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Old 03-22-2020, 04:32 PM   #21
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Originally Posted by Ready View Post
Financial advisors don’t know any more than the rest of us. We went through Ebola, SARS, MERS, and H1N1 and the world did not shut down. This one is clearly different and the first time in modern history that it has caused such a dangerous pandemic that it required such a massive lockdown of the human population.

Apparently the only people who had advanced notice of it were those senators that sold massive amounts of stock right before it hit.
Well, it turns out some CDC officials were starting to ring the warning bells as early as February 25th. These are extracts from this article -

https://www.statnews.com/2020/02/25/...uld-be-severe/

about a CDC director speaking to reporters.

(1) "As we’ve seen from recent countries with community spread, when it has hit those countries, it has moved quite rapidly. We want to make sure the American public is prepared,” Nancy Messonnier, director of CDC’s National Center for Immunization and Respiratory Diseases, told reporters.

(2) "As more and more countries experience community spread, successful containment at our borders becomes harder and harder,” she said.

(3) The CDC urged American businesses and families to start preparing for the "possibility of a bigger outbreak. Messonnier said that parents should ask their children’s schools about plans for closures. Businesses should consider whether they can offer telecommuting options to their employees, while hospitals might need to look into expanding telehealth services, she said."

and most ominously (4)
“Disruption to everyday life might be severe,” Messonnier said, adding that she talked to her children about the issue Tuesday morning. “While I didn’t think they were at risk right now, we as a family ought to be preparing for significant disruption to our lives.”

CNN, the New York Times, and CNBC all wrote about this CDC announcement on 2/25, so it was out there. Granted, this IS Monday morning quarterbacking by me, but on reflection this CDC official did nail it.
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Old 03-22-2020, 04:50 PM   #22
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My Fidelity FA told me two years ago I had enough to retire and could scale back my risk. So I did. I went in capital preservation mode. 30/70 at the time. Maybe a couple years too early, but her advice is now greatly appreciated.
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Coughing? Fever? Sell everything!
Old 03-22-2020, 04:52 PM   #23
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Coughing? Fever? Sell everything!

I don't see anywhere that the CDC guy said to reduce exposure to equities. All I see is comments about a more widespread health issue.
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Old 03-22-2020, 04:59 PM   #24
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I don't see anywhere that the CDC guy said to reduce exposure to equities. All I see is comments about a more widespread health issue.
No, a CDC person wouldn't say that of course. But, you can start to connect the dots how that could effect the economy.
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Old 03-22-2020, 08:26 PM   #25
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I was pretty pessismistic about all this and it is following that path. I regret not selling a few weeks ago. We really do not know what a work stoppage, businesses closed, pandemic looks like. Can't compare to 1987, 2001, 2008, etc.

Oh well, I didn't sell but I feel OP's pain as well. I think most of us around here are pretty informed and know this stuff well, makes it feel worse to me. IE, to have the knowledge and didn't act worse than a clueless investor who did not. Just me venting out loud.
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Old 03-22-2020, 09:15 PM   #26
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My sister said both her and my brother sold some a month ago and advised us to do the same at the time. We are all at the age where losing is not good. I followed her advice. She is not a FA.
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Old 03-22-2020, 09:54 PM   #27
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Originally Posted by Mdlerth View Post
I don't see anywhere that the CDC guy said to reduce exposure to equities. All I see is comments about a more widespread health issue.
Well, the remarks made by the CDC woman did rattle the market that week. See this nasdaq.com article -

https://www.nasdaq.com/articles/dow-....s.-2020-02-25

From this article -

"The CDC just warned that the coronavirus will spread to the U.S. The Centers for Disease Control and Prevention’s Dr. Nancy Messonnier went so far as to tell reporters that Americans should prepare for a major disrupting to occur because of the disease.

The CDC just warned that the coronavirus will spread to the U.S.—and markets aren’t happy. The Dow has dropped 900 points, while the S&P 500 is off more than 3%. Maybe it is time to stop comparing coronavirus to other health outbreaks, and compare it to other disasters instead.

The CDC just warned that the coronavirus will spread to the U.S.—and the stock market is not happy."


Also from the article -
"The Dow, which had been trying to limit its losses, took another leg down and closed off 879.44 points, or 3.2%, to 27,081.36, while the S&P 500 fell 3% to 3128.44.

The Centers for Disease Control and Prevention’s Dr. Nancy Messonnier went so far as to tell reporters that Americans should prepare for a major disruption to occur because of the disease. At this point it is becoming clear that coronavirus shouldn’t be compared with SARS, MERS or bird flu, which never really had an impact on the U.S. but other disasters instead."

Also -
"According to Joseph Kalish, chief global macro strategist at Ned Davis Research, the best analogues might be 9/11 and the Japanese tsunami in 2011. While previous health scares were “relatively contained,” these two disasters caused economic activity to slow, disrupted supply chains, and caused some people to stay inside."

Again, this is Monday morning quarterbacking by me, but the warning alarms were starting to sound. Some people were trying to downplay these warnings since it DID start to rattle the markets.
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Old 03-22-2020, 10:01 PM   #28
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If I sold my equities every time some financial expert published an article on the internet claiming the markets are doomed I would have never been able to buy any equities. Those articles have been appearing daily since the beginning of time. Right alongside the articles claiming the Dow will hit 50,000. And everything in between.

At some point someone who predicts doom and gloom is going to be correct. That doesn’t make them a genius. It just makes them lucky.
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Old 03-22-2020, 10:13 PM   #29
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Hmmm - do computers have crystal balls? Went full auto 2006 with my 'real' retirement portfolio.

So those trusty Vanguard computers re balanced their little hearts out during the 2008/2009 and current kerfuffle. Still the dips were/are a mental challenge to 'stay the course' which remains to be seen.

heh heh heh - RMD and nixed travel plans have freed up some mad money. Let's hope we keep within compass and don't get carried away.

So does a computer count as an investment advisor as in set and forget?
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Old 03-22-2020, 10:13 PM   #30
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Originally Posted by Ready View Post
If I sold my equities every time some financial expert published an article on the internet claiming the markets are doomed I would have never been able to buy any equities. Those articles have been appearing daily since the beginning of time. Right alongside the articles claiming the Dow will hit 50,000. And everything in between.

At some point someone who predicts doom and gloom is going to be correct. That doesn’t make them a genius. It just makes them lucky.
Perhaps you're right. I'm just trying to reconstruct this train wreck in my own mind and what I could've done differently.

Again, it gets back to my original question of whether anyone's FA did anything about this, since this is their full time job to analyze this stuff.

If an FA is paid by assets under management, they're going to be taking a big haircut in this too (if the market doesn't rebound quickly). So they have a lot of skin in the game.
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Old 03-22-2020, 10:46 PM   #31
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Hmmm - do computers have crystal balls? Went full auto 2006 with my 'real' retirement portfolio.

So those trusty Vanguard computers re balanced their little hearts out during the 2008/2009 and current kerfuffle. Still the dips were/are a mental challenge to 'stay the course' which remains to be seen.

heh heh heh - RMD and nixed travel plans have freed up some mad money. Let's hope we keep within compass and don't get carried away.

So does a computer count as an investment advisor as in set and forget?
Nope, Vanguard's computers have no artificial intelligence to predict market movements. It's all predicated on current NAV's, current shares, and your target asset allocation. However, I think Vanguard's advisory services only rebalance a couple of times a year, so you could still get out of wack depending on when your accounts were last automatically rebalanced. They do have some guardrails built in (e.g., perhaps 5% drift if the adjustment would be too big).

I guess they could do off-cycle rebalancing, but I'm not aware that they do that. Even if they did, it could quickly get out of balance again with another sudden swing.

This is why automated rebalancing is tricky. It does eliminate the hunches and gut feelings from the equation.
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Old 03-22-2020, 11:09 PM   #32
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I manage my own finances, and am not a market timer.

However, I keep kicking myself for not seeing/anticipating how this virus would impact the markets once it hit the U.S., and doing some defensive measures.

Did anyone's financial advisor give early warning before the market went crazy?

I know it's little comfort, but if they didn't see it coming either, my backside won't be as sore!
Consider this. If you FA was prescient enough to tell you at the end of Feb that in 3 weeks' time, the market would take a 30%+ dive, Fed would cut the rate to 0, half of the US population would be locked down, all shops, dine-in restaurants, hotels/motels, malls, theme parks and schools would be closed, unemployment claims would shoot through the roof with millions being laid off/furloughed, and told you to sell everything, would you have believed him/her and followed his/her advice? You probably would have laughed in his/her face. I know I would have.

We're in unchartered territory. Nobody could have seen this coming (in terms of the dramatic measures taken by the government to shut everything down and bring the market/economy to this point), so there's no point in kicking yourself

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Old 03-22-2020, 11:19 PM   #33
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Consider this. If you FA was prescient enough to tell you at the end of Feb that in 3 weeks' time, the market would take a 30%+ dive, Fed would cut the rate to 0, half of the US population would be locked down, all shops, dine-in restaurants, hotels/motels, malls, theme parks and schools would be closed, unemployment claims would shoot through the roof with millions being laid off/furloughed, and told you to sell everything, would you have believed him/her and followed his/her advice? You probably would have laughed in his/her face. I know I would have.

We're in unchartered territory. Nobody could have seen this coming (in terms of the dramatic measures taken by the government to shut everything down and bring the market/economy to this point), so there's no point in kicking yourself

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Well said, thanks Lucky Dude!
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Old 03-22-2020, 11:28 PM   #34
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All you who are regretting not having sold equities a month ago are missing something. As long as you are in the market you will get what the market is doing. Before the 2008 meltdown I removed about 25% of our net worth from the market for a completely unrelated-to-the-economy reason. But it worked out brilliantly, and after the crash I was slapping myself on the back for my lucky/genius move.

However, I could never bring myself to buy back in, especially as the market would gyrate wildly. I did get back in eventually, but in the long run I did no better, and maybe worse, than the ones who just rode it out.

IMO it's more important to have a decent bucket of fixed income money available for use during bad times than it is to be able to get out of the market before a crash. I know some don't agree with keeping a significant fixed income allocation, but in a case like this one or 2009 or whatever, as long as you aren't forced to sell equities to live on during the bad times you haven't really lost anything but numbers on a spreadsheet. And unless it really is different this time, I'll be OK. I like 3 years of living expenses in fixed income, and I'm willing to take the loss of growth for the safety of being able to outlast the bad times. I was willing to work a little longer to build that up, and that makes me sleep much better at night with my current equities allocation.

Plus, the asteroid missed us today, so it probably isn't really the end times.
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Old 03-23-2020, 05:32 AM   #35
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^ What harley said.
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Old 03-23-2020, 05:48 AM   #36
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IMO it's more important to have a decent bucket of fixed income money available for use during bad times than it is to be able to get out of the market before a crash. I know some don't agree with keeping a significant fixed income allocation, but in a case like this one or 2009 or whatever, as long as you aren't forced to sell equities to live on during the bad times you haven't really lost anything but numbers on a spreadsheet. And unless it really is different this time, I'll be OK.
Like most of us, I regret not getting out earlier. But our income is all pension/SS so we haven't had to sell anything. For awhile I was worried I wouldn't be able to put more cash in before the market came back up. I've stopped worrying about that particular problem...
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Old 03-23-2020, 06:00 AM   #37
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I suspected it was coming when China started shutting down. I wasn't confident enough to dump all stocks but I did go to a more typical AA and I'm glad I did. I still expect stocks to drop by >50% before this turns around, but I've certainly been wrong before and I hope I am this time. Fortunately, I shouldn't need any of my stock investments any time soon, if ever.
I think a bunch of us expected a hit and were amazed to see the equity markets keep going up in Jan and Feb.

I had been increasingly nervous about the stock market valuations since early 2017. I was already at my most conservative AA of 50/50 and in early Jan rebalanced to target. Still with 50% exposure to stocks I’m taking a pretty good beating now.

Have no idea how long the recovery will be. Folks expecting a quick market turnaround like in 2009-2010 - I fear they will be disappointed.

Due to travel constraints, we are spending very little this year.
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Old 03-23-2020, 06:40 AM   #38
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IMO it's more important to have a decent bucket of fixed income money available for use during bad times than it is to be able to get out of the market before a crash. I know some don't agree with keeping a significant fixed income allocation, but in a case like this one or 2009 or whatever, as long as you aren't forced to sell equities to live on during the bad times you haven't really lost anything but numbers on a spreadsheet. And unless it really is different this time, I'll be OK. I like 3 years of living expenses in fixed income, and I'm willing to take the loss of growth for the safety of being able to outlast the bad times. I was willing to work a little longer to build that up, and that makes me sleep much better at night with my current equities allocation.

Plus, the asteroid missed us today, so it probably isn't really the end times.
Absolutely. I’ve had half of investable assets in fixed income for several years now. I like the symmetry - even odds.

It’s hard to even think about rebalancing during scary times unless you have a good chunk in fixed income, because you need to cover both potentially several years of expenses and rebalancing.
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Old 03-23-2020, 06:45 AM   #39
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Absolutely. I’ve had half of investable assets in fixed income for several years now. I like the symmetry - even odds.

It’s hard to even think about rebalancing during scary times unless you have a good chunk in fixed income, because you need to cover both potentially several years of expenses and rebalancing.
Based on your past posts on Cape 10 reference AA investing, are you still considering increasing your equity exposure now?
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Old 03-23-2020, 06:45 AM   #40
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I use an FA for half my investable assets. It is with ML and they charge 1%. The only good news is that their 1% just got cheaper as my assets have declined. I am watching to see what if anything
they do.
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