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

[Member 38805]

Real estate investing doesn't just mean buying rental property, and collecting rent each month. I too would not be interested in the burden of maintaining rental property, or collecting rent from possible deadbeat renters. But I have friends who own numerous rentals and don't mind it at all. It's just become part of their lives, and they deal with it.
But I have invested in property instead of the stock market, and it did quite well at times. Most investment counselors can set your fund up as real estate based, so you don't have to care for rentals to have an investment that's real estate based. But I wouldn't do so presently considering the housing market's high values today. Like the stock market, you don't want to get into it when prices are high, you do so when they're down. The housing market is currently great, and not prime for making money on; or at least not big money.
Same for those who flip houses. I have friends who've done quite well flipping houses because they do most of the work themselves. But they tell me the last year has been dismal. Houses needing a lot of work costing 10-20% over asking price, and then when they've completed all the upgrades to get them ready to sell they're lucky if they make 10%, and that's not after taking an hourly wage for the time they put into them!
So real estate is off the table for me currently.

 

[arakboss]

Would not surprise me at all. Better to shut down all international travel than domestic. Shutting down interstate domestic movement will be a SHTF in about 48 hours or less.

CNBC just announced that national lock down is a disinformation campaign and HSS is being targeted by hackers???

 

[CoastRange57]

Houses needing a lot of work costing 10-20% over asking price, and then when they've completed all the upgrades to get them ready to sell they're lucky if they make 10%, and that's not after taking an hourly wage for the time they put into them!

Then they clearly do not know what they are doing. My son, a friend and I were flipping houses for about 2 years starting in 2014 and stopped in 2016 when those over valued prices put the base price of the subject houses outside of the profit parameters we set up. You had to have discipline and the ability to walk away from it when the numbers did not make sense anymore. We liked to get paid for our work and did reasonably well.

They were strictly spreadsheet decisions and when the numbers reached a certain point we just stopped doing it and took our money elsewhere.

 

[The Heretic]

The U.S. Stock Market Could Crash Another 25% If This Nightmare Scenario Unfolds

The U.S. stock market crash could get worse as the Dow and S&P 500's losses this year could exceed the Great Recession of 2008.

www.ccn.com

 

[CoastRange57]

The U.S. Stock Market Could Crash Another 25% If This Nightmare Scenario Unfolds

The U.S. stock market crash could get worse as the Dow and S&P 500's losses this year could exceed the Great Recession of 2008.

www.ccn.com

Some hype in some of those articles, but overall I agree with most of them. This came on a lot faster than 08 and everybody forgot real fast just how f up the economy was in 08, got complacent and thought this could never happen again. I felt it would happen again, just did not know the time frame, did not expect to happen this fast and this hard. The sh*t has is getting real close to the fan now and will hit soon.

I know a lot of contractors and business people that needed to remember 2008 and should have adjusted their business and life styles accordingly, but did not and now are going to pay the price hard.

 

[Member 38805]

Then they clearly do not know what they are doing. My son, a friend and I were flipping houses for about 2 years starting in 2014 and stopped in 2016 when those over valued prices put the base price of the subject houses outside of the profit parameters we set up. You had to have discipline and the ability to walk away from it when the numbers did not make sense anymore. We liked to get paid for our work and did reasonably well.

They were strictly spreadsheet decisions and when the numbers reached a certain point we just stopped doing it and took our money elsewhere.

They know what they're doing, and have made big money in the past. But flipping a house doesn't happen overnight as you must know if you've done it also? So once you've purchased a dog cheap, and spent 4-6 months refurbishing it to get max return, the market can change. The last house cost them $214k and was a 3200 sq. ft. home on a huge lot with 3 car garage. They could see it easily going double that when done, after they'd sunk some serious money into it. But it needed a lot of repairs, which included all new roof, windows, complete remodel, with all new flooring, and completely redone kitchen. They sunk in right at $100k not counting their hours, and it was suggested they ask $465k by the realtor. Sounded great to them, and I thought it was a bargain at somewhere around the price. It already had new electrical panel, and new furnace, so nothing needed there.
Unfortunately the housing market has gone flat in the Portland metro area, and they had no offers in 6 weeks. So it got continually dropped every two weeks until it finally sold at $365k. Now I don't have a crystal ball, but I sure wouldn't have predicted that much house, all new inside would go that low. I don't think it was because they don't know what they're doing, as I'd guess having made a lot of money before that they knew what the "thought" they'd make on it.

 

[CoastRange57]

Yeah it can go south on you real quick. We were at a lower price point in the market, our model and that was 6 years ago, was to buy at no more than 175K, all cash, try to do a good job on the pre buy and keep our total investment to less than 250, and sell at 299, and move 3 a year. No realtors involved on our side. That was a different market in those days. When we could no longer source the base home in the 175 to 185 range we got out. The prices had went up on stuff that needed more than we felt was reasonable to recover costs and profit for our time, and we wanted to be in the sub 300 market which vanished about 3 years ago.

We did enough over the 3 or so years that we ended up keeping 3 of them for rentals, the prices went up and we sold all three, and between the rent and profits, my son and the partner were able to buy mortgage free homes for cash, and I paid off my place which we sold last year. You can make a lot of money, but you can lose your azz if you open a wall and find something too.

 

[georgepittenger]

Ya know how when you're on the roller coaster and it gets to the top of the first incline and sort of pauses before it plunges into it's terrifying descent ?
And your stomach is feeling queasy 'cause you know what's coming ?
Your brain is crying - Oh no , oh no , oh no .......

Well that's pretty much where we are in the stock market . Every morning is a re-creation of those feelings .And so it will continue like that for the foreseeable future . As they say , don't get into stocks if you don't have a strong stomach .

It's gonna be another wild ride today , I suspect .

Keep your powder dry fellas , not time to buy yet .
The 'best' is yet to come . Cash is King .


George

 

[Mikej]

Ya know how when you're on the roller coaster and it gets to the top of the first incline and sort of pauses before it plunges into it's terrifying descent ?
And your stomach is feeling queasy 'cause you know what's coming ?
Your brain is crying - Oh no , oh no , oh no .......

Well that's pretty much where we are in the stock market . Every morning is a re-creation of those feelings .And so it will continue like that for the foreseeable future . As they say , don't get into stocks if you don't have a strong stomach .

It's gonna be another wild ride today , I suspect .

Keep your powder dry fellas , not time to buy yet .
The 'best' is yet to come . Cash is King .


George

Our stocks are with Morgan Stanley. I'm not going to look until I hear/read of the market going back up a certain amount. I'm nauseous on and off throughout the day.

You talk wild ride? A wild ride goes up and down and all around. A complete free-fall straight down for days isn't wild. It's sickening.

At least, when we inherited this portfolio the man from MS got rid of a bunch of stuff he didn't like that dad DID like 40 years ago, and had been shifting from stock to mutual funds and such previous to this situation.

 

[The Heretic]

Stocks aren’t bargains yet, but a buying opportunity will come. Here’s how you’ll know it’s here

Four key ratios show the U.S. market’s valuation picture is a lot better than it was a month ago, writes Mark Hulbert.

www.marketwatch.com

 

[georgepittenger]

Stocks aren’t bargains yet, but a buying opportunity will come. Here’s how you’ll know it’s here

Four key ratios show the U.S. market’s valuation picture is a lot better than it was a month ago, writes Mark Hulbert.

www.marketwatch.com

( not a response to the Heretic ! )

Mike

I ain't real sure of your comment about shifting from stocks to mutual funds was what your Dad was doing or what your adviser is doing after you got the portfolio .

If it's your adviser doing it then ............. ah man , he is prob earning a good chunk off you while you are gonna suck wind over time . IMO . I hate mutual funds . A creation whereby everybody wins but the customer . You .

The BEST thing I ever did was to move my $ from mutual funds to dividend paying stocks once I got control of my 401K ( when I switched jobs ) .

Well it's the best thing I ever did AFTER I bought my bakers dozen of 1911s !


George

 

[Dwesson]

I don't consider myself an expert but I do trade regularly.

I am mostly in cash at the moment in taxable accounts. I have not touched our 401k and only added here or there to established positions in IRA.

I am waiting until volatility subsides and ideally the bond market to calm down, then I will begin deploying cash in earnest.

 

[Member 38805]

Since I'm in a fixed interest IRA presently, and have been since I retired, I see that as a good option when I did so before retiring, but not today. It will mature next January, and I know at today's Fed rate it wont be an option next year. I will likely go into bonds then, but will try to go with municipal bonds that are tax exempt. They may not get huge interest, but the fact I wont pay taxes on dividends will help make up for that part.

 

[edslhead]

I bought Boeing, UPS, WellsFargo and somthing I cant spell. I'm gonna be rich I tell ya!!

Its starting to look like this may take while.

 

[arakboss]

The market is presenting us with an absolute sheet show today. 7% breaker tripped. I don't see anything to stop it from going down further when 15min pause is up. I am thinking about buying one more SPY share today?

 

[The Heretic]

Still going down on average. Down 10, up 5, down ten again, up 5. Bouncy bouncy, but overall going down. Still waiting for the bottom.

I am down about $70K now from my peak.

I think I am going to be working another year or two, if I don't lose my job due to a recession.

 

[georgepittenger]

The market is presenting us with an absolute sheet show today. 7% breaker tripped. I don't see anything to stop it from going down further when 15min pause is up. I am thinking about buying one more SPY share today?

No , wait .

It's like throwing a pebble into a vertical mine shaft .

Can you hear me now ? Nope ...... a ways to go yet .

IMO .


George

 

[arakboss]

No , wait .

It's like throwing a pebble into a vertical mine shaft .

Can you hear me now ? Nope ...... a ways to go yet .

IMO .


George

Yep I held off after seeing ticker news saying Chase is going to be closing 20% of it's branches. I have a feeling there is going to be a huge wave of news like that coming soon. Trump is going to have his work cut out for himself leading up to November.

 

[The Heretic]

I am $70K+ down. Still waiting for the elevator to get to the lobby level, much less the garage.

Kinda scary. Hope I still have a job this year and next because:

1) Recession
2) Retirement funds just devalued considerably, even after going to 80% bonds last year when the market was up.

Did hear thru the grapevine at work that there is a hiring freeze for the foreseeable future.

 

[gmerkt]

The commentators and pundits on cable financial news are all saying, "but this time it's different, it isn't about financials, it's about Corona virus." Well, the virus may be the proximate cause of the drop. But easy credit pushing an over-bought run in equities of over ten years is behind it. When the market appreciated 400 or more percent during that time, nobody was complaining about it. These things go in cycles, all the way back to the early years of the Republic. When the Fed and the government tried to prevent a natural correction in markets in 2008, they only postponed a disaster. In so doing, they replaced lost money with new, then created more new money to get things going again. They are already starting the same thing again with new QE which will further devalue our money.

Effervescent markets collapse for various reasons. There's always some event that is the tipping point. Nearly nobody sees it coming. And by the time it comes, it's too late for most people to do anything about it. But when you see a bubble growing over time, you have to wonder when it's gonna blow.

People say, "leave your money in the market, it will recover, over history it has only gone up." The trouble with that idea is that maybe the numbers get bigger, but in a relationship that causes the real value of money to go down. So your equities are worth more dollars but it takes more dollars to buy what you need. Same comment applies to big gains in real estate.

Here's to hoping that this market downturn blows over, turns out to be only a temporary reversal. I'd rather live in comfort and relative security until my time is up. After that, it's somebody else's worry.