Good riddance, 2008.....

[Alan]

My mom has a Vanguard IRA -- when my dad was diagnosed as terminal in 2005, he cashed everything out into Prime MMF to keep it simple for her. But I started doing her investing for her a year later, and I slowly started easing some of it into Wellington and Wellesley which, when combined in equal portions come close to a 50/50 mix.

Actually, now I have her IRA as about 30% Wellington, 30% Wellesley, 20% MMF and 20% TIPS (it was down about 8% in all of '08). That gives her about 30% equities as of now, and I'm DCAing the remainder of the MMF into a combination of Wellington and Wellesley and the net result (when finished) will be about 40/60.

I think that is a good move. While I enjoy messing with the finances, DW has little interest, so keeping it simple has a double advantage - easy for her and stops me leaping from fund to fund.

 

[JOHNNIE36]

I started the year with a 50/50 allocation and I'm down 20% as of the close 12/31/2008. Now, what does 2009 have in store.

For me, it's 5.0 %. Capitol One 5 year CD through Fidelity. Rolled my 401k into a Fidelity IRA. I sleep really good at night. Wake up in the morning and only have to think about my tee time. So long to stocks.

 

[Bikerdude]

For me, it's 5.0 %. Capitol One 5 year CD through Fidelity. Rolled my 401k into a Fidelity IRA. I sleep really good at night. Wake up in the morning and only have to think about my tee time. So long to stocks.

You certainly were in the right place at the right time. I dodged a "bullet" in 2000/2002 but got caught with 2008. Going forward, I would be concerned with the amount of money being printed and the inflation to follow.

 

[DallasGuy]

-10.36% for 2008.....with about 65% in cash when the year started.

 

[Gumby]

-32% for 2008. Back to approximately year end 2006 levels and consequently sets my RE plan back by two years as well.

 

[rkser]

- 21% for the year,& don't like it one bit, but there is no other way to hedge

against inflation apart from investing for the future.

I am too lazy/not good at, at any venture apart from my regular day job.

There is no place other than the Market to save & invest. I do try to keep it

simple, with all in Index Funds from Vanguard


Regards

 

[Dawg52]

For me, it's 5.0 %. Capitol One 5 year CD through Fidelity. Rolled my 401k into a Fidelity IRA. I sleep really good at night. Wake up in the morning and only have to think about my tee time. So long to stocks.

Good for you. I hope some day I recover my losses and then can say the same thing. BTW, I saw where Abby Joseph Cohen is predicting a nice rally for 2009. She predicts the S & P 500 to close at 1150. That would be a 27% gain. Hope she's right, but she has been to optimistic before.

 

[Gumby]

The thing that really bothered me was that asset class correlations ran to 1.0 All that diversification provided absolutely no protection -- everything went down.

 

[freebird5825]

-24.7% YTD on a 50/50 AA, intentionally repositioned in summer 2007 from pre-FIRE 65/35 AA.
current AA has migrated to 45/55, still within my tolerances of target 50/50.
Riding the roller coaster, and haven't blinked.

 

[NW-Bound]

The thing that really bothered me was that asset class correlations ran to 1.0 All that diversification provided absolutely no protection -- everything went down.

Sure. That tells you something. That's everything went down except PAPER MONEY. Think about it. PAPER MONEY. The only difference between a $1 dollar bill and the $100 dollar bill is the two extra zeros that are printed. Did not even cost more ink!!! And people want to hold THAT!!!

Already having two houses, I am not going into real estate, though it does appear quite reasonable now. So, I only look at equities. In contrast with most people here, I usually have about 30% cash+Bond, 35% MFs and 35% individual equities, the latter I pick and follow.

In 2003, after losing 50% of my portfolio (due to tech stocks, but never dotcoms), I looked around to survey the landscape. At the same time that the US Marines toppled Saddam's statue in Bagdad, I observed that the entire natural gas sector plus the oil drillers/oil exploration were totally down in the mud. Not being a financial analyst, I simply did not understand how entire sectors could be down. Never being arrogant, I thought perhaps the street knew something I didn't.

So, I only bought only a couple of the strongest ones, such as Apache and Anadarko. I thought about sprinkling some money among the many weaker ones that were traded down around a few bucks. But then I refrained from it, still hurting from the losses of tech stocks that I loved so much, being an employee in that field myself. Still, I did not get out of the market, telling myself that two wrongs would not make it right, namely being heavy in tech stocks then getting out to cash at market bottom.

Apache and Anadarko did fairly well. But the lesser ones recovered much better and went up 10X. Yes, 10X. Had I sprinkled some money among them, I would do a heck of a lot better.

Now, looking around, there are so many stocks so cheap. I no longer care that much about tech stocks (wonderful but non-essential technology), but am salivating at old stodgy industrial stocks, such as chemical companies, tire and car battery producers, food growers, fertilizer producers. Looking abroad, I see mining companies, and later tar sand companies in Canada.

Cheap, cheap, cheap stocks.

BUY, BUY, BUY ...

Of course I may be wrong big, this time. It would be easier if I am not ER'ed and have a steady income to rely on to take more risks.

 

[Koolau]

For me, it's 5.0 %. Capitol One 5 year CD through Fidelity. Rolled my 401k into a Fidelity IRA. I sleep really good at night. Wake up in the morning and only have to think about my tee time. So long to stocks.

Only time I'll ever get to really brag to you guys and gals...so I will. Actually came out ahead this year at least doing back-of-the-envelope calc. That even includes subtracting my yearly draw - which was pretty big due to intensive remodeling projects.

OK, I didn't do it Johnnie's way (think more along the lines of stable value funds, and some rather 'esoteric holdings' I won't go into.) But I'm scared spitless about the inflation I figure all the gummint money printing is bound to cause in the next few years.

Still trying to slowly move into equities, but my % equities keeps going down due to the recent unpleasantness.

As Gumby pointed out, correlation of the usual asset classes is near 1. As NW indicated paper money (for crying out loud!) was good to hold in '08. It's enough to make me think there is NO way to protect oneself no matter how diversified they are. And, I freely admit I got lucky this year.

So, if it weren't for a modest pension and the 'hope' of SS, I'd probably be looking for a j*b. Wait! There aren't any.

What keeps everyone else so confident in their AA? I really do want to move into equities because of inflation, but this 'perfect storm' of '08 makes me wonder if that's such a good idea after all.

I know all the theory and I've read most of the recommended books (e.g., Random Walk...). But when it comes right down to it, where do I go to get the 'faith' to execute on all the theory?

 

[NW-Bound]

.
I know all the theory and I've read most of the recommended books (e.g., Random Walk...). But when it comes right down to it, where do I go to get the 'faith' to execute on all the theory?

Neither do I. So, I am still holding near 50% cash+MM+ I bonds, and have been DCA'ing into the various individual stocks I found interesting. Very slooowly now.

What happened in 2003 was that I started to buy a bit too soon, and kept losing money. So, I stopped buying (but did not sell!). I still came out OK, as my top in 2007 was nearly 3X my bottom in 2003.

 

[Tadpole]

I never do know exactly what number people are reporting so I will explain mine. I am 60 and my husband 62. Husband will retire in September.

The dollar value of my savings is down -2.32%
Subtracting out this years savings and contributions, in dollars, I am down -9.87%.

(Started DCA from 60/40 equity/bond&cash mid 2007. Completed DCA to 25/75 equity/bond&cash by 1/11/08. New contributions approximately 60/40 equity/bond&cash. Finished year with 20/80 equity/bond&cash. Some of bond funds chosen during DCA were bad choices and real losers. Coincidentally the balance at the end of 07 was also my all time high.)

Saw this at Calculated Risk and decided to stay put (read that frozen) for awhile:
http://dshort.com/charts/bears/mega-bear-quartet-large.gifhttp://dshort.com/charts/bears/mega-bear-quartet-large.gif

 

[dm]

My investments, stocks, bonds,and money market, are down 29%. Last year was also my first full year of early retirement.

My tee time is 11:00, life is still good!

 

[TromboneAl]

...buying $108,000 of Wellesley at $52.48/share. Bad timing, share price is now $44.57. In retrospect I should have kept the money in a MMF and DCA'ed over the year. C'est la vie

Yes, but if you'd done that, and it had gone up fast in December, you might now be saying that in retrospect you should have lump summed.

I moved my $106,000 this morning despite a power outage (I used this antique thing called a "telephone"). Scary to move so much at once, but my system is to do my rebalancing all on Jan 2. By following a predefined system, I avoid any regrets that might come from listening to or not listening to voices in my head (Ziggy type voices -- not crazy type voices).

 

[REWahoo]

Scary to move so much at once, but my system is to do my rebalancing all on Jan 2. By following a predefined system, I avoid any regrets that might come from listening to or not listening to voices in my head (Ziggy type voices -- not crazy type voices).

*I hear voices...

I am itching to rebalance and get in on these low prices.

Father Guido voices...

A real man wouldn't wait...

*S&P 500 on 11/20/08 when that was posted: 752
Today's opening S&P 500: 903 (+20%)

PS - I didn't have the guts to rebalance at that point either.

 

[calmloki]

*I hear voices...

....

Interesting. As for me,

 

[theloneranger]

Down 12.65% from last January 1.
Company stock is about the same as last year, though was up about 40% in mid summer.

 

[Alan]

Yes, but if you'd done that, and it had gone up fast in December, you might now be saying that in retrospect you should have lump summed.

I moved my $106,000 this morning despite a power outage (I used this antique thing called a "telephone"). Scary to move so much at once, but my system is to do my rebalancing all on Jan 2. By following a predefined system, I avoid any regrets that might come from listening to or not listening to voices in my head (Ziggy type voices -- not crazy type voices).

Power to ya, Al. I can never bring myself to DCA these days either. I used to spread out IRA and 401k contributions over the whole year etc. Nowadays my 401(k) contributions always go in as fast as I can get them in and my bonus goes into the IRA's as lump sums as soon as I get it in April.