Who kept investing heavily through the great recession?

[Beer-man]

Curious to hear some stories/experiences of those of you who stuck to your guns through the scary 2008-2010 period. I was young, low income, and we had little in the market back then....and it was pretty hard to tune out the “sell stocks and buy bullets and gold” noise.
I want to be ready for the next downturn as we have a lot more in the market and both automatically and purposefully buy in regularly.
What was your experience through recessions? Did you buy more? How did it work out for you gains wise? Any regrets?

 

[Maenad]

We had a moderate amount invested, mostly in our 401ks at that point. I won't lie, it was a white-knuckle ride. What helped was that DH and I are both engineers, and make our livings by trusting data, even when our instincts scream to go in another direction. So we automated the monthly chunk that went into our after-tax account (401k was already automated, of course), stopped looking at our balances and trusted the historical data that showed that "this too shall pass".

We didn't invest more, since we've always been fully invested beyond our emergency fund, so we just kept putting in as much as we could. It's paid off marvelously, but I won't pretend it was enjoyable at the time - too many people losing their jobs and homes for me to about stocks being on sale.

 

[street]

Each month from my check went into buy stocks. It didn't matter what the markets were doing, I was buying. This processes went on for 35 years and bought and held. I always looked at it this way. If I go down, so will many others and I also knew that the markets would come back in the bad times.

 

[atmsmshr]

I was 47 and fully invested in equities. In my 401k, a $440 thou balance turned into $180k very quickly. Literally stopped looking at the balance and kept monthly DCA buys. Months before I took on a new challenging job, and then DW got sick for several years. Teenage kids still at home and picking out colleges. House mortgage temporarily went underwater. Very dark times for us to keep it all together. In laws went bankrupt and asked for money.

10 years later, DW health stabilized, kids have good careers, the job is manageable now, 401k has $1.2M, cash pension $360k, and $350k home equity. Vested in company medical pension. In laws are still broke.

Have a life strategy and stay the course.

 

[scrabbler1]

My single biggest investment came during the 2008 economic downturn. When I ERed at the end of October, I cashed out the company stock, whose value had taken only a tiny hit, and bought a HUGE amount of shares at rock-bottom prices in the bond fund I had been watching carefully the whole year (and had created a database of NAVs and monthly DPS).

This gave my ER a great jump-start by adding about 25% more shares in the bond fund than I had originally planned to buy, a benefit I have enjoyed every month for the last 10 years.

 

[Montecfo]

I recall advising nervous coworkers not to sell into the decline. I stayed the course and began buying in March 2009. I recall in particular buying Williams Companies that spring which I thought was a pretty conservative buy. It worked out very well over the next few years till I began unwinding it a few years ago. I would have to go back and look at other buys but I recall that one especially.

 

[pb4uski]

I stayed the course... technically I was a buyer since I was still making 401k contributons and those were being invested in stocks.

OTOH, my AA was screaming at me to sell bonds and buy stocks since the market drop twisted my AA compared to my target AA but I could not summon the courage to do that... I was a bit like a deer in the headlights when it came to making a big move.

 

[Callitaday2022]

I went from 15% to 30% of pay going to 401K. Buy while it's on sale!
My job was secure, but the hard part was lots of people were getting laid off.

 

[Stormy Kromer]

I began investing 40% of my gross income in equities in 1987 when I was 22. I stayed the course and ER'd at age 50 in January of 2016. Staying the course worked for me.


I invested through many downturns during this time. I didn't open a statement or check my balances for over 2 years in 2008 - 2010. I just tossed the statements in the burn barrel and told myself "I bought some stock on sale this month".

 

[steelyman]

Like others, I kept investing through monthly deductions from my paycheck, so dollar-cost averaging. No change in the monthly amount because I always contributed the maximum to both 403(b) (for non-profits) and 457 (deferred compensation) plans.

My employer started offering Roth 403(b) plans in early 2008 and I switched completely from contributions to the traditional version to Roth. In hindsight that turned out well but it wasn’t due to some magic insight about the markets on my part.

 

[mrfeh]

We continued investing in our 401Ks and IRAs as usual.

 

[Rianne]

Bought $50k into VG total stock market fund @ 2009, late 2008. Then 3x that much when market was at 16000. But again, I'm not watching the DOW so closely anymore. VG stock and bond funds are not mirrors of the DOW. Of course, DH has say in all this. I can't take full responsibility, but we always discuss it. Last Tues. we funded our Roth's with total stock market and international stock funds.

 

[audreyh1]

I did.

I was retired and living off my investments.

I rebalanced a three times in 2008, to sell bonds and buy stocks, as my AA out of balance triggers were hit. The first two times I definitely caught a falling knife.

By the third time I was pretty bloody. At this point I sat down and carefully reviewed some other criteria I had set long ago: how many years of after-tax expenses in fixed income I would still have after the next rebalance. I reconfirmed a number I could live with in the face of more losses, and did the third rebalance. It was very, very hard to do. If the market had kept dropping I would have held tight as I had reached a limit.

Buy Aug 2009 I was rebalancing the other way as the portfolio was recovering big time.

After this experience I widened my rebalance criteria such that I would have rebalanced less often in 2008. I usually end up rebalancing after Dec distributions in Jan anyway as I take my annual withdrawal. So now it would take a major event to trigger a mid year rebalance.

Nothing this year has been big enough to cause a rebalance. I’ve never been more than +/- 1.5% off from my equity % target.

 

[Freedom56]

I held no equities and still hold no equities. My taxable accounts were holding treasuries and CDs and my 401k was invested in Ginnie Mae and stable value back in 2008. The 2008 period was a non-event for me. However with plunging yields into 2009 and beyond, I moved into many corporate bonds and Muni bonds that were offering better yields. Many investment grade preferred stocks are now converging once again to yields that we saw back in late 2013. I'll be picking up many of those over the next few weeks. This year I'm up only 5.9% and down from 8.29% in August but performing much better than the vast majority of bond funds that are negative.

 

[jollystomper]

I did not change my AA at the time and kept my monthly retirement investments to the max. In addition, Megacorp was laying off many folks and I thought the odds were good that I might be laid off before retirement eligibility (which would have cost me close to half my pension and all of my retirement health insurance).

It was not easy, but I did have the long term experience of going through Black Monday 1987 and the dot-com bubble, so I was betting on things working out in the long run (I just did not guess as to how long).

 

[MRG]

I was in a lot of Megacorp stock in my ESOP. Scary as it dropped lower and lower still. Watched a bunch of options go underwater and expire worthless.

I kept contributing to my 401k all throughout this time.

 

[Which Roger]

I stayed the course... technically I was a buyer since I was still making 401k contributons and those were being invested in stocks.

OTOH, my AA was screaming at me to sell bonds and buy stocks since the market drop twisted my AA compared to my target AA but I could not summon the courage to do that... I was a bit like a deer in the headlights when it came to making a big move.

Same for me. I stayed the course, but when it was time for my annual rebalancing in 2009, I couldn't quite summon the courage to move the full amount from bonds to stocks in one chunk, so I moved only half of it. The difference was minor, moving 2% of my portfolio instead of the full 4%, but it's the only time I've ever strayed from the course even a bit.

 

[COcheesehead]

First, I tax loss harvested. Thoses carryover losses helped me for years afterward.
Then I reinvested those funds and added funds every month. I was still down a year or so afterward, but then my portfolio doubled in about 5 years and more than tripled in 8 years. Today it stands about 4x what it was 10 years ago.

 

[TDub]

I didn't open a statement or check my balances for over 2 years in 2008 - 2010. I just tossed the statements in the burn barrel and told myself "I bought some stock on sale this month".

Love this idea. This will be our COA moving forward.

In 2008-2009 I was educating myself on personal finance for the first time (all I had was a checking account and a CD), so I’m bracing myself for my first big market drop when I have real skin in the game.

This thread provides excellent perspective. Thanks to the OP for asking the question.

 

[tulak]

I increased my equity allocation from 85% to over 95% at the time. I remember being disappointed I didn’t have cash to buy more. I was also wary of how much I was losing, so it wasn’t easy, but I was confident that it would eventually recover.

There were other factors that made it easier too. I was working full time with no worries about losing my job and my portfolio wasn’t as large, even though the dollar amounts were still significant.

I clearly remember that I had no joy in buying though. It’s no fun buying something that keeps going down in value.

 

[target2019]

In April 2006 I started my first 401K. I maxed contributions each year, and continued until that job petered out in 2014-2015. The results were outstanding for that account.

I did not listen to news so much in those days. Just concentrated on the total number and how it grew so much. Eyeballing the chart, our total dropped by 25% at the time. It seemed like a large amount back then.

 

[pb4uski]

Same for me. I stayed the course, but when it was time for my annual rebalancing in 2009, I couldn't quite summon the courage to move the full amount from bonds to stocks in one chunk, so I moved only half of it. The difference was minor, moving 2% of my portfolio instead of the full 4%, but it's the only time I've ever strayed from the course even a bit.

That reminds me... at the end of 2008 the Evergreen "Core Bond" fund in my 401k had dropped in value a lot more than most broad based bond funds. Come to find out the managers of the fund had made a big bet on MBS that didn't work out... lesson learned for me.. to pay more attention to the flexibility that fund managers have to make a big bet with my money.

 

[ERD50]

...and it was pretty hard to tune out the “sell stocks and buy bullets and gold” noise. ...

Come to the realization that it is just noise, then you don't need to 'tune it out', because you never 'let it in'.

I was already retired for the 2007-2009 cycle, but it got extreme enough that I did rebalance - I bought some more stocks at what turned out to be very near the low. It was looking at history that made me fairly calm. These deep dips do occur, and they have recovered. Sure, maybe this would be different, but I figured the odds were with me, why bet against history? I was surprised it came back so fast though, kinda expected a decade of slogging back.

-ERD50

 

[HadEnuff]

I was still working, and [-]figuring[/-]hoping I'd be retiring in 8-10 years. I figured that a crash 8 years before retiring would be better timing than a crash immediately following retirement.

I kept my AA where it had been (60-40 equities-bonds) in indexed funds. It worked out. It wasn't that I knew it would go like it did, as much as it was the only way that would get me where I wanted to go. If it didn't work, I'd just keep on working until it did.

 

[pacergal]

We kept investing, the money coming out of our checks monthly. Kept most of my 457 in an aggressive fund at that time. I really did not like getting the quarterly statements, but my Dad, who was my financial guru and cheerleader, just kept reassuring me that "the stock market will bounce back". It did.