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Old 10-11-2018, 11:22 AM   #61
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Originally Posted by Lsbcal View Post
The 1987 crash was scary ....
I specifically remember not being scared.

I was in ~ 12th year of my career, so I would have had some investments, probably mostly in my 401K or profit sharing, and invested in a balanced fund (I should have been more aggressive).

There was the 'noise' on the news, but I came into work, we kept working on the projects we did the days/weeks before, so I just shrugged. This too will pass.

Perspective:

http://pages.stern.nyu.edu/~adamodar...histretSP.html

for the year 1987, the S&P500 total return was 5.81%. Yes, that's a positive 5.81%.

Scary?

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Nerves of steel?
Old 10-11-2018, 11:35 AM   #62
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Nerves of steel?

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Originally Posted by calmloki View Post
Either you all have nerves of steel or there is some whistling in the graveyard going on. I don't like it when $40k vanishes in a week.
Honestly I am the world's worst nervous Nellie and I just don't see a graveyard yet. Maybe later! But not today.

Here's what is going on in my head. To begin with, I had a little under $30K vanish compared with your $40K. Maybe I have a smaller portfolio. Or, maybe that was because I have a pretty conservative AA, 45:55, mostly in broad index funds to spread the risk. The reason for my AA is that I remember 2008-2009, and how some forum members sold low. I don't want to be tempted to do that so I don't have a more adventuresome AA. This AA got me through 2008-2009 and that was a pretty rigorous test, so I kept it.

Also, as far as spending money? I withdraw all that I plan to spend that year from my portfolio during the first week of the year, so events like this cannot impact me immediately like that. By the end of the year, things may even out and at least we will know more. If I have to adjust what I spend, it would be next year anyway. I'm still in "Blow that Dough" mode for this year. BTW today I actually have MORE in my portfolio than I had last December 31st and I base my WR for each year on the previous December 31st portfolio value.

And most important - - I have been following the market for over half a century by now (even though I have not been investing for that long). You probably have been following it for a long time too. Anyway as you know the market goes up, and it goes down. In the short term it's a roller coaster ride sometimes and other times it's less volatile. But all in all, I am firmly convinced that it's a decent way to invest for the long term.
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Old 10-11-2018, 11:44 AM   #63
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The 1987 crash was scary . . .
That crash helped me a lot. I was new to investing and was taking the advice of a newsletter (monthly, paper, snail mail) to buy/sell mutual funds. They had several model portfolios that had done much better than the market over long periods--it looked great.
We had the crash and their next newsletter showed, miracle of miracles, that their model portfolios had moved a considerable amount from stocks to bonds after the publication of the previous newsletter but before the Black Monday crash. That's when it became clear to me how their great track record had been achieved.


This prompted me to learn more about the performance of more static asset allocation methods, rebalancing, costs, and the true value of active management. So, in retrospect, the 1987 crash helped me a lot.
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Old 10-11-2018, 11:46 AM   #64
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I purchased a put on the market on Friday before the market plunge on Monday 1987. Now I know why, there’s several days of down in the market.
Thanks for the memories! I was short futures for myself and clients that day. I made millions that day, went in the next day to settle accounts and close up shop. Have not stepped foot anywhere near Wall street (office was on Broad street) in almost 31 years!
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Old 10-11-2018, 11:53 AM   #65
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Originally Posted by W2R View Post

Also, as far as spending money? I withdraw that from my portfolio during the first week of the year, so events like this cannot impact me immediately like that. By the end of the year, things may even out and at least we will know more. If I have to adjust what I spend, it would be next year anyway. I'm still in "Blow that Dough" mode for this year.

And most important - - I have been following the market for over half a century by now (even though I have not been investing for that long). You probably have been following it for a long time too. Anyway as you know the market goes up, and it goes down. In the short term it's a roller coaster ride sometimes and other times it's less volatile. But all in all, I am firmly convinced that it's a decent way to invest for the long term.
+1
Yesterday brought me back to where I was in February; so I've essentially lost almost the entire year's growth. With a YTD of ~1%, I have no expectations to see my 10 year 8% average this year nor my forecasted 6%.

Graveyard or no graveyard, I have no plans to do much other than minor tweeking. I draw as needed from dividends and fund cap gains which I set aside in a MM bucket rather than reinvest.

What I look at for comfort in times like these is the continuous upward trend over the past 50+ years. ("continuous" doesn't mean non-stop, but hold that Dow chart out at arm's length)
To me, it's a tide that continues to rise despite the occasional barriers and detours that are put in it's way. Ever make a sand-wall at the beach?

I'll once again remind us of my smarter-than-you neighbor who 'sold everything' on the last week of February 2009.

If anything 2008 taught me a lesson of the benefits of staying the course.
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Old 10-11-2018, 12:20 PM   #66
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+1
Yesterday brought me back to where I was in February; so I've essentially lost almost the entire year's growth. With a YTD of ~1%, I have no expectations to see my 10 year 8% average this year nor my forecasted 6%. ....
+1 ... very similar story here... total nut is a bit lower than at the end of February and 1.00% for YTD.
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Old 10-11-2018, 12:43 PM   #67
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More down, please!!
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Old 10-11-2018, 12:44 PM   #68
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For every share sold off today, someone was on the other side buying. So someone thinks there's still value to be found.
Doesn't that apply to every market, every day?
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Old 10-11-2018, 12:45 PM   #69
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Originally Posted by Lsbcal View Post
The 1987 crash was scary...
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Originally Posted by ERD50 View Post
I specifically remember not being scared...
I remember hearing on the radio about the market crash on the drive home from work. That was the time I had to commute 100 miles round trip each day through a freeway construction zone. Then, read about a guy jumping off a high rise. And another guy bringing a gun to his brokerage office and shot his broker.

I did not have a whole lot in the market then to be scared or worried. I did not even look at my 401k. In fact, I did not even know how much money I had. Maybe $100K.
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Old 10-11-2018, 12:45 PM   #70
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Has it been down 10% from the peak yet.
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Old 10-11-2018, 12:46 PM   #71
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+1
Yesterday brought me back to where I was in February; so I've essentially lost almost the entire year's growth. With a YTD of ~1%, I have no expectations to see my 10 year 8% average this year nor my forecasted 6%.
I am also back to where I was back in February, although February represents a drop from the highs I was at back in December and January. I am basically back to where I was last November ago when everything was still on the rise.

Regarding 1987, I had just started contributing to my old 401k at the end of 1986. I was mostly in the Stable Value fund whose annual return was about 8%. My losses in the S&P500 index fund were under $100 and very quickly bounced back.
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Old 10-11-2018, 12:48 PM   #72
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Beginning to think this is manipulation, politically motivated (upcoming elections). The economy is strong and there is no fundamental reason for the huge drop this past week..NOT EVEN "rising rates" because we've all known that for months if not longer now.

The big boys are attempting to cause a stampede, and it appears to be working. Doesn't help all the talking heads on TV are stoking the fires of fear and panic.

I survived 2008 without panicking and selling, but now that I am retiring (in Nov) this is really, really bad timing. Thankfully my AA is good and we'll be fine, but watching my net worth drop in $50K+ chunks every day for multiple days in a row is stressful at best.

All JMHO..
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Old 10-11-2018, 12:50 PM   #73
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Has it been down 10% from the peak yet.
No, only -7.4% from the top. Needs another 90 points on the S&P.
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Old 10-11-2018, 02:10 PM   #74
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I feel amazingly calm. I even surprised myself. I have picked off a few deals in bonds, but other than that just watched.
All the other market meltdowns I have lived through ('87, '91, '01, '08 and probably a few other corrections in there) I think have prepared me well.


My biggest concern now is what's for dinner.
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Old 10-11-2018, 02:11 PM   #75
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+1 ... very similar story here... total nut is a bit lower than at the end of February and 1.00% for YTD.
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I am also back to where I was back in February, although February represents a drop from the highs I was at back in December and January. I am basically back to where I was last November ago when everything was still on the rise.
Always respected both of your market insights...glad to see I'm in good company!
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Old 10-11-2018, 02:21 PM   #76
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Doesn't help all the talking heads on TV are stoking the fires of fear and panic.
I cancelled cable TV several years ago and stopped watching the financial talking heads. I felt a bit of withdrawal immediately after I did it, but within a short time I got used to not watching it, and now I feel much better and don't miss it at all. Every once in a while I get exposed to the TV talking heads at an office or somewhere else, and I find myself wondering how I was able to watch that before. It feels strange to admit this, but there was a time that I used to look forward to watching Jim Cramer on Mad Money after work, it was entertaining.
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Old 10-11-2018, 02:28 PM   #77
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I found an AA that seemed to better suit my situation, and my personal risk tolerance.

i guess I hit the sweet spot, because this isn't bothering me.
That's a good sign.
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Old 10-11-2018, 02:29 PM   #78
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I cancelled cable TV several years ago and stopped watching the financial talking heads. I felt a bit of withdrawal immediately after I did it, but within a short time I got used to not watching it, and now I feel much better and don't miss it at all. Every once in a while I get exposed to the TV talking heads at an office or somewhere else, and I find myself wondering how I was able to watch that before. It feels strange to admit this, but there was a time that I used to look forward to watching Jim Cramer on Mad Money after work, it was entertaining.

Oh, I don't watch either - but the herd does. And that's excaberating the panic that is most likely driving the dive.
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Old 10-11-2018, 02:34 PM   #79
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We don’t watch Cramer anymore. Too loud is the reason.
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Old 10-11-2018, 02:36 PM   #80
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I cancelled cable TV several years ago and stopped watching the financial talking heads. I felt a bit of withdrawal immediately after I did it, but within a short time I got used to not watching it, and now I feel much better and don't miss it at all. Every once in a while I get exposed to the TV talking heads at an office or somewhere else, and I find myself wondering how I was able to watch that before. It feels strange to admit this, but there was a time that I used to look forward to watching Jim Cramer on Mad Money after work, it was entertaining.
Even worse than that, I used to love watching Kudlow's show. Talk about killing brain cells.
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