Honestly, how did we miss this?

[audreyh1]

I think many of us here feel like we can’t sell all our equities for a couple of reasons. 1 - in taxable accounts (which for us is >85% of our retirement assets) you would take a huge capital gains tax hit, reducing what is available to reinvest and 2 - whenever do you get back in?

Therefore, many folks are figuring out what amount of their portfolio they can “ride it out” with. For some folks this is X years of expenses, other folks this is choosing an AA that has Y% in fixed income, and stick with that, letting the equity side ride.

If you realize you are going to be invested for another 20 or 30 years or more, and can cover many years of expenses, riding it out with the rest of the portfolio isn’t so terrifying.

[brewer12345]

Quote:

Originally Posted by BeachOrCity Am I the only one buying a few SPY puts at this afternoons pricing?

Thought about it. With the Vix so high it is harder to make money that way.

[BeachOrCity]

Quote:

Originally Posted by RunningBum To be fair, you did call it a "dead cat bounce". Unless you are saying the US economy will completely fail, this is not that is. A "dead cat bounce" is a business that is doomed to go out of business and has had a huge drop, but has an uptick on optimism that the business will hang on or it's assets have more value that the stock market cap. In any case, I am one to stay the course, because I don't have a feel for just how much of a drop this should be causing.

What I meant by DCB was that it was kind of a false rally after a decline. I did not mean to imply that the USA will fail over the long term. I am confident we will recover, I just think there is further to fall before we do. Maybe I used the term incorrectly.

[Koolau]

I have to admit being surprised by the depth of the market slide. I did nothing to ameliorate my personal financial slide. Heh, heh, haven't even checked my overall stock position - just my favorite Pharma stocks - down, a bit, but not out! Starting with a low (about 30%) stock AA, I have pretty much ignored the market. I am hopeful it will all come back in months to a year or two. Good news: My RMDs will be taken from my GIF instead of my depressed stocks.

Having said all that, I expected the pandemic. I really did. I have a good doctor friend who has traveled the world, helping folks in situations not dissimilar to this one. Having Sunday dinner with her on 26 Jan, she "declared" that this was "going to be extremely bad" and there was not much we could do about it.

Why did the media ignore it for so long? My answer would sound political (even though true.) Of course, YMMV.

[dixonge]

Quote:

Originally Posted by RunningBum To be fair, you did call it a "dead cat bounce". Unless you are saying the US economy will completely fail, this is not that is. A "dead cat bounce" is a business that is doomed to go out of business and has had a huge drop, but has an uptick on optimism that the business will hang on or it's assets have more value that the stock market cap. In any case, I am one to stay the course, because I don't have a feel for just how much of a drop this should be causing.

I've never heard DCB used to refer to a business, just stock, and usually in reference to the market overall.

Dead Cat Bounce

[Badger]

I set a buy up yesterday if the stock goes low enough. It has been a solid company in which I already have some shares that pay a very large dividend. Still it is not a lot of money. More like sticking my toe in to test the water. If it does go to my limit or lower I may buy more. Other than that I will stay the course. No need to sacrifice cash in hand.


Cheers!

[Which Roger]

Quote:

Originally Posted by audreyh1 Therefore, many folks are figuring out what amount of their portfolio they can “ride it out” with.

That's something we should have all figured out a long time ago, when we decided what asset allocation would allow us to sleep at night. The only reason I would take action now is if I realized I had been wrong about my sleeping point, but I was confident that wouldn't happen because I wasn't wrong about it in 2008-2009.

[audreyh1]

Quote:

Originally Posted by Which Roger That's something we should have all figured out a long time ago, when we decided what asset allocation would allow us to sleep at night. The only reason I would take action now is if I realized I had been wrong about my sleeping point, but I was confident that wouldn't happen because I wasn't wrong about it in 2008-2009.

I did mean in the past ahead of this event, although I’m sure people have double checked recently that they still agree with their own “ride it out” plan.

[Rianne]

Quote:

Originally Posted by P.S. To dissect out “how did we miss this,” it might be helpful to look at it from the questions of: 1. What was the thought process that led to a final conclusion that this was going to be really bad, and should be acted upon? 2. How does one equip oneself to recognize this in the future? This is not a worse version than the flu. This is not even just a deadlier version than the flu. One can read the case series in the medical literature; this virus is terrifying in what it does to the human body. Add to that the transmission by subterfuge and the long lag time to COVID manifestation. There is no comparable outbreak in modern medicine. Flu is flu is influenza, whatever the strain. Flu v.__ will be a variant of what has occurred and what is understood. SARS and MERS were deadly, but I think even as those outbreaks were occurring, those viruses were better understood than SARS CoV2 today is three months into an outbreak. On top of what I knew that I didn’t know... there were all kinds of extremely disturbing videos leaked out of China.

OP, did you mean how did we miss this in terms of financial or health? This is a wake up call for a virus that kills, say 40% of its victims. How quickly will we react when that one comes to call? I envision, from this virus, a possible lifetime of lung problems. We're still not sure of immunity. And will it mutate to something much worse? Seems as though they have that tendency? Like flu H1N1.



At least health challenges of pandemics are in full view. We now know the actions we have to take. The missed preparedness was adequate PPE. Big mistake. In relation to the markets, the uncertainty drove it to practically collapse. Where's the testing, what is this thing? I had no problem self isolating. Connecting by social media is just fine by me. And we'll ride it out. Global collapse screws all of us anyway. There is no such thing as smart investing if that happens. What's the point if few or no humans are left?


Edit: Good article from 2011 exploring all our apocalyptic possibilities and how we managed to escape doom.
https://www.thestreet.com/personal-f...lypse-11222411

[Koolau]

Quote:

Originally Posted by Rianne Edit: Good article from 2011 exploring all our apocalyptic possibilities and how we managed to escape doom. https://www.thestreet.com/personal-f...lypse-11222411

Thank you so much for that uplifting article. My felling on the subject: If the gators don't getcha, the skeeters will, but YMMV.

[ExFlyBoy5]

Quote:

Originally Posted by Koolau I have to admit being surprised by the depth of the market slide. I did nothing to ameliorate my personal financial slide. Heh, heh, haven't even checked my overall stock position -

Speaking of which...how many folks haven't bothered to look at their current positions? I thought about it, but I think right now...ignorance is bliss. If I were to see where I stand, it won't change anything since I am still investing and not drawing down any $$$ and if I were to see the decline, I might freak out a little bit.

I did get a *little* good news. Property assessments are out this week and the home assessment has declined enough to save me about $300 this year on property taxes.

[Which Roger]

Quote:

Originally Posted by ExFlyBoy5 Speaking of which...how many folks haven't bothered to look at their current positions? I thought about it, but I think right now...ignorance is bliss. If I were to see where I stand, it won't change anything since I am still investing and not drawing down any $$$ and if I were to see the decline, I might freak out a little bit. I did get a *little* good news. Property assessments are out this week and the home assessment has declined enough to save me about $300 this year on property taxes.

I haven't looked. I have close to a 50/50 allocation, and stocks are down about 30%, so I'm confident I'd find that my total portfolio is down 15% +/- a bit. I'll take a close look in July which is when I always rebalance.

[Lisa99]

I got curious about our performance when the DOW hit 18k. Market was down ~25% we were down 9%.

I pulled 2 years of spending out in January for reasons completely unrelated to what’s currently going on. So no need to look again until I need to rebalance on June 1.

[SpinDoctorTX]

The news I follow was reporting on it quite a lot (npr, bbc, wa post, etc...) and knowing my skills at timing the market, I decided to take just a few steps. I saw that some of my previous under performers were at historic and inexplicable highs. I ditched 3 of them netting an average of 6% gain over two years, so moved 80k into spaxx (mm). I had my eye on some I wants as well as two funds I've picked that are even now performing markedly well. So when it tanked last week I bought into them all- but only 50k. I see another opportunity in the near future and I'll buy more of one- 10k maybe.

So far I've bought low, but even with big drops these will all likely recover over the time I have which is 5-10 years before I even have to dip into my IRA $.

Hopefully it'll all work out, but I do not see this situations resolving in weeks or perhaps not for months. Sadly, I made travel arrangements for a trip to Ireland in June. I fully expect that'll not happen. Thank God for travel insurance.

In Houston it is getting scary and I can't say enough bad things about the politicians managing this horror show. We were JUST put into lock-down... Better late than never, I guess.

Stay safe & healthy all.

[Badger]

Quote:

Originally Posted by SpinDoctorTX In Houston it is getting scary and I can't say enough bad things about the politicians managing this horror show. We were JUST put into lock-down... Better late than never, I guess. Stay safe & healthy all.

Politicians you say. That seems about right. It sounds like they are closing the barn door now that the horse has gone.



Cheers!

[Perryinva]

Quote:

Originally Posted by BeachOrCity What I meant by DCB was that it was kind of a false rally after a decline. I did not mean to imply that the USA will fail over the long term. I am confident we will recover, I just think there is further to fall before we do. Maybe I used the term incorrectly.

Ditto here.

[sengsational]

Quote:

Originally Posted by ExFlyBoy5 Speaking of which...how many folks haven't bothered to look at their current positions? I thought about it, but I think right now...ignorance is bliss. If I were to see where I stand, it won't change anything since I am still investing and not drawing down any $$$ and if I were to see the decline, I might freak out a little bit.

I haven't pulled since the end of February. My normal schedule is to look after month end, so I'm keeping the routine. I must say, these last few days have been killing me, not looking. But I have no plans to do anything, so why look?

[RunningBum]

One reason to look is to see if you can do any tax loss harvesting.

[pb4uski]

Quote:

Originally Posted by sheehs1 I do not think anyone can predict whether others "who jumped" will be worse off or not. As we all know, "jumping" is an individual decision, relative to age and whether it's possible to recoup with the years remaining. We are used to financial disruptions, recessions, etc. However this time we are in unchartered waters with a pandemic added to it as well as an economic "shut down". For me, this significant economic shut down has been the other half of the black swan. The foreseeable future is much harder to predict than before. I did not miss the signs but boy when it started, it sure happened fast. It took three years for this to happen in 1929 rather than the short three weeks this time. (read that somewhere). For full disclosure, while I had significant cash on the sides (over 20 years worth) and should have been comfortable riding this out, I liquidated my accounts but not before loosing most all unrealized gains on the books. Why did I do this? 1) I am 64 2) As I rode the market down, I was willing to loose the unrealized gains to see if this thing would correct. I was not willing to loose "principle". We all have to have "our line in the sand" moment. 3) The markets were shrugging off the Fed announcements of asset buying, zero interest rates, etc. 4) Wish I had listened to my gut and sold when the niggles started In January much like when I sold Boeing at 375. 5) I can live with the decision and can always get back in when things settle. Sometimes it is about preserving your wealth.

+1 to a lot of the above. I am bullish on equities in the long run and still am but this one does seem different and I'm thinking that the economic disruption and resulting recession will be really bad.

I wasn't so focused on principal, but it was disconcerting to see my total balance slide towards the number that I had when we retired. I shouldn't have been uneasy knowing that I have since withdrawn 8 years of spending, paying for a winter condo in cash, converting our one-car garage to a two-car garage with loft, paying off our mortgage, newer cars than when we retired, etc. but it was a psychological hurdle for me.

So I'm now at mostly cash and CDs for the first time since I was in my late 20s. I definitely plan to get back in but I want to have more information to assess how disruptive this recession will be before getting back into equities.

I guess the other thing that bothered me is that the market has been artificially propped up by easy money and the volatility of computerized trading is troubling to me.

[Fermion]

Quote:

Originally Posted by pb4uski I guess the other thing that bothered me is that the market has been artificially propped up by easy money and the volatility of computerized trading is troubling to me.

I am not exactly seeing the money getting any more chaste in the near future.