Who kept investing heavily through the great recession?

[nash031]

Curious to hear some stories/experiences of those of you who stuck to your guns through the scary 2008-2010 period. I was young, low income, and we had little in the market back then....and it was pretty hard to tune out the “sell stocks and buy bullets and gold” noise.
I want to be ready for the next downturn as we have a lot more in the market and both automatically and purposefully buy in regularly.
What was your experience through recessions? Did you buy more? How did it work out for you gains wise? Any regrets?

I didn’t have a hard time tuning out the noise at all. I accelerated my savings, and the $60K or so I sank in between 2008/09 has grown almost four fold since. Maintain the long view. Figure out how to ignore noise. There’s always noise. That addition of $60K over six months or so represented about 30% of my portfolio at the time. Nothing goes away until you sell, so I always read the “lost it all” stories with a quizzical eye.

 

[NYEXPAT]

Thankfully nothing in the markets and had sold my condo in NY for 500k a few years before. Bought a condo in Peru in 2005 and by 2011 it had tripled in price.

 

[W2R]

Most of us?

Curious to hear some stories/experiences of those of you who stuck to your guns through the scary 2008-2010 period. I was young, low income, and we had little in the market back then....and it was pretty hard to tune out the “sell stocks and buy bullets and gold” noise.
I want to be ready for the next downturn as we have a lot more in the market and both automatically and purposefully buy in regularly.
What was your experience through recessions? Did you buy more? How did it work out for you gains wise? Any regrets?

I was too terrified to sell low. I was so close to retirement, and thought this would snatch it away from me just before I could retire.

I rebalanced a few times, which essentially had me buying low each time. I was back to what I had before, by April, 2009, and it's been up, up, up ever since then. But bear in mind that I was still working and contributing heavily to my portfolio according to my asset allocation (even though that was tough to do!) during that time; otherwise my recovery would have taken longer.

I retired on the first day that I qualified for federal retiree health insurance, in November of 2009.

 

[Chuckanut]

I was working and decided to dump a bit more into a Deferred Compensation plan that was offered to me a few years earlier. However, I was not ready to bet the farm - like I said, a bit more.

 

[ERD50]

Most of us? ...

Seems like it!

I think OP might have better titled this " Who did not keep investing/rebalancing through the great recession?"

From the way it was worded, I'm guessing he expected a smaller number of positive responses?

Although there were quite a few posts of people who seemed frightened by this little bit of volatility in the market recently, so maybe more 'chickened out' than it appears?

-ERD50

 

[Winemaker]

I began investing 40% of my gross income in equities in 1987 when I was 22. I stayed the course and ER'd at age 50 in January of 2016. Staying the course worked for me.


I invested through many downturns during this time. I didn't open a statement or check my balances for over 2 years in 2008 - 2010. I just tossed the statements in the burn barrel and told myself "I bought some stock on sale this month".

I started in 1981, but I did monitor my statements, and DW's and DM's. DW and I continued to max out 401k, 403b, and Roths.

 

[tdv2]

Being that I knew I needed at least another 8 years of contributions, I didn't change a thing. Had a strict investment policy that amounted to more than 50% of after tax monies being invested monthly. Dollar cost averaging is a beautiful thing....In hindsight if the market rout lasted longer, I would have benefited even more....not that I was wishing for it at the time.

 

[jazz4cash]

I stayed in the market and continued to invest.

We had scary lean times due various financial issues including going from 2 to 1 income due to layoff. I was encouraged by the fact that I was never tempted to stop investing via payroll into my 401k and knew it was my backstop if things got bad enough.

 

[deserat]

I didn't sell anything - I was in a transition at the time from working as an employee to self-employed, however, I had a formula: max out SEP IRA to what I could (20-25% of gross earnings up to back then around $50K or so), save 25% of what I paid myself. I wasn't paying attention to what the stock market was doing, I just wanted to keep saving. I put the SEP IRA in a Target fund with a far out date and the 25% in Wellesley. Oh, I also saved 100% of my Reserve pay in TSP again in a Target fun with a far out date.

10 years later and some personal and professional bumps along the way (good and bad ones), and I *can* RE now.....I am still very interested in my civilian profession-consultancy, but only work on those interesting projects. I shoehorn the consulting projects in between my fun stuff (99's, badminton, swimming, skiing, hiking and international travel).

 

[SecondCor521]

I was 100% stocks from at least 1987 through mid-2016. I moved to 90% stocks at that point because I had FIREd and realized I probably would need some mental security in the next downturn, whenever that happens. I also looked carefully at the historically optimal AA for 40 year retirements, and it looked to me to be about 90%.

I was quite sanguine about the 2008-2010 period because I had a job and was buying stocks on sale. However, there was one point, I think it was in the fall of 2009, when Lehman was going bankrupt and the market was dropping hundreds of points in a day and the government was intervening, that I thought to myself, "Well, maybe this time it is different and this is the end of the world."

I didn't think it was, but it seemed like a possibility to be considered. I then threw my hands up and said to myself, "Well, if it is the end of the world I can't do much about it, and at least I'm a bit better off than some because I have my health and an education, so I'll make do with whatever happens."

I ended up saving about half of my salary from 2009 through 2016. If you want to know how I did you can just look at VTSAX during that time.

 

[RobbieB]

I was working then and I kept my 401K contribution maxed out as usual. Yup, I lost half my dough but bought twice as much while the prices were low.

When it came back I was rewarded nicely -

 

[Huston55]

We were within a few years of our planned FIRE date and essentially doubled down during the 2008/9 recession. While I’d like to conclude that we’re very smart, there was also the good fortune of a long Bull Market to help us. I will also say that we had some anxiety during the period; not a lot but, definitely lots of analysis & self-questioning. We had weathered the DotCom bust of 2001 (with substantially less NW) and, in 2008/9 had the luxury of still working and having our likely worst case scenario being a few more years of work + supercharging savings so, that helped us stay the course. I’ll also note that the “doubling down” we did was into after-tax accounts, which has benefitted us greatly in early FIRE. Our AA at the time was ~80/20, which we transitioned to 60/35/5 after FIRE.

Our approach is described in this post: http://www.early-retirement.org/forums/f28/share-your-fire-milestones-65754-35.html#post1488193

 

[Alectoris]

Dec. 2008 I had just bought my first home and was about three years into my first "real" job. I can't remember what I had in the market at that point, but it was probably under 100K after the down payment on said home.

I just kept plugging away. 401(K), IRA, HSA contributions were maxed out and I would sock away some money every month in a regular Vanguard account. I really didn't give it much thought. I look back on it now and think that I really took a hit but also see the reward of staying the course and the benefits of buying in a really depressed market.

 

[DEC-1982]

Just the usual 401-k contributions. No change because of the Great Recession.

 

[Huston55]

Another related thought on this thread. There is a lot of ‘mean reversion’ of equity returns implicit in the responses to this thread, mine included. But, there are several learned folks who argue that it doesn’t exist or, that if it does it’s not worth the gamble.

The Retirement Café: Mean Reversion of Equity Returns and Retirement Planning

 

[SpinDr]

Started investing in 1984 with 401ks and some individual stock and mutual fund investments. Since that time I’ve been 90%+ in equities and only recently started moving to 80%.

During the more painful downturns was not buying much outside of my 401k but was always buying within it throughout.

 

[Dtail]

100% equities invested and kept the 401k contributions going.
More dumb luck, as was not paying enough attention to get scared.

 

[sengsational]

Interesting question. I've never really looked at my results.

I knew I didn't sell anything, but never went back and laid out how well I "bought low". Well, turns out I wasn't the luckiest one in this span of time, but it turned out ok.

My normal 401k buying was interrupted at the worst possible moment due to a j*b change. The red circles are where I was chunking-in some inheritance money. Making no attempt to time the market, just putting it in whenever the distributions were made. None of the distributions came at "the right time", but the account got it's head above water for a while in 3Q2010, then ever since the end of 2011.

 

[Stashu]

DW and I were lucky enough to maintain our positions with the same companies throughout that period and stuck to our buy-and-hold plan for the long term. We didn't look at the discouraging balances often but they have been fun watching for the past 10 years. Buying an expensive home at the peak in '07 didn't work out as well.

 

[MarieIG]

Well, I don't know if it was a case of sticking to my guns so much as inertia. A body in motion tends to stay in motion sort of thing.


I was working and saving about 1/3 of my gross income, and continued to do so. I did tend to stick my head in the sand like an ostrich, but the auto investments stayed in place. Was pretty much all in equities, and don't recall any rebalancing at the time. Just continued to buy equities.

 

[ndnguy822000]

I bought 2 houses to rent in 2009 and in 2010 I was putting away 30% of my income in my 401k, I even sold my car to have money to invest in the houses l. I was 25 years old and kept going for 5 years and today at 36 in seeing the benefits. As the markets decline into correction today I am once again awaiting for the economy to go much lower so I can run in and buy more investments as everyone else is selling. One more economic decline and I can retire.

 

[FIREd]

I kept investing as usual IIRC. Actually, 2008 was a great income year. The wife got a big promotion and her income almost doubled, so we had a lot of extra cash to invest. But best of all, her promotion came with a huge stock option grant at a time when her company stock was rock bottom. We held onto these options and cashed them in at a huge profit during the recovery.

 

[Sunset]

It was a scary time.
However I remembered 2000 when it dropped and popped back over the years.

So I upped my 401K contribution.
Borrowed $60K and invested it for 4 years in a stock index fund.
And bought some Bank stocks when they were $4->$8. (sold them waaaay too early, for a small profit).

 

[38Chevy454]

Like many, I was working, continuing to invest as much as I could into 401k; stayed invested 100% equities. Yes my statements showed a lot of lost value, but never sold and therefore rode it out.

 

[spirit]

Canadian here

That was a scary time for me and my husband. He had been retired for many years but I was still working. It was getting pretty stressful at work and I was thinking of retiring but still not quite ready to make the leap.

Boy, in 2009 I was so glad I did not leave my job at 56, I had been through the 87 downturn and also the 2000 tech bubble but our savings were not really affected in those downturns. Jobs were hard to get but we somehow managed to pay our bills and put food on the table.

But the 2007-2009 crash was like nothing I had ever seen before. I was terrified that we were close to crashing the world economy....and so we were. That was when I started watching all the investment shows on television. My husband and I watched the financial news every chance we could...just to get a grasp on what was happening. I joined this forum, I read a lot of financial journals and became a true partner with my husband in our investing strategies. I had always gone to the meetings with our financial advisor but had felt this was his area of expertise. No more, it is important to be aware of how your money is being invested....a great lesson for me. I also was glad to know that living below your means was a tried and true method that many others followed....and my husband and I were not the only ones.

Now, in 2018, I fear we are on the cusp of another financial meltdown....still a lingering effect from the QE that never really stabilized our economy like it was meant to.

But that is a story for another time. We never did buy extra equity in 2009...we just stayed the course. Now that we have more liquid money....if there was another crash....I think we would do the same. We never made out like bandits during the after-effects of the crash...but our investments recovered well and we were able to sleep at night during most of the worst times.

Our investments are divided half and half between mutual funds and GIC's....Canadian bond type funds in a 5 year ladder structure. No debts....and our health is pretty good. I guess we will do fine...and be able to help our children out if they need it. We are blessed.