Join Early Retirement Today
View Poll Results: How do you feel about stocks given the past 3 years
Better (always comes back) 61 83.56%
Worse (cannot stand the volatility) 12 16.44%
Voters: 73. You may not vote on this poll

Reply
 
Thread Tools Search this Thread Display Modes
Poll:Given the past 3 years, what do you think of stocks?
Old 12-29-2010, 07:06 PM   #1
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 162
Poll:Given the past 3 years, what do you think of stocks?

These are the facts:

By March 2009, the US stock market (and most of the world markets) lost over half its value. Less than 2 years later, almost all of that has been made up.

Does this make you feel better about the stock market (it always comes back) or

Worse given the volatility (less dependable asset class)

Given a long retirement, stocks will be a necessity, I am just not sure how to view the past 3 years.
__________________

__________________
firewhen 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 12-29-2010, 07:11 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Jul 2003
Location: Pasadena CA
Posts: 2,695
Better, but not great and not as good as many years ago when PEs were lower.
__________________

__________________
T.S. Eliot:
Old men ought to be explorers
yakers is offline   Reply With Quote
Old 12-29-2010, 07:15 PM   #3
gone traveling
 
Join Date: May 2008
Posts: 3,864
I'm up 75% since Oct 26, 2008...
( However, some of the other snapshots don't look so good..)
__________________
Westernskies is offline   Reply With Quote
Old 12-29-2010, 07:18 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,382
Quote:
Originally Posted by firewhen View Post
These are the facts:
Quote:
Originally Posted by firewhen View Post
By March 2009, the US stock market (and most of the world markets) lost over half its value. Less than 2 years later, almost all of that has been made up.

Does this make you feel better about the stock market (it always comes back) or

Worse given the volatility (less dependable asset class)

Given a long retirement, stocks will be a necessity, I am just not sure how to view the past 3 years.
Neither (essentially irrelevant data).

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 12-29-2010, 07:18 PM   #5
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,078
None of the above.

How I "feel" about stocks given the past three years makes no difference to the market and doesn't impact what I do - at least not very much. My allocation plan, based on my age (64) and my status (retired), says I should be somewhere around 35-40% equities and I am.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 12-29-2010, 07:18 PM   #6
Recycles dryer sheets
 
Join Date: Apr 2008
Posts: 223
There have been many stock market crashes/depressions in the past, eg, 2000, 87, etc. This event should not have changed anyone's mind about it, the question is strategies for dealing with it. I think we also found out that diversification might not be a safeguard to this since there was a very high correlation between many other investments including commodities, real estate, world stock markets, etc. But even this has been the case in the past, high correlations during declines which are not present in bull markets.
__________________
inquisitive is offline   Reply With Quote
Old 12-29-2010, 07:33 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,971
I don't really like the stock market. After 10 years of investing, I don't think I have any more money than what I put in plus a small portion of what my employer put in. Over the last 10 years I would've been better off in CD's. I don't have detailed records to prove this but it seems to be the case for me.

I don't know if I heard it here or somewhere else but this is perfect for me: "I don't care about the return on my money, I care about the return of my money.
__________________
aaronc879 is offline   Reply With Quote
Old 12-29-2010, 07:46 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by firewhen View Post
These are the facts:

By March 2009, the US stock market (and most of the world markets) lost over half its value. Less than 2 years later, almost all of that has been made up.

Does this make you feel better about the stock market (it always comes back) or

Worse given the volatility (less dependable asset class)

Given a long retirement, stocks will be a necessity, I am just not sure how to view the past 3 years.
What would you question have been if this was Dec 1999?
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 12-29-2010, 08:09 PM   #9
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,846
Quote:
Originally Posted by REWahoo View Post
None of the above.

How I "feel" about stocks given the past three years makes no difference to the market and doesn't impact what I do - at least not very much. My allocation plan, based on my age (64) and my status (retired), says I should be somewhere around 35-40% equities and I am.
I agree completely, but even though what I feel about stocks doesn't change my investing strategy, I still feel what I feel. And in my case, that's just great because I voted "Better, always comes back".

I feel more confident in my asset allocation and stronger should we have another market crash.

My net worth today is the highest it has ever been. Wow! What a surprise. Granted, I was still funneling money into my portfolio until I retired in November of 2009, but still I feel really good about the way my investments bounced back from then until now.
__________________
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 12-29-2010, 08:14 PM   #10
Thinks s/he gets paid by the post
kyounge1956's Avatar
 
Join Date: Sep 2008
Posts: 2,171
Quote:
Originally Posted by firewhen View Post
These are the facts:

By March 2009, the US stock market (and most of the world markets) lost over half its value. Less than 2 years later, almost all of that has been made up.(snip).
Say what? Using the S&P 500 as a proxy for "the US stock market", the high was 1557.59 in the week of 10/1/07. From there it fell to a low of 683.38 the week of 3/2/09, a loss of 875.21 points, which, as you say, was more than half its value. But the index currently stands at 1259.78, so it is still only 80% of its high, and has made up 576.4 of the 874.21 points it lost. I'd call that a recovery of about 2/3 of what was lost, not almost all.
__________________
kyounge1956 is offline   Reply With Quote
Old 12-29-2010, 09:04 PM   #11
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Location: Los Angeles area
Posts: 1,432
Although I keep 100% in individual stocks, the market price swings of the past 3 years (or any other period) are of no importance to me. Much more important is that the stocks I invest in keep consistently growing their earnings and dividends, and keep allocating capital well (IMO).

The collapse of some sectors business model (banks, mortgage lenders) serves as a reminder to watch the companies you invest in, and to depart them when they become non-analyzable.
__________________
learn, work, save, invest, fire
CyclingInvestor is offline   Reply With Quote
Old 12-29-2010, 09:38 PM   #12
Recycles dryer sheets
 
Join Date: May 2007
Posts: 371
Quote:
Originally Posted by aaronc879 View Post
I don't really like the stock market. After 10 years of investing, I don't think I have any more money than what I put in plus a small portion of what my employer put in. Over the last 10 years I would've been better off in CD's. I don't have detailed records to prove this but it seems to be the case for me.

I don't know if I heard it here or somewhere else but this is perfect for me: "I don't care about the return on my money, I care about the return of my money.
You are right about the past decade, but I'm keeping my nose to the grindstone. Historically stocks have done a LOT better than that.
__________________
novaman is offline   Reply With Quote
Old 12-29-2010, 09:55 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
bbbamI's Avatar
 
Join Date: Dec 2006
Location: Dallas 'burb
Posts: 9,039
Hmmm...during many years of investing I didn't pay that much attention to the stock market as I knew it would go up and down. I just kept pluggin' along...staying the course.

When the stock market took the big dip I was rather concerned since DH would be retiring soon...but I didn't panic. When the portfolio 'came back', I realized we did not need such a large percentage of stock and changed our allocation.

IMO, there can be a difference in the 'tude' when you're young/working....and when you're older/retired.
__________________
There's no need to complicate, our time is short..
bbbamI is offline   Reply With Quote
Old 12-30-2010, 12:19 AM   #14
Recycles dryer sheets
 
Join Date: Feb 2006
Location: Valencia
Posts: 121
<<None of the above.

How I "feel" about stocks given the past three years makes no difference to the market and doesn't impact what I do....>>

I agree with this completely. Volitility is part of the stock market.

Nevertheless, it's very unfair for me to pontificate because I was able to "ride out" the 50% decrease in s/p 500. I'm sure some investors were either forced to get out of stocks due to a financial crisis or simply could not stand the pain any more.

Everyone has his/her breaking point. A better question would be "How close did you come to your breaking point?" How close did you come to bailing out?
__________________
*
using an 8.5% withdrawal rate until SS kicks in
*
albundyz is offline   Reply With Quote
Old 12-30-2010, 03:51 AM   #15
Thinks s/he gets paid by the post
 
Join Date: Sep 2009
Location: Hong Kong
Posts: 1,571
Quote:
Originally Posted by W2R View Post
I agree completely, but even though what I feel about stocks doesn't change my investing strategy, I still feel what I feel. And in my case, that's just great because I voted "Better, always comes back".

I feel more confident in my asset allocation and stronger should we have another market crash.

My net worth today is the highest it has ever been. Wow! What a surprise. Granted, I was still funneling money into my portfolio until I retired in November of 2009, but still I feel really good about the way my investments bounced back from then until now.
Likewise, it has not changed my views on the market - bear markets/crashes are buying opportunities. I'm old enough to have lived through the 1987 crash, the Asian crisis (1997 -2003), the tech bubble bursting (2000), SARS (2003) and the Great Financial Crisis (2007-8). All of these presented wonderful buying opportunities (although I successfully mismanaged some of them).

If another crash happens again, I hope I will have the discipline to take advantage of it rather than panic and sell out.

However, I do recognise the potential for a very long term decline in equity markets (e.g. Japan) and do not automatically assume that every decline will be followed by a recovery within a similar time period to what we experienced over the last few years. Our local Hang Seng Index is still well below it's pre-crisis levels in absolute terms and is also below its long term trailing and forecast earnings multiples.
__________________
Budgeting is a skill practised by people who are bad at politics.
traineeinvestor is offline   Reply With Quote
Old 12-30-2010, 07:19 AM   #16
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Three years is just under 10% of the time that DW/me have been investing for retirement (started in 1982).

Three years or a decade does not matter for folks that are long term investors, IMHO.

Looking at the period of 1/1/90 (the time I set up the IRA spreadsheet, even though investing years earlier) through yesterday's market close shows a gain over the 20+ year period of +8.90% for me, +8.06% for DW (she is more conservative).

This does not include annual contributions and it is just for our TIRA/Roth IRA accounts. Our respective 401(k) accounts had too much flux over the years due to different employer account managers and matching contributions. That makes it a bit more difficult to do an IRR when contributions include your own, the company's match (at different rates) and market return. All I know is we have much, much more than we had in actual contributions over the years.

Since 1990, we had three negative return years (2001,02,08). All others were positive; some more, some less.

We have never had an equity position of less than 50% (90/10 Equity/Bond-Cash in our accumulation years, 60/40 when I retired, to 50/50 today).

Just some info, from my personal tracking...
__________________
rescueme is offline   Reply With Quote
Old 12-30-2010, 07:25 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,382
Quote:
Originally Posted by rescueme View Post
Three years is just under 10% of the time that DW/me have been investing for retirement (started in 1982).

Three years or a decade does not matter for folks that are long term investors, IMHO.
It can matter quite a lot if you need to make regular withdrawals from the portfolio.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 12-30-2010, 07:44 AM   #18
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Quote:
Originally Posted by haha View Post
It can matter quite a lot if you need to make regular withdrawals from the portfolio.

Ha
True. I've been retired since May 2007 and have been taking most my income from my portfolio (including taxes due), along with a small VA disability check (tax free) each month.

Looking at DW/my portfolio's as one (what is hers is hers - what mine is hers ) we are at a return of just over +1% since that time, even though drawing my income (including taxes) during that time, along with a car purchase (for my volunteer work).

Positive factors were her contributions to her 401(k) during that time (we stopped IRA contributions after 2008), along with the market uptick of just over the last year.

Negative factors were of course the downturn of 2008 and the big one being my funding my retirement expenses directly from my portfolio (not drawing SS till I'm 70, another 8 years).

Since our retirement expenses (calculated for both of us, since DW expects to retire early in 2011) come out to 66% me/33% DW, I've been spending the bulk of the expense money, since I cover all expenses related to our home/vehicles (e.g. insurance, taxes, upkeep, etc). DW uses her income primarily for travel (our highest expense item). She has no responsibility for any other expenses other than travel and personal items (e.g. clothes, gifts, etc.) When my DW starts hitting her portfolio next year, that will start drawing down our total joint portfolio, but will soon end when she gets two small pensions at age 65, her SS at age 66, me claiming 50% spousal SS benefit at age 66 (we're the same age), and of course my SS at age 70.

My graphs (using Fidelity's RIP tool) show the slight dip from ages 59 to 65, flatten out, and then start growing for the remainder of our retirement as our other income sources come on-line (at a 95 C.I.) Yes, I ran it through FIRECalc, and have no periods of failure (if you were wondering).

So far, plan is working as forecast at time of my retirement a bit over 3.5 years ago. That's all I can expect. If things change, so will we. BTW, the reason the downturn did not affect us was that we set up our respective retirement cash buckets (including forecast expenses and taxes due) and did not sell any fund holdings during the downturn. The shares were there to take advantage of the market rise - same as when they were there during the market fall. We don't sell during down periods - that's why the cash buckets were formed (with a 3-4 year level of cash needed, and added to during up years or superior returns - as GMNA was this past year). No need to be forced to sell at a bad time just because the market has a cold. And if we reach an extended period of time when the cash is used up? We still have our non-equity (e.g. bond) holdings as backup. Of course, the greatest risk to us is over the next two years - until Medicare, SS, and DW's pensions kick in.
__________________
rescueme is offline   Reply With Quote
Old 12-30-2010, 07:57 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,263
Quote:
Originally Posted by firewhen View Post
These are the facts:

By March 2009, the US stock market (and most of the world markets) lost over half its value. Less than 2 years later, almost all of that has been made up.

Does this make you feel better about the stock market (it always comes back) or

Worse given the volatility (less dependable asset class)

Given a long retirement, stocks will be a necessity, I am just not sure how to view the past 3 years.


You forgot "neither"....
__________________
Texas Proud is offline   Reply With Quote
Old 12-30-2010, 10:45 AM   #20
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 162
I guess the better question would have been will this recent experience change your asset allocation? We are about 90% equity, and during the worst of the crisis, I was thinking that RE was dead, or at least delayed an extra 10 years. I remember saying that if the market ever recovered I would take some money off the table. Now that it is recovering so fast, I am not sure if I will make any changes. If I do, it will probably be small and I am not sure when. I voted for better, and despite the huge drop, the Dow gaining 5,000 points in less than 2 years is reassuring to me.
__________________

__________________
firewhen 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
Floyd Norris of NYT on the Past Decade in Stocks haha FIRE and Money 12 12-26-2010 08:24 PM
11 Stocks-5+years Div Growth-5% Yield tjscott0 Stock Picking and Market Strategy 4 12-20-2010 10:30 AM
Bonds have outperformed stocks the last 40 years? cardude FIRE and Money 7 04-02-2009 05:20 PM
stocks very poor last 10 years mathjak107 FIRE and Money 26 03-28-2008 04:23 AM
10 Best Stocks for the Next 10 Years janeeyre FIRE and Money 3 04-18-2007 08:00 PM

 

 
All times are GMT -6. The time now is 01:24 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.