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Old 10-09-2014, 09:11 AM   #41
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Small cap really needs perspective... it has clawed back a few percentage points of the 35% you gained in 2013?
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Old 10-09-2014, 10:09 AM   #42
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Not watching it too closely. Earlier in the year before I FIRE'd I set aside about two years of cash and equivalents knowing that there will always be bear markets and bull markets.
This. Retiring in Dec. of this year and will have 3 years expenses in cash, so I'm not worried about short-term issues.
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Old 10-09-2014, 10:24 AM   #43
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Small cap really needs perspective... it has clawed back a few percentage points of the 35% you gained in 2013?
Scrooge McDuck is alive and well in most of us. We just want more.
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Old 10-09-2014, 01:55 PM   #44
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If someone were going to retire within the next few months, it wouldn't be a terrible thing to ratchet down their AA or "buckets" to have a little more safe money so the longer term capital can let it ride through a potential correction or bear market. Even now we're only about 6-7% off the all-time highs so while the best time to "get out" passed earlier in the year, it's still not far off the top.

I think this would be reasonable advice for anyone about to retire within the next (say) 2-3 years. If you can configure things so that you have enough cash and "safer stuff" to spend down in case this is 2001 or 2008 all over again, the risk of "retiring at the wrong time" can be managed a bit.
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Old 10-09-2014, 04:03 PM   #45
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I retired in May 2009, with the market in the midst of a long tail spin. When I made the decision to retire in April 2009, the SP500 was down 40-45% from the peak. I was "hopeful" that the lows had been made and I had a good cash/fixed income cushion (2-3 years worth of expenses). I also asked myself if I lost another 20-25% on my equity positions, would I still have enough to pay basic expenses (enough to keep me from absolutely having to get a job). The answer was yes, and I went with the decision to retire.

Interestingly enough, I'm back working full time (teaching at the college level) after having worked a few years part time. But it's not for the money (although it is partially for the health care benefits as I am quite a few years away from medicare). I like the j-o-b, the hours aren't bad, and I have the summers off.
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Old 10-09-2014, 04:09 PM   #46
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The Vanguard Total Stock Market Admiral Shares (VTSAX) is up 6.69% YTD. I realize that small cap is flat YTD and the Total Internation Stock Index is down 1.19%. We aren't talking a crisis here or even a bad year. If you are feeling angst now, you need to revisit your expectations of being in the equities market.
Well said. Things are still far from it being a really bad year.
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Old 10-09-2014, 06:24 PM   #47
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The Vanguard Total Stock Market Admiral Shares (VTSAX) is up 6.69% YTD....
Ehh, give it a few days--down 2.12 percent today.

Being re'd and in our midsixties, we are pretty conservative here and still feel a little twinge or two at Mr. Market's wild ride this week. Staying the course come hohw though.
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Old 10-09-2014, 07:40 PM   #48
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Fire May 2015

I plan to FIRE in May 2015, my AA in my rollover IRA is 50/50 and I have three years in a taxed savings account by the time that's gone SS will kick.Even so it gets my attention.
BF
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Old 10-09-2014, 07:55 PM   #49
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We think we can get by on about 2/3 of our current assets. Have 2 years in cash and inherited treasuries that mature next year. Cross our fingers and enjoy the ride. Of course the group wants me to stay on in the new position but less frequently. Will have to consider.


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Old 10-09-2014, 09:03 PM   #50
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Retiring in 7 weeks and have 4 years in cash, 5 to 10 years in balanced fund and TIPS. I have given notice and can't wait to start really living.
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Old 10-10-2014, 12:33 AM   #51
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Watching the Dow and S&P take a sharp downturn....not liking the trend...but not panicking and holding my ground.

BUT - it is making me concerned/worry about my plans to FIRE in '15.

If the market continues to sell off and slide - I may have to face OMY

I don't want to start FIRE with a 'bad sequencing'.

Anyone else feeling the same way?
You are going to see many downturns throughout retirement so I wouldn't worry about it.

If you are truly diversified(bucket strategy) and have several years of cash on hand you should be good to go. If not. You need more buckets.
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Old 10-10-2014, 01:18 AM   #52
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i agree with others who say this is hardly a blip.

A correction doesnt occur until a 10% fall. A bear market not til 20%.

SP500 still up for the year
Even Russell 2000 is down just a couple percent this year...

peanuts. normal volatility. buy the dips.

if this small "normal" september-october dip is causing anxiety, maybe you're not as ready as you think to retire. We've not been in correction territory in 3+ years. It's actually quite healthy for bull markets to correct now and then. Best we did was -6% back in Feb if I recall.

We need 10%. personally I'd like to see 15% with an excuse being Ebola or Fed raising rates or something like that. Good to wash off the decks now and again.

Keep to your strategy. Dont panic. Dont fear.
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Old 10-10-2014, 06:58 PM   #53
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Snarky reply from Wednesday

Oh, market is recovering a bit this AM - is everything OK now?

-ERD50


Snarky replay today - no

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Old 10-10-2014, 07:45 PM   #54
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Snarky reply from Wednesday

Oh, market is recovering a bit this AM - is everything OK now?

-ERD50


Snarky replay today - no
It wasn't snarky. It was just an observation that markets go up and down. Even today's (or this week's) drop is just a blip in the long run. Look at a long term chart.

If a long term investor got scared over every drop of this order, they'd be out of the market again and again. And when would they get back in?

edit/add: after going back to look at my post, I see you left out all the analysis I put into it. That last comment was just an 'exclamation point' to my previous comments. If I just wanted to be snarky, there wouldn't be any analysis, just something 'pithy'. Something bugging you?

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Old 10-13-2014, 06:50 AM   #55
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If I were retiring now I would bake in a 20% correction and see if I was still good to go.
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Old 10-13-2014, 11:09 AM   #56
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If I were retiring now I would bake in a 20% correction and see if I was still good to go.
Agree, and I've been doing that all along. Without a correction I wouldn't feel "good" without 100% success; with the correction factored in I'm ok (but still somewhat nervous) with a 95% success rate but I keep trying to remind myself of the upside potential.
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Old 10-13-2014, 11:12 AM   #57
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If I were retiring now I would bake in a 20% correction and see if I was still good to go.
I have my worst case scenario set so I'd still be ok with equities going to zero. Obviously, that would indicate far greater problems and that the fixed income may no longer be good.
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Old 10-13-2014, 11:27 AM   #58
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If you're crying, you should be buying.....
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Old 10-13-2014, 11:47 AM   #59
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If I were retiring now I would bake in a 20% correction and see if I was still good to go.
Before I retired in June I adjusted my AA and planned on a 40% correction on the equity side of my portfolio.

My former employer hinted on my return for a project in January and I respectfully declined. Just the thought of having to be in the office again makes me anxious.
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Old 10-13-2014, 11:50 AM   #60
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40% planned correction ? 100% equity wipe out ? I thought I was conservative .... I look like a rebel
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