In the past year, the S&P 500 is up 23%, Dow 25%, Nasdaq 17%. Any predictions on when this is going to end, and/or discussion on general strategies for weathering the (eventual) downturn in the market?

sell before it happens?

more seriously, not sure. I've been feeling cautious for a few weeks now, but it keeps going up. I would look more into international exposure, but most non-US markets have run up so much in the last few years I have no idea what a good point to jump in would be.

if things start cooling off soon, there's always the blue chips, high dividend payers, and with so much summer to go, oil/gas.

so in short, no clue

It all depends on what your investment horizon is. It is really hard to time a market. Many jumped out 6 months ago, and they missed a large runup. If it is money you don't need for 8-10 years, then the best strategy is to stay the course. I don't believe there has ever been a 10 year period where the market has declined. Of course you should have a good asset allocation strategy that is right for your risk level and financial needs. Having cash available will allow you to buy many bargains if there is a decline. The usual reaction by novices is to pull out their money and/or stay away. Then it is like a sale, and the buying of good companies and or funds should occur - just like on B$

Over time, I have been changing my asset allocation strategy from one of accumulation to one of preservation. While I don't see large gains on a daily basis, I also don't see large losses either! While it is more boring, boring now is good.

Nobody knows.
Sell short.

Check out Japan stock market

It has declined for almost 14 years.



I heard many analysts said Dow will touch 14000 in this summer before any major correction happen.

When the stock market goes down, the best way to go is the bond market. Or if you want to go ahead of it, start stocking up your treasury box with bond funds now. I personlly will keep at least 1/3 of my investments in the market with the blue chips and big international companies, 1/3 in the short-game market, and 1/3 goes back to the never-my-favorite bond funds.

Nobody knows when the stock market will go south. Anyone who tries to tell you is a fool. If you're afraid of the bubble then invest conservatively. If not, then poor the money in and put stop-loss positions on all your trades for about 5-10% so if the market starts to crash, you shouldn't lose too much. I am in the same boat as you, but I missed most of the ups and I will be jumping in and diversifying so the road down isn't too bumpy. I think carloscai has a good conservative plan, I would follow him if you're afraid.

I thought I could predict bumps in the stock market last year. I knew the market was overbought in May 2006 so I sold at the peak and bought in at the 2nd dip. It was great to see the minimal 1.5% that I lost in the income fund compared to the 3-5% loss in equities. So, I tried it again in August... You can predict the rest of the story. I waited every month hoping there would be a small crash so I could "get back in." I missed one of the largest run-ups my money would have ever seen up till now. Will there be a large correction in the next few months? I bet there will be a huge one!

Out @ Dow 11500
In @ Dow 10950
Out @ Dow 11400
In @ Dow 12200

This is my plan, is basically increasing my bond / fixed income positions in the near future, while keeping some exposure to growth stocks. Hopefully value will be a good counterbalance to losses in growth, as was true during the last market drop in 2000-2002.

maybe not soon, thats my bet
huge money sums from china come to investment for cheap ($)
and merger&acquisition activity will boost markets until
Rep legislation turns over to Dems

see Cramer

frosh

Yup, Cramer said it will boost to 14k points this year in his show last night. To be frank with you, I really don't know if that would be true. And of course, the higher it climbs, the harder it crashes.

nah - it's not going to crash just because it's high. beside, would you take investment advice from this guy:

Seriously, people follow this guy like a market god.

Onward and upwards it remains. I will start moving equities into income funds this month before the summer market doldrums.

I bet the market starts to tumble on June 5th...

Same here - I have already started shifting funds out of my stock-centric funds into income or value. I was at about 10-90 allocation (income:stocks), and my plan is to be about 40-60 when I'm done (maybe even higher on the income side).

Also (just in case it's not obvious to people), for those who are moving some of their money into "international" funds to avoid too much exposure to the US market, make sure you read those prospectuses!

There are several so-called international funds available in my 401(k) that are made up of 40-50% US stocks!

Generally speaking, income (bond / MMF) funds and value funds tend to do well in bear markets. International funds can be used to spread your exposure, so although stock-based, they will obviously move differently than the US market-based funds.

This could be when the stock market runs out of steam. We shall see if there is a rebound after this drop.

Glad I just reallocated the other day to a more bearish portfolio. Hopefully everyone else who was heavily invested in stocks took steps to manage downside risk. Although at the moment it's only a 1% drop, which isn't extremely significant.

Yeah but the market has been uncharacteristically Bullish even with almost every economic indicator pointing to a mild recession.

nope, was going to but thought I'd wait a few days
but as you said, nothing significant.

Market timing if often futile. If you are well diversified and pursue a buy and hold strategy, you tend to do better in the long run. Even if you "guess" right on one end, you usually miss on the other end, often missing the eventual run up.

Agreed - in my case, several funds had been added to my [old] 401(k) that I hadn't taken advantage of - I was basically in a 100% stock position, mostly concentrated in large cap growth, which is so undiversified, it would have left me overexposed in any circumstance. In this case I finally got around to doing something about it, and was able to take advantage of my stock exposure in a good way over the past 9 months (mostly based on luck, I admit).

Now I am much more broadly exposed to a mix of stocks and bonds (maybe 80:20), US and international stocks, and across the M* style box within US stock funds - so I feel a lot better

At some point I'll move funds out of there into an IRA, but I may hold off until 2010 when I will (supposedly) be able to roll it directly into a Roth without paying the conversion penalty.

Tuesday, June 5th?

awww, why didn't you post that on Monday, June 4th?

Getting close as of yesterday: Dow 13,861.73 Up 283.86 (2.09%)

Yesterday was a very nice day to be invested. Makes up for some of the bad ones.

today's start is pretty good too....

DOW just shoot through the 14k limit!!!!!

OMG! Cramer was right!!!!!!!

Not to hard for Cramer to be right when everybody else was saying the same thing.

not hard for cramer to be right when he says just about everything

wow.

Ouch!

Yesterday was quite nasty. But I'm thinking about taking some of my GD off the table today.

gotta love them dry bulk shippers...

Today's not looking so good either

Yep, I lost a couple hundred already in my mutual funds that I just bought a couple weeks ago.

For those who have cash on the sidelines, it's a good opportunity to take advantage of dollar-cost averaging

Approaching 400 points...

Bwhahaha, apparently Yahoo(?) stores trading volume in a variable that accepts a max value of around 4.2M (or - check out the chart for the NYSE trading volume: Link

Is this the beginning of the end?

yikes.... tomorrow morning will probably be the same. Hopefully by tomorrow afternoon..things will pick up

We all knew this would happen sometime this year!

The market can only be on fire for so long before some of it burns up!

Maybe the end of the beginning...I don't remember how many ups & downs I've seen in the market over the years...and life hasn't much changed as I know it...

Exactly the right attitude - unfortunately, many people have grown up only witnessing the fact that it goes up - there are down periods. You have to be prepared to wait them out. Remember it is only a loss if you sell!

Bad sell-off in the last 20 minutes of trading. I'm expecting this slide to continue into Monday...

Am I the only guy who thinks this is a good thing?

Generally in bull runs, the stock market has corrections of 10% to propel it even higher. By that token, we are down only 5% or so off the peak. Corrections are generally healthy, as they lessen the probability of a bubble. Note that it has been over five years since the last 10% correction was witnessed (historical average, I believe is lesser)

However, there is always the risk that this might be the start of a a bear run. Again, I would rather have a limited bear run now, rather than prices becoming unsustainable, and leading to a longish bear run akin to what happened circa 2000.

I stay fully invested, and believe that this correction may offer some of the mutual funds I own to snag up quality stocks on the cheap.

Anyone else feeling this? I may need to get out of individual stock picks.
I'm down -3.96%, -4.30%, and -2.11% ATM on the 3 different stocks I own.

I am beginning to think that the analysts are behind these big swings. Yesterday was great, today sucks.