It's worth noting that most people nowadays don't buy bonds directly, you would normally hold them through an ETF/index fund like BND or TLT. Yields typically drop when there's a flight to quality (i.e., people selling stocks to buy bonds). The upward pressure on bond prices drives yields down because people are willing to pay more for lower yields. Bonds are almost like a future of expected return on capital. If bond prices are high and yields are low, it suggests the market thinks equities will have a lower return.
Bonds and stocks have been fairly non-correlated over recent years, but this hasn't always been so. It's great for modern portfolio theory (i.e., holding a portion of stocks and bonds and rebalancing periodically). There's no guarantee that it will stay this way.
Anyway, I'm not giving investment advice, but I think the current market panic is short term and non-systemic, so it's not a terrible idea to consider rebalancing from bonds into stocks while the prices are good. If you think the market might keep dropping, then perhaps wait a little longer.
The truth is that trying to time the market is like throwing a dart at a board blindfolded, so you might as well take advantage of the current state instead of speculating about the future.
You’re not wrong, but government bonds actually have a somewhat different role in the modern financial system. Specifically, they are used as collateral in the interbank lending market, which means they have exchange value above and beyond the discounted cash flow of the bond itself. Which is basically how negative yielding bonds could even exist.
> Bonds and stocks have been fairly non-correlated over recent years, but this hasn't always been so. It's great for modern portfolio theory (i.e., holding a portion of stocks and bonds and rebalancing periodically). There's no guarantee that it will stay this way.
This is true. This correlation has held for 30 years so we are conditioned into believing this is a sure trade - but it is not.
Any good brokerage allows for trading bonds. Interactive Brokers does.
The bond market is far larger than the stock market. If you wanna know "what's going on" better become familiar with at least the basics of it (interest rates, how they relate to bond prices, spreads for risky credit, floating rate vs fixed rate, inflation protected securities, carry trades).
And it's not true that most bonds are held via ETFs (except by retail). There's a lot of trading going on at the institutional levels.
Is it fair to say that one reason the bond market is so large is because of capacity and simplicity?
The impression I get is that when you start talking in terms of $x0M+ US regular investment (e.g. on Monday, then again on Tuesday) stocks become a less viable option (due to liquidity and risk of orders moving the market).
Bonds also seem more simplified and standardized, in that there are fewer weird / unmodelable features in a given bond issue.
Bonds are actually more complex. Try understanding covenants on bonds, it is not easy. There are hedge fund strategies that rely on better (than market) understanding of the legalese, triggering weird cases of technical defaults (i.e. defaults other than through a lack of timely payment) and whatnot.
The way I was looking at it... technically by owning a stock you're exposed to the risk of the entire corporate legal structure (e.g. board, bylaws) as well as operational structure.
Compared to a bond, even one with esoteric clauses, that seems more complicated.
When you have a bond you're exposed to the entire corporate structure too. What the board does affects you a lot. Except your contract is (sometimes) much more complicated.
The primary reason why they want covenants is because credit holders do not get to influence management (except in Chapter 13, when they basically take over the company).
Over the phone - sure, nobody at Goldman Sachs will pick up to receive your buy order for $10k, but many bonds trade on electronic markets. You can just place an order there.
There were quite a few years when it has been positive.
One of the more useful attributes of bonds is that you could sell them when stocks tanked: when you rebalanced your portfolio to re-align things to the desired equities/fixed-income allocation, bonds were a form of 'keeping your powder dry' to buy low during stock market corrections.
Not only did that happen to me, but Robinhood's outage (1) prevented me from selling in the morning when I tried to, and (2) didn't trigger the auto-sell 1h before market close on un-exercisable options.
Cost me $25k or so on top of the rally. Fuck Robinhood for this.
I think US government is potentially the source for systemic risk that is realized within year or two.
Regulation and oversight is cut dramatically, SEC has been castrated, white-collar crime investigations are cut in DOJ. In addition the administration does everything it can to keep markets going up until the elections.
The change that large scale financial frauds and systemic risks can grow without being checked.
Pandemic is not systemic risk. Pandemic might trigger systemic risk. Pandemics, wars etc. are real world events that affect economy, not internal systemic instabilities in the financial markets.
Bonds are a commited fixed return, which means the value of bond goes up if the going rate for new bonds goes down.
Thus bonds can be much more profitable than stocks when the marketing is going down. The central bank will drop rates, and thus any holder of existing bonds gets to sell their old bonds for more, maybe much more.
Of course this is not the big driver for bond demand. Rather bonds are demanded by money managers who are not allowed to take any risk. Think banks, and especially central banks.
Said money managers want to never-ever lose so much as a dollar of principle. They are not paid to maximize total return, but rather to manage this pile of money in such a way to never let it shrink.
You'll see this set of incentives all over the world if you know where to look: money which is not expected to be invested.
Think of mega-corp's payroll. Every month they need to pay X large number of dollars by the end of the month. Missing payroll by 1% would be such an incredible disaster it would lead to lawsuits. So big-corp does the sensible thing, and keeps the money in a money-market fund. Said money-market fund in-turn holds various short-term bonds (1 year or less).
Who borrows money for only 1 year or less? People who have a little bit of their own money with which to take risk and want to turn around and borrow longer term.
Bit by bit money which needs to be 100% safe, gets lent its way up the value chain until you reach end users.
My favorite example of this is how the large Japanese REITs finance themselves. These REITs will have a relationship with a single major bank. One might expect that since they have a special relationship said bank will provide all financing: but they do not. Instead the REIT borrows floating-rate loans from 10+ banks, including their special bank. Then the REIT turns around and offers these loans to the special relationship bank. Said special bank takes the 10+ float rate loans and provides the REIT a single (let same size) 30year fixed rate loan.
In this way everyone gets what they want. The REIT gets to tell investors their loans are not due for refinance until 2050. All the banks get to lend out money at 0.5% interest, and the special bank gets to take the other bank's money and earn an extra 0.5% interest on top of it all in exchange for taking the interest rate risk.
So if you are wondering why bonds are weird: it is because you are not the customer.
This doesn't explain why rates change. The delta can only ever be explained by people choosing to buy bonds instead of what they previously owned, or vice versa. Those people are definitely not trying never to lose any money at any cost, or they'd have bonds all the time and rates would never change.
Not quite - rates are going down not because people think they won't be paid back, but because they think their alternatives will return less due to lower growth and are shifting investments from there to bonds.
> Bonds are a commited fixed return, which means the value of bond goes up if the going rate for new bonds goes down.
> Thus bonds can be much more profitable than stocks when the marketing is going down. The central bank will drop rates, and thus any holder of existing bonds gets to sell their old bonds for more, maybe much more.
> Of course this is not the big driver for bond demand. Rather bonds are demanded by money managers who are not allowed to take any risk. Think banks, and especially central banks.
> Said money managers want to never-ever lose so much as a dollar of principle. They are not paid to maximize total return, but rather to manage this pile of money in such a way to never let it shrink.
> You'll see this set of incentives all over the world if you know where to look: money which is not expected to be invested.
> Think of mega-corp's payroll. Every month they need to pay X large number of dollars by the end of the month. Missing payroll by 1% would be such an incredible disaster it would lead to lawsuits. So big-corp does the sensible thing, and keeps the money in a money-market fund. Said money-market fund in-turn holds various short-term bonds (1 year or less).
> Who borrows money for only 1 year or less? People who have a little bit of their own money with which to take risk and want to turn around and borrow longer term.
> Bit by bit money which needs to be 100% safe, gets lent its way up the value chain until you reach end users.
> My favorite example of this is how the large Japanese REITs finance themselves. These REITs will have a relationship with a single major bank. One might expect that since they have a special relationship said bank will provide all financing: but they do not. Instead the REIT borrows floating-rate loans from 10+ banks, including their special bank. Then the REIT turns around and offers these loans to the special relationship bank. Said special bank takes the 10+ float rate loans and provides the REIT a single (let same size) 30year fixed rate loan.
> In this way everyone gets what they want. The REIT gets to tell investors their loans are not due for refinance until 2050. All the banks get to lend out money at 0.5% interest, and the special bank gets to take the other bank's money and earn an extra 0.5% interest on top of it all in exchange for taking the interest rate risk.
> So if you are wondering why bonds are weird: it is because you are not the customer.
I believe your talking about a participation loan. These are very common in the US as well because some financials are capped at how much they can lend so they participate with other financials who maybe can't hedge the whole risk but may want a piece of it. The lead institution benefits because they don't need to lend a sizeable chunk of their cap and they get to build that relationship.
Please don't quote an entire post, you're just adding noise. We can already see which post you are replying to. Quoting is for replying to a specific excerpt.
I recently cashed out a Canada Savings Bond I had from when I was a kid and I after taking into account inflation I made about $8 while the government had my money for 20+ years.
This actually is a demonstration of an efficiently priced near zero risk asset.
Your Canadian bond was probably priced in Canadian dollars, which have a near zero risk of default (Canada can just print more dollars to pay it), so the pricing of these bonds should be such that it is largely inflation plus a vanishingly small premium for the black swan default.
Bond values in most countries have risen so phenomenally over the past few decades that they almost kept up with stock returns. It is unprecedented in history. Your situation is not typical.
The dividend yield doesn't matter (alone). The more common way to return cash to shareholder's is via buybacks.
The actual 'yield' of the market should thus be calculated as div yield + buyback yield, giving the investor yield, which is what intellectually honest people should compare to treasury yields.
Buybacks directly cause dividend yields to go up because they reduce the number of outstanding shares, causing the remaining shareholders to receive a greater stake when future profits are distributed amongst fewer parties.
Bond yields should be less than S&P dividend rates because with a bond, there is a much higher likelihood of getting your principal back (debt is senior to capital) that isn't there with underlying stocks of the S&P.
Also, the underlying stocks of the S&P can cut their dividends to 0 tomorrow without warning, so you need to price this risk in.
> Bond yields should be less than S&P dividend rates
No. Stocks don’t necessarily pay out any dividends at all, like google or amazon. Stocks can also give substantial capital gains. Bonds have historically had higher yields than the dividend yield of the S&P to entice people to purchase them to compete with this fact.
While they have a higher chance of getting your principal back they also have to compete with other assets for the money. This is why bond yields typically go up during “good” times as people feel the stock market is a better place, but the yields then go down (for “safer” bonds at least, like the federal government or high rated corporations) as people flock to safety and the demand means they can pay out less.
This is news because it’s another indication that people are flocking to “safety” causing both the bond yields to go down due to demand, and the stock yields to go up as their prices fall.
They did, but if dividends are higher than bond yields, that could be nature's way of telling you that future capital gains will be roughly zero or less.
If you look back like 40 years, the long term bonds ended up returning about the same as the stock market. So maybe the current long term yields are telling you what stocks will return over the same period of time.
I don't think it broke any real records, the only one is the absolute point drop in the indexes, but that's a meaningless stat that will constantly be broken in the future as the economy grows - proportion is what's interesting.
My bad, it did not break records outside the 1987, dot-com and GCF crises, made a mistake there. However, I don't agree with the theory of infinite economy growth (as you said "constantly be broken in the future").
In Canada, most people lock into their mortgage rate for 3-5 years. After that, you've got to renegotiate a rate but you're also free to switch banks. It's like starting over again at whatever you currently owe. I locked into mine 4 and a half years ago, so renewal is coming up this summer. Meanwhile, my home's value has skyrocketed (thanks to an insane Toronto housing market).
What this all means is that in a few months, at my renewal date, the mortgage interests rates may be incredibly low (they're already at 2.7% today), my home's value is much higher than what I owe, and the stock market looks like it's going to be hitting the bottom around that time too.
So the question is... do I gamble on this? I could easily access hundreds of thousands of dollars in a low interest mortgage and drop it all on index funds. If it worked, 10 years later I could retire early. If it doesn't, I'm another god-knows-how-many years away from paying off the mortgage.
Mind you, my (sane, rational, smart-than-me) wife would never agree to any of this so it's only nice to think about.
> If you actually had any inkling of which way the markets would move... you'd be retired already.
Yeah, this is exactly what my sane, smarter wife says. I briefly worked in a startup that built tools for professionals in the finance world. What I mostly learned there was that I knew nothing.
It doesn’t make sense to pay off the mortgage when money is essentially free, where interest rate is lower than inflation.
I believe it does make sense to invest what you can now in a balanced and diversified 60/40 portfolio. The current market turmoil is mere noise in the long term.
The fundamentals are still solid. Companies continue to make profits and hire people.
>The current market turmoil is mere noise in the long term.
Which is exactly my point.
Interest rates could skyrocket to 20% or more for yet another unknown unknown financial black swan event.
Or your home could be worth 25% of what it is today before you know it.
The ground could literally open up beneath your house and swallow it hole, leaving you with nothing but that massive debt obligation. (As most home insurance plans do not cover acts of god like sink holes).
That's an insanely rare and extreme example, but I hope you get my point.
It's best to get out while the getting-out is good.
If you have a large debt obligation that your current home value can pay off right now and then some, get rid of that debt and create some real wealth.
You've officially won the game of middle-class life at that point.
Then you can dream about what to do with that wealth until the cows come home... once you're actually wealthy and have the time and money to theorize how to properly invest that wealth.
Just 3 years? Usually you can ask the bank to guarantee the current interest rate for up to 15 years. Of course you will have to pay a premium on top of the market rate interest but e.g. getting 3.3% instead of 2.6% is not a bad deal compared to being surprised 3 years later that your original 1.5% rate is now 2.5%. 1% additional interest on a $600k house could mean that your monthly payments go up by $500. That shouldn't be taken lightly. However, negotiating a different interest rate after 10 or 15 years often makes sense because you have already accumulated equity. You no longer owe interest on the full sum. If only $200k are remaining on the loan then your monthly payments would only increase by $167.
If you want to get into the stock market then do it in a sustainable way. Don't try to time the market, you probably won't win a second time and lose your money before you have fully understood how the stock market works. Get a small financial buffer. Enough to stay unemployed for 6 months. Put the surplus into a conventional portfolio. If you don't care about the stock market but want to get your cut then focus on ETFs that index the market (S&P 500 is a classic) and put the rest in bonds. I recommend starting today. Just spend $100 on a random ETF to become familiar with the selling/buying workflow.
Most important rule always do your own research. Let strangers (financial advisors, friends, maybe random people on the internet) help you figure out yourself but never take their word as the truth.
I've seen 6 people in the last 2 weeks on wallstreetbets gamble away their student loans.
The sad part is one guy will post their success of doubling their student loan, and it will just cause a bunch of younger inexperienced 19 year olds to lose tens of thousands to their own gambles.
For some, it is addiction. For others, they simply cannot fathom the risk they expose themselves to. They have no concept of the time, effort, and stress they will cost themselves over the course of their lives as a result of their error.
Try explaining to a teenager that the 50k bet that costs them their chance at an education is actually them putting 1m+ at risk if you compound the effect over the course of their life.
I think there’s a lack of understanding of markets as well.
Great, you can toss 10k towards at it if you burn your student loans. GP might be able to toss 100k with a refi and investing his home equity.
Market movers have plenty more zeros at their disposal. We are bugs and the best thing to do is to make decisions that don’t make us end up as splats on their windshield.
All true. Even without the concern of competing against big money, there's always the simple fact that you can just lose a bet.
Through a personal connection, I'm aware of a failed SAP implementation that cost a company their position on the DOW. You'd never consider that was a possibility as a teenager because SAP doesn't even exist in your universe yet.
Maybe. They could also make a lot of money playing roulette. I'm not sure one is a better idea than the other, though at least if you lose a lot of money in a casino, they'll comp you a room and some meals.
I remember someone describing the appeal of Robinhood to millennials - they said that buying some stock and having it go down was like "dropping your iPhone in the toilet".
At the end of the day it depends on what your risk appetite is.
We've been on quite the bull run so in that regard I would say no, but given rates are super low and mortgage debt is cheap to come by (barely covers inflation), I honestly don't see why you wouldn't investigate it more. If you can make more than the mortgage interest rate, then it was worth it.
Using debt is fine is you can stomach a potential drop in a liquid market. That is more psychological than financial, actually. Would you panic sell if your (leveraged) investment drops 30 or 50%? I've come to realise I wouldn't hence I would consider making that investment, but to each their own.
This is less risky than using pure margin debt on your investments, because this can't be automatically liquidated.
You might consider the Japanese experience. In the 1980s they had an asset price bubble fueled by loose monetary policy.
The Nikkei never recovered from its peak.
Is that probable? Perhaps not. Is it possible? Definitely. We have had an asset price bubble and loose monetary policy.
Investing on margin is a mug’s game. You can’t realistically know when the bottom of a market is. Also, if an asset price bubble does pop, your home will likely go down a lot in value too.
Why would you ever want to pay off your mortgage? Mortgages are the best and cheapest way to get debt. Considering the rate environment, the rate risk isn’t a big deal, IMO. Hell, I would even go a step further: dump that 200k into a levered S&P 500 (2x should be good). Unless the world falls apart, you’ll definitely be a millionaire in 10 years. And if you do 3x, maybe even 5 years (that’s some more risk though).
I can’t really imagine a world in which the annualized yield of SPY over 10 years is less than 2.7%. And like I said before, rates are only going down and that’s not going to change anytime soon. Of course a financial advisor wouldn’t tell you to do it but they don’t really care about you in the first place.
"I can’t really imagine a world in which the annualized yield of SPY over 10 years is less than 2.7%."
Seems your imagination is lacking. From 2000 to 2010 it was negative. I wonder if the current market is the only market you ever have seen. Housing prices also have collapsed not too long ago in the past.
Downturns in the market will kill you if you are leveraged. Once the money it's gone, it's gone and it will be hard to make it back. that is, unless you have a rich dad who gives you more money. That's why I think it's very important not to be naive with investment advice.
A 2x levered S&P 500 ETF will always be buying when the market is high and selling when it's low (the debt will end up less than 50% of the value if the market goes up, requiring them to buy more to maintain 2x leverage, and the reverse when it's down).
So if the market doesn't move in a straight line you make less than 2x the S&P 500 return over time, including losing extra money in neutral and bear markets.
It's hard to objectively calculate how large the impact from corona virus will be and how it has affected the supply chain. Additionally, this could be a black swan event that could become a catalyst, this is not an isolated event and it will send a shockwave across the markets.
The losses in earnings as well as the reduction of consumption are hard to estimate, they need to be priced in into the stock's price which might be currently undervalued or overvalued. The idea is that no one knows exactly what the prices should look like. You might go for the S&P yield and end up losing 20% in the short term because of the price tanking.
The point is that investors like certainty, that's why some are holding cash or even a mix of bonds, cash and gold. They might prefer lower yields than S&P and more certainty.
The 2008 GFC was a good opportunity invest in hindsight because for a period of time stock prices were low and the economy recovered within a few years.
However today stock prices only 12%~ off all time highs and some are predicting prolonged stagflation.
That's a question of market timing, and of you try and time the market, you'll either be broke or lucky. Maybe stocks are insanely undervalued and we're on the cusp of a bull run. Or, maybe the markets are going to crash and the dividend rate isn't going to hold as we move into future as companies go bankrupt and stop paying dividends. Unlike treasury bonds, dividends aren't certain, so this one data point alone isn't enough to really conclude either way
I agree theres nonsuch thing as smart money, but there probably is a distinction between dumb and not dumb money - like someone putting a part of their savings in an index fund versus someone putting their entire net worth on far out of the money AMD calls
As an ex fund manager, albeit with little macro experience, here's some thoughts.
The time since the GFC is a sort of strange era. Again and again, we're told that central banks (and governments) are going to do whatever the heck keeps the market up. Buying the dip has more or less worked the whole time. A lot of asset classes look expensive if you take a longer-back view of things, but then again that longer view tended to not include "we'll do anything".
This virus thing could be quite a different thing to what traders and fund managers are used to. The kinds of things I used to look at were things like what do the brokers say about rates, or what do economists think about oil. Or more specifially for me what does the market think about the supply and demand of volatility risk. Even the GFC itself was something that many people in my circles had thought about. It was definitely in the financial arena; either you thought subprime was gonna be a mess, or you thought it would stay localized and not burst its banks.
Also keep in mind traders tend to be young, and there has been a trend towards juniorization particularly in the investment banks.
I'm in the UK at the moment, and the number of cases doubled in the last couple of days. It did the same a couple of days earlier. So then the question is whether this is an exponential process. And if it is, what's going to stop it being exponential? Public awareness isn't going to be it, because everyone in the whole world already knows they're supposed to wash their hands and stay away from old people.
Certainly we can't just pretend the virus is not here. An expert on the radio last night mentioned that if Twickenham was full for the match today, and the 80k people there all had flu, 8 of them would be expected to die. According to him with Coronavirus at 2-3% it would be in the ballpark of 2000. Chances are people who would be ill but recover would also be a fair chunk.
So something has to be done, governments aren't going to get away with just playing it down as the numbers double every other day.
And this is where fragility comes into play. We're used to the economy being coated in a thick layer of cheap money. Business models that were previously tenuous now seem solid, because there's always someone who will finance it. I'm sure you've heard of a few such businesses in the recent news. What this translates into is that you can motivate people to work in a certain way because you can borrow (and this is in the larger sense, not just loans) the firepower to pay them.
But what if a bunch of people suddenly cannot work? If you're properly ill, there's no amount of money that will make you able to work. And you will have to live with not earning money, and your boss will have to live with work not getting done. It doesn't seem like something that handing more money out for will help. At most you can help to make sure that peripheral issues are solved, like cash crises in people's private finances don't cause them to have to sell their house or business. But people not being able to work on a large scale will cause some kind of collapse somewhere in the system, and supply and demand isn't going to generate more supply, it will just raise the price of work. This is kinda like how historians write that peasants had a great time after the plague killed a third of Europe.
And of course companies are negotiating with labor over the spoils of production, so profits would seem to go down.
But this is all pretty sensitive to the size of the actual outbreak. If the top is today the death toll is similar to 9/11, and the economy will be fine. If it grows to shut down schools and workplaces all over the world, it's gonna be really interesting.
No, this isn't a crash, the main US indices are just back to where they were 6 months ago. That isn't a great buying opportunity, they weren't cheap 6 months ago either.
One way to look at is, when did we last see prices like this?
If this is a good opportunity then it's only slightly better than October of last year when the prices were about the same. (Slightly better because in theory, you could have done something else with the money in the meantime.) It's not better than any time before that, when prices were lower.
Stocks are on sale, but it's hard to beat time in the market, which is still better for most timespans.
The problem with this type of thinking is that it could always go even lower and by selling now you end up missing a lot of potential profit. The window of the global optimum is often only a few days wide.
I'm about to start investing with lump sum next week since stocks looks cheaper. I was thinking to go with 80% SWDA (global stocks [1]) and 20% AGGU (global bonds[2]). I'm a non US resident.
I would not recommend taking investment advice from HackerNews. /r/PersonalFinance is a better place, or you can start reading forums like Boggleheads and blogs.
If you’re canadian I can recommend a couple of blogs I follow, otherwise I’m sure there are others from your country with specific advice.
If all else fails, paying a for-fee advisor that doesn’t sell funds can help you setup a plan for yourself.
I would consider dropping the bonds unless you are going with junk bonds. The yield on high-grade bonds is trash and not worth it. In fact, the only reason anyone buys that shit is: a) they are legally required to b) they don’t care about making money, just not losing it. Instead, I would consider adding metals (or just gold) as your 20% uncorrelated asset.
The way my portfolio currently looks as of today (it changes a lot) is 50% gold and 50% 3x levered S&P 500 etf. This effectively gives me 1.5x market exposure plus an uncorrelated asset that both boosts my returns and cuts my volatility. When I feel like this whole coronavirus thing is over I’ll probably increase the 3x market exposure.
This is a fun and directionally interesting comparison, but it's ultimately meaningless.
Cash flows with different durations can't be used in carry trades so this cannot be exploited even if you have a hypothesis about the relative risk of each asset.
Convexity increases the price of high duration cash flows which drives down yields of instruments such as the 30 year treasury.
I backed the truck up in 2018 for Fidelity Treasury Bond Index Fund. Most of of my 401K is in it. It's up 31% in the last year. With almost no management fee. That's all.
Congrats, but you should sell out of that before prices come crashing back down to earth, which they inevitably will after the covid-19 scare passes. It might be a couple of months, but history says that you're going to lose all of that money again over the next two years.
You're betting against all of documented history.
Also, your concern shouldn't be interest rate risk.
Your concern should be a reversal in perceived credit risk.
You benefited from a flight to quality. While these can persist much longer than one would expect (see LTCM), you will eventually lose.
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Bonds and stocks have been fairly non-correlated over recent years, but this hasn't always been so. It's great for modern portfolio theory (i.e., holding a portion of stocks and bonds and rebalancing periodically). There's no guarantee that it will stay this way.
Anyway, I'm not giving investment advice, but I think the current market panic is short term and non-systemic, so it's not a terrible idea to consider rebalancing from bonds into stocks while the prices are good. If you think the market might keep dropping, then perhaps wait a little longer.
The truth is that trying to time the market is like throwing a dart at a board blindfolded, so you might as well take advantage of the current state instead of speculating about the future.