Good riddance, 2008.....

[ziggy29]

...so sayeth Fidelity in calculating my 401K's "return" in 2008:



Yuck. Of course, it was down about 36% at one point...

[Bikerdude]

Quote:

Originally Posted by ziggy29 ...so sayeth Fidelity in calculating my 401K's "return" in 2008: Yuck. Of course, it was down about 36% at one point...

I started the year with a 50/50 allocation and I'm down 20% as of the close 12/31/2008. Now, what does 2009 have in store.:confused:

[Alan]

My end of year performance was a return of -16.45%. My worst ever, Previous worst was -11% in 2002.

According to the VG portfolio analyzer, for my mix of 40/50/10, the worst ever year was -18.0% (1931) so a bit of a recovery in the last quarter I think.

My other figures are:

Last year -16.45%
Last 3 years -0.6%
Last 5 years 2.7%
Last 10 years 3.0%
Last 14 years 8.9%

I only started recording the details from 1994 but you can see how 2 bears in 10 years hammers the returns, and this current one possibly has a ways to run yet.

All the best in 2009.

[Moemg]

-30% .Let's hope this year is better !

[Dawg52]

Quote:

Originally Posted by Alan My end of year performance was a return of -16.45%. My worst ever, Previous worst was -11% in 2002. According to the VG portfolio analyzer, for my mix of 40/50/10, the worst ever year was -18.0% (1931) so a bit of a recovery in the last quarter I think. My other figures are: Last year -16.45% Last 3 years -0.6% Last 5 years 2.7% Last 10 years 3.0% Last 14 years 8.9% I only started recording the details from 1994 but you can see how 2 bears in 10 years hammers the returns, and this current one possibly has a ways to run yet. All the best in 2009.

You beat me. I was down just a little over 20% for 2008 with a 50/50 AA. But I'm moving forward. Even ditching my 'Born Loser' ID. Back to 'Full Time Golf Bum'. But if 2009 brings another 20% decline, back to 'Loser' status.

[Alan]

Quote:

Originally Posted by Dawg54 You beat me. I was down just a little over 20% for 2008 with a 50/50 AA. But I'm moving forward. Even ditching my 'Born Loser' ID. Back to 'Full Time Golf Bum'. But if 2009 brings another 20% decline, back to 'Loser' status.

I noticed your new avatar even before I read the e-mail. I like the positive approach to '09

[JOHNNIE36]

Quote:

Originally Posted by Bikerdude I started the year with a 50/50 allocation and I'm down 20% as of the close 12/31/2008. Now, what does 2009 have in store.:confused:

For me, it's 5.0 %. Capitol One 5 year CD through Fidelity. Rolled my 401k into a Fidelity IRA. I sleep really good at night. Wake up in the morning and only have to think about my tee time. So long to stocks.

[Bikerdude]

Quote:

Originally Posted by JOHNNIE36 For me, it's 5.0 %. Capitol One 5 year CD through Fidelity. Rolled my 401k into a Fidelity IRA. I sleep really good at night. Wake up in the morning and only have to think about my tee time. So long to stocks.

You certainly were in the right place at the right time. I dodged a "bullet" in 2000/2002 but got caught with 2008. Going forward, I would be concerned with the amount of money being printed and the inflation to follow.

[Dawg52]

Quote:

Originally Posted by JOHNNIE36 For me, it's 5.0 %. Capitol One 5 year CD through Fidelity. Rolled my 401k into a Fidelity IRA. I sleep really good at night. Wake up in the morning and only have to think about my tee time. So long to stocks.

Good for you. I hope some day I recover my losses and then can say the same thing. BTW, I saw where Abby Joseph Cohen is predicting a nice rally for 2009. She predicts the S & P 500 to close at 1150. That would be a 27% gain. Hope she's right, but she has been to optimistic before.

[Gumby]

The thing that really bothered me was that asset class correlations ran to 1.0 All that diversification provided absolutely no protection -- everything went down.

[freebird5825]

-24.7% YTD on a 50/50 AA, intentionally repositioned in summer 2007 from pre-FIRE 65/35 AA.
current AA has migrated to 45/55, still within my tolerances of target 50/50.
Riding the roller coaster, and haven't blinked.

[NW-Bound]

Quote:

Originally Posted by Gumby The thing that really bothered me was that asset class correlations ran to 1.0 All that diversification provided absolutely no protection -- everything went down.

Sure. That tells you something. That's everything went down except PAPER MONEY. Think about it. PAPER MONEY. The only difference between a $1 dollar bill and the $100 dollar bill is the two extra zeros that are printed. Did not even cost more ink!!! And people want to hold THAT!!!

Already having two houses, I am not going into real estate, though it does appear quite reasonable now. So, I only look at equities. In contrast with most people here, I usually have about 30% cash+Bond, 35% MFs and 35% individual equities, the latter I pick and follow.

In 2003, after losing 50% of my portfolio (due to tech stocks, but never dotcoms), I looked around to survey the landscape. At the same time that the US Marines toppled Saddam's statue in Bagdad, I observed that the entire natural gas sector plus the oil drillers/oil exploration were totally down in the mud. Not being a financial analyst, I simply did not understand how entire sectors could be down. Never being arrogant, I thought perhaps the street knew something I didn't.

So, I only bought only a couple of the strongest ones, such as Apache and Anadarko. I thought about sprinkling some money among the many weaker ones that were traded down around a few bucks. But then I refrained from it, still hurting from the losses of tech stocks that I loved so much, being an employee in that field myself. Still, I did not get out of the market, telling myself that two wrongs would not make it right, namely being heavy in tech stocks then getting out to cash at market bottom.

Apache and Anadarko did fairly well. But the lesser ones recovered much better and went up 10X. Yes, 10X. Had I sprinkled some money among them, I would do a heck of a lot better.

Now, looking around, there are so many stocks so cheap. I no longer care that much about tech stocks (wonderful but non-essential technology), but am salivating at old stodgy industrial stocks, such as chemical companies, tire and car battery producers, food growers, fertilizer producers. Looking abroad, I see mining companies, and later tar sand companies in Canada.

Cheap, cheap, cheap stocks.

BUY, BUY, BUY ...

Of course I may be wrong big, this time. It would be easier if I am not ER'ed and have a steady income to rely on to take more risks.

[Koolau]

Quote:

Originally Posted by JOHNNIE36 For me, it's 5.0 %. Capitol One 5 year CD through Fidelity. Rolled my 401k into a Fidelity IRA. I sleep really good at night. Wake up in the morning and only have to think about my tee time. So long to stocks.

Only time I'll ever get to really brag to you guys and gals...so I will. Actually came out ahead this year at least doing back-of-the-envelope calc. That even includes subtracting my yearly draw - which was pretty big due to intensive remodeling projects.

OK, I didn't do it Johnnie's way (think more along the lines of stable value funds, and some rather 'esoteric holdings' I won't go into.) But I'm scared spitless about the inflation I figure all the gummint money printing is bound to cause in the next few years.

Still trying to slowly move into equities, but my % equities keeps going down due to the recent unpleasantness.

As Gumby pointed out, correlation of the usual asset classes is near 1. As NW indicated paper money (for crying out loud!) was good to hold in '08. It's enough to make me think there is NO way to protect oneself no matter how diversified they are. And, I freely admit I got lucky this year.

So, if it weren't for a modest pension and the 'hope' of SS, I'd probably be looking for a j*b. Wait! There aren't any.

What keeps everyone else so confident in their AA? I really do want to move into equities because of inflation, but this 'perfect storm' of '08 makes me wonder if that's such a good idea after all.

I know all the theory and I've read most of the recommended books (e.g., Random Walk...). But when it comes right down to it, where do I go to get the 'faith' to execute on all the theory?

[NW-Bound]

Quote:

Originally Posted by Koolau . I know all the theory and I've read most of the recommended books (e.g., Random Walk...). But when it comes right down to it, where do I go to get the 'faith' to execute on all the theory?

Neither do I. So, I am still holding near 50% cash+MM+ I bonds, and have been DCA'ing into the various individual stocks I found interesting. Very slooowly now.

What happened in 2003 was that I started to buy a bit too soon, and kept losing money. So, I stopped buying (but did not sell!). I still came out OK, as my top in 2007 was nearly 3X my bottom in 2003.

[FIREdreamer]

The XIRR for my overall portfolio was -29% in 2008.

[TromboneAl]

My rebalancing spreadsheet tells me that tomorrow I need to move $106,000 into stocks. That's a lot. The only question is whether I do it all at once, or in several.

[Alan]

Quote:

Originally Posted by TromboneAl My rebalancing spreadsheet tells me that tomorrow I need to move $106,000 into stocks. That's a lot. The only question is whether I do it all at once, or in several.

My recent personal Wellesley returns are very poor and when I look I see that last year I did some TLH in December, buying $108,000 of Wellesley at $52.48/share. Bad timing, share price is now $44.57. In retrospect I should have kept the money in a MMF and DCA'ed over the year. C'est la vie

[TromboneAl]

Quote:

Originally Posted by Alan ...buying $108,000 of Wellesley at $52.48/share. Bad timing, share price is now $44.57. In retrospect I should have kept the money in a MMF and DCA'ed over the year. C'est la vie

Yes, but if you'd done that, and it had gone up fast in December, you might now be saying that in retrospect you should have lump summed.

I moved my $106,000 this morning despite a power outage (I used this antique thing called a "telephone"). Scary to move so much at once, but my system is to do my rebalancing all on Jan 2. By following a predefined system, I avoid any regrets that might come from listening to or not listening to voices in my head (Ziggy type voices -- not crazy type voices).

[REWahoo]

Quote:

Originally Posted by TromboneAl Scary to move so much at once, but my system is to do my rebalancing all on Jan 2. By following a predefined system, I avoid any regrets that might come from listening to or not listening to voices in my head (Ziggy type voices -- not crazy type voices).

*I hear voices...

Quote:

Originally Posted by TromboneAl I am itching to rebalance and get in on these low prices.

Father Guido voices...

Quote:

Originally Posted by REWahoo A real man wouldn't wait...

*S&P 500 on 11/20/08 when that was posted: 752
Today's opening S&P 500: 903 (+20%)

PS - I didn't have the guts to rebalance at that point either.

[calmloki]

Quote:

Originally Posted by REWahoo *I hear voices... ....

Interesting. As for me,