First month of major investment loss

[Dicey]

FFS, Pete himself doesn't carry homeowner's insurance ...

From a financial perspective of having so much money he would just buy another house with his stash.

That's not a financial position most people are in. 

Context matters.

Hey SwordGuy! I just read both of your journals today - you're killing it! I hope both of your girls are all recovered from their travails and your back is back to normal.

I agree with you a thousand percent! We don't encourage people to go all conservative if they hope to achieve the E portion of RE, much less FI.

On a personal note, regarding Homeowner's Insurance, I could do the same thing. No fucking way would I take such a risk. Not the same as going all conservative with your investments any time the wind kicks up a little. Insurance was just an example that the whole MMM/FIRE thing is not based on being afraid of a reasonable amount of risk. MMM takes more risks than most, not less.

[FoundPeace]

Glad to hear that for the majority of you this dip was no big deal. I was never at risk of divesting, because I understand the math.

Honestly most of my fear was around what would happen if my wife looked at our accounts. For better or worse, that is pretty unlikely. She’s more frugal and concerned about money than I am and I “manage” our investments because looking at the peaks and dips would increase her already high anxiety levels.


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[effigy98]

For those that are heavy stocks, think about switching out some of your total stock market for VDC defensive plays, it pays a little less then VTI in strong bull markets, but does much better in down markets. My portfolio is actually up since July.

[ysette9]

For those that are heavy stocks, think about switching out some of your total stock market for VDC defensive plays, it pays a little less then VTI in strong bull markets, but does much better in down markets. My portfolio is actually up since July.

Switching my asset allocation in response to market swings is exactly what I should not do. That is exactly contrary to what all of us have been saying: just hang tight and keep investing. Things will work out for the best in the long run if you do not try to time the market.

[Davnasty]

If market dips of this size make you feel sick, then I suggest you adjust your assets to a more conservative asset allocation.

It'll stop you panic selling when we experience an actual market drop.

Don't do this if you ever hope to reach FIRE. Instead, read, study, and LEARN. Otherwise, you're just wasting your time here.

i think you're being a bit dogmatic there.  said another way, an investor could never fire with a conservative asset allocation.  clearly untrue.

some folks are fine at 100%+ equity exposure.  Others, not so much.  there's different ways to skin the cat and to each their own.

This is laugh out loud funny. Do you ever read the actual blog? The whole point is to retire As Early As Possible. I did not say "never", but this is not the place for people who want to maybe retire...someday.

FFS, Pete himself doesn't carry homeowner's insurance and doesn't even wear a helmet. He scoffs at the fearful.

And for the record, it's the timidity I responded to. I made no asset allocation recommendations. The way to conquer fear is through education.

Not the message I got. I thought the whole point of this blog was life optimization with a heavy tilt towards using money to achieve that end?

[damnedbee]

The only reason I mind the recent dip is because it makes updating my monthly progress in the "Race from $X to $X" thread less enjoyable.

[dacalo]

Not bothered at all. Went through 2008 and this so far has been nothing compared to that. Just being consistent and buying as usual.

[soccerluvof4]

My portfolio was pretty much down exactly % of the Drop in the Nasdaq. Always seems closest to my portfolio with a 60/40 allocation at Vanguard. But like Dicey mentioned you just keep going with it. Its healthy for the market as well since we really havent had much of a correction in the longest time.

[sol]

Its healthy for the market as well since we really havent had much of a correction in the longest time.

This sort of attitude is absolutely subversive.  Don't you watch Cramer?  You're supposed to be having an emotional meltdown right now so you can sell low and help people like me (and Cramer) take ownership of your distressed assets.  You're supposed to be whipsawing your entire financial empire from Netflix to bonds to Tesla to gold every few days, generating transaction fees for money managers and creating artificial bubbles in a rotating list of hot new investment opportunities.  Didn't you learn anything from bitcoin?  How am I supposed to generate 30% per year returns if I can't profit from your stupidity?

All of this calm cool and collected MMM-style asset management is just ruining the markets.  You passive people are going to turn into super-wealthy scions and then I'll have to share my slice of the US economy with you.  It's much better for me if you all go back to relentlessly chasing an extra 1.8% per year by hopping on every new bandwagon that comes along.  Please ignore the healthcare, finance, and durable consumer goods sectors and go all in on marijuana stocks, or maybe a hot new AI startup. 

They sky is falling, we're all going to die, and so you should sell me all of your index funds at fire sale prices.

[2Birds1Stone]

One too many Bloody Mary's, sol?

[SwordGuy]

FFS, Pete himself doesn't carry homeowner's insurance ...

From a financial perspective of having so much money he would just buy another house with his stash.

That's not a financial position most people are in. 

Context matters.

Hey SwordGuy! I just read both of your journals today - you're killing it! I hope both of your girls are all recovered from their travails and your back is back to normal.

I agree with you a thousand percent! We don't encourage people to go all conservative if they hope to achieve the E portion of RE, much less FI.

On a personal note, regarding Homeowner's Insurance, I could do the same thing. No fucking way would I take such a risk. Not the same as going all conservative with your investments any time the wind kicks up a little. Insurance was just an example that the whole MMM/FIRE thing is not based on being afraid of a reasonable amount of risk. MMM takes more risks than most, not less.

@Dicey ,  thanks for the compliments!   The ladies of the house are healing but still injured.  I'm hoping all will be well by the end of January.  Fingers crossed!

Now that we're no longer working we cut our term life insurance.   We don't need the insurance money to pay for funeral bills or get by, so it made sense to cut it out of our budget.  It was costing about $5k a year for the two of us.  (Remember that we're older than most MMM readers.)

We're keeping health insurance (for the obvious reasons) here in the US.   Our daughter just got prescribed some medication that will cost $2,000 a month for the next 24 months.  We're hoping insurance will cover it.  If not, we'll just cough up the money and be glad we saved for a rainy day.

We keep insurance on our home and our rental properties.   The rental property coverage is pretty cheap, actually.  Even so, it adds up with all our properties. 

Our top 4 annual expenses are the home mortgage, medical insurance & fees, property tax, and property insurance.   

[DirtDiva]

Its healthy for the market as well since we really havent had much of a correction in the longest time.

This sort of attitude is absolutely subversive.  Don't you watch Cramer?  You're supposed to be having an emotional meltdown right now so you can sell low and help people like me (and Cramer) take ownership of your distressed assets.  You're supposed to be whipsawing your entire financial empire from Netflix to bonds to Tesla to gold every few days, generating transaction fees for money managers and creating artificial bubbles in a rotating list of hot new investment opportunities.  Didn't you learn anything from bitcoin?  How am I supposed to generate 30% per year returns if I can't profit from your stupidity?

All of this calm cool and collected MMM-style asset management is just ruining the markets.  You passive people are going to turn into super-wealthy scions and then I'll have to share my slice of the US economy with you.  It's much better for me if you all go back to relentlessly chasing an extra 1.8% per year by hopping on every new bandwagon that comes along.  Please ignore the healthcare, finance, and durable consumer goods sectors and go all in on marijuana stocks, or maybe a hot new AI startup. 

They sky is falling, we're all going to die, and so you should sell me all of your index funds at fire sale prices.

LOL.... there’s a lot going on between those ears...

[Slow&Steady]

Besides the race to threads I only track year end numbers in my spreadsheet and my spreadsheet doesn't start until 2013.  This is great for not sweating the monthly bounces.  However, it makes me very curious about these downturns because I know was putting money into a 401K in 2008 & 2009 but I don't have those numbers to see what my personal bounce was and I want to know.  I know that I changed jobs and rolled over my 401k in late 2008 which means I probably locked in a LOT of loss but I can't see how much and it annoys me.  I obviously wasn't putting in very much money because the dollar amount that I have for 2013 year end is pretty small compared to what I would have liked to see (looking back).  I can see that 2015 year end was barely up over 2014 year end so I am guessing that year was not awesome but it was still positive, maybe due to contributions but I doubt that my contributions were that high as that was the 1st full year of baby 1 and I am pretty sure I lowered contributions (obviously before I started reading MMM).

Anyways, what I wanted to say is that the data of tracking these things monthly are fun to look back on but that is about all they are good for.  If it stresses you out or makes you worried, then stop tracking them monthly and pick a bigger interval (quarterly, semi-annual, annual, etc).  I have been watching this bounce really close because I am fascinated with it and have even complained about what it is doing to my $$ balance but ultimately I will only "track" my Dec 31st total so this bounce might not even show up on my graph (similar to 2015).  I just watch, sometimes with my mouth hanging open, and wonder how big and when the next up tick will be.  I do have goals damn it and I don't need some inanimate object (like the market) dictating if I can reach those goals or not ... wait that is probably not true.