Recognizing an historic crash vs. correction or bear market.

[Lsbcal]

Quote:

Originally Posted by Options ...(snip)... The best deal for the invididual investor is indexing, picking an AA while accounting for one's risk tolerance, rebalancing, and minimizing costs (the single most important factor determining superior PF performance, according to a number of studies), and staying the course. Since 1920, this has always been the superior approach, and with calculators like FIRECALC, modelling demontrates the approach would work as far back as 1871. OTOH, for people like you Lbscal with extra $$ to "play with", a great investment might be writing me a check to cover the $3300 I had to drop yesterday to replace a 20 year old bed/mattress. You'll get a guaranteed return of making someone else very happy!

First, I don't know where you get the idea I have "extra $$ to play with". I take investing seriously and don't consider playing a good activity in financial matters. Maybe you got this idea from my "votes" sentences above? I just mean that it's a free financial market and every dollar is a vote on the direction. Institutions probably have the biggest number of votes. I am very small potatoes in that sea of money.

Second, I'm all for Bogleheads ideas and I think most investors would do best to stick with that. However, we are all mature adults here and people are free to form their own opinions. Investing is not a religious activity. I do not think the most forum participants (particularly regulars here) feel they must be saved from the sharks. There are admittedly a lot of naive folks out there (and occasional people who visit this forum) who have unformed ideas on good investing. Again, for those people the Bogleheads buy-hold ideas are best.

Now hopefully we can stop arguing. We probably share more areas of commonality then differences. We should get back to the OP's original intent for this thread. Also my fingers are tiring of this line of dialog.

[haha]

Quote:

Originally Posted by Lsbcal First, I don't know where you get the idea I have "extra $$ to play with". I take investing seriously and don't consider playing a good activity in financial matters. Maybe you got this idea from my "votes" sentences above? I just mean that it's a free financial market and every dollar is a vote on the direction. Institutions probably have the biggest number of votes. I am very small potatoes in that sea of money. Second, I'm all for Bogleheads ideas and I think most investors would do best to stick with that. However, we are all mature adults here and people are free to form their own opinions. Investing is not a religious activity. I do not think the most forum participants (particularly regulars here) feel they must be saved from the sharks. There are admittedly a lot of naive folks out there (and occasional people who visit this forum) who have unformed ideas on good investing. Again, for those people the Bogleheads buy-hold ideas are best. Now hopefully we can stop arguing. We probably share more areas of commonality then differences. We should get back to the OP's original intent for this thread. Also my fingers are tiring of this line of dialog.

This idea of a varying AA based on some reliable long term value indicator is interesting. The obvious gotcha is that in an equity market moving steadily upward, the closer to 100% equities someone can handle is going to be most profitable. Until the market goes in the other direction, which may be very sudden. Then 0% equities might be optimum.

Today, the Fed seems to be playing the tune that people are dancing to, so it is really hard to know whether past experience is even relevant in the near term. I would guess that eventually it will be, but eventual is quite a concept.
Ha

[RobLJ]

[QUOTE=karluk;1410374]Of all the awful news from back then, the item that most struck home to me was the failure of Washington Mutual, which Wikipedia says happened on September 25, 2008. I would have guessed it happened a little earlier, but most likely that's because rumors of its imminent failure were already circling.

There were two reasons this news made an impression on me. It was the first time in my life that a financial institution failed in which I personally had an account. I had a credit card with them, which at the time was maxed out in a 0% loan.]

We had our checking, savings accounts, our mortgage, as well an equity loan with WaMu and in mid 2007 I convinced my wife to start a Schwab checking and brokerage account because I was fairly certain WaMu was going down, along with several others.I wanted to be sure we could get by for 3-4 months while waiting for the damage to settle. Turns out Chase opened the branch on Monday after closing it from Friday through the weekend.
The Texas S&L crash started right when I graduated from a Texas school and I saw the miniCalifornia real estate crash in 90 begin before we moved back to Texas, so that helped. I also started moving to bonds/cash in late '06, but primarily in '07 to a 40% bond/cash allocation from about a 90% stock beforehand. I remember wondering in early '08 whether I was just missing something, then when Bear-Sterns went down I knew I was probably right. When I heard about money-markets freezing, I got very worried we would see a 30's event.