Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 12-19-2014, 02:14 PM   #161
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,405
Quote:
Originally Posted by samclem View Post
If I were similarly afflicted, I would make every effort to just check my balance annually.
Daily fluctuations are just noise, and no reason for glee or sadness.
Viewing wealth as "shares owned" or "claims against future revenue" can be just as valid as a dollar amount.
When the "noise" can add up to one yearly expense or, heaven forbid, a decade of expenses, I want to know what's going on. However, I agree that people who have a weak stomach should not look at their account often. I have plenty of relatives who would do a heck of a lot better if they didn't.

Quote:
Originally Posted by M Paquette View Post
A bear market is an extended period of time during which people who think this time is different sell all their investments to people who understand that this time is never different.
Eh, I can say the same thing about a bubble. In fact, I can say the same thing about any market.

There are always a buyer and a seller in any market. What concerns me is what they think the fair price is. And I want to know what the settled price is, even if I am not part of that transaction. It's just my nosy manner. And if the price is irresistible, I may want to enter into that transaction. I hate to miss out on a good deal, whether buying or selling.
__________________

__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound 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 12-19-2014, 04:53 PM   #162
Thinks s/he gets paid by the post
frayne's Avatar
 
Join Date: Oct 2002
Location: 19th Hole
Posts: 2,530
I'm calling this latest downturn and rebound nothing more than a corrected correction. Very similar to what happened a few months ago.
__________________

__________________
A totally unblemished life is only for saints.
frayne is offline   Reply With Quote
Old 12-19-2014, 05:34 PM   #163
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 1,905
Quote:
Originally Posted by frayne View Post
I'm calling this latest downturn and rebound nothing more than a corrected correction. Very similar to what happened a few months ago.
So when it goes down again its an incorrectly corrected correction correct?
__________________
ejman is online now   Reply With Quote
Old 12-19-2014, 06:22 PM   #164
Thinks s/he gets paid by the post
RetireAge50's Avatar
 
Join Date: Aug 2013
Posts: 1,121
I agree the portfolio value is what it is at any given time. However this value is only meaningful at the time I want to sell. For example if my home goes up to $1 million it means the same to me as if it was only worth $100,000. Shelter, warmth, etc.
If you are generating an $80,000 income on a $2 million portfolio a 20% correction or $400,000 should only feel like a $16,000 per year hit on your income. The short-term volatility is felt when you sell but the longer term probabilities remain unchanged.
__________________
RetireAge50 is online now   Reply With Quote
Old 12-19-2014, 07:08 PM   #165
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,405
Every so often, to tamper our enthusiasm about equities, we should look at a graph like the one below that I linked in from simplestockinvesting-dot-com. Except for during the secular bull market of 1983-2000, buy-and-holders do not do that well.

For the most recent period of 2000-2013, only people who bought the dips got ahead. These buyers are either younger accumulators with fresh cash, or retirees who rebalance or hold balanced funds that rebalance for them. Buy-and-holders got nowhere.

And look how much investors lost in the period of 1967-1985, even with dividends all reinvested and a WR of 0.

__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 12-19-2014, 07:36 PM   #166
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,384
True enough. But everyone is an expert in his own mind, thus we will believe whatever we want or need to believe.


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 12-19-2014, 07:37 PM   #167
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,035
Quote:
Originally Posted by NW-Bound View Post
Every so often, to tamper our enthusiasm about equities, we should look at a graph like the one below that I linked in from simplestockinvesting-dot-com. Except for during the secular bull market of 1983-2000, buy-and-holders do not do that well.

For the most recent period of 2000-2013, only people who bought the dips got ahead. These buyers are either younger accumulators with fresh cash, or retirees who rebalance or hold balanced funds that rebalance for them. Buy-and-holders got nowhere.

And look how much investors lost in the period of 1967-1985, even with dividends all reinvested and a WR of 0.


Sp500 is a price index, and your graph looks like it may not be total return. Can you confirm it is total return?


Sent from my iPhone using Early Retirement Forum
__________________
dallas27 is offline   Reply With Quote
Old 12-19-2014, 07:54 PM   #168
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,405
The blue line is price only. The orange line is with all dividends reinvested.

Both are corrected for inflation, as labeled in the chart header.

I quoted the source of this chart in the previous post. One can find many charts like this on the Web. I assume they are all based on the same historical data set.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 12-19-2014, 08:02 PM   #169
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,405
Quote:
Originally Posted by haha View Post
True enough. But everyone is an expert in his own mind, thus we will believe whatever we want or need to believe.
I like to have more people believing in stocks. Not that equity is bad as I am still 70% in it.

But as the price goes higher and higher, eventually something good becomes overvalued. I want to be able to bail out before my cohorts.

Yes, I may be a player in the "greater fool" game too, but I do not think that I have a choice. So, the only thing for me to do is to execute properly, when that time comes. Easier said than done, but a guy has got to at least think ahead.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 12-19-2014, 08:10 PM   #170
Thinks s/he gets paid by the post
frayne's Avatar
 
Join Date: Oct 2002
Location: 19th Hole
Posts: 2,530
Quote:
Originally Posted by ejman View Post
So when it goes down again its an incorrectly corrected correction correct?

Correct !
__________________
A totally unblemished life is only for saints.
frayne is offline   Reply With Quote
Old 12-19-2014, 08:18 PM   #171
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,615
Annualized return of the broader US market ( Wilshire 5000) from 19 Dec 2000 to today (the supposedly flat period when B&H investors made nothing). After inflation and dividends= 3.75% PA. Lessons: Hold a diversified portfolio. Buy and hold can work just fine (I'm virtually certain a Wilshire 5000 B&H investor did much better over this period than the average trader trying to buy on the dips).
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Old 12-19-2014, 08:47 PM   #172
Full time employment: Posting here.
 
Join Date: Mar 2010
Location: Chicago
Posts: 867
Quote:
Originally Posted by audreyh1 View Post
Agreed - not that exciting until we cross 2070.
OK, Aud, we just crossed 2070. What should we do next.
__________________
ripper1 is offline   Reply With Quote
Old 12-19-2014, 08:53 PM   #173
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,405
I was careful to say 2000-2013 instead of 2000 to present, the reason being all the gain from 2000 till present came in the last 2 years.

I do not think the Wilshire 5000 would differ that much from the S&P, but went to Morningstar to look up the performance of the WFIVX Vanguard Wilshire 5000 mutual fund to see for myself. For inflation data, I use data from inflationdata-dot-com.

From 1/1/2000 to 12/18/2014, a $10K deposit grows to $18,014 (dividend reinvested), which is an annualized return of 4.3%. However, that is before inflation, which runs 40% cumulative in that period. The $18K becomes $12.87K after inflation, which is an annualized return of 1.8%/yr.

What is worse is that all that return comes in less than the last 2 years. Up to as late as May 2013, the $10K only grew to $13.8K nominally, which barely matched the cumulative inflation up to that point. In other words, buy-and-hold investors had to wait more than 12 years to break even.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 12-19-2014, 11:12 PM   #174
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,469
Quote:
Originally Posted by ripper1 View Post
OK, Aud, we just crossed 2070. What should we do next.
Get ready to make the magic noise . But maybe wait until after Jan 2nd for those of us rebalancing on the first trading day of the year?

I thought today we might have a new closing all-time-high. Intraday high is 2079 something, closing high 2075.4 or thereabouts.
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is offline   Reply With Quote
Old 12-20-2014, 05:10 AM   #175
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,412
Quote:
Originally Posted by NW-Bound View Post
I was careful to say 2000-2013 instead of 2000 to present, the reason being all the gain from 2000 till present came in the last 2 years.

I do not think the Wilshire 5000 would differ that much from the S&P, but went to Morningstar to look up the performance of the WFIVX Vanguard Wilshire 5000 mutual fund to see for myself. For inflation data, I use data from inflationdata-dot-com.

From 1/1/2000 to 12/18/2014, a $10K deposit grows to $18,014 (dividend reinvested), which is an annualized return of 4.3%. However, that is before inflation, which runs 40% cumulative in that period. The $18K becomes $12.87K after inflation, which is an annualized return of 1.8%/yr.

What is worse is that all that return comes in less than the last 2 years. Up to as late as May 2013, the $10K only grew to $13.8K nominally, which barely matched the cumulative inflation up to that point. In other words, buy-and-hold investors had to wait more than 12 years to break even.

this will be updated for december at months end.

through november real return from 2000 peak was 1.74% dividends reinvested. we picked up a few more fractions of a % in december.

__________________
mathjak107 is offline   Reply With Quote
Old 12-20-2014, 08:22 AM   #176
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Eagan, MN
Posts: 3,049
What would a bond portfolio look like after inflation? That is a better comparison...

You will likely find it worse.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is online now   Reply With Quote
Old 12-20-2014, 08:59 AM   #177
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,412
here you go. i found it up to 2013.
__________________
mathjak107 is offline   Reply With Quote
Old 12-20-2014, 09:10 AM   #178
Thinks s/he gets paid by the post
Bikerdude's Avatar
 
Join Date: Jul 2006
Posts: 1,901
Quote:
Originally Posted by Senator View Post
What would a bond portfolio look like after inflation? That is a better comparison...

You will likely find it worse.
Just a quick check but it looks like 1.783% real for the 10 yr tbill.

http://dqydj.net/treasury-return-calculator/
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
Bikerdude is offline   Reply With Quote
Old 12-20-2014, 11:29 AM   #179
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
harley's Avatar
 
Join Date: May 2008
Location: Following the nice weather
Posts: 6,428
Actually, the OP title is exactly right. It was a small correction for a few days (the crash of October) followed by big gains and new records.
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Will Rogers, or maybe Sam Clemens
DW and I - FIREd at 50 (7/06), living off assets
harley is offline   Reply With Quote
Old 12-20-2014, 01:26 PM   #180
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,615
Quote:
Originally Posted by NW-Bound View Post
From 1/1/2000 to 12/18/2014, a $10K deposit grows to $18,014 (dividend reinvested), which is an annualized return of 4.3%. However, that is before inflation, which runs 40% cumulative in that period. The $18K becomes $12.87K after inflation, which is an annualized return of 1.8%/yr.
I guess it is subjective, but 1.8% real return during a "flat market" doesn't sound too shabby. And if we compare it to the offered alternative (clever in and out trading to beat those other slothful investors), I think we might be even more satisfied with those returns.
__________________

__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   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
2014 Doritos Crash the Superbowl Contest nvestysly Other topics 2 01-09-2014 04:20 PM
I put it all in Disney in October 2012...and I got a lot of grief from memebers oldnews Stock Picking and Market Strategy 68 11-02-2013 04:03 PM
October 1987 Crash: What would you do? ZMAN FIRE and Money 47 10-19-2007 10:45 PM

 

 
All times are GMT -6. The time now is 11:36 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.