Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Perhaps I did learn something from the last recession?
Old 01-03-2019, 07:10 PM   #1
Full time employment: Posting here.
 
Join Date: Oct 2015
Posts: 617
Perhaps I did learn something from the last recession?

So, here we go again, 10 yrs later. The Bears are out in full force after our long bull run and many are predicting more significant losses as we head into a full blown recession in 2020. Will it happen... who knows. Did I like my stock allocation dropping 4% - 6% (major indexes)in 2018... no. Did I like my flat to slightly negative bond allocation returns... no. Did I like to hear the news on Apple today and see the big drop and sign of things to come... no. BUT, somehow this go around, despite having a much more significant portfolio than 2008, I just seem to be more indifferent, less fearful, less feeling like the end is near. I am still on track to pull the plug end of 2019 IF I choose to, but I suppose the market could tell me otherwise. None the less, I just don't seem to be as emotionally affected this time. I suppose I learned allot about my "investing nerves" or my risk tolerance from the last recession. Sure, I am more conservative today at a 60/40 AA vs an aggressive 80/20 10 yrs ago, but perhaps I am maturing?
How are you weathering the recent drop? Are the Bears frightening you causing you to act? Or, is it just pass the popcorn and let's watch Netflix?
DawgMan is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-03-2019, 07:15 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jan 2018
Location: Tampa
Posts: 8,361
Just chasing some yield on the Fixed income side, otherwise staying put but continue though to run the calculators.
__________________
TGIM
Dtail is online now   Reply With Quote
Old 01-03-2019, 07:16 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 10,252
The recent drop is just a small blip caused by the actions of just a few people. If those people change their minds which they seem to do often, then there will be no recession.

But if they don't change their minds, then a recession is worth the price to get rid of them.

Thus either outcome I'm good with it.
LOL! is offline   Reply With Quote
Old 01-03-2019, 07:33 PM   #4
Full time employment: Posting here.
mamadogmamacat's Avatar
 
Join Date: Dec 2012
Posts: 751
I'm also a bit surprised, but greatly pleased, at my relative indifference emotionally and actually a bit of enjoyment intellectually, as I watch this downturn unfold to whatever it is going to be (we will only know when we look back at it years from now) and whenever it will end. Having about 48.3% currently in SI, based on spending needs, helps a lot of course.
mamadogmamacat is offline   Reply With Quote
Old 01-03-2019, 07:35 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2011
Posts: 6,414
I've mentioned several times that 2008 emboldened me and taught me to not panic. Sleeping at lot better through this downturn than I was 10 years ago.
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Old 01-03-2019, 07:42 PM   #6
Recycles dryer sheets
 
Join Date: Jul 2018
Posts: 60
Therein lies the problem. This time around many people are not as fearful and are holding on tight. Which means, it will take a bigger fall for them to capitulate and for the market to bottom out. History always rhymes even if it doesn't repeat.
revhappy is offline   Reply With Quote
Old 01-03-2019, 07:44 PM   #7
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 48,036
Quote:
Originally Posted by marko View Post
I've mentioned several times that 2008 emboldened me and taught me to not panic. Sleeping at lot better through this downturn than I was 10 years ago.
+1

Of course in 2008 there was serious discussion that we were experiencing TEOTWAWKI. This time, not so much.
__________________
Numbers is hard

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 01-03-2019, 08:00 PM   #8
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 4,299
Made my first roundup of cash and bonds (minus 1.5-2. years of spending) and put 20% of it into equities when they broadly hit 20% down from the peak. I've softened my equities stance for my retirement accounts and try for 25% bonds. Get down as far as last recession and I'll be at 100% equities once more. Not that I think that will happen.
Animorph is offline   Reply With Quote
Old 01-03-2019, 08:10 PM   #9
Thinks s/he gets paid by the post
 
Join Date: Nov 2015
Posts: 2,190
Quote:
Originally Posted by marko View Post
I've mentioned several times that 2008 emboldened me and taught me to not panic. Sleeping at lot better through this downturn than I was 10 years ago.
While obviously different, it is still somewhat similar.... With the last hurricane, Michael, that hit the pan handle in Florida many people stayed, unwilling to leave or do anything as every other hurricane that passed that way had never done significant damage. They found out that this time was not the same as all the other times, but unfortunately only after experiencing catastrophic damages. They too will eventually return to normal, but in a much longer period of time than they had expected...
bobandsherry is online now   Reply With Quote
Old 01-03-2019, 08:52 PM   #10
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 48,036
Quote:
Originally Posted by revhappy View Post
Therein lies the problem. This time around many people are not as fearful and are holding on tight. Which means, it will take a bigger fall for them to capitulate and for the market to bottom out. History always rhymes even if it doesn't repeat.
Quote:
The US bear market of 2007–2009 was a 17-month bear market that lasted from October 9th 2007 to March 9th 2009, during the financial crisis of 2007-2009. The S&P 500 lost approximately 50% of its value...
https://en.wikipedia.org/wiki/United...007%E2%80%9309

So you are anticipating the S&P will have to fall more than 50% to reach a bottom this time?
__________________
Numbers is hard

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 01-03-2019, 09:06 PM   #11
Recycles dryer sheets
Franklin's Avatar
 
Join Date: Jul 2018
Location: in transit
Posts: 208
Quote:
Originally Posted by DawgMan View Post
So, here we go again, 10 yrs later. The Bears are out in full force after our long bull run and many are predicting more significant losses as we head into a full blown recession in 2020. Will it happen... who knows. Did I like my stock allocation dropping 4% - 6% (major indexes)in 2018... no. Did I like my flat to slightly negative bond allocation returns... no. Did I like to hear the news on Apple today and see the big drop and sign of things to come... no. BUT, somehow this go around, despite having a much more significant portfolio than 2008, I just seem to be more indifferent, less fearful, less feeling like the end is near. I am still on track to pull the plug end of 2019 IF I choose to, but I suppose the market could tell me otherwise. None the less, I just don't seem to be as emotionally affected this time. I suppose I learned allot about my "investing nerves" or my risk tolerance from the last recession. Sure, I am more conservative today at a 60/40 AA vs an aggressive 80/20 10 yrs ago, but perhaps I am maturing?
How are you weathering the recent drop? Are the Bears frightening you causing you to act? Or, is it just pass the popcorn and let's watch Netflix?
Well there is actually some good stuff this time around on Netflix.....but I get your point. I have lost a few years worth of WD's but am not as worried this time around. I have been 50/50 which puts me down about 7% ish but I am sleeping well. I admit I do look at the market a few times daily on days like today! I'll worry if Washington can't get along in a few months and China talks fall apart but for now I see things working out within a month to 2. Hey, I may look back (as I have done already) and say what was I thinking?? But for now I am staying pat. Let's all hope this storm blows over.
__________________
A persons wealth is measured by what they can afford to do without.
Franklin is offline   Reply With Quote
Old 01-04-2019, 06:38 AM   #12
Full time employment: Posting here.
 
Join Date: May 2015
Location: Atlanta suburbs
Posts: 633
Quote:
Originally Posted by DawgMan View Post
Are the Bears frightening you causing you to act?
no

It's just part of the normal cycle.
DEC-1982 is offline   Reply With Quote
Old 01-04-2019, 06:54 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 29,891
Just finished my rebalancing over the past two days as planned. Bought a lot of equities.

The stock market can go back up now!

Have my annual income withdrawn and parked in high yield savings and Prime MM. that always feels good.

I’ll sit on my hands unless the stock market takes another large drop in which case rebalancing may again be warranted. Or perhaps some tax loss selling.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 01-04-2019, 08:09 AM   #14
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 1,263
I don't think its a valid comparison to say "I'm not as worried this time as I was in 2008". 2008 the markets fell more than 2x farther than they have so far this time.

Reactions are non-linear. The first fall from 0 to 10% is much milder than the reactions to "markets fell another 10% today and are now down 50% from their highs".
Spock is offline   Reply With Quote
Old 01-04-2019, 11:31 AM   #15
Thinks s/he gets paid by the post
 
Join Date: Mar 2009
Posts: 2,517
Only mild rebalancing with reinvesting dividends. I'm also trying to lengthen the maturity of my CD ladder albeit at a snails pace with each maturing issue.
Of course my current 37% equity allocation helps a lot vs 70% in 2007. On top of that I had a j*b in a cyclical industry at the time which looked pretty shaky. For me it is different this time.
__________________
Took SS at 62 and hope I live long enough to regret the decision.
foxfirev5 is offline   Reply With Quote
Old 01-04-2019, 12:20 PM   #16
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 48,036
Rumor has it the market has enlisted the services of this guy to sue for the repeated whiplash it has suffered from for the past couple of weeks...

__________________
Numbers is hard

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 01-04-2019, 12:27 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 29,891
According to some talking head big sharp rallies are typical in bear markets, so yes I guess whiplash is guaranteed.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 01-04-2019, 12:31 PM   #18
Thinks s/he gets paid by the post
 
Join Date: Oct 2013
Posts: 1,490
Quote:
Originally Posted by REWahoo View Post
+1

Of course in 2008 there was serious discussion that we were experiencing TEOTWAWKI. This time, not so much.
Your post reminds me of the REM song "It's The End Of The World As We Know It" and one of its lyrics:

This means no fear, cavalier, renegade and steering clear
It's the end of the world as we know it, and I feel fine
__________________
“Before you criticize someone, walk a mile in their shoes. That way, you’ll be a mile from them, and you’ll have their shoes.” – Jack Handey
candrew is offline   Reply With Quote
Old 01-04-2019, 12:53 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 6,816
Quote:
Originally Posted by DawgMan View Post
So, here we go again ... How are you weathering the recent drop? Are the Bears frightening you causing you to act? Or, is it just pass the popcorn and let's watch ...
Oh, I watch the market just for fun. Sometimes read the pundits, also for fun. Read the posts here and continue to be impressed with the maturity of the comments.

I think there are two pieces to being comfortable. First, as you say, having experience helps a lot. We got whacked for the first time in 1987 and every gyration since has made us more and more comfortable with taking a long term view.

The second, though, is also important: Not having to sell equities in order to meet obligations like eating, college expenses. That's where the AA comes in for me. We view the fixed income portion of our portfolio more like a bucket than an allocation. That's the source of the funds we will spend while the current kerfluffle continues. As things settle down, we'll probably replenish the bucket.

I do wish, though that the flash boys' market distortions can be eliminated by some new trading rules. I am getting kind of tired of the gyrations.
OldShooter is offline   Reply With Quote
Old 01-04-2019, 01:38 PM   #20
Thinks s/he gets paid by the post
Cobra9777's Avatar
 
Join Date: Jul 2012
Location: Texas
Posts: 2,365
I was hit pretty hard in 2001. A mountain of high-tech Mega options went underwater, never to resurface. So much for retiring in my 40s.

In 2008, I knew I was within a few years of ER, and was pretty scared of a repeat of 2001. So I drastically reduced equity exposure in mid-2008, then all-in by mid-2009. Retired a few years later.

This time, I'm not as concerned. With 2 pensions, rental income, and dividends, we don't sell very often... and usually just to fund discretionary travel and home improvements. Reality is, we sell less in taxable than we reinvest in tax-deferred. Meaning our WR is less than the overall portfolio dividend rate. Then this... even with the recent drop, we're still up 30% from the day I hung up the spurs, and I felt pretty good about our FIRECalc success rate on that day. And finally, SS is right around the corner if we want to go that route for one of us.
__________________
Retired at 52 in July 2013. On to better things...
AA: 55% stock, 15% real estate, 27% bonds, 3% cash
WR: 2.7% SI: 2 pensions, some rental income, SS later
Cobra9777 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
You Learn Something New Every Day Birdie Num Nums Other topics 71 11-01-2013 09:22 AM
New member looking forward to learn something Skippie Hi, I am... 14 06-17-2008 12:57 AM
Perhaps we should work longer? JustCurious FIRE and Money 55 02-17-2008 05:27 PM
If you want to actually learn something about Immigration................. Cut-Throat Other topics 20 05-24-2006 09:29 PM
See @ Last, See @ Last, Thank God I Can See @ Last Beachbumz Other topics 24 02-18-2005 08:16 PM

» Quick Links

 
All times are GMT -6. The time now is 09:06 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.