Feel Like a Fool and It's My Own Fault ...

[jollystomper]

To the OP, I would beat myself up on over this. As was stated before, all of us on this forum have made mistakes, we let emotion override the logical at times, it is part of life.

Not knowing your financial details (and I am not asking to know them), my question would be what you are going to learn from this as it relates to your FIRE, because inevitably during your RE time your holdings will go down.

If at 60 (the same age as I am), you have been invested for a long time, those "high risk" items likely have done very well over the years, and even the fun at the end of last year should still have you well ahead.

My approach - which is not for everyone, as YMMV - was to simply have enough in cash to tide me over until I choose to take SS, so that I would never be forced to sell equities. Yes, I give up those potential high returns... but at this stage I do not need to chase the highest returns, just returns that are good enough for my situation.

When I RE's the end of June last year, through October I thought my timing was brilliant... of course we know what happened since then. But still, at the end of 2018 I am way up compared to March 2009, heck, even up compared to the end of 2016. And with my SWR coming entirely from cash, stock market losses are not fun, but are no reason to panic.

So just consider what you need to do with your portfolio to allow you to sleep at night when this happens in the future... and you will be able to FIRE and be comfortable with it.

 

[24601NoMore]

My approach - which is not for everyone, as YMMV - was to simply have enough in cash to tide me over until I choose to take SS, so that I would never be forced to sell equities. Yes, I give up those potential high returns... but at this stage I do not need to chase the highest returns, just returns that are good enough for my situation.

That's a great strategy and the same approach I'm taking..there's a lot to be said for creating a plan that is "good enough for (your) situation" and not just chasing the highest potential returns.

It's quite likely that the next 10 or so years of equity returns are not going to be like the last 10. It does concern me at times when I see high equity percentages in people's portfolios that are either in ER or very close to it..lot to be said for balancing things out a bit more with CDs, MM, bonds and other FI.

Back to the OP, yeah - been there and done that. Global Crossing (GLBC). World's largest fiber optic network, so one heck of a compelling story with global communications and data use growing the way it has been over the past 10+ years. Had a big position in it, and it went to zero (Chp 11) - literally two weeks after their CEO (John Legere, now CEO of T-Mobile/Sprint) was asked on CNBC if there "is any potential for bankruptcy in your future (based on rumors)". He literally pounded the table and was emphatic that there was ZERO chance of that - and two weeks later, bankrupt. Why he did not go to jail for securities fraud (since we all know you can't prepare Chp 11 for a multi-billion $$ company in a week or two - so he clearly lied) is still a mystery, but GLBC had donated to BOTH sides of the aisle pretty heavily, so that could (probably does) have something to do with how they avoided jail time where Worldcomm execs were not so lucky. Dateline (Stone Phillips) did a whole 2-hour special on how people's lives were decimated by GLBC - bankruptcies, etc. Learned since then to not have such a big position in ANY individual stock..FWIW.

 

[NW-Bound]

...
Fast forward to end of 2018 and I lost nearly $40K out of my pocket because I was chasing profits in a company started by someone I knew well. Stock was at $288/share and projected to go to $400. Yeah, right. It's around $145 today. OUCH...(

Sounds like NVDA.

It does. Incidentally, both Apple and Amazon dropped as much as 33% from the 52-week high before rebounding.

That's what one gets for being heavy in any single stock. Risk comes with potential reward.

Or you could be in Lam Research, down as low as 133 from 235. LRCX has P/E of 11 now. Buy, buy, buy?

PS. How about Micron Technology? Down as low as 28 from a high of 65. P/E ratio of 2.8 now. Yes, less than 3. Crazy market, eh?

PPS. The above are trailing P/E. The market says forward P/E will not look so spectacular. That's the rub.

 

[Car-Guy]

Anybody else in here been as foolish as us and had to postpone FIRE?

Not enough to postpone FIRE but as a swing trader, I've had short term losses that far exceed your numbers. I guess it also matters what percent of your NW was lost (or dropped). 1%, so what. 10, 20 or 30% in the short term. Ouch.

 

[kaneohe]

..................................................

Anybody else in here been as foolish as us and had to postpone FIRE?

Perhaps another way to look at this is that you learned a good lesson while you're still working. Think about what it would be like if you learned it after
you had retired.

One of the blessings in my life is that I learned I was no good as a stock picker when I was a student and didn't have much money. I also learned early that all those sales folks who spoke so confidently didn't know much more than me even though the story sounded good.

 

[ImThinkin2019]

I'm so glad to hear from all the people here that have lost money on a "great, foolproof" investment. Makes me feel better.

I did that myself chasing what seemed like guaranteed high real estate loan returns. The broker was recommended by a trusted friend of my father. Now I consider that money donated to the hard knocks education fund. The broker went to jail and I paid most of the pittance allocated back to me to the attorney that I needed to do the clawing.

Now we are in index funds for money we don't plan on using. And fixed income for the rest, which we'll live on part of the earnings from.

So glad all our lives we lived below our means, and saved all the time.

We all make mistakes and hopefully we learn from them. Most of the ones I've read here are the type that are never forgotten!

 

[HI Bill]

What most of us do here: Choose your AA, and stick to it. Index funds (no stock picking, no market timing). Bucket with 2-3 years expenses or budget in cash/MM/CDs. Rest easy, don't fret the market tumult, and retire.

Or, gamble and maybe you'll win, maybe you'll lose. Within 2 years of retirement, you shouldn't be gambling in such a haphazard, and dare I say, wreckless way. Best wishes on putting the train back on its track!

 

[brokrken]

It does. Incidentally, both Apple and Amazon dropped as much as 33% from the 52-week high before rebounding.

That's what one gets for being heavy in any single stock. Risk comes with potential reward.

Or you could be in Lam Research, down as low as 133 from 235. LRCX has P/E of 11 now. Buy, buy, buy?

PS. How about Micron Technology? Down as low as 28 from a high of 65. P/E ratio of 2.8 now. Yes, less than 3. Crazy market, eh?

PPS. The above are trailing P/E. The market says forward P/E will not look so spectacular. That's the rub.

I own NVDA, AAPL and FB. All got crushed in December. However, I have owned them for a really long time (except FB, which I got shortly after IPO), so I am still up in them in hundreds % and in one case over 1000%. So, yeah, it hurt, but I'm still looking pretty good.

 

[Islandtraveler]

Watching the market is like watching 100 dollar bills going by on a conveyer belt. It is very easy to succumb to the temptation of trying to grab a few as they go by. I’ve been a self directed investor for 35 years. The biggest problem I have always had is avoiding the temptation to speculate. Just when I think I’ve got it licked, I get wrapped up in another cockamamie scheme. Just so happens, I lost $1,500 today on a nat gas futures contract. Sometimes I feel like Charlie Brown and the football. Good Grief!!

 

[iloveyoga]

What most of us do here: Choose your AA, and stick to it. Index funds (no stock picking, no market timing). Bucket with 2-3 years expenses or budget in cash/MM/CDs. Rest easy, don't fret the market tumult, and retire.

Or, gamble and maybe you'll win, maybe you'll lose. Within 2 years of retirement, you shouldn't be gambling in such a haphazard, and dare I say, wreckless way. Best wishes on putting the train back on its track!

Yes!!

 

[sheehs1]

I had a friend who invested in a tip from another friend in some sort of real estate venture with a company down in Florida selling Fractional Ownership Shares of a resort. This other friend had been invested for 2 or 3 years at this point. The difference between this and a time share is/was that "my friend" owned and was deeded the properties he bought. The monthly and yearly interest rate return was substantial. I actually called the contact but never heard back from him.

Months later I found out why. My friend lost all of his money which was close to 3/4 million and his other friend lost everything he owned including his house. Evidently it was more than a scam. The supposed Lawyer in the deal was writing fake deeds. Anyway, court and jail time for the people running the scam.

I learned a long time ago not to do these types of deals, or new golf course start ups, or new condominium start ups.....etc. As a minority owner you have no say. and too many go belly up. My friend was thankful I had not gotten a return call. I told him, "No matter, I wouldn't have done it but I WAS curious enough to call".

oh..and I am still holding KMI.....waiting...waiting...waiting....

 

[chrisaukcam]

What has worked for me is to do 90% into ETF's and mutual funds. Then I play around with the other 10% to satisfy that urge to speculate and take chances. If I somehow lose that 10% then I am still pretty solid with the rest.

 

[karen1972]

I wouldn't beat yourself up about it, we all made decisions that have delayed retirement unless you saved 100% of your money. (bad advisor, expensive car, expensive house, bad stock choices, its all the same thing to me, its money that could have been used for retirement but wasn't.) There is no magic way that guarantees retirement on some specific future date.

I'm retired, but since I have 40+ years ahead of me I still take risks and I'm willing to live with the consequences. You obviously knew the risks and knew the consquences, it just always sucks when it doesn't go in your favor and I can appreciate that.

I did force myself to create what i call my "gambling" account, thus limiting the amount of money I play with these days so I don't go too crazy.

 

[Nick12]

I try to pay cash whenever possible in my simplistic lifestyle before and after I ER'd last year. Using that plastic is only for emergencies only. Bills are set up in auto pay. Auto pay invest into index funds monthly and whatever is left in my checking I budget my lifestyle around. Could have bought all the toys I wished for but not into it. I used this approach when I went to college on work study program ( washed dishes and became friends with the cooks that fed me 3 meals a day in the cafeteria for the 4 years I was in school. ). My heart is full and I'm always looking for ways to increase net worth. The ups and downs of the market is not for everyone. If you can't take the fire time to get out of the kitchen.

 

[MichaelL]

Remember the rage for LDDS? Later known as WorldCom? I know lots of people who lost money on it. It happens. Average person should stay in funds.

This caused me to have a flash back. When I was at my first job in Tech in the Bay Area in 1997 the little company that I was at got bought by Lucent. I had thousands of Incentive Stock Options (ISOs) given to me at $5 a share just before the acquisition which converted to Lucent stock. The stock split twice and doubled. It went to $85. It was the most widely held stock in America. I remember walking through LAX with some colleagues on our way back from a trade show in our Lucent shirts and people called out to us, "Lucent! Lucent!". People thought that it would just keep going. I had never owed so much stock that was worth so much money and I was concerned about the risk of having so much in one investment. As the options vested each month I started selling. In December of 1999 I read an article in Investors Business Daily about Parabolic Stock Charts and they showed that the NASDAQ had gone parabolic indicating a severe bubble. It was already dropping and I sold some in December. I sold off the rest of my stock in January to put in on the next tax year. Some people rode it down to $1. I still remember people saying that it would recover. I was so lucky. I have been wary of holding individual stocks since then.

 

[pb4uski]

I try to pay cash whenever possible in my simplistic lifestyle before and after I ER'd last year. Using that plastic is only for emergencies only. Bills are set up in auto pay. Auto pay invest into index funds monthly and whatever is left in my checking I budget my lifestyle around. Could have bought all the toys I wished for but not into it. I used this approach when I went to college on work study program ( washed dishes and became friends with the cooks that fed me 3 meals a day in the cafeteria for the 4 years I was in school. ). My heart is full and I'm always looking for ways to increase net worth. The ups and downs of the market is not for everyone. If you can't take the fire time to get out of the kitchen.

Here is a way to increase your net worth... shop just as you always do but pay with the Citi Double Cash Back card set up on auto-pay... a slam-dunk easy 2% reduction in spending... plus an additional 2 years warranty for any major items paid for with the card and Price Rewind, which will credit you if items that you register are available for less within 60 days from date of purchase.

 

[Texas Proud]

So now we've lost nearly a year of gains in our 401k's AND all that liquid cash. (I know it's not "lost" until I sell my stock, and I'm holding on optimistically--am only down $33K now).

Anybody else in here been as foolish as us and had to postpone FIRE?

So wrong... it is lost... now, you might be able to get a gain and get it back... but it does not change the fact that as of the date you wrote this you had a loss...


People get confused with an actual loss and a 'reportable' loss... you actually lost... it does not become reportable until you sell...

 

[Al18]

So your retirement balance went down 6% and you're considering delaying your retirement? I think you should adjust your retirement plan - the S&P 500 has dropped 50% twice since 2000.



The S&P 500 was down 6.2% last year, and many investment grade/bond funds were flat last year. Many 60% stock/40% bond balanced funds were down 5% last year.


I think it's wise to assume a 50% stock/50% bond retirement balance will drop 25% during any particular year. Most recent bear markets last about 3.5 years, so you should have enough fixed income (CD, money market, etc) to ride out the bear market without selling stocks at a loss.

 

[dtbach]

As others have said, we all have some regrets in investing. Nobody (not even Warren Buffet) has a 100% success rate.



I invested in WorldCom on the advise of an advisor and rode it all the way down to nothing. $20K gone just like that. The broker said, I guess it didn't work out. I've never had a broker since.


Sure I still invest in individual stocks, but most are utilities and other high dividend stocks. Sill have a couple of aggressive stocks but they are less than 5%.


Get yourself 70% in funds or ETF's, mostly indexes. And enough cash for 2 years. Then you can ride out most of the wild stuff.

 

[Cut-Throat]

Sigh. A few months ago I was flying high and getting excited about the prospect of FIRE-ing. (I'm 60 and was looking seriously at 62 to retire.)

Fast forward to end of 2018 and I lost nearly $40K out of my pocket because I was chasing profits in a company started by someone I knew well. Stock was at $288/share and projected to go to $400. Yeah, right. It's around $145 today. OUCH.

And on top of that, my DH and I *both* invested our 401k's in pretty high-risk funds that did great while things were great, but ... well, you know the rest.

So now we've lost nearly a year of gains in our 401k's AND all that liquid cash. (I know it's not "lost" until I sell my stock, and I'm holding on optimistically--am only down $33K now).

Anybody else in here been as foolish as us and had to postpone FIRE?

Don't feel bad.... I had some errors, that is why I am 100% index funds and 70% Bonds, now that I am retired... I sleep like a baby.


I think Bill Bernstein said "You have to look yourself in the mirror and admit that you are the enemy" .... Then move forward.

 

[HadEnuff]

As others have said, we all have some regrets in investing. Nobody (not even Warren Buffet) has a 100% success rate.



I invested in WorldCom on the advise of an advisor and rode it all the way down to nothing. $20K gone just like that. The broker said, I guess it didn't work out. I've never had a broker since.


Sure I still invest in individual stocks, but most are utilities and other high dividend stocks. Sill have a couple of aggressive stocks but they are less than 5%.


Get yourself 70% in funds or ETF's, mostly indexes. And enough cash for 2 years. Then you can ride out most of the wild stuff.

that's at least 3 of us on this thread who got bit by WorldCom, plus my dad as I referenced in my post.

 

[HadEnuff]

So your retirement balance went down 6% and you're considering delaying your retirement? I think you should adjust your retirement plan - the S&P 500 has dropped 50% twice since 2000.



The S&P 500 was down 6.2% last year, and many investment grade/bond funds were flat last year. Many 60% stock/40% bond balanced funds were down 5% last year.


I think it's wise to assume a 50% stock/50% bond retirement balance will drop 25% during any particular year. Most recent bear markets last about 3.5 years, so you should have enough fixed income (CD, money market, etc) to ride out the bear market without selling stocks at a loss.

I always tell people who ask me for advice that you don't need a plan "if" the market tanks, you need a plan for "when" it tanks. Ain't no "if" about it.

 

[Nick12]

Here is a way to increase your net worth... shop just as you always do but pay with the Citi Double Cash Back card set up on auto-pay... a slam-dunk easy 2% reduction in spending... plus an additional 2 years warranty for any major items paid for with the card and Price Rewind, which will credit you if items that you register are available for less within 60 days from date of purchase.

Thanks for the tip!

 

[NW-Bound]

... Stock was at $288/share and projected to go to $400. Yeah, right. It's around $145 today. OUCH...

Sounds like NVDA.

It does. Incidentally, both Apple and Amazon dropped as much as 33% from the 52-week high before rebounding.

That's what one gets for being heavy in any single stock. Risk comes with potential reward.

Or you could be in Lam Research, down as low as 133 from 235. LRCX has P/E of 11 now. Buy, buy, buy?

PS. How about Micron Technology? Down as low as 28 from a high of 65. P/E ratio of 2.8 now. Yes, less than 3. Crazy market, eh?

PPS. The above are trailing P/E. The market says forward P/E will not look so spectacular. That's the rub.

A quick update.

LRCX reported good earnings last week. Share price jumped from $139 to $166 today. Texas Instruments (TXN) did not do too bad either, and stock jumped from $95 to $104 today. The good news lifted the entire semiconductor industry. Buy, buy, buy...

On the other hand, Nvidia reported bad earnings today. Stock crumbled as low as -17% at open, recovering to -11% as of this writing.

Fun time!

 

[kgtest]

That is the beauty of investing in broad based index funds that give you what the market gives.... when they underperform you have loads of company and when they do well you can all party together.

TRUTH! My 401k was down well over 40k just in November, December alone, some of it did come back though.



I'll never forget when I bought CAT, and then TASR...we all make mistakes lol.