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Old 08-22-2015, 12:29 PM   #61
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Agree, and the chart is alarming accurate. I saw all of this from one of my coworkers in the '08-09 mess. He literally sold it all on the absolute bottom and put it into CDs and has not returned since. Man, what a loss he took. Haven't seen him in a while, but I can imagine that yesterday he was saying "Told you so!"

On the other side in 1999 I had a coworker that sold all his IRA of Berkshire Hathaway (at its bottom) and bought a ton of tech stocks. 10 yrs later he died at his desk, still working, aged 70


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Old 08-22-2015, 12:31 PM   #62
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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.
Oh that is ME !!!! I'll be honest - I'm a bit upset. But, I did deploy 1/2 of my excess cash on Thursday and would have deployed the other half yesterday if it were in my brokerage account.

I've been reminding myself that this is why I worked two more years to get to a 3% WR.

I really hate the idea that I may end up being the poster child for "Bad Sequence of Returns Risk"
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Old 08-22-2015, 12:46 PM   #63
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The reason I can't see a big drop ahead is still valid. It would destroy the somewhat recovery of pension funds and there is not a big enough growth in tax base to replenish them.

I will stand by this hypothesis until we hit DOW 12,000, then I will try and figure out how the government is going to dig out of the huge hole it will be in.

Smarter people in government have probably figured all of this out already and will launch some QE
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Old 08-22-2015, 01:25 PM   #64
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25K, chicken feed. try this thread: Anyone else want to join the "Lost over a million" club?
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Old 08-22-2015, 01:33 PM   #65
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The reason I can't see a big drop ahead is still valid. It would destroy the somewhat recovery of pension funds and there is not a big enough growth in tax base to replenish them.

I will stand by this hypothesis until we hit DOW 12,000, then I will try and figure out how the government is going to dig out of the huge hole it will be in.

Smarter people in government have probably figured all of this out already and will launch some QE

On the surface speaking in generalities, it sure seems like a crash is less likely in an era of 2% bonds and CDs. Unless people just care only about safety and that is it. You figure after a while, low yields would cause most people to poke their heads back out of the bunker though.
But you never know about heard mentality. CNBC already had decided to have a "live Market Crash show" Sunday night. The talking heads are gonna get paid OT for Sunday night blabbering. Just think if the market really sank Friday, say 10%.... Lockup and American Greed would have been cancelled all weekend for Judge and the Gang to regurgitate all weekend 24/7 what had happened.


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Old 08-22-2015, 03:31 PM   #66
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I don't use the "I lost expression". If I have an actual tax loss in a position, I consider it a loss until proven otherwise. There are too many worldwide instances of stocks going down, and still being down many years later to honestly look at it otherwise.

But normally, after along up market, what we are calling losses are really drawdowns, which may or may not become losses.

There must bea fair number of outright market timers in our membership.

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Old 08-22-2015, 03:31 PM   #67
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I know many have deep "mark to market" allegiances, but when their accounts are down $25K, do they really feel the same sense of loss as if they had permanently misplaced an envelope with 250 hundred dollar bills? Or as though they had totalled an uninsured small car, sunk a boat, etc?
I know these days when I "misplace" 25k in one day (gambling) , I have real sense of loss. (and it has happen) However it's a really great feeling when I find it over the next few weeks (And that happens too) Usually I'll misplace or find far less in any one day or short period of time. YMMV

The only time I've lost 25k (or more) in the market on one day was probably during in the 2002 time frame. (I seem to remember several of those days in 2002.) That was 401k money and I was still working and not really thinking about retiring at the time, so I don't recall feeling all that bad (maybe concerned but not that much). I held on, didn't sell anything, fully recovered over the next few years and got out before the 2007/08 crash.
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Old 08-22-2015, 03:35 PM   #68
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Yes, I forget about the herd mentality. On the survivalist forum they are always talking about cashing out their 401K because the market or government is going to take their money. If this type of attitude is more widespread than a few % of Americans, then I guess we could see a cascade of selling if we get a big enough one day drop.

I can't wrap my head around too big of a drop considering the amount of cash on hand for some of these bigger tech companies. Doesn't Apple have like 150B in cash or some such? Nokia fell but it took a lot longer than one month.
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Old 08-22-2015, 04:31 PM   #69
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I keep between 1.5 and 2 years spending in readily available form (cash and CDs). Times like these reinforce the wisdom of doing that.
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Old 08-22-2015, 04:55 PM   #70
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If I paid attention to how much we gain or lose every day I would go nuts.

When I was working, there were days where a whole year's salary could be gained or lost.

So I learned to tune it out. All that matters is the amount I get to withdraw each year, and that is based on the Dec 31 value.
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Old 08-22-2015, 07:41 PM   #71
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We were down 40k and a total of about 80k from the recent high . While it is a large number the reality is if we were not invested in volatile assets we would not even be close to having what we do at the low.

Yeah, we fell about 10% from the high but it was in effect the markets own money it gave us to get us there.

The point is the markets are higher highs and higher lows as time goes on . You can lose a whole lot of moneyand still be a head of if you didn't invest.
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Old 08-22-2015, 07:46 PM   #72
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Oh that is ME !!!! I'll be honest - I'm a bit upset. But, I did deploy 1/2 of my excess cash on Thursday and would have deployed the other half yesterday if it were in my brokerage account.

I've been reminding myself that this is why I worked two more years to get to a 3% WR.

I really hate the idea that I may end up being the poster child for "Bad Sequence of Returns Risk"
Hey i was taking that job. I retired 3 weeks ago and this is what i retire in to.
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Old 08-23-2015, 07:48 AM   #73
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I retired July 1st. From the time I announced my plans, every dip in the market caused me to rerun the numbers. Since July 1st, I haven't run the numbers once. I am done worrying about the "plan", it will unfold over time, and reading Imoldrnu's post on his 23 years of retirement, I have decided to focus on the rest of the plan. The $s will be what they are, the rest of the plan (the travel, the time with DW, the time spent with friends and extended family, etc), will continue regardless of the market movements. $25k up or down won't change that. I'm no longer worried about the day to day changes.


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Old 08-23-2015, 08:23 AM   #74
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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.
On the other hand, if they don't raise rates, it could signal that things are worse than previously thought, and that could lead to further tanking of the market.
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Old 08-23-2015, 08:44 AM   #75
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I always look at my portfolio as if it were income property. The rent (dividends) come in every month/quarter but the value of the property can go up or down depending on what is going on.

If something external, like a long term road construction is going on, my "property" value is going to drop for a while but the rent keeps coming in. Sooner or later things turn around and my property value goes back up along with continuing rent.
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Old 08-23-2015, 08:46 AM   #76
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If I paid attention to how much we gain or lose every day I would go nuts.

When I was working, there were days where a whole year's salary could be gained or lost.

So I learned to tune it out. All that matters is the amount I get to withdraw each year, and that is based on the Dec 31 value.
+1. Yup - this is exactly the way I have learned to look at it. It helps keep things in perspective.

I know what my % rate is for the year-end withdrawal, and when I apply that % to the decline in my portfolio over the past week, I see that I will really only suffer a few $100 in annual spending. A few RBD's are not so bad when you look at your portfolio this way.
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Old 08-23-2015, 12:40 PM   #77
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I don't see it as a loss. I didn't sell anything.
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Old 08-23-2015, 12:59 PM   #78
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Down $35K on Friday but dividends stayed the same and that is what we live on.
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Old 08-23-2015, 01:46 PM   #79
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I haven't checked our portfolio recently but one thing to keep in mind is that as prices drop expected returns go up. I see this like converting kinetic energy into potential energy.
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Old 08-23-2015, 02:15 PM   #80
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I don't see it as a loss. I didn't sell anything.
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I haven't checked our portfolio recently but one thing to keep in mind is that as prices drop expected returns go up. I see this like converting kinetic energy into potential energy.
Hope these kind of comments/thoughts help everyone sleep better until things turn around.
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