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Author: joey2509 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75539  
Subject: Should I sell now Date: 11/19/2008 4:35 PM
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I watched my porfolio go from 650k to 300k. I cant sleep at night as this is my next egg that I worked my life for. I am 44. I have my sell orders in for the morning. I know that they say that fear spooks most people but this really seems very bad and seems like there is more downside. I think there is more chance of the marger going to 5000 than to 10,000. Any final thoughts?
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Author: killerfraug Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 64585 of 75539
Subject: Re: Should I sell now Date: 11/19/2008 4:43 PM
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"So if you've stuck it out this long, it's far too late to sell. Even if the bear market stays with us in the years to come, the odds are good that selling right now after a panic-driven drop will prove to have been a huge mistake."

http://www.fool.com/investing/general/2008/10/08/is-it-too-l...

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Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 64586 of 75539
Subject: Re: Should I sell now Date: 11/19/2008 5:27 PM
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If part of the stock is in a taxable account then you may be able to sell to take the capital loss. You can normally take $3000 against your ordinary income if you don’t have capital gains to offset these against. Any excess you can carry forward. Regardless of your long term strategy doing some selling for tax reasons might mike a lot of sense even if you buy the same stocks back in 32 days.

As your long term strategy, the key is really to looks several moves ahead, if you do sell, what do you do with the money and when do you do it?

One option(pun intended) would be to buy some options or a short mutual fund to protect yourself if the market does go down more but the detail of just how to do that are beyond me.

Greg

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Author: hockeypop Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 64587 of 75539
Subject: Re: Should I sell now Date: 11/19/2008 6:03 PM
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I watched my portfolio go from 650k to 300k. I cant sleep at night as this is my next egg that I worked my life for. I am 44. I have my sell orders in for the morning. I know that they say that fear spooks most people but this really seems very bad and seems like there is more downside. I think there is more chance of the marger going to 5000 than to 10,000. Any final thoughts?

Well, I'm 63 and watched my portfolio drop 30% in the last year (and I'm 80% invested in securities). I think the DOW could go lower, but admit I don't know. I have an asset allocation I like and understand, believe in the SWR figures Intercst and RYR discusses, have an emergency fund, pretty well live below my means, and don't have to touch my stocks for five years if I don't want to. I also don't believe you will pick the bottom so even if you're right, I don't think you'll be able to get back in.

I lived through something similar in 1973-74 and freely admit that it was easier watching my portfolio go from $10,000 to $6,600 that a $1 million portfolio lose $340,000. But I'll also say that I made your mistake (IMO) in 2001, and am more knowledgeable now.

If you've been at TMF very long than you should understand the risk in a portfolio that's dropped by 55% and that over 20 years it should come back. You've been making "risk" bets, and they've been temporarily called. You'll have to decide how long-term that is.

I'll plug RYR and admit that in the last four years I've been a better long-term investor than I was for the previous 40, but there is plenty of good free advice here at TMF too. Everyone SAYS they have the stomach for the drop but they often don't. I'll be the one buying your shares at these rates. H*ll, I'm even closing on a new house next week (could be the only one in NJ), so I am a contrarian.

We'll see in a year how our portfolio's have fared. I wish you luck!

Hockeypop

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Author: joey2509 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 64590 of 75539
Subject: Re: Should I sell now Date: 11/19/2008 7:20 PM
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I went into this knowing that we could get some corrections to the markets but who signed on for this? I canceled my cell orders and I will just wait. This is just s hard to watch, I am really thinking it might take 20 years for it to get back up again. Good luck with thh house!

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Author: MurrayS Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 64593 of 75539
Subject: Re: Should I sell now Date: 11/19/2008 7:43 PM
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I went into this knowing that we could get some corrections to the markets but who signed on for this? I canceled my cell orders and I will just wait. This is just s hard to watch, I am really thinking it might take 20 years for it to get back up again. Good luck with thh house!

Twenty years to get back to what exactly? I think people have an irrational habit of remembering the highs of their portfolio and gauge their losses against that high. For example, I've heard people state that it took X number of years for the market to return to it's peak in 1929, completely ignoring the fact the the market had a fantastic decade prior to that high. IOW, you didn't drop all the money in at the high.

Another perspective to consider, your investing over the last few years was far more risky than it is today since market metrics such as PE ratios are now more in line with historical averages than they were a year ago.

Just some food for thought.

-murray

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Author: hockeypop Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 64595 of 75539
Subject: Re: Should I sell now Date: 11/19/2008 8:23 PM
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I went into this knowing that we could get some corrections to the markets but who signed on for this? I canceled my cell orders and I will just wait. This is just s hard to watch, I am really thinking it might take 20 years for it to get back up again. Good luck with the house!

While you're waiting, why not share your portfolio here for some opinions? I won't understand individual stocks, but I'd probably look at the allocation, and there are really bright people here who can probably help. You've got about 20 years to continue your investing, at least for the next period at really reduced rates.

I also notice that you don't use CAPS. I own NO individual stocks but really like to play CAPS. It keeps me from making HUGE mistakes or if I do it's with magical money.

Sleep well. FWIW I've said that this reduction in the market is a side show. You want pain -- it's the recession that keeps ME up. Well, that and trying to close a new house in NJ.

Best ...

Hockeypop

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Author: DrTarr Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 64598 of 75539
Subject: Re: Should I sell now Date: 11/20/2008 12:16 AM
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Hey Hockey -

Ya, that CAPS thing was fun while I played it. Funny thing is that I basically quit Q1-08. With the new job I don't want any one to say I was "recommending" individual stocks. At that time I sold (closed out) all of the positive picks and have just let the rest ride since then. Seem to be doing better than most with my (NOT WINNING) picks. I say not winning rather than losing cause in this market - gauged against the S&P I did OK.

Also - wouldn't mind closing on a house in Pottstown either, but a recession definitely - disturbing!!

"your investing over the last few years was far more risky than it is today since market metrics such as PE ratios are now more in line with historical averages than they were a year ago"

Again - remember past performance is not an indicator of future returns!! But I will say, I bought on October 10th. Came out of about an 80% cash position, in part for the reason above. But I did it for value stocks. Long time existing companies with steady growth - very boring blah blah.. and am looking over the next couple of days to buy another load. Although this time I may go for some preferred/convertible something or other rather that straight up equity... anyway - point is you shouldn't think about the past at all when thinking about whether to buy or sell. Like Murray also pointed out - don't just think about the high point of your portfolio and gauge from there.. You should think - right now does that stock represent a vehicle I am willing to put my money into and risk X to get Y? I think this is true in both the technical and the foundation views of equity. Yes technical does take into account the past other wise it wouldn't be technical but you get the point.

Today you have so many $$$$. Would you be willing to buy the stocks you have today for the price they are at - if so - KEEP'EM. If not, sell'em. Just be selective about what the X is you are risking for what Y - for example: SO (disclaimer yes i do) compared to GOOG (bragging no i don't)

Definitely GOOG offers a better Y , but man that X would keep hockey up 24/7....... how bout you?

d(VPU)/dT

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Author: Follydolly Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 64599 of 75539
Subject: Re: Should I sell now Date: 11/20/2008 12:18 AM
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I watched my porfolio go from 650k to 300k. I cant sleep at night as this is my next egg that I worked my life for. I am 44. I have my sell orders in for the morning. I know that they say that fear spooks most people but this really seems very bad and seems like there is more downside. I think there is more chance of the marger going to 5000 than to 10,000. Any final thoughts?

Joey, I feel for you. But the upside to this mess is that you are 44 and have a while to make up your losses. The way to look at it now, is that you are buying cheap stock. You should keep investing in your 401K or IRA every month. If you bail out now, the interest rates are so low you will not make back your losses. See how it works. When my DH died, there was $350k in his 401K. That was in 1987. By the end of 2007, the portfolio had over 2 million in it. Of course there were some great years in-between. But this can happen for you if there will be some great years in the future. I do have to say, there is no longer $2 million in that portfolio, because just like you, I have taken a big hit. And I am retired and use that portfolio for my retirement income.

No one has a crystal ball, but history tells us that someone your age should keep investing if he wants to have enough for retirement. But there are no guarantees in life or the stock market. Just be very careful where you put your investment dollars.

Birgit

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Author: DrTarr Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 64600 of 75539
Subject: Re: Should I sell now Date: 11/20/2008 12:19 AM
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The first half was to Hockey, the second half to Joey - just thought I would clarify that............

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Author: volsfan0720 CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 64603 of 75539
Subject: Re: Should I sell now Date: 11/20/2008 4:46 AM
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Joey...definitely the right call on keeping your assets put. You need to remember that right now you are operating from position of strength even though you may not feel that way. By selling you are all but surrendering that position and settling for a weaker position. Assuming you like where you are at and you can stomach the short term then I think that you will look back at this moment in time 15 to 20 years from now and realize that this is one of the smartest decisions that you ever made. IMHO...

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Author: joelxwil Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 64604 of 75539
Subject: Re: Should I sell now Date: 11/20/2008 8:12 AM
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Take this opportunity to learn how to avoid such losses in the future. Study technical and fundamental analysis, so that you can invest and trade profitably.

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Author: hockeypop Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 64605 of 75539
Subject: Re: Should I sell now Date: 11/20/2008 8:17 AM
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1. CAPS just puts a "stick in the sand" when you're thinking, and measures it against the S&P 500 (as good as any generic);

2. There ARE such things as bad stocks. As someone suggested that somehow comes as a revelation to most. If you're playing individual stocks I eventually came to the realization (for me) that I should get the best 10 EVER, and stick with those. But I still played (and usually lost).

3. So, for me, the winning way was mutual funds (and as I said membership in RYR). Pick an allocation, keep costs low, use mostly index funds, rebalance occasionally, pick a SWR, have a CD/bond ladder as I get close, and concentrate on the rest of my life. Long-term I beat others about 85% of the time.

4. The biggest danger is the recession, which often doesn't coincide with even steep market declines, but does this time. If you're working you can make it back. If you're not, then you best have emergency funds and the talent to return to work. At that point the market matters much less.

5. I'm married to a wonderful woman. In 2003 we did an unusual 3 year adjustable rate mortgage because I REALLY hated the real estate market in NJ and we planned to downsize in 2005 (all the kids mostly out of the big house). It took until 2006 for her to make that decision but we sold near the top (the first buyers backed out in June, but we sold for less in August -- saw the rate adjust for only 3 months -- but ouch). For two years we've lived in a much smaller rental with most things in boxes, and found her dream lot in a 55+ community a year ago and it's almost done. Selling at the top was somewhat lucky, being married to my wife is priceless. She deserves this place.

Best,

Hockeypop

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Author: hockeypop Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 64606 of 75539
Subject: Re: Should I sell now Date: 11/20/2008 8:27 AM
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Dr. Tarr: (with proper respect): PS, you're beating me at CAPS (smile), but that short of the market sure helps (big smile). Want to pick some losers for me (widest smile).

It is interesting that I tend to fall in love with my biggest losers in CAPS (assuming there there because I thought they were good). I've wanted to own a share of Berkshire for almost 30 years since I lived in Nebraska, and things are SO negative now that I just may break my no stock "rule" -- well, maybe a guideline).

Congratulations! I can't do what you do.

Hockeypop

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Author: temsike Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 64636 of 75539
Subject: Re: Should I sell now Date: 11/21/2008 3:28 AM
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joey2509:
<<I watched my porfolio go from 650k to 300k. I cant sleep at night as this is my next egg that I worked my life for. I am 44. I have my sell orders in for the morning. I know that they say that fear spooks most people but this really seems very bad and seems like there is more downside. I think there is more chance of the marger going to 5000 than to 10,000. Any final thoughts?>>

You must have a near 100% equity allocation for your portfolio. It dropped 54%. My port has dropped 35% year to date.

My 60% equity allocation at the begining of the year is now 41%. My stock portion dropped 56%, and I had a nice chunk of foreign and emerging market ETFs. 17% of that begining equity portion (10% of the total port) are REITs.

Since my 30% fixed income is now 47% of the portfolio, if I were rebalancing today, I'd over-rebalance stocks to 66%.

If you don't have any fixed income to either statically rebalance your equity portion to what is was at the begining of the year, then you should just ride it out until recovery--however long that takes.

In the future, never go more than 80% equities. That's about as agressive as any 20 year old should get. At your age of 44, you should be anywhere from 56 to 76% equities.

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