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Old 01-17-2016, 10:07 PM   #61
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If you've been retired for several years this drop is nothing to be concerned about and you simply stay the course. However, we all know about the studies of sequence of return risk. For those who retired in December, I think it's the hardest.
Definitely not fun but a good reminder of why I did TMY to get me down to a planned initial WR of 3%. Hope for the best, plan for the worst.
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Old 01-17-2016, 10:18 PM   #62
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My parents had a bomb shelter in our cellar . Our cellar was creepy so the thought of months down there eating canned food was pretty awful.
We didn't have a cellar, but I remember keeping canned goods and supplies in a central hallway, that could be somewhat closed off from radiation. My father, a U.S. Marine at the time, didn't say much about it, but I think he thought it was pretty much a waste of time. If there were a nuclear war our little bit of food would not amount for much.
He actually took part in some of the atomic bomb tests at Yucca Flats (he said he was wearing dark goggles, but could still see the bone in his arm, which he held across his face). Then they marched close to ground zero. I remember as a young kid, collecting the sand from the cuffs in his pants when he came home, thought it would be cool to have some "radioactive" sand.
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Old 01-18-2016, 12:49 AM   #63
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We keep supplies and have an earthquake plan. Much more likely; perhaps no different survivability-wise.

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Old 01-18-2016, 04:59 AM   #64
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But... two tons from older individuals?

I didn't say all older individuals. Just some .... Hence 1 ton.
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Old 01-18-2016, 05:05 AM   #65
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Looks like the Party is over

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Originally Posted by aim-high View Post
If you've been retired for several years this drop is nothing to be concerned about and you simply stay the course. However, we all know about the studies of sequence of return risk. For those who retired in December, I think it's the hardest.

Indeed. That's where having a withdraw rate closer to the average dividend yield of the market is helpful - while it does not negate ravages of longer term inflation, that strategy typically avoids liquidating down positions early on / short term and gives the market a chance to recover. Having a higher AA makes sense given the benefit of equities over bonds in higher inflation environments.

Based on all the sequence of returns risk assessment work I've seen, it's the very reason the 4% rule should never apply to early retirees, those in their 40s and early 50s... And why even 3% makes some earlier retirees very nervous due to SOR risk.

Now 2.5% or less is most survivable / sustainable for the first decade of retirement (again for those retiring in their 40s up to mid 50s) to mitigate SOR risks for those One to two decades out from the "guarantee" of SS.
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Old 01-18-2016, 06:28 AM   #66
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My parents had a bomb shelter in our cellar . Our cellar was creepy so the thought of months down there eating canned food was pretty awful.
My mom was a WWII refugee, in Italy. By 1960 she was raising me and my siblings in Cincinnati. We had a bomb shelter and a basement full of Spam. When the Cuban Missile Crisis resolved, we still had a bomb shelter, and a basement full of Spam, which we had to eat. Ugh! We could have written the Monty Python skit on "Spam, Spam and Spam" except we wouldn't have found any humor in it.

Meanwhile, back on topic: Stay the course.
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Old 01-18-2016, 06:49 AM   #67
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Every once in a while, I revive this old post I submitted:

"So, I’ve been thinking about this lately. Over the course of my life there were supposed to be all sort of calamities and dire warnings of doom and apocalypse. What I’ve learned in my 60 plus years is that nothing seems to ever be as bad as the ‘experts’ claim.

The fifties had us looking under our beds in search of Communists and spies.

The sixties had us digging bomb shelters in our backyards, stocking up on food and readying for nuclear attack. Hide under your school desk; you’ll be fine.
If that didn’t happen, we were going to be all starving from massive overpopulation (The Population Bomb) within 20 years.

The seventies brought us warnings about running out of oil. By 2010, all the oil was supposed to be gone and we were going to be living by candlelight and riding bicycles.
The ‘albedo effect’ was going to bring about global cooling not seen since the ice age, which, coupled to the demise of oil, one would assume we’d all freeze to death.
The Saudis were buying up everything and were going to own the entire United States.

In the eighties the AIDS virus was “a mere mutation or two” away from being able to be contracted as easily as the common cold or flu.
Acid rain was turning all our buildings into sand.
The Japanese were buying up everything and were going to own the entire United States.

The nineties saw us worrying about global warming, which then became climate change.

More recently, we had the BP Gulf oil spill which many billed as “the greatest environmental disaster in the history of mankind”.

I'm not saying that many of these issues did not impact certain people, but the severity and “end of life as we know it” never seems to materialize."


IMHO, the Great Recession was a blessing in a way.

For the first time in 80 years, (almost) the worst happened. And yet, here we are; after 5 years, most of us (those who didn't panic) made our money back and likely made a ton more.

Throughout the trough of 2008-2010 my dividends (sorry mathjak) kept me whole financially and my lifestyle during that period didn't change one iota.

Now if you thought "this time is different" and sold on the 3rd week of February of 2009 (like my smarter-than-you neighbor), well..........
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Old 01-18-2016, 06:50 AM   #68
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The problem with getting out of the market is timing the back in part. Many investors can get out in time, very few can get back in. There is always a case for going lower. Many retail investors are still out from 2008.

Maybe get out, wait for a 5-10% drop, and get back in. Maybe we are already at the bottom, and you get back in over where you got out.

I am going to rely on 130+ years of market history and stay the course. I will continue to invest my ~$10K a month until I retire this year. Then only $5K a month for a few years.

Dividends are still steady, and reinvested. If this economy makes for a bad market, imagine when things really go bad...
This is probabaly closest to where I am at on this. The weak market does not make me feel good, but I know that I cannot figure the right time to get out and then also the right time to get back in. I do have a general plan to slowly reduce my equity AA over time, which I did on Jan 4 from 75 to 72 regardless of the market that day.

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Lastly, RBS says sell everything and other Doomer's are jumping on the bandwagon.
If it's really true that sentiment is at the maximum low, then no one is left to sell and the only way remaining is up. I don't try to guess that either on catching the falling knife.
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Old 01-18-2016, 08:16 AM   #69
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Looks like the Party is over

Have not seen the stock market or oil calamity appear on Time or Newsweek cover. When that happens, I'll know the correction or bear is about over

Just as I know we were a bit over valued when a barber was telling me what hot stocks he liked.... Literally 3 weeks ago.

Just as I knew to steer clear of big oil when a united flight attendant told me during a long haul flight last spring that she was "all in" on big oil and stock trading was her hobby ...

Just follow the street sentiment... And run Forrest .....run ....
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Old 01-18-2016, 08:58 AM   #70
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If your 30% equity exposure is making you think of running for the hills based on a correction (or even a possible future recession), perhaps you should revisit your allocation and lighten up.
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Old 01-18-2016, 09:06 AM   #71
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If it's really true that sentiment is at the maximum low, then no one is left to sell and the only way remaining is up. I don't try to guess that either on catching the falling knife.
I haven't quite seen a "Death of Equities" moment in this downcycle yet. When I see that I'll be convinced we're close to hitting bottom....
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Old 01-18-2016, 09:09 AM   #72
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If your 30% equity exposure is making you think of running for the hills based on a correction (or even a possible future recession), perhaps you should revisit your allocation and lighten up.
+1.

Or invest mainly in TIPS like other risk averse people on this board.
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Old 01-18-2016, 09:55 AM   #73
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I see it as an opportunity to once again practice doing what I do best - nothing.

Anyone can put together a laundry list of "why we're doomed" topics, but I won't be convinced that's true until I look up in the sky and see the asteroid first hand.

Attempts to try to "avoid the coming financial disaster" often end up having investors zig when they should have zagged. My experience is the wisest move is staying still.
So I have two more months until I am officially retired. 3/31/16 My company has ask that I drop down to part time for 6 months which I agreed to.

Anyhoo,
My AA has been sort of modeled after the "bucket" method. I have an immediate need bucket, which is a years living expenses in a money market fund.

Since I am only 55 I do have a long term bucket with 65% equities. I'm not making any changes since this bucket will hopefully not come into play for another 20 years.

LOL this maybe one of the times when being a new comer is a good thing. I don't know enough to "time" the market.
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Old 01-18-2016, 10:08 AM   #74
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Anyhoo,
My AA has been sort of modeled after the "bucket" method. I have an immediate need bucket, which is a years living expenses in a money market fund.
Money market fund? Just wondering why use an uninsured, minimal interest rate vehicle to hold a years worth of funds when there are FDIC insured options around that will pay you around 1%?
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Old 01-18-2016, 10:37 AM   #75
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I know he has to be an intelligent guy, BUT... Yes, my head spins watching the entertainment show... It treats each days advise, like he never said anything the day before... Or emphasizes what he says he said last week, but was opposite of the day before.. His selective memory is better than mine!


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Old 01-18-2016, 03:20 PM   #76
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I am not sure if it is a hoax but Yahoo Finance shows Dow Future (for Monday) at +1,000 S&P 500 futures
1,876.50 -38.00 (1.98%)

Dow futures
17,336.00 +1,055.00 (6.48%)
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Old 01-18-2016, 03:38 PM   #77
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The info isn't correct - check some other sources.
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Old 01-18-2016, 03:51 PM   #78
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CNBC shows Dow and S&P futures virtually unchanged vs fair value relative to Friday's close. The -38 points on the S&P futures is probably vs Thursday's close.
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Old 01-18-2016, 03:55 PM   #79
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The info isn't correct - check some other sources.

This stuff happens more times than you think...Sometimes I will have to look at 3 or 4 websites just to reach a consensus on what my stock price is. Several times a few of mine have been listed as worth 0, down 100% today....CNBC website does this often to me.


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Old 01-18-2016, 04:16 PM   #80
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You know, audreyh1, you have a good point. Perhaps I should withdraw the entire year's worth of RMD's from Fido and put the money in a 1.05 percent FDIC insured account. Only a couple of hundred dollars to be gained, but it's FDIC insured.

The bigger problem is what to do with the three years of additional cash sitting in a treasury MM fund at Fidelity. It might be worth setting up a separate IRA at one of the online banks and laddering some one and two year CD's. Has anyone done that?
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