All I know is Bull...

[kgtest]

Apparently the Bull (depending on who you ask) is now 3454 days old.

This essentially means all I've ever known is a bull market. Not sure how that will change my future investments...but one would think to expect lower than historical returns if I started at the bottom...which I did.



Looks like S&P dipped to 666 on 3/2/2009 and has now recovered 329%. Thats an average of ~34.8% per year almost.

 

[Aerides]

You must be quite young, comparatively, to other investors and those here.

Thankfully, you have information and resources to know that there is far more to be learned from longer history, and far more potential for different future outcomes, than your own personal limited experience.

 

[Red Badger]

Sometimes, DW says that's all I know too!

 

[Bestwifeever]

For a lot of us, the bull market is all we've known in retirement (ten years ago on 8/8 for dh and me, so a bit beyond the 3454 days old statistic). We have enjoyed watching the conservatively invested nest egg grown in spite of some major spending on elective (not required) home renovations and lots of travel. We know intellectually it won't go on forever and we will then stop our major spending if we need to, but in reality, it will be a shock.

 

[candrew]

Sometimes, DW says that's all I know too!

Accusations of being turd-glutted have been leveled at me from time to time.

 

[MRG]

I remember '87. Our CIO came calling to say look the blank out! Are the online systems available?

I remember 2001. I was thinking I could retire soon. Yeah, it got better..... until when ? And when?

Bulls get old and die. Sometimes spectacularly.

 

[DrRoy]

Stick around. You will know the Bear too.

 

[marko]

This essentially means all I've ever known is a bull market. Not sure how that will change my future investments...but one would think to expect lower than historical returns if I started at the bottom...which I did.

I would expect that you've already seen "lower than historical returns" on a year to year basis over the past 10 years. What I mean is, despite the bull market, 2011 and 2015 were less than stellar (under 3% for me those two years).

Bears are also relatively short lived and a bear market does not necessarily mean something massive similar to 2008. (Someone here usually displays a bull/bear duration chart)

A well balanced AA should carry you through a bear, which is the whole point of it. "Bulls and bears make money....."

 

[flintnational]

To me, surviving a bear market is the triumph of logic/knowledge over emotion. Generally when folks bail on the market, it is because their emotions get the best of them and/or they do not know stock market history. If you have not done so, I suggest you read extensively about long term market performance/gyrations and reread your best books during down turns. Because the bear is coming. We just don't know when. Now is the time to prepare.


PS: When the market drops significantly it is generally related to an economic downturn. So, things really do look gloomy. Pundits will say, "things will never be good again". All signs and signals will say "sell". That's what you have to prepare for and resist.

 

[target2019]

I've been woke since 2005. I do know there were events from 1985-2004, but I was asleep in an investing sense. So all I know is the really big dip and the generally positive up-sweep since then.

 

[wmc1000]

Up, Down unless I'm selling, which I'm not it doesn't matter until that time. Before FIRE every month the same little bit went into the market going up and down but over time growing, growing, growing.

Someday I might need to sell but until then it is just a number.

 

[marko]

PS: When the market drops significantly it is generally related to an economic downturn. So, things really do look gloomy. Pundits will say, "things will never be good again". All signs and signals will say "sell". That's what you have to prepare for and resist.

Not only resist, but think about buying.

 

[Aerides]

Perfect timing, this article (AP, no paywall).

An interesting point in this is that You (OP, young investor who has never seen a Bull) are going to be a key actor in the next downturn. That is, how you and your peers react. Will you collectively panic, decide the music has stopped, and seal your losses by selling early? Or will you ride it out? It will be interesting to see.

https://apnews.com/4447e6969fb3478db5b8e0bb528ac0ec

 

[Lawrencewendall]

Obligatory Bull vs Bear

 

[corn18]

I like to add the 60/40 Bull vs. Bear chart as well. Illustrates the mitigation of downside risk that 60/40 brings, but the huge loss in gains when the bulls are running.

 

[copyright1997reloaded]

Not only resist, but think about buying.

I've actually used this methodology. That is, I have points in time where I was losing money hand over fist and my built-in "fight vs flight" mechanism was telling me "flight while you still have something left", and yet I managed to hold my nose and buy. I've gotten some of my best long term holdings that way.

Perfect timing, this article (AP, no paywall).

An interesting point in this is that You (OP, young investor who has never seen a Bull) are going to be a key actor in the next downturn. That is, how you and your peers react. Will you collectively panic, decide the music has stopped, and seal your losses by selling early? Or will you ride it out? It will be interesting to see.

https://apnews.com/4447e6969fb3478db5b8e0bb528ac0ec

They will panic. It is nature at work, markets can't bottom without the last flush.

 

[kgtest]

Perfect timing, this article (AP, no paywall).

An interesting point in this is that You (OP, young investor who has never seen a Bull) are going to be a key actor in the next downturn. That is, how you and your peers react. Will you collectively panic, decide the music has stopped, and seal your losses by selling early? Or will you ride it out? It will be interesting to see.

https://apnews.com/4447e6969fb3478db5b8e0bb528ac0ec

I agree. Panic and fear really exaggerate the hurt and pain when bear chatter hits the news reel.



Technically, the first time I entered the market myself was around 2008 when I finally had the option to receive a 401k match at an IT firm. I had the option at some construction jobs before, but those guys never really had the acumen to give me much advice.


Wasn't until I got into IT that I realized investing was something everyone should probably be doing. I was in some target date retirement fund back then and it was way too conservative, I was actually in some bonds that first year I invested, which in hindsight probably wasn't a bad thing.



I feel I'm experienced enough to know how to "not react" to the fear and panic. And if I ever see a 10% sale, with a bear imminent, I will be prepared to do everything short of starve myself to buy that dip.


Even though I didn't feel the pain of some of you older investors, I know it is inevitable. Not something I look forward to but its also an opportunity (unless you literally just retired).



With a good 13 to 18 years before I ER, I can't really worry too much what happens. I guess technically I would want to see a bear no sooner than about 7-8 years from now so it will be recovered and in bull territory when I pull the plug in 2031. But after seeing folks retire in almost every imaginable scenario, I am not losing sleep.



I obviously watched my dad jumping for joy in 2000 and basically getting shoved back into the seat when Pets.com went under lol. I still really don't know the lesson learned from the .COM bubble, it seems to me everything was just completely overvalued at the time.



The housing collapse, and those packaged derivatives of the 2005-2007 era were something else too, but those results made a bit more sense to me.



I guess I am glad I've learned my history lessons from others so far, but like I said...it's inevitable, I will see a bear run in my life.



I had originalyl booked a trip out to Wall St for October, thinking we would hit this milestone then. Had planned on snapping a pic of me riding that bull they have down there on Wall St. Looks like the milestone came a month or so sooner than my projection.



We decided to skip New York, with a 3 and 1 yr old people kept telling us we were crazy to try and visit the city.

 

[Oz investor]

i entered the market at the end of 2010 , mainly propelled by the share portfolio i inherited from a relative , otherwise i may have easily bought another investment property had my inheritance been solely from my mother's estate ( i had already learned a lot negative regarding banks and cash deposits )

technically some of the shares in the inherited portfolio were acquired around 1970 .

so the inherited portfolio ( 3 stocks ) are liable to survive the next crash , but might be rather badly mauled in the process ..

my strategy is to basically endure , and exploit , if i have enough surplus cash ( i suspect either massive inflation or some freezing of credit .. aka cash in the bank )

so actual access to cash at the right time will be pivotal

 

[MRG]

That's all my last manager knew too.

 

[marko]

If I'm reading the above charts correctly, the 1929 Bear lasted 2.8 years (worst ever) followed by a 13 year Bull.

Also the Bears seem to be much shorter lived ever since the 1980's.

Doesn't mean there aren't dips along the way or even within a Bull as in 2011 and 2015.

 

[RenoJay]

The thing to know about only experiencing a bull market is that, while intellectually you can study the past, when a vicious bear hits, what you'll experience is an emotional reaction. It's one thing to know intellectually that your investments will drop 50% one day, and then take 4-5 years to get back to even. It's another to witness it happen, in the middle of making life plans, and to stay the course. I have a hunch that lots of people will change their asset allocation after they've had the emotional experience of a bear market.

 

[Chuckanut]

Obligatory Bull vs Bear

I think this chart is a bit misleading due to what it leaves out, unless I am reading it wrong. (I find it hard to read on my laptop screen. )

It shows the Bear markets as being rather short term compared to the Bull markets. But, it leaves out the time needed to recover fully from the Bear Market.

Take the Bear of '73-'74. The Bear ravaged the market for almost two years. But, the market did not recover in real dollar terms until 1993 - 20 years to recover.

There's some food for thought in that history.

 

[RenoJay]

Perfect timing, this article (AP, no paywall).

An interesting point in this is that You (OP, young investor who has never seen a Bull) are going to be a key actor in the next downturn. That is, how you and your peers react. Will you collectively panic, decide the music has stopped, and seal your losses by selling early? Or will you ride it out? It will be interesting to see.

https://apnews.com/4447e6969fb3478db5b8e0bb528ac0ec

As a middle-aged Gen X'er, this market reminds me of the late 90's. Many of us never knew a bear market, and therefore took a long time to recognize it when the crash happened. So stocks took nearly three years to bottom out. Currently, I have some Millenial friends around 30 years old. They're always talking about crypto currencies. From my vantage point, I believe their bubble popped about 8 months ago, but they don't see it. My sense is that the older you get, the quicker you assess your viewpoint.

 

[marko]

The thing to know about only experiencing a bull market is that, while intellectually you can study the past, when a vicious bear hits, what you'll experience is an emotional reaction. It's one thing to know intellectually that your investments will drop 50% one day, and then take 4-5 years to get back to even. It's another to witness it happen, in the middle of making life plans, and to stay the course. I have a hunch that lots of people will change their asset allocation after they've had the emotional experience of a bear market.

True. But having gone through it a few times -- and with a few year's cash reserves -- it does get a bit easier.

The trick is to truly, truly believe that it will fully recover; then, it just becomes a matter of waiting it out.

I try to focus on my dividend/interest payouts during those times vs the portfolio value.

 

[corn18]

I think this chart is a bit misleading due to what it leaves out, unless I am reading it wrong. (I find it hard to read on my laptop screen. )

It shows the Bear markets as being rather short term compared to the Bull markets. But, it leaves out the time needed to recovery fully from the Bear Market.

Take the Bear of '73-'74. The Bear ravaging the market for almost two years. But, the market did not recover in real dollar terms until 1993 - 20 years to recover.

There's some food for thought in that history.

There are a few looooonnng peak-to-peak periods in there that are kindof scary. Heck, the 1999 crowd is just now getting back to pre-crash levels, adjusted for inflation.