Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Not as chilled as the rest of you - need advice
Old 08-24-2015, 02:49 PM   #1
Dryer sheet aficionado
 
Join Date: Apr 2013
Posts: 49
Not as chilled as the rest of you - need advice

I'm typically a buy and hold investor - have pretty much done that my whole investing career when I haven't had time to spend and when I have had time to spend then I've gravitated towards value stocks and enjoyed trading. That was years ago.

My (our) situation is this. My DH (we are both 52) is painfully waiting to retire. This has been going on for years. We'd originally said Jan. 2017 but a review of things has us considering Sept of 2018 just for more cushion (we have two sons in college), though Jan. 2017 was still looking doable. However...

Like many of you, we've lost a lot of money this past few days. Just today alone we've lost almost 25K.

When I was looking at a draw down rate of 3.5 % last week, things looked pretty rosy based on the balance I was plotting to draw down from. Now things are not looking so rosy. Having lost (on paper, I know) over 100K, I feel that bit of panic. I have worked really hard to do what I can to help us be in a position for my husband to retire. But gee whiz. This rattles me a bit.

I have a chunk of cash (about 150K) that is sitting in cash in our Fidelity account. Normally I would see this as time to go shopping. But today I'm finding I don't know what to do.

I will buy more VMI for my 19 year old son with his money b/c he'd asked me to do that before he left for college last week. So that's a no brainer. It truly is a sale for him.

If my husband had already retired, then we'd just deal with it. But since he hasn't yet and since our new balance is so much lower, what advice do you have for deciding whether to keep up with your plan? And how do you sleep at night when you're invested in the market?

I need to make another post in a few days about asset allocation, something I've been meaning to ask you all about. Most of our money is in our 401K, which has decent offerings but it makes way less percentage wise than my own small portfolio which is about half the balance of our 401K. I don't know how to maximize earnings in it and keep it safer at the same time. Moving towards safety is a new ballpark for me to explore.

If there is specific information I can offer that would help, please ask. I'm in a bit of a reactive mode at the moment so I know I'm venting more than anything.

Many thanks!
__________________

__________________
steady saver is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-24-2015, 03:20 PM   #2
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,948
Just hang on, and don't sell low.

When the market recovers and is thriving once again (which WILL happen sooner or later), you might want to consider moving to a less risky asset allocation. We all need an AA that is something we can stick with through the inevitable market slumps and crashes that occur from time to time.

With risk comes reward, so AA during the accumulation phase can be a little riskier than AA after retirement. But you are getting close enough to retirement that I think you would be justified in starting a shift towards less risk if you want to, once the market has recovered so that you can sell high.
__________________

__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 08-24-2015, 03:23 PM   #3
Full time employment: Posting here.
 
Join Date: Sep 2002
Posts: 542
Venting is a good thing. And I would argue that it's not a loss until you sell it. Of course its hard to this mentally. Look at how long it took the market to set new highs from the 2008 mess. It wasn't that long only a couple of years from what I recall. Stick to your plan and don't do anything rash.

JDARNELL
__________________
JDARNELL is online now   Reply With Quote
Old 08-24-2015, 03:32 PM   #4
Thinks s/he gets paid by the post
walkinwood's Avatar
 
Join Date: Jul 2006
Location: Denver
Posts: 2,677
You have 3 years to go for retirement, so that's good news. This would have been worse on your nerves had you just retired.

Pay attention & see if you can do some tax loss harvesting by selling mutual funds and moving them to another similar fund. Read up on this before acting. That way, you stay in the market, but get some tax benefit near term.

As someone else said, you may need to re-evaluate your AA after this has blown over. Think about what your future AA should be.

We're all in the same boat. We may not act, but don't, for a moment, think that we're all "chilled" about this.

All the best.
__________________
walkinwood is offline   Reply With Quote
Old 08-24-2015, 03:40 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 5,201
There are risks anywhere you put your money.

Bonds? Corporations or cities can default on them.

Real estate? What if renters don't pay or you can't get a renter, or a flood or earthquake happens, or a pipeline goes through your property?

Annuities? The insurer can go under, leaving it worthless.

FDIC insured savings? Inflation can ravage the value and make your money worth a lot less, even if the amount in your account doesn't fall.

Stocks have more risk than most because there is more upside. I look at this drop in perspective of the run up we've had for the last 6 years. I also look at historical drops and see how the drops mostly were just corrections from a market that was too high. As long as you don't sell in the trough you will come out of it okay.

Diversification is a good way to insure against a bad event ruining your retirement. Own a reasonable % of some or all of these categories (and any others I've missed). The stock market may be down 10% or whatever it is depending on where you start looking, but I haven't lost 10% because I'm not 100% in stocks.

It's a long way to 2017. In some ways you're lucky. If we're in for a long slide, you've still got jobs and can hopefully delay ER if you're not where you want to be then.
__________________
RunningBum is offline   Reply With Quote
Old 08-24-2015, 03:58 PM   #6
Recycles dryer sheets
 
Join Date: Jul 2015
Location: Beaverton
Posts: 293
Hey, I'm retiring Friday. My sister's retiring in a month. We're both a little freaked out. You have to pick a point a just go for it. You're much younger than both of us.

On the good side I am going P/T in a month and can live off half my old salary (have benefits). So, I'm just not going to read the financials for a month or two.

__________________
Bir48die is offline   Reply With Quote
Old 08-24-2015, 04:14 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Moemg's Avatar
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 10,037
I retired in 2008 & I did not chill during that meltdown . I seriously thought about going back to work but I nixed that idea & just went with the drop . The thing that kept me sane is realizing that a $100,000 drop is only $ 4,000 of your annual budget & unless your budget is very tight most of us have $4,000 wiggle room. So the big trip gets postponed or you cut down on dinner's out .I lost a lot in 2008-2009 but I did get it back & then some .
__________________
Moemg is offline   Reply With Quote
Old 08-24-2015, 04:16 PM   #8
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Eagan, MN
Posts: 3,068
I am relying on 130+ years of market data. I am staying the course.

I used to do trading. I have been to many trading schools, bought every high flying stock out there. You can buy them, watch them run up, then decide to stay the course. And lose money on them eventually.

I buy a set amount every month. I purchased September's allocation today. I should have waited, but a week is not going to make or break me. My Real Estate income gives me more than enough to live on, and I am still working. I have some pension money, and SS too, when I get to that point. And free health care.

The market had high volume at the open, and many investors were stopped out early today. Many more were forced to sell due to margin calls this afternoon. It will not be long, and all the sellers will have sold, forced or not. At that point, only buyers will remain. The market will be forced to go up.

The economy is doing well, sort of. The fundamentals are the same as last week. There are a few investors that left the market which caused the down swing. Real Estate is not an option for most people at today's prices. Bonds are no bargain at 1% - 2%. Equities are the only game in town.

The market will be up at the end of the year, (likely). If the Fed raises rates, all bets are off.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is offline   Reply With Quote
Not as chilled as the rest of you - need advice
Old 08-24-2015, 04:18 PM   #9
Recycles dryer sheets
emerytura's Avatar
 
Join Date: May 2014
Location: Far Hills
Posts: 51
Not as chilled as the rest of you - need advice

Perseverance will pay off. You have time to recover, as long as you do not sell lower than you purchased. I took the risk today and moved some cash from money market in my 401k to Large Caps. I do not need this money for the next 5 years and will let them ride. No one really knows how this will unfold in the future, but judging by the past, market usually recovers.
__________________
emerytura is offline   Reply With Quote
Old 08-24-2015, 04:26 PM   #10
Recycles dryer sheets
 
Join Date: Jun 2014
Posts: 433
Agree with everyone here.

No one shrugs off a 6-10% drop in net worth in a couple days... But the question is how you act right after that.
My suggestion is to figure out your AA and contingency planning when you emotion neutral (or close to it) and then write it down.

Something like "I know I'll freak out when the market drops 5%+ in a day so when it does I will do nothing... Go for a walk... Take a trip to my favorite bakery, etc."

Or. "I know I'll get really scared when it drops 15% in a month and then I'll buy $x, and rebalance as necessary"

And

"I'll be scared out of my mind when it drops 50% in one year and then I'll do x, y, z"

If you want you can put "back to w*rk" triggers or whatever.

The key is to have something other than cnbc to listen to when there's stuff like this.

Its like a fire escape plan... Figuring it out when the house is burning down isn't necessarily the best idea .

Sent from my HTC One_M8 using Early Retirement Forum mobile app
__________________
petershk is offline   Reply With Quote
Old 08-24-2015, 04:37 PM   #11
Thinks s/he gets paid by the post
Nemo2's Avatar
 
Join Date: May 2011
Location: Belleville, ONT
Posts: 4,331
Quote:
Originally Posted by JDARNELL View Post
And I would argue that it's not a loss until you sell it.
DW & I so have a hard time with that........from our perspective, if we had've cashed out before a/the drop, that money would've been in our hands...that was OUR money.......and now it's not.
__________________
"Exit, pursued by a bear."

The Winter's Tale, William Shakespeare
Nemo2 is online now   Reply With Quote
Old 08-24-2015, 04:40 PM   #12
Confused about dryer sheets
 
Join Date: May 2015
Location: Woking
Posts: 1
FWIW I am sat at home, having a nice whisky (Dalmore 18 if anyone's asking) reviewing net worth. And it's down - by an absolute number than makes me not feel good (hence the liquor :-)

But overall net worth is 96.6% of the peak I've record so in the grand scheme of things it's not a killer (not 100% invested in equities). And if the (equity) market drops another 10% then it will hurt some more - but that will be the time to both stay calm and also try to buy a little more stock.

And thankyou for giving me the excuse to write this and feel a bit better - and stick with it, don't sell at the lows. Definitely stop checking your portfolio value daily unless you are awaiting a topup point - we are past the point of selling.
__________________
levypa is offline   Reply With Quote
Old 08-24-2015, 04:43 PM   #13
Thinks s/he gets paid by the post
Car-Guy's Avatar
 
Join Date: Aug 2013
Location: Citizen of Texas
Posts: 2,486
I went through this a couple of times with my 401k investments when I was working and typically just stayed the course, kept my head down and focused on work.

Now that I'm retired, I'm mostly in fixed income investments. However, I did buy some specific stocks today that I'm interested in with spare cash and will probably buy more tomorrow, etc, if the market drops again.
__________________
Car-Guy is online now   Reply With Quote
Old 08-24-2015, 04:50 PM   #14
Thinks s/he gets paid by the post
Car-Guy's Avatar
 
Join Date: Aug 2013
Location: Citizen of Texas
Posts: 2,486
Quote:
Originally Posted by JDARNELL View Post
And I would argue that it's not a loss until you sell it.

JDARNELL
never could get comfortable with that concept but that's me

Quote:
Originally Posted by Nemo2 View Post
DW & I so have a hard time with that........from our perspective, if we had've cashed out before a/the drop, that money would've been in our hands...that was OUR money.......and now it's not.
that's the way I see it too
__________________
Car-Guy is online now   Reply With Quote
Old 08-24-2015, 04:55 PM   #15
Thinks s/he gets paid by the post
frayne's Avatar
 
Join Date: Oct 2002
Location: 19th Hole
Posts: 2,535
My advice, turn off the boob tube and go play golf, take a bike ride, or go fishing. The ups and downs of the markets are just the natural voice of the process that you can't control.
__________________
A totally unblemished life is only for saints.
frayne is online now   Reply With Quote
Old 08-24-2015, 05:02 PM   #16
Thinks s/he gets paid by the post
Car-Guy's Avatar
 
Join Date: Aug 2013
Location: Citizen of Texas
Posts: 2,486
Quote:
Originally Posted by frayne View Post
Always carry a flagon of whiskey in case of snakebite and furthermore always carry a small snake. - W. C. Fields.
Sorry, no snakebite, but I needed the whiskey today before I could buy into the market. I'll refill tonight for another round tomorrow.
__________________
Car-Guy is online now   Reply With Quote
Old 08-24-2015, 05:12 PM   #17
Recycles dryer sheets
 
Join Date: Jan 2014
Location: Everett
Posts: 285
I'm 53 and hope to retire in 3-4 years. Not panicking, but coming here for some comfort. (Can't do a shot just now, still at the office...). I'm looking to buy some VTSAX soon as the funding clears in my new Vanguard account.

Now if I could just talk my boyfriend into getting back into the market. He pulled a few years ago and has been missing out...or will he have the last laugh? Stay tuned!!
__________________
O2Bfree is offline   Reply With Quote
Old 08-24-2015, 05:12 PM   #18
Recycles dryer sheets
 
Join Date: Aug 2014
Location: Phoenix
Posts: 473
When I saw what was going on this morning, I just thought back to the 1987 crash when I was fully invested and could do little but watch the carnage. No online trading in those days and the broker phone lines were hard to get through. Wasn't considering selling which is the WORST thing you can do in such a situation. I would have bought more but just didn't have cash available to do so. Today, I was carefully evaluating the situation as I now have cash available to pick up some great dividend stocks on sale. We may see some more wild behavior tomorrow but don't be rash in whatever you decide to do.
__________________
Ian S is offline   Reply With Quote
Old 08-24-2015, 07:03 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,906
We just retired this year so imagine how we feel! Market dropping 1000 points in a day during your first year of retirement. It would be hard with kids, but without kids you can always depend on the taxes of strangers to cover things like ACA and reduce your spending on other items to fit your budget. I think forgoing a European vacation trumps driving an hour each way to work and spending 10 hours in a cubical. Europe is overrated anyway.
__________________
Fermion is offline   Reply With Quote
Old 08-24-2015, 07:04 PM   #20
Dryer sheet aficionado
 
Join Date: Jul 2015
Posts: 36
Another vote for staying the course... of course I have another 20 yrs until I'd like to retire, so it's easy to take that position.

I've bought on 2 dips. I didn't today, but I will when it dips some more.
__________________

__________________
turbo89 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
How doctors die, not like the rest of us ! frayne Health and Early Retirement 54 12-15-2011 05:05 PM
Happy Birthday to my little buddy..and Happy St. Patty's day to the rest of you! thefed Other topics 18 03-18-2010 05:15 AM
And Now You Know The Rest of the Story Eagle43 Other topics 9 03-02-2009 08:59 PM

 

 
All times are GMT -6. The time now is 09:31 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.