Make It Stop!!!!!

[Helen]

Less than 4 months from my last day of w*rk

Congratulations! Do you get butterflies when thinking of retirement?

 

[Andre1969]

I just added up my numbers this morning. Even after yesterdays rogering, I didn't do nearly as bad as I thought. I'm down about 18% from my peak on February 19.


For comparison, back in late 2018, peak-to-trough (late September to Christmas Eve) I was down about 25%.

Of course, we might not have hit the bottom of the trough, yet.

The only other recent event, since the Great Recession, that I can remember being particularly bad, was from July 7 to August 8, 2011, I lost about 14%. I can't even remember what the circumstances were that caused it, but I remember the early part of the year being a bit volatile, but then after that crash it pretty much stayed down for awhile, and I ended up at a slight loss for the year. It was around February 2012, I think, that I had recovered to that 7/7/11 peak.

 

[audreyh1]

+1. I’m personally more curious to see where the markets end up on 12/31/20 so that I can judge the year, not that I’ll change anything, regardless. My own portfolio is back to August levels, i.e. just a blip that can be made up. For other “investors,” yesterday was one of those occasional panics where the herd just sells everything and flees to cash. In general, however, bonds have been way up this year. It’s possible that the herd will next fly to safety in bonds and we could also have even more interest rate cuts, both helping bond prices. Interest rate cuts might also help real estate prices. IOW, there’s much more to watch in this picture than the stock market.

Same here. No hurry. We’ll see where we wind up after a few quarters.

 

[Dtail]

I just added up my numbers this morning. Even after yesterdays rogering, I didn't do nearly as bad as I thought. I'm down about 18% from my peak on February 19.


For comparison, back in late 2018, peak-to-trough (late September to Christmas Eve) I was down about 25%.

Of course, we might not have hit the bottom of the trough, yet.

The only other recent event, since the Great Recession, that I can remember being particularly bad, was from July 7 to August 8, 2011, I lost about 14%. I can't even remember what the circumstances were that caused it, but I remember the early part of the year being a bit volatile, but then after that crash it pretty much stayed down for awhile, and I ended up at a slight loss for the year. It was around February 2012, I think, that I had recovered to that 7/7/11 peak.

Sounds like you will have to cross back over the 2m goal again. It will come.

 

[Andre1969]

Sounds like you will have to cross back over the 2m goal again. It will come.

Yep...and the $1.9M goal, the $1.8M goal, and the $1.7M goal


To put a dollar amount on it, I fell from ~$2.048M on February 19, to ~$1.679M on March 9. I'm basically back to roughly March 2019 levels.

 

[mountainsoft]

My own portfolio is back to August levels

Same here. Just by coincidence I changed my asset allocation earlier this year from 60/40 to roughly 50/50 since we are getting close to retirement. With the recent stock market drop I'm closer to 40/60 now. I'm only down about 7% from my peak last month.

 

[kgtest]

For comparison, back in late 2018, peak-to-trough (late September to Christmas Eve) I was down about 25%.

Of course, we might not have hit the bottom of the trough, yet..

thanks for the reminder, I totally forgot I think i was down about 20 or 25% back then as well peak to trough. For me it's exciting, it's not sad, depressing, scary...

It's exhilarating, exciting, fun!

 

[kgtest]

My own portfolio is back to August levels,

same. Went back to mid August levels. Essentially the Earth unwound 5 months of gains, but it'll spin fast to catch up. It's like that old office clock after daylight savings...you are amelessly staring at it in a meeting one day and all of a sudden it just stops... then it speeds up real quick to catch back up to time.

 

[pb4uski]

It sucks for a lot of people. You're entitled to feel sucky...Many, Many people feel that way and its normal! My heart has been beating a little faster these past 2 weeks because we are retiring next year and have seen our NW drop by mid six figures over these 2 weeks! But that said, not everyone is fortunate to have saved enough to even have this type of problem to worry about. So I pause, take a breathe and remind myself "this too shall pass."

But what does really get under my skin is when I hear these arrogant/out of touch jerks make comments like "YEAH, I hope it drops another 15% so I can buy more!" Perhaps these folks don't have much skin in the game to begin with, IDK....But fine, celebrate your flash-sale, but keep your gleeful comment to yourself because this market is killing many peoples retirement and pension funds and to be so flippant about it, its just dead wrong!

If you are younger with a longer time horizon or have a $***ton of money to reinvest in this declining, bipolar market then its a great opportunity. But many folks who are close to retirement or already in it and have to watch their investments go backwards without the benefit of many years or regular income to take advantage of these declines.

^^^ If you're all wound up about this correction/bear then I'm not sure if investing in equities is for you. I'm retired and like you have watched my investments go backwards over six-figures and ~10% from the all-time high and am calm as a cucumber.... but I've been seriously investing in equities since the early 1980s so have been through a number of these crisises.

I actually wish that that I did have some dry powder to buy stocks on sale, but I'm so happy with my fixed income investments that I don't care to sell any to buy stocks. I'll ride out the storm. Crap happens but as you say... this too shall pass.

 

[ERD50]

Relax - that info on the Japan market is very misleading. The actual Total Return over that time is POSITIVE. Yes, positive.

First, look at this chart - someone who retired DEC1989 wold have typically been investing for 20 years or so. Their average buy-in price would be far below that peak. If they never invested in the market, they would not have a peak to fall from. And they likely would be even further behind.

Second, you can't ignore dividends (oddly, some of the dividend stock proponents seem to often ignore stock price!). When you include dividends, the index has been up ~ 0.66% annually.

Relax.

edit - forgot to add screen grabs...


-ERD50

That return is not for a retired person withdrawing money but for an investor not touching funds and reinvesting dividends. Run Nikkie from 1989 and withdraw 3% per year - adjusted for inflation in Japan and see where you end up. If there is any money left I'd be shocked.

Yes, although I don't know what inflation was in Japan over that time, or what their fixed income options were (assuming a Japanese retiree would not be 100% Japan stocks). If inflation was near zero, you might have been able to draw 3% for 30 years, as the total return was positive.

But I stand by my points - it isn't helpful to judge from peaks, most people invest over time, and it distorts things to ignore dividends.

-ERD50

 

[Freedom56]

Some words of wisdom from Robert Schiller.

‘It’s a dangerous time’
“What we have now is really two epidemics. We have an epidemic of the coronavirus, but we also have an epidemic of fear based around a narrative that is not necessarily keeping up with scientific reality. And, this narrative has been quite striking,” he said. “It’s a dangerous time for the stock market.”

The outbreak is pushing the U.S. to the edge of a bear market.

Monday’s market plunge happened on the eleventh anniversary of the longest bull market ever. The Dow, S&P 500 and Nasdaq saw their worst day since 2008. The Dow tumbled almost 8 percent, closing down 2,014 points.

“It’s highly likely now that we’ll have a recession,” he added. “It’s already disrupting business. It’s already causing people to pull back. We’re not going to see creative new investments blossom in this environment.”

https://www.cnbc.com/2020/03/09/shi...s-not-peaked-market-plunge-just-starting.html

 

[easysurfer]

We are getting close :

A bear market is widely defined as a drop of 20% from a recent peak. Stocks had dropped into correction mode — defined as a pullback of 10% — late last month as fears over the economic impact of the coronavirus outbreak began to rise.

Here are the levels where key indexes would need to close to enter bear territory, according to Dow Jones Market Data:

S&P 500 SPX, 0.332% — 2,708.92

Dow Jones Industrial Average DJIA, 0.149% — 23,641.14

Nasdaq Composite COMP, 0.507% — 7,853.74

https://www.marketwatch.com/story/s...low-these-levels-2020-03-09?mod=mw_latestnews

 

[ER Eddie]

Fwiw,

"The average length of a bear market is 367 days. Conventional wisdom says it usually lasts 18 months. Between 1900 and 2008, bear markets occurred 32 times with an average duration of 367 days."

https://www.thebalance.com/what-is-a-bear-market-difference-from-a-bull-3305814

 

[Markola]

same. Went back to mid August levels. Essentially the Earth unwound 5 months of gains, but it'll spin fast to catch up. It's like that old office clock after daylight savings...you are amelessly staring at it in a meeting one day and all of a sudden it just stops... then it speeds up real quick to catch back up to time.

And just like that, mid-October.

 

[kgtest]

Yessir. Although AAPL down after hours and havent checked Nikkei. Not sure how futures will look when the earth spins amother 8 hours as I sleep. Time to get kids to bed. Another day another dollar.

 

[Cayman]

If the market drops more than 40% I may spend the day in bed, too.

School of hard knocks has taught me that I'm pretty risk averse.
Ten+ years cash let's me ignore most market swings. I have plenty of cash to buy but don't feel any confidence that this is a sale. But then I'm not much of a gambler. Heck, I lose $10 almost every Thursday night at poker.

 

[audreyh1]

We are getting close :



https://www.marketwatch.com/story/s...low-these-levels-2020-03-09?mod=mw_latestnews

It takes time too, to make it a bear market.

 

[audreyh1]

Fwiw,

"The average length of a bear market is 367 days. Conventional wisdom says it usually lasts 18 months. Between 1900 and 2008, bear markets occurred 32 times with an average duration of 367 days."

https://www.thebalance.com/what-is-a-bear-market-difference-from-a-bull-3305814

And that’s the dropping part. But it feels much longer than that because it takes so long to recover.

 

[Sunset]

The human tendency is to absorb the peak of the bubble as the new "worth"...for example, folks who bought houses in SW Florida in 2000, for 250K, and learned that their neighbors had sold a similar house for 425K a few years later, came to the belief that their house was now worth 425K.

Same for folks with a heavy AA stock portfolio,who, after a historically long bull market, came to the belief that the inflated value on the day of the highest valuation, established the new value. Of course, it only would have done so had they sold everything on that day, but who wants to do that when everyone is going "whee!!!"?

I'm like that, I take the highest value as the new high and so it all looks bad right now, not terrible, but bad.

If I instead considered all my holdings as worthless, then today everything looks GREAT !!!

It's true, in less than 100 years from now all my holdings are worth nothing to me, so right now it's GREAT... my new ZEN.

 

[ER Eddie]

And that’s the dropping part. But it feels much longer than that because it takes so long to recover.

Ah, so that's just half the picture. I thought it seemed a little short.

 

[Freedom56]

I'm looking at some equity investments now after 30 years (other than short term trades). The Canadian banks are starting to look attractive. Like all banks, they are exposed to the oil and gas and airline sector. The market hasn't fully discounted the carnage that's about to unfold in that sector. There hasn't been that much panic selling in bonds and preferred shares yet, other than in the oil and gas and retail sectors which I won't touch. Other items crossing the news wire is that Boeing is having some serious liquidity problems and is now down 10%. There is no way they can continue to issue debt to pay their dividend. We will likely see them cut or suspend the dividend. All those Wall Street analysts who were pumping up the stock after the second crash are now in hiding.

 

[audreyh1]

Ah, so that's just half the picture. I thought it seemed a little short.

Yes, that often gets glossed over in the discussions, but bear market duration is only from the peak to the bottom of the bear market. And most folks actually want to know how long recovery is, as they may be drawing on fixed income until stocks recover.

 

[njhowie]

It's going to get worse. Mom and pop investors who for a long time bought in to buy and hold forever just kept contributing as Buffett, Bogle, and others told them. However, looking at the bottom line on their portfolios and seeing it drop by 25% in under a month has to have many beginning to panic, as seen in some of the comments here and elsewhere. Same as 2009, retirement plans are going to change for many. At some point others will no longer be able to handle the pain, even if it's just on paper, throw in the towel, adjust their plans accordingly, come to terms that either they have to go back to work, or simply will no longer be able to retire. We've seen this before, it's going to happen again. How low will the markets go before they go higher once again? That's anyone's guess.

We're now beginning to see the downside aspect of how index funds work, how they can drive the markets lower, just the reverse of how they work on the way higher. Fund inflows make the funds blindly purchase all stocks in the index according to their weightings. This drives the entire market higher. Mom and pop continue sending in their monthly automatic investment, along with others who see the indexes going higher, which begets more buying, driving the markets even higher. Now, on the way down, just go in reverse. Mom and pop have held on for a long time. At what point do they freak out and throw in the towel?

Here are the stats (net) for the past few weeks:

03/04/2020 Equity Fund Outflows -$20.3 Bil
02/26/2020 Equity Fund Outflows -$22.1 Bil
02/19/2020 Equity Fund Outflows -$2.1 Bil
02/12/2020 Equity Fund Inflows $4.7 Bil
02/05/2020 Equity Fund Inflows $3.4 Bil

We have not hit peak hysteria yet, but it's coming.

 

[njhowie]

I have contended for many years that too many folks are in the market who shouldn't be, with too much of their money. Too many folks are reliant on the market for their retirement...paper millionaires. Too many folks do not understand or appreciate the risks of "investing" in the market. That you can lose money in the market, potentially everything.

Every 10 years or so, we get a flush and reset of the markets so the masses can be educated. We're now at that point. Smart investors take it in stride and will come out fine on the other end. Those who did not belong in the market in the first place will leave, taking their losses and swearing off of putting anything in the stock market...until the next time.

I see my 2/98 AA slowly moving to maybe 10/90 between now and year end. Most of that increase in the equity portion will be driven by income being thrown off from my fixed income holdings.

Let the declines continue...I'm loving it.

 

[HadEnuff]

My personal opinion, and I've stated it more than once on these boards and when talking to people contemplating retirement (early or otherwise), is that if your financial plan for retirement can't survive a 40% drop in equity prices, you are either over-allocated in equites, or you don't have enough money yet to retire.

I was involved in a program, I guess you might call it a mentorship, with "young" dentists, not so much about dentistry, but about managing money, managing the practice, and saving and investing for retirement. I could not believe the optimism of these young people when it came to stock market returns, as they projected the growth of their retirement portfolios. Then it dawned on me that they didn't experience the "tech bubble" crash of the late 1990s, or the housing bubble crash and recession of '07-'08. All they "knew" was the Bull run.

Then, I remembered running those same calculations myself, in the mid 1990s, salivating over how much money I would have by my mid 50s, given the obvious 15 -20% yearly increase in my portfolio. And I had what I described as a "high risk tolerance"...I had confused "high risk tolerance" with a " love to make 20% tolerance"....

I told these young dentists, who aren't that young anymore, that you don't really know your risk tolerance until you see your portfolio decline 40% or more over two years. I am certain a few of them are starting to get it now.
It's all part of the fun of growing up.