Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
About Ready to Give In to....Resignation
Old 11-11-2008, 10:26 AM   #1
Full time employment: Posting here.
tangomonster's Avatar
 
Join Date: Mar 2006
Posts: 756
About Ready to Give In to....Resignation

I read the thread about giving in to panic, started this past summer (ironic how we thought we were hurting just a few months ago when we hadn't seen anything yet!):

ugh almost ready to give in to panic

I'm about ready to give in and capitulate, but I don't see it as being panic---more like just resignation as to how things are.

Can some of you tell me if my math/reasoning is off? I realize no one has a crystal ball, but......

If a million dollars was cashed in and put in TF bonds paying 4%, in 3 years that million would be worth $1,120,000----and I'd be sleeping a lot better at night and enjoying my ER a whole lot more.

Whereas if the market goes down another 20%, that million would go down to $800,000. If it went up about 30% as is typical after a bear market, it would go up $240,000---but be worth $1,040,000---$80,000 less than keeping it in TF bonds.

So it seems like that keeping it in the market in hoping to recoup some of the losses is kind of futile, since it does seem likely that there will be further losses in the stock market....

Go easy on me!
__________________

__________________
“It is not a sign of good health to be well adjusted to a sick society”.------Krishnamurti
tangomonster is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-11-2008, 10:35 AM   #2
Thinks s/he gets paid by the post
 
Join Date: Nov 2006
Posts: 2,268
What if the market goes down 5% and then back up 35%?
What if it goes straight up 22%?
What if it goes down 10% and then back up 32%?
What if that $1M was put into CDs back in 2000?
What if it had been left in CDs from 1990-1999?

We can "what if" all day long but we dont know what is going to happen in the market so we set up an AA that we can live with thru good and bad times and expect those good and bad times to come.
__________________

__________________
utrecht is offline   Reply With Quote
Old 11-11-2008, 10:36 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,380
It is really impossible to know what the best thing to do is. But overall, now is perhaps not the time to leave. The one thing that we know for absolute sure is that the absolute price of equities is now less than before.

Our minds always arrange and rearrange the information according to what has recently happened. So right now your perception of loss possibility is very high, whereas in 2006 for example losses may have seemed a remote possibility.

I have trained myself to react oppositely to this general trend. So far this year this has resulted in my getting my rear kicked all over the room.

I don't know your specific situation, but unless you are facing short term liquidity needs it might be best to hang on. Remember, not long ago a 5% drop was being hailed as a "Blue light special", and equities were on sale.

Generally we cannot trust ourselves to react optimally, or even to have a very good idea what that might be.

But there are some very talented persons on this board who sold all their stocks and went to 100% cash on October 15, 2007. Perhaps some of them will be kind enough to give you a more helpful answer.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 11-11-2008, 10:38 AM   #4
Thinks s/he gets paid by the post
OAG's Avatar
 
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,598
I cannot see anything wrong with what you say. I do not have $1MM to throw around, but, hey I just bought a 7 year FDIC CD at 5.5% APY this morning. $15K becomes $21,616.29 ($20,693.86 after taxes) if held to maturity. APR is 5.35% if I pull the interest monthly. On autopilot until 11/11/2015 (rung 7 of a 10 year CD Ladder).
__________________
Vietnam Veteran, CW4 USA, Retired 1979
OAG is offline   Reply With Quote
Old 11-11-2008, 10:51 AM   #5
Recycles dryer sheets
 
Join Date: May 2005
Location: Newport Beach
Posts: 122
I can't say I blame you--it seems that this market has no bottom.

Before making any big changes, I would re-read some of the classic investment books like the Four Pillars and Winning the Loser's Game. They might help you step outside the current pessimism and get a different perspective.

I read them again recently and felt that, while this is certainly a severe bear market, it will probably be no different than previous bears in that it will someday come to an end. As you know, the recovery rallies are usually quick and explosive.
__________________
newporttony is offline   Reply With Quote
Old 11-11-2008, 10:57 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,380
Quote:
Originally Posted by newporttony View Post
it will probably be no different than previous bears in that it will someday come to an end. As you know, the recovery rallies are usually quick and explosive.
About this I have no doubt. Even Hong kong has giant rallies, and we know that Hong Kong could have its lights go out any time China wants them too.

Even if our economy might never be strong again (a highly unlikely scenario) there will be huge rallies. This is the nature of speculation.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 11-11-2008, 11:01 AM   #7
Thinks s/he gets paid by the post
DblDoc's Avatar
 
Join Date: Aug 2007
Posts: 1,224
tm your math seems correct but there is just no way to predict the future. Without more details of your situation it is impossible to make specific recommendations. I can't imagine that a complete capitulation would be the right thing to do however. I second the recommendation to re-read 4 pillars.

DD
__________________
DblDoc is offline   Reply With Quote
Old 11-11-2008, 11:02 AM   #8
Full time employment: Posting here.
tangomonster's Avatar
 
Join Date: Mar 2006
Posts: 756
OAG, right now 5.35% is looking awfully good! So is all your money in "safe" investments? Actually, all belly aching about the market aside, if I had $15K to spare (or any amount), I think I would be investing it in stocks right now. While they still may go even lower, it does seem like there are bargains to be had and money to be made.

Hmmm---maybe as Ha suggests, there is some illogical psychological processes going on. If I can perceive the market as good for OAG or anyone else to buy into now, then why don't I perceive that same market as being equally worthwhile to stay in? If those who have been invested long-term stay in, we will enjoy the same upswing that someone buying into today's market will. I guess it's because I perceive/know that my investments have lost so much money, while a new investment will make money.....

Utrecht, good points. I've spent way too much of my life worrying about the what-ifs. And I do realize that there are cycles of bad and good times. Knew our investments could go down, which is why I wanted to liquidate around the summer/fall of 2007 (just thought they had gone up enough and was so happy with our net worth that I just wanted to preseve it) but never realized it could be this bad----or that there could be so many contributing factors.

Ha, I understand entirely about my perception of possible losses being high, but don't know if it is just my perception at this point, or whether it's the reality of a number of factors (like end of the year accounting and diminished retail sales) that could make the market go down even more....
__________________
“It is not a sign of good health to be well adjusted to a sick society”.------Krishnamurti
tangomonster is offline   Reply With Quote
Old 11-11-2008, 11:06 AM   #9
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,067
Quote:
Originally Posted by tangomonster View Post
... if I had $15K to spare (or any amount), I think I would be investing it in stocks right now. While they still may go even lower, it does seem like there are bargains to be had and money to be made.
Do you see any inconsistency in the above quote and your 'resignation'?
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 11-11-2008, 11:08 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Moemg's Avatar
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 10,029
I know how you feel and sometimes I have to step away from the market and seriously think how the loss is affecting me . If I was at the point that my retirement was going to be so frugal as to not be enjoyable I 'd probably cash out a large percentage but if my lifestyle was okay and only required some belt tightening I'd probably make sure I had several years safe and ride it out . We never know when the drops or rallies will happen so it is really up to our comfort level .
__________________
Moemg is offline   Reply With Quote
Old 11-11-2008, 11:18 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,380
Quote:
Originally Posted by tangomonster View Post
I guess it's because I perceive/know that my investments have lost so much money, while a new investment will make money.....
This is the famous "mental accounting trick".

Quote:
Ha, I understand entirely about my perception of possible losses being high, but don't know if it is just my perception at this point, or whether it's the reality of a number of factors (like end of the year accounting and diminished retail sales) that could make the market go down even more....
I agree completely with what you say. When I suggest that something is a perception, that doesn't mean that it is wrong. I agree with your reasoning about the economy. For myself I try to remember that I at least cannot know the future. But I can know the past, and I can try to understand human psychology. The recent past has been brutal. The typical human response to that is to let it have a very large place in one's mindscape.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 11-11-2008, 11:19 AM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Dawg52's Avatar
 
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 7,431
I'm still in, so that is a pretty good signal to be out of the market. Hey, if some of you guys chip in and pay me for what I'm down, I'll promise not to every buy another stock and you can be sure the market will run up forever.
__________________
Retired 3/31/2007@52
Full time wuss.......
Dawg52 is offline   Reply With Quote
Old 11-11-2008, 11:26 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
bbbamI's Avatar
 
Join Date: Dec 2006
Location: Dallas 'burb
Posts: 9,039
I can chip in a quarter....
__________________
There's no need to complicate, our time is short..
bbbamI is offline   Reply With Quote
Old 11-11-2008, 11:33 AM   #14
Full time employment: Posting here.
VaCollector's Avatar
 
Join Date: May 2007
Posts: 544
Tango, you may just be on the right track!

As someone who has now lost more than I have left, I wish that I had cashed out even just 60 days ago....but I can't seem to let go of the "buy and hold" mentality.

Take a moment and think about it - ALL THAT WE HAVE BEEN TAUGHT is now upside down!

#1 - "always take advantage of your pre-tax investments (IRA, 401K)"....mine is down 40%+

#2 - "buy real estate - you'll never go wrong"....don't think I need to explain that one any more....BTW, I have yet to sell an unoccupied condo after 2 years on the market and having lowered the asking price by 25%!

#3 - "buy good quality stocks and hold them - you can't go wrong".....hmmmm, another piece of advice that I have taken advantage of and believed in....and I know that I'm not the only one! .....down over 50%!!

#4 - "if you're buying quality stocks, buy on the dips....buy when everyone else is selling....DCA"....with this market I would have to say that it's ALL BS!....this is just another piece of advice that has placed me in a position to re-enter the work force after going all-in with a good piece of my "3 years of living $$$'s"....

So.....as my investment world is now upside down, you may just have the right idea as the ONLY sage piece of investing advice that I can think of that is correct right now is ~ CASH IS KING"!!

Good luck with your decision!
__________________
VaCollector is offline   Reply With Quote
Old 11-11-2008, 11:34 AM   #15
Thinks s/he gets paid by the post
 
Join Date: Dec 2007
Posts: 4,764
Im frozen with fear so Im doing nothing. Just keep putting some in every so often. Maybe it will go up again someday Are you not supposed to buy stocks when they are down not vice versa ?

Dawg54 maybe you should start a paypal donation fund
__________________
Notmuchlonger is offline   Reply With Quote
Old 11-11-2008, 11:39 AM   #16
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,372
I'm sorry, Dawg, I have already pledged my fair share to Ziggy for bringing down the oil bubble.....
__________________
Bestwifeever is offline   Reply With Quote
Old 11-11-2008, 11:50 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Dawg52's Avatar
 
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 7,431
Quote:
Originally Posted by bbbamI View Post
I can chip in a quarter....
A quarter of a million will do. Can I pick of a check this afternoon?
__________________
Retired 3/31/2007@52
Full time wuss.......
Dawg52 is offline   Reply With Quote
Old 11-11-2008, 11:52 AM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
bbbamI's Avatar
 
Join Date: Dec 2006
Location: Dallas 'burb
Posts: 9,039
Sure come on over...good luck cashing it though!
__________________
There's no need to complicate, our time is short..
bbbamI is offline   Reply With Quote
Old 11-11-2008, 11:53 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,380
Quote:
Originally Posted by VaCollector View Post
As someone who has now lost more than I have left...
Ouch! This is a big hurt.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 11-11-2008, 12:00 PM   #20
Recycles dryer sheets
 
Join Date: May 2006
Posts: 442
I sold off 2/3 of my equities 3 weeks ago. I went from 90% stocks to 33%. I couldn't sleep and it was stressing me out. The market is right where we were when I sold out. So I figure this is like a "time out". However I find myself getting sad when the market goes down because I still have some stocks, and sad when it goes up cause I feel like I missed the boat. Go figure.
__________________

__________________
dmpi is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Anybody else ready to give in??? VaCollector Stock Picking and Market Strategy 32 07-17-2008 08:08 PM
ugh almost ready to give in to panic wallygator69 FIRE and Money 277 07-04-2008 02:23 PM
handed in my formal resignation yesterday, ERed July 14 retiringat50 Hi, I am... 2 06-29-2008 05:36 PM
52 and ready to jump, give me a push! Shafer239 Hi, I am... 17 06-28-2008 11:32 AM
Handed in my resignation claire Young Dreamers 16 09-13-2006 10:02 PM

 

 
All times are GMT -6. The time now is 08:37 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.