Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Length of time to recover our lost money?
Old 10-12-2008, 11:26 AM   #1
Thinks s/he gets paid by the post
 
Join Date: Mar 2007
Posts: 3,323
Length of time to recover our lost money?

Some of the people with financial backgrounds probably can guesstimate this one, but I understand that, during the Great Depression starting in 1929, those who left their money in stocks took alllll the way to 1954 to recoup the losses. Please correct me if I am wrong on that statement.
Anyway, is it going to take another 25 years to recoup all the losses many of us are taking right now, too? I am assuming so, but would love to hear what the finance professionals here think.
__________________

__________________
Please consider adopting a rescue animal. So very many need a furr-ever home and someone to love them! And if we all spay/neuter our pets there won't be an overpopulation to put to death.
Orchidflower 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 10-12-2008, 11:31 AM   #2
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
Quote:
Originally Posted by Orchidflower View Post
Some of the people with financial backgrounds probably can guesstimate this one, but I understand that, during the Great Depression starting in 1929, those who left their money in stocks took alllll the way to 1954 to recoup the losses. Please correct me if I am wrong on that statement.
Anyway, is it going to take another 25 years to recoup all the losses many of us are taking right now, too? I am assuming so, but would love to hear what the finance professionals here think.
I am not financial professional, and of course it will depend on what each individual owns, but I very strongly doubt that large aggregates like the Dow will be down anywhere near that long.

IMO, there are some amazing bargains around in companies that essentially cannot disappear.

ha
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Old 10-12-2008, 11:45 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by haha View Post
but I very strongly doubt that large aggregates like the Dow will be down anywhere near that long.
I'd vote for less than 25 yrs too, but certainly much longer than just a quick 2 - 3 year snap-back where we're sitting here in the autumn of 2011 talking about how glad we are that that's over with!

This assumes that during the next decade or so we solve major issues such as energy, water, food, inbound immigration, terrorism and the resulting cost to keep it in check, etc. Otherwise, we've just experienced a permanent adjustment downward in our aggregate wealth that won't abate ever, at least in terms of our lifetimes......
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 10-12-2008, 11:53 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,971
Sorry this is so vague, but last week I heard on CNN or FoxNews that Goldman Sachs was predicting the DJIA would be up 30% in the next 8 months and 40% in the next year. Wouldn't that be nice! Unfortunately, I've Googled to find verification --- without success...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 10-12-2008, 11:53 AM   #5
Thinks s/he gets paid by the post
 
Join Date: Mar 2007
Posts: 3,323
I saw on another post on this board regarding Suze Orman that she says this will be an L shaped recession--returning on the upswing around 2015. She could be right as every article on Marketwatch or from the Wall St. Journal--or any other media tv show or paper I have been able to get my hands on--says we will bottom somewhere around March or April of 2009 with a very slight upturn after that; so, we could just lope along until 2015 or longer.
...all I know is that I am a very unhappy camper lately...as in VERY....
__________________
Please consider adopting a rescue animal. So very many need a furr-ever home and someone to love them! And if we all spay/neuter our pets there won't be an overpopulation to put to death.
Orchidflower is offline   Reply With Quote
Old 10-12-2008, 12:12 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,408
im betting on new high within 5yrs.... i hope!
__________________
mathjak107 is offline   Reply With Quote
Old 10-12-2008, 12:42 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
I track my net worth on a annual basis.
I'm working on my projections now.
I'm estimating from 1/1/09 to 12/31/15 should equal 1/1/08 - so 7 years
#s after living expenses.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 10-12-2008, 12:43 PM   #8
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
Well, if I was smart enough to get out before this mess I'd be able to predict the recovery. Since I'm still all in, I'll pass on any predictions.
__________________
73ss454 is offline   Reply With Quote
Old 10-12-2008, 12:45 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
There is a mountain of money on the sideline now. Eventually people will be wanting to get the money earning again. And I expect that to be sooner than later.

However, for large cap indexes get back to the previous high the last time took almost 7 years from when the decline started.

I think investor will move money back in in the next 12 months if things stabilize. But meaningful gains are probably a ways off. The S&P 500 almost has to double to get back to its high.
__________________
chinaco is offline   Reply With Quote
Old 10-12-2008, 01:16 PM   #10
Full time employment: Posting here.
old woman's Avatar
 
Join Date: Dec 2005
Posts: 551
I think it will happen pretty quickly and those on the sidelines will see it up a few weeks then wait to see if it is truly going up then get in after the main upswing. People are putting money in 401K and IRA or ROTH and will not all stop yet those trying to live on investments will pull out less. Some of us will work years longer to be sure we have plenty in spite of this setback. For those of us not yet retired but about ready this was a good wake up call not to count on high returns and really think about risk tolerance. I have a very high risk tolerance and even with this downturn haven't considered selling low.
__________________
old woman is offline   Reply With Quote
Old 10-12-2008, 01:20 PM   #11
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
I'm going to say this for the umpteenth time.

If you reinvested dividends, your break-even point from the 1929 peak would have occurred in 1944, NOT 1954.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 10-12-2008, 02:16 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
TromboneAl's Avatar
 
Join Date: Jun 2006
Posts: 11,197
I'll also wager that if you rebalanced regularly, you would have recovered more quickly.

I cannot seem to understand what an "L shaped recession" means. Anyone?
__________________
Al
TromboneAl is offline   Reply With Quote
Old 10-12-2008, 02:29 PM   #13
Moderator Emeritus
Khan's Avatar
 
Join Date: Aug 2006
Location: Pine Island, Florida
Posts: 6,868
Send a message via AIM to Khan
Quote:
Originally Posted by TromboneAl View Post
I'll also wager that if you rebalanced regularly, you would have recovered more quickly.

I cannot seem to understand what an "L shaped recession" means. Anyone?
Down sharply
Stay low
Stay low
Stay low
Stay low
Up sharply
__________________
"Knowin' no one nowhere's gonna miss us when we're gone..."
Khan is offline   Reply With Quote
Old 10-12-2008, 02:31 PM   #14
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
Quote:
Originally Posted by ziggy29 View Post
I'm going to say this for the umpteenth time.

If you reinvested dividends, your break-even point from the 1929 peak would have occurred in 1944, NOT 1954.
Not to quibble, but in what sense is a retiree re-investing dividends? Quite the opposite- she is usually taking out more than dividends in living expenses.

There are many places to learn how to save and make money, but not very many devoted to living off that money.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Old 10-12-2008, 02:34 PM   #15
Dryer sheet aficionado
 
Join Date: Oct 2008
Posts: 46
Warren Buffett was recently quoted saying that in 5-10 years we would look back on this period and the extraordinary buys available at this time.

No surprise there but I think it's worth noting he did not say 3-5 years
__________________
Fastfade is offline   Reply With Quote
Old 10-12-2008, 02:39 PM   #16
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by haha View Post
Not to quibble, but in what sense is a retiree re-investing dividends? Quite the opposite- she is usually taking out more than dividends in living expenses.
If you had 15 years in a safe "bucket" for income, then you would have been able to reinvest all the dividends because you wouldn't be selling stocks for income for many years. This is one of the benefits of a "buckets of money" type of approach to asset allocation in and approaching retirement.

Plus, I didn't think the scenario we were talking about was strictly within the context of someone already retired.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 10-12-2008, 02:40 PM   #17
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
Very important to realize that what people usually say reflects their prejudices and failure to understand reality, much more than it has any meaning that reflects the outside world.

One of the reasons that world leaders are trying so hard to contain this mess is that a real business collapse would lead to severe social and political dislocation in almost all countries.
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Old 10-12-2008, 02:50 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by TromboneAl View Post
I'll also wager that if you rebalanced regularly, you would have recovered more quickly.

I cannot seem to understand what an "L shaped recession" means. Anyone?
RGE - The US Recession: V or U or W or L-Shaped?
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 10-12-2008, 03:05 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Mar 2007
Posts: 3,323
Ziggy29: The article I read must have meant without reinvesting then. Thanks for the input. I have it recorded, and, at least, you won't have to correct me again. Got it!
__________________
Please consider adopting a rescue animal. So very many need a furr-ever home and someone to love them! And if we all spay/neuter our pets there won't be an overpopulation to put to death.
Orchidflower is offline   Reply With Quote
Old 10-12-2008, 04:07 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,017
Quote:
Originally Posted by Fastfade View Post
Warren Buffett was recently quoted saying that in 5-10 years we would look back on this period and the extraordinary buys available at this time.

No surprise there but I think it's worth noting he did not say 3-5 years
In 10 years WB will be 88 years old. He doesn't have to plan for 40 years of ER. He has a huge NW even now and cannot possibly run out of money during his lifetime. How does this affect his risk tolerance?
__________________

__________________
Meadbh is offline   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
Find lost money (NOT spam!) dory36 Other topics 33 06-29-2013 07:16 PM
Your Boot Length TromboneAl Other topics 24 04-27-2006 04:18 PM
One of the manay lost sheep takes time to ask for info mickeyd FIRE and Money 0 02-25-2006 09:23 AM
MAKE UP FOR LOST TIME consejo Other topics 0 11-20-2004 04:28 PM

 

 
All times are GMT -6. The time now is 09:04 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.