How do you feel now? (4 Months later)

[youbet]

I had my assets bucketized...........
I know it’s a mind trick, but it works.

Yep. The biggest flaw in using so-called "buckets" is believing you're actually doing something different than if you held exactly the same mix of investments but simply tracked your total AA. The fact you understand you're organizing (in your mind) your assets in a way that propped you up in times of decision induced stress, but you haven't actually done anything different with your investments, marks you as "getting it."

I do a tiny amount of so-called bucketing, but mostly for DW's benefit. We have enough cash equivalent funds at our local B and M bank that, when coupled with pension + SS, would carry us for 2 - 3 years. DW manages that and only looks occasionally at the bottom line of our brokerage accounts which I manage with an AA outlook. Keeps her from fretting about market variation. Keeps me from wading into too many day to day budget details.

Probably shouldn't call it a "bucket" approach. More like a tub and a thimble.

 

[W2R]

Lot of people sold in March or changed allocation strategy by reducing equity exposure. Most did not change their strategy.

How do you feel now about your decision?
If you sold or reduced equities when do you plan to get back in?

I will ask same question end of next month.

I didn't sell anything or change my AA. As usual I just did nothing except live off what is in my bank accounts right now plus SS+mini-pension. (I always withdraw the year's spending money from my portfolio right before rebalancing, the first week in January).

I haven't been posting my gleeful announcements of having more money in portfolio+bank accounts than ever before, because I thought maybe those posts were getting annoying to some people. On the other hand, why not be gleeful when we can manage it, during this awful pandemic? Let them eat cake. So here goes:

Last Tuesday, July 21st, the sum of my investment portfolio plus bank accounts was not just doing fine, but actually totaled MORE than I have EVER had in my entire life!!!!

I think that is pretty doggone cool considering the state of the world, and how the news media seems to think that it will crater the stock market. Seems we buy-and-hold'ers are doing just fine, thank-you-very-much.

Another thing I like about doing nothing, is that it takes very little effort and fits in with my retirement lifestyle and philosophy.

 

[TechLead]

I think that is pretty doggone cool considering the state of the world, and how the news media seems to think that it will crater the stock market.

I don't see media doing anything to "crater" the stock market.

 

[W2R]

I don't see media doing anything to "crater" the stock market.

I wasn't clear about what I meant by "it". I did not mean the media; I meant the state of the world. The news media seems to think that the miserable state of the world (pandemic, riots, etc) will crater the stock market. And let's be real - - other than one initial blip back in February, it HASN'T.

I think such beliefs are based on the idea that we can predict with complete accuracy what the market will do. And I don't know of anyone who can do that. If they could, they would be fabulously wealthy and probably would be living on their own tropical island away from the world, or something like that, and I would speculate that they might not be working every day as a journalist.

 

[pb4uski]

....

...

I feel a lot better about having very little in equities now.

 

[youbet]

As usual I just did nothing.........

Another thing I like about doing nothing, is that it takes very little effort

Pretty much our strategy, as it was in 2008 - 2009. I've allowed our AA to drift a bit towards equities and am holding more cash equivalents and short term instruments inside the fixed portion, but that's about it. 50/45/5 (or so) has drifted to 54/35/11 as of COB Friday.

 

[TechLead]

I wasn't clear about what I meant by "it". I did not mean the media; I meant the news. The news media seems to think that the miserable state of the world (pandemic, riots, etc) will crater the stock market. And let's be real - - it HASN'T.

I think such beliefs are based on the idea that we can predict with complete accuracy what the market will do. And I don't know of anyone who can do that. If they could, they would be fabulously wealthy and probably would be living on their own tropical island away from the world, or something like that, and I would speculate that they might not be working every day as a journalist.

Once Fed announced "unlimited" QE everybody (including News) realized that large US companies will do just fine.

They will soon electronically print another 2-3 Trillion dollars Lot of it is sitting on big banks balance sheets. It will be interesting to see what happens to value of dollar if that money finds its way into the peoples hands. Dollar already significantly declined vs other currencies.

 

[W2R]

Yea once Fed announced "unlimited" QE everybody (including News) realized that large US companies will do just fine.

They will soon electronically print another 2-3 Trillion dollars

I refuse to get into a partisan political discussion.

I was talking about the NEWS MEDIA which still predicts the market is getting ready for the biggest crash since the Great Depression. I don't think you, or the news media, or even people like Warren Buffet can predict what the market will do or why. Well, except in retrospect. Everyone's a genius when it comes to predicting things that have already happened. .

 

[sengsational]

The "W" word, uttered on July 26, 2020? Oh, my!

As to the question, back when it was in Wuhan only, I said to myself "this is going to sweep the world and have a big impact". Not formally, but I decided I was going to ride it out with my existing asset allocation targets. That's what I have done.

But in the first down draft (not this upcoming one, caused by the "W" word), I sat down and wrote an essay about changes I could make and directions the market could take. I wrote it because I really couldn't remember what I was thinking at Wuhan only time, and wanted a record of my thinking at that other moment in time. The upshot was that I couldn't stomach the possible eventuality of breaking my stick with the AA rule, then have the market go against that move. So I did rebalance (and the volatility made it more challenging), but stuck with the existing target AA.

 

[pb4uski]

Except, if memory serves me correctly, there has been pretty high historical correlation between W2R posting

and market crashes.... that is my signal.

 

[youbet]

I don't see media doing anything to "crater" the stock market.

W2R didn't say the media was doing something to crater the stock market. She said "the state of the world, and how the news media seems to think that it will crater the stock market." I agree with her. I frequently hear/read the media expressing the opinion that relations with China, internal political turmoil in the USA, COVID-19, aggressive special interest groups, etc., all have the potential to abruptly alter the investment markets.

 

[Lawrencewendall]

The "W" word, uttered on July 26, 2020? Oh, my!

It was an image so it doesn't count.

 

[Sunset]

I'm with pb4uski above. I also feel just fine, except for a few aches and pains now and then.

+1

I only sold within IRA and ROTH accounts (due to tax reasons), and only those things that were pretty close to the Feb highs , off by about 10%->12%.

Yes, a little FOMO regret as those same things are higher than Feb, and if I had sold them now I'd have an extra 30->40 K (big approximate).

We are still in the market with taxable accounts and 401K, but are now more conservative from our 85%->90% stock allocation. It was a great run for the last 10 yrs, so now it's ok to be more conservative.

I actually feel calmer when I hear the market drop some %, I don't even look.

 

[Splash]

For the most part, I held and it feels good.

I trimmed a little from our equity holdings since the market recovered; we are now at 45/55. My one regret is that I didn't convert more to our Roth IRAs. I made 2 conversions in March each for 10% of our 2020 planned conversions. The market came back so fast and has stayed up that I wish I would have been more aggressive. Then again, the year's not over.

 

[jebmke]

I'm good; I did some minor tax loss harvesting and cleaned out a couple of tax-inefficient holdings around the bottom. I'm about at target allocation now. Unless the bottom falls out again, nothing to do now but sit back.

 

[RunningBum]

I'm fine. I went from 60% equity to 55% by selling off some losers and only partly buying back other stock funds. The recovery has me back to 57.5% stocks. If it keeps running, I'll be back at 60/40. It we take a big drop, I'll buy more stock to get it back to 60/40. For now being 2.5% off my AA does not bother me.

 

[iloveyoga]

I feel great. I already had a fairly conservative allocation, so made no changes. But I did realize that I really don't need to worry as we can easily live on our incoming pensions and SS. And no travel has certainly been a money saver.

 

[aja8888]

+1

I only sold within IRA and ROTH accounts (due to tax reasons), and only those things that were pretty close to the Feb highs , off by about 10%->12%.

Yes, a little FOMO regret as those same things are higher than Feb, and if I had sold them now I'd have an extra 30->40 K (big approximate).

We are still in the market with taxable accounts and 401K, but are now more conservative from our 85%->90% stock allocation. It was a great run for the last 10 yrs, so now it's ok to be more conservative.

I actually feel calmer when I hear the market drop some %, I don't even look.

I only sold in my IRA so no tax consequences. Taxable is mostly CDs and a municipal bond fund.

I did buy into a bond fund (ISTB) in the IRA which is mostly treasury paper. I am going to be 77 soon and won the game so no sense gambling as I can't make it back if the equity market crashes for a decade or so. What's in equities now (15%) is a lump of SCHB and 7 preferred stocks. I'm sitting on a lot of cash and that's OK.

 

[jollystomper]

The only action I took was to do some tax loss harvesting. I got lucky as I did it near the March bottom and reinvested what I sold in a different area. The gain of the reinvestment has far outgrown the loss I took.

As I have mentioned before, I had always assessed, during "good" market times, what my portfolio values would be at 50% of the equity prices, and set my AA to be comfortable with that. The drop helped me confirm that I would still sleep at night.

During the time the biggest financial move I have made was paying off our mortgage. I have no idea how the markets will go in the "short" . But my own personal feeling is having no debt is a good thing, no matter what happens in the short run.

 

[OldShooter]

... How do you feel now about your decision? ...

I won't know for five or ten years. Then I'll be able to look back and see how things turned out.

My new favorite Buffett quotation: "Lethargy bordering on sloth should remain the cornerstone of an investment style."

 

[brewer12345]

I sold/shorted in January and February, still largely in cash and short term bonds. Fine and dandy. Wish I had jumped on gold, otherwise just waiting for the inevitable fallout.

 

[MRG]

Except, if memory serves me correctly, there has been pretty high historical correlation between W2R posting

and market crashes.... that is my signal.

More powerful than a pandemic.

 

[harllee]

I sold all my equities in May and I am sleeping well and feeling good about my decision. I may or may not get back into some equities some day (I am age 69 so I may decide not to). Personally I think we are in for major economic problems in the United States, we ain't seen nothing yet.

 

[calmloki]

Gee - thanks a bunch W2R. I'm busily trying to convince my gal to let me ease out of rentals and sell the hard assets that have done so well during all the various crashes. She is enquiring just what we are to put the property sale proceeds into that will make a fraction of what the rentals make. And now - now, as we are reviewing an apartment sale offer - NOW you pick to utter the big W~~~ word?

Duck and cover folks - Monday is coming and the voodoo queen augurs ill for the market!

 

[brett]

Stayed the course with no changes. Did the same on the last downturn and the one before.

I believe that a downturn is the time to buy, not the time to sell.

Not buying this time around, but not selling either. I know a few people who elongated their retirement plans by panic selling during 2008/9 lows, moving in to to fixed, and not enjoying the subsequent gains.