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Nine year bull
Old 03-19-2018, 07:21 AM   #1
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Nine year bull

I read somewhere that Friday was the nine year mark for this current bull market. Not sure if that is true. I've only been invested since 2007 (when I had access to very first 401k). I remember when I found this group back then, someone had suggested I move my money into some bonds.

Back then I didn't even know what a bond was then but I did. I think it was in 2008 that I went to a stock index fund.

Strange I've really only known a bull market this far into my investing career, but I did see the impact of 2000, 2006/2007 and know that history does repeat itself eventually.

Not sure how long the other "long" bull runs lasted but it would be neat to see.

I hope it keeps going to 11,12, or 14 year run. I still have 13yrs before SofR is an issue, Hopefully the matador doesn't put this guy to sleep before then. I don't want a 13 yr bull, I don't like the # 13 lol
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Old 03-19-2018, 08:00 AM   #2
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Fundamentals are still good, so barring a geopolitical disaster the bull could continue. But we’ll all be surprised in time. Buy and hold has always been the best approach for most. Chart below thru Sept 15. Lsbcal may stop by soon with a more up to date chart.

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Old 03-19-2018, 08:09 AM   #3
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It could run another 5 years
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Old 03-19-2018, 08:33 AM   #4
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Originally Posted by kgtest View Post
I read somewhere that Friday was the nine year mark for this current bull market. Not sure if that is true. I've only been invested since 2007 (when I had access to very first 401k). I remember when I found this group back then, someone had suggested I move my money into some bonds.

Back then I didn't even know what a bond was then but I did. I think it was in 2008 that I went to a stock index fund.

Strange I've really only known a bull market this far into my investing career, but I did see the impact of 2000, 2006/2007 and know that history does repeat itself eventually.

Not sure how long the other "long" bull runs lasted but it would be neat to see.

I hope it keeps going to 11,12, or 14 year run. I still have 13yrs before SofR is an issue, Hopefully the matador doesn't put this guy to sleep before then. I don't want a 13 yr bull, I don't like the # 13 lol
Actually, if you are going to be accumulating for another 13 years, now would be a perfect time (for you) for a Bear. You can spend a few years buying on the cheap before the next run-up.
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Old 03-19-2018, 08:40 AM   #5
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I'm hoping for the bear to come out of the cave come 2019 when we start doing Roth conversions. Will be able to convert more shares at a cheaper price, thus, paying less taxes. Then when bull comes back, all the converted shares grow tax free. There is always a silver lining.
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Old 03-19-2018, 09:08 AM   #6
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Not sure how long the other "long" bull runs lasted but it would be neat to see.
Take a look at 1982-1999. Compound annual return = 18.5% from the end of 1981 until the end of 1999.
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Old 03-19-2018, 09:09 AM   #7
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Actually, if you are going to be accumulating for another 13 years, now would be a perfect time (for you) for a Bear. You can spend a few years buying on the cheap before the next run-up.

True! Good point. I sort of cram everything I can in and close my eyes lol. So far it's been a fairly stable mix of RE and Stocks. Life creep has a slight hold with 2 kids. I never wish for negative news though, but if I had a buy low opportunity I wouldn't mind. Then again if the bull went another five years, and THEN I had a buying opportunity I wouldn't mind that either lol

Either way, there will be another buying opportunity as soon as i check my crystal ball.
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Old 03-19-2018, 09:10 AM   #8
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Fundamentals are still good, so barring a geopolitical disaster the bull could continue. But we’ll all be surprised in time. Buy and hold has always been the best approach for most. Chart below thru Sept 15. Lsbcal may stop by soon with a more up to date chart.
This visual is amazing.
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FIRE in 2031 @ 50yrs old (+/- 2yrs) w/ a hypothetical $2.5mil portfolio, 3 appreciated homes worth $1.0mil and rental income to fund my gap years until RMD. Assets will go to an inherited IRA where I plan on watching the investments grow until I die or the trust gets executed.
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Old 03-19-2018, 09:18 AM   #9
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Lsbcal may stop by soon with a more up to date chart.
That chart really puts things into perspective, thanks. Here's one updated through 2017.
https://www.ftportfolios.com/Common/...8-628ff9bfe12d
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Old 03-19-2018, 09:27 AM   #10
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Originally Posted by kgtest View Post
I read somewhere that Friday was the nine year mark for this current bull market. Not sure if that is true. I've only been invested since 2007 (when I had access to very first 401k). I remember when I found this group back then, someone had suggested I move my money into some bonds.

Back then I didn't even know what a bond was then but I did. I think it was in 2008 that I went to a stock index fund.

Strange I've really only known a bull market this far into my investing career, but I did see the impact of 2000, 2006/2007 and know that history does repeat itself eventually.

Not sure how long the other "long" bull runs lasted but it would be neat to see.

I hope it keeps going to 11,12, or 14 year run. I still have 13yrs before SofR is an issue, Hopefully the matador doesn't put this guy to sleep before then. I don't want a 13 yr bull, I don't like the # 13 lol
Just remember that when you are buying into the market, you are buying both bulls and bears for the future. Not a big deal! The market goes up, and down, over and over. Most of us still do fine either way, buying low in a bear for example.

If you assume that will be the case, and invest accordingly, I think you will be able to handle the next bear with greater equanimity.

Consider moving towards slightly less volatile investments when you get closer to retirement. With risk comes reward, but by retirement many of us feel we have "won the game" and prefer less risk and reward.

Worried about Sequence of Returns Risk? Well, just assume the worst and when you get closer to retirement, put a little cash aside to help deal with expenses during an immediate crash if/when it happens, for a few years anyway. Do what you can to minimize your bare bones expenses in retirement.
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Old 03-19-2018, 10:04 AM   #11
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Originally Posted by Midpack View Post
Fundamentals are still good, so barring a geopolitical disaster the bull could continue. But we’ll all be surprised in time. Buy and hold has always been the best approach for most. Chart below thru Sept 15. Lsbcal may stop by soon with a more up to date chart.

Quote:
Originally Posted by kgtest View Post
This visual is amazing.
Quote:
Originally Posted by Done View Post
That chart really puts things into perspective, thanks. Here's one updated through 2017.
https://www.ftportfolios.com/Common/...8-628ff9bfe12d
As much a stock lover as I am, that chart has something that bothers me. I went through the "Lost Decade" of 2000-2010, and I know things were not as benign as this chart shows. Something is amiss!

Thinking about it a bit, I saw the answer. The way the data is presented, it is very misleading. Here's how.

Suppose the market dropped quickly, losing 50% in a year. It then rebounded to 1.5x, and recovered most of that loss. Suppose the market then inched up slowly and took 9 years to recover to its old high.

What the chart will show you is a quick blip of bear market of 1 year worth, then followed by 9 years of bull. The orange area looks a lot less than the area painted blue, but in fact the market took 10 years to recover its high.

Indeed, if you bought at the market high in early 2000, it would be late 2011 before you were made whole, and that was with dividends reinvested. If you took inflation into consideration, you still lost, and had to wait to 2012 to get even. Check it out for yourself, using Morningstar which includes dividends in the return.

None of the above was obvious in the chart, if you look at the above period that I described. They do not call it "The Lost Decade" for nothing.

A bear market is good for accumulators, as many posters here who are retired now were still working during the "Lost Decade" and were able to buy cheap stocks. It was less rosy for people already retired, although rebalancing between stock/bond/cash helped some.

Now, I still have a lot of stock (65%), and will not sell everything. I just temper my expectation looking forward.
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Old 03-20-2018, 11:28 AM   #12
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As much a stock lover as I am, that chart has something that bothers me. I went through the "Lost Decade" of 2000-2010, and I know things were not as benign as this chart shows. Something is amiss!

Thinking about it a bit, I saw the answer. The way the data is presented, it is very misleading. Here's how.
Very interesting!
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Old 03-20-2018, 12:36 PM   #13
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As much a stock lover as I am, that chart has something that bothers me. I went through the "Lost Decade" of 2000-2010, and I know things were not as benign as this chart shows. Something is amiss!

Thinking about it a bit, I saw the answer. The way the data is presented, it is very misleading. Here's how.

Suppose the market dropped quickly, losing 50% in a year. It then rebounded to 1.5x, and recovered most of that loss. Suppose the market then inched up slowly and took 9 years to recover to its old high.

What the chart will show you is a quick blip of bear market of 1 year worth, then followed by 9 years of bull. The orange area looks a lot less than the area painted blue, but in fact the market took 10 years to recover its high.

They need a different color for each recovery, and correlate it to the bull. I pickup what you are throwing down NW. Sort of a hot/cold type of gauge to show you how LONG the recovery took.
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FIRE in 2031 @ 50yrs old (+/- 2yrs) w/ a hypothetical $2.5mil portfolio, 3 appreciated homes worth $1.0mil and rental income to fund my gap years until RMD. Assets will go to an inherited IRA where I plan on watching the investments grow until I die or the trust gets executed.
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Old 03-20-2018, 01:37 PM   #14
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As much a stock lover as I am, that chart has something that bothers me. I went through the "Lost Decade" of 2000-2010, and I know things were not as benign as this chart shows. Something is amiss!
Yes, I like that chart but don't know exactly what to make of it either. This Inflation Adjusted S&P500 chart is reality (for prices, not dividends). Inflation Adjusted S&P 500 Your lost decade is obvious.

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Old 03-20-2018, 02:38 PM   #15
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Yes, I like that chart but don't know exactly what to make of it either. This Inflation Adjusted S&P500 chart is reality (for prices, not dividends). Inflation Adjusted S&P 500 Your lost decade is obvious.

As you noted, dividends were not included. If they were, this chart would be a better indication. The earlier chart shows total return.

But as it is, this chart is too pessimistic, the reason being that in the past the dividend yield was as high as 8-10%. Leaving that out makes the stock market look terrible while it was not. For example, the chart shows that it took until the mid 50s for the market to recover to the 1929 high, or about 26 years. In reality, one could live very well on the stock dividends during those 26 years.

When I first started to educate myself about stock investing in the 80s, I did not know about the effects of dividends, and this kind of charts scared me off.

What we need is a chart that is inflation-adjusted, and of the total return.
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Old 03-21-2018, 08:55 AM   #16
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As much a stock lover as I am, that chart has something that bothers me. I went through the "Lost Decade" of 2000-2010, and I know things were not as benign as this chart shows. Something is amiss!

Thinking about it a bit, I saw the answer. The way the data is presented, it is very misleading. Here's how.

Suppose the market dropped quickly, losing 50% in a year. It then rebounded to 1.5x, and recovered most of that loss. Suppose the market then inched up slowly and took 9 years to recover to its old high.

What the chart will show you is a quick blip of bear market of 1 year worth, then followed by 9 years of bull. The orange area looks a lot less than the area painted blue, but in fact the market took 10 years to recover its high.

Indeed, if you bought at the market high in early 2000, it would be late 2011 before you were made whole, and that was with dividends reinvested. If you took inflation into consideration, you still lost, and had to wait to 2012 to get even. Check it out for yourself, using Morningstar which includes dividends in the return.

None of the above was obvious in the chart, if you look at the above period that I described. They do not call it "The Lost Decade" for nothing.

A bear market is good for accumulators, as many posters here who are retired now were still working during the "Lost Decade" and were able to buy cheap stocks. It was less rosy for people already retired, although rebalancing between stock/bond/cash helped some.

Now, I still have a lot of stock (65%), and will not sell everything. I just temper my expectation looking forward.
+1

Visually, your eye is drawn to the areas of the bull/bear segments. But the area (growth x time) is meaningless.

For the long term investor, the only thing that matters is the growth. It doesn't matter whether the growth occurred over a 10 month period or a 10 year period. But on the chart, the second would look way more impressive than the first.
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Old 03-21-2018, 10:42 AM   #17
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This Inflation Adjusted S&P500 chart is reality (for prices, not dividends). Inflation Adjusted S&P 500 Your lost decade is obvious.
The folks who were spending money from their portfolios suffered that 'lost decade' because of a sequence of returns type problem. (If I understand the terminology correctly.)

Where I have retired from mega-corp, my second career and circumstances are such that I am still in accumulation mode. My ability to contribute (and actual contributions) during that time frame increased significantly. Thus, my portfolio benefited greatly from adding to my investments during that same time frame. In particular, those contributions made during the 2007-2010 period have performed exceedingly well.
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Old 03-21-2018, 12:52 PM   #18
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During the time period of 2000-2012, I was working part-time on/off and my wife did not ER until 2005. With two children in college in that time frame, I did not have much extra money to save, but not having to dip into the stash helped a lot. The earned income also gave me some confidence to take a more aggressive investment style.

Having survived that terrible period and even prospered, I will try to remind myself to be take a more conservative stance after this nine-year bull. But then, I have more money now, and also have SS on tap. The effect of the big bad sequence of returns would be subdued, I think.
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Old 03-21-2018, 08:24 PM   #19
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I think there have been some good points about why the chart presented does not very accurately represent how badly a Bear market can hurt. (If you're 100% equities, waiting 5 - 15 years to get back to even is pretty hard.) But here's another point...the chart is wrong in its percentages. For instance, for the 2000 - 2002 bear, it shows a drop of 24.8%. But that's simply not nearly accurate. The S&P 500 fell nearly 50% from peak to trough. In the Great Recession, the drop was ~55%, not the 50% shown on the chart. Perhaps the chart is simply measuring from Jan. 1 - Dec. 31 or something like that, but I do not believe it's accurate. When half your wealth evaporates, you don't tend to care what dates accompany it.

The link below will take you to an article that shows the actual point drops and percentage drops from each bear.

11 historic bear markets - Business - Stocks & economy | NBC News

And here's another point. According to this article, there have been 35 bear markets between 1900 - 2013. I know those dates don't overlap precisely with the chart, however, I only count 8 bear markets on the chart. Something is really fishy here.

https://www.cnbc.com/2015/08/24/8-th...r-markets.html
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Old 03-21-2018, 10:22 PM   #20
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I think there have been some good points about why the chart presented does not very accurately represent how badly a Bear market can hurt. (If you're 100% equities, waiting 5 - 15 years to get back to even is pretty hard.) But here's another point...the chart is wrong in its percentages. For instance, for the 2000 - 2002 bear, it shows a drop of 24.8%. But that's simply not nearly accurate. The S&P 500 fell nearly 50% from peak to trough. In the Great Recession, the drop was ~55%, not the 50% shown on the chart. Perhaps the chart is simply measuring from Jan. 1 - Dec. 31 or something like that, but I do not believe it's accurate. When half your wealth evaporates, you don't tend to care what dates accompany it.

The link below will take you to an article that shows the actual point drops and percentage drops from each bear.

11 historic bear markets - Business - Stocks & economy | NBC News

And here's another point. According to this article, there have been 35 bear markets between 1900 - 2013. I know those dates don't overlap precisely with the chart, however, I only count 8 bear markets on the chart. Something is really fishy here.

https://www.cnbc.com/2015/08/24/8-th...r-markets.html
Not so amazing....
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FIRE in 2031 @ 50yrs old (+/- 2yrs) w/ a hypothetical $2.5mil portfolio, 3 appreciated homes worth $1.0mil and rental income to fund my gap years until RMD. Assets will go to an inherited IRA where I plan on watching the investments grow until I die or the trust gets executed.
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