More Worried About Markets Now Than Any Time Since 2009

[haha]

The way I look at it 2008 was an odd blessing. It showed me that even if the (almost) worst happens, things [-]straighten themselves out[/-] come back to an equilibrium pretty quickly.

Only continued data, over many cycles will confirm or refute this learning. "Damn the torpedoes, full speed ahead" can turn out to be a plucky and profit making course, or a prelude to disaster.

Most of what we "learn" about markets is highly situational and time dependent, rather than reliable generalizations.

Ha

 

[NW-Bound]

The way I look at it 2008 was an odd blessing. It showed me that even if the (almost) worst happens, things [-]straighten themselves out[/-] come back to an equilibrium pretty quickly.

As far as the current news cycle, things never turn out as dire as they're supposed to be and, as always, those with resources (financial or intellectual) find a way to prosper.

I'm always reminded of my notorious granddad who went out in the midst of the 1930 Depression and bought up foreclosed property.

Yes, things are usually never as good nor as bad as people think.

But when war breaks out, or REWahoo's asteroid strikes, all bets are off. The US has not had war on its ground since the Civil War, but most other countries are not so fortunate.

Only continued data, over many cycles will confirm or refute this learning. "Damn the torpedoes, full speed ahead" can turn out to be a plucky and profit making course, or a prelude to disaster.

Most of what we "learn" about markets is highly situational and time dependent, rather than reliable generalizations.

Ha

True too. As Bob Dylan has sung,

And don't speak too soon
For the wheel's still in spin
And there's no tellin' who
That it's namin'
For the loser now
Will be later to win
For the times they are a-changin'
​

 

[nun]

Back in 1987 I decided to split my retirement saving in two and contribute to a deferred annuity for an income floor and put the rest Into mutual funds. 30 years latter and I just used the deferred annuity to buy into a pension. So the ups and downs of the market don't impact my income....just my net worth........and the plan has worked out well.

 

[jim584672]

I am not a perma bear at all. I hope I am wrong. Usually bear market rallies are sharp and last 2-3 weeks. Time will tell. To convince me I want to see new highs, which will not be a problem if this is still a bull market. Given the fragility of the world's monetary systems I hope the bear never comes.

 

[jazz4cash]

Watching the market minute by minute may be worse than w*rking.

 

[jim584672]

Watching the market minute by minute may be worse than w*rking.

True. These markets are exhausting to watch. May take a job to relax.

 

[HadEnuff]

3 straight days in the green...one more and I'm buying a new Beemer.

 

[NW-Bound]

Absolutely not buying anything other than food. Well, also the usual booze.

I am still down an entry-level Rolls Royce from my highwater mark, after adjusting for expenses.

 

[HadEnuff]

Absolutely not buying anything other than food. Well, also the usual booze.

I am still down an entry-level Rolls Royce from my highwater mark, after adjusting for expenses.

that's why you gotta buy your toys at the top!

food is wayyy overrated.

 

[marko]

I have been watching the markets minute by minute lately. I can't help feeling like a huge crash is coming very soon, maybe next week. .

"Next week" is now this week.

I just don't see it coming this week.

Maybe next week, eh?

 

[jim584672]

"Next week" is now this week.

I just don't see it coming this week.

Maybe next week, eh?

Two days left. Anything can happen with this market.

 

[audreyh1]

that's why you gotta buy your toys at the top!

food is wayyy overrated.

I definitely take out funds to buy toys at the top! (Actually, I just don't put back money I don't spend from the withdraw).

And food is definitely not overrated.

 

[Lsbcal]

Two days left. Anything can happen with this market.

Well, there was that Thursday in October 1987. Bad followed by worse on Friday. Then the waterfall event, Black Monday on October 19th.

One can always hope for such a thing, to be rescued from an errant prediction.

 

[NW-Bound]

What toys during up-market years? I blew my discretionary allotment on home repairs and improvements already.

Good thing we are both homebodies when we do not travel, and care more about our homes than fancy cars.

 

[Looking4Ward]

What toys during up-market years? I blew my discretionary allotment on home repairs and improvements already.

Good thing we are both homebodies when we do not travel, and care more about our homes than fancy cars.

My plan is to allocate and set aside the money for toys during up-market years but actually buy those toys during down-market years.

(Toys = boat, motorcycles, jet skis, etc.)

 

[NW-Bound]

That should work well, because during economic hard times you would get good deals on everything from cars, homes, to services like travel, home improvements, etc...

The problem is it is difficult to plan for, as stock market movements as well as recessions are not predictable. Plus, when you are older your time may be limited and you cannot wait.

In the last few years I took a few long RV treks and paid through the nose for expensive gas, particularly in Canukstan and the People Republic of, oh never mind. If I take those trips now, would save perhaps $3K on gas, but how did I know then if I would still be breathing now?

For younger retirees with more time left, a bit of flexibility in discretionary spending will work well.

 

[audreyh1]

That should work well, because during economic hard times you would get good deals on everything from cars, homes, to services like travel, home improvements, etc...

The problem is it is difficult to plan for, as stock market movements as well as recessions are not predictable. Plus, when you are older your time may be limited and you cannot wait.

It's not too hard to manage. When the markets are up, my withdrawal increases, and I tend to have more left over after spending. So I tend to have more going into my "slush fund" during up markets. Then, in a down market, when my withdrawal drops, I have that to slush fund draw on if I choose.

 

[HadEnuff]

S&P and Dow finished in the red today....I needed 4 days in a row in the green to buy that Beamer....too bad...

 

[NW-Bound]

It's not too hard to manage. When the markets are up, my withdrawal increases, and I tend to have more left over after spending. So I tend to have more going into my "slush fund" during up markets. Then, in a down market, when my withdrawal drops, I have that to slush fund draw on if I choose.

That may be a good accounting device to remind you that you underspent in past years and can still indulge now. But I can also call up my past year expenses in Quicken to get that info.

And Quicken tells me that there is no underspending. In fact, I have been spending quite steadily in the past 3 years since I fully retired, and more than I initially thought I would. Hah!

The saving grace is that FIRECalc tells me that I can spend even more, a lot more than I allow my frugal self. So, if I want some toys, I can use FIRECalc as an excuse to indulge. But I do not want anything more now, and am quite content with my life and my "stuff". If the market god suddenly turns generous and dumps a boatload of money into my account, I may, just may, get an X3 or X5 just for the heck of it. Or I may not spend on anything, and just look at that number on Quicken screen, and smile.

 

[audreyh1]

That may be a good accounting device to remind you that you underspent in past years and can still indulge now. But I can also call up my past year expenses in Quicken to get that info.

I don't have to review past expenses in Quicken - that money is already gone! The growing "slush fund" is squirreled away in various high yield savings accounts, so it's just a matter of adding them up. OK - Quicken does that. I do track current YTD spending, and how much allocated to current year budget still left to spend. The rest is the excess!!

Anyway - a short-term funds report, and I know how much my slush fund has grown. It's pretty obvious to me.

I do review current year budget and short-term funds monthly.

 

[NW-Bound]

Yes, we have talked about this before.

I do not predraw money to spend for each year. We never had a budget during our working years, and tended to underspend consistently. This habit of not having a rigid budget carries over into retirement now.

I have a number in mind as to how much I should spend, and would occasionally look at the actual expenses to compare. My "slush fund" is just mental, and commingled with the rest.

 

[Lsbcal]

I'm attracted to complexity like a moth to a flame. Recently this moth has been trying to simplify where possible. Seems a specific place for the spending money is a good thing to me. As I get older it will be more appreciated. So I like Audrey's approach.

On a minor note, if I put 4% aside for this year I won't worry about accounting for that as purely spending money, i.e. it's still figured in as being part of the AA. But if it is not spent in that year, the pile grows and then I'll have to consider it as a separate pile of pure spending money. Wouldn't want to subject that pile to a bad sequence of years. We'll see how that works out as we might have difficulty spending all of our $'s this year ... a nice problem to have.

 

[audreyh1]

Yes, we have talked about this before.

I do not predraw money to spend for each year. We never had a budget during our working years, and tended to underspend consistently. This habit of not having a rigid budget carries over into retirement now.

I have a number in mind as to how much I should spend, and would occasionally look at the actual expenses to compare. My "slush fund" is just mental, and commingled with the rest.

Our budget isn't rigid. It's just a number that usually exceeds our actual annual expenses with a few allocations for certain things like gifts/charity. So I know I need to set aside that much for one year, and I watch as we spend it down. And at the end of the year I see how much was "left over" and it gets rolled into the "slush fund".

We've always tracked out annual spending, so I was able to come up with a pretty good number that would more than comfortably cover our usual expenses, and that's what we use.

 

[pb4uski]

Same here. I don't get too hung up on what we spend as the total is pretty consistent. I can monitor it in a way by looking at our local bank balance and projected balance in Quicken as our automatic monthly withdrawals and quarterly dividends from taxable accounts more than cover our basic spending.

What does surprise me is that I haven't needed to increase our monthly automatic withdrawal for inflation.

 

[audreyh1]

Same here. I don't get too hung up on what we spend as the total is pretty consistent. I can monitor it in a way by looking at our local bank balance and projected balance in Quicken as our automatic monthly withdrawals and quarterly dividends from taxable accounts more than cover our basic spending.

What does surprise me is that I haven't needed to increase our monthly automatic withdrawal for inflation.

I set what I considered to be a generous budget over 10 years ago. We are just now catching up to that number, but I haven't had to increase it yet. So no inflation indexing here either.