Frustration with 2015

[UnrealizedPotential]

I am not that disappointed with 2015. It has been a nice run since the March 2009 lows. Also, real estate is a big part of my plan so I am not relying solely on how the market does. It didn't used to be that way. I feel like I know more now about the process than I did in years past.

 

[karen1972]

I'm actually kind of glad about this year as my first year of retirement. As it helps me feel more comfortable that my plan is going to work. Its one thing to say you have a plan, its another to stay the course.. ie especially when I was down 6 figures at one point...with no income coming in.. which was the first time I was truly tested. I was about where you are during the 2001 crash, learned my lessons and went into 2008 much more prepared and came out much better off for it. When your working is really the time to determine if your comfortable with your strategy, good or bad markets. ie if you can't handle swings, will you be forced to put your money into less risky investments and then can you live with having the lower returns and does that work with your plan?

 

[DrRoy]

Nah, you wanna talk about frustration, you should have been around the second half of 1987!!!

Just be patient. Keep on investing regularly and use the down turns to pick up some bargains. If you still find it too frustrating, then as others have suggested, don't check your Mint account every day.

jsal7, you are partly suffering from trend bias. The human brain has a tendency to presume that a going trend will always continue. Over most of your investment experience, you did not have to wait more than a few months to see your NW rising, so when you ran into a flat year (not unusual over the long term) it felt bad. For you and anyone else, I recommend the book Your Money and Your Brain by Jason Zweig.

I strongly concur with the many replies that your have gotten here. Lots of good advice. Try looking at a chart of the stock market since 1900. There have been periods much longer than a year where the market went nowhere, such as 1966 to 1982.

Like Ian, I have had to watch my investments during 2H 1987, 2H 1990, 2000-2003, and 2007-2009. Big losses are much worse than no progress. For this year, even if the indexes are flat we still got the dividends.

 

[Senator]

If you cannot handle a flat market, you are in for a big surprise some year...


I saved quite a bit myself. Every time I added an amount, it seemed to go away. Keep the faith, it will work out.

 

[marko]

I'm actually kind of glad about this year as my first year of retirement. As it helps me feel more comfortable that my plan is going to work. Its one thing to say you have a plan, its another to stay the course.. ie especially when I was down 6 figures at one point...with no income coming in.. which was the first time I was truly tested.

What a great perspective! "If my plan works now in this flat market, it'll work through anything"

Sort of the view I had during the 2008-09 mess. "Well, (almost) the worst has happened and we're still ok....."

 

[frayne]

Sometimes you're the bug and sometimes you're the windshield. In the long run, the turtle wins the race.

 

[HadEnuff]

In the 1970s, my father was working for P&G, and had been since 1950. They kept putting P&G stock away for him, and it really didn't do much until 1982. Then a nice 7 year run-up before his retirement in 1989, and all of those years of putting cheap stock away that didn't appreciate much, made him a wealthy retiree.
My cousin-partner and I ran a business together and we were both savers. The years from 2000- 2008 were not "good" years for watching our NWs "grow", in dollars, but we kept putting our maximums away in our pension-401k plan, more or less buying "on the cheap", then when the upturn hit, we did great. Just like my old man.
Keep saving, stay diversified, and when things get out of whack re-balance...I think you'll do great.

 

[frayne]

If it is any consolation;
As of mid-December 2015, Berkshire Hathaway’s (BRK-B) equity has declined by 15% over the past one year, compared to the 2% decline of the S&P 500 (SPY). Historically, the company has delivered performance at par or above the index.

http://finance.yahoo.com/news/berks...0NG9yBGNvbG8DYmYxBHBvcwM3BHZ0aWQDBHNlYwNzcg--

 

[audreyh1]

If it is any consolation;
As of mid-December 2015, Berkshire Hathaway’s (BRK-B) equity has declined by 15% over the past one year, compared to the 2% decline of the S&P 500 (SPY). Historically, the company has delivered performance at par or above the index.

http://finance.yahoo.com/news/berks...0NG9yBGNvbG8DYmYxBHBvcwM3BHZ0aWQDBHNlYwNzcg--

Hey - opportunity!

 

[W2R]

Is anyone else going through these tough feelings? Would be great to hear I am not alone in feeling this "stuck in the mud" feeling.

They say that nothing is certain but death and taxes, but there's another thing that is just as certain: That the market goes up, and the market goes down, again and again.

It's hard to not react emotionally to market changes. But I find I am a better investor when I follow a plan, rather than responding emotionally to market events.

So, I tend to look back at similar times and tell myself, "yeah right, it's nowhere NEAR what we went through in 2008!" Then I go back to enjoying life and just put off worrying about it. By the time I get around to it, the market will be back up again.

 

[HadEnuff]

Listen to the wisdom of those who've posted already.

And here's an anecdote: Back in the late 90's, I remember talking to a fellow who was the customer service interface (he didn't really 'sell') to a fixed-rate annuity we were investing in. He commented that younger people, who'd never seen a down market, were going to be shocked when corrections finally occurred. Then 2001 happened....

So this is nothing new, and you'll see it over and over. Stay the course.

So true..I was one of those younger people who found out the hard way...now I hear young professionals who have been out of school since 2008, or 2010 say things like "well, I KNOW I can make 12% a year in the market, so why should I ....blah blah blah...."....ok.....

 

[Taxman59]

So true..I was one of those younger people who found out the hard way...now I hear young professionals who have been out of school since 2008, or 2010 say things like "well, I KNOW I can make 12% a year in the market, so why should I ....blah blah blah...."....ok.....

I had a coworker who was planning the future value of a deferred compensation account and wanted me to set up the spreadsheet to model it. He insisted that the investment returns had shifted to a13% average return based on the long term averages! I pointed out that 10% was the long term average and the any change was due to the recent abnormal returns. He denied it. That was 1999, and the subsequent returns have returned the averages to the long term averages! Btw, the 15 year average return was 12%, but he left in Feb 2009 with a return of 3%!


Have the day you deserve, and let Karma sort it out.

Sent from my iPad using Early Retirement Forum

 

[HadEnuff]

I'll have one helluva nice retirement if I can average 10%...but I'm crossing my fingers and hoping my 4% WR will last till I croak.

 

[jsal7]

Well, after a brutal January (and February so far!), I find myself coming back to this thread. Instead of having a pit in my stomach, I read, digested and embodied all of your advice, and decided to look at this year as the year I really socked it away. Bought alot of equities at a low low price, and will look back at this as one of the best of the early years as far as seed money goes for my retirement.

32 years old, I guess I have a long @$$ time to go!!!

 

[REWahoo]

32 years old, I guess I have a long @$$ time to go!!!

Maybe not, if you keep buying equities when they are on sale.

 

[zesty]

32 years old, I guess I have a long @$$ time to go!!!

It sure feels like that, doesn't it?

I am 32 and saving $40k per year as well, but at 0% real return it'll take me 30 more years to get to my FI target.

While I'm slightly more optimistic at 2% real future returns, it wouldn't surprise me if we saw 30 years of 0% returns.

 

[NW-Bound]

...Just needed to vent some frustration.
My net worth was $242K in May 2015
Fast forward to November 2015 and I am at $240K, despite saving approx $25K...

So, you have lost 10%. Would you jump off a bridge if the market dropped 50% from its previous high, as it did in 2003 or 2009? You should get used to a 10% correction, or even 20% bear market. It's part of the deal. The market does not have to go up every year.

...While I'm slightly more optimistic at 2% real future returns, it wouldn't surprise me if we saw 30 years of 0% returns.

30% of 0% return would hurt a lot of people, retirees and workers alike.

Can I survive that? Yes, but that's with SS, and also I will not leave much if any for my children. But if that's the way it's going to be, I will not be the only one hurting. Misery loves company.

 

[EvrClrx311]

The human brain is very good at deflecting us from the path of logic through emotional stresses. In this kind of situation I've learned to hijack that process and turn it into a positive, because mathematically it is...

When the market goes down... stocks get cheaper, it's the time you should invest more! What's already in your account goes down too, and that stings, however what you're putting in has more POWER now. I'm a firm believer that there is a long term trend of the market and that those forces are fixed... short term fluctuations move around that long term trend. The year by year ups and downs don't matter so much on the longer horizon... 20+ years.

If that isn't enough to turn your mood upward... how about this one:

Everyone will experience a really bad... and long term... bear market during their lifetime. We are in the midst of a long one now... it's been going on since you were a teen. Stocks are cheaper because of it... your $40,000 a year is buying a lot more than it would have in 1999. I can confidently say that because look what the market has done since 1999... I can safely say that in another 17 years we be doing better than we have the last 17... Every calculation I've done shows that hitting these bear markets later in life effects your balance SO much more than if you run into them in your earlier years. A person who is consistently investing, would actually hope to have a bear at the start, and wish to avoid one at the end...

The flip of that is... if I told you you'd run into a very properus decade at some point in your working career and gave you the choice to experience it in your 20's when your account is low or 50's when you've had three years of contributions to benefit... which would you choose?

Because of this I'm thankful for 2015... and ever the optimist. The only way to make it to the end with a pile of money that will sustain you, is to be stubborn in your strategy. Keep up the great work!

 

[ugeauxgirl]

I am 31 years old, and have been an avid saver for the last 8+ years.

William Bernstein said "A 25 year old who is actively saving for retirement should get down on his knees and pray for a decades-long, brutal bear market so that he can accumulate stocks cheaply"

You're doing great- markets like this are not fun, but you are a long way from retirement- try to think of it as a stock sale- just be sure you're doing the buying not the selling!