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You have to believe in Success
Old 05-24-2014, 06:36 PM   #1
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You have to believe in Success

I remember in 2007 I had 100k in investable assets.Man I thought I was king of the mountain.Then the 2008-2009 bear market hit.I got killed.At the March 2009 low I had $45,409k.Ouch!As painful as that was I never lost hope and continued to invest.My AA believe it or not, is pretty much what I have today.I had nothing IMO real risky.In a bear market everything goes down it seems no matter what you own.Of course today I have long since recovered.I had 100k in October 2011 and today I have 200k in investable assets.I believe investing and patience will lead me to a better place.Anyone else want to share their stories of highs and low?
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Old 05-24-2014, 06:52 PM   #2
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I have tracked my NW for a while, so I'll give my NW gains by year:
2006 28%
2007 31%
2008 -30%
2009 113%
2010 70%
2011 19%
2012 20%
2013 18%
2014 target 12%

Of course these figures will come down significantly once I RE. In 2007 I had a really good promotion, 2008 was a little scary for me, and luckily I have worked for a company that has done very well. Since 2011 I have tried to keep my ESPP/vested RSUs less than 10% of the portfolio. I am approaching that point again, so it is getting time to harvest some.
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Old 05-24-2014, 07:01 PM   #3
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My low in Oct 2002 was 56% of the high-water mark in Mar 2000.

My low in Mar 2009 was 63% of the high-water mark in Oct 2007. That high-water mark of 2007 is 52% higher than that of 2000.

I am currently at 22% above the pre-crash high of Oct 2007, and at 1.85X the high of 2000.

Caveat: I have been drawing on my portfolio for 100% of living expenses the last 2 years (full retirement), and prior to this did not contribute that much for 10 years due to working part-time, college costs for 2 children, buying a 2nd home, wife fully retired (no pension for either of us), etc...

The above said, as more and more people get giddy about their fortune, the higher the risk of a big correction gets.
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Old 05-27-2014, 04:05 PM   #4
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My portfolio went down 31% in 2008, and didn't fully rebound until mid-2010. My portfolio now is about 1.75 times what it was at the end of 2011.
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Old 05-27-2014, 04:38 PM   #5
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.I believe investing and patience will lead me to a better place.
My neighbor, who prides herself as being the smartest person in the room announced that she "sold everything and got out of the market" the last week of February 2009.

Of course, a few days later..........

We believe she has yet to re-enter the market.
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Old 05-27-2014, 04:39 PM   #6
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Here's my little trip down memory lane:
1998: +12.8%
1999: +44.9%
2000: -5.4%
2001: -31.4%
2002: -23.1%
2003: +24.0%
2004: +18.3%
2005: +15.3%
2006: +24.0%
2007: +18.5%
2008: - 42.0%
2009: +44.7%
2010: +19.8%
2011: -0.12%
2012: +15.9%
2013: +23.1%
2014: +3.3% (as of 5/23/14, today will push it a bit higher)

For some reason, I remember getting really excited when I broke the $60K barrier in investable assets. It was in October, 2000. Even though I lost money in 2000, I kept hitting new highs because of additional investments. There wasn't anything special about the $60K number, all by itself. I just think it was more a factor of being in a really happy place in my life at that point. I was getting close to quitting my second job delivering pizzas. I had gotten a pretty good raise at my main job. I was actually toying with the idea of buying a motorhome! But, it was an old one, a 1974 Travco 220 that combined all the troubles of an old car with an old house, and once I saw it in person I came to my senses. I think the biggest thing that scared me was the dry-rotted tires that were an odd size, 17.5", and on something called a "split rim", that I hear can be dangerous.

I don't think any barrier since then has been quite as exciting, although late 2004 was a happy time, when I made the final payment on my car and then sold my condo about 2 weeks later. However, to this day, occasionally I'll have a dream that the deal fell through, and I end up moving back into it.
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Old 05-27-2014, 04:46 PM   #7
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My neighbor, who prides herself as being the smartest person in the room announced that she "sold everything and got out of the market" the last week of February 2009.

Of course, a few days later..........

We believe she has yet to re-enter the market.
Please let us know when she gets back in. I generally don't do market timing, but something as good as this...
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Old 05-27-2014, 05:10 PM   #8
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Yes, you should stay in the game and diversify. It really helps if you are adding to accounts in a bear market. I was fortunate in that respect in my 401k.

In my personal SEP-IRA, once I diversified, and added just a bit each year, things took off in that area. There was a decline in 2007, but I stayed with my allocation.

A while back I put this graph together to explain a point in another thread. It will help motivate me during the next bear.
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Old 05-27-2014, 05:28 PM   #9
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Bear markets are wonderful for accumulators. Of course one needs to have guts to buy, buy, buy...

On the other hand, full retirees are in the decumulation phase, and the only thing they can do is to rebalance. There's no new cash to buy anything. It's scarier!

So, at some point, if you are successful in reaching that ER stage, you will have a chance to experience those gut-wrenching market movements. Heh heh heh...
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Old 05-27-2014, 06:09 PM   #10
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Bear markets are wonderful for accumulators. Of course one needs to have guts to buy, buy, buy...

On the other hand, full retirees are in the decumulation phase, and the only thing they can do is to rebalance. There's no new cash to buy anything. It's scarier!

So, at some point, if you are successful in reaching that ER stage, you will have a chance to experience those gut-wrenching market movements. Heh heh heh...
+1 Great comment.

I was a dollar cost averager guy who would send in extra checks to buy more whenever the market dipped. Had friends who repeatedly panicked and sold. They thought I was nuts. I thought they were nuts.

Mrs Sittingduck and I have accumulated more than we ever thought we we would basically by just not looking at our fund statements during the down times Though our assets are modest compared to many on this forum -I think they are pretty good for a sales guy and a waitress.

MegaCorp is killing me and I planned on retiring this year. I really hate the idea of RE into a market peak. Look at all the opportunities I will miss when everything is on sale!!! After 30 years of accumulation phase - it is hard to get my head around decumulation. I think I run Fire Calc 3 times per week....
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Old 05-27-2014, 06:21 PM   #11
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...After 30 years of accumulation phase - it is hard to get my head around decumulation. I think I run Fire Calc 3 times per week....
I see that you came here in 2013, so missed that time in this forum when people were crying their eyes out, and we kept each other comfort. There was much reminiscence about the Great Depression, and people were testing each other's knowledge of that era, the Dust Bowl, etc...

Some posters disappeared after the Great Recession. I think they bailed out of the market and were wiped out.

It's easy until you are deep in the foxhole, hearing the incoming and wondering if it's your turn. Heh heh heh... It makes your heart pump faster, raises your blood pressure, dilates your pupils, makes you feel alive...

OK, OK, I will stop exaggerating. It was just scary.
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Old 05-27-2014, 06:33 PM   #12
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It makes your heart pump faster, raises your blood pressure, dilates your pupils, makes you feel alive...
I think it would just make me loose sleep
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Old 05-27-2014, 06:41 PM   #13
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Yes, that too.

Seriously, one feels very vulnerable in the decumulation phase. There's no income coming in, and if you are truly ER'ed, you have no SS, and nowadays no pension.

You have nothing but your stash, and you watch it shrink a few % each day right before your eyes. How do you like to see 1 year of living expenses (3-4%) wiped out from your account balance in a single bad day? Oh man, it's SCARY!
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Old 05-27-2014, 08:16 PM   #14
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D'oh...just realized, I posted rate of return over the years, and not change in investible assets. Here's a revised list...
Year.....ROR..../Investible Asset change
1998: +12.8%/+82.9%
1999: +44.9%/+173.9%
2000: -5.4%/+54.1%
2001: -31.4%/+4.1%
2002: -23.1%/-2.3%
2003: +24.0%/+56.4%
2004: +18.3%/+41.6%
2005: +15.3%/+92.6%
2006: +18.4%/+28.6% (caught an error in calculating ROR for '06, corrected it here)
2007: +18.5%/+27.6%
2008: - 42.0%/-36.0%
2009: +44.7%/+76.6%
2010: +19.8%/+29.0%
2011: -0.12%/+4.1%
2012: +15.9%/+20.9%
2013: +23.1%/+20.5% (ROR was higher than Investible Asset change because I pulled out a lot of money to pay down the mortgage)
2014: +3.7%/+4.6%
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Old 05-27-2014, 08:23 PM   #15
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Yes, that too.

There's no income coming in, and if you are truly ER'ed, you have no SS, and nowadays no pension.
Although if you have SS coming in the future, there is the promise of that. That helps doesn't it? I know it's not the same as knowing a check (or direct debit) will be arriving in a few days though. It takes a bit more of a leap of faith to tell yourself that financial help will be along in 10-15 years
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Old 05-27-2014, 08:52 PM   #16
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Although if you have SS coming in the future, there is the promise of that. That helps doesn't it? I know it's not the same as knowing a check (or direct debit) will be arriving in a few days though. It takes a bit more of a leap of faith to tell yourself that financial help will be along in 10-15 years
Depends on the age of the hapless ER, he/she may have to think of a backup plan to survive till that promised check arrives. Something like living out of a car in the forest, or at the Slab for a couple of decades for a youngster ER?

I remember during the Great Recession when people were commiserating about stocks/bonds/homes/everything going down and the fear of job loss, an older poster said he/she was glad to be old to not having to worry about the above. It would be bleak if a youngster wish to be old to have some financial security, would it not?

People tend to have short memories, but not I. I try to remember the bad times as well as the good.
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Old 05-27-2014, 09:00 PM   #17
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I remember in 2007 I had 100k in investable assets.I had 100k in October 2011 and today I have 200k in investable assets.I believe investing and patience will lead me to a better place.Anyone else want to share their stories of highs and low?

Similar, here but July '08 was the peak in net worth before the crash. Our oldest son had started college out of state in '07 with the youngest about to start. I had reallocated significantly during '06-'07, luckily, and got a promotion, so we recovered peak Net Worth very quickly, by August '09. Now a 109% increase in Net Worth since the peak. We're now 10% from target, although I'll semi-retire while DW works for a few more years, to ease into the Grey Havens.

I and DW were both working and just kept dollar cost averaging and paying tuition from '08-'13, so I admire those of you ER who looked the Crash in the teeth and skinned the b'ar.
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Old 05-27-2014, 10:08 PM   #18
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On the other hand, full retirees are in the decumulation phase, and the only thing they can do is to rebalance.
Not all of them. No earned income shuts off one source of funds, but there are others like pensions, SS, and the dole.

Furthermore, retirement certainly doesn't have to mean "decumulation"(Is this even a word?) Deliberate liquidation of is only one model of living from assets, and until the modern era of mass investing it was not a very popular model.

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Old 05-28-2014, 12:56 PM   #19
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I was writing for the youngster ERs who stop working in their 30s or 40s, and even those like me who still need a few years till SS and Medicare.

I have not even looked up to see what SS I will get, but think that if I delay till 70, it would supply a large percentage of our diminished needs at that point, hence a very secure status to be in. But I am not there. Till then, I have to think that 3.5% WR is written in God's book and golden.

Anyway, decumulation is accepted as a word in the unabridged Merriam-Webster dictionary. New words are invented all the time.
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Old 05-28-2014, 01:13 PM   #20
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I have not even looked up to see what SS I will get, but think that if I delay till 70, it would supply a large percentage of our diminished needs at that point, hence a very secure status to be in. But I am not there. Till then, I have to think that 3.5% WR is written in God's book and golden.
I've looked it up, and in my case at least, it goes up pretty quick, delaying taking SS from 62 to 70. Here's a few data points, from the last time I ran the numbers...

If I retire now, at age 44, and take SS at 62, I'd get about $12,400 per year.
If I work until 62, and start taking it then, it goes up to about $17,900 per year. So, another 18 years of my life wasted on work, just to get another $5400 per year. From there it starts going up pretty fast though.
If I work until 65, it's up to $22,400
At age 67, $26100.
And finally, at age 70, $32600

Now, I just used the quick calculator on the SSA website, so it might not be *too* accurate. And I don't know how to input, say, dropping out of the workforce at 44 but delaying taking it until 70. The results above assume I work until 62, 65, 67, or 70. I've heard, though, that once you're past 62, the biggest jump comes from delaying taking benefits, and not working an extra year. So if you retire at 62 and take benefits at 70, the amount might be about the same as working until 70 and then taking them.

Anyway, I always budgeted for about $40,000 per year in retirement to live off of, so SS is a pretty big chunk of that. I have a feeling the closer I get, though, I'm going to change that target. The last time I ran the FireCalc numbers, in January I think, it gave me a 96.6% chance of success if I retire next year, with a $40K per year budget. Almost seems too good to be true!
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