Did 2008 Recession Spoil You?

[audreyh1]

Quote:

Originally Posted by marko With the market seemingly taking a 300+ point drop every day of late, my general reaction is 'meh!'. Having white-knuckled the 2008 Great Recession and survived it quite profitably, I'm wondering if one of the side benefits was for folks to have learned to not over-react to such drops. So, did anyone else change their view of market drops/corrections after 2008? In addition to now viewing market plummets as buying opportunities, are you more relaxed about a big air pocket than before '08? Did the recession of '08 spoil you or ruin you?

Quote:

Originally Posted by foxfirev5 I think that while pretty severe the relatively short duration has contributed to complacency. The Great Depression had much longer lasting impression. A long slow rise out of the 1932 bottom, only to get hit again in 1937. However most of those effected are gone.

The OP are taking about stock market behavior.

Recessions are a different thing.

The Great Recession was a huge economic event regardless of what happened in the markets. Unemployment went way up - higher than it had been in a long time, and took a very long time to get back to “normal” range. Layoffs and foreclosures were everywhere. Credit is still tight.

And it did take several years for the markets to regain the old highs, while the economy was stuck in a slow growth environment.

I think people have short memories.

But yes - at these lofty levels a 10% stock market correction means nothing to me.

Get us back to early 2016 levels and I might start paying attention.

[ponyboy]

Quote:

Originally Posted by njhowie How is everything rosy? There is $20T in national debt, expected to grow by (at least) $1T per year for the next 10 years, interest rates are on the rise, and a global trade war is on the horizon. Looks more like the perfect storm to me.

You do realize the "national debt" is completely made up? It has absolutely no meaning. Its simply a talking point that politicians like to throw around to make themselves look good and others bad.

The federal reserve (private company) prints its own money at will. The USD is no longer backed by anything. If our government needs more money they just print more.

If someone can point me in the direction where the national debt is id like to know. If you're going to direct me to a spreadsheet that shows a negative balance...skip it. Again...we print our own money...national debt is a joke. the government does not pay back loans they take from private companies.

[Free bird]

The 9 year run up has spoiled people more than any recession. ZIRP & negative rates have given the impression that holding risk assets isn't risky. QE was not a known tool until the fed became desperate. The rich get richer & the poor get poorer. In the calculator we trust. Looks like a retest of the lows is underway. If a long shallow bear market emerges & all the pulling growth forward strategy starts to fizzle the massive debt might start to drag us down. Hey I've been on the computer too long. Bring on the snarkie remarks .

[NW-Bound]

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Originally Posted by audreyh1 ...I think people have short memories. But yes - at these lofty levels a 10% stock market correction means nothing to me. Get us back to early 2016 levels and I might start paying attention.

Yes, people do have short memories.

I pay attention everyday, even without a market correction, market up or down, even though I do not trade every day. Gotta keep my eyes peeled for opportunities.

[easysurfer]

Held on tight in 2008-2009. Survived the recession by not doing any panic selling or rushing out to buy.

Found confidence in survived then and can do so now.

Big ups and down swings in markets are great theater, but not something to throw me away from my AA strategy.

[Olbidness]

Having retired July of last year I wondered how I would react to a market correction now that I don't have an actual paycheck coming in. I have 2 years of living expenses in cash so that helps with sleeping at night. I would like to think having survived the black Monday in '87, dot-com bust, the great recession in 2008 have all contributed to make me a more seasoned investor. Now as before I look at a market downturn as a buying opportunity, I pray that inclination does't bite me in the buttocks.

[copyright1997reloaded]

Quote:

Originally Posted by marko But I tend to take a long view. Like 15-20 years out, even though I'll be 80 by then. I think one of the most underestimated and under used phrases in the market is "over time". IMO, most things people worry about in the short term get sorted out over the long haul. Downdrafts are not pleasant but for me, it allows me to go "back in time" so-to-speak and take advantage of pricing on good companies that I missed back then. Wouldn't it be nice to go back to 2016 and buy Apple at $92?

Just remember that if Apple is back at $92, there will be all kinds of news about the economy suffering, about them losing market share, about soft phone sales, about ... in other words risk of further loses.

[ExFlyBoy5]

I haven't really paid too much attention to the ups/downs of the market recently. The news noisemakers love to banter on endlessly about "DOWN 300 POINTS!!!" but with the market as high as it is, this works out to be a very small percentage.

At any rate, I do think there is a significant correction coming and I have planned accordingly. I am still pretty darn young, so I am not really sweating it too much. However, my Dad is approaching 91 years old and until (very) recently was weighted very heavily in stocks...but I have taken most of that off of the table. He was initially skeptical about reducing his stock holdings, but I told him he has REALLY won the game, so it was time to cash out.

[foxfirev5]

Quote:

Originally Posted by audreyh1 The OP are taking about stock market behavior. Recessions are a different thing. The Great Recession was a huge economic event regardless of what happened in the markets. Unemployment went way up - higher than it had been in a long time, and took a very long time to get back to “normal” range. Layoffs and foreclosures were everywhere. Credit is still tight. And it did take several years for the markets to regain the old highs, while the economy was stuck in a slow growth environment. I think people have short memories. But yes - at these lofty levels a 10% stock market correction means nothing to me. Get us back to early 2016 levels and I might start paying attention.

Oh, don't worry. I know the difference between the stock market and the economy. However there is a mighty strong correlation although the timing may vary considerably.
Working in a cyclical industry (construction), I always dealt with the situation that when stocks were cheap the job situation was usually shaky as well. Despite all that I kept buying for decades. More like a deer in the headlights than a financial wizard.

[copyright1997reloaded]

Quote:

Originally Posted by ponyboy You do realize the "national debt" is completely made up? It has absolutely no meaning. Its simply a talking point that politicians like to throw around to make themselves look good and others bad. The federal reserve (private company) prints its own money at will. The USD is no longer backed by anything. If our government needs more money they just print more. If someone can point me in the direction where the national debt is id like to know. If you're going to direct me to a spreadsheet that shows a negative balance...skip it. Again...we print our own money...national debt is a joke. the government does not pay back loans they take from private companies.

Yes, they can print money at will. That doesn't mean that they can cause goods and services to be created at will. So let's play a game. Let's say they simply go 'poof' and give themselves $20 Trillion dollars to pay off all of the debt. What happens next? (I will give you a hint, it starts with i and isn't a phone.)

[kgtest]

Quote:

Originally Posted by marko But I tend to take a long view. Like 15-20 years out, even though I'll be 80 by then. I think one of the most underestimated and under used phrases in the market is "over time". IMO, most things people worry about in the short term get sorted out over the long haul. Downdrafts are not pleasant but for me, it allows me to go "back in time" so-to-speak and take advantage of pricing on good companies that I missed back then. Wouldn't it be nice to go back to 2016 and buy Apple at $92?

Yes, especially since I have a lot more cash. I bought at $96 back then. It's been my best move so far. Problem is, when do you sell....when AAPL looks to be tanking? When AAPL growth slows, whihc does happen in history but comes roaring back...or do you just keep holding today

[W2R]

Quote:

Originally Posted by marko With the market seemingly taking a 300+ point drop every day of late, my general reaction is 'meh!'. Having white-knuckled the 2008 Great Recession and survived it quite profitably, I'm wondering if one of the side benefits was for folks to have learned to not over-react to such drops. So, did anyone else change their view of market drops/corrections after 2008? In addition to now viewing market plummets as buying opportunities, are you more relaxed about a big air pocket than before '08? Did the recession of '08 spoil you or ruin you?

I feel more confident now that I can survive another crash. I don't think I am especially relaxed when the market drops, but I am not now (and never was) inclined to sell low or do anything, really, in response to these drops. I know what works for me, which is to do nothing, and luckily I find that for me fear has a tendency to produce exactly that result.

2008-2009 also taught me that the often repeated mantra of "This time it's different!" in some respects was just total hogwash, because the market did recover as always. So, maybe that will help in future crashes. Or, maybe not.

I feel like it's part of our job to reassure any newbie investors that may appear on the forum, and do some handholding if necessary. Whether now or in 2008-2009, I am always concerned that some may over-react and lose much of their retirement nestegg. But there hasn't been much or any handholding needed lately. I think that is probably because we have not had the giant market drops of 2008-2009; these are awfully small by comparison.

[Mdlerth]

I'm dodging answering the OP's question, and posing my own: Am I the only person who thinks this thread is amusing? (Admittedly, I also think "pull my finger" is funny. )

There will undoubtedly be bear markets again, but the next one hasn't even occurred yet and already I'm hearing "This time it's different?"

The market's gone up too far for too long. It's all based on Fed fiddling. Too much debt everywhere. Investors are too complacent. Buffett is stockpiling cash. CAPE10. Derivatives. China this, Russia that.

It's as if we just can't accept that the world may not be coming to an end.

[NW-Bound]

Quote:

Originally Posted by Mdlerth I'm dodging answering the OP's question, and posing my own: Am I the only person who thinks this thread is amusing? (Admittedly, I also think "pull my finger" is funny. ) There will undoubtedly be bear markets again, but the next one hasn't even occurred yet and already I'm hearing "This time it's different?" The market's gone up too far for too long. It's all based on Fed fiddling. Too much debt everywhere. Investors are too complacent. Buffett is stockpiling cash. CAPE10. Derivatives. China this, Russia that. It's as if we just can't accept that the world may not be coming to an end.

The world is not coming to an end. But it may go through 7 biblical years of famine. I think I can handle it.

[audreyh1]

Quote:

Originally Posted by NW-Bound Yes, people do have short memories. I pay attention everyday, even without a market correction, market up or down, even though I do not trade every day. Gotta keep my eyes peeled for opportunities.

I deliberately picked an investment style that lets me ignore the markets for a whole year if I so choose!

[NW-Bound]

Sure. But you couldn't ignore the market, and still have to see what it is doing.

I like to see what the market is doing. It's interesting to see people running back and forth, and all the chaos.

The husband of my wife's sister truly does not care about what the market is doing. He has been in CD since around the time of 9/11. He couldn't hack the market gyrations.

PS. I don't have access to CNBC at the main home. I simply watch the indices on the Web, and look how my own stock holdings bounce like yo-yo. Lots of churning, running to and fro... And when I can't stand that craziness, I make a buy or sell against them.

[bigcmagor]

I would have to say that period of time ruined me as an investor and burned me out as a leader. Twenty years of investment gains and employer matching funds vaporized. Had to choose which 140 of 360 close-knit employees to lay off. Best friend and next door neighbor committed suicide - he was a home builder.


I've been in and out of the market since and recovered financially but scared to death with the prospect of facing those days again, especially on the verge of retirement.

[audreyh1]

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Originally Posted by NW-Bound Sure. But you couldn't ignore the market, and still have to see what it is doing. I like to see what the market is doing. It's interesting to see people running back and forth, and all the chaos. The husband of my wife's sister truly does not care about what the market is doing. He has been in CD since around the time of 9/11. He couldn't hack the market gyrations. PS. I don't have access to CNBC at the main home. I simply watch the indices on the Web, and look how my own stock holdings bounce like yo-yo. Lots of churning, running to and fro... And when I can't stand that craziness, I make a buy or sell against them.

Oh I go through long periods of ignoring the markets. Gosh - it might sometimes be two months before updating any tracking spreadsheets.

If I’m watching during the year it’s purely for entertainment.

I don’t watch any broadcast TV let alone financial news networks. I have the CNBC app with a watch list and occasionally see some headlines. That’s way more than enough.

[Live And Learn]

There are only two things that worry me lately (a) sequence of return risks and (b) healthcare and being able to get "reasonably priced" coverage for pre-existing conditions since I still have 10 years to Medicare.

On the other hand, the last two years have brought me from being a daily market watcher to a being a busy retiree who has little time for watching television or reading the news (therefore no talking heads to get my panties in a bunch).

If things get really bad I reserve the right to freak out just as much as I did in 2008 - 2009 !

[NW-Bound]

Quote:

Originally Posted by audreyh1 Oh I go through long periods of ignoring the markets. Gosh - it might sometimes be two months before updating any tracking spreadsheets...

Two months is not as long as a year though.

Can you imagine logging to your account after 1 year, and see that you now have 60 cents on the dollar? Like in 1998?

Well, I am sure that, unless one is on an island cut-off completely from the outside world, he is not going to miss something like the Great Recession.

I did go for 2 months or longer without making a trade. But with the yo-yo market, I can pick up a bit of money here and there. I like it.