RetireJapan

That fall in the yen/dollar exchange rate is the only silver lining for me from this correction. It makes our kids' college tuition that slight bit cheaper and means the next payment we make for any US stocks or index funds are cheaper still in yen. Certainly doesn't make up for the carnage though

I have started putting some of my sideline cash back to work and plan to DCA over the next few months as I have no idea when the bottom will be (it could have been Monday or it could be 5 years down the road). I am worried that this is the beginning of a cyclical bear and recession (I think Japan and Europe are already in a recession and the US will soon follow). While bonds have performed admirably with the decline in stocks, there is only limited further upside as rates fall to 0% or negative and a whole lot of downside if liquidity dries up and rates start to increase. Should this prove to be a prolonged bear, I worry that these 'safe' assets may not continue to provide a counter-weight to falling stocks and we could see bonds and stocks fall in tandem. The only bright light I see is JPY which will probably do its thing and continue to strengthen.

So what to do? The #1 thing is to keep your job and save. Staying employed during a recession is like getting a 30m head start in the 100m dash. The other thing is to ensure you have a good emergency fund just in case you lose your employment or other sources of income. The final thing is to follow the sage advice of the Hitch-hiker's Guide to the Galaxy, and don't panic.

eyeswideshut wrote: ↑Wed Mar 11, 2020 1:18 am The final thing is to follow the sage advice of the Hitch-hiker's Guide to the Galaxy, and don't panic.

I'll grab my towel!

OkLah! wrote: ↑Wed Mar 11, 2020 3:04 am So back in 2017 Austria issued a 100y bond at 2.1%. Would you have bought this? Not me.

Well now bond is trading at 230 up from 100 in 2017 and up from 160 end of last year.

So, basically in price I don’t think there is any limit up even mean very negative yield.

Of course in 2117 the bond will be worth 100 so a big loss in principal. Including coupon even at that price you still making money - yield is around 1%.

So let’s not dismiss bonds with low or negative yield when it is short term hedging. Of course buy and hold is a different discussion.

The issue is, if short term interest rates go up above 2.1% then the value of that 100 year bond will shrink dramatically. My perspective is that the real danger is not the stock market bubble bursting but the bond bubble bursting. People can accept major losses in stocks but a major loss in their fixed income? That will come as a nasty shock to a lot of people.

...and, immediately after I put some more money into the stock market we are down another 5% and officially into a bear market. Italy is in complete shut-down and my company has asked everyone to work from home. I plan to keep buying all the way down but this is getting crazy.

I believe we're at -19.7% on the S&P, so not officially a bear market until that drops to 20%. Only a fraction away though, so it likely won't be long.

My wife bought the entirety of her year's NISA allocation on the day of the high, back in February.

eyeswideshut wrote: ↑Wed Mar 11, 2020 11:11 pm ...and, immediately after I put some more money into the stock market we are down another 5% and officially into a bear market. Italy is in complete shut-down and my company has asked everyone to work from home. I plan to keep buying all the way down but this is getting crazy.

This is exactly what happened to me last night My fourth investment so far during this rollercoaster dip over the last month or so. I had quite a bit of cash saved back that I had been meaning to invest for a while. I've already used about 70% of it, but now I'm feeling slight paralysis as to when I should drop the rest in.

Rezz wrote: ↑Thu Mar 12, 2020 1:02 am

eyeswideshut wrote: ↑Wed Mar 11, 2020 11:11 pm ...and, immediately after I put some more money into the stock market we are down another 5% and officially into a bear market. Italy is in complete shut-down and my company has asked everyone to work from home. I plan to keep buying all the way down but this is getting crazy.

This is exactly what happened to me last night My fourth investment so far during this rollercoaster dip over the last month or so. I had quite a bit of cash saved back that I had been meaning to invest for a while. I've already used about 70% of it, but now I'm feeling slight paralysis as to when I should drop the rest in.

This seems to happen to me all the time. I just take it for granted that the day after I buy there will be a drop! I also used my entire NISA and my wife's entire NISA for the year in January. But, I do still have some cash so plan just dropping a bit more in than usual for a while from now.

Sounds familiar! I filled my NISA up at the end of Feb. Just placed another order with half of my remaining reserves. Expect another dip soon