"I lost $25K today"--Does it really feel like that?

[truenorth418]

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.

 

[Ronstar]

I don't see it as a loss. I didn't sell anything.

 

[misanman]

Down $35K on Friday but dividends stayed the same and that is what we live on.

 

[photoguy]

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.

 

[Car-Guy]

I don't see it as a loss. I didn't sell anything.

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.

 

[audreyh1]

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.

I'm half thinking that part of the market "tantrum" is that they are tired of waiting for the Fed to raise rates, and want them to just get it over with.

 

[HFWR]

I'm half thinking that part of the market "tantrum" is that they are tired of waiting for the Fed to raise rates, and want them to just get it over with.

I still have trouble with the concept that a well-telegraphed 0.25% rate hike would do anything except get the Fed off of zero...

 

[Fermion]

I don't see it as a loss. I didn't sell anything.

Heh heh

Joke, right?

 

[Car-Guy]

I don't see it as a loss. I didn't sell anything.

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.

Heh heh

Joke, right?

Fermion, I think the two quotes above yours were really intended to be posted in the "Its Funny Joke Thursday" thread.

 

[Ronstar]

Heh heh

Joke, right?

Somewhat. Sure some paper losses in equities that I expect to recover long before I need to liquidate them. But no losses in medium term income generating portion of the portfolio.


Sent from my iPad using Early Retirement Forum

 

[samclem]

Somewhat. Sure some paper losses in equities that I expect to recover long before I need to liquidate them.

That's how I see it. If I'm not selling now, does it really matter what the market thinks it's worth now?

And until I sell, the dividends will keep coming in (I hope).

 

[Fermion]

That's how I see it. If I'm not selling now, does it really matter what the market thinks it's worth now?

Well, I mean no, it doesn't exactly matter.

But take another "investment", gold. When the market says the gold you bought at $1700 is only worth $1150, do you feel any kind of loss? I personally would. By your reasoning though, the gold is still worth $1700 an ounce.

 

[samclem]

By your reasoning though, the gold is still worth $1700 an ounce.

No, that's not what I'm saying. By my reasoning, the price of the gold doesn't matter to me until I sell it.

 

[Car-Guy]

But take another "investment", gold. When the market says the gold you bought at $1700 is only worth $1150, do you feel any kind of loss? I personally would. By your reasoning though, the gold is still worth $1700 an ounce.

If someone bought a bunch of gold at $1150 an oz and it went up to $1500 an oz, I'll bet most people would feel they had made $350 an oz and count it in their net worth calculations before they sold it. Of course losses or profits are unrealized until sold but it "is what it is" (value) on any given day..

 

[HFWR]

Gold isn't a good analogy, though. Many, though not all, stocks pay dividends, and bonds pay interest, whereas gold just kind of sits there...

I'm still well within my rebalance bands, so no action here...

 

[Fermion]

No, that's not what I'm saying. By my reasoning, the price of the gold doesn't matter to me until I sell it.

Ok. If stocks dropped 90% I would make changes in spending habits even if I didn't have to sell any stock at that moment. If I extrapolate that to any significant drop then I have to say the price the market places on my stocks does matter to me even if I am not selling. Maybe we have just not had a significant drop. If we do get a 90% drop, I will check back and see if the price still doesn't matter to you

 

[Fermion]

Looking at the Asian markets, I think the thread title might need to be changed to $50K (hopefully not $75K) by mid week.

 

[Nemo2]

Looking at the Asian markets, I think the thread title might need to be changed to $50K (hopefully not $75K) by mid week.

Or perhaps by noon Monday.

 

[bingybear]

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"

I feel your pain. I RE in March. We started talking early last year about RE. We were talking a couple years out. I did the opposite... no OMY, but a couple less years. While we can be pretty fugal... I did buy a new car that was not in the budget and was twice as expensive as any car we have purchased before.
We'll see where this goes...

Worst case.. go back to w@!\... They hit me up periodically to see if I'll come back.

 

[Corporateburnout]

Worst case.. go back to w@!\... They hit me up periodically to see if I'll come back.

I retired 14 months ago and I would not consider returning to work unless my portfolio is cut in half. Which means the stock market would have to go down by 95%+ since I'm 50/50 AA.

But since in such a scenario the likelihood of getting a job would be slim to none I would never go back to work

 

[bingybear]

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.

There are many who use the "I don't have a loss because I didn't sell" (not just you in this thread)... so not trying to pick just at you. I've always had problems with this statement. I see this as a time to tax loss harvest assuming you can use this in your tax planning. One example would be to sell a down S&P ETF and buy a LC and MC ETF in comparable proportions to the S&P. Not similar enough to trigger a wash sale. So, in that case, do you have a loss? You end up with a tax loss, you did sell something, but your investments in the market are effectively the same with very similar overall allocation. If you did re-balance your allocation may be shifted a bit in the process.

 

[Dawg52]

One silver lining to all this, my road trip out west in a couple of weeks will be a lot cheaper from a fuel cost stand point over this time last year. But I'm going to be driving knowing I'm a lot poorer.

 

[Greathusky74]

I am hoping that my reinvested dividends day happens on the same day I lose $25K. I will be buying more shares.

 

[Andre1969]

I don't know how much I "lost" on Friday, because I didn't tally up for Thursday. But, Friday put me at a slight loss for the year so far. I had been up in the 5.5-6% range back in May. Dollar wise, I've probably lost about $60K from that peak. If I think too much about it, I'll get annoyed...start thinking about what I could have bought with that $60K, stuff like that. So, I just try not to think about it too much!

I guess this correction has been due for awhile though. I haven't seen a >10% correction since 2011, when I lost about 14% from July to August. That was about a $90K drop for me. I was fully recovered around Feb/Mar 2012, though.

 

[Theseus]

I "made $25k" from this mornings low, but it doesn't feel like it!