What is your action vs Market Fall?

[audreyh1]

Two years of expenses set aside in cash.
Turned off the TV
Went to the beach

I was too busy today to check until late. I figured it would be another negative day, but it exceeded expectations!

In the meantime - no change in strategy:

I always withdraw my entire annual income from the retirement portfolio so that it’s not exposed to stock or bond volatility. Years like this make me glad I did. I won’t see any income drop until next year.

We have accumulated quite a stash in unspent funds as our income has risen during the rally years. These are invested in short-term, low volatility instruments. A nice cushion if needed.

If we really get a 20% selloff, then I’ll probably rebalance the retirement portfolio as that should mean my equity allocation drops to the 45-46% range and I’ll need to pull it back up to 50%. It usually takes at least months to resolve if the selloff is that severe.

The whole idea is that I could ignore things for an entire calendar year if I really wanted to. I just monitor for rebalancing opportunities, and I can do that infrequently if I choose.

 

[mamadogmamacat]

DOW futures down 644 points as of 11:30 EST

 

[HadEnuff]

My plan is to eat Ramen Noodles and SPAM until the DOW returns to it's previous overblown, overvalued highs. Unless it goes down below 24,000, in which case it will be Ramen Noodles and ALPO.... so I have that going for me.

 

[mamadogmamacat]

I recommend cat food higher protein and less carbs

 

[GoodWishes]

We have been investing since the 80s and seen lots of ups/downs. We will do what we always do, nothing.

 

[SecondCor521]

As mentioned numerous times, I rebalanced to my AA on the way up by selling stocks and buying bonds. I'll be rebalancing to my AA on the way down by selling bonds and buying stocks, although I have to wait until February 24th because of Vanguard's short term trading policies.

In the meantime I'm going to the store to buy some eggs and sugar to make some banana bread.

If things drop more tomorrow, I will be confused and console myself by pretending that all the sellers are the foolish money.

The banana bread turned out well.

 

[audreyh1]

DOW futures down 644 points as of 11:30 EST

Well that’s better than an hour ago when it was down over 800.

It’s been all over the map. Now down less than 500.

 

[audreyh1]

My plan is to eat Ramen Noodles and SPAM until the DOW returns to it's previous overblown, overvalued highs. Unless it goes down below 24,000, in which case it will be Ramen Noodles and ALPO.... so I have that going for me.

The futures has the DOW opening around 23,500.

 

[targatom2019]

#2 for me.

I have seen my 401k gone from 475K in 2005 down to 350K in 2007 and up to $1,025,000 two weeks ago and now back to $990,000. I left everything alone and just keep maxing out every year. I got no mortgage, zero debt and enough cash in CD to survive 3 years so it’s best just to sit tight.

 

[scrabbler1]

I'm invested to generate income. I don't particularly care if the share prices fluctuate and go down for years. My main concern is that my income doesn't drop.

My fixed income is investment grade and my stocks are defensive, mostly utilities. So I may not get any cuts at all. Share prices were probably inflated. So I wouldn't be surprised if it takes years to recover on paper.

Re-investing income at lower prices means higher yields. Probably a great opportunity to grow my income.

I have 2 different AA philosophies. One, for my taxable account, is like this one. It is income oriented, so I don't care a lot if the stock side rises or falls. I will care what the stock fund's next dividend payout is, in April. Then again, only about 20-25% of my dividend income comes from the stock fund. I rarely rebalance, only to adjust the income producers.

In my IRA, it is like SecondCor521's. I rebalance more frequently there, as all the moves there are shielded from any tax implications. Also, it is a longer-term account, something I won't be tapping into for at least another 5 years. My AA there had me close to yet another stock-->bond move but the recent drop on the stock side (and small rise on the bond side) actually put me more in the center of my AA range. It would take a pretty big drop on the stock side to result in a bond-->stock move, a move I have made only 4 times since I first created the rollover IRA back in late 2008. In contrast, I have made stock-->bond moves 17 times in that same period.

Those 17 stock->bond moves I have made since late 2008 have transferred out a little more than the entire initial purchase of the stock fund I made back in late 2008. Yet the value of the stock fund, without any outside purchases, is still a little more than double what my initial purchase was. This means I am playing with House Money at this point, and double that! Another reason to sit still and not panic.

 

[unclemick]

Since I started in 1966 the DOW has recently gone down more points than the 1000 ceiling it was never going above in my lifetime.

I should have perspective and let those Vanguard computers do their thing with my full auto retirement portfolio.

heh heh heh - A few more thousand points down and lust for 'a few good stocks' may overcome my common sense. Resistance is futile and besides the Superbowl is behind us till next football season.

 

[hgm735]

And how does one know when the market has finally stabilized? Bear markets seldom go down, Down and DOWN without a few upsides to lure in more prey for the Bear.

Stay the course, keep your AA in mind, ignore the financial press and have some fun.

+1.

Staying the course here. Not being in ETFs has certainly curbed the urge to trade or feel somehow "responsible" for keeping my money in during a bad market day. Psychology is everything when it comes to investing.

 

[skipro33]

I don't get it. I'm flat for the month. Actually, I'm ahead about a thousand for the last 30 days. I don't see that as anything to get excited about.

 

[Newventurer]

How do you maintain a short position with that much of your portfolio for that long and still have any money left

Retired in a up market and had an irrational fear of losing it all in the first few years having read stories of those that did and went back to w*rk.

Bought SH shares, can’t go broke just lose your investment.

 

[UnrealizedPotential]

Not much reaction. Continue to buy when I can and above all don't panic. This will pass. Maybe not today, or even soon, but it will pass. I will survive. I have before and will do so again. If I want to survive I have to.

 

[explanade]

There seems to be confidence that however much the markets drop, they will go back up quickly as they did in 2008-09.

But what if that was an unusual situation which doesn't repeat?

There are different hands in charge of the Fed, the Treasury and the rest of Washington.

We may not get QE or other extraordinary measures to backstop the markets, even if they're needed.

 

[hgm735]

There seems to be confidence that however much the markets drop, they will go back up quickly as they did in 2008-09.

But what if that was an unusual situation which doesn't repeat?

There are different hands in charge of the Fed, the Treasury and the rest of Washington.

We may not get QE or other extraordinary measures to backstop the markets, even if they're needed.

True - no wonder I've been so calm, thinking if there is another 2008, this will just be a repeat. (Ex-gambler here; the last couple of days haven't been panic inducing at all - contrast to panicking every day when timing the market.... )

If this is an unusual situation, it won't be the size of the drop but the duration which will test ability to stay the course.

 

[DEC-1982]

It will take a lot to move the equity allocation up 5% or down 5% from the values at the beginning of the year.

 

[Senator]

I ignore it. I have rental income and dividends.

If I was one to panic, I would hire a FA to tell me not to panic. Then I would have even less.

 

[DrRoy]

Do nothing. We just came off the longest period in history without a 5% correction.

 

[audreyh1]

Do nothing. We just came off the longest period in history without a 5% correction.

We did? I don’t think so. It’s only been two years. Market’s gone longer than that 3+ years.

 

[Maenad]

Haven't retired yet, so keep putting money in the 401k and after-tax accounts, just like the past 20 years or so.

And take some pork chops out of the freezer for our dinner party on Friday.

 

[kcowan]

Yesterday was Constitution Day here in Mexico. Heard about it on the nightly NBC News.
Yawn...

 

[orangehairfella]

Continue buying on my regular schedule and rebalancing as needed. Same thing thing I did on the way up.

 

[DrRoy]

Do nothing. We just came off the longest period in history without a 5% correction.

We did? I don’t think so. It’s only been two years. Market’s gone longer than that 3+ years.

I was a little off on the stat. Here is the info from a CNN-Money article on Nov. 26, 2017:

"In fact, the S&P 500 hasn't fallen 3% from a previous high point (over one day or several days) since the slump that ended on November 4, 2016, four days prior to the election.That 388-day stretch is the longest the S&P 500 has ever gone without a 3% or more retreat, according to Bespoke Investment Group. (It's 18 days longer than the previous record, which was set in 1995.)"