in and ride it up, or don't play the game. Right now, I'm reading that Chinese nationals with LOADs of cash are buying up SF. Wow. Then that drives the prices in the PNW even more... it's the new exodus. What the 3rd or 4th Calif-PNW migration?

 

[bbbass]

Real estate investing is fine for some. But, also plan for what happens.....when your renters refuse to pay.

That's the thing... casual rental investors usually don't plan properly. They don't have a capital mgt or rainy day fund and wind up upside down and in trouble with very few missed rents. In my day, we set aside a 6 month expense for each unit we owned. Today one would probably be well served with a one year level put away for expenses.

One of the reasons I went with comercial properties. A business has all the reasons you do to keep things looking nice and have the upkeep that is necessary to run a successful business. In the 10 or so years been doing it not a problem yet. Having a lawyer that has a background in real estate draft the lease agreement was money well spent. He had stuff that really covered my but that most, myself included wouldn't of even thought of.

When I was involved, from 1975 - 2000, most rental owner strategies were to leverage up into commercial properties in order to have stable income. It's a diff game that few people understand, as commercial renters are harder to find, and vacancies are typically longer and harder to fill. But once a good lessee is found, they usually don't leave often... unless they go out of biz, or unless the landlord raises the new lease too high. I know many a mall has been killed by the rising triple net rates.

I invested in the stock market for most of my adult life. Spent 30 years putting monies into it towards retirement. But 5 years before I retired I moved everything out of the stock market and into guaranteed interest investments. I've been in those over the last 15 years. They certainly haven't made me the gains I saw in the stock market, but also haven't lost a cent either.

My wife got very nervous about 10yrs ago, during the Obama era, and pulled her Mutual Fund based IRA and put it into a flexible annuity IRA which neither of us understood well. She didn't lose any money, but it was a dog of a performer and she really wasn't seeing any income from it either...so why own it? We eventually got her out of that and back into some Edward Jones based funds. Now the problem is endless mailings from Ed Jones... sheesh, we gotta get those people to put us on paperless, my file drawers are full!!!

 

[Bushman]

I think we are headed for recession.

What gave it away? lol

 

[Bushman]

IMHO.....

Real estate investing is fine for some. But, also plan for what happens.....when your renters refuse to pay.

I only have one property. I live on/in it. I like it that way.

IF, there is a recession and people don't work/lose their jobs.... How will they pay for their rents or mortgages? A recession is/will be ugly. Then, remember the last time? Rrrright...... some people, simply walked away from their obligations (never having to pay it back) and some had to be forcibly evicted (at the landlord's expense). Call it as, being protected by the Government. Whatever.....just remember that the past has a funny way of repeating itself.

BTW.....local governments in CA were recently considering eliminating the tax write off for home mortgages on 2nd homes. Attacking the rich. But, isn't that the trend?

Proposed law would end tax break for second homes

Not that "investors" with their business tax write-offs will care. Or maybe, those who use their 2nd "vacation" properties as Air BnBs?

Aloha, Mark

Man who owns no rentals tells those who have many to have a plan for what happens when renters refuse to pay. It's like someone who has never climbed Everest telling people who have climbed Everest multiple times considerations for their climb lol.

Tenant screening is key to having quality tenants. Credit score, education and income are tell tale signs. Twelve years with multiple rentals, always got my money. I require first/last and security deposit. It takes a month to do a judicial eviction so the money collected up front protects you. I'm a strong personality and not easily intimidated. The three I've had issues with left immediately. The more doors you have the less risk there is. My reserves are honestly excessively high.

Also, not all of us work normal jobs. I have advanced degrees and a high income job, I pay almost six figures in income tax a year. I can pay the mortgages on all my houses by myself even if they sit empty...

 

[Bushman]

That's the thing... casual rental investors usually don't plan properly. They don't have a capital mgt or rainy day fund and wind up upside down and in trouble with very few missed rents. In my day, we set aside a 6 month expense for each unit we owned. Today one would probably be well served with a one year level put away for expenses.




When I was involved, from 1975 - 2000, most rental owner strategies were to leverage up into commercial properties in order to have stable income. It's a diff game that few people understand, as commercial renters are harder to find, and vacancies are typically longer and harder to fill. But once a good lessee is found, they usually don't leave often... unless they go out of biz, or unless the landlord raises the new lease too high. I know many a mall has been killed by the rising triple net rates.

YEP! This guy knows his stuff. Most people over leverage and think rentals are easy peasy. Almost every colleague (I work in tech) I've ever had at any org has had a rental or rentals....and lost it all. Over leveraged, no reserves. This is akin to the McDonalds worker buying rentals 2000-2008 with no down payment, no income verification, etc. There is a reason you have to pay 20% down or pay PMI. Statistically you are at high risk of default if you can't put 20% down. I get people online messaging me constantly "how can *I* get into real estate with no money". They don't like my answer: if you can't put 20% down and have 10% in reserves, you can't afford it. So you're talking low six figures.

One of the reasons I've stayed away from commercial real estate is exactly what is mentioned here in your quotes: harder to find tenants and longer vacancies. Yeah, NNN leases are low maintenance and longer...but that commercial tenant might go under. Good luck finding a replacement tenant for them, especially in a recession.

I stick to residential. Everyone needs food, water and...shelter....I provide shelter. Right now I have about a dozen applicants for just ONE of my rentals turning over to go through today...All from high income Engineers....

 

[41mag]

we gotta get those people to put us on paperless, my file drawers are full!!!

....what, no woodstove???

 

[PDXbiker]

S&P 2700, which is 20% off the high of 3380. This one is difficult to call as no one knows the future spread of the CV virus or the economic damage it will cause over at least the next quarter.

After the OP started this thread, I made the first reply last Friday. I was way too optimistic. Not even I thought this would crash this fast this low in less than a week. After the 10% decline today in the markets, this is looking like it may have all the earmarks of being as bad as the 2000 dot com or 2008 Great Recession downturn. This is fear driven selling of what the future may hold.

We are now starting to push nearly 30% off the highs. The S&P has dropped below the next benchmark of 2500. That puts it back to December 2018, wiping out last years gains. And we've really just started with the spread of CV here.

 

[parallax]

Still on sidelines/cash.
Wondering now if this will be the eventual implosion of all world markets, that we always joke about.
Every great society eventually collapses. If that happens, currency will be food/ fuel/matches/ bullets.

 

[Pandaz3]

Yeah shades of the great depression, but I worry not for the long term, I am listening to the Wells Fargo investor daily market call right now. They are starting to buy commodities, like oil. Oil was $42 a barrel and now $30, cost of production of shale oil in Texas is around $45 so producers here and the world over are shutting down or slowing down and the oil surplus will diminish rapidly and price will rise. Lot of other tidbits, but the big deal to me are They (Wells Fargo at least) are thinking and doing. Makes me have a warmer fuzzy

 

[bbbass]

....what, no woodstove???

I'd love to have a woodstove!!! But alas, those days are behind me now. There are days when I can't put on a sock, much less chop wood for da stove.

 

[41mag]

days when I can't put on a sock, much less chop wood for da stove.

me too, but 1) electric wood splitter is a therapeutic appliance; and
2) pellets can't be too far away someday in my own heating plans...

I just saw something called "bear bar" in a sporting goods store recently, an ultra-highly compressed 'wood products' looks-like-mostly-sawdust somewhere between quart & 16 oz. size. "6 in a.... well, a "6 pack" for about $5/

 

[USMC1911]

YEP! This guy knows his stuff. Most people over leverage and think rentals are easy peasy. Almost every colleague (I work in tech) I've ever had at any org has had a rental or rentals....and lost it all. Over leveraged, no reserves. This is akin to the McDonalds worker buying rentals 2000-2008 with no down payment, no income verification, etc. There is a reason you have to pay 20% down or pay PMI. Statistically you are at high risk of default if you can't put 20% down. I get people online messaging me constantly "how can *I* get into real estate with no money". They don't like my answer: if you can't put 20% down and have 10% in reserves, you can't afford it. So you're talking low six figures.

One of the reasons I've stayed away from commercial real estate is exactly what is mentioned here in your quotes: harder to find tenants and longer vacancies. Yeah, NNN leases are low maintenance and longer...but that commercial tenant might go under. Good luck finding a replacement tenant for them, especially in a recession.

I stick to residential. Everyone needs food, water and...shelter....I provide shelter. Right now I have about a dozen applicants for just ONE of my rentals turning over to go through today...All from high income Engineers....

I agree in most of what you say except the harder to find a tenant and the "might go under" part. Same could be said of residential. An engineer can easily lose a job in a recession. That engineer works for someone that rents or owns a commercial property. Try finding industrial rental space in Portland. Lots of "markets" within the commercial space and they are not all the same just like residential. The key is to have ability (money) to weather storms no matter how or who created it not matter if its residential or commercial.

 

[Bushman]

After the OP started this thread, I made the first reply last Friday. I was way too optimistic. Not even I thought this would crash this fast this low in less than a week. After the 10% decline today in the markets, this is looking like it may have all the earmarks of being as bad as the 2000 dot com or 2008 Great Recession downturn. This is fear driven selling of what the future may hold.

We are now starting to push nearly 30% off the highs. The S&P has dropped below the next benchmark of 2500. That puts it back to December 2018, wiping out last years gains. And we've really just started with the spread of CV here.

As I noted in some of my first posts in this thread a few days or a week ago, you have a ways to go before this stops. The virus will keep spreading for now, at least another month or two, possibly more. The real panic hasn't even begun yet. Once there are mass infections the real SHTF will start. Like I said that girl texted me first day the market crashed and said "it's a good time to buy!" I'm like, not yet, it will go down further. Sure enough it did....and will keep dropping. Hold, keep your powder dry. After the crash in late 2018 I didn't buy back in. My trailing order was for 10% so triggered in 2018 and I didn't buy back in. I see opportunity on the horizon though..

 

[RedRover]

Every great society eventually collapses. If that happens, currency will be food/ fuel/matches/ bullets.

 

[arakboss]

After the OP started this thread, I made the first reply last Friday. I was way too optimistic. Not even I thought this would crash this fast this low in less than a week. After the 10% decline today in the markets, this is looking like it may have all the earmarks of being as bad as the 2000 dot com or 2008 Great Recession downturn. This is fear driven selling of what the future may hold.

We are now starting to push nearly 30% off the highs. The S&P has dropped below the next benchmark of 2500. That puts it back to December 2018, wiping out last years gains. And we've really just started with the spread of CV here.

I bought another share of SPY today at $251.50. Once again I should have waited until later in the day. I have enough cash to purchase one more share and if I add a little cash to my acct maybe two more shares. My guess is the market won't trend back upwards until it gets a grip on how widespread this virus is going to be. Will it continue through summer or start to decline in a month or two? Our virus testing sucks, hopefully private labs will pick up the slack so we can get a handle on how many cases we are actually dealing with.

 

[arakboss]

Futures pointing to another down day tomorrow despite Feds attempt at "fixing" things today. Sounds like deeper problems emerging: The credit markets are signaling a bigger problem is afoot despite the Fed's interventions

Update: market futures are now looking up in these early morning hours.

 

[3MTA3]

Buy anytime people are panic selling. If it tanks your fiat dollars are worthless anyway. If it recovers you made a ton. Always do the opposite of the masses.

 

[Caveman Jim]

We finally paid our house off this last year and all we have for payments is the wife's car, everything else is free & clear....
I just pulled 75% of my 2025 target date stocks and place them in a money market account. It's disheartening to see $22,000 disappeared a matter of weeks.