Worst year ever for the S&P....

[ziggy29]

...was 1931.

Until now.

S&P now at 775 and change as I write this. If the S&P 500 finishes below 776 this year, 2008 will overtake 1931 as the worst calendar year for that index.... EVER.

Sleep tight.

 

[Bimmerbill]

We still have 1 month+ to go.
I don't plan to do anything differently, so it doesn't matter to me right now. Ask me in 20 years tho... It could be a whole different story!

Look on the positive side, we are living in history making times!

 

[Dawg52]

Look on the positive side, we are living in history making times!

 

[FIREd]

Let's focus on the positive! 1931 may have been the worst year for equities ever, but 1933 was the beat year for equities ever (+54%)! So I am still hoping for a very strong rally in 2009 or 2010!

 

[ziggy29]

-48.8% for the year...

 

[hankster]

Ziggy, I haven't admitted this before, but I too heard the voices in October '07 telling me to go mostly cash/bonds and stay on the side lines for awhile. Perhaps we can get into group therapy

The bottom is starting to look like a bottomless pit!

 

[freebird5825]

Let's focus on the positive! 1931 may have been the worst year for equities ever, but 1933 was the beat year for equities ever (+54%)! So I am still hoping for a very strong rally in 2009 or 2010!

please make room for me on the bleachers next to you.
this may be a housecleaning that is badly needed. just imagine the fat cats who are gonna be a lot thinner, who will be promptly weeded out. i know replacements stand ready to fill in behind them, but at least this generation of wall st crooks will be thinned.
rinse and repeat...

 

[ziggy29]

Ziggy, I haven't admitted this before, but I too heard the voices in October '07 telling me to go mostly cash/bonds and stay on the side lines for awhile. Perhaps we can get into group therapy

The good news is that I'm nearly 50% cash and Treasuries now after all this carnage, so I have some dry powder. I should be rebalancing but I can't get myself to grab at the falling knife.

 

[SonnyJim]

Let's focus on the positive! 1931 may have been the worst year for equities ever, but 1933 was the beat year for equities ever (+54%)! So I am still hoping for a very strong rally in 2009 or 2010!

So we are down 48% this year as the worst. Lets say I had $100,000 at the beginning of the year, it would be worth $52,000 now and if we match 1933 for +54% next year I would have $80,080 left. Not much solace in that for me today, that even the best year ever would not help offset the worst year I just endured.

 

[FIREd]

So we are down 48% this year as the worst. Lets say I had $100,000 at the beginning of the year, it would be worth $52,000 now and if we match 1933 for +54% next year I would have $80,080 left. Not much solace in that for me today, that even the best year ever would not help offset the worst year I just endured.

Well $80,000 sure beats $52,000 doesn't it?

Are you buying in this market? I am and I am able to lower my average cost basis per share (and break even point) quite significantly.

For example, on two of my favorite Vanguard mutual funds:

VWELX: If I had not bought any new shares since the market started tanking last year, this fund would have to go up 58% for me to get all my money back. But because I have bought quite a few new shares lately at very low prices, it now just has to go up 35% for me to erase all my losses.

VWINX: If I had not bought any new shares since the market started tanking last year, this fund would have to go up 28% for me to get all my money back. But with the new shares I bought lately, it just has to go up 13% for me to erase all my losses.

Conclusion: I don't need the market to recover completely to recoup all the money I lost in the past year...

 

[FIREd]

please make room for me on the bleachers next to you.
this may be a housecleaning that is badly needed. just imagine the fat cats who are gonna be a lot thinner, who will be promptly weeded out. i know replacements stand ready to fill in behind them, but at least this generation of wall st crooks will be thinned.
rinse and repeat...

Plenty of room for you on the bleachers... We have ice cream, Botox and only those showing their toes are admitted...

 

[laurence]

Well $80,000 sure beats $52,000 doesn't it?

Are you buying in this market? I am and I am able to lower my average cost basis per share (and break even point) quite significantly.

For example, on two of my favorite Vanguard mutual funds:

VWELX: If I had not bought any new shares since the market started tanking last year, this fund would have to go up 58% for me to get all my money back. But because I have bought quite a few new shares lately at very low prices, it now just has to go up 35% for me to erase all my losses.

VWINX: If I had not bought any new shares since the market started tanking last year, this fund would have to go up 28% for me to get all my money back. But with the new shares I bought lately, it just has to go up 13% for me to erase all my losses.

Conclusion: I don't need the market to recover completely to recoup all the money I lost in the past year...

Excellent post, very germane to our situation (buying with years to go to ER) but not much solace to our ER'ed friends. I can tell you one thing, this market sure makes a case for "buckets" of money. I'd hate to sell after all this carnage just to pay the bills.

 

[FIREd]

Excellent post, very germane to our situation (buying with years to go to ER) but not much solace to our ER'ed friends.

Point well taken, sorry ER'ed friends! Though I guess they could always take advantage of the lower prices by rebalancing... I don't know if I would have the guts to do it myself, had I already retired, but the option is available for those brave enough!

 

[laurence]

If someone started 70/30 stocks/bonds a year ago as an ER, aren't they about 50/50 now? That would take huevos, especially if you did it in all one chunk.

 

[FIREd]

If someone started 70/30 stocks/bonds a year ago as an ER, aren't they about 50/50 now? That would take huevos, especially if you did it in all one chunk.

Yes it would!!! Or you put your money in a balanced fund and they'll do the rebalancing for you, a small chunk at a time, a la Unclemick...

 

[laurence]

Yes it would!!! Or you put your money in a balanced fund and they'll do the rebalancing for you, a small chunk at a time, a la Unclemick...

Target Retirement 2035 here. Yay for me....

 

[Bestwifeever]

Yeah, those target funds haven't gone down one bit

 

[2B]

I'm down from my 60/40 allocation to 45/55. I'm still dollar cost averaging into the S&P with my 401k and SERP. However, the $$$ amount going in is trivial based on my overall assets. I am not going to rebalance because when I set up the 40% fixed it was picked as a minimum amount to have a modest but liveable retirement. Since I'm expecting to be out of w*rk soon (layoff), I'm interested in protecting my cash. I haven't sold anything yet but I plan to take a loss in my after tax account and move into VTI for a month.

 

[Dawg52]

Now down 28% for the year. Simply unbelievable. And that's with a 50/50 blend. Now closer to 40/60. I lost more today than yesterday. Oh well, we all have pretty much the same story. No need to go on about it.

 

[Looking Ahead]

This is so painful. Please, somebody tell me the bounce will come. This depression talk is freaking me out.

 

[freebird5825]

This is so painful. Please, somebody tell me the bounce will come. This depression talk is freaking me out.

this is the best i can offer. maybe it will make you smile in the face of the raging hurricane.
Tigger's Bounce
you need to let it install shockwave.

 

[2B]

This is so painful. Please, somebody tell me the bounce will come. This depression talk is freaking me out.

A bounce will come. Feeling better?

Look at it another way. Even the Great Depression ended. Back then a lot of government policies prolonged it. Hopefully, we've learned the lessons and can get things moving quicker and keep it to the recession level.

 

[Looking Ahead]

Firebird and 2B,
Thanks for the smiles! Yeah, I feel a tad bit better this a.m. Of course, the market hasn't opened yet. lol.

 

[ERD50]

Excellent post, very germane to our situation (buying with years to go to ER) but not much solace to our ER'ed friends.

Point well taken, sorry ER'ed friends! Though I guess they could always take advantage of the lower prices by rebalancing... I don't know if I would have the guts to do it myself, had I already retired, but the option is available for those brave enough!

Good in theory, but I started rebalancing when it dropped 30% and again at 40% (roughly). I've got some bravery left, but no money left

Not literally no money left - but I'm about 70% eq now, and a good chunk of the 30% is hi yield bonds which are acting pretty much like equities. So, no money that I want to take further risk with - I'm pretty far out there as it is. Maybe I am out of bravery, too. I am sooooo ready for a recovery. This is a drop of historic proportions, and I *do*mean that literally (unfortunately)!

-ERD50

 

[haha]

Chart Shows That Current Bear is Alltime #3 0r 4 in Overall Loss