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03-24-2021, 08:34 AM
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#41
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Thinks s/he gets paid by the post
Join Date: Oct 2019
Posts: 3,657
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Quote:
Originally Posted by TheWizard
If you sit and think about it, that seems like an eminently reasonable assertion...
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One Mar 1 2020 we did have a 20% decline over Pandemic fears.
It didn't last long.
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03-27-2021, 08:29 PM
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#42
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Thinks s/he gets paid by the post
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,455
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Quote:
Originally Posted by twaddle
I remember way back when we used to think a pandemic would cause a market crash.
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It did but then quickly recovered due to aggressive monetary policy.
__________________
May we live in peace and harmony and be free from all human sufferings.
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03-28-2021, 12:23 PM
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#43
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,671
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"Stocks have reached what looks like a permanently high plateau. Irving Fisher, Professor of Economics, Yale University (1929)
__________________
Part-Owner of Texas
Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx
In dire need of: faster horses, younger woman, older whiskey, more money.
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03-28-2021, 12:43 PM
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#44
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Thinks s/he gets paid by the post
Join Date: May 2014
Posts: 1,390
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Is there ever a time when investing in the stock market isn't at least somewhat scary? I mean when things are going well in the stock market there are plenty who say it can't last, stocks are expensive, and when things are bad there are those who say the market has good reason to be down due to.... inflation, pe ratios, economy, etc.
So what's the solution? I don't have one. But I certainly do not read the headlines that much as it is impossible to tell how the market will perceive information beforehand. Come up with an AA that suits you and go on with life.
__________________
Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things. Charlie Munger
The first rule of compounding: Never interupt it unnecessarily. Charlie Munger
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03-28-2021, 01:09 PM
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#45
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Thinks s/he gets paid by the post
Join Date: Feb 2021
Posts: 2,327
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Quote:
Originally Posted by UnrealizedPotential
So what's the solution?
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The solution is to invest regularly over time, in good markets and bad, up or down, recession or boom, for the several decades of your working years. And then sit back and enjoy the results in retirement.
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03-28-2021, 01:13 PM
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#46
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Thinks s/he gets paid by the post
Join Date: May 2014
Posts: 1,390
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Quote:
Originally Posted by disneysteve
The solution is to invest regularly over time, in good markets and bad, up or down, recession or boom, for the several decades of your working years. And then sit back and enjoy the results in retirement.
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Yes, but a lot of people have trouble doing that. Maybe not on the forum, but investors in general. Fear oftentimes gets the best of investors . It's easier said than done for a lot of investors.
__________________
Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things. Charlie Munger
The first rule of compounding: Never interupt it unnecessarily. Charlie Munger
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03-28-2021, 01:41 PM
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#47
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Thinks s/he gets paid by the post
Join Date: Feb 2021
Posts: 2,327
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Quote:
Originally Posted by UnrealizedPotential
Yes, but a lot of people have trouble doing that. Maybe not on the forum, but investors in general. Fear oftentimes gets the best of investors . It's easier said than done for a lot of investors.
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Absolutely. I think the key is to automate it. We started investing in 1992 right after we got married. I set up an automatic investment plan for $50/month. As our situation improved, that increased to $100/mo, then $200/mo, then a couple of funds, then our IRAs and enrolling in work plans. Before we knew it, we had tens of thousands saved, then hundreds of thousands, now nearly $2 million. And we've been through a few big drops along the way but we just stuck with the program.
I think the hardest part is starting. Once you get started, I think it's easier to keep at it. And making it automatic takes some of the emotion and thought out of it.
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04-06-2021, 06:49 AM
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#48
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Full time employment: Posting here.
Join Date: Oct 2017
Posts: 717
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Quote:
Originally Posted by UnrealizedPotential
Yes, but a lot of people have trouble doing that. Maybe not on the forum, but investors in general. Fear oftentimes gets the best of investors . It's easier said than done for a lot of investors.
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Thats true but recognize the fact that since 1871 the S&P 500 has grown at an average annual rate of about 10.8%. That includes the Great Depression, two world wars, the dot com bust and the sub prime meltdown to name just a few. Its performed like that despite any of those events or anyones fears...
__________________
Whatever failures I have known, whatever errors I have committed, whatever follies I have witnessed in private and public life have been the consequence of action without thought... - Bernard Baruch
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04-06-2021, 10:01 AM
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#49
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,472
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Quote:
Originally Posted by twaddle
I remember way back when we used to think a pandemic would cause a market crash.
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I sure thought it would! But I stuck with my financial plan, AA, etc, which got me through 2008-2009, and guess what?
As of the market close last night, the sum of my portfolio and bank accounts is the largest that it has ever been in my entire life! I feel like I am living in some sort of crazy delusional fantasy, but there it is.
Despite my super conservative AA, this sum is 168% of what it was on the day I retired back in 2009. When corrected for inflation it has still risen by 150% even though I have used it to live on. OK that was more the case before I started getting SS, but still. I am simply floored. So much for the market crash that I was absolutely SURE would happen last year.
If any other Bogleheads have not been checking your portfolio lately, today is a good time to check it. Looks like a miracle to me and the Dow closed at 33,527 .
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04-06-2021, 11:04 AM
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#50
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Thinks s/he gets paid by the post
Join Date: Jun 2006
Posts: 1,703
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__________________
Emancipated from wage-slavery since 2002
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04-06-2021, 11:50 AM
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#51
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,472
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Quote:
Originally Posted by twaddle
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04-06-2021, 01:04 PM
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#52
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,580
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Quote:
Originally Posted by W2R
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W2R, youre asleep and dreaming .... soon it will be time to wake up and get ready for work ... oooohhhhhh ...... oooohhh noooooooo .....
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04-07-2021, 12:44 AM
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#53
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,472
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04-07-2021, 06:13 AM
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#54
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,001
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Quote:
Originally Posted by mickeyd
"Stocks have reached what looks like a permanently high plateau. Irving Fisher, Professor of Economics, Yale University (1929)
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Freaky, as people were saying that in 1999 too.
__________________
Retired since summer 1999.
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04-07-2021, 06:34 AM
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#55
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Thinks s/he gets paid by the post
Join Date: Oct 2019
Posts: 3,657
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I heard Bob Brinker say, "The Stock Market Climbs a Wall of Worry".
I looked it up, apparently it was coined in the 1950s.
It seems very true to me!
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04-07-2021, 06:40 AM
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#56
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2016
Posts: 9,414
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I have so many friends that are scared to death of the stock market. I have asked a few through the years, if they have any mutual funds etc. and they think a person is crazy to have money in the markets.
I can't imagine not being in the markets. There is no way living of off CD's, MM funds can make you a enough to even live a few months on.
Some of them are young and some are in their 60's and all working full time. Some own ranches and some working for a wage.
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04-07-2021, 06:44 AM
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#57
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Moderator
Join Date: Oct 2010
Posts: 10,653
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Quote:
Originally Posted by Time2
One Mar 1 2020 we did have a 20% decline over Pandemic fears.
It didn't last long.
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That was a scary rebalance. I wrote an essay at the time, imagining doing several things. The bottom line was that the feeling of not sticking to my guns and then having it go against me would be the outcome that I needed to avoid at all costs.
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04-07-2021, 08:01 AM
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#58
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Thinks s/he gets paid by the post
Join Date: Nov 2013
Location: Twin Cities
Posts: 3,927
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Quote:
Originally Posted by UnrealizedPotential
Is there ever a time when investing in the stock market isn't at least somewhat scary? I mean when things are going well in the stock market there are plenty who say it can't last, stocks are expensive, and when things are bad there are those who say the market has good reason to be down due to.... inflation, pe ratios, economy, etc.
So what's the solution? I don't have one. But I certainly do not read the headlines that much as it is impossible to tell how the market will perceive information beforehand. Come up with an AA that suits you and go on with life.
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+100. The market climbs a wall of worry. - Some sage person
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04-07-2021, 08:40 AM
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#59
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Thinks s/he gets paid by the post
Join Date: Nov 2009
Location: SF East Bay
Posts: 4,323
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Quote:
Originally Posted by disneysteve
Absolutely. I think the key is to automate it. We started investing in 1992 right after we got married. I set up an automatic investment plan for $50/month. As our situation improved, that increased to $100/mo, then $200/mo, then a couple of funds, then our IRAs and enrolling in work plans. Before we knew it, we had tens of thousands saved, then hundreds of thousands, now nearly $2 million. And we've been through a few big drops along the way but we just stuck with the program.
I think the hardest part is starting. Once you get started, I think it's easier to keep at it. And making it automatic takes some of the emotion and thought out of it.
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+1 to all of this. So many folk are scared of investing in the stock market, because they are fearful of it going down which, of course, it will do. Helping to increase the worry is data showing the fairly long periods during which the indices moved within narrow bands, the suggestion being that investing during these periods would have been pointless. However, these sorts of fears are only really legitimate for people who plan to put all of their money into equities at once, and withdraw it all at once, at a later date. Who does that?
Most would-be retirees invest into stocks gradually, over a long period. They also withdraw gradually, over (hopefully) a long period. This realization alone should help to negate any volatility fears a would-be investor might have. Even for people who begin their investing career with a fairly large sum, and who invest it all at once, they will still be withdrawing it gradually over a long period of time.
Just as many of us have inbuilt psychologies that tend to "set" our spending habits, our reactions to short and long-term investment volatility also seem to be baked into our personalities. I think it's possible, to a certain extent, to push back against some of these built-in tendencies. I've read stories here, from people who used to be spendthrifts, and have turned frugal. Likewise, over time, I think it's possible to get used to dealing with stock market volatility. I couldn't have retired without the stock market, and am glad I learned how to live with it's various idiosyncrasies and hissy fits. I do it mainly by ignoring them and thinking of the long-term*. Probably not too different from raising a teenager
__________________
Contentedly ER, with 3 furry friends (now, sadly, 1).
Planning my escape to the wide open spaces in my campervan (with my remaining kitty, of course!)
On a mission to become the world's second most boring man.
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04-07-2021, 10:53 AM
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#60
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Thinks s/he gets paid by the post
Join Date: Oct 2019
Posts: 3,657
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I've told the story before about my neighbor, that took all his $200k out after 9-11. We were setting at his kitchen table and he brought out his investment statement, and was wondering if things were all right. I looked it over, it was all in cash equivalents, I said, you don't have any stocks, he said yes, I took it all out of stocks after 9-11. That was July of 2019. I said you really should have some stocks! He was hesitant I said, just get your feet wet with $10,000. He has since that kitchen table conversation, missed a 67% gain in VTSAX.
As far as I know he never did buy any staocks, but he did buy a new 4 wheeler for almost $10,000.
Oh, he wasn't even keeping up with inflation with his cash equivalents. But he is safe! Except for the $600,000 he missed in VTSAX since 9-11. I think I forgot to add in dividends.
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