Just like 2008

[COcheesehead]

In 2008 I didn't own any bonds or bond funds. I just watched in awe as my money evaporated.
I now at least have something to rebalance from and won't have to touch equites for a long, long time. I can wait this out for years.

 

[explanade]

One difference may be that the Fed is trying to normalize or raise rates after the most accommodative monetary policy in history.

 

[Another Reader]

Will check around November 5th to verify all the tenants paid their rent this month. Wasn't much of a problem in 2008 - 2012. No ripples in employment from this one yet.

 

[street]

There is an old flight training rule regarding failed-engine landings at night:

As you get close to the ground, turn on your landing light. If you don't like what you see, turn it off.

When the market is going up I tend to watch it and smile. When it's going down, I'm a long-term investor, landing light off.

I like that a lot and that is how, I see it also.

 

[bingybear]

Yes, a 3% swing means a $55K change for me...seeing $100K dissapear from your account value over the course of a week is disconcerting...but I also bought some at lower valuations. Like I told my wife. Every time the market hits a new high, I have faith that regardless of how low it goes, and eventually, the new high will be surpassed. I'm looking forward to being retired and out doing stuff, instead of sitting in my office, watching the market's peturbations.

And what do you do if it changes by 100k - 150k in a day?

ok...it is not enjoyable.

 

[copyright1997reloaded]

Yep, that is the issue, in a nutshell. If you don't need the money for 5,10, or more years, then "meh" is probably the right attitude. On the other hand, if you think you might need it sooner, then that is an entirely different situation. Some would say you shouldn't have been in equities in the first place if you fall into the second category (and I don't disagree); but if you are, then I think it makes some sense to move to safer assets with at least some of your $$ in equities. Just my opinion.



And yes, I understand the effect of inflation over time, etc, etc., so no need to go there.

This is why 'target date' funds exist. So that it is done automatically for you.

 

[Franklin]

painful day but sitting tight

well after the 600 pts today I am $366K below my hi water mark just 60 days ago. Thats about a 4% decline from the top. So dollar wise it is larger than I expected . My mix is about 55% moderate equities with the remainder bonds and cash. But I've been down this road before and tend to creep back in now.

 

[ESRwannabe]

There is an old flight training rule regarding failed-engine landings at night:

As you get close to the ground, turn on your landing light. If you don't like what you see, turn it off.

When the market is going up I tend to watch it and smile. When it's going down, I'm a long-term investor, landing light off.

I setup automatic deposits today with Vanguard for monthly purchases. So now I don't need to look at it. Everything is on auto-pilot.

It may be about time to delete all my financial/news bookmarks, cancel cable, and go on a year plus video game bender.

If I spend all my time killing space aliens and zombies there won't be time to screw up my investments.

I'm going to make damn sure I am as ignorant as possible about what the economy and stock market are doing if we get another 2008. I'm not going through that %&*)^^ again.

 

[pb4uski]

Take a breath everyone.... VTSAX which IMO is a good proxy for the U.S. domestic stock market is still 0.20% up YTD with dividends reinvested.... this is nothing like 2008.

It might just be a bit of a flat year but only time will tell.

https://investor.vanguard.com/mutual-funds/profile/performance/vtsax

 

[RAE]

The title of this thread is "Just like 2008"

My big take-away from 2008 was the great benefit of sitting tight and riding it out.

If this is indeed just like 2008, can we hope for another decade of extraordinary returns starting sometime in March 2019?

I wouldn't bet on that happening.

 

[NW-Bound]

Not quite a 10% correction up to this point, and people already compare it to the Great Recession. Come on!

That was a 53% market drop. People were talking about going back to work, regretting ER, drawing SS early, cutting spending, growing own food and all that exciting stuff.

Here, we were still talking about "blowing dough" just a few days ago. Don't be such scaredycats.

 

[Moemg]

Not quite a 10% correction up to this point, and people already compare it to the Great Recession. Come on!

That was a 53% market drop. People were talking about going back to work, regretting ER, drawing SS early, cutting spending, growing own food and all that exciting stuff.

Here, we were still talking about "blowing dough" just a few days ago. Don't be such scaredycats.

Remember that a lot of our members have only had up years they have never lived through a serious correction .All that talk about stay the course is easy when you are not seeing hundreds of thousands melting away .

 

[Free bird]

One of the twelve horsemen said the US economy no longer needs stimulus. So rates are no doubt going higher. Not sure if he's right but one thing is for sure. Of he's wrong we will suffer not him.

 

[HI Bill]

And what do you do if it changes by 100k - 150k in a day? ok...it is not enjoyable.

I dutifully update my spreadsheet and painfully consider whether I need to work longer! And consider buying opportunities!

 

[NW-Bound]

Remember that a lot of our members have only had up years they have never lived through a serious correction .All that talk about stay the course is easy when you are not seeing hundreds of thousands melting away .

I just looked back at my record. In 2000-2003, I lost close to $800K in today's dollars. Talk about "blowing dough".

Darn, that's a big percentage of my net worth then. And the small company I helped founded went under too. And my father was dying.

Pretty stressful time. And there was the 9/11 attack too.

 

[Free bird]

I guess the real question is as always can you make a case for earnings to support stock prices. If you can then its probably pretty safe. If your bs meter starts moving then watch out.

 

[NW-Bound]

For the same earning, how much do the investors want to pay? It varies.

Kind of like trying to estimate a home price based on the square footage. It varies with the buyer's mood. Of course location and the quality of build make a difference, just like growth stocks like Amazon have a much higher P/E than Walmart does.

They pay one price, then the next day they don't wanna. Who knows?

 

[ERD50]

PC says that even if I took a 50% hit, my probability only drops from 99% to 97% success rate.

Actually, I don't think your success rate changed at all.

If you look back at the successful runs in FIRECalc, some of them dip by 50% or more... and then recover. A high % success rate at the start means you survived the 50% dip. You don't recalculate while you are in the dip - that's double-counting!

It actually does work the other way though (at least historically). You can recalculate on a rise in your portfolio (Retire Again & Again), because the new amount takes into account future dips. Remember, dips occur after rises, and that's what FIRECalc success rates are based on, retiring on the peak, and still succeeding.

Applying that 'peak-safe-WR' at anytime other than a peak ends up being ultra-conservative, and that is represented by the many lines that maintain buying power, or go to the moon! Of course, we can never really know until after the fact.

-ERD50

 

[copyright1997reloaded]

Sell everything. Seriously. On the open, market orders. Get out. You will sleep better at night!

We need indiscriminate selling, followed by a move up, followed by a successful test of the previous low ... to move on and move higher. We saw some of that late in the day...but unfortunately the futures are slightly positive (which is not a good sign). Still searching for that capitulation low.

 

[GR111]

In 2008 I only glanced very briefly (with one eye closed) every couple weeks at portfolio though I knew it would bounce back. Doing about the same now but with higher cash position. Riding it out like always.... looking for good buys on the other side.

 

[audreyh1]

I just looked back at my record. In 2000-2003, I lost close to $800K in today's dollars. Talk about "blowing dough".

I think there was a poll at some point late 2008 early 2009 that asked how much people had lost by range, and several answered losing more than 7 figures.

 

[NW-Bound]

Yes. There was a $1M club. I remember clearly.

I never lost that much, because I did not have as much as they did.

PS. I had a lot more during the 2008-2009 recession than I did in the 2000-2003 market rout. But I lost less the 2nd time around in percentage terms, but a little bit more in dollar amounts.

 

[Moemg]

I think there was a poll at some point late 2008 early 2009 that asked how much people had lost by range, and several answered losing more than 7 figures.

It might have been "Who joined the lost a million club " and we had several members . I was in the lost a crap load but not quite a million.

 

[TwoByFour]

This is not 2008. What people here are remembering is the equity market crash but the big news for 2007 and 2008 was not equities, it was credit. There was an almost total collapse of credit markets, worldwide, which then caused equities to tank. As far as I know we do not have a dangerous level of poorly secured debt as we did then. Any similarities between 2018 and 2008 are cosmetic, not structural.

 

[Another Reader]

Yes. There was a $1M club. I remember clearly.

I never lost that much, because I did not have as much as they did.

PS. I had a lot more during the 2008-2009 recession than I did in the 2000-2003 market rout. But I lost less the 2nd time around in percentage terms, but a little bit more in dollar amounts.

Come to think of it, we belong to that club. Lost a lot in the inherited IRA's that I had given to an FA to invest. Very depressing to see the values of the real estate drop between 30 and 60 percent. Fortunately, occupancy was stable and rents rose. A lot of people that lost houses in foreclosures and short sales still needed a place to live and had some income to pay for them.

I like to think I'm better positioned now due to better investments and deleveraging the real estate. Pensions have weathered previous storms and Social Security has been added to the income mix. Maybe this is the time I will find out if I'm right.