What to do...

[CindyBlue]

Fine...I retire and the market crashes...sigh...
I saved diligently for 40+ years. I had enough to retire. I have most everything in a 403b at Vanguard. I've lost a lot the past two months. Any advice as to what I could do at Vanguard to not lose any more, considering that I don't really know what I'm doing? Should I just wait it out? Can/should I tell them to move the money to a more conservative place, and if so, how do I do that?

 

[Toocold]

What's your investment policy? In other words, what is your plan for your investments to make sure you are ok during times of volatility? In general, it's not a good thing to change your course in the middle of a storm. This usually leads to bad market timing (e.g. buy when the market is high, sell when the market is low).

 

[freedomatlast]

You haven't lost anything unless you sold. You still have the same number of shares. Don't make market moves based on emotion. I'm holding tight. I've lived through the downturns in '87, '08/'09. '99/'00, etc. Didn't sell then, not selling now. This too will pass. Then you can take a second look at your asset allocations and rebalance if you think it's necessary based on your tolerance for risk.

 

[Montecfo]

Stay the course

 

[CindyBlue]

Thanks for replying...I don't really have an "investment polity." And I don't understand the language very well, sorry. I am on a "path" at Vanguard that moves my money to be more conservative as I get closer to retirement, which they put at age 67 (I'm 65) Last year, I called and asked them to move it to the next year, i.e., more conservatively, and they did. I have been to one financial adviser, and he said I was on the right track.
If my money is in a 403b, and I'm not contributing to it anymore, does that mean that my losses are final, even when - if! - the market begins to climb back up again?

 

[Franklin]

Stay the course

+1.... First make sure you have a years worth of cash then stay the course. Like u I retired 2 years ago and didnt see this coming. I've seen my egg get way smaller recently but you should ride this out. 6 months from now you will be glad you didnt sell. Hang tight.

 

[Aerides]

I'm in the do nothing camp.

I also have always kept a small cash position to cover 2-3 years of expenses, to avoid having to sell in a downturn. You only lose money if you sell at a loss. Otherwise it's just data.

 

[Toocold]

If that is the case, I wouldn't change. Best thing for you is to not look at your balance for a bit.

On your 403b question, it should go up when the market goes back up.

 

[CindyBlue]

I don't know what I'd do without you people here.
I have enough cash to get me through three years or more of expenses, if we don't get sick and so all of a sudden have a lot of expenses. In a year I'll be on Social Security.
Looking at the Vanguard statement they sent yesterday just shocked the hell out of me...I lost two years worth of living expenses in two months. I just don't want it to go down to nothing (can it)

 

[Aerides]

Looking at the Vanguard statement they sent yesterday just shocked the hell out of me...I lost two years worth of living expenses in two months. I just don't want it to go down to nothing (can it)

Don't look at statements. That's your first mistake

Assuming you are diversified, no, it can't go to nothing. You have cash, you put away the statements and ride this out.

 

[CindyBlue]

Ok, I have to breathe...I can do this...I can...
I did it in 2008, just put away the statements. But I was contributing then, something every month (a lot for what I was earning - we've always lived simply), so I figured it would go up eventually. Now that I'm not contributing, I was worried that it would just go down to nothing and I wouldn't have anything left, much less recover anything. I'm not withdrawing anything to live on yet, planned to do that at 72 1/2 (or whatever age it is now.)
I'm going to put away the statements and try to forget about them for a few months...

 

[Helen]

Ok, I have to breathe...I can do this...I can...
I did it in 2008, just put away the statements. But I was contributing then, something every month (a lot for what I was earning - we've always lived simply), so I figured it would go up eventually. Now that I'm not contributing, I was worried that it would just go down to nothing and I wouldn't have anything left, much less recover anything. I'm not withdrawing anything to live on yet, planned to do that at 72 1/2 (or whatever age it is now.)
I'm going to put away the statements and try to forget about them for a few months...

If you are 65 and won't need this money for 7 years then forget you even have this money tucked away. It's already being managed for you on an auto basis.

Enjoy your retirement, you did well!

 

[Jerry1]

Ok, I have to breathe...I can do this...I can...
I did it in 2008, just put away the statements. But I was contributing then, something every month (a lot for what I was earning - we've always lived simply), so I figured it would go up eventually. Now that I'm not contributing, I was worried that it would just go down to nothing and I wouldn't have anything left, much less recover anything. I'm not withdrawing anything to live on yet, planned to do that at 72 1/2 (or whatever age it is now.)
I'm going to put away the statements and try to forget about them for a few months...

I've found this downturn a great, albeit painful, lesson. Just to reiterate what has basically been said. Make sure you have enough cash to weather the storm and find a way to get comfortable with an asset allocation into equities that you'd theoretically be willing to lose - at least 50% of it. I'm working on all that now. I wasn't there before this hit.

 

[OldShooter]

Ok, I have to breathe...I can do this...I can...
I did it in 2008, just put away the statements. But I was contributing then, something every month (a lot for what I was earning - we've always lived simply), so I figured it would go up eventually. Now that I'm not contributing, I was worried that it would just go down to nothing and I wouldn't have anything left, much less recover anything. I'm not withdrawing anything to live on yet, planned to do that at 72 1/2 (or whatever age it is now.)
I'm going to put away the statements and try to forget about them for a few months...

Each time you weather one of these storms, you become more confident when the next one comes. Just remember what you learned last time, do it again, and if history is any guide all will be well.

 

[REWahoo]

I've found this downturn a great, albeit painful, lesson. Just to reiterate what has basically been said. Make sure you have enough cash to weather the storm and find a way to get comfortable with an asset allocation into equities that you'd theoretically be willing to lose - at least 50% of it.

That is precisely the lesson I had reinforced to me in 2008.

While I already knew it intellectually, I didn't really appreciate it until I experienced it first hand. At the time I did have sufficient $ in cash and bonds to fund several years of expenses and my equity allocation was at a conservative 45%. Even so, it was painful to watch my portfolio wither away and once it recovered, I gradually lowered my equity exposure to under 40%. Glad I did.

 

[Lsbcal]

Fine...I retire and the market crashes...sigh...
I saved diligently for 40+ years. I had enough to retire. I have most everything in a 403b at Vanguard. I've lost a lot the past two months. Any advice as to what I could do at Vanguard to not lose any more, considering that I don't really know what I'm doing? Should I just wait it out? Can/should I tell them to move the money to a more conservative place, and if so, how do I do that?

I think you should talk with a Vanguard advisor and understand your risk tolerance. That might involve getting the full picture of your finances and expenses and future plans/dreams. It sounds like you cannot tolerate a deep drawdown in retirement and maybe should revise your finances accordingly.

ADDED: The market just now is enjoying a bounce back. This might be a good time, right now, to revise your plans if you need too.

 

[LOL!]

You haven't stated what you are invested in, but it reads like a simple Target Retirement or LifeStrategy style portfolio. I doubt you have lost more than 10% to 15% of your portfolio and perhaps even less. I believe that because I always look at various asset allocations to see how they have performed.

Portfolios routinely lose 10% to 15% of their value every 3 to 5 years or more often. Perhaps you are not used to this, but it has been happening over the past 40+ years that you wrote about that you have been saving. It is going to happen over the next 40+ years, too, whether you live that long or not.

So, now that you know this is more or less normal and that you have been used to it without even realizing it, please step back and go enjoy yourself and stop looking at your Vanguard assets.

 

[RetiredAt55.5]

I think you should talk with a Vanguard advisor and understand your risk tolerance. That might involve getting the full picture of your finances and expenses and future plans/dreams. It sounds like you cannot tolerate a deep drawdown in retirement and maybe should revise your finances accordingly.

+1000

 

[pb4uski]

What is your current asset allocation?... that is the percentages in stock, bonds/fixed income and cash across all of your accounts that you plan to use for spending whether taxable accounts, tax-deferred or tax-free?

 

[SnowballCamper]

You haven't lost anything unless you sold.

This is why you have an asset allocation. If you "need" to do something, then rebalance. (it's likely out of whack a bit). Then you have done something in response to the current situation, and it's in accordance with your investment strategy.

 

[blueskyk]

Lots of good advice given here.

There is almost always a huge gap between knowing something in theory and experiencing it (examples abound). When it comes to the market and investments, I never found a lot of fear and worry in the theory. I did find it in the experience. I began investing in 1982 and rode all the downturns out based on wise counsel, only nipping and tucking a bit if necessary. It worked out well.

It's a skill that grows with practice but no one, including myself, really wants the practice

 

[mrfeh]

Stay the course

+1

In the years ahead, this will be a blip in the rear mirror.

 

[travelover]

Stop thinking in terms of "lost". Just stay the course and if you have enough to live on, quit worrying about it. It will come back and the only ones that will have "lost" will be those that panic sold.

 

[jebmke]

Ok, I have to breathe...I can do this...I can...
I did it in 2008, just put away the statements. But I was contributing then, something every month (a lot for what I was earning - we've always lived simply), so I figured it would go up eventually. Now that I'm not contributing, I was worried that it would just go down to nothing and I wouldn't have anything left, much less recover anything. I'm not withdrawing anything to live on yet, planned to do that at 72 1/2 (or whatever age it is now.)
I'm going to put away the statements and try to forget about them for a few months...

I retired at the end of December, 2007. You know what happened right after that, of course. Since you planned to wait for quite some time to withdraw anything, chances are good that things will recover along the way. It would be good if you could tell everyone what fund(s) you are invested in. The answers might be more specific if that information was known.

 

[CindyBlue]

You haven't stated what you are invested in, but it reads like a simple Target Retirement or LifeStrategy style portfolio. I doubt you have lost more than 10% to 15% of your portfolio and perhaps even less. I believe that because I always look at various asset allocations to see how they have performed.

Portfolios routinely lose 10% to 15% of their value every 3 to 5 years or more often. Perhaps you are not used to this, but it has been happening over the past 40+ years that you wrote about that you have been saving. It is going to happen over the next 40+ years, too, whether you live that long or not.

So, now that you know this is more or less normal and that you have been used to it without even realizing it, please step back and go enjoy yourself and stop looking at your Vanguard assets.

You are correct, it's about down about 11.4% from February. It just looks so bad on paper...sigh...

You gave me a lot of relief when I read your words here, that it's "normal" to go down that much. It's amazing, that if it loses that much every 3-5 years, how it ever increases (wry smile!)

I am pretty sure I won't need the money until I'm at RMD age, and also hoping that, at that time, it's all still there. I can make it until then, I hope!

Thank you for your calming words!