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Old 09-26-2013, 04:58 PM   #41
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For whatever reason, I was pretty calm. I remember looking at the charts and saying to myself, 'Geez, this really is of historic proportions!' (a bit more colorful language than that).
That's a better reaction than I had. I just sat there dumbfounded and said "WHAT? What just happened". I remember being in a meeting in Jan 09 and thinking, "well, there that goes..."

I kept plugging away with the usual monthly contributions and it seems in retrospect to be maybe one of the most pronounced times for dollar-cost averaging, at least in my investing time. Yes, there was the tech bust in 2000, but the limits for retirement contributions were pretty low.
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Old 09-27-2013, 12:58 PM   #42
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Here's a quick article of how returns affect success rates. MC simulation still, but the relative importance of returns should be widely applicable. I guess the big question is how to handle it.

Wade Pfau's Retirement Researcher Blog: Lifetime Sequence of Returns Risk

"For years 31-60, we switch from accumulation to distribution, and I am showing the impact of each year's return on the maximum sustainable withdrawal rate experienced by retirees. The return in year 31 is the return for the first year of retirement, and the result in this first year explains more than 14% of the final outcome for retirees. Retirees are very vulnerable to what happens just after they retire. This result holds even more so in the real world when we consider how human capital plummets at the retirement date, as it becomes increasingly difficult to return to the workforce. Sustainable withdrawal rates are disproportationately explained by what happens in the early part of retirement. The returns experienced in the last 10 years (years 51-60) have very little impact on how much one could sustainably withdraw over retirement.





And so with this figure, we can see a clear demonstration of the lifetime sequence of returns risk.
"
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Old 09-27-2013, 01:01 PM   #43
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That's a better reaction than I had. I just sat there dumbfounded and said "WHAT? What just happened". I remember being in a meeting in Jan 09 and thinking, "well, there that goes..."

I kept plugging away with the usual monthly contributions and it seems in retrospect to be maybe one of the most pronounced times for dollar-cost averaging, at least in my investing time. Yes, there was the tech bust in 2000, but the limits for retirement contributions were pretty low.
I was trying to figure out ways to get my hands on more cash to buy equities! That's why we all have different portfolios.
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