October 10th Market Plunge

[karen1972]

Well first off, I assumed it plunged because of me... ie I was out doing a framing inspection on my new home and while I do have 25% down payment in a Mutual Fund, I failed to take out my extra 10% reserve as I told myself to.. so Karma is just messing with me as that 10% just happens to be EXACTLY what I lost in the market yesterday.

Seriously, it was a blip, I do expect some softening before the election and of course people's fear of the trade wars and the Fed tightening, that's a lot of factors making various people all fidgety.

I'd be ok DCA right now as I like the volatility. I expect by the time the election is done, everything will be baked in and then there isn't as much opportunity.

 

[ERD50]

Either you all have nerves of steel or there is some whistling in the graveyard going on. ....

A 4%-5% drop, and you are talking about "nerves of steel" or "whistling in the graveyard"?

Get a grip! Many of us handled the 2008 drop w/o getting all weak kneed. I re-balanced what turned out to be near the lows. Yes, bought more stocks when they were down ~ 40%.

So far, this is just a blip of noise. Very likely, if you didn't look for a week or two, you wouldn't even suspect anything happened. That is yet to be seen, but you can't judge on a single digit blip.

-ERD50

 

[Totoro]

Quite a reversal compared to the peak for me, yet not a really big hit compared to Jan 1st.

• Tracker worldwide +3% (peaked at +9%)
• Tracker emerging -11% (peaked at +6%)
• Individual +2% (peaked at +11%)

All in EUR.

 

[copyright1997reloaded]

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.

I lost 20+% in one morning on 10/19/87, and that was AFTER the market went down 3.8% on 10/14/87, and 2.4% down on 10/15/87 and 4.6% on 10/16/87.

Yesterday was a "pimple on the a** " of that. I survived that day and so did the US economic expansion that was happening at that time.


















=

 

[Fedup]

I lost 20+% in one morning on 10/19/87, and that was AFTER the market went down 3.8% on 10/14/87, and 2.4% down on 10/15/87 and 4.6% on 10/16/87.

Yesterday was a "pimple on the a** " of that. I survived that day and so did the US economic expansion that was happening at that time.

=

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.

 

[NW-Bound]

I don't own or plan to own any Tesla car or stock

I think Tesla cars are OK. Just keep your eyes wide open, hands on the steering wheel, foot on the brake, like Musk said.

 

[Lsbcal]

I lost 20+% in one morning on 10/19/87, and that was AFTER the market went down 3.8% on 10/14/87, and 2.4% down on 10/15/87 and 4.6% on 10/16/87.

Yesterday was a "pimple on the a** " of that. I survived that day and so did the US economic expansion that was happening at that time.

The 1987 crash was scary but those were quite different economic times. For example, the yield on the 10 year Treasury was 8.9% (the 3 mo Treasury was 5.5% !!). Real bond returns were highly positive. So it paid to move to bonds over stocks in those days. Just saying this because there were true underlying reasons for many to move out of stocks besides just pure panic ... and there was plenty of pure panic.

My Plan B is only effective when variables associated with recessions of the past are present. That is not the case now. So I'm sitting tight.

 

[NW-Bound]

... I don't like it when $40k vanishes in a week...

That's 1/2 of what I lost just yesterday. And of course I do not like it.

You have more in real estate, while I only invest in equities. So, your pain is just from a paper cut.

 

[RobbieB]

I couldn't care less and am doing nothing as a result.

 

[HadEnuff]

When we had the bump in late January-early February 2018 I did some soul searching and decided I was not comfortable with my AA. It wasn't predicated on a belief that the market was about to crash, but after assessing my needs, and what would happen if the market continued to climb, or stay put, or fall back, 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.

 

[ERD50]

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/New_Home_Page/datafile/histretSP.html

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

Scary?

-ERD50

 

[W2R]

Nerves of steel?

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.

 

[samclem]

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.

 

[NYEXPAT]

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!

 

[marko]

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.

 

[pb4uski]

+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.

 

[nash031]

More down, please!!

 

[mickeyd]

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?

 

[NW-Bound]

The 1987 crash was scary...

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.

 

[Fedup]

Has it been down 10% from the peak yet.

 

[scrabbler1]

+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.

 

[24601NoMore]

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..

 

[NW-Bound]

Has it been down 10% from the peak yet.

No, only -7.4% from the top. Needs another 90 points on the S&P.

 

[COcheesehead]

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.

 

[marko]

+1 ... very similar story here... total nut is a bit lower than at the end of February and 1.00% for YTD.

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!