Worst Draw-Down

[haha]

What was your worst peak to trough draw-down? Mine was Oct 1987. I was already mostly retired and living on my portfolio. Since I was bearish, I had sold equities down to about 50%. Even so, in the crash my equities went down about 40%, and since I was 50% equity and the rest was mostly cash, my overall drawdown was about 20%. Of course it was much worse than this at various points during the day.

It felt pretty bad, maybe because it was so sudden. Although I had been investing for some years, most of my investing was started near the bottom in 1974, so I hadn't yet experienced bad results. Even though I was retired, I was plenty young enough to have gone back to work full time if I felt I should. I think that fact lessened my stress somewhat.

I would not like to lose that much now. Partly becuase it would be an absolutely greater sum, and partly because it would be much harder for me to create good earnings elsewhere.

I think it is very important to not lose much money when you are retired. Especially with today's valuations ( I know, some don't believe in that ) I would be afraid that low prices could outlast me.

I would be interested in hearing what drawdowns others have endured, and whether you were in withdrawal or accumiulation at the time it happened.

I remember reading something that Martin Whitman said that stuck with me-"The financial position of the investor is at least as important as the financial position of the issuer." If you don't have a job, even if you have $2mm invested, your financial position is constrained by the fact that you don't have inflow to take advantage of low prices, and the fact that you are likely easier to scare.

How would you feel about it now? What sort of drawdown do you feel that you and your mate if you have one could handle without undue distress?

Mikey