The Market is Crashing - What's Your Plan?

[Deep_Blue]

I've never heard of "being accredited" by an entity.

The accredited investor threshold is based on net worth (over $1 million excl. primary residence) or past two years of income (>$ 200k). If you meet either of those, my understanding is you are considered accredited and will have to prove that when investing

[other_evolved]

Market timing rarely works out for the typical (read: large majority) investor.

[Flying Ace]

Originally Posted by Deep_Blue

I've never heard of "being accredited" by an entity.

The accredited investor threshold is based on net worth (over $1 million excl. primary residence) or past two years of income (>$ 200k). If you meet either of those, my understanding is you are considered accredited and will have to prove that when investing

Correct. You get the accreditation when you inquire and invest with them.

My point is, the entire AI world is like the cool kids group in high school. To get invited to all their parties (to get solicited for investments), you have to get into your first party (invest with someone first and get accredited).

Just be careful, the buy ins are large, liquidity is weak and some has insane management fees. But they throw out some very yummy yields. A lot of them are real estate, natural resources and land trusts. There are also hedge funds and other shit.

[qba335i]

Originally Posted by Flying Ace

Well you need to be an accredited investor to get into a lot of the private investments. Your risks are higher and there are Madoff's type scams out there too.

I would talk to an wealth management person at a Merrill Lynch or UBS office first. Sure they'll sell you expensive investment shit, but they'll at least show you the way to get accreditation.

Basically you can't get accreditation without having to buy something first. No one will accredit you for free.

If you have questions about what AI means, PM me your cell and I'll call you with an overview. Don't worry, I'm not selling you shit.

RE has a pretty high positive correlation to the market. Additionally ALL correlations increase during stress periods. In a raising interest rate environment value of RE will depreciate. Depending on the market/sector the RE can be massively overvalued now.

You want to hold bonds/cash so you don't have to liquidate your portfolio. For High net worth individuals It is advised to have 5-8 years of ALL expenses in bonds. Dividends can partially offset this, but companies can always cut them in hard times.

With private RE you need to be very careful. You need to analyze portfolio (type of properties, target markets, leases, leverage) and fees. Most of those investments are not beating an index after fees. Plus when the market crashes you will have a hard time liquidating it, and hope that it survives.

You want to have a real finance professional (portfolio manager) and not a broker (sells person). A lot of those guys like to put people in fancy/illiquid products (that they don't understand) with high fees that are not performing that well.

[DETRoadster]

Originally Posted by Flying Ace

Well you need to be an accredited investor to get into a lot of the private investments. Your risks are higher and there are Madoff's type scams out there too.

I would talk to an wealth management person at a Merrill Lynch or UBS office first. Sure they'll sell you expensive investment shit, but they'll at least show you the way to get accreditation.

Basically you can't get accreditation without having to buy something first. No one will accredit you for free.

If you have questions about what AI means, PM me your cell and I'll call you with an overview. Don't worry, I'm not selling you shit.

Thanks again! I have portfolio management through Baird and will talk to them about it. Will follow up with you offline if I have other questions. I suspect, though, that this avenue may be a bit too involved and too risky for my relative lack of knowledge. The lure of higher returns is always there but at the end of the day I'm a total novice and have to know when to steer clear of investments mechanisms that require a lot of time, management, knowledge, etc!

[kprocivic]

Hopefully I pass my 6 and 63, that is all I have to add to this thread.

[DETRoadster]

Originally Posted by qba335i

You want to have a real finance professional (portfolio manager) and not a broker (sells person). A lot of those guys like to put people in fancy/illiquid products (that they don't understand) with high fees that are not performing that well.

So true! Best decision I ever made was to ditch my broker and hire a real portfolio manager who actively manages my investments and is paid based on performance, not based on whose "hot" fund they are selling that month.

[UncleWede]

Like you, I invested aggressive as a youth, and I just don't even look at it even now at 52. My investment manager calls me every couple of months to come in and review the mix, make sure I am still comfortable, and nothing really changes much unless a fund disappears.
Every year my employer-sponsored retirement fund manager brings BACON (and assorted other breakfast items) and I sit in and listen.

At this point, I still have more than I started with, and my house will be paid off in about 3 years. After that, I start looking at where to retire, and see if I can buy another place there. Keep the house here and it becomes additional income property.

[qba335i]

Originally Posted by kprocivic

Hopefully I pass my 6 and 63, that is all I have to add to this thread.

You want series 7... not a 6

Those exams are pretty easy - 2 weeks of study and you will be good to go.

[kprocivic]

I don't want to be an advisor, I just need them to continue my career.

[Flying Ace]

Originally Posted by DETRoadster

Thanks again! I have portfolio management through Baird and will talk to them about it. Will follow up with you offline if I have other questions. I suspect, though, that this avenue may be a bit too involved and too risky for my relative lack of knowledge. The lure of higher returns is always there but at the end of the day I'm a total novice and have to know when to steer clear of investments mechanisms that require a lot of time, management, knowledge, etc!

Then as mentioned before, bonds and fixed income investments are you safest bet when you're ready to rotate your investments away from risk.

Problem is fixed income still relatively expensive with the low interest rate environment. But since you already have an investment advisor, then why are you here? lol

I do everything myself. But I stick with large stock mutual funds with low fees. I realized in my youth, I am terrible with timing and impatient with stock picking. Just bet on the old US of A and we'll all end up winners. Seeking alpha is incredibly difficult and sometimes very expensive.

[Ali Shiralian]

As long as they can get this Tax reform bill signed markets will be good. As for real estate, still waiting for Toronto housing bubble to happen so I can take all the money out of the markets and buy anything I can. That doesn't seem to be happening anytime soon though.

[wdb]

Originally Posted by Deep_Blue

Not on a large enough scale - I like low fee, long term index funds. (and real estate, but thats beyond the scope)

Market timing is a bad idea. For every hero who tells how he timed the market, there are many more who quietly got burned. Just ride it out.

When the market goes down, stock are on sale, buy more. Selling only locks in your losses.

Yep. I tend to park my money in indexes and hold some aside as liquid for whatever comes up. In 2009 I basically 'doubled down' on stocks and have been quite pleased at the result over the past 7+ years. I have been slowly rebalancing but otherwise keep my hands out.

When I retire I may set aside a small pool to play with and see if I can hit a geyser. But probably not. I'm just not interested enough to invest the time and energy. I have other interests -- like bucket list cars.

[ASAP]

where would someone invest 100k today?

Housing is crazy and you are guaranteed almost no return (especially if you live in an expensive area).

The market is in a bubble... people that are starting off are a bit screwed.

[someguywithanm3]

I plan to sell in a couple of months. I'm hoping for the housing market to have some sort of correction next year, but not before I sell.

I'm not an expert, so don't do what I do. I feel this is a bit of a gamble, but one that will pay out nicely for the time being at least.

[someguywithanm3]

Originally Posted by DETRoadster

That's exactly what I did in Feb of this year when the Dow hit 21k. That was the top and it was downhill from there, I thought. Doh! Now in reality, before that move I was really unbalanced in my portfolio having about 90% in equities and 10% in bonds. Moving 100% of my 401K's existing money into a bond fund balanced me out to about 80% equities and 20% bonds so I dont feel too bad about missing out on the growth that's happened since Feb. The bond fund has crept along but it's not making the gains that my other investments are.

I went into "protect my money" mode around the same time ha ha. Although, I moved a significant amount back into equities a few months after. I don't think this bull market will last long, so I'm a little paranoid.

[///M Power-Belgium]

Originally Posted by someguywithanm3

I moved my 401k money into bonds during the very first stages of the last crash. I did okay., so I'll do that again.

As far as the IRA, I'll move a lot to gold.

Gold Rush ?

[DETRoadster]

Originally Posted by Flying Ace

But since you already have an investment advisor, then why are you here? lol

I know, right?

Spreading my risk. My guys are paid a straight percentage so while that keeps them honest with respect to what investments they pick, it also incentivizes them to grab the largest slice of my investment funds possible. So I always take that into consideration. They have about 50% of my total portfolio and are itching to get their hands on a nice little chunk that I have poorly invested in some annuity BS my last advisor steered me in to 7 years ago. I'm considering moving that and trying to figure out where. Hence all the questions here.

[rad doc]

Originally Posted by DETRoadster

I know, right?

Spreading my risk. My guys are paid a straight percentage so while that keeps them honest with respect to what investments they pick, it also incentivizes them to grab the largest slice of my investment funds possible. So I always take that into consideration. They have about 50% of my total portfolio and are itching to get their hands on a nice little chunk that I have poorly invested in some annuity BS my last advisor steered me in to 7 years ago. I'm considering moving that and trying to figure out where. Hence all the questions here.

Great thread and question. Advisor status is irrelevant. Nobody should blindly following their advisor. I have same issues. I am sitting at about 25% equity due to large influx of cash. Tough time to put it all in market! Maybe go up to 50%?

[DETRoadster]

Originally Posted by rad doc

Great thread and question. Advisor status is irrelevant. Nobody should blindly following their advisor. I have same issues. I am sitting at about 25% equity due to large influx of cash. Tough time to put it all in market! Maybe go up to 50%?

I just sat down and looked over my entire portfolio. Im currently at roughly:

10% Cash
10% Annuity
20% Bonds
60% Equities

I feel like that's a pretty reasonable mix given my age and appetite for risk. but that 60% equity really eats at me. on the one hand I want to axe that annuity and ratchet up the equities which have been making me almost as much money than my job the last year. On the otherhand I just cant help bu feel the party is going to come to a terrible screeching halt in the not too distant future. I get option paralysis and end up just holding, which in the end may be the best thing anyway!

[3.0L]

Originally Posted by DETRoadster

OK, OK, so the market is not crashing (yet) but eventually it will. This rally will not go on forever. At some point, a major correction is coming. Is it a month from now, a year from now, or 10 years from now? I don't know. But history tells us that what goes up must eventually come back down.

I know we have a ton of savvy investors on this forum and I'd love to hear their thoughts on what they feel the key, early, indicators of looming trouble are and where the safe havens are thought to be in riding out a significant downturn.

Is anyone already starting to shift their positions in anticipation? Move out of equities and into gold, cash, treasuries, other?

The market will always go up and down, and sideways, then up and down again. Then waaaaay down. This is not necessarily a bad thing.

I've been investing since 1991 and have stuck faithfully with a wide range of mutual funds. When the market dives, I simply sit back and do nothing. I don't move my money around at all.

Meanwhile, my dividends keep automatically reinvesting as usual, buying even more shares because they are less costly. During market down cycles, I acquire more shares than I normally would. When the market recovers, I smile.

[rad doc]

Originally Posted by 3.0L

The market will always go up and down, and sideways, then up and down again. Then waaaaay down. This is not necessarily a bad thing.

I've been investing since 1991 and have stuck faithfully with a wide range of mutual funds. When the market dives, I simply sit back and do nothing. I don't move my money around at all.

Meanwhile, my dividends keep automatically reinvesting as usual, buying even more shares because they are less costly. During market down cycles, I acquire more shares than I normally would. When the market recovers, I smile.

Yeah, that is all true. But you have to have cash to buy when market is down so that means somewhere less than 100% equity. How much is the question assuming greater than 10 yrs till retirement. I don't really believe in market timing much but going all in when market is so overvalued is tough!