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Old 09-29-2008, 06:19 PM   #41
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Staying the course here. 60/40 AA. I'm hanging on to this bungee cord. It's either gonna break or it's gonna sling me back onto the platform

BTW, I visited with an old friend today who's dying of cancer. This puts things like market downturns and investment portfolios into perspective for me.
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Old 10-02-2008, 11:17 PM   #42
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I don't even want to know how much money I've lost since dumping my life savings into an index fund earlier this year. I just try to close my eyes and roll the mouse wheel down when I go to Reuters so I don't have to see the scary headlines and red numbers...
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Old 10-03-2008, 09:17 AM   #43
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I don't even want to know how much money I've lost since dumping my life savings into an index fund earlier this year. I just try to close my eyes and roll the mouse wheel down when I go to Reuters so I don't have to see the scary headlines and red numbers...
Since you're relatively young (26 according to your profile info), I wouldn't worry too much about the downturn in the market unless you were, or are, planning to sell off your holdings. As long as you're in it for the long haul, the odds are pretty good that the market will rebound, as it always has in the past (I realize that "past performance is no guarantee of future results"). At this point in time, you only lose your money if you dump your equities......sure they may be worth less (not 'worthless') now than when you bought them, but you have the same amount of shares as you did before the price drop, and their value will rebound when the market rebounds......which most will agree that it's "when" not "if"....though it may take a while.

IMHO (and it's just MHO), one would be wise to continue DCA'ing now that stocks are "on sale". Or if one has spare cash that they're looking to do something with, using it to buy some extra equities while their cheap.

Again, that's JMHO.....and that's what I prefer to do. YMMV.
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Old 10-03-2008, 09:53 AM   #44
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Overall, we have made no changes to our allocation. I did, however, re-directed a portion of new contributions from bonds to equities.

We have about 5 months worth expenses in cash. Till now, we did not see a need for more cash on hand. Even though our jobs are unstable, we could live quite well on either of our incomes. Also, till now, we thought if things turn really grim we could also get by on credit (we have no liabilities what-so-ever at this time) in a near term by tapping into a HELOC or getting a mortgage. With the deleveraging snowball rapidly rolling downhill, I feel we should no longer assume credit will be there (cheap, easily obtainable type, anyway) when we needed it... so FIREdreamer, we share the same concern related to liquidity and we have made more or less identical portfolio changes in an attept to be more liquid.

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...<snip> my problem is not one of risk mismanagement, it is one of liquidity. I will compensate for the increase in my taxable cash position by investing more of my tax-deferred money in equities for a while. Overall there will be no change to my AA but it will make my portfolio less tax efficient temporarily. Just more liquid assets that can be tapped in case of an emergency.
We just completed harvesting losses in our taxable account and rather than buying different equities in taxable, for the time being we kept 5-6 months worth of expenses in MM funds. Much like in your case, this resulted in higher equity holdings in our tax deferred accounts. Although, I do not view those MM funds as "available for spending", it's comforting to know they are there in case we really need them.
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Old 10-03-2008, 10:55 AM   #45
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Since you're relatively young (26 according to your profile info)...
This is not relatively young; it is absolutely young.

I am relatively young.

Ha
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Old 10-03-2008, 01:31 PM   #46
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Since you're relatively young (26 according to your profile info), I wouldn't worry too much about the downturn in the market unless you were, or are, planning to sell off your holdings. As long as you're in it for the long haul, the odds are pretty good that the market will rebound, as it always has in the past
Well yeah, but if I invested 100 dollars at point A before it was almost immediately decimated to, for example, 50 dollars at point B, that means the money I have 40 years from now will be half of what it would have been if I had invested that same amount at point B, right (and this is not a rhetorical question mark--I could have that all wrong)? It's not that I don't expect it to go back up before I sell it that bothers me, but rather the knowledge that my timing will have made such a massive difference in the end.

And as for continuing to buy now "while it's cheap", the fact that I know that's a good idea only compounds my gloom. I invested everything I had slowly saved over the last 10 years or so all at once, so I won't have any funds with which to buy for a good long while.
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Old 10-03-2008, 02:22 PM   #47
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Ever heard of Loss aversion?

I feel/hear your pain. The flip side is, if you would've waited to invest over time, the market might've gone up and you'd have felt like you missed the low price.

Seems like you can pick the studies you want to believe, but the market generally goes up over time; it's best to "lump sum" it into the market.

Don't correlate a good strategy with a bad outcome.

-CC
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Old 10-03-2008, 02:41 PM   #48
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Well yeah, but if I invested 100 dollars at point A before it was almost immediately decimated to, for example, 50 dollars at point B, that means the money I have 40 years from now will be half of what it would have been if I had invested that same amount at point B, right (and this is not a rhetorical question mark--I could have that all wrong)? It's not that I don't expect it to go back up before I sell it that bothers me, but rather the knowledge that my timing will have made such a massive difference in the end.
This is not going to be the last time that the market comes along and knocks the hell out of you. Next time it won't be half of a hundred dollars, but maybe half a million. Your idea of waiting until the market is done making profits go *poof* is a great one. Except for one fatal flaw - when will it be done?
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Old 10-03-2008, 02:57 PM   #49
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This is not going to be the last time that the market comes along and knocks the hell out of you. Next time it won't be half of a hundred dollars, but maybe half a million. Your idea of waiting until the market is done making profits go *poof* is a great one. Except for one fatal flaw - when will it be done?
More than once since 1966 - with time, reinvested dividend's, and dollar cost averaging it's a wash - time and persistance and staying the course.

Then as time marches on you too can become an old phart and watch those half million swings in balanced index - thus gaining the opportunity to Pssst - Wellesley, mention SEC yield of your portfolio and tell warm and smarmy Norwegian widow stories.

Or not.

heh heh heh - Ah to Bogle or not to Bogle - that is the question. Whether it is nobler to ----.
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Old 10-03-2008, 03:00 PM   #50
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This is not relatively young; it is absolutely young.

I am relatively young.

Ha
Eh, I was just trying to polite.

I'm twice that, but usually pride myself in acting like a 5 year old much younger than I am.
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Old 10-03-2008, 04:52 PM   #51
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Staying the course, maxing out the 403b and dw's 401k. It's pretty much automatic, so I don't really think about the retirement account purchases.

We have picked a not so good time to remodel the kitchen and we are paying for it as we go as opposed to financing it, but we'll build up cash outside the retirement accounts when we finish the project. I don't really like dishing out 30 -35k for the kitchen at this time, but the process has already started. I tell the neighbors that dw is trying to stop this recession all by herself. I guess we'll weather this market downturn cooking and entertaining in style.
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Old 10-03-2008, 09:33 PM   #52
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I guess we'll weather this market downturn cooking and entertaining in style.
A woman I know told me years ago that her grandparents had a bit of money at the start of the Great Depression and bought a record player and new linoleum flooring for the kitchen.

They were poor, but could invite friends and family over for pot-luck parties!

===

I got a raise and increased my 401k contrib by the same amount. It's going into an index, so I'm ignoring it lately. But we shall rise, yes we will

Bottom? I figure it's like going canoeing in low water - we're going to do some scraping along the bottom all the way down the channel ...

ta,
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Old 10-04-2008, 12:24 AM   #53
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Nothing really has changed for me. I did re-balance my 401k today.

My goals right now are:

- Pay off the ~1k in credit card debt I have (first CC debt ever, *sigh*)
- Re-fund the contribution $$$ I had to take out of my Roth IRA earlier this year (it's not a lot, but *double sigh*)
- Increase my emergency fund

Luckily everything else is going well, though.
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Old 10-04-2008, 10:50 AM   #54
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I changed my TSP monthly investment to the "F" fund - a bond index. Stopped my DCA investment to Fidelity Defense Select and Aerospace Fund for the time being.
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Old 10-04-2008, 11:21 AM   #55
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All of my funds are "F" funds right now. At least thats the first sound I start making when I look at them.
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Old 10-04-2008, 12:05 PM   #56
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I'll give everyone fair warning that I've moved all my pennies back from cash into stocks; this is a fairly reliable sell signal for the market.

Not only that, but I've decided to live off of PB&J for a while so I can invest yet another 15% of gross income in the market (not DCA'ing - just setting limit orders at 52week lows for certain stocks). If when the S&P500 falls below 800 I'll move the bonds to stock as well. After that? ... well there's always margin.
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Old 10-04-2008, 12:52 PM   #57
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All of my funds are "F" funds right now. At least thats the first sound I start making when I look at them.
My "S" funds aren't doing any better.

DD
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Old 10-04-2008, 01:56 PM   #58
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Pssst - Wellesley = 4.93% SEC yield and dats above the mythical 4% SWR.

It's football season and if your team doesn't do well there's always Mr Market to entertain you.

Thrill of Victory and Agony of Defeat and all that rot.

heh heh heh - . Just gassed up at 2.99/gal ?? Mowed the lawn - grass is still growing and the birds are singing.
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Old 10-04-2008, 07:46 PM   #59
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heh heh heh - . Just gassed up at 2.99/gal ?? Mowed the lawn - grass is still growing and the birds are singing.
I 'm down to the last 1 gallon of gas (out of about 20 gallons) that I bought in May '07 for the generator and yard equipment.....don't remember what I paid per gallon back then, but I'm pretty sure it was less than I'll plunking down tomorrow to refill all the containers. Sure am glad that somebody invented that "Sta-Bil" gasoline stabilizer! This last bit of gas smells just as fresh as it did when I got it......and it's also nice to know that I've been burning 'cheap' gas to mow the lawn this year!

I had the rider out today chasing the squirrels around the estate mowing the lawn that doesn't seem to want to quit growing for the season just yet.

But on a brighter note.....at least the market didn't take another nosedive today!
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Old 10-04-2008, 07:56 PM   #60
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But on a brighter note.....at least the market didn't take another nosedive today!
Yeah. When I retired, I didn't think I would give a rip about weekends like I did when I worked. Now I look forward to the weekends to give my portfolio a break.
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