From February 2020 to March 2020 the DOW dropped by about 1/3 or 10,000 points over the course of 5 weeks (much uncertainly over the emerging virus we now know as COVID). It then recovered to its previous high by November 2020.
Selling and going to cash would have cost me a million dollars or more in capital gains taxes, so I just sat it out as is my long term strategy.
If you did market time, when did you get out? – and then back in?
intercst
I got out at the half way down point, more or less, and have not returned.
I only held on to my quite sizable`position in KRC, a specialized high tech office buildings on west coast REIT that I was convinced would continue dividends and growing in value if not price. It did just that.
I put my money into bare land in Mexico and into private deal loans in Los Angeles and have come through very very well, and I can sleep well at night. I still find the markets to be too irrationally crazed and the situation of the world as tetering on edge of disaster.
TINA is a liar, and I never accepted her drunken arguments. Perhaps being a gay guy made it much more pleasant to hang with guys like ARI (avoid risky investments).
david fb
You make a good point. It makes sense to sit it out…unless the situation is a new long-term trend which will permanently depress the value of the assets. This would happen if the Fed decides to maintain a truly neutral fed funds rate (inflation + 2%) which they haven’t done since 2000.
That may be unlikely, since every Fed chair since Alan Greenspan has supported the asset markets (stocks, bonds and real estate) with free lending or even negative real rates.
Wendy