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Old 08-22-2015, 07:49 AM   #41
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Still, I bet for a newbie who just retired in the past month and isn't living off a pension, must find a sudden drop unnerving. When you are working it isn't as big as a deal, or if it isn't your first rodeo in retirement it is not as troubling. But to get that first punch in the mouth has to sting a bit I would think.

It did. Retired 3/31/07 and we all know what happened soon there after. But a few bottles of cheap bourbon(couldn't afford the good stuff) eased the pain.
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Old 08-22-2015, 07:54 AM   #42
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Down about $25k-ish from my own all-time high. Can't say I enjoy it, but I'd rather the market take a breather every now and again, to recalibrate expectations. The market overshoots, and undershoots, but I still "own" the same assets. Not enough movement yet to trigger a rebalance, so...
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Old 08-22-2015, 08:00 AM   #43
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Watching the "bloodbath" is always a bit unnerving for most folks. The thing to remember right now is the following:

1. No U.S. recession is looming.
2. The economy is growing slightly and steadily.
3. Unemployment is about as low as it can get.
4. Inflation is low.
5. Housing is pretty strong.
6. Commodities are in the toilet (low gas prices, cheap feedstock for plants)
7. No one is starving in the U.S.
8. Interest rates are at historic lows (cheap mortgages, loans, etc).
9. The restaurants are full and a one hour wait is common.
10. Discount Tire is selling tires like crazy.
11. I did see a guy selling Apples at the side of the road today


.. but it was at a farmers market.
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Old 08-22-2015, 08:05 AM   #44
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My Stable Value 401k fund is looking pretty good right now. Basically I have done better with it vs. my other 401k options.

I realize it is a temporary parking of the money but I think we still have further to fall and will end the year down.

There just is not a lot of good news out there and the Fed will act in an irrational way. History tells us so.


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Old 08-22-2015, 08:16 AM   #45
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Hi aja8888,

Just my take on your list:

What is scary is that the Fed thinks that everything on your list is true.

A few points:

A second recession is still possible.
A rate boost could trigger it without signs of inflation.
China is imploding mainly because there are no reporting or accounting standards.
Corporate returns are not impressive.
Housing activity is based on low rates. When Rates move up, market will dry up.

Just another point of view.....


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Old 08-22-2015, 08:25 AM   #46
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I realize it is a temporary parking of the money but I think we still have further to fall and will end the year down.

There just is not a lot of good news out there and the Fed will act in an irrational way. History tells us so.
Are you buying any options? A relatively small investment in "puts" could pay off big if you are right.
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Old 08-22-2015, 08:33 AM   #47
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What is scary is that the Fed thinks that everything on your list is true.
Everything on the list is true. Unfortunately, so is the fear of deflation. And another recession.

Ray Dalio Fed tightening is like 1937 - Business Insider
"The Fed raised rates eight years after the 1929 financial crisis, following accommodative monetary policy to boost the economy, and it still ended up being too soon. The Dow lost half of its value between 1937 and 1938."

I lost plenty in the latest crash. And in 2000 and in 2008. I decided to move more towards rental property, something I could control. And I have more income diversification.

Inflation is dead. The only reason you see higher prices is increased demand. There is plenty of un-utilized capacity. Companies are making less, and charging more. Look at earnings reports, top-line revenue growth is always the issue, not profits. Lowest oil prices in 7 years, yet prices at the pump are high. Kill the chickens, raise egg prices. Prevent housing from being built, and you raise rents.

The only reason why the Fed wants to raise rates is the member banks are crying for it. The banks will make a killing on the increased rates on HELOCs and ARMs. Most of the banks loans are insured, so they have very little risk. If banks get in a bind, none of the larger banks will fail, as the fed can bail them out.

If the fed raises rates, it will absolutely kill the economy and make last weeks rout look like a great week. I lost a year+ worth of expenses, easily. Likely two years. Yet, I am still in. I am also paying off rental mortgages again (5.375%), in addition to investing my monthly allocation.
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Old 08-22-2015, 08:50 AM   #48
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I monitor my taxable account holdings far more closely than my Rollover tIRA. This includes recording their balances monthly in the taxable but only quarterly in my IRA, a holdover from the quarterly account statements I got for my 401k which became the Rollover tIRA after I ERed. I therefore record combined balances every quarter, too.


It took only 12 months (from mid-2013 to mid-2014) to crash through the $1.2M mark and $1.3M mark. With the market's recent losses (including losing $16k Friday), I am just under $1.3M again. No big deal.


It is time to do some mild rebalancing in my tIRA, though, as its AA has gone outside my range of acceptable bounds. Again, no big deal.
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Old 08-22-2015, 08:53 AM   #49
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No options for me. I have learned from experience not to bet for or against the market. I was retired at 60 but went back to work when I was asked to join a local firm as a business development officer. Been in community banking for 40 years.

History tells us that the Fed will act irrationally. When rates move up, they never move up slowly. This come out like a cannon shot. Will this be the case? I do not know. Any rate move upward will stifle the market especially in an election cycle with no clear leader identified yet.

I cannot wait to get reinvested but being close to retirement, I have become a lot more conservative in my thinking.

As has been written everywhere, the Fed is out of arrows. They have never unwound a balance sheet
like they have now, full of mtg backed securities. As rates rise the value of their investments will drop like a rock. Another disaster waiting to happen.

Man I wish I was having happier thoughts!


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Old 08-22-2015, 09:10 AM   #50
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I think we're somewhere between 5 and 6...
I agree, and I think 12 and 13 probably happen around SP 1900... so no big deal...
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Old 08-22-2015, 09:13 AM   #51
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Everything on the list is true. Unfortunately, so is the fear of deflation. And another recession.


I lost plenty in the latest crash. And in 2000 and in 2008. I decided to move more towards rental property, something I could control. And I have more income diversification.


If the fed raises rates, it will absolutely kill the economy and make last weeks rout look like a great week. I lost a year+ worth of expenses, easily. Likely two years. Yet, I am still in. I am also paying off rental mortgages again (5.375%), in addition to investing my monthly allocation.
Senator, my DH and I have been considering rental property for a while now b/c, like you, we want more diversification (and tax benefits for now). We are planning on retirement between Jan. 2017 and Sept. of 2018. Like everyone else here, we took a 25K+ hit this past couple of days. I need to do some AA (that will be a different post) but had wanted to ask here about diversifying into rental property.

I'd read an article that quoted rental property as having a rate of return averaging roughly 3%. Is that your experience? And do you do your own maintenance? We're limited in our capabilities on that end. Thoughts on commercial vs. residential?

Thanks!
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Old 08-22-2015, 09:13 AM   #52
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Only 20%?

I went back, wanting to add that a "loss" of $25K in a day would not be traumatic, but when it drags on for a month or two, now you are talking real money.

And we were there in 2008-2009. Heh heh heh... Time to revive old threads?
I think the experience of 2008-2009 is still pretty fresh. This probably makes some a little more enured to the losses. There were days during that period where I lost 7 figures. This certainly doesn't feel as bad, yet. But who knows where it's going. All the reassurances from talking heads, who know less than nothing is a little disconcerting.
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Old 08-22-2015, 10:00 AM   #53
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Hi aja8888,

Just my take on your list:

What is scary is that the Fed thinks that everything on your list is true.

A few points:

A second recession is still possible.
A rate boost could trigger it without signs of inflation.
China is imploding mainly because there are no reporting or accounting standards.
Corporate returns are not impressive.
Housing activity is based on low rates. When Rates move up, market will dry up.

Just another point of view.....
Yep, I agree completely. Anyone who thinks things are just rosy with the US economy has blinders on. Average wages have not increased since the 80's for most professions. A whole lot of people are living paycheck-to-paycheck, unable to save much (if anything) on what they earn. Unemployment figures are misleading (to say the least), as many people have either quit looking for work, or are in part-time, temp. jobs with no benefits. I can easily see another recession happening in the near future. I do think the Fed. is starting to realize that a rate increase this year is not a good idea, and so I don't think it is going to happen. But, if they go ahead with it, look out below for this market.
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Old 08-22-2015, 10:22 AM   #54
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I think we're somewhere between 5 and 6...

This is my all time favorite chart, and you need to dust it off and repost every couple weeks. This is so me in a nutshell, so that is why I do not buy common stocks. I am a long term investor, who gets too antsy on short term downdrafts.


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Old 08-22-2015, 10:23 AM   #55
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Does it feel like some big loss days?
Yes

Do I mark to market?
Yes

Do I feel better after doing the weekly numbers?
It's my way of coming to terms with where I'm at financially. But I do keep in mind it's a continually evolving story. Must wait for the next chapter.
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Old 08-22-2015, 10:24 AM   #56
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I didn't lose a thing. I still have X shares of 'this', Y shares of 'that'....

What's happened to me is that there are some folks who think those shares are worth less than what they thought yesterday, based on things that really have very little to do with the actual intrinsic worth of the share. Now, my story will change when I go to sell, but until then, shares of stock represent to me whatever value the company issuing them presents to THEIR market...

That is my delusion, and I'm sticking to it...
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Old 08-22-2015, 10:25 AM   #57
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Yep, I agree completely. Anyone who thinks things are just rosy with the US economy has blinders on. Average wages have not increased since the 80's for most professions. A whole lot of people are living paycheck-to-paycheck, unable to save much (if anything) on what they earn. Unemployment figures are misleading (to say the least), as many people have either quit looking for work, or are in part-time, temp. jobs with no benefits. I can easily see another recession happening in the near future. I do think the Fed. is starting to realize that a rate increase this year is not a good idea, and so I don't think it is going to happen. But, if they go ahead with it, look out below for this market.

And what is sometime forgotten....Historically speaking we are already past time for another recession. That doesn't mean anything in and of itself, but .....


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Old 08-22-2015, 10:31 AM   #58
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I think we're somewhere between 5 and 6...
Love this graphic.. yes I'd say 5-6, but a true test of what I feel.. ie I'm fine with this 5-6, its the 10% correction, I'm fine with.. if we get to 7, then I may be out looking for some extra income because I didn't pull enough money out in my safe investments, my bad, but lesson learned.
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Old 08-22-2015, 11:11 AM   #59
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Only 20%?

I went back, wanting to add that a "loss" of $25K in a day would not be traumatic, but when it drags on for a month or two, now you are talking real money.

And we were there in 2008-2009. Heh heh heh... Time to revive old threads?
Investing since 1966 hopefully I have finally mastered 'stay the course'.
However perhaps a tongue in cheek discussion of the many varieties of 'pucker' might help us master our determination to soldier on with individual asset allocation.

heh heh heh -
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Old 08-22-2015, 12:20 PM   #60
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I'd read an article that quoted rental property as having a rate of return averaging roughly 3%. Is that your experience? And do you do your own maintenance? We're limited in our capabilities on that end. Thoughts on commercial vs. residential?Thanks!
It's closer to 20%, not 3%. I will send a PM to avoid hijacking this thread.
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