Remember the basics....don’t panic

[Toddtheformeraccountant]

We have to all remind ourselves that, in the area of long-term financial independence, we should expect bear markets like this every 10 years or so, and an even worse one every 30 years or so. So don’t panic, clutch your pearls, or lose sleep when it does happen. Instead of thinking you can time the market, keep a reasonable asset allocation, and relax, and don’t let the current circumstances dissuade you from your long-term goals and asset allocation. Continue to spend less than you earn, and save the difference. You’ll be fine. That is all!

 

[frayne]

+1

 

[Toddtheformeraccountant]

+1

You are correct sir! Very true.

 

[rk911]

We have to all remind ourselves that, in the area of long-term financial independence, we should expect bear markets like this every 10 years or so, and an even worse one every 30 years or so. So don’t panic, clutch your pearls, or lose sleep when it does happen. Instead of thinking you can time the market, keep a reasonable asset allocation, and relax, and don’t let the current circumstances dissuade you from your long-term goals and asset allocation. Continue to spend less than you earn, and save the difference. You’ll be fine. That is all!

+2

 

[Perryinva]

And what fun is that? Take the chance and make a bundle on the opportunity!! My long term goals and FI is done. Game won. Blow the dough!

 

[rk911]

slow and steady wins the race.

 

[Oz investor]

We have to all remind ourselves that, in the area of long-term financial independence, we should expect bear markets like this every 10 years or so, and an even worse one every 30 years or so. So don’t panic, clutch your pearls, or lose sleep when it does happen. Instead of thinking you can time the market, keep a reasonable asset allocation, and relax, and don’t let the current circumstances dissuade you from your long-term goals and asset allocation. Continue to spend less than you earn, and save the difference. You’ll be fine. That is all!

LOL

considering i have chronic heart failure , panic is NOT a wise option for me , at any time , and was always frugal ( but a positive wastrel in my family .. i use teabags twice , not use a tea-pot and reuse tea leaves )

but started investing late (at the beginning of 2011 ) so am still eager to add some assets at rock bottom prices

but asset allocations is the hard one i am looking at government and regulator gymnastics , and finding it hard to locate income producing safe havens in the current climate , rental income MIGHT come back next year but golly gee i hope the government isn't depending on me for tax revenue this year .
. spending is down ( despite buying more equities in March in the big dip ) , income is down i may as well have gone into hibernation for the last six weeks and the next six weeks might not be any more fruitful .

good luck

we should all learn some valuable lessons from this

 

[UnrealizedPotential]

Don't panic is huge. There are a lot of investors that can't do it. When the market was going down 6, 7, 8 and 9% a day it tests ones risk tolerance. But it's not easy for me when my portfolio goes down thousands of dollars in a day.

But it's bounced back and I have made up some ground. Like others have said, stay the course. I had a couple of days in March there where it was hard. I wouldn't even look at my portfolio . It's hard to take it. But all things pass. I am not saying we are out of the woods by any means, I don't think we are, but it will pass.

 

[RobbieB]

I've got a few more years of spending more than I earn and I'm not worried.

 

[DrRoy]

+ how ever many it is now.

 

[blueskyk]

Someone wrote a letter to the editor in the WSJ cleverly comparing Jason Zweig’s investment advice in managing your portfolio to protecting your face - don’t touch it (except for rebalancing and tax harvesting).

 

[targatom2019]

Bear markets do not destroy wealth but how we behave during bear markets is what destroys wealth.

 

[nvestysly]

Bear markets do not destroy wealth but how we behave during bear markets is what destroys wealth.

AGREED! DW and I made a couple of moves (aka rebalancing) during recent events but no dramatic changes. Not that we wanted a big crash but I wouldn't have minded a bit more of sideways movement in the market.

I'll be curious to see what happens months and years from now. All this throwing money from helicopters has me a bit concerned.

 

[Red Badger]

+1 on all of this.

I retired ~3 years ago and wondered how I would tolerate my first real bear market. In spite of some gut wrenching days, I'm staying the course. I watch limited financial news (hype) and also limit C-19 news to Task Force briefings (and not a lot of that either).

 

[Running_Man]

You have a tremendous opportunity to get out of the market now not too far off of the top, If anyone thinks this is like anything in American history I think you have not looked at American history, it is worse than 1929 and in 1929-1932 the market sank 80% the stock market will fall further than that, and any money you obtain by selling on Monday will be money to invest in the future, that is not panicking that is rational behavior.After the market falls 30-40% you will be powerless to make moves as the market will have moved you to a lower stock allocation. I really wish people would stop and think what individuals and companies are going to have to do over the coming year.

 

[Markola]

You’re predicting the stock market will fall more than 80%?

 

[Toddtheformeraccountant]

You have a tremendous opportunity to get out of the market now not too far off of the top, If anyone thinks this is like anything in American history I think you have not looked at American history, it is worse than 1929 and in 1929-1932 the market sank 80% the stock market will fall further than that, and any money you obtain by selling on Monday will be money to invest in the future, that is not panicking that is rational behavior.After the market falls 30-40% you will be powerless to make moves as the market will have moved you to a lower stock allocation. I really wish people would stop and think what individuals and companies are going to have to do over the coming year.

Um...where did you get your apocalyptic crystal ball?

 

[targatom2019]

You have a tremendous opportunity to get out of the market now not too far off of the top, If anyone thinks this is like anything in American history I think you have not looked at American history, it is worse than 1929 and in 1929-1932 the market sank 80% the stock market will fall further than that, and any money you obtain by selling on Monday will be money to invest in the future, that is not panicking that is rational behavior.After the market falls 30-40% you will be powerless to make moves as the market will have moved you to a lower stock allocation. I really wish people would stop and think what individuals and companies are going to have to do over the coming year.

Should I load up more ammo ?

 

[Perryinva]

Though I have zero facts to base on, I am agreeing somewhat with @Running_man, based on history. I can’t agree that this insane action/reaction is a non or yawn event. (It’s not the end of the world either. ) We use historical reference in FIREcalc for planning and assurance, so besides 1929, or the Spanish flu, when have we ever seen this aggressive a reaction from world governments and market volatility with economic hits like this? Is todays markets more solid than those markets of past, when at the touch of a button Trillions of dollars are lost? In the few bear markets that have been this deep, how many have been a V recovery? I hope I am totally wrong. I really do.

But I feel that the weight of this large a population unemployed makes the percentage of unemployed more impactful than the same percentage 90 years ago. The debt damage to so many more companies than even existed 90 years ago will have domino effects for a long time. While the Fed action to prop everything up is probably for the best, its still amputating a foot to save a leg. Or a leg to save a life. There has to be consequences from dumping this much printed money in to the system. I also don’t consider it panic to retreat to a safe position, merely prudent.

This rally already put me at an all time high, so I got out in a big way on Friday. I know I fear loss more than FOMO, and I have never had any hesitation getting back in to the market when facts presented that as a reasonable risk to do so. I have always lost more money being greedy than prudent. If you believe that this will all sort itself out in 5 years, and are good with that, then great. That is just a bit too long at my age to bet on and I don’t even need my portfolio to live on at all. My $0.02, which is all anyones opinion is worth.

 

[UnrealizedPotential]

So Running_Man,

I am curious, have you sold all of your stock holdings? Are you 100% in cash today? If not, are you going to sell all your stocks today and go 100% cash?

 

[jazz4cash]

We have to all remind ourselves that, in the area of long-term financial independence, we should expect bear markets like this every 10 years or so, and an even worse one every 30 years or so. So don’t panic, clutch your pearls, or lose sleep when it does happen. Instead of thinking you can time the market, keep a reasonable asset allocation, and relax, and don’t let the current circumstances dissuade you from your long-term goals and asset allocation. Continue to spend less than you earn, and save the difference. You’ll be fine. That is all!

No, not like this.

 

[RunningBum]

You have a tremendous opportunity to get out of the market now not too far off of the top, If anyone thinks this is like anything in American history I think you have not looked at American history, it is worse than 1929 and in 1929-1932 the market sank 80% the stock market will fall further than that, and any money you obtain by selling on Monday will be money to invest in the future, that is not panicking that is rational behavior.After the market falls 30-40% you will be powerless to make moves as the market will have moved you to a lower stock allocation. I really wish people would stop and think what individuals and companies are going to have to do over the coming year.

Why will you be powerless to make moves later but you are suggesting people change their stock allocation now?

 

[Running_Man]

Why will you be powerless to make moves later but you are suggesting people change their stock allocation now?

Right now the market is where it was in September of last year. 30% down and we are back where we were in 2017 a 75/25 stock portfolio becomes a 52/25 stock portfolio 60/40 becomes 42/40 assuming bonds hold even. So your portfolio will already be at a more conservative level than it was at the top.

Transferring 30 % now on a million dollar portfolio would mean selling 250K of stocks to get to 50/50, but that opportunity will be lost with a 30% decline.

Keep in mind, the oil market, one of the largest and most fluid, fell 38% overnight and is now down 82% on the year and the value of the oil industry on January 1st was about 4 trillion dollars. MEanwhile Canadian Select Western Oil turned negative

https://twitter.com/x/status/1252193171813150721

Pick another time in history when oil fell 38 percent in one day. Or the value fell below zero

 

[Running_Man]

Should I load up more ammo ?

No but you may want to sell your VTI here

 

[Running_Man]

So Running_Man,

I am curious, have you sold all of your stock holdings? Are you 100% in cash today? If not, are you going to sell all your stocks today and go 100% cash?

If you look at my signature you will get the answer you seek. I am not 100% cash though, I have an allocation to some long term bonds still though I have been selling those as rates approach zero and I have a healthy allocation to precious metals (less than 10% but more than 5%).