Reading an article in the WSJ that individual investors are buying the dip even as institutional investors continue selling off.

My inclination has never been to be a day trader type, I tend to just accumulate funds. I may make the odd play, accelerate buying during a dip like this, but my horizon is long and this seems to be a prudent approach.

But the current downturn has caused me to look back farther, as I wonder whether the market's performance the last 40-50 years was based as much on fundamentals and accurate valuations as it should have been. Especially in the last 20 years, accelerated under the money printing during the pandemic.

Index funds like those based on the S&P have had reliable ROI since the 80s, so conventional wisdom has been to avoid bonds and keep funds in equities. I wonder if that might be softening (not reversing though).

I've always viewed the individual investor segment as market flotsam with big investment houses moving the market. In the internet age I wonder if the balance of power hasn't adjusted a bit. For sure institutional investors have and will continue to be able to dictate a lot of how the market moves. But individual investors seem to be moving in a more coordinated fashion than in past eras, likely owed to the commoditization of information. Whether that information makes for good investment advise is another question altogether, but that individual investors are more coordinated than in past eras at least engenders a discussion of this dynamic.

I don't know what to make of all of this or whether it changes anything about how I think about investing, but there didn't seem to be a dedicated thread on this so figured I'd start one.

I'm in a buying frenzy, for sure. Could it drop more? Of course, but I don't pretend to know by how much and for how long so I just dump money in as I get it. Might sell off some of my utility and energy sector funds if the S&P drops further.

14 minutes ago, we_gotta_believe said:

I'm in a buying frenzy, for sure. Could it drop more? Of course, but I don't pretend to know by how much and for how long so I just dump money in as I get it. Might sell off some of my utility and energy sector funds if the S&P drops further.

I bought earlier when it was sliding, unfortunately mostly before the latest big slides. Most of my remaining capital is currently tied up in a real estate purchase that I would prefer not to have entered into at this time, but for family related reasons I have to. 

I would much rather be putting that money into the market. But institutional investors are still betting on more downhill sliding, so after this deal is behind me I can start to contribute more heavily to my equity fund. 

Long term the real estate deal I'm working on is probably going to be a good thing, but the timing is pretty fugging awful. 

This is the article I was reading today FWIW: https://www.wsj.com/articles/buy-the-dip-faith-has-a-last-bastion-individual-investors-11655981820?mod=lead_feature_below_a_pos1

30 minutes ago, JohnSnowsHair said:

I bought earlier when it was sliding, unfortunately mostly before the latest big slides. Most of my remaining capital is currently tied up in a real estate purchase that I would prefer not to have entered into at this time, but for family related reasons I have to. 

I would much rather be putting that money into the market. But institutional investors are still betting on more downhill sliding, so after this deal is behind me I can start to contribute more heavily to my equity fund. 

Long term the real estate deal I'm working on is probably going to be a good thing, but the timing is pretty fugging awful. 

This is the article I was reading today FWIW: https://www.wsj.com/articles/buy-the-dip-faith-has-a-last-bastion-individual-investors-11655981820?mod=lead_feature_below_a_pos1

Real estate is just bananas right now. Has some real 2006 vibes going on, but I feel like I've been saying that for a couple years now so who the F knows what's in store there.

2 minutes ago, we_gotta_believe said:

Real estate is just bananas right now. Has some real 2006 vibes going on, but I feel like I've been saying that for a couple years now so who the F knows what's in store there.

It really is. This is a place we're buying jointly with my MIL, and we'll own outright when she passes as a rental. Since she's going in half with cash I mostly see it as us buying it at a discount, and it's a good location for a rental. 

When I retire I hope to have a few properties I can either continue to rent for income or just cash out on, along with the traditional retirement savings. And whatever is left out of SS, but I'm betting on it not being there (even though it almost certainly will in some form).

51 minutes ago, we_gotta_believe said:

Real estate is just bananas right now. Has some real 2006 vibes going on, but I feel like I've been saying that for a couple years now so who the F knows what's in store there.

I made almost 400k selling two properties this year. People were pretty much fighting each other to buy both homes. I think I'm done with that game for a while.

2 minutes ago, Boogyman said:

I made almost 400k selling two properties this year. People were pretty much fighting each other to buy both homes. I think I'm done with that game for a while.

You should head over to the bitcoin thread to learn how to make even moar monies.

14 minutes ago, JohnSnowsHair said:

You should head over to the bitcoin thread to learn how to make even moar monies.

I'm good lol. My post was more to do with the market than my own finances. It's nuts how quickly the value rose on those two properties. I accidently looked like I knew what I was doing.

1 hour ago, JohnSnowsHair said:

It really is. This is a place we're buying jointly with my MIL, and we'll own outright when she passes as a rental. Since she's going in half with cash I mostly see it as us buying it at a discount, and it's a good location for a rental. 

When I retire I hope to have a few properties I can either continue to rent for income or just cash out on, along with the traditional retirement savings. And whatever is left out of SS, but I'm betting on it not being there (even though it almost certainly will in some form).

The lending standards are better than they were in the 2000’s and the banks have less leverage/better capitalization. So a repeat of that scenario at the same scale isn’t likely. That said, we are out on a limb as far as mortgage/rent prices as a percentage of income. Combine that with commodity prices and the consumer will get squeezed.

I do think we are headed for a global recession, but it’s probably going to be more like the 1970’s malaise than the 2000’s crash. 

If you are in for the long haul, buy now.  In three years, you'll be up big time.

At this very moment I’m happy to be cash heavy. No doubt that will be short lived. 

6 minutes ago, barho said:

If you are in for the long haul, buy now.  In three years, you'll be up big time.

Maybe 5-7

12 minutes ago, Ipiggles said:

Maybe 5-7

Tell me any time in history after a downturn where in 3 years the market wasn't up?

I'll say 3-5 years then

22 minutes ago, Ipiggles said:

Maybe 5-7

I’ll say 7-12

1 minute ago, Dave Moss said:

I’ll say 7-12

I'll go with 3 to 12, until someone throws some more numbers out in here and then I'll adjust.

4 minutes ago, Boogyman said:

I'll go with 3 to 12, until someone throws some more numbers out in here and then I'll adjust.

I called my dad on Father’s Day and he was talking about having played the market for 50 years.  But I still told him he should stop buying all those tech stocks.  Lol

2 minutes ago, Dave Moss said:

I called my dad on Father’s Day and he was talking about having played the market for 50 years.  But I still told him he should stop buying all those tech stocks.  Lol

So are we now going with 3 to 50? That narrows it down!

2 minutes ago, Dave Moss said:

I called my dad on Father’s Day and he was talking about having played the market for 50 years.  But I still told him he should stop buying all those tech stocks.  Lol

Maybe you should finally start listening to him

31 minutes ago, barho said:

Tell me any time in history after a downturn where in 3 years the market wasn't up?

I'll say 3-5 years then

Thats a good point, but you have to be certain we have hit bottom, before the bounce back, which you can easily see in the review mirror, hard to see it when it is happening. Also, while it does start coming back up , but at 3 years it wont be the height, at 3 years the market will still have a few more years of growth before it dips/corrects again. 

1 minute ago, Ipiggles said:

Thats a good point, but you have to be certain we have hit bottom, before the bounce back, which you can easily see in the review mirror, hard to see it when it is happening. Also, while it does start coming back up , but at 3 years it wont be the height, at 3 years the market will still have a few more years of growth before it dips/corrects again. 

Timing the market is a fool's errand. If you think value is there, buy. Especially if you have a horizon out beyond 5-10 years.

4 minutes ago, DrPhilly said:

Maybe you should finally start listening to him

He shared one of his accounts with me and it’s lost $300,000 in the last couple months. I told him he should just spend it all.

FWIW there is one three year period in recent history where the S&P had three years of negative returns - 2000-2002. 

While I see some bubbles bursting, I don't see an internet stock bubble that will cascade into a multi-year downer. And even if you'd bought in 2001 and lost some more on the way down you'd be up a couple years later and up bigly now.

Just now, Dave Moss said:

He shared one of his accounts with me and it’s lost $300,000 in the last couple months. I told him he should just spend it all.

Yeah, bald hippies don’t need no stinking money. 

1 minute ago, Dave Moss said:

He shared one of his accounts with me and it’s lost $300,000 in the last couple months. I told him he should just spend it all.

That would've been a pretty great few days in Vegas.

Might not remember those days. But they would've been great.

1 minute ago, DrPhilly said:

Yeah, bald hippies don’t need no stinking money. 

Agreed