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Long term outlook--backward
Old 07-14-2008, 07:06 PM   #1
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Long term outlook--backward

Today I cringed a little (okay, wanted to cry like a little girl) when our egg fell below a certain number. I looked at our 401K website and saw we were down 6.2 for the year (down only that much because we changed our AA last year from conservative to ridiculously conservative). To make myself feel better, I was able to call up a comparison of where we stood two years ago compared to today. We are still up 14 percent from that time.

If two years ago someone had said we would be up that much I would have been thrilled. So I am trying to stop the cringing/worrying/crying like a little girl by keeping that in mind.

Anyone else still feel they are better off in the long term on this roller coaster?

Signed,
Pollyanna
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Old 07-14-2008, 07:11 PM   #2
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Anyone else still feel they are better off in the long term on this roller coaster?
Nope. Our AA was not well designed during the growth periods of the 1990's and 2003-2007. As such, we missed out on a lot during our accumulation phase. As we head into the home stretch towards retirement (6 years from now), this period has caused us to rethink our entire plan. I really hate this.

Now I'll step aside and let those who have 20+ years until they need their retirement money gloat about how they are getting wonderful discounts on numerous stock funds.
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Old 07-14-2008, 07:19 PM   #3
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"Anyone else still feel they are better off in the long term on this roller coaster?"

Yes.
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Old 07-14-2008, 07:32 PM   #4
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"Anyone else still feel they are better off in the long term on this roller coaster?"

Yes.
1993 entering ER my part of the nest egg was 200k(with a little k). Fast forward to the little 2002/3 dip - converting the % down one quarter translated into a 1/4 mil or so.

That's when I started making jokes about Micheal Jordon's muti colored underwear ad's.

Bought the shorts - stayed the course - in balanced index.

This time around - plan to do the same.

heh heh heh - did add 2 inches around the waist since then .
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Old 07-14-2008, 07:32 PM   #5
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Although I'm not happy to go through a SECOND bear market occur during my first 9 years of retirement, we saw a lot of growth in our portfolio 2003-2007, and so we are "losing" from a much higher level. It actually doesn't seem so bad.

I'm just hoping it doesn't last as long as the last one did! That sure was a miserable grind.

Audrey
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Old 07-14-2008, 07:34 PM   #6
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I just accept the fact these things happen. Will always happen. Eventually it wont happen. Then I probably have something worse than how much money I have to worry about.
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Old 07-14-2008, 08:43 PM   #7
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Anyone else still feel they are better off in the long term on this roller coaster?
Signed,
Pollyanna
Oh heck yeah.

We'll have to get back to 2001 levels before I consider it "bad"...
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Old 07-14-2008, 09:13 PM   #8
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I'm with Audrey. I have only been investing for about 10 years now, and it does feel like I'm running in place.

But I keep reminding myself that it was the ugly markets of yesterday that formed the foundation of so many of the happily FIREd of today, so I'm sticking with our planned asset allocation and still plowing our savings into our 401K and IRAs, paying down debt, and trying to keep expenses down.
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Old 07-14-2008, 09:27 PM   #9
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Yes, better off. But it's hard watching this crap go down ever day. I'm now down 8.6% for the year. More than that from last years high. I keep telling myself that it's too late to get out now, but the market continues to crap every day. Glad I have an inheritance coming one day, looks like I'm going to need it.
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Old 07-14-2008, 09:34 PM   #10
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Glad I have an inheritance coming one day, looks like I'm going to need it.
That's what we're saying about our home. I think we would like to stay put, but the equity in our home has become our bailout should the stock and bond markets continue to crap all over our pre-retirement planning. Thankfully, real estate in our area has remained relatively stable and is starting to show signs of going up again. The advantages of living in a highly desirable public school district.
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Old 07-14-2008, 10:15 PM   #11
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Pssst - Wellesley = 4.73% SEC yield. Try not to look at the YTD column.

Dividends are almost as good as real money and Mr Market is manic - er in the words of the late J. P. Morgan it(he) will fluctuate.

Maybe we can get a Budhist chant going - oooom div a dends.

You know like the white plastic fence things and DE - fense chant the football fans have.

heh heh heh -
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Old 07-14-2008, 10:45 PM   #12
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I know it's going to be a lot harder to face a bear market after ER.

While I am working, it's not so bad. My goal becomes "not shrinking" rather than growing my nestegg, as I pour much of my paycheck into it.

In that respect, the recent slow-down reminds me of 2000-2001.

I would say that this time is easier for me so far, but also I am pretty sure we are not through the woods yet. So, we shall see.
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Old 07-15-2008, 02:55 AM   #13
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My total return portfolio (excluding dot-com stocks) dropped 40% from its peak in September 2000 to its valley in September 2002. I don't know how I made it through those times psychologically, but the portfolio recovered to its previous high by the end of 2003 (and all of the capital loss carryforwards I harvested were used up by the end of 2004).

I was adding money regularly to my total return portfolio throughout that period because I managed to stay employed. But many of my colleagues lost their high tech jobs and ended up moving out of the area or leaving the high tech field (some entered the real estate field and were doing OK until recently).

Right now, I have earned income again to cover my living expenses and I'm also adding to my dividend portfolio whenever I have sufficient excess capital to do so. I'm directing this fresh money to dividend-paying stocks so that I can earn investment income that is not dependent on market valuation increases (i.e., capital gains).

By the end of the year, the dividend stream should cover about 25% of my living expenses so that I would need only a 3% SWR from my total return portfolio should I experience a long stretch of downtime between contracts again and have to draw on my investment income to pay living expenses.
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