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Old 03-09-2011, 06:35 AM   #41
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I got crushed in the latter half of 2008 and lost my job at the same time in what quickly became a "no bid" labor market. After finding a secure job in December 2008 and ultimately being down roughly 50%, I started buying with both hands. I sold anything that had held up reasonably well and bought big positions in longshots, highly levered firms, even borrowed money to buy bonds trading at crazy yields. I knew I was making an all or nothing bet and did so through the first half of 2009.

By the time of the bottom I was working like a gravedigger (late nights, weekends, etc.) on a big project to Save The Modern World For Capitalism. In return for the project essentially succeeding and all my hard work, I got a t shirt I cannot wear in public (for fear of being stoned to death) and a certificate that was autosigned by people who I would much preferred to have an actual autograph from. Ah well. I figure it was atoning for my sins (which must have been whoppers, whatever they were).

Lessons learned? I keep much better track of my investments, asset allocation, etc. than I used to. I have firm sell prices on my investments and stick to them. I keep more cash around than I used to. I still have some excessive concentrated positions in my portfolio that I will sell down over time to ensure more diversity. I am more motivated to kill the mortgage. And I have decided that I will pursue ESR sooner rather than full ER later.

I will say that the best investment I made in the bad times was an inexpensive travel trailer. All those trips into the woods (and gallons of box wine) kept me sane, plus I suppose I knew that if I lost the house and everything turned to cinders we could live in the trailer...

"Neither my companion or I carry firearms on our persons. We depend on the goodwill of our fellow man and the forbearance of reptiles."

- English Bob
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Old 03-09-2011, 07:19 AM   #42
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I will say that the best investment I made in the bad times was an inexpensive travel trailer. All those trips into the woods (and gallons of box wine) kept me sane, plus I suppose I knew that if I lost the house and everything turned to cinders we could live in the trailer...
it's a healthy way to look at the situation.

May we live in peace and harmony and be free from all human sufferings.
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Old 03-09-2011, 07:35 AM   #43
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Wahoo, agreed, but it was still my reaction. It is similar to the increase in gas prices. I know things are going up in price, I also know/believe my plans are OK for the foreseeable future, i.e. until I am dead. So even there it is still a yawn.
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Old 03-09-2011, 07:38 AM   #44
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I think that was around the time I started moving old 401K accounts to a self-directed IRA, because I did a lot of buying - not at the bottom, but on the way up.

I bought some financial corporate bonds on the secondary market at a deep discount. My risk tolerance is high. No regrets, no real defaults - one bond changed its payout dates, but eventually it's paying back the money and meanwhile I moved it into a ROTH IRA so all the capital gain and 7% interest is tax free.

I mostly rode it down and up but I took advantage of some major buying opportunities as they came along when I had the cash to do it.

I hated my current 401K options and discovered when I turned 59 1/2 I could take all the money out as long as the new money went into it. As a result of all these activities, I retired at 62. I don't know if I could have, if I didn't have this strange set of circumstances to take advantage of.
Retired July 2, 2010 at 62. My only regret is that I couldn't do it sooner.
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Old 03-09-2011, 07:47 AM   #45
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I can recall "I hope the bleeding stops soon, because there's no way I'm selling down here."
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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Old 03-09-2011, 09:55 AM   #46
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In 2008 and 09 we were very fortunate market-wise. We were still working and piling in lots of money into our AA of 40/60. Over those 2 years we DCA'ed $158k into our funds. As we were retiring in 2010 I did let the AA slip to 35/65 where I had planned to have it during our retirement years.

I'll remember 2009 more for the loss of my father and MIL than for the movements in the markets. The market rose back up, our parents didn't.
Retired in Jan, 2010 at 55
Now it's adventure before dementia
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Old 03-09-2011, 10:07 AM   #47
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Me, as we were at Dow 7700 on the way down, I just started selling $2000 in bonds every other day and buying the s&p500. I also scraped every dollar I could get my hands on and buying the ETF SPY.

I saw a sale that I never thought I would see. I didn't rebalanced to my ideal 60/40 split until the DOW was back over 10500. It worked for me, but I am also very young and knew I had plenty of time for it to come back if it didn't recover. I was thinking it was going to be 5-7 years before we would hit DOW10k again, but it recovered to that point super quick in my opinion.

This worked for me. But had I been closer to retirement, I would have never deviated from my ideal allocation.
Give me a surfboard and a hammock, some fresh fruit and veg, a fish or two and I am happy for life. I don't need much of a roof over my head to be happy.
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Old 03-09-2011, 10:23 AM   #48
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Originally Posted by CyclingInvestor View Post
No anxiety or changes in attitude. I retired in Oct 06 at 48 with a 100% individual equity portfolio, and while its market value dropped by about a third from its peak, its dividends (which I live on, no pension/ss) and earnings kept rising, 6-10%/year right through the market gyrations. Dividends and earnings are now about 45% higher than when I retired, with roughly the same stocks. Market value is about the same as when I retired.
Are your dividends actually 45% higher in dollars or are they 45% higher as a percentage of your portfolio value?
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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Old 03-09-2011, 10:23 AM   #49
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Buying GE @ 7.50, FITB @ 1.41, WFC @ 8. I was on contract at a conservative insurance company and remember the outrage by management that AIG got a bailout.
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Old 03-09-2011, 10:45 AM   #50
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I had been FIRE'd approximately 2 yrs when the recession went into overdrive....... We wound up not changing our strategy at all. Whether that was due to being smart or due to being paralyzed with fear, I'll never know. But it worked out.

1. We neither bought or sold investments other than minor selling to cover our budget. While we didn't benefit from buying low, we also didn't lose out by selling low. We just stood our ground. Our AA drifted from 50 - 50 closer to 40 - 60. Selling to cover expenses turned out to not be difficult. We do have a teacher's pension, some deferred compensation (at the beginning) and SS (now) which covers some of the budget. Divs and int covers some more. And, for the balance, it seemed that despite the extremely depressed equity values, I always had something where I could harvest a few bucks without "selling low." Now our AA has returned to near 50 - 50 (without rebalancing) and our total portfolio has returned to its pre-recession real value.

2. We generally continued our spending plans with only some small reprioritizations. In hindsight, the scariest part of the recession was how close we came to canceling some plans and sitting "on idle" for 2 years while time continued to pass by.

Going forward, I'm more concerned about inflation as a portfolio buster than market crashes. A few years of 6% - 8% - 10% inflation, as we had just a few decades ago, coupled with a portfolio performance level that substantially loses ground to that level of inflation would be a killer. FireCalc bears this out. Inflation never has a recovery such as we're currently enjoying in the equity markets. Once prices are up they're seldom, if ever, offset by periods of deflation.
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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Old 03-09-2011, 10:51 AM   #51
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Originally Posted by Moemg View Post
Let me refresh your memory !
That's why I can't remember. Or was it the med's?
Full time wuss............
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Old 03-09-2011, 11:55 AM   #52
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Originally Posted by ziggy29 View Post
I can recall "I hope the bleeding stops soon, because there's no way I'm selling down here."

That was my thoughts exactly in Nov 2008 and March 2009. I kept saying it will recover one day, and you are already down too much. I was 40% down in my portfolio.
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Old 03-09-2011, 12:34 PM   #53
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I remember that and realizing that I had been foolish in my investments. I had never paid that much attention to the 401ks. In our case, DH's lump sum pension was to be the bulk of our retirement so I had tended to get/make constributions and then forget about them, rarely making any changes. The thing is that I had started this soon after DH and I married in the early 90s and I didn't know much about asset allocation. So, when things started going low the year before I was at 100% equities in my 401k and DH was at about 90% equities.

I didn't change anything when things started going down. By March of 2009 we were down about 40% in DH's 401k and down almost 50% in mind.

I never really panicked and never became afraid to be in equities although I felt at the time that our retirement plans would be derailed. What really annoyed me was that 2008 had been the first year that DH and I had fully maxed out contributions to retirement plans. The couple of years before we had focused on debt repayment and had contributed but not maxed. In 2008, we had a choice - to continue focusing on the last of debt repayment while making contributions that were roughly half of max or to max contributions slowing down debt repayment somewhat. We decided to make the max contributions. Obviously a year later, I was kicking myself for that. I wished I had made lower contributions that year and had paid off our debt instead.

By the end of 2009, though, we had paid off the debt and I had learned something about asset allocation so I had modified our portfolios to about 2/3 equities. Then, when DH retired and received the pension lump sum we put into place a 50-50 allocation.
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Old 03-09-2011, 12:54 PM   #54
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background: still in accumulation mode, started investing mid-90's,
AA is 80/20 stocks/bonds.

In March of 2009 my portfolio was down about 43% from it's Oct 2007 high. At that point I remember thinking there was no point in selling now. If things really hit the fan, everyone including me would have worse problems, and chances were things would recover eventually. But it was the first time I personally was seriously worried about the US/world economy going down the tubes. The voices in my head (what? doesn't everyone have voices?) were saying, "If you're seriously worried and you have a very high risk tolerance, I bet investors in general are terrified." Buffett's quote about being greedy when others are fearful came to mind. I tend to always be fully invested in my chosen AA so I didn't have extra cash lying around to invest, but I continued my normal contributions. Over 2008/2009 I probably rebalanced and harvested losses several times.

Stay-the-course has worked out pretty well this time. I don't chalk it up to any brilliance on my part - I'm fortunate to have the sort of outlook that lets me deal with finances mostly dispassionately. And I agree with whoever said this forum/thread is an example of survivor bias.
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Old 03-09-2011, 01:03 PM   #55
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I had hit my own personal rock-bottom on November 20, 2008, and was pretty much in shock at how quickly it all vanished. But I knew enough to just hold tight, and if anything, start ramping up my investing. By 12/31/08, I was up about 24%, and on 1/6/09, peaked out about 30% ahead of that November valley. Now that's just net worth, and not returns. No doubt a lot of that bounce back was because I started investing more.

Took a big plunge in February, and I kept watching to see if it would go below the 11/20/08 dip. Ended up about 4% higher, so I breathed a sigh of relief.

And then, in every month since March of 2009, I posted gains. By 11/25/09, barely a year after that great crash, my portfolio was at another all-time high. And kept going up, until February 2010. That was a momentary setback as March and April. May and June were down months, and I bottomed out again on 7/2/10, down about 15% from my April 23 peak. Honesty, that run had me a little worried, as I was afraid the previous run-up was only a temporary thing, and was waiting for it to all crash again.

But then, from July 2 to February 17, it's been practically nothing but up. And even with the recent shakeout, I'm only down maybe 1.5% from that 2/17 peak.

So for me, the March 9 bottom was pretty much just another day in the life. I had felt the pain back on 11/20/08, so if anything, I was actually HAPPY on 3/9 that I didn't hit a new low!
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Old 03-09-2011, 02:44 PM   #56
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We were freaking brilliant. Now bear in mind that we are pretty much penny slot machine grade investors, but still...

2/10/09 bought VTI
2/17/09 bought VDE
2/20/09 bought VPU

Followed up by the extra loyal purchase of GM stock on 3/10 and 3/30. Those purchases didn't do so well....

If we had bought more than maybe 3 months worth of living expenses worth of stock in that February I'd feel extra brilliant.

I posted this and offered you all a way out of the markets had you wished - ever helpful!

And now for something completely different!
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Old 03-09-2011, 04:07 PM   #57
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Hi everyone,

This is my first post since joining in because I remember the date like it was yesterday. I have been putting maximum allowable 401k contribution into 90% stocks, 5% bond, and 5% stable income funds since 1990 since I wanted to retire at 55 which is 2016. Needless to say I took a huge hit something in the neighborhood of 40+ percent loss.

I hated myself for not doing assets allocation to safer vehicle as I'm getting closer to the retirement age. However, I didn't do anything. (Being a procrastinator paid off for first time since my second divorce ) My portfolio came back up and I'm keeping where it is.

Anyhow, everyday at work market was topic of discussion and some of my co-workers panic and reallocation of their assets while other said they are not worry because they have it on 100% fixed income funds.

Now days, those who had in fixed income funds have retired, those who reallocated their funds are extending their retirement, and guys like myself hoping not fall in love again and get married and retire at 55 as planed.
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Old 03-09-2011, 04:50 PM   #58
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All I remember is saying, This is not a good thing. Can't remember the rest of the story. Mercifully.
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Old 03-09-2011, 06:04 PM   #59
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I was approximately 50% in stocks when the market crashed. Most of my portfolio was in Vanguard Total Stock Market at the time. I dollar cost averaged for several months until I had a 60% position in stocks.

At the beginning of 2009, I read an article by William Bernstein (Effecient Frontier) who said that junk bonds were an incredible buying opportunity. I took his advice and allocated the remaining 40% of my portfolio into Vanguard High Yield Fund. This turned out to be very profitable.

Since DW is collecting SS and I have a COLA'd pension, I now treat this monthy income as an allocation to bonds (on Jack Bogle's recommendation). Currently we are 98% invested in stocks. When we start another bear market, I would probably return to a 50% allocation in stocks, but would not go below that number.

I believe it's highly unlikely that the market crash of 2008-2009 will repeat itself in my lifetime.
"I went to the woods because I wished to live deliberately... and not, when I came to die, discover that I had not lived."

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Old 03-09-2011, 06:27 PM   #60
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I thought about this a little more today and realized that, although I remember very clearly where I was on the official day of the bottom (as I mentioned in the post that started this thread), probably the best description of feeling by March 9th was "numb".

As I remember, we'd had a little bump up following the Nov '08 elections, but things kept on going down from there, so that by the time March 9th came around, the news and values had been so bad for six months that it felt to me like being the losing boxer in a B movie. Since I was paralyzed, I'd kept on with the DCA monthly and in retrospect I'm glad I did (I guess the only adjustment I made was to shut down any new contributions to bond funds, otherwise no changes). It was, and remains for now, all stock. That '08-'09 crash certainly "rebalanced" my 403B/457/IRA portfolios for retirement and I am still slowly trying to bring it back to my original plan.

For me, the really memorable time was not the bottom, but rather the panic that started in Sept '08 with the Lehman collapse and all that followed. Boy, what a time. Hope we are spared from that during all of our future ER lives

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