Perhaps I did learn something from the last recession?

[DawgMan]

So, here we go again, 10 yrs later. The Bears are out in full force after our long bull run and many are predicting more significant losses as we head into a full blown recession in 2020. Will it happen... who knows. Did I like my stock allocation dropping 4% - 6% (major indexes)in 2018... no. Did I like my flat to slightly negative bond allocation returns... no. Did I like to hear the news on Apple today and see the big drop and sign of things to come... no. BUT, somehow this go around, despite having a much more significant portfolio than 2008, I just seem to be more indifferent, less fearful, less feeling like the end is near. I am still on track to pull the plug end of 2019 IF I choose to, but I suppose the market could tell me otherwise. None the less, I just don't seem to be as emotionally affected this time. I suppose I learned allot about my "investing nerves" or my risk tolerance from the last recession. Sure, I am more conservative today at a 60/40 AA vs an aggressive 80/20 10 yrs ago, but perhaps I am maturing?
How are you weathering the recent drop? Are the Bears frightening you causing you to act? Or, is it just pass the popcorn and let's watch Netflix?

 

[Dtail]

Just chasing some yield on the Fixed income side, otherwise staying put but continue though to run the calculators.

 

[LOL!]

The recent drop is just a small blip caused by the actions of just a few people. If those people change their minds which they seem to do often, then there will be no recession.

But if they don't change their minds, then a recession is worth the price to get rid of them.

Thus either outcome I'm good with it.

 

[mamadogmamacat]

I'm also a bit surprised, but greatly pleased, at my relative indifference emotionally and actually a bit of enjoyment intellectually, as I watch this downturn unfold to whatever it is going to be (we will only know when we look back at it years from now) and whenever it will end. Having about 48.3% currently in SI, based on spending needs, helps a lot of course.

 

[marko]

I've mentioned several times that 2008 emboldened me and taught me to not panic. Sleeping at lot better through this downturn than I was 10 years ago.

 

[revhappy]

Therein lies the problem. This time around many people are not as fearful and are holding on tight. Which means, it will take a bigger fall for them to capitulate and for the market to bottom out. History always rhymes even if it doesn't repeat.

 

[REWahoo]

I've mentioned several times that 2008 emboldened me and taught me to not panic. Sleeping at lot better through this downturn than I was 10 years ago.

+1

Of course in 2008 there was serious discussion that we were experiencing TEOTWAWKI. This time, not so much.

 

[Animorph]

Made my first roundup of cash and bonds (minus 1.5-2. years of spending) and put 20% of it into equities when they broadly hit 20% down from the peak. I've softened my equities stance for my retirement accounts and try for 25% bonds. Get down as far as last recession and I'll be at 100% equities once more. Not that I think that will happen.

 

[bobandsherry]

I've mentioned several times that 2008 emboldened me and taught me to not panic. Sleeping at lot better through this downturn than I was 10 years ago.

While obviously different, it is still somewhat similar.... With the last hurricane, Michael, that hit the pan handle in Florida many people stayed, unwilling to leave or do anything as every other hurricane that passed that way had never done significant damage. They found out that this time was not the same as all the other times, but unfortunately only after experiencing catastrophic damages. They too will eventually return to normal, but in a much longer period of time than they had expected...

 

[REWahoo]

Therein lies the problem. This time around many people are not as fearful and are holding on tight. Which means, it will take a bigger fall for them to capitulate and for the market to bottom out. History always rhymes even if it doesn't repeat.

The US bear market of 2007–2009 was a 17-month bear market that lasted from October 9th 2007 to March 9th 2009, during the financial crisis of 2007-2009. The S&P 500 lost approximately 50% of its value...

https://en.wikipedia.org/wiki/United_States_bear_market_of_2007–09

So you are anticipating the S&P will have to fall more than 50% to reach a bottom this time?

 

[Franklin]

So, here we go again, 10 yrs later. The Bears are out in full force after our long bull run and many are predicting more significant losses as we head into a full blown recession in 2020. Will it happen... who knows. Did I like my stock allocation dropping 4% - 6% (major indexes)in 2018... no. Did I like my flat to slightly negative bond allocation returns... no. Did I like to hear the news on Apple today and see the big drop and sign of things to come... no. BUT, somehow this go around, despite having a much more significant portfolio than 2008, I just seem to be more indifferent, less fearful, less feeling like the end is near. I am still on track to pull the plug end of 2019 IF I choose to, but I suppose the market could tell me otherwise. None the less, I just don't seem to be as emotionally affected this time. I suppose I learned allot about my "investing nerves" or my risk tolerance from the last recession. Sure, I am more conservative today at a 60/40 AA vs an aggressive 80/20 10 yrs ago, but perhaps I am maturing?
How are you weathering the recent drop? Are the Bears frightening you causing you to act? Or, is it just pass the popcorn and let's watch Netflix?

Well there is actually some good stuff this time around on Netflix.....but I get your point. I have lost a few years worth of WD's but am not as worried this time around. I have been 50/50 which puts me down about 7% ish but I am sleeping well. I admit I do look at the market a few times daily on days like today! I'll worry if Washington can't get along in a few months and China talks fall apart but for now I see things working out within a month to 2. Hey, I may look back (as I have done already) and say what was I thinking?? But for now I am staying pat. Let's all hope this storm blows over.

 

[DEC-1982]

Are the Bears frightening you causing you to act?

no

It's just part of the normal cycle.

 

[audreyh1]

Just finished my rebalancing over the past two days as planned. Bought a lot of equities.

The stock market can go back up now!

Have my annual income withdrawn and parked in high yield savings and Prime MM. that always feels good.

I’ll sit on my hands unless the stock market takes another large drop in which case rebalancing may again be warranted. Or perhaps some tax loss selling.

 

[Spock]

I don't think its a valid comparison to say "I'm not as worried this time as I was in 2008". 2008 the markets fell more than 2x farther than they have so far this time.

Reactions are non-linear. The first fall from 0 to 10% is much milder than the reactions to "markets fell another 10% today and are now down 50% from their highs".

 

[foxfirev5]

Only mild rebalancing with reinvesting dividends. I'm also trying to lengthen the maturity of my CD ladder albeit at a snails pace with each maturing issue.
Of course my current 37% equity allocation helps a lot vs 70% in 2007. On top of that I had a j*b in a cyclical industry at the time which looked pretty shaky. For me it is different this time.

 

[REWahoo]

Rumor has it the market has enlisted the services of this guy to sue for the repeated whiplash it has suffered from for the past couple of weeks...

 

[audreyh1]

According to some talking head big sharp rallies are typical in bear markets, so yes I guess whiplash is guaranteed.

 

[candrew]

+1

Of course in 2008 there was serious discussion that we were experiencing TEOTWAWKI. This time, not so much.

Your post reminds me of the REM song "It's The End Of The World As We Know It" and one of its lyrics:

This means no fear, cavalier, renegade and steering clear
It's the end of the world as we know it, and I feel fine

 

[OldShooter]

So, here we go again ... How are you weathering the recent drop? Are the Bears frightening you causing you to act? Or, is it just pass the popcorn and let's watch ...

Oh, I watch the market just for fun. Sometimes read the pundits, also for fun. Read the posts here and continue to be impressed with the maturity of the comments.

I think there are two pieces to being comfortable. First, as you say, having experience helps a lot. We got whacked for the first time in 1987 and every gyration since has made us more and more comfortable with taking a long term view.

The second, though, is also important: Not having to sell equities in order to meet obligations like eating, college expenses. That's where the AA comes in for me. We view the fixed income portion of our portfolio more like a bucket than an allocation. That's the source of the funds we will spend while the current kerfluffle continues. As things settle down, we'll probably replenish the bucket.

I do wish, though that the flash boys' market distortions can be eliminated by some new trading rules. I am getting kind of tired of the gyrations.

 

[Cobra9777]

I was hit pretty hard in 2001. A mountain of high-tech Mega options went underwater, never to resurface. So much for retiring in my 40s.

In 2008, I knew I was within a few years of ER, and was pretty scared of a repeat of 2001. So I drastically reduced equity exposure in mid-2008, then all-in by mid-2009. Retired a few years later.

This time, I'm not as concerned. With 2 pensions, rental income, and dividends, we don't sell very often... and usually just to fund discretionary travel and home improvements. Reality is, we sell less in taxable than we reinvest in tax-deferred. Meaning our WR is less than the overall portfolio dividend rate. Then this... even with the recent drop, we're still up 30% from the day I hung up the spurs, and I felt pretty good about our FIRECalc success rate on that day. And finally, SS is right around the corner if we want to go that route for one of us.

 

[kgtest]

Just chasing some yield on the Fixed income side, otherwise staying put but continue though to run the calculators.

Same. Was going to frontload 401k but decided to chase short term yield and DCA all year instead...since everyone claims things will get interesting in Q2,Q3. Time will tell.


It' a beauty having a small cash reserve to give myself options. I could put more towards the 4% interest rate on my note but I'll likely split 50/50 note/markets with my investable$

 

[marko]

I don't think its a valid comparison to say "I'm not as worried this time as I was in 2008". 2008 the markets fell more than 2x farther than they have so far this time.

Agreed, but to hear some, both on this forum and in the media, it's the same and only the beginning .

 

[hopefullyoneday]

Agreed, but to hear some, both on this forum and in the media, it's the same and only the beginning .

Only if WE let it. The media needs NEW news, and they will get more attention if they say the market is crashing since it has been rising for a while now. And some people on this forum want it to crash because they can buy in and ride the elevator up. The market is driven downward by fear. The more people selling than buying makes the market go down. I am just going to hang where I am.

 

[LOL!]

I am 10 years older than I was in 2008-2009. That means I have 10 fewer years of retirement expenses to worry about. That's a big burden that has simply vanished from my psyche, so of course I am less worried now than I was 10 years ago.