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12-08-2018, 09:43 AM
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#181
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,265
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Quote:
Originally Posted by jjflyman
My original post was simply to point out that nobody really saw this coming, and if they did they would have sold everything in September instead of riding this out saying things like it is "normal" and "expect it to last 5 years".
Nobody likes losing money, regardless if they have 50K or 500K in the markets.
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I agree we need different opinions and need to avoid group think. And being able to sleep at night is a significant factor in how we invest our assets. It doesn't hurt us to have somebody shouting a warning. It's easy to become complacent and assume tomorrow will be like today.
The market is inherently risky and unpredictable. That's why the returns can be very good in the long run. It rewards risk. It is also why most of us don't put all our eggs in one basket. Never bet the farm on one deal. Among the other things we may have are pensions, SS benefits, CDs, Bonds, Real Estate, etc.
FWIW, I think long term inflation is much more probable and dangerous to me, than the market never recovering after correction or Bear, or recovering to late to do me any good.
My 2¢. Take what you wish and leave the rest.
__________________
Comparison is the thief of joy
The worst decisions are usually made in times of anger and impatience.
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12-08-2018, 09:55 AM
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#182
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Thinks s/he gets paid by the post
Join Date: Apr 2005
Location: Midwest
Posts: 2,969
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Ya wanna "different" opinion: Anybody looking at the charts could see something was coming. Not make a day-to-day call months in advance but anybody who purports to watch the market or care at all about investing could see the trouble therein. It is discussed here all the time.
Now, one's reaction to it could be to trust and say So what? Past performance is, in effect, a sort-of-guarantee of future ... etc etc... Or some would look at it and say: Yo! I don't need whatever aggravation might be in store.
Neither has an edge. Both are hoping they're right. (Altho the one who side-steps for a while might avoid a catastrophe if there is one.) But nobody can say they didn't see anything a'cookin'.
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12-08-2018, 10:12 AM
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#183
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Full time employment: Posting here.
Join Date: Aug 2013
Location: https://www.google.com
Posts: 750
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Quote:
Originally Posted by jjflyman
Nobody likes losing money, regardless if they have 50K or 500K in the markets.
I wish you good luck my friend
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It's only a loss if you sell
So good luck to you moving money in and out of markets
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12-08-2018, 10:12 AM
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#184
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2016
Posts: 9,523
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Quote:
Originally Posted by NW-Bound
Right. And if you have an initial WR of less than 4%, you have some margin for the future being worse than the past. And then, if you still have SS to claim, that's even safer.
Call me prudent, but I am a belt-and-suspenders kind of guy. Or perhaps I am a miser, and do not want to see my stash goes down a lot if we have a bad sequence of returns.
For happiness, a guy needs to know how to balance greed and fear within himself.
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I agree with your thinking! I have been debating on when to take SS for many years before I was even eligible. I'm eligible next year and I'm taking SS for many reasons. I wouldn't need to ever take it but I will and do it as early as I can. Why wait for more money when I don't need it any way.
In times of long down markets, which will happen and not knowing when, it is my decision to take it early.
It gives me more room to spend more, or spend less if I want too.
It is the safest approach for me to be able to grow my portfolio.
In my case with cash and SS I'm ready for a very long drought when it happens.
I'm still a saver and even though I'm not buying each day, I will never get the accumulating mode out of my system. Old habits are hard to break.
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12-08-2018, 10:23 AM
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#185
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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My wife made up her mind to take SS early. She's just been procrastinating on filing for it. As for me, I plan to delay till 70, as that is the conventional wisdom for a couple to delay the higher benefit of the two.
However, if things turn bad I may claim mine early too. What happens so far does not qualify as that yet.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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12-08-2018, 12:39 PM
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#186
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Recycles dryer sheets
Join Date: Feb 2018
Posts: 98
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Quote:
Originally Posted by hesperus
It's only a loss if you sell
So good luck to you moving money in and out of markets
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That's a good point, the paper loss *might* take years to recover, but it almost certainly *will* recover. (heck, maybe the markets will skyrocket from here if there is a surprise announcement on trade)
I never said I was moving money in and out of the market. I have cut my exposer down to about 5% in the last few years. The only in and out I do is if a stock looks cheap, I might buy some, and I might sell some stock when there is a profit worth taking. I just don't have the risk tolerance I did when I was younger.
If I was young (say, 30's or 40's) I would keep investing and not worry about a bear market, but I no longer *need* market returns for my retirement. Pension, savings, interest on CD's, investment's and SS/spouse SS is more than we will spend.
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12-08-2018, 02:02 PM
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#187
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Thinks s/he gets paid by the post
Join Date: Jun 2016
Posts: 4,663
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Anyone investing in equities should heed the wisdom of Peter Lynch:
https://awealthofcommonsense.com/201...market-losses/
Far more money is lost trying to anticipate corrections than in the corrections themselves.
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12-08-2018, 03:03 PM
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#188
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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Quote:
Originally Posted by jjflyman
Dow Oct 30 = 26,816
Dow Nov 23 = 24,259
That's what I mean when I said turned bad so quickly
You can play with numbers like "6.4% higher than it's 52 week low" but the fact is most people average in over many months this year, and have bought many shares when they were very high, so they are behind.
Investing in equities is not for me, I am only 5% in the market after many years of investing.
The markets are now way unstable for me, but good luck to you my friend
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Can you share what you do invest in now?
Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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12-08-2018, 03:37 PM
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#189
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Gone but not forgotten
Join Date: Jul 2012
Location: Peru
Posts: 6,335
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__________________
If you want others to be happy, practice compassion. If you want to be happy, practice compassion.
--Dalai Lama XIV
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12-08-2018, 06:39 PM
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#190
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Thinks s/he gets paid by the post
Join Date: Dec 2015
Posts: 2,232
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What movie is that picture from. I know i've seen it, but I can't place it.
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12-09-2018, 06:35 AM
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#191
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Full time employment: Posting here.
Join Date: Dec 2018
Posts: 966
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I have been investing for 40 years so I have experienced bear markets and bull markets. Bear markets are no fun at all while you see your nest egg start to shrink. This is why I have a 50/50 portfolio with the 50% in aggressive stocks and the other 50% in conservative bonds. Of course my stock portion will suffer but my conservative bonds are my rainy day fund to sell during a bear market until the recovery which may take 3 to 8 years.
Remember "buy low sell high". In retirement you are in the selling phase when you withdraw for retirement expenses. You do not want to sell stocks at a relatively low price during retirement. You should sell your bonds to meet your retirement expenses to allow time for the market to recover. If you do not have a rainy day fund for a bear market then you are going to get hurt. During a bull market, many inexperienced investors will say why have bonds making 2 to 3% when I can have stocks making 6 to 8%? Remember that it is all about greed and fear. The greedy suffer the most during a bear market. We just had a historical bull market. Eventually all good times come to an end and we have to go through the market cycle. I am becoming bearish just like Jack Bogle.
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12-09-2018, 06:52 AM
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#192
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2016
Posts: 9,523
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^Great advise, thanks.
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12-09-2018, 07:45 AM
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#193
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Thinks s/he gets paid by the post
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,894
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Quote:
Originally Posted by vchan2177
I have been investing for 40 years so I have experienced bear markets and bull markets. Bear markets are no fun at all while you see your nest egg start to shrink. This is why I have a 50/50 portfolio with the 50% in aggressive stocks and the other 50% in conservative bonds. Of course my stock portion will suffer but my conservative bonds are my rainy day fund to sell during a bear market until the recovery which may take 3 to 8 years.
Remember "buy low sell high". In retirement you are in the selling phase when you withdraw for retirement expenses. You do not want to sell stocks at a relatively low price during retirement. You should sell your bonds to meet your retirement expenses to allow time for the market to recover. If you do not have a rainy day fund for a bear market then you are going to get hurt. During a bull market, many inexperienced investors will say why have bonds making 2 to 3% when I can have stocks making 6 to 8%? Remember that it is all about greed and fear. The greedy suffer the most during a bear market. We just had a historical bull market. Eventually all good times come to an end and we have to go through the market cycle. I am becoming bearish just like Jack Bogle.
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Excellent post and mirrors my sentiments exactly and so true.
__________________
Earning money is an action, saving money is a behavior, growing money takes a well diversified portfolio and the discipline to ignore market swings.
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12-09-2018, 08:24 AM
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#194
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Gone but not forgotten
Join Date: Jul 2012
Location: Peru
Posts: 6,335
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We'll probably get caught when the next recovery happens, but for now, we'll stick with our old IBonds. Probably not too smart, back in the early days, but it seemed safe, and we needed safety. Between 2001 and 2004, each person could buy a limit of 30K/yr. Limits are now $10K, I think.
For those early investments, here are the current combined I Bond interest rates.
Nov. 2003 Apr. 2004 3.43%
May 2003 Oct. 2003 3.43%
Nov. 2002 Apr. 2003 3.94%
May 2002 Oct. 2002 4.34%
Nov. 2001 Apr. 2002 4.34%
May 2001 Oct. 2001 5.35%
Nov. 2000 Apr. 2001 5.76%
May 2000 Oct. 2000 5.96%
Nov. 1999 Apr. 2000 5.76%
May 1999 Oct. 1999 5.66%
Nov. 1998 Apr. 1999 5.66%
We feel lucky... not rich, but safe.
__________________
If you want others to be happy, practice compassion. If you want to be happy, practice compassion.
--Dalai Lama XIV
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12-09-2018, 08:33 AM
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#195
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Thinks s/he gets paid by the post
Join Date: May 2005
Location: Portland
Posts: 1,713
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Quote:
Originally Posted by HadEnuff
What movie is that picture from. I know i've seen it, but I can't place it.
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Google search says movie The Ballad of Buster Scruggs
now available on Netflix
*I was not paid for this ad placement
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12-09-2018, 08:50 AM
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#196
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Location: Miraflores,Peru
Posts: 1,992
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It is actually from the movie "The Balad of Buster Scruggs"!
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12-09-2018, 09:58 AM
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#197
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,351
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Quote:
Originally Posted by vchan2177
I have been investing for 40 years so I have experienced bear markets and bull markets. Bear markets are no fun at all while you see your nest egg start to shrink. This is why I have a 50/50 portfolio with the 50% in aggressive stocks and the other 50% in conservative bonds. Of course my stock portion will suffer but my conservative bonds are my rainy day fund to sell during a bear market until the recovery which may take 3 to 8 years.
Remember "buy low sell high". In retirement you are in the selling phase when you withdraw for retirement expenses. You do not want to sell stocks at a relatively low price during retirement. You should sell your bonds to meet your retirement expenses to allow time for the market to recover. If you do not have a rainy day fund for a bear market then you are going to get hurt. During a bull market, many inexperienced investors will say why have bonds making 2 to 3% when I can have stocks making 6 to 8%? Remember that it is all about greed and fear. The greedy suffer the most during a bear market. We just had a historical bull market. Eventually all good times come to an end and we have to go through the market cycle. I am becoming bearish just like Jack Bogle.
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Exactly! I bought my first stock in 1972 and spent 30 years learning this.
The only place I may differ slightly from @vchan2177 is that I don't think 50/50 is any kind of universal AA. The % we have in fixed income is lower because that amount is almost certainly more than adequate for our future needs. The equity is invested for our estate; charities and two sons' trusts. But YMMV wildly depending on the amount of investable assets, your age, your goals, and your expected needs.
Don't just do something, sit there!
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12-09-2018, 10:37 AM
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#198
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Full time employment: Posting here.
Join Date: Aug 2016
Posts: 770
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Quote:
Originally Posted by vchan2177
Remember "buy low sell high". In retirement you are in the selling phase when you withdraw for retirement expenses. You do not want to sell stocks at a relatively low price during retirement. You should sell your bonds to meet your retirement expenses to allow time for the market to recover. If you do not have a rainy day fund for a bear market then you are going to get hurt. During a bull market, many inexperienced investors will say why have bonds making 2 to 3% when I can have stocks making 6 to 8%? Remember that it is all about greed and fear. The greedy suffer the most during a bear market. We just had a historical bull market. Eventually all good times come to an end and we have to go through the market cycle. I am becoming bearish just like Jack Bogle.
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This is probably a dumb, newbie question but how do you sell bonds during a bear market if you're invested in VG Wellington and/or Wellesley?
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12-09-2018, 10:54 AM
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#199
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,351
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Quote:
Originally Posted by Carpediem
This is probably a dumb, newbie question but how do you sell bonds during a bear market if you're invested in VG Wellington and/or Wellesley?
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Well, in some sense you are selling bonds -- assuming the funds are rebalancing to their target allocations. But as a practical matter, if you hold only blended funds (including target date funds) you don't have the option of selling only bonds while you wait out the equity recovery.
Personally, I would never consider blended funds because it is almost impossible to benchmark their performance. But this inflexibility is another good reason to avoid them IMO.
If taxes are not a consideration you could sell the blended funds and buy the equivalent percentages in a stock fund and a bond fund. That essentially preserves the market status quo. Then you have the flexibility you're looking for.
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12-09-2018, 12:33 PM
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#200
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Full time employment: Posting here.
Join Date: Dec 2018
Posts: 966
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Like I stated previously 50%/50% portfoilio as a baseline is the way to go. There are many articles on the 50/50 and many pros and cons which I am not going into that.
However, within the 50% stock portfolio you should diversify into many different asset classes in stock: High caps, mid caps, small caps, energy, health, overseas, etc. The 50% bond portfolio shall also be diversify into many different bond classes: Treasuries, corporate, government, junk, etc.
During retirement, you are in the selling phase. I simply withdraw the stock or bond class that is relatively high. After that fund is depleted, I go with the next relatively highest value asset and so on. Remember "buy low sell high" and "diversification always reduces your risk".
I am selling the relatively high asset class during retirement. With blended or target date funds, you cannot do what I am doing. Blended or target funds works OK before retirement because you are not withdrawing. They do not work well after retirement when you need to withdraw and this is my opinion and I am not a financial advisor. Took me 40 years of experience to learn the real meaning of "buy low and sell high" and that portfolio management of your withdrawals involves a different strategy after retirement.
When I was working, I would sometimes reallocate my 50/50 portfolio in my IRA to 75% stock/25% bond after a correction/crash or to 25% stock/75% bond if the stock market reaches a high using the 50 days exponential moving average as a guide. You can do this without tax consequences in a IRA and this game is consistent with my "buy low and sell high" strategy. I do not play this risky game during retirement but it was fun for me playing this game while I was working.
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