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09-09-2008, 11:33 PM
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#41
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gone traveling
Join Date: Aug 2006
Posts: 994
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No worries here.
I was out of the stock market before I retired last year.
Out of debt too.
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09-09-2008, 11:34 PM
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#42
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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You'll be less happy in 45 days.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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09-09-2008, 11:37 PM
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#43
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gone traveling
Join Date: Aug 2006
Posts: 994
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09-10-2008, 02:37 AM
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#44
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Recycles dryer sheets
Join Date: Sep 2004
Posts: 108
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No disrespect, but there's recently been a thread about the ability to handle market girations. This is no different. A diversified asset allocation would help reduce the portfolio declines we're all experiencing.
Your portfolio will shift up and down by expenses covering one year or more. This will happen. This will never end. You need to be able to handle this. There's no pill one can take to remove this issue. Portfolios can fall 50% and then rebound. One needs to be able to ride it down and back up, in order to live off a portfolio during FIRE. If you cannot handle that, you cannot FIRE or stay FIRE'd, you'll just be fodder for another foolish newspaper article about how the TSE or the S&P 500 fell 30% and my retirement is ruined...
Your withdrawals cannot be completely connected to (temporary) portfolio values, you'll never know which way is up. The multiple your portfolio covers in annual expenses will bounce around. That's all part of the fun, but it beats working for a living, no?
Petey
Quote:
Originally Posted by vickko
...my FIRE depends on the TSE and it fell another 500 points today.
I now need to die 3 years earlier :-(
Best to hunker down, enjoy my classes, and hobbies, until brighter skies. I can't add to the camera collection, but I can shot more of my stockpile of film.
How are you weathering this?
Vick
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09-10-2008, 06:31 AM
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#45
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 9,072
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Quote:
Originally Posted by peteyperson
No disrespect, but there's recently been a thread about the ability to handle market girations. This is no different. A diversified asset allocation would help reduce the portfolio declines we're all experiencing.
Your portfolio will shift up and down by expenses covering one year or more. This will happen. This will never end. You need to be able to handle this. There's no pill one can take to remove this issue. Portfolios can fall 50% and then rebound. One needs to be able to ride it down and back up, in order to live off a portfolio during FIRE. If you cannot handle that, you cannot FIRE or stay FIRE'd, you'll just be fodder for another foolish newspaper article about how the TSE or the S&P 500 fell 30% and my retirement is ruined...
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If someone's portfolio drops by 50% during retirement, they don't have a diversified one.
__________________
Retired 3/31/2007@52
Investing style: Full time wuss.
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09-10-2008, 06:36 AM
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#46
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Full time employment: Posting here.
Join Date: Mar 2005
Location: Punta Gorda, FL
Posts: 828
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I'm nearing my first year of ER. I retired on the last friday in September at 50 years of age. I have to admit I'm not thrilled with the market but I knew that there would be down years. It has caused me to be alittle more carefull with my money and I will probably cut back alittle on the extras untill things turn around. If the market was up I would probably be more inclined to take nicer vacations ( do you still call them vacations if your not working?). We will still be taking some trips but they will be less expensive. I wish I could say that the market gyrations don't effect me but I still know I'm down over a years worth of expenses. I'm not going to be bailing out of stocks, and I may even be buying a small amount, but it does effect me.
We have no debt and enough comming in that all the basic's are covered even without our stock holdings, so I still sleep fine at night. But it does effect my spending on the extra's.
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09-10-2008, 06:52 AM
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#47
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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Quote:
Originally Posted by mb
W2R,
You seem to have become a lot more immune to market ups and downs in the last year or two!
MB
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Quote:
Originally Posted by cute fuzzy bunny
Its the Wellesley...it does that...
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Wellesley is a big help for me. Also, I have ironed out my asset allocation quite a bit in the past two years. Two years ago, I was in the accumulation phase with 80:20 (equities:fixed), and shortly before then I was 100% equities. I wasn't at all comfortable with that, but had to do it because of starting over with nothing but debt, a broken sofa, and an unreliable junk car in 1998 (divorce is ugly). It was a gamble that I had to try, and it paid off especially between 2003-2006.
Since then I have gradually moved to a 45:55 AA for retirement, which is an AA that I can live with. And yes, I love my Wellesley!
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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09-10-2008, 07:28 AM
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#48
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Thinks s/he gets paid by the post
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,455
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Quote:
Originally Posted by Want2retire
Since then I have gradually moved to a 45:55 AA for retirement, which is an AA that I can live with.
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Want2retire,
I am glad that you have survived the hurricane. Our AA is about 50/50 (equity/fixed income) but still quite volatile.
__________________
May we live in peace and harmony and be free from all human sufferings.
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09-10-2008, 08:08 AM
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#49
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,896
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Triple !!!
Go do a FIRECALC run with your diversified portfolio choice.
Look at the squiggly lines that show the portfolio balance over time. Show me one that does not drop 50% over a 30 year retirement.
Please.
-ERD50
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09-10-2008, 08:44 AM
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#50
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Buy, buy, buy!!!
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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09-10-2008, 08:48 AM
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#51
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Moderator Emeritus
Join Date: Jun 2007
Location: At The Cafe
Posts: 6,873
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Quote:
Originally Posted by FinanceDude
Buy, buy, buy!!!
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Yes, but. I have a chunk in Money Market earmarked for equities. Here's the dilemma, I'm retired and can't seen to get to that part of my do-list; point, click, invest looks like w*rk. I agree, buy now or buy soon.
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09-10-2008, 09:02 AM
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#52
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
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Ya wanna talk nerves of steel do ya - this Friday going cold turkey - driving vacation with no lap top, don't watch the market OR football(may crack on this one), or post on the forum(maybe, maybe not).
If the withdrawal doesn't put me in ICU somewhere - Kansas City to a week on the beach at Nags Head and driving down to a wedding in Diamondhead, MS and back to Kansas City - two weeks or so hopefully.
Hmmm - forum abstinance, no market watching, no football - wonder if the there is a pill for that.
heh heh heh - we know that will never fully happen but it's a great theory. .
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09-10-2008, 09:46 AM
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#53
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Recycles dryer sheets
Join Date: Sep 2004
Posts: 108
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I was thinking it terms of Buffett's famous quote, invest in equities only if you are prepared withstand a 50% decline. Of course, with a diversified portfolio the decline should be substantially less. This retire, portfolio drops 20%, panic, go back to work, is crazy. If one cannot handle that kind of volatility then one will never be able to retire! AKA you cannot make an omlette without breaking a few eggs.
Petey
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09-10-2008, 10:09 AM
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#54
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Full time employment: Posting here.
Join Date: Mar 2005
Posts: 557
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Quote:
Originally Posted by unclemick
with no lap top, don't watch the market OR football(may crack on this one), or post on the forum. .
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laptop....you can do without
not watching the market....may be good for you
no posts on the forum.....you can catch up in two weeks
But NO FOOTBALL...what are you thinkin'?...can't do it, shouldn't do it, I give you until Saturday night!
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09-10-2008, 10:59 AM
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#55
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Dryer sheet aficionado
Join Date: Apr 2006
Posts: 49
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I've been retired a little over 3 years now. DW right at 3 years. I have a Cola'd pension that covers 90% of my annual expenses. So I've been drawing on my portfolio a little less than 3% .
The market fall has bothered me some - but not really to the point of worry. I have a pretty heavily weighted equity asset allocation (around 80/20). Porfolito down around 11% YTD - The market down is not pleasant - but when I start to worry too much about it, I go through some mental math to show myself that if it dropped 50% and then stayed level for 10 years I'd still be ok - Well before then DW pension and SS will kick in.
Though I still wince when I see the market drops like Tuesdays.
Rick
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09-10-2008, 01:15 PM
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#56
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Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
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I'm just glad I decided to go from 90/10 to 60/40 last summer. I didn't have any special insight but after reading enough books and articles on asset allocation it was very clear I was taking too much market risk so close to retirement. I was FI so why push my luck?
We seem to be getting a little bounce back. Maybe my penance helped. I don't want to have to resort to Leviticus even though I know how much Lazy likes that.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
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09-10-2008, 01:47 PM
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#57
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2008
Posts: 7,438
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Quote:
Originally Posted by CuppaJoe
Yes, but. I have a chunk in Money Market earmarked for equities. Here's the dilemma, I'm retired and can't seen to get to that part of my do-list; point, click, invest looks like w*rk. I agree, buy now or buy soon.
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Are we at the lows for the year? Some guy on CNBC said be wary if it breaks through the 1200 at the S&P.
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09-10-2008, 02:53 PM
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#58
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 9,072
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Quote:
Originally Posted by ERD50
Triple !!!
Go do a FIRECALC run with your diversified portfolio choice.
Look at the squiggly lines that show the portfolio balance over time. Show me one that does not drop 50% over a 30 year retirement.
Please.
-ERD50
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Triple? :confused:
I just ran a starting portfolio of 1 mil using a 50/50 split with a 4% w/d rate and including SS earnings of 17k(pretty typical for a single person) and I didn't see anything close to a 50% drop in any year. I also ran one excluding SS and any w/d and I didn't see one under that scenario either.
__________________
Retired 3/31/2007@52
Investing style: Full time wuss.
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09-10-2008, 03:55 PM
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#59
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,896
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Quote:
Originally Posted by Dawg52
Triple? :confused:
I just ran a starting portfolio of 1 mil using a 50/50 split with a 4% w/d rate and including SS earnings of 17k(pretty typical for a single person) and I didn't see anything close to a 50% drop in any year. I also ran one excluding SS and any w/d and I didn't see one under that scenario either.
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Did you mean not a 50% drop in any single year? That is not what you wrote, and not what I responded to:
Quote:
If someone's portfolio drops by 50% during retirement, they don't have a diversified one.
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I responded to 'drops by 50% during retirement'. And much worse than that certainly happens with a 4% w/d rate.
From FIRECALC, with a $1M start and $40K spend, 50/50 mix:
Quote:
The lowest and highest portfolio balance throughout your retirement was $-223,952
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If the graph output changed w/wo SS, then you really do not have a 4% w/d rate in each case. You would have $40K spend minus the $17K income = $23K = 2.3% w/d rate. Then figure COLA.
But, if you meant that a diversified portfolio should not drop 50% in any single 12 month period, well, I sure hope you are correct! Hopefully, I'm in full survivalist mode if *that* happens
-ERD50
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09-10-2008, 07:51 PM
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#60
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 9,072
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Quote:
Originally Posted by ERD50
Did you mean not a 50% drop in any single year? That is not what you wrote, and not what I responded to:
I responded to 'drops by 50% during retirement'. And much worse than that certainly happens with a 4% w/d rate.
From FIRECALC, with a $1M start and $40K spend, 50/50 mix:
If the graph output changed w/wo SS, then you really do not have a 4% w/d rate in each case. You would have $40K spend minus the $17K income = $23K = 2.3% w/d rate. Then figure COLA.
-ERD50
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Well I guess you are correct under a true 4% w/d rate from your portfolio. I have always thought in terms of how much money do I need per year as a % of my portfolio. Using the numbers in my example, 4% would = $40,000 regardless of where it comes from. Pensions, SS or from the portfolio itself. Again in my little world I would be drawing down $40k per year from my portfolio for the first 8 years until I reach 62 when SS kicks in. Under that scenario, I do not see a 50% drop at any time. But under your example of w/d 4% from the portfolio plus SS, you could see a 50% drop.
FIRC would lead you to believe as shown in my example, that is the way one would look at it. I know under the old FIRC(and new) if you put in a 4% w/d rate and then add SS, it automatically nets out the two as you stated above. It doesn't maintain a 4% w/d rate and just add SS on top of it. My misunderstanding of the concept I guess.
__________________
Retired 3/31/2007@52
Investing style: Full time wuss.
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