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Length of time to recover our lost money?
10-12-2008, 10:26 AM
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#1
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Thinks s/he gets paid by the post
Join Date: Mar 2007
Posts: 3,323
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Length of time to recover our lost money?
Some of the people with financial backgrounds probably can guesstimate this one, but I understand that, during the Great Depression starting in 1929, those who left their money in stocks took alllll the way to 1954 to recoup the losses. Please correct me if I am wrong on that statement.
Anyway, is it going to take another 25 years to recoup all the losses many of us are taking right now, too? I am assuming so, but would love to hear what the finance professionals here think.
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10-12-2008, 10:31 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by Orchidflower
Some of the people with financial backgrounds probably can guesstimate this one, but I understand that, during the Great Depression starting in 1929, those who left their money in stocks took alllll the way to 1954 to recoup the losses. Please correct me if I am wrong on that statement.
Anyway, is it going to take another 25 years to recoup all the losses many of us are taking right now, too? I am assuming so, but would love to hear what the finance professionals here think.
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I am not financial professional, and of course it will depend on what each individual owns, but I very strongly doubt that large aggregates like the Dow will be down anywhere near that long.
IMO, there are some amazing bargains around in companies that essentially cannot disappear.
ha
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10-12-2008, 10:45 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by haha
but I very strongly doubt that large aggregates like the Dow will be down anywhere near that long.
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I'd vote for less than 25 yrs too, but certainly much longer than just a quick 2 - 3 year snap-back where we're sitting here in the autumn of 2011 talking about how glad we are that that's over with!
This assumes that during the next decade or so we solve major issues such as energy, water, food, inbound immigration, terrorism and the resulting cost to keep it in check, etc. Otherwise, we've just experienced a permanent adjustment downward in our aggregate wealth that won't abate ever, at least in terms of our lifetimes......
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10-12-2008, 10:53 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Sorry this is so vague, but last week I heard on CNN or FoxNews that Goldman Sachs was predicting the DJIA would be up 30% in the next 8 months and 40% in the next year. Wouldn't that be nice! Unfortunately, I've Googled to find verification --- without success...
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10-12-2008, 10:53 AM
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#5
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Thinks s/he gets paid by the post
Join Date: Mar 2007
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I saw on another post on this board regarding Suze Orman that she says this will be an L shaped recession--returning on the upswing around 2015. She could be right as every article on Marketwatch or from the Wall St. Journal--or any other media tv show or paper I have been able to get my hands on--says we will bottom somewhere around March or April of 2009 with a very slight upturn after that; so, we could just lope along until 2015 or longer.
...all I know is that I am a very unhappy camper lately...as in VERY....
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Please consider adopting a rescue animal. So very many need a furr-ever home and someone to love them! And if we all spay/neuter our pets there won't be an overpopulation to put to death.
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10-12-2008, 11:12 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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im betting on new high within 5yrs.... i hope!
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10-12-2008, 11:42 AM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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I track my net worth on a annual basis.
I'm working on my projections now.
I'm estimating from 1/1/09 to 12/31/15 should equal 1/1/08 - so 7 years
#s after living expenses.
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10-12-2008, 11:43 AM
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#8
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Thinks s/he gets paid by the post
Join Date: Oct 2004
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Well, if I was smart enough to get out before this mess I'd be able to predict the recovery. Since I'm still all in, I'll pass on any predictions.
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10-12-2008, 11:45 AM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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There is a mountain of money on the sideline now. Eventually people will be wanting to get the money earning again. And I expect that to be sooner than later.
However, for large cap indexes get back to the previous high the last time took almost 7 years from when the decline started.
I think investor will move money back in in the next 12 months if things stabilize. But meaningful gains are probably a ways off. The S&P 500 almost has to double to get back to its high.
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10-12-2008, 12:16 PM
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#10
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Full time employment: Posting here.
Join Date: Dec 2005
Posts: 567
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I think it will happen pretty quickly and those on the sidelines will see it up a few weeks then wait to see if it is truly going up then get in after the main upswing. People are putting money in 401K and IRA or ROTH and will not all stop yet those trying to live on investments will pull out less. Some of us will work years longer to be sure we have plenty in spite of this setback. For those of us not yet retired but about ready this was a good wake up call not to count on high returns and really think about risk tolerance. I have a very high risk tolerance and even with this downturn haven't considered selling low.
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10-12-2008, 12:20 PM
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#11
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I'm going to say this for the umpteenth time.
If you reinvested dividends, your break-even point from the 1929 peak would have occurred in 1944, NOT 1954.
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10-12-2008, 01:16 PM
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#12
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I'll also wager that if you rebalanced regularly, you would have recovered more quickly.
I cannot seem to understand what an "L shaped recession" means. Anyone?
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Al
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10-12-2008, 01:29 PM
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#13
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Gone but not forgotten
Join Date: Aug 2006
Posts: 6,924
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Quote:
Originally Posted by TromboneAl
I'll also wager that if you rebalanced regularly, you would have recovered more quickly.
I cannot seem to understand what an "L shaped recession" means. Anyone?
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Down sharply
Stay low
Stay low
Stay low
Stay low
Up sharply
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10-12-2008, 01:31 PM
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#14
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Quote:
Originally Posted by ziggy29
I'm going to say this for the umpteenth time.
If you reinvested dividends, your break-even point from the 1929 peak would have occurred in 1944, NOT 1954.
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Not to quibble, but in what sense is a retiree re-investing dividends? Quite the opposite- she is usually taking out more than dividends in living expenses.
There are many places to learn how to save and make money, but not very many devoted to living off that money.
Ha
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10-12-2008, 01:34 PM
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#15
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Dryer sheet aficionado
Join Date: Oct 2008
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Warren Buffett was recently quoted saying that in 5-10 years we would look back on this period and the extraordinary buys available at this time.
No surprise there but I think it's worth noting he did not say 3-5 years
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10-12-2008, 01:39 PM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by haha
Not to quibble, but in what sense is a retiree re-investing dividends? Quite the opposite- she is usually taking out more than dividends in living expenses.
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If you had 15 years in a safe "bucket" for income, then you would have been able to reinvest all the dividends because you wouldn't be selling stocks for income for many years. This is one of the benefits of a "buckets of money" type of approach to asset allocation in and approaching retirement.
Plus, I didn't think the scenario we were talking about was strictly within the context of someone already retired.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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10-12-2008, 01:40 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Very important to realize that what people usually say reflects their prejudices and failure to understand reality, much more than it has any meaning that reflects the outside world.
One of the reasons that world leaders are trying so hard to contain this mess is that a real business collapse would lead to severe social and political dislocation in almost all countries.
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"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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10-12-2008, 01:50 PM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by TromboneAl
I'll also wager that if you rebalanced regularly, you would have recovered more quickly.
I cannot seem to understand what an "L shaped recession" means. Anyone?
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RGE - The US Recession: V or U or W or L-Shaped?
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Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
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10-12-2008, 02:05 PM
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#19
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Thinks s/he gets paid by the post
Join Date: Mar 2007
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Ziggy29: The article I read must have meant without reinvesting then. Thanks for the input. I have it recorded, and, at least, you won't have to correct me again. Got it!
__________________
Please consider adopting a rescue animal. So very many need a furr-ever home and someone to love them! And if we all spay/neuter our pets there won't be an overpopulation to put to death.
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10-12-2008, 03:07 PM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by Fastfade
Warren Buffett was recently quoted saying that in 5-10 years we would look back on this period and the extraordinary buys available at this time.
No surprise there but I think it's worth noting he did not say 3-5 years
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In 10 years WB will be 88 years old. He doesn't have to plan for 40 years of ER. He has a huge NW even now and cannot possibly run out of money during his lifetime. How does this affect his risk tolerance?
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