Just like 2008

[TwoByFour]

Quote:

Originally Posted by Big_Hitter I'd say a 25% to 33% change in SWR is material

How can you have a change in SWR based on the market after you have retired? SWR by definition is calculated once, when you retire, and is based entirely on your assets at that time.

[HI Bill]

Quote:

Originally Posted by Texas Proud it looks like I am going to lose almost as much this month as I did 10 year ago!!!...Now, the pct is much less, but in absolute $$$s it is almost the same...

Yes, a 3% swing means a $55K change for me...seeing $100K dissapear from your account value over the course of a week is disconcerting...but I also bought some at lower valuations. Like I told my wife. Every time the market hits a new high, I have faith that regardless of how low it goes, and eventually, the new high will be surpassed. I'm looking forward to being retired and out doing stuff, instead of sitting in my office, watching the market's peturbations.

[Big_Hitter]

Quote:

Originally Posted by TwoByFour How can you have a change in SWR based on the market after you have retired? SWR by definition is calculated once, when you retire, and is based entirely on your assets at that time.

my bad I just meant WR

[Jerry1]

Quote:

Originally Posted by Jerry1 Not only that, the S&P is still above the starting level for the year of 2,695.

Quote:

Originally Posted by Running_Man Ummm no it is not Oh wait... Yes it is..... Will revisit in a few minutes.......... Ummmm no it is not....... Soon I wont be able to reedit...... but I think this will hold for a while

Yes, a rough day but still, if it holds as it is today, a flat or slightly negative year is a lot better/different than a 10, 20 or higher percentage loss.

Thankfully, I took the advice of many on this forum and elsewhere and have a very low equity percentage in my AA (about 40%). Not that it isn’t hard to watch the number on my Fidelity statement go down, but that money is for much later in life. My big worry is the tsunami, market drop, MC takes away retiree healthcare, inflation kicks in at a much higher rate . . . I can take on some disappointment, but being my first year of retirement, SOR risk does concern me.

On the flip side, better now than later. I’d rather go back to work now than to realize when I’m 75+ that I don’t have enough and need to work and not be able to at that time.

[Big_Hitter]

Quote:

Originally Posted by Jerry1 Thankfully, I took the advice of many on this forum and elsewhere and have a very low equity percentage in my AA (about 40%).

I don't consider 40% to be very low - I'm at 50% at age 54

but yes having a lower equity percentage allows us to withstand material market drops

[marko]

The title of this thread is "Just like 2008"

My big take-away from 2008 was the great benefit of sitting tight and riding it out.

If this is indeed just like 2008, can we hope for another decade of extraordinary returns starting sometime in March 2019?

[Willers]

This feels nothing like 2008 to me. I have a few friends in the banking industry and remember them actually looking literally scared a few times during that drop.

That said, even though I have a relatively conservative allocation (which helps my psyche), I've still lost enough that I can't exactly say "meh" to 6 figure drops. I know I don't need the cash for years, but it still doesn't feel great...

[Free bird]

Slow day. Everyone counting their money.

[Retch The Grate]

This is why I am aiming for a 3% withdrawal rate with inflation adjustment afterwards. No historical period where that has failed for any duration. So whatever the market does, I get my desired lifestyle unless things go extraordinarily differently. For now, bring on the buying opportunities hopefully.

[NW-Bound]

Quote:

Originally Posted by marko The title of this thread is "Just like 2008" My big take-away from 2008 was the great benefit of sitting tight and riding it out. If this is indeed just like 2008, can we hope for another decade of extraordinary returns starting sometime in March 2019?

Back then, the S&P lost 57% of its value from the peak. Starting from $1, it became 43 cents.

The S&P recently peaked at 2931. It closed today at 2656, not quite 10% down. One dollar became 90 cents.

Yes, you can have 10 years of extraordinary returns once the S&P gets down to 1267. It means the S&P gets down to 1/2 of what it is now.

The current 90 cents has to become 43 cents first. After that, a wonderful 10 years awaits us.

[COcheesehead]

In 2008 I didn't own any bonds or bond funds. I just watched in awe as my money evaporated.
I now at least have something to rebalance from and won't have to touch equites for a long, long time. I can wait this out for years.

[explanade]

One difference may be that the Fed is trying to normalize or raise rates after the most accommodative monetary policy in history.

[Another Reader]

Will check around November 5th to verify all the tenants paid their rent this month. Wasn't much of a problem in 2008 - 2012. No ripples in employment from this one yet.

[street]

Quote:

Originally Posted by OldShooter There is an old flight training rule regarding failed-engine landings at night: As you get close to the ground, turn on your landing light. If you don't like what you see, turn it off. When the market is going up I tend to watch it and smile. When it's going down, I'm a long-term investor, landing light off.

I like that a lot and that is how, I see it also.

[bingybear]

Quote:

Originally Posted by HNL Bill Yes, a 3% swing means a $55K change for me...seeing $100K dissapear from your account value over the course of a week is disconcerting...but I also bought some at lower valuations. Like I told my wife. Every time the market hits a new high, I have faith that regardless of how low it goes, and eventually, the new high will be surpassed. I'm looking forward to being retired and out doing stuff, instead of sitting in my office, watching the market's peturbations.

And what do you do if it changes by 100k - 150k in a day?

ok...it is not enjoyable.

[copyright1997reloaded]

Quote:

Originally Posted by RAE Yep, that is the issue, in a nutshell. If you don't need the money for 5,10, or more years, then "meh" is probably the right attitude. On the other hand, if you think you might need it sooner, then that is an entirely different situation. Some would say you shouldn't have been in equities in the first place if you fall into the second category (and I don't disagree); but if you are, then I think it makes some sense to move to safer assets with at least some of your $$ in equities. Just my opinion. And yes, I understand the effect of inflation over time, etc, etc., so no need to go there.

This is why 'target date' funds exist. So that it is done automatically for you.

[Franklin]

well after the 600 pts today I am $366K below my hi water mark just 60 days ago. Thats about a 4% decline from the top. So dollar wise it is larger than I expected . My mix is about 55% moderate equities with the remainder bonds and cash. But I've been down this road before and tend to creep back in now.

[ESRwannabe]

Quote:

Originally Posted by OldShooter There is an old flight training rule regarding failed-engine landings at night: As you get close to the ground, turn on your landing light. If you don't like what you see, turn it off. When the market is going up I tend to watch it and smile. When it's going down, I'm a long-term investor, landing light off.

I setup automatic deposits today with Vanguard for monthly purchases. So now I don't need to look at it. Everything is on auto-pilot.

It may be about time to delete all my financial/news bookmarks, cancel cable, and go on a year plus video game bender.

If I spend all my time killing space aliens and zombies there won't be time to screw up my investments.

I'm going to make damn sure I am as ignorant as possible about what the economy and stock market are doing if we get another 2008. I'm not going through that %&*)^^ again.

[pb4uski]

Take a breath everyone.... VTSAX which IMO is a good proxy for the U.S. domestic stock market is still 0.20% up YTD with dividends reinvested.... this is nothing like 2008.

It might just be a bit of a flat year but only time will tell.

https://investor.vanguard.com/mutual...formance/vtsax

[RAE]

Quote:

Originally Posted by marko The title of this thread is "Just like 2008" My big take-away from 2008 was the great benefit of sitting tight and riding it out. If this is indeed just like 2008, can we hope for another decade of extraordinary returns starting sometime in March 2019?

I wouldn't bet on that happening.