Your memories of the '09 market bottom?

[Dawg52]

Let me refresh your memory !

That's why I can't remember. Or was it the med's?

 

[texastech97]

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.

 

[Katsmeow]

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.

 

[figner]

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.

 

[Andre1969]

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!

 

[calmloki]

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!

http://www.early-retirement.org/forums/f28/and-now-for-something-completely-different-43044.html

 

[Sandhog]

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.

 

[ls99]

All I remember is saying, This is not a good thing. Can't remember the rest of the story. Mercifully.

 

[Retire Soon]

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.

 

[steelyman]

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

 

[Spanky]

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.

Sorry for your loss.

 

[Moemg]

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.

So sorry ! There is nothing like a personal loss to put money losses in perspective .

 

[Spanky]

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.

Is it market timing or something?

I believe it's highly unlikely that the market crash of 2008-2009 will repeat itself in my lifetime.

I would not bid on this.

 

[Moemg]

I believe it's highly unlikely that the market crash of 2008-2009 will repeat itself in my lifetime.

Unless you are 95 I wouldn't bet on that !

 

[NW-Bound]

Let me refresh your memory !

Surely, all that shock to the brain would cause one's memory loss. And that was the time before Janet added that powerful emoticon to the forum smilies repertoire.

I don't remember how much head banging I did myself. But yawning, I will not claim. I have my records to remind me what an interesting time it was.

Looking at my cash level, I saw that being a CMT myself, I was selling and raising cash throughout 2008. In fact, in Oct 08, I had twice as much cash as I had a year earlier in Oct 07. Then, in the four months of Nov 08 through February 09, thinking that the market had bottomed, I started to buy back. My record truthfully shows that while I spent nearly $400K during those four months to buy equities, my total portfolio was still going down another $250K.

Whatever money I threw into the market was sucked in and promptly disappeared into that bottomless rathole!

So, when the market started to climb back up, I started to sell, as my cash level was rising again and peaked out in May 09. And then, obviously, I was sensing that the bull market was going to last a while, I was buying again, as my cash level dropped again. Had I held on to the stocks I bought in early 09, I would have done a lot better than where I am now.

Still, being more than 8% above my Oct 07 high, I should be grateful that I did not make too many wrong moves.

Writing this post reminds me that my cash level has not been this low for almost 4 years. Perhaps I should be lightening up on equities soon, really, really soon.

 

[CyclingInvestor]

Are your dividends actually 45% higher in dollars or are they 45% higher as a percentage of your portfolio value?

Technically both, since my dvds are up 45% and the market value is the same. Not too surprising - 2006 dvds vs current :

ABT 1.18 to 1.92 +63%
ADP 0.78 to 1.44 +85%
JNJ 1.50 to 2.16 +44%
KO 1.24 to 1.88 +52%
PG 1.24 to 1.93 +56%
SYY 0.68 to 1.04 +53%

 

[redduck]

Well, I guess someone has to balance all this out. I sold off a bunch of my portfolio (probably about 15-25%) down toward the low. I really thought we were heading into a depression. Those damn bailouts just got in the way. Anyhow, poor prognosticating on my part. Damn those bailouts, anyway. (I know, I already mentioned that). So now you know who was selling you all the stock that you were buying.

 

[Moemg]

Damn those bailouts, anyway. (I know, I already mentioned that). So now you know who was selling you all the stock that you were buying.

Don't feel bad I sold 4% close to the bottom . I couldn't sleep and this was my solution . Stupid yes but necessary for sanity !

 

[obgyn65]

I hope you are right. However, I believe it is very likely we will see something as shocking as the 2008 market collapse again in our lifetime, but it will not take the same form (i.e. it may be a huge currency collapse that time).

I believe it's highly unlikely that the market crash of 2008-2009 will repeat itself in my lifetime.

 

[Sandhog]

I hope you are right. However, I believe it is very likely we will see something as shocking as the 2008 market collapse again in our lifetime, but it will not take the same form (i.e. it may be a huge currency collapse that time).

I think huge currency collapse is at the front door knocking. I don't recall when way last time Canadian Dollar was worth more than US$? I'm beginning to believe both government is working toward Amero The North American Currency Union theory.

 

[dex]

I believe it's highly unlikely that the market crash of 2008-2009 will repeat itself in my lifetime.

YouTube - Ball Of Confusion


People movin' out
People movin' in
Why, because of the color of their skin
Run, run, run, but you sho' can't hide
An eye for an eye
A tooth for a tooth
Vote for me, and I'll set you free
Rap on brother, rap on
Well, the only person talkin'
'Bout love thy brother is the preacher
And it seems,
Nobody is interested in learnin'
But the teacher
Segregation, determination, demonstration,
Integration, aggravation,
Humiliation, obligation to our nation
Ball of Confusion
That's what the world is today

The sale of pills are at an all time high
Young folks walk around with
Their heads in the sky
Cities aflame in the summer time
And, the beat goes on

Air pollution, revolution, gun control,
Sound of soul
Shootin' rockets to the moon
Kids growin' up too soon
Politicians say more taxes will
Solve everything
And the band played on
So round 'n' round 'n' round we go
Where the world's headed, nobody knows
Just a Ball of Confusion
Oh yea, that's what the wold is today

Fear in the air, tension everywhere
Unemployment rising fast,
The Beatles' new record's a gas
And the only safe place to live is
On an indian reservation
And the band played on
Eve of destruction, tax deduction
City inspectors, bill collectors
Mod clothes in demand,
Population out of hand
Suicide, too many bills, hippies movin'
To the hills
People all over the world, are shoutin'
End the war
And the band played on.

 

[kyounge1956]

I don't remember specifically what I was doing or thinking on 3//9/09. I do recall looking at my account balance and seeing that even though I was putting in maximum contributions plus over-50 catchup, my account balance was dropping! I was still working—I think if I'd been retired already and my account had been falling like that, I'd probably have panicked.

As it was, I instead started at some point wondering to myself whether I should buy more stock. This was purely based on stories I had heard of people becoming rich through buying at a panic point, and the fact that the words "market recovery" were starting to be heard. Any such purchase would have been pure speculation on my part, based on what "they" were saying the market was going to do next. After a period of vacillation, a relevant (albeit somewhat paraphrased) verse from James' epistle popped into my memory :

Now listen Karen, you're thinking, “Today or tomorrow I'll buy a bunch of stock at the low and make pots of money when the market recovers”, but you have no clue what will happen next! Instead, you ought to say, “If it is the Lord’s will, I'll be alive, I'll still have a job and I'll be able to keep on saving as I planned to.”

So, I didn't buy more stocks, I just kept moving toward my target allocation. But at the time, I had a higher percentage of stock in my portfolio than my target AA, and it took me a while to get from there to the desired 30%, so I didn't miss out on the gains of the last two years and I'm still on course to retire as planned in 2013.

 

[redduck]

Don't feel bad I sold 4% close to the bottom . I couldn't sleep and this was my solution . Stupid yes but necessary for sanity !

Gee, I don't know, Moemg. We seem to be the only two to have sold during the downturn. JUST WHAT WERE YOU THINKING? SANITY? WHAT'S THAT? Anyhow, since we are not nearly as sharp as the other members of this forum, maybe we should put each other on our ignore lists so as not to influence one another.

 

[Moemg]

Gee, I don't know, Moemg. We seem to be the only two to have sold during the downturn. JUST WHAT WERE YOU THINKING? SANITY? WHAT'S THAT? Anyhow, since we are not nearly as sharp as the other members of this forum, maybe we should put each other on our ignore lists so as not to influence one another.