What has this drastic financial situation tought you?

[DrRoy]

I believe it teaches everyone how truly comfortable they are with their AA,well beyond what various tests/assessments tell you how much risk you can tolerate. It is the "practice" that validates if your "theory" is correct.

+1 I found that I was doing so much better than in 2008. My AA was 58 instead of 82 and beta was 1.0 instead of ~1.2. I had been on a course where with every (approx) 4% rise in NW I was reducing my AA by a point. Going forward, I am thinking of making these moves a little larger, as I do not really need the equity exposure.

 

[racy]

(1) Financially, nothing. Seen movies of this genre several times before.
(2) Keep your ammo shelf full at all times; ya can't find it when the mob panics.

 

[Markola]

I’m grateful for the late Jack Bogle and Vanguard Corp.

 

[njhowie]

I think I'll transition to a 60-30-10 AA, equities, bonds, cash.

I dunno. Gotta wait until the statement comes in. Used to be 80-18-2.

Once the statement comes in, you may find that you might not have much transitioning to do at all - it will likely already be close to 60-30-10 because of how stocks and bonds have performed since the last statement. What is more important would be remaining at 60-30-10 going forward - as stocks appreciate and the AA becomes more heavily slanted towards equities again to continue to rebalance towards 60-30-10 so you don't find yourself at 80-X-Y again.

 

[deserat]

It's been interesting for me as I came out of semi-retirement back to work. I like FIREd had a divorce, which cut my net worth in half, but I was still able to be 'retired' with a consulting company doing quarter-time work to stay intellectually challenged.

This episode has not changed my philosophy and has even further demonstrated to me that I could quit right now and still be solvent. It is interesting to look back at the different decisions I made (and that were thrust upon me) and realize I've done pretty well financially and will be fine for a long time to come.

I work in Health IT over here, so you can imagine I am very busy. The demand for instant virtualization of healthcare services is driving most of my current work.

The part of this decision I made to go back to work that is not being fulfilled right now is the travel aspect, but I hope that will come back into the picture.

I did go and look at my portfolio and it has held up fairly well. I am happy with my AA and my current rate of spending/saving/etc. My lifestyle is fine for me - interestingly from a personal standpoint, outside of the lack of travel, I stayed home a lot, cooked for myself a lot and pursued simple hobbies/interests before. There has not been much of a change for me with this 'lockdown.' Most people who meet me would think I'm an extrovert, but I tell them I am actually an introvert and that when I do get in to a group of people, I'm like a charged capacitor who is immediately grounded.....all of that energy is quickly dissipated.

So, for me, this crazy episode in our world history of which I am a participant has validated many of my assumptions and life long decisions.

 

[deserat]

Oh, and I 'imported' a Costco package of TP to Germany in my furniture shipment - I think it might last over a year for me. I haven't had any issues buying stuff here either on the economy or at the military base.....

 

[Time2]

I’m grateful for the late Jack Bogle and Vanguard Corp.

I'll second this and I'd add Bob Brinker for the education I got from him and for his introduction to Jack Bogle and Vanguard Corp. I was a Brinker listener for 30 years.
Brinker got me started investing in no-load mutual funds and all the tax deductible vehicles that I saved money in.


On gratitude, my wife and I are very fortunate and grateful. We have had a slightly above middleclass income. When I took our SS statements and inflation adjusted* them to today's dollar, then averaged the income, our inflation adjusted income over 37 years was approximately $71k. As we retired, our networth is more than our lifetime earnings.
This is a good reminder, I need to be thankful everyday!



* In 1981, our $18k income = $51k today.

 

[Tiger8693]

Although holding a mortgage wasn't stressful over the last 8 years, (3.25%) it became a nagging concern when my portfolio was sliding downhill. So today I sent a check to the mortgage holder to pay it off. Lesson learned. Tomorrow I start dollar cost averaging into a mutual fund again.

I don't get the consternation over this, but hope not having it makes you more comfortable. Hopefully the funds to pay it off were pulled out of market last year.

 

[Tiger8693]

I learned that despite watching a downward $200k+ move at the low point, I still feel comfortable with my AA and plan.

Also, that there are a LOT of "glass half full" people in the world, and that ER.Org is a microcosm of that.

 

[scrabbler1]

I haven't done anything big in the last 6 weeks. I have made a few fairly small rebalancing moves in my IRA even though it is not something I can really access (nor do I need to) for at least another 3 years. I have a pretty small range for the IRA's AA so I make a few "tinkering" moves every year. Haven't made any from bonds -> stocks in a while.


In my taxable account, I very rarely make any rebalancing moves because the purpose of that account is to generate the income I need to cover my expenses. The big move I made there was at the end of 2019 when I went over the ACA cliff for the third year in a row. I liquidated an actively managed stock fund I had been in since 1996 (while I was still working) which generated a lot of dividends and cap gain distributions in favor of an index fund which invests in mainly the same types of stocks but without all the annual income. This will keep my income taxes down and put me safely back into the ACA subsidy business, lowering my expenses.


All of this is pretty mild compared to 2008-09 when I first retired. I had to set up my taxable account to generate the ER income, so I tinkered with it a few times to make sure that was working properly to pay the bills. Like now, I did some occasional rebalancing in the (rollover) IRA.


I can't say I liked seeing the market tank in March, watching a lot of my market gains in the last few years vanish. But the most important part of my portfolio's performance remained intact - the monthly DPS from my main bond fund. The income it generated was basically unchanged from prior months. I can track this during the month by requesting its Daily Mil Rate to make sure it doesn't tank (and do something about it if it does).

 

[ls99]

Actually learned way back in the Army. $h*t happens. Above all keep a level head, don't panic and ignore the herd mentality. Leaving investment mix as it was set around six years ago. Will have a look at numbers in a few months.

 

[OldShooter]

So the economy getting put on lockdown is not a swan? LOL, I thought I was wrong about this being a swan or not. You're in a whole 'nother league.

Let me know if you change your mind when/if we're getting near depression level, this has the potential to make 2009 feel like a mild recession. ...

Badly phrased, I guess. I was thinking in terms of the market, the subject of this thread.

On its own the pandemic is not a black swan to the public health community but, of course, it is to us civilians.

Maybe five+ years ago I was in a FEMA Incident Command System training class (ICS-300). The students ranged from wildland fire folks to urban and rural sheriffs to the state's public health department. Wait ... public health?!? They need Incident Commanders, Operations Section Chiefs, Logistics Section Chiefs, and all that ICS stuff ... ?!!!? Yup. They were preparing for the coming pandemic, which they were nearly certain would happen. (Of course, no one was listening to them so no one in the upper levels of government never allocated the resources that they recommended.)

 

[HF63]

Maybe five+ years ago I was in a FEMA Incident Command System training class (ICS-300). The students ranged from wildland fire folks to urban and rural sheriffs to the state's public health department. Wait ... public health?!? They need Incident Commanders, Operations Section Chiefs, Logistics Section Chiefs, and all that ICS stuff ... ?!!!? Yup. They were preparing for the coming pandemic, which they were nearly certain would happen. (Of course, no one was listening to them so no one in the upper levels of government never allocated the resources that they recommended.)

Local officials do not to listen because they are just planning for the next election, this is the type of General you do not want have in a war time.

 

[ncbill]

A reliable internet connection is vital to work from home...I have a cellular WiFi hotspot as backup to cable internet

And if AT&T would just run their fiber from the main road outside my neighborhood down into my neighborhood I'd add that as well.

 

[razztazz]

Local officials do not to listen because they are just planning for the next election, this is the type of General you do not want have in a war time.

Which is what bureaucracies are for. So when the unlucky elected official actually has to decide what to do, there are people who are already there who know what to do to provide options then know how to do them.

 

[Born2Fish]

We changed our AA to be very conservative after 2008. Looking back I don't know why we didn't retire in 2007, call it good enough and move everything to conservative investments. We could have both retired several years earlier than we did. I learned back then, to paraphrase Warren Buffet, there was no point in risking the money I had and did need to make extra money I didn't have and didn't need.

Great quote!

Down 10% from high but have moved to more defensive 35/65 AA.

If/when market recovers to previous all time high I will be better off than I was before.

This downfall taught me to be more careful with individual stocks in my IRA portfolio. 401k is all ETFs/funds.

Got greedy and suffered heavy MLP and REIT losses early on. Kept solid stocks (PG, SO, D, BX,...) and they are doing fine.

Sold dogs very early in the slaughter and nibbling into SPY. Eventually will add other ETFs.

 

[OldShooter]

Which is what bureaucracies are for. So when the unlucky elected official actually has to decide what to do, there are people who are already there who know what to do to provide options then know how to do them.

True enough, but it is the elected officials who control the purse strings on the physical and management resource stockpiles that may be needed.

Actually, I mentioned the FEMA ICS system. It predates my time but I understand that it came out of Katrina, where organizations found it almost impossible to work together because vocabulary and org charts were incompatible and sometimes incomprehensible. ICS tries to fix that. Ditto radio communications: In 9/11 the responders couldn't talk to each other because of incompatible radios and frequencies. This is being worked; our state has a trunked radio system that can be software-configured quickly to create "talk groups" of compatible radios regardless of which agencies are involved.

A bigger problem is $$ to create and maintain stockpiles of things that might be needed for a particular black swan: respirators, beds, drugs, anti-nerve agents, etc. (One big problem that the military has worked is determining the "real" shelf life of drugs in order to minimize the cost of maintaining their stockpiles.)

 

[atmsmshr]

It's taught me to be humble and grateful we're retired and comfortably FI, almost no matter what happens (AA below). So it hasn't led me to lose any sleep, or change my AA at all - just like '87, '00 & '09. If anything I'll up my equity and bond allocations as I have way more dry powder than ever before, but I'm not in any hurry.

And I believe our investments will recover nicely, just don't know if it will take months or years, though the latter seems more likely in my uneducated view.

I am genuinely concerned about the millions of people just beginning their careers or finding their way in the job market, at least the many who've made the right choices but will be badly hurt financially if not otherwise.

+2

DW and I are writing a check (probably first of several) to the local food bank for those less fortunate.

We are already sending money to relatives.

 

[Tiger8693]

+2

DW and I are writing a check (probably first of several) to the local food bank for those less fortunate.

We are already sending money to relatives.

Good for you guys! We have done this for years now (long before this event), and it always feels good to provide that help.

 

[dd564]

1. Our supply chain is incredibly resilient

2. We found out who the essential workers are and they are undervalued in our society

3. Paranoia doesn't pay

 

[pacergal]

I had started to move our equity percentage downward in January, as I had not been as comfortable with it as I was (we were over 75%), moving closer to 60/35/5 or 50/45/5
This was the first big downturn since we retired, and even with a pension, I now know our AA was too off kilter for me. I will see where we are in a month or two.

I do feel very blessed to be retired and financially OK, as many in my family are currently either young and laid off or having to work and in their 60's.

 

[foxfirev5]

At my age and experience level I haven't learned much. Still plodding along and trying not to make any big mistakes. I've had a few near death and close calls, none of which I ever anticipated. If this virus doesn't kill or severely harm any of my loved one's I'll consider myself lucky.
The financial stuff is piece of cake. Know when you have enough and don't get too greedy.

 

[atmsmshr]

That DW and I are very lucky, and that good planning combined with luck should not be confused with being smart. Being lucky can end unexpectedly.

 

[MRG]

Financial yea, keeping multiple years in cash equivalents is smart. I feel fortunate that last year I went from 60/37/3 to 50/35/15. It's currently a little lighter on equities now but I'm not making many moves. I'd like to say I was genius and predicted this, nah I was nervous about equities getting frothy and afraid of interest rate issues so I stayed with what I understood.

What it did drive home are lessons I learned from my depression era mother. Keep a well stocked pantry and medications. Plan on no groceries for a while, act accordingly. The TP shortage allows me a guilt free way to buy a bidet attachment to our MB toilet.

I did follow another poster's idea about reusable kitchen towels and will continue using them for cooking. Some of our meals have been interesting and enjoyable. Funny how you crave things our lunches have been very healthy and all homemade. Today I made a grocery store run and DW asked if I would go to McDonald's and get her a quarter pounder with cheese. I agreed but thought it was a goofy idea as I don't care for McDonald's. I got one too, best thing I have eaten in weeks.

 

[razztazz]

1. Our supply chain is incredibly resilient

2. We found out who the essential workers are and they are undervalued in our society

3. Paranoia doesn't pay

1) Apparently not simple stuff like TP or hand sanitizer. Lots of typical capitalist excuses going around on "supply chain" stuff. They already knew better but went for that bottom line thing instead.

2) We always know that we just don't want to look at it because then we'll have to pay them more. I don't believe this will change. Like everything else we need but "simply can't afford it."

3) Fear is quite lucrative for some sectors. It even gets mentioned here often enough.