Newly Retired & Survived First Bear Market

[street]

In a bear attack play dead, don't run, stay put and weather the storm.

You have seen many attacks and know the protocol to survive the bear attack.

[copyright1997reloaded]

Quote:

Originally Posted by street In a bear attack play dead, don't run, stay put and weather the storm. You have seen many attacks and know the protocol to survive the bear attack.

Then again, another approach is to whack your friends leg with a stick so that you can outrun him. "When there are two of you, you don't have to outrun the bear, you just need to outrun your companion."

Perhaps the market analog to this is to sell early, before the panic?

[RobbieB]

Selling in January has worked well for me so far. I sorta estimate what the new year plan is and fund accordingly in January. This year I took extra out for the boat and you know what happened next. Well, now I'm only down 5.5% YTD, so my (January) timing worked well again.

Sell high!

[Souschef]

Quote:

Originally Posted by audreyh1 Welcome to the club! Ha, ha, I retired in August 1999. Then 2000 hit, bear lasted until Oct 2002! Market just kept going down, down, down. Then 2008 hit! This one was far worse! Technically started in Oct 2007, it did not reach bottom until March 2009. This was the “Great Recession”. Economic recovery took a long time. The ones since have been shorter .

Thank you for clearing up something for me. I retired in January 2009 and rolled my 401K into a mutual fund. It was about $185K, and is now worth $1 mil. Apparently through dumb luck I got in at the bottom, it certainly was not due to market timing.

[MarieIG]

I'm newly retired as well, but the bear is not my main concern, inflation is. IMHO, it has raised prices permanently, and even when it slows, the base prices, i.e. of food and other necessitates have been permanently raised.

[DawgMan]

Quote:

Originally Posted by RetiredAt49 I officially retired 1/1/2022 at the age of 49. I watched our professionally managed brokerage and IRA's drop 26% (including fees) and I survived I must say that retiring at the peak of a bull and watching your portfolios drop 26% was rough... so much so that I fired our AUM financial advisors (thanks to this website and bogleheads) and we rained in our expenses a fair bit. We are lucky because we have substantial rental properties (they don't generate a ton of income but they are worth a lot of money if/when we needed to sell them) which is why our brokerage and IRA's are in 100% equities. Curious to hear your perspective/thoughts especially if this was your first bear market... Hopefully nobody pulled out of the market because (fingers crossed) it's headed back up!

Yep, retired this year at 58, but set up a 10 year bond ladder to cover planned spend just to sleep well at night. Everything else is in equities. Since my spend is highly discretionary, I have other levers to pull if needed. That said, the current drop in the market is really messing up pretty graph showing my net worth growing by 5% a year!

[DawgMan]

Quote:

Originally Posted by RobbieB Yeah, if you believe in equities, you hold on through the whole roller coaster eh? Equities funded complete inside and outside home improvements with 3 sheds, landscaping and irrigation. New furniture, 2 new cars and domestic first class travel. Not to mention putting DSD through UCLA And the best for last, Dream Catcher; Pops told me when I was young, after you have the house and the cash fund, start buying stocks, that's where you'll make the most -

Like your style!

[ImThinkin2019]

Quote:

Originally Posted by street In a bear attack play dead, don't run, stay put and weather the storm. You have seen many attacks and know the protocol to survive the bear attack.

This is essentially what we have done. Not because we're smart - just because we did not know what else to do. I think this is sort of what Warren Buffet recommended for the average investor. In my head I call it mental paralysis. It worked for us.

Just kept investing. Inertia, not genius.

The only difference now is we don't have jobs so no longer get paychecks from someone else. Just from ourselves and eventually the US Govt.

[Lsbcal]

Quote:

Originally Posted by RetiredAt49 I officially retired 1/1/2022 at the age of 49. I watched our professionally managed brokerage and IRA's drop 26% (including fees) and I survived I must say that retiring at the peak of a bull and watching your portfolios drop 26% was rough... so much so that I fired our AUM financial advisors (thanks to this website and bogleheads) and we rained in our expenses a fair bit. We are lucky because we have substantial rental properties (they don't generate a ton of income but they are worth a lot of money if/when we needed to sell them) which is why our brokerage and IRA's are in 100% equities. Curious to hear your perspective/thoughts especially if this was your first bear market... Hopefully nobody pulled out of the market because (fingers crossed) it's headed back up!

As others have noted we are not out of the woods yet. Suggest you look at the chart I updated on 8/12 (midway down the page) here:

https://www.early-retirement.org/for...-114071-5.html

[COcheesehead]

Second leg down in a bear is the killer.

[target2019]

Congratulations on ditching the FA.

The 200-day trend is still down for growth, but it appears for now that the worm has turned.

What may drive you a bit crazy is the stock market going sideways for an extended period. Value has been doing that for a year.

I guess we'll have to wait for the future!

[FLSUnFIRE]

I'll wait to celebrate for when my inflation adjusted available withdrawal doubles without increasing my withdrawal rate.... not sure a year (or 6 months) after FIRE gets one past the threat of SOR impacting ER... especially those of us in our 40s. Statistically, I should have some BTD$ eventually, but it'll be a while IMO.



So far, my portfolio has gone down in absolute and even more in inflation-adjusted value. Not that it causes me any stress but it would be more fun if it went the other way.

[JohnT]

My investments are now down about 8% from the peak earlier this year. I was down 15% - so nice little recovery in August. Let's see if it continues into the Fall.

I sold a bit last week to build up my cash position, otherwise am in good shape.

[aja8888]

Quote:

Originally Posted by MarieIG I'm newly retired as well, but the bear is not my main concern, inflation is. IMHO, it has raised prices permanently, and even when it slows, the base prices, i.e. of food and other necessitates have been permanently raised.

My bold. This is a valid point.

I don't see grocers' lowering prices anytime soon. The yogurt I buy that went for $1.12 per container to 1.96 per container won't be reduced. Inflation may be pushed down to 2% (FED's target) and prices will continue to rise from the new base.

As retirees in our late 70's, I am concerned that we won't be able to maintain our current lifestyle as prices march up. Health care is rising way faster than daily costs. Even with good Medicare plans, we are spending over $1,000/month on healthcare and I am very healthy, DW, not so much.

[Montecfo]

Quote:

Originally Posted by aja8888 My bold. This is a valid point. I don't see grocers' lowering prices anytime soon. The yogurt I buy that went for $1.12 per container to 1.96 per container won't be reduced. Inflation may be pushed down to 2% (FED's target) and prices will continue to rise from the new base. As retirees in our late 70's, I am concerned that we won't be able to maintain our current lifestyle as prices march up. Health care is rising way faster than daily costs. Even with good Medicare plans, we are spending over $1,000/month on healthcare and I am very healthy, DW, not so much.

You will see declines in commodity linked prices due to competition. Retailers and manufacturers can't just unilaterally decide to "keep prices high". Competitors will use that to grab market share.

Prices of things like lumber, fuel and airlines tickets have already declined from where they were.

You will also see prices consolidate as inflation moderates.

[Looking4Ward]

I FIREd'd over 8 years ago with $1.2M. I've been spending considerably more than I planned each year ($72K-$90K) and when Covid hit I dropped to $1.15M.

I was back up to over $1.6M last December but have since dropped to $1.35M. Still more than I started with.

This year I decided to start Social Security so that I can lessen my withdrawals for a few years, giving my portfolio a chance to take a few deep breaths.

So technically I've been thru two "crashes" so far and haven't had to go to the local food banks. Oh, and like RobbieB, I've managed to pick up a few toys along the way:

[Bamaman]

I retired in 2008, and watched my funds as they had dropped in value.

Now, I've got to start making RMD's in 2022--after the market tanked. And needless to say I'm not too thrilled to have to sell/trade more of my Fidelity account than I ever made in a year's salary. And I don't need the funds for anything.

[RetiredAt49]

Quote:

Originally Posted by Looking4Ward I've managed to pick up a few toys along the way:

Glad to hear that you picked up some toys along the way! Enjoy hearing experiences from those of you who are retired and experienced bear markets. I’m hoping we are recovering and not in a bear rally!

[OldShooter]

Quote:

Originally Posted by RetiredAt49 ... I’m hoping we are recovering and not in a bear rally!

Actually if you are in the accumulation phase, that is not what you want. What you want is for stocks to be very cheap up until you move into a phase where you are selling rather than buying. Then you want a strong bull market.

[RetiredAt49]

Quote:

Originally Posted by OldShooter Actually if you are in the accumulation phase, that is not what you want. What you want is for stocks to be very cheap up until you move into a phase where you are selling rather than buying. Then you want a strong bull market.

Duly noted. I retired at the beginning of this year (at peak of last bull) so hoping for a bull now.