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What a difference three years makes!
Old 03-17-2013, 05:24 AM   #1
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What a difference three years makes!

In September 2008 I started tracking our net worth daily as I wanted to see how it would correspond with the quickly deteriorating market. It has been really interesting to watch the results. We hit a low point on March 9th, 2009. We just hit an all time high point this week -- and it is a VERY significant number. Basically I now feel pretty confident that if anything should happen to either of our jobs, we could sell our current home and call ourselves FIRED Not going to cash out now for a number of reasons I won't bog this thread down with, but very nice to be in this position.

We did not sell anything during the downturn. I moved my 403(b) from my old employer over to an IRA at Vanguard in August 2009, putting everything in the 2030 Retirement Fund. We moved the bulk of DH's retirement funds into a target fund at American Funds (his only option -- grrr...) at about the same time. We made a couple of well-market-timed lump sum investments into the kids college funds. We also bought an apartment here in Beijing in spring 2009 at what turned out to be the bottom of a very brief post-crash dip in the property market here. That has been where the bulk of our networth growth has come from -- current value estimates are well over double what we paid -- but the market has also been good to us at a time when we have been able to max out retirement contributions and really step up what we were putting into college funds. I have been pleasantly surprised how easy that has been, given that we took on a fairly good sized mortage. Helps that we've both gotten a few raises -- small, but every bit counts -- and now that I have hit 5 years with my employer they are kicking in 10% to my retirement.

We're currently anticipating changing the kids school and that is going to hit us hard financially, but the more I look at the numbers the more I think it is doable. We might need to cut back a bit on retirement and college savings, but we're still well ahead of where most people are and don't really need to worry too much about the future.

Curious about what others have seen happen in the last three years, especially if you were still working/investing during this period.
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Old 03-17-2013, 07:54 AM   #2
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We were fortunate enough to have (relatively) strong jobs at the end of 2008 and beginning of 2009, so when we saw the crash it was BUY BUY BUY!!! Like you, we are WAY up and very happy about it. But we're still working, and 5-7 years out from RE, so it's easier for us to be blasť about it.
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Old 03-17-2013, 08:12 AM   #3
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Quote:
Originally Posted by lhamo View Post
Curious about what others have seen happen in the last three years, especially if you were still working/investing during this period.
Net worth increased by 60%, but that included savings from w*rk and some inheritance, while paying a private college tuition. A better measure might be the 7.7% IRR during calendar years 2010 through 2012.
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Old 03-17-2013, 09:49 AM   #4
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I had already been retired 7 years by the time of 08-09 events. Fortunately, like most posters here I did not panic and sell and as a result NW came back very nicely to the highest point ever even though I haven't seen a salary going on 11 years now. I did not have SS or a pension during this time so this just points to the wonders of sticking to a reasonable asset allocation.
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Old 03-17-2013, 10:13 AM   #5
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I benefited greatly in 2008 from a very conservative asset allocation (~33% stocks at the time). Not only was I not tempted to sell, but I actually made large stock purchases throughout the crash, ending in the fall of 2009. As a result, our net worth including new investments, regained its 2007 high in the late summer of 2009. By year end, 2009, we had actual investment profits from the October, 2007 peak through December, 2009. As of today, our portfolio is just under 70% higher than its precrash peak.
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Old 03-17-2013, 10:26 AM   #6
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I was still working, DW part time working, and saving as much as always in the 401k, IRA's etc. during '08 and '09 We didn't change our AA.

We ER'ed at the start of 2010. Net worth today is 64% higher than at the start of 2008.
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Old 03-17-2013, 10:34 AM   #7
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We have seen the same thing. I couldn't believe how low our net worth was in March 2009 vs today. We are up over 300% (net worth) since March 2009.
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Old 03-17-2013, 11:07 AM   #8
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Not sure about net worth, but our invested assets (including 457, Roths, and taxable investment accounts) have increased just over 300% including contributions.

We have an IRR of about 22% per year (not incl contributions) since 3/9/09 with an AA of about 75/25
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Old 03-17-2013, 11:42 AM   #9
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Are we talking three years or four here? From 3/9/09, it would actually be four. Anyway, I just ran my numbers. Portfolio is up 142% since 3/9/09. From March 2010, it doesn't look *quite* as rosy..."only" up 46%. But, I'll take it!

Also, I would be up by more, but I recently paid down the mortgage some, bought a new truck. And back in late 2009 had to buy a used car. If it wasn't for those outlays, my returns would be 153% and 52%, respectively.

I should also point out that I took a major hit during the downturn, too. At the bottom (which for me was actually late November 2008), I was down by a bit more than half.
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Old 03-17-2013, 12:10 PM   #10
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While I monitor values much more frequently, I only keep annual values, so below is from 12/31/2009. Been steadily employed and saving aggressively during that time (403B, 457 and Roths). Probably 80/20 (equities versus FI & cash) in late 2008, 75/25 now. No significant rebalancing along the way, except that new contribs all went to equities (domestic and foreign) during the dip and recovery. More recently, with equity values returned and retirement looming, most new contributions are being directed to FI (bonds, TIAA Traditional and CDs).

From December 2009 to now:

Cash/investments account value increase: about 130%
(taxable, Roth, supplemental 403b and 457, including new contributions)

Increase in anticipated pension income: about 54%
(retire now versus then)

Decrease in estimated time to retirement: approx 92.66666...
;-)

****edited to change "reallocation" to "rebalancing" in above for clarity.
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Old 03-17-2013, 12:24 PM   #11
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We didn't change anything since I qualified for retirement in 2008 other than move to a more conservative 50% stocks/bonds in my 401K and built up the cash reserves more so that we wouldn't be forced to withdraw from our investments accounts I got laid off sooner than planned. We continued to dollar cost average into the 401K and some of our taxable accounts. From its previous peak our net worth went down about 20-25% in 2009 but has since gained about 67%, and includes major expenditures for a new roof, heat pump, and car. My 401K has just about doubled since its low (including contributions). I am very happy with this as it is at a risk level that lets me sleep at night. The years have also increased my expected annual pension by about 26%.
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Old 03-17-2013, 12:40 PM   #12
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Our net worth today is 5.4 times higher than what it was in March 2009 (and still adding to the pot).
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Old 03-17-2013, 12:43 PM   #13
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I hired a one-time fee-only financial planner last year to help with asset allocation and to give me a nudge to do something with cash we had from real estate liquidations.

I think the most interesting piece of data in the huge analysis she gave me is this:

Quote:
The best & worst returns for your current portfolio are as follows:

Best 1 year return: +24% (2009)
Worst 1 year return: -24% (2008)
DH took early retirement in 2008, and that was scary, as he was also diagnosed with cancer the same day. I thought the world was ending. We were out with close friends that night, and two friends said their elderly parents had not only cashed out of the stock market, but had gone to the bank and withdrawn all their cash.

I sat tight, kept throwing $$$ in my 401(k) during all the down months, and still slept much better than those folks who were rolling around in theirs on their mattress.

I hope I never have to eat my words on the above....
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Old 03-17-2013, 02:50 PM   #14
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We had strong earnings 2008-2011. As we had done prior to the market fiasco, we maxed out out 401ks, 403bs, and Roth IRAs through the nastiest market i can remember. The market was terrible and we just held our noses, didn't look at our investment losses, and stayed the course. In 2007 and 2008 I kept saying to DW that we needed one more good market downturn to hit FI...and boy did we get it.

More recently, in the past 3 months, I have taken my foot off the throttle and moved from a 15% bond allocation to a 25% allocation. I don't particularly like bonds at this point (mostly short term) but our station in life calls for a more conservative allocation.
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Old 03-17-2013, 04:55 PM   #15
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My story is different in that I saved aggressively when I was in my late twenties until age 50 and then stopped due to my company terminating business and forcing me to jump into a series of career changes.
While that has been fun, my income dropped to the point where I stopped contributing to any retirement plans choosing to use my investment knowledge to work with my portfolio as it stood in 2005.
So I have simply watched my portfolio grow and decline based on Mr Market and whatever value I could add in terms of my investment decisions. Here is a brief recap:
2005: about $670,000
I reinvested about 2/3 of this amount in 2006 since my company cashed me out of the 403b I had. I mostly invested in a mix of mutual funds, growth, dividend payers, international, commodities…limited bonds. I bought a few individual stocks, blue chips.
The portfolio grew to $775,000 in 2007, what a fun ride those two years were. You couldn’t NOT make an investing mistake. That was when the market finally hit 10,000 and just went on a tear for two years.
Then in 2008, I lost one third (32% actually) and my portfolio evaporated to $525,000. But considering that the S&P lost 38% and Investment Company of America, one of my model mutual funds, lost 35%, I was not too discouraged.
During those next years, I ended up cashing out some funds that just never performed and so ended up with around $100 K to play with during the terrible downturn. I used that money to buy individual dividend payers. So I bought Exxon when it was going for $50, JNJ when it was in the 60’s, APPL at $135 and with the help of the excellent Seeking Alpha website, a few others.
Today, I have about $70K in dividend paying stocks; $25K in senior loans and a bond fund, $108000 in various cash positions ($60 k of it pays 3% a year, better than anything else I can find so it suffices for bonds for now)…$15000 is available for investing in my IRA and the rest is just bank savings and $637000 in funds. My total is: $840,000.
So I am up about 62% from my 2008 low.
I must confess that back in 2005, I looked at my totals and just figured it would be easy to get to $1 M by now...after all CD's were paying well, bonds were doing OK...who saw the market collapse and most especially the collapse in interest rates. So here we are so excited to see dividend payers of 3% and feeling good about that.
It is good to recap from time to time. Thanks for making me go through this exercise. We shall see what the rest of 2013 brings but at least if the market tanks, it will be falling from a higher level. That is how I have consoled myself during the tough times and most especially those years when the market yo yoed and you could not figure out why.
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Old 03-17-2013, 05:34 PM   #16
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Originally Posted by lhamo View Post
Curious about what others have seen happen in the last three years, especially if you were still working/investing during this period.
Like you, my portfolio hit its 2008-2009 recession low on March 9, 2009. I retired just eight months later, on November 9th, 2009, and since that time my living expenses have come primarily from my portfolio dividends.

And then, like you, my portfolio hit yet another all time high this past week (last Thursday).

Sort of like a dream come true for all of us, I think! It seems a bit easier to spend a little more with portfolio values like those we have all been seeing lately.
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Old 03-17-2013, 08:04 PM   #17
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Portfolio

The portfolio is up 85% since the '07 peak and up 132% from the '09 nadir.
Amazing. I had moved from 90% stock funds to 55% from '06-'08, so that dampened the blow, although I think 3 years ago I was briefly at 28 percent down, although that was reduced by about 8 percent in only two weeks. We kept the 401k buys on autopilot and since I had already sold stock mutuals in '06 & '07 I didn't do much selling, other than to keep bond and cash levels to 45% allocation.
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Old 03-17-2013, 08:17 PM   #18
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Nothing to brag about here. We didn't do anything in panic mode, but we let our AA drift to something more conservative during and after the crash. It was a period of paralysis, if you will. At least we didn't actively cash out like some of my co-workers. Although we didn't sell out, we also didn't seize the opportunity to buy in.

Woke up last year and realized the equities in the AA were enough to get us near FI. That's when I came back to this board and joined.

Woke up today and the number is FI. So we've seen improvement. I have it on quicken and can't tell you the exact increase, but it is good.

Now considering where to go next, how to sync our retirements together, trying to avoid OMY, etc.
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Old 03-17-2013, 08:56 PM   #19
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Originally Posted by Andre1969 View Post
Are we talking three years or four here? From 3/9/09, it would actually be four. Anyway, I just ran my numbers. Portfolio is up 142% since 3/9/09. From March 2010, it doesn't look *quite* as rosy..."only" up 46%. But, I'll take it!

Also, I would be up by more, but I recently paid down the mortgage some, bought a new truck. And back in late 2009 had to buy a used car. If it wasn't for those outlays, my returns would be 153% and 52%, respectively.

I should also point out that I took a major hit during the downturn, too. At the bottom (which for me was actually late November 2008), I was down by a bit more than half.
I was wondering the same thing - 3 years or 4? Since March 2009, I am up 45% and that is despite being ERed the whole time and making a $46k federal income tax payment in April 2009.

I took a big hit in the 2008 downturn but by March, 2010, I had bounced back from my late 2007 high and have greatly exceeded it since then (and remember I stopped working in late 2008).
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Old 03-18-2013, 12:11 AM   #20
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Unfortunately the market ups and downs continue. Judging from what happened to the markets in Asia and Europe following the Cyprus debacle, there is going to a major sell down on the DOW tonight
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