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Old 05-09-2009, 07:44 PM   #21
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I learned a 40-45% equity allocation works for me
I learned the "hurry up and do nothing" approach to rebalancing can be a workable strategy
I learned having 8+ years worth of expenses in a combined cash bucket and SS income lets me sleep at night
I learned that being debt free (including no mortgage) also helps with the sleep at night thingy
I learned I'd much, much rather cut expenses than go back to w*rk
I learned that months of the news media screaming "THE SKY IS FALLING" can work on my ability to sleep at night and cause me to question the benefits of all the planning above.
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Old 05-09-2009, 07:50 PM   #22
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- I learned what my real, honest, OMG risk tolerance was. My post-FIRE 50/50 AA took me a bit beyond what I thought I was comfy with. I will stay with 40/60 going forward, maybe let it drift back to 50/50.
- I learned how to keep buying what people often laugh at (munis) as an investment, even when they tanked last year. In fact I upped my DCA amount until it impacted my cash flow. I learned I had guts after all.
- I learned that it isn't always by the numbers wrt AA and diversification. Crazy behavior overrules common sense and the numbers go out the window.
- Life has been pretty rough, but I stand tall as a survivor. I learned that I am happy to be FIREd, I have a brand new life and future with dh2b, and nothing the stock market does that will ever take that away.
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Old 05-09-2009, 08:34 PM   #23
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Maybe we have learned nothing and the worst is yet to come.

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Old 05-09-2009, 08:37 PM   #24
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Originally Posted by Notmuchlonger View Post
Maybe we have learned nothing and the worst is yet to come.
I learned that predictions are unpredictable...
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When I hit 70, it hit back

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Old 05-09-2009, 08:40 PM   #25
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I learned that predictions are unpredictable...
Yeah. Ive learned quite a bit of what people learned here before this bump in the road.

One in the hand is better than two in the bush ?
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Old 05-09-2009, 08:44 PM   #26
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I also learned that as Khan says I'd rather sell a kidney than return to work .
Great thread Brewer !
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Old 05-09-2009, 09:00 PM   #27
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One in the hand is better than two in the bush ?
I've heard the latter requires special stretching exercises...
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Old 05-09-2009, 09:31 PM   #28
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I've heard the latter requires special stretching exercises...

Darn. Im leaving them right over the plate these days...
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Old 05-09-2009, 09:37 PM   #29
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Good thread.
- I confirmed that my high-equity AA is okay for our needs based on other sources of income. Still, I may increase my cash so that we can avoid selling in the future when there's been a decline. (I avoided selling equities this time because I'm still working part time--the cash earned has been enough to allow us to leave the portfolio untouched.)
- I confirmed that I'm not tempted to sell and throw in the towel when the portfolio is in the toilet. I tend to figure that the train has left the station, and "locking in" the losses by selling hurts more than the prospect of more declines. Maybe it's just a mind game with me, but I'm not a mark-to-market guy when it comes to my holdings--I haven't lost money until I've sold them for less than I paid.
- I learned that diversification isn't a magic vaccine against the travails of the market. Sometimes almost everything goes down at once.
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Old 05-09-2009, 09:56 PM   #30
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  • My 55-60% equity AA was too much at age 60; letting it settle back down in the 45-50% range
  • Even Wellesley and the like got hit bad. Balanced funds are not bonds. I'll leave them far anything I might consider "safe" money.
  • Rebalancing really will be an infrequent exercise for me. I watched this market at times thinking about how I might rebalance, but things changed so fast and furious that almost any rebalancing was an impossible game of chasing your tail. Thinking maybe once every 12-24 months or at least a 20-25% veer from baseline that lasts a month or more. Don't know but it won't be often.
  • In the end, the plan worked more or lesss. I lost less than the market as a whole, had only half my assets at risk, and they were diversified enough; I kept DCAing in all along and got some bargain prices. I have my fair share, no more no less.
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As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
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Old 05-09-2009, 10:40 PM   #31
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  • My 55-60% equity AA was too much at age 60; letting it settle back down in the 45-50% range.
Yes, I'm really having a hard time deciding which way to go on this one. My range is 50-60% equities and I'm 58, ER'd now into my 7th year - no pension no annuity. Most of what I read from generally respected sources (Bogle et al) suggests my equity allocation is too high. The other side of the coin is that even that high an allocation appears (up to now anyway) to be survivable even given fairly extreme events.

Dunno, maybe I'll follow the advice to do nothin' until the feeling of doing somethin' passes
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Old 05-09-2009, 10:49 PM   #32
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I learned that when you have more money than you need...cash out. I'll be sure to do just that..... next time.
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Old 05-09-2009, 11:14 PM   #33
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With 8 to 10 years left to work, I learned that my 65/35 AA allowed me to avoid total panic and despair - just a little scared at times

I learned that I can tolerate a nasty downturn without locking in my losses at the bottom (I hope we've seen the bottom

I definitely plan to start shifting toward 50/50 or even 40/60 as retirement approaches.
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Old 05-09-2009, 11:44 PM   #34
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I learned that:

1) a moderately aggressive portfolio (60/40) is just right for me at age 35. Aggressive enough to get the blood pumping, but not so aggressive as to give me palpitations.
2) valuations are important.
3) my diversified dividend income stream has been surprisingly stable throughout this crisis.
4) a job, no matter how undesirable it can be, is not a bad thing to have during tough economic times...
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Old 05-10-2009, 12:25 AM   #35
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I learned that:

1. Buying equities when they are going down makes you feel dumb.
2. Having too aggressive a portfolio (90/10) doesn't give you enough room to up your equity exposure.
3. Even with #2, I managed to get to 94/6 when the dow was at 7500.
4. When the dow hit 6500, #2 prevented me from buying more and #1 made me think I'd be crazy if I could.
5. With the dow at 8500, life is much better.
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Old 05-10-2009, 01:52 AM   #36
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I learned about tax loss harvesting.
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Old 05-10-2009, 04:12 AM   #37
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I learned a major lesson during the tech bubble bust... I was younger and lost a considerable amount (paper loss). I knew if I wanted to ER, I could not let that happen again. While the bust can be temporary, if it happened when i wanted to exit my j*b... I would miss my ER opportunity.

The major lesson I learned back then was diversification into bonds. I made that move with approx 30% of our assets in late 2006 . I had a bit of a struggle doing it at the time because the stock market was doing so well at the time.

The other lesson I learned was that timing investments matters. Investing in the hot areas can be a mistake (even over longer-time periods 5 - 7 years) if one tends to buy and hold. I seem to keep learning this lesson and paying for the education over and over . For example investing in foreign stocks during the last 5 years. The dollar was riding low and US investors were paying a premium for foreign stocks along with the overvalued positions in the stocks. Now that the USD is higher, it is time to make the move into foreign investments for long-term holdings (10-15 years).

Re-balancing is key... but not too frequently.

Fight the fear and do it anyway. (But have a plan!)
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Old 05-10-2009, 05:14 AM   #38
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I learned in 1974 I had a strong aversion to catching falling knives. I'm glad I again remembered that lesson this time even though I've been tempted.

But the tone of most of the posts seems to indicate a belief that the worst may be over. If (a big if) the markets drop 40% or so from here and overshoot on the downside of valuations then I may see if there are a few knives blunt enough to catch.
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Old 05-10-2009, 07:13 AM   #39
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Good post Brewer.

I learned that everything can fall at the same time.
I learned that asset allocation, combined with safe pensions and no major expenses, allows me to sleep at night (and nice naps, too).
A key thing I learned and which I was not doing, is to rebalance. Sell the winners and lock in the profit.
I learned that I can survive the "worst economic disaster since the depression." At least that's what the media tells me it is/was.
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Old 05-10-2009, 07:21 AM   #40
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I learned that a good cash cushion is the key to surviving such a mess.
I learned the importance of AA
I learned that I could tolerate my j*b (until the debacle eases)
I learned to control my expenses better
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