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Old 06-29-2008, 08:08 AM   #121
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Sitting tight here. I did learn my lesson in 2001-02, when I was 100% in domestic equities. In the years since, I have gone to an approximate 60/40 split and diversified internationally, which has greatly moderated the pain this time. It is also helpful that I still have a j*b which pays the bills and leaves some for continued saving. If I were retired and living off my investments, I probably would not be so sanguine.
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Old 06-29-2008, 08:51 AM   #122
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Sitting tight here. I did learn my lesson in 2001-02, when I was 100% in domestic equities. In the years since, I have gone to an approximate 60/40 split and diversified internationally, which has greatly moderated the pain this time. It is also helpful that I still have a j*b which pays the bills and leaves some for continued saving. If I were retired and living off my investments, I probably would not be so sanguine.
Yes, that has got to be so much harder. Because of that, my financial plan is based on enough core fixed income investments which should provide enough for my essential needs (plus more) in ER.

My equity investments will simply be there to combat long term inflation, and I do not intend to sell them at all, except if necessary during rebalancing due to a bull market, never in a bear market.

Even so, I would imagine that my first years in ER will be pretty nerve-wracking until I have shown myself that I can indeed support myself over a long period of time without working. That's a non-intuitive idea for me and the best way for me to believe it will be the reality of seeing it happen.
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Old 06-29-2008, 09:17 AM   #123
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For all the doom and gloom out there, I just checked and I am about 1% (on net worth) below where I was at the stock market peak in October. I guess I'll just stay the course.
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Old 06-29-2008, 10:05 AM   #124
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For all the doom and gloom out there, I just checked and I am about 1% (on net worth) below where I was at the stock market peak in October. I guess I'll just stay the course.

Care to share how you achieved that?

My allocation is precisely as "Sheltered Sam" portfolio from Bernstein's Four Pillars. I've lost 11% from peak.

I'm riding this out but am interest in your allocation for future moves.
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Old 06-29-2008, 10:40 AM   #125
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Easy to be up (I am up 2.9% between 10/07-06/2008 in NETWORTH as long as you ARE ADDING to savings from current income.
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Old 06-29-2008, 10:44 AM   #126
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I would imagine that my first years in ER will be pretty nerve-wracking until I have shown myself that I can indeed support myself over a long period of time without working. That's a non-intuitive idea for me and the best way for me to believe it will be the reality of seeing it happen.
If you keep track of your annual expenses and contrast them with the annual income produced by your investments, you should be able to see the evidence in pre-retirement.

I have done this for the past several years, and it was encouraging to see a (hypothetical) deficit become a surplus. I certainly don't want ER to be nerve-wracking!
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Old 06-29-2008, 10:55 AM   #127
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If you keep track of your annual expenses and contrast them with the annual income produced by your investments, you should be able to see the evidence in pre-retirement.
That's a good idea! I just did some back-of-the-envelope computations based on my recent quarterly dividends. It looks pretty good, especially considering that 27% of my inheritance is yet to materialize and that I wasn't considering SS or pension income. If I just assume that 2% SWR is OK, that works nicely too.

Still, as a future Missouri resident (hopefully), I have that "Show Me" attitude and I'll feel a lot better when I see it happening. I worry a lot about a variety of things (needlessly, usually), so I will probably stick to a bit of LBYM for at least the first year of ER and not spend more than my dividends until I know what's what.

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I have done this for the past several years, and it was encouraging to see a deficit become a surplus. I certainly don't want ER to be nerve-wracking!
I know - - me either! I have SO much more that I'd rather do in ER than sit around and stew about the market.
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Old 06-29-2008, 10:55 AM   #128
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For all the doom and gloom out there, I just checked and I am about 1% (on net worth) below where I was at the stock market peak in October. I guess I'll just stay the course.
Must have very little in stocks.
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Old 06-29-2008, 11:08 AM   #129
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Must have very little in stocks.
Dawg52, I like your golfing pal in the photo.

Yeah, my thoughts exactly, it's hard to find any positive performance in equities. Maybe he/she is still working and ADDING as OAG mentions.
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Old 06-29-2008, 11:08 AM   #130
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We could have all converted our portfolios to cash and bough gold at around $620 back in october and then sold the gold when it reached $1000 a couple months back and invested in oil. Anybody here do exactly that? Anyone who did would be up over 100% for the last 9 months.
Sorry, anyone can look back in time and said "Man that was so obvious we're all so stupid for not doing it". At the time, it was anything BUT obvious. Oil looked too expensive at the time and I recall reading stories about people shorting it. They looked like geniuses then, chumps now.

Hindsight really is 20/20. Coulda woulda shoulda.

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Must have very little in stocks.
Not everyone here is retired. My NW has never suffered a down month, mostly because I continue to infuse money into my investments. It would take a serious correction to overpower my contributions.

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Sitting tight here. I did learn my lesson in 2001-02, when I was 100% in domestic equities. In the years since, I have gone to an approximate 60/40 split and diversified internationally, which has greatly moderated the pain this time.
I hope everyone here reads that particular post as it is the only prudent action to take in times such as these - having a proper asset allocation based on your ability/need/willingness to take risk.
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Old 06-29-2008, 11:23 AM   #131
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I just did some back-of-the-envelope computations based on my recent quarterly dividends. It looks pretty good, especially considering that 27% of my inheritance is yet to materialize and that I wasn't considering SS or pension income. If I just assume that 2% SWR is OK, that works nicely too.

Still, as a future Missouri resident (hopefully), I have that "Show Me" attitude and I'll feel a lot better when I see it happening. I worry a lot about a variety of things (needlessly, usually)
I don't want to create work for you, but it might be time well spent to sit down and more accurately total up all of your expenses and your dividend / interest income. Completing that exercise quarterly or once every six months shouldn't take more than a few hours a year, and I really think that it would go a long way towards setting your mind at ease.

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I will probably stick to a bit of LBYM for at least the first year of ER and not spend more than my dividends until I know what's what.
Sure, that makes sense.
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Old 06-29-2008, 11:26 AM   #132
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Dawg52, I like your golfing pal in the photo.

Yeah, my thoughts exactly, it's hard to find any positive performance in equities. Maybe he/she is still working and ADDING as OAG mentions.
Whoooa, not a bad avatar either. Wish I could figure out a way to add to my portfolio without having to go back to w*rk. Guess I'll just have to hope the old market rebounds one day.
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Old 06-29-2008, 11:32 AM   #133
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Care to share how you achieved that?

My allocation is precisely as "Sheltered Sam" portfolio from Bernstein's Four Pillars. I've lost 11% from peak.

I'm riding this out but am interest in your allocation for future moves.

I am down 1% mainly because I am still working and maxing out retirement accounts. If I were not working and contributing, I estimate the loss would be 8 -12 percent from the peak. My allocation is around 80 -20. When the market is bad, everybody with stock holdings suffer, but if you are still buying, it's not too bad. I don't know how I will feel when I retire. Maybe I'll adjust the portfolio to be more conservative.

Nice golf partner!
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Old 06-29-2008, 11:49 AM   #134
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I am down 1% mainly because I am still working and maxing out retirement accounts. If I were not working and contributing, I estimate the loss would be 8 -12 percent from the peak. My allocation is around 80 -20. When the market is bad, everybody with stock holdings suffer, but if you are still buying, it's not too bad. I don't know how I will feel when I retire. Maybe I'll adjust the portfolio to be more conservative.

Nice golf partner!
You know there is an excel formula that will tell you exactly what your portfolio returns are even when you are making regular contributions, right? You shouldnt have to guess that you would be down 8-12 percent if you werent making contributions.

All you are saying is that you lost all of your contributions plus 1% since the high point, but you cant really use that measure to compare to anything to see how your portfolio is doing.
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Old 06-29-2008, 11:49 AM   #135
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I am down 1% mainly because I am still working and maxing out retirement accounts. If I were not working and contributing, I estimate the loss would be 8 -12 percent from the peak. My allocation is around 80 -20.
It just seems to me that if you quote a percentage up or down over some time period you should exclude the effect of any contributions made (or distributions taken) over that period. There are so many variables -- how much did you contribute, what percentage of the portfolio was that, what was the effect of the additional contributions performance on the total...

Thanks for clearing it up.
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Old 06-29-2008, 11:54 AM   #136
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We're also not hearing a whole lot from the folks who like to arb a mortgage.
I'm waiting for IJS to pay its next distribution.

I was kinda hoping that'd happen in July, but it might not be until October...
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Old 06-29-2008, 11:58 AM   #137
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You know there is an excel formula that will tell you exactly what your portfolio returns are even when you are making regular contributions, right? You shouldnt have to guess that you would be down 8-12 percent if you werent making contributions.

All you are saying is that you lost all of your contributions plus 1% since the high point, but you cant really use that measure to compare to anything to see how your portfolio is doing.

I didn't realize this would cause such a stir. In my original post, I stated: <<For all the doom and gloom out there, I just checked and I am about 1% (on net worth) below where I was at the stock market peak in October. I guess I'll just stay the course.>>

I'm not attempting to do a precise analysis of my stock market returns. I am just stating that for all the bad news, being down 1% on my net worth from the peak isn't so bad, nothing more, nothing less.
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Old 06-29-2008, 12:08 PM   #138
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Several posters have said how they would me more upset if they were retired in this downswing . I'd be more upset if I was still working and seeing my contributions immediately go into negative terriority .
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Old 06-29-2008, 12:32 PM   #139
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Several posters have said how they would me more upset if they were retired in this downswing . I'd be more upset if I was still working and seeing my contributions immediately go into negative terriority .
I think I would dislike being retired and seeing the downswings more, but not having been there, who knows. My net worth is lower than it was in October, but just last month, I hit a new net worth high, so I don't feel like my contributions immediately go into negative territory. I also know the market is going to go up and it's going to go down, and I don't know when it's going to go in which direction. I focus more on monthly income and monthly spending (things I can control) and let the automatic investments (403b, 401K, Roth, Pension) continue on autopilot. I am still 5+ years away from retirement.
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Old 06-29-2008, 12:59 PM   #140
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... it might be time well spent to sit down and more accurately total up all of your expenses and your dividend / interest income. Completing that exercise quarterly or once every six months shouldn't take more than a few hours a year, and I really think that it would go a long way towards setting your mind at ease.
You might want to set up a cashflow spreadsheet by month and keep it updated on a daily (expenses), weekly (investments), and monthly (dividends) basis. You can always project future values for these numbers by using your postulated rates for inflation, investment returns, and dividend growth.

It took me a bit of work to set up my spreadsheet initially because it forced me to think through all of the financial issues I might encounter, but the spreadsheet is easy to maintain and it keeps me current on my financial situation virtually in real time (i.e., I overwrite the projected numbers for the current month by the actual numbers as I get them).

The whole process is so automatic for me now that I wonder how I ever survived before personal computers, electronic spreadsheets, and online banking came into existance.
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