NW-Bound
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 3, 2008
- Messages
- 35,712
Ding ding ding!!! We have the answer.
This time is different!!
- Thread starter Hopeful
- Start date
Ding ding ding!!! We have the answer.
timeforgolf
Dryer sheet wannabe
- Joined
- Mar 25, 2018
- Messages
- 11
This time seems different. Not to sound like an alarmist, but financial preparedness is one thing. Psychological impact from large scale quarantines or product shortages is another. Let's hope we get a break.
Markola
Thinks s/he gets paid by the post
It’s different for me to own about 50% bonds and watching them do their job as ballast. Thanks bonds!
aja8888
Moderator Emeritus
You really mean to say that the bonds are the only securities that are not tanking badly!
Cayman
Recycles dryer sheets
- Joined
- Nov 14, 2015
- Messages
- 448
Absolutely. And it may.... and that's ok. It won't be particularly comfortable. Not knowing where the bottom was and when we'd hit it was especially hard for me in '08. Buckle up!
While I am still working with 10 years until FIRE, it is extremely difficult to stay the course. I keep having to tell myself about all the low price shares I am buying during this downturn, and not to panic sell, and lose money.
Ronstar
Moderator Emeritus
For someone still working and investing, this downturn is a good thing. You’ll be buying more shares than before with the same amount of investment dollars.
The crash of 2008 was a good thing for my 401k. It allowed me to buy more shares at lower prices, maxing out contributions up until my retirement in 2014. The result was that I had significantly more shares that increased in value during the recent run up.
DrRoy
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
In 2008 I was at 82% equities and something around 1.2 beta, so it was like 100% and a really rough ride. Now I am 58% and even beta. That's a lot better.
I did do some Roth conversion that priced at the close yesterday.
copyright1997reloaded
Thinks s/he gets paid by the post
Yes, compounding has really helped! On the other side, the 4% SWR starts to fall apart over many centuries of withdraws. That's why I still w*rk (although I do get the summers off and a nice break between Fall/Spring terms).
Ronstar
Moderator Emeritus
In an email from our FA:
"While assessing the impact of the COVID-19 virus on earnings and economic growth is still very much a fluid exercise, we would continue to remind investors that historically similar events have tended to have little long-term impact. Two recent examples that come to mind include the Ebola concerns in 2014 and the SARS outbreak in the early 2000s. While near-term demand is likely to be displaced and company supply chains may be disrupted as a result of the virus, over the intermediate and long term the economic impact from these types of events has generally seen a delay in growth, not a derailment. Further, governments and central banks around the world have already noted the potential impacts the virus could have on the economy, and may move to enact stimulus that could help offset some of the virus’ related weakness. As a result, we would caution against overreacting to headlines from a portfolio standpoint, and near-term volatility may even create opportunity for long-term investors."
"While assessing the impact of the COVID-19 virus on earnings and economic growth is still very much a fluid exercise, we would continue to remind investors that historically similar events have tended to have little long-term impact. Two recent examples that come to mind include the Ebola concerns in 2014 and the SARS outbreak in the early 2000s. While near-term demand is likely to be displaced and company supply chains may be disrupted as a result of the virus, over the intermediate and long term the economic impact from these types of events has generally seen a delay in growth, not a derailment. Further, governments and central banks around the world have already noted the potential impacts the virus could have on the economy, and may move to enact stimulus that could help offset some of the virus’ related weakness. As a result, we would caution against overreacting to headlines from a portfolio standpoint, and near-term volatility may even create opportunity for long-term investors."
It's human nature.
Corrections happen. They always feel like this, regardless of the reason.
Markola
Thinks s/he gets paid by the post
You really mean to say that the bonds are the only securities that are not tanking badly!
No, that’s not what I’m saying. I meant that at age 54 over the last 10 years we’ve ticked down toward FIRE from 100% stocks to 80/20 to 60/40 to 50/50. Before we got more balanced, swift stock downturns like this one were wilder to ride. This time the experience is different because our bonds are tugging the other way. To your point, I’d guess our home equity will tug the other way, too, since mortgage rates are trending down, and we have some cash. No doubt many other asset classes are acting as ballast to stocks, too. What are you experiencing?
harley
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
This time IS different. There's a likely end in sight, just based on the ebb and flow of viruses. There will be medical interventions that decrease the effect, and don't forget summer. Even the production disruptions will be temporary. So while the drop can be unpleasant to watch, it's not like the 2008 situation where everything was going to hell for an unknown period of time.
So, as an experienced observer of market gyrations (see my tagline), I'm going to wait it out, with just a few actions taken. I'll definitely do my Roth conversions early this year while the market is down. And I'll probably buy some more equities with available cash when I think the market is in the vicinity of the bottom. Nothing major, just tweaking around the edges.
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target2019
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Each time is different. There's the passing of time, especially our own. There have been pandemics, wars, and the kitchen sink, with dips and recoveries of various measure. It's unlikely that this time will overlay and match a previous time. That is why we plan for worst case, such as 50% equity drop.
Advised dad to get on his conversion. I moved some cash back onto the table. Slowly. Prepared to double down if i have to in the event of another 18% rout lol.
aja8888
Moderator Emeritus
Looking at my accounts, my VTSAX is down about 15% from this year's high. My bond fund (I have only one) is stuck in neutral (no NAV change due to this market drop).
My preferred stocks are not dropping more than 1 - 3 % and a couple are actually up.
My AA is 25/75, the 75 being CD's, Bond fund, MM cash, etc.
I am 76 and not risking much in the market.
Our home equity is whatever it sells for when the time comes (no mortgage). Home prices don't move much in Texas, maybe 2% per year these days.
NW-Bound
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 3, 2008
- Messages
- 35,712
So you should care less about money, and be more concerned about what you have less of.
Did Tax Loss Harvesting in taxable acct
VTIAX (Vanguard International Fund) >> VFWAX (Vanguard FTSE EX-US World Fund)
VTMSX (Vanguard Tax Managed small Cap Fund)>> VTSAX (Vanguard Total Stock Market Index Fund)
Will Rebalance next week if the rebalance bars get hit
Have a great Weekend!
VTIAX (Vanguard International Fund) >> VFWAX (Vanguard FTSE EX-US World Fund)
VTMSX (Vanguard Tax Managed small Cap Fund)>> VTSAX (Vanguard Total Stock Market Index Fund)
Will Rebalance next week if the rebalance bars get hit
Have a great Weekend!
Lisa99
Thinks s/he gets paid by the post
- Joined
- Aug 5, 2010
- Messages
- 1,440
Happy with AA and very glad I decided to do a relatively big sell in January instead of waiting until December.
I have long ago concluded that I am very much a glass half full kind of person. Hopefully it means that when the apocalypse comes that I will die happy
I took our annual withdrawal of funds in January. If the funds are still well down next January then we have enough in cash to carry us forward a year without any withdrawals. Next year we will both also start receiving our UK SS. Early 2021 DW will start her US SS. I plan to start my US SS in 2025, but can always pull the trigger before that if needed.
I took our annual withdrawal of funds in January. If the funds are still well down next January then we have enough in cash to carry us forward a year without any withdrawals. Next year we will both also start receiving our UK SS. Early 2021 DW will start her US SS. I plan to start my US SS in 2025, but can always pull the trigger before that if needed.
foxfirev5
Thinks s/he gets paid by the post
- Joined
- Mar 22, 2009
- Messages
- 2,991
Looking at my accounts, my VTSAX is down about 15% from this year's high. My bond fund (I have only one) is stuck in neutral (no NAV change due to this market drop).
My preferred stocks are not dropping more than 1 - 3 % and a couple are actually up.
My AA is 25/75, the 75 being CD's, Bond fund, MM cash, etc.
I am 76 and not risking much in the market.
Our home equity is whatever it sells for when the time comes (no mortgage). Home prices don't move much in Texas, maybe 2% per year these days.
Nice. Looks like a good plan.
Yes, it was a tough time!
@copyright1997reloaded must have had the foresight to buy shares in the Dutch East India Company during the Black Plague market downturn.
ugeauxgirl
Thinks s/he gets paid by the post
So in 2007/2008 I was fully freaking out. I was still working, had just lost my dad (and gotten a mid-size inheritance) and was terrified about what to do with that. Fortunately, I discovered some of the more rational investing sites like er.org, bogleheads, etc... I learned about asset allocation and lazy portfolios.
I put that into place.
The market did well.... Then I retired in 2014 and saw a few dips... not big dips like this week - but big enough.... but I stayed the course... checking for rebalance needs every quarter...
I guess this has paid off - because I'm relatively calm even though we've lost more in just this week than 3-4 years worth of withdrawals.... Portfolio is still higher than it was not too long ago - and definitely higher than when I retired.
The only bummer is that younger son (age 17) just bought in his first Roth for $1k this week... It's now worth $900. I'm not going to tell him. He's got plenty of time to recover the loss.
I put that into place.
The market did well.... Then I retired in 2014 and saw a few dips... not big dips like this week - but big enough.... but I stayed the course... checking for rebalance needs every quarter...
I guess this has paid off - because I'm relatively calm even though we've lost more in just this week than 3-4 years worth of withdrawals.... Portfolio is still higher than it was not too long ago - and definitely higher than when I retired.
The only bummer is that younger son (age 17) just bought in his first Roth for $1k this week... It's now worth $900. I'm not going to tell him. He's got plenty of time to recover the loss.
