REWahoo
Give me a museum and I'll fill it. (Picasso) Give
Been there, done that. 1st SS payment deposited to my bank account in February of 2009.
Fear and Greed !
- Thread starter frayne
- Start date
Been there, done that. 1st SS payment deposited to my bank account in February of 2009.
skipro33
Thinks s/he gets paid by the post
I was 52 in 2009 and over 75% in equities, planning to retire by 55. I could not find good advice as my funds were in a company 401K and 457 account. Anyone I spoke to told me they could not offer financial advice beyond that my plan 'looked good'. Very frustrating time! Luckily I was able to recover by earning more and working one more year, retired at 56. As my DW puts it, our money is "just enough" without SS and a 4% draw. I feel much better about my position now that I am turning 62 this year and have a 'Plan B' that won't force me into choices that are a retreat.
Spanky
Thinks s/he gets paid by the post
Another way to look at the possible decline is the gain required for recovery:
Decline Gain required
10 11.11%
15 17.65%
20 25.00%
25 33.33%
30 42.86%
35 53.85%
40 66.67%
45 81.82%
50 100.00%
60 150.00%
The recovery period could be quick or very long - who knows?
unclemick
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Ouch! Sure did. And that's another reason why I let those dang non-emotional Vanguard computers do my re-balancing.
heh heh heh -
.copyright1997reloaded
Thinks s/he gets paid by the post
The thing about market cycles is that they can go on far longer than you think. So calling the top (or the bottom) is a very difficult process. I personally think we haven't topped yet, but how close to "March 2000" or "October 1987" we are is a difficult to guess. Me? I'm guessing that we aren't there yet, maybe like mid-1998 or early 1999? Who knows.
What I do know is that it isn't necessary to make it a binary decision. Some posters decide they are nervous and therefore need to drastically reduce their equity allocation all at once.
I think (hope?) the market is going higher over the next year, but am a net seller. Why? Because my equity allocation had moved up to almost 70% (69%). That doesn't mean I have to immediately sell bunches of stuff. Instead, I sold a little (1/2 of 1%) to edge it own a little. As time goes on, I will continue this approach.
For reference, my age is 60 and I have a pension from previous mega corp (retired in 2009) and I am employed full time (teaching, at a considerably lower salary). My fixed position is overweight in cash equivalents (laddered CD's, inflation adjusted bonds). Between the mega corp pension and income from the fixed portion of my portfolio, I would have enough to fund retirement, so I sleep just fine at night. I have always run my overall allocation with a higher than typical cash position, but that also allows me to remain "in" when others get nervous and flushed out at the wrong time.
What I do know is that it isn't necessary to make it a binary decision. Some posters decide they are nervous and therefore need to drastically reduce their equity allocation all at once.
I think (hope?) the market is going higher over the next year, but am a net seller. Why? Because my equity allocation had moved up to almost 70% (69%). That doesn't mean I have to immediately sell bunches of stuff. Instead, I sold a little (1/2 of 1%) to edge it own a little. As time goes on, I will continue this approach.
For reference, my age is 60 and I have a pension from previous mega corp (retired in 2009) and I am employed full time (teaching, at a considerably lower salary). My fixed position is overweight in cash equivalents (laddered CD's, inflation adjusted bonds). Between the mega corp pension and income from the fixed portion of my portfolio, I would have enough to fund retirement, so I sleep just fine at night. I have always run my overall allocation with a higher than typical cash position, but that also allows me to remain "in" when others get nervous and flushed out at the wrong time.
USGrant1962
Thinks s/he gets paid by the post
Today I ran across this representation of the length of bull markets (found from a posting on Bogleheads). By their criteria we have room to run (greed). It is a "History of U.S. Bear and Bull Markets Since 1926" and this one is only average so far.
https://www.ftportfolios.com/Common...tentGUID=4ecfa978-d0bb-4924-92c8-628ff9bfe12d
https://www.ftportfolios.com/Common...tentGUID=4ecfa978-d0bb-4924-92c8-628ff9bfe12d
audreyh1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
That’s the length of bear markets from peak to trough, but doesn’t include time to recover to the prior peak. The S&P500 index didn’t recover it’s 2000 peak until Oct of 2007, just in time for an even bigger bear. The Oct 2007 peak wasn’t exceeded until 2013.
Total return including dividends will shorten the recovery time. By a year in the last two cases. VTSAX recovers its 2000 peak by late 2006 so around 6.5 years. The Oct 2007 peak is recovered by early 2012, 4.5 years.
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HighOnLife
Dryer sheet aficionado
As a new investor, I've heard the recent predictions from Vanguard about international markets outperforming US markets, and the importance of being globally diversified for the future. I realized all of my equities are domestic US, so I moved 10% of my portfolio to FTIPX, purely following this advice and not out of any real conviction of my own, which assumes that tax cuts will keep US markets healthy. Still deciding if this is me becoming more seasoned, or reacting to market predictions. I expect the international exposure to increase my volatility, and portfolio visualizer implies a lower return over time based on past data, neither of which thrill me, but I am now more diversified.
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I was here on this board during the last market crash 10 years ago, at the time I was in my early 30s and had a measly 200k portfolio and calmly declaring, "Stocks are on sale! Time to buy!" Now my retirement accounts alone have crossed 750k and I now know the icicles of fear my more experienced ER types were feeling back then. It's tempting to buy a crystal ball and try to market time when the stakes feel so much higher. Between my stocks and my rental property we can actually see bare bones FIRE from where we are at now, it starts to mess with your head a bit!
Absolutely! Sure, I am somewhat envious of those who had the nerve to be fully, or nearly fully, invested in equities these last 2 years (exactly the period of my retirement), instead of the pedestrian 45% I have been. But, had I been, I would have either sold to lock in some profits, or be sleepless.
I have to remind myself that if the market continues to climb, I'll be fine. And if it corrects, I'll be fine. Asset Allocation in conformance with risk tolerance, and an understanding of how long you have to recover if you get it wrong, are the keys, IMO.
unclemick
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Chickenheartedness. That's my grand theory. Having putzed in the market since 1966 one would think I have grasped the grit of 'Stay the Course' vs 'This Time it's Different'.
Going full auto 2006 with Target Retirement before the last downturn I had mastered emotion. Right?
heh heh heh - I did manage to stay the course but there was some tush pucker and short periods when I refused to check Mr Market.
Meadbh
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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You now have Loss Aversion, because you have more to lose.
SumDay
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I heard a great quote the other day: "The haves spend all their time worrying about becoming the have nots".
Beldar
Full time employment: Posting here.
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When the snow melts in Korea and there is good flying weather I suspect events may force the market to burp. But until then, I really like my quarterly statements
_B
Sunset
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I don't use stop-losses, they sound great in theory as the market declines it gets triggered, and I'm sure they work sometimes that way.
However, when the market drops suddenly, all sorts of orders to sell flood in, and not enough buyers know, so the price keeps dropping, it blows way past your sell number and finally gets bought.
Even in good times, it happens. Back in 2000 , everyone made money before lunch in the market. A fellow put in a stop loss order on a memory chip stock, went to lunch, and when he came back he found there was a 35% crash in the price for 2 minutes and then it jumped back up higher than previously. Of course his stop loss triggered part of the way down so he ended up selling far too cheap.
Let's be sure we're talking about the same thing
The blog misses the point by confounding average tax rates with marginal tax rates. By definition, any increase (or decrease) in profits is happening at the margins.
The blog misses the point by confounding average tax rates with marginal tax rates. By definition, any increase (or decrease) in profits is happening at the margins.
USGrant1962
Thinks s/he gets paid by the post
He also never explains the gap he identified between SEC-reported tax burdens and federal corporate tax revenues. If real there must be a reason.
Overall a very weak article.
