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Comment by joejerryronnie | Hacker News Reader

This is a very easy statement to make in the middle of an unprecedented bull market. But you know what they say about things that go up . . .

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...they go into orbit?

While I'm a big believer that we're going to see a big correction in the next couple of years (the kind that will make 2008 look like a foreshock), nobody knows how much higher the market can go and for how long. Maybe it will still be going up before I die.

The conventional wisdom is to never try to time the market. Buy and hold, and in the long run you'll make money.

Yes, but a good number of individual investors will pour money into the markets only when things get super frothy and exciting (i.e. at the peak) and then freak out and pull all their money out of the markets when we see a huge downturn.

And those people are the reason everyone else says not to do that, not to time the market, and to invest for the long term. If you stick to an established plan, adjust your allocation according to that plan, and don't panic sell, historically you will have always come out ahead.

http://awealthofcommonsense.com/2014/02/worlds-worst-market-...

Correct, but I think this is easier said than done sometimes - especially if you've only been investing during a huge bull market. As Mike Tyson once said, "Everybody has a plan until they get punched in the face."

All the more reason to constantly tell people the right thing to do and why and strategies to avoid letting fear and other emotions get the better of them in those situations. We can all be susceptible to such things, but with a little education and discipline can avoid making terrible mistakes like that.

Not really, regardless of the state of the market, you are probably better off keeping your stock than selling it.

This seems true, however the following quote is worth mentioning:

“The market can remain irrational longer than you can remain solvent.”

https://quoteinvestigator.com/2011/08/09/remain-solvent/

The important thing the linked article shows is that even if you're always investing right before crashes the market still trends upwards and you still come out ahead — as long as you don't panic sell.

Of course, there is a difference of how much ahead. If you would have invested few months later you could have come much more ahead.

Yes. If you can (accurately) predict the future you can make a hell of a lot of money far faster than 43 years with out of the money options.

Out of the money options are really risky if there is a pullback. ITM options 30-45 DTE can you make tons of money.

As Warren Buffet once observed, the stock market is just a device for transferring money from the impatient to the patient.

Or the desperate to the well-bufferred.

> Buy and hold, and in the long run you'll make money.

Is that where Bitcoin's HODL "wisdom" comes from?

Also, don't bet on one horse.

That's why you should buy a fund/ETF tracking the All Country World Index.

I agree. I'm still waiting on my dogecoins to make me a millionaire!

There are opportunities in bull and bear markets. Also, has the $SPY ever gone to $0? If you have the belief that it will, well, when that happens, we are all screwed. No point thinking doomsday.

But let's step back and calculate suppose you got into $SPY in 2007 at 155. If you had kept the $10K in there, it would be worth $20K today almost. However, if you had kept adding money to it each year, your return would be massive. As you get older, you move from more index holdings to bonds, which guarantees you to hold your money. Another method is dividends, if you had AAPL shares, suppose 1000 shares @ 0.50 per quarter, that's $2.00 a year on 1000 shares, $2000 a year. If you had a family member who doesn't work and owns all the shares, in Canada, that would be up to $60,000 each year you can earn tax free.

I don't hold any stock, although I believe it is safe to do so, I currently only own 2 shares of TSLA as I wanted to be eligible for the class action lawsuit if there ever was one. I only trade options and I believe that is the safest way to make money and never go bankrupt.

Also, if you buy stock you can also sells calls/puts against your shares to protect you from a downside/flat days.

To reiterate, the statement above, is always easy to make, because this is the only way to make money. If you don't get into the market, then each year your money is running away from you, see inflation. Ally savings accounts just aren't as helpful.

Hopefully I have changed your mind and you will start looking into Vanguard funds at the minimum.

This is all very true but you mentioned not working hard in your previous post. It seems that you are working hard to research the best opportunities, hedge your positions, etc. (it's not like you're digging ditches but still). Perhaps I was too quick to judge your post as a "make tons of money without any work" comment. I would agree that being passively invested in the market is better than sitting in cash or trying to time it.

With that said, I am nervous about the current market. I'm still invested but am starting to diversify into buy and hold real estate in established locations. One thing I don't like about the market is the impact that some random geopolitical event can have and I don't see the world moving toward more stability at the moment.

Basic financial literacy is important to learn. The items I mentioned are somethings everyone should be able to do after hours of reading. Worst case VTI/Vanguard funds require limited work. You can also get a bank to manage your money for you and pay the fee. If you learn it yourself though, you will always be able to save that MER fee. There are many people who work 9-5 and just put all their money in $BRK or an ETF fund or other investments and in their retirement are doing okay. The ones who didn't are struggling from the people I have interacted with.

As for the political instability, if it gets bad enough, we are all going to die of famine, so no point thinking doomsday. Also, since you are holding long term, who cares if it goes down, you are worried about 15/20/25 years from today. I think this is what stops many people from getting the market, thinking banks are corrupt, the system is crazy, and so on. Leave your politics to the side, this is the market, it doesn't care about conservatives or liberals, Chinese or American, black or white, it cares about dollars and cents.

Where I work hard is my options trade.

If you really want to see proof that you can make money, without working hard, shameless plug, www.marketgodfathers.com, I provide option trades before the market opens, I provide when I enter and when I exit. If someone follows my plans, they would make the same amount of money, percentage wise with a $30K account and no research required or work. So there are ways. Obviously, you might think this is incorrect, but if you spend time researching the market, you can definitely do what I do on your own. I do it in bull markets, and I will do it in bear markets.

The thing about money in the market is when you make more, you want more. It never stops. Also, when you learn one way to make it, you always want to enhance it and do better. It's a never ending journey.

Remember the richest people in the world pay people to manage their money, so the stock market is where you want to be.

One other approach when you don't trust the market is to pay off debt (if you have any).

Depending on the interest rates of the debt you hold and how long it's supposed to take to pay it back, you could save yourself a lot of money long term. It's not an approach that investors often recommend but if you've got a 7% interest rate on a 30 year mortgage the return for paying it off early is 7% saved. Whether the market goes up or down, the loss for that percentage remains the same.

The more debt you get paid off, the more cash flow you free up to invest.

It doesn't always make sense, but it's worth considering. When interest rates were really low I locked up a 2.8% rate on a 15 year mortgage...and at that point there's really no incentive to pay it off early. Other forms of debt will vary though.

Very good point, I am paying off debt as well. This will position me better for the following two things:

- Better debt to income ratio/monthly cash flow numbers as I diversify into real estate

- Provide more cash flow to purchase under valued assets should the market drop significantly (there's always an initial overreaction)

Hey, I didn't want to respond to the real estate remark you made in the post where I responded, but now I kind of just had to.

With real estate, there are hidden costs. The furnace breaks, the AC breaks. The stairs need something. The roof needs patching. There is mold. There is property tax. There are bad tenants. There are other aspects also. It takes time.

IMO forget real estate and get in the market. But I mean, I am biased right? :)

Re: the hidden costs of real estate - yes, this all has to be taken into consideration when you run the numbers. But it works in the opposite direction, too. You can add some upgrades, or even a car port or storage unit, and increase the value and cash flow of your asset.

I'm not looking at it as an either/or thing though, I'll still stay in the market just not 100%. Part of the reason I'm diversifying is because the market has been very good to me and I want to pull some of that profit off the table. In any event, I'm going to begin looking for the user named realestategod so you two can have a chat :)

This all comes down to time. Time > Money.

Even true over the entire historical performance of the S&P 500. You just have to look at a longer time horizon. Busts are temporary.

Unless you're Japan.

This deserves upvotes.

Edit: Also, everyone should investigate this.

And China's debt profile is starting to resemble Japan's before the lost decade.

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