Biggest drop in portfolio value from peak that you've weathered?

[Finallyunderstand]

I'm curious what people have weathered with nerves of steel in regards to biggest percentage drop from your peak portfolio value without selling?

And then a follow up would be how long did it take you to reach that peak again?

Feel free to include dollar amount if you want.  That may give more of a glimpse into your fortitude!

[Roboturner]

following - trying to get mentally prepared for the inevitable

[MilesTeg]

I'm curious what people have weathered with nerves of steel in regards to biggest percentage drop from your peak portfolio value without selling?

And then a follow up would be how long did it take you to reach that peak again?

Feel free to include dollar amount if you want.  That may give more of a glimpse into your fortitude!

A co-worker of mine weathered a 7 figure drop in drop in 07-09. He worked with me as his FIRE gig, in his+his wife's "real" career they had a combined income of about 400k and had built up 8 figures so the percentage was relatively small. Still.. losing 7 figures... ugh.

[Catbert]

During the 2000 drop I was losing ~50K a month out of a low 7 figure portfolio.   While stressful I didn't sell anything.  I couldn't even tax loss harvest because the assets outside retirement accounts had been held long enough that I was losing capital gain rather than actual loss.  That helped to steady my nerves.

Not sure how much I lost starting in 2007/8*.  After 2000 it didn't bother me that much.  I was able to tax loss  harvest 14K of new-ish investments.

*I could look it up, just too lazy to.

[OurTown]

After the "Panic of 1907" I went straight to cash.  I still haven't recovered.

[2Birds1Stone]

Like many here I suffer from recency bias and have not really experienced a "downturn" due to beginning my investing career in 2012.

That said, the Feb/March 2016 15-20% correction was the biggest. I lost low 5 digits.

[wenchsenior]

We lost the typical 30% of assets during the 2008 crash (29.4% to be exact).  At that time, we didn't have a big portfolio so I think it was just under 40K lost.  It took around 17 months to climb back.  As I commented in another thread, I was DYING to pour money into the market during that crash but life conspired to tie up every bit of spare cash and then some at the exact same time. Stupid life. 

All the other short term losses have been on the order of 10-20K over a month or two.  No big.

I don't really expect to see another crash of 30%+ magnitude in my lifetime, but of course anything is possible. And it would suck more now that we have more assets, but I regularly run the mental exercise of e.g. losing 150-200K in a couple of months. Normally I have nerves of steel, so the only real white-knuckling I could foresee is if we were right on the verge of pulling the plug on working, or had just pulled the plug and a crash occurred in the first year or two.  But as we get closer to pulling the plug, I'll try to plan for that and emotionally inoculate myself against the possibility.

[neil]

My net worth went from $181K in 10/2007 to $117K in 3/2009 (-36%) which includes being gainfully employed the entire time with a 60% savings rate.  I had a positive cash flow of ~60K, of which a big portion was a 1/2008 bonus that went right into the market at that time.  So, pretty bad.  I was more or less 100% stocks but a good portion were individual selections with a mid-cap tilt.  I underperformed VTSAX by 11% in 2008 and thankfully outperformed it by 19% in 2009.

I didn't really pay a price in the long run, but something I took out of the crash was that individual selection can easily enhance losses and avoiding additional drawdown is more critical to long term survival and I am not committed to managing my portfolio as a replacement for my current job. 

[nawhite]

Not me but a co-worker. My best understanding is that he had all of his $400k retirement savings in a 3x levered oil fund. Then the price of oil cratered and the fund went bankrupt taking all of his savings with it. He left early that day and we all were a little nervous about what he might do but he came back the next day and never spoke about money again while he was there.

Also just posting to follow since my personal biggest loss was only about 20k in early 2016.

[rachael talcott]

In 2007 I saw the crash coming and pulled everything out and put it into cash.  I never put it back in, and I'm kicking myself because even though I correctly called the impending crash, I could not call the bottom.  I'm now invested in real estate instead, which suits my personality better.  But eventually I'm going to get back into the stock market.  After it crashes.  Some people never learn :-)

[Indio]

I lost 32% from a high in May 2008. The biggest hit was in house value, which has never fully recovered but it is valued 155% more than I paid for it. My 401K acct recovered to its previous high by April 2012. My other investment accts recovered earlier because I bought AAPL in 2008. Other than that, I've been way too cautious since then.

[DoubleDown]

I lost about 75% of my net worth in 2007-08. I had a divorce that coincided with the recession/crash, so all-in-all, I went from about $1.2M to $300-400k (half was split in the divorce, the remaining half fell around 40%). I did not pull anything out of the markets and, in fact, lived largely on credit for about three years so that I would not have to do so (almost all of my paycheck was going to my ex in the form of alimony/child support). That was a really rough time, but a good call, as of course the markets recovered.

It all ended up being only a minor setback to FIRE, as I ended up recovering my net worth in about 5-6 years and retiring.

I'm also proud that I talked a co-worker out of moving all her money out of the stock market in 2008. She was really spooked by the financial crisis and was going to move everything to cash, but fortunately she listened to me and didn't do that.

[DoubleDown]

Meanwhile, another coworker of mine (before I retired) told me the story of how around 1999-2000 he and a partner were inking a deal to sell their small IT/internet consulting business, and his share of the sale would have been $13 MILLION. This was just before the huge crash in tech stocks, where all major tech stocks plummeted in value. They were literally set to close on the deal at a bank or escrow firm around 2 or 3pm the day the markets crashed. My friend/coworker was at the Porsche dealer that morning test-driving the new car he was going to buy, when his partner called him frantically and told him to get the f*ck out of the car and hand the keys back to the dealer -- the markets were crashing and their buyers called off the deal! Poor guy, just a few more hours and the deal would have been signed!

I actually ran into him outside a store just a few months ago -- he's still working :-(

[powskier]

Down 57%
My portfolio was heavily slanted toward  high risk. Didn't sell and rebalance until losses had been recouped.
Basically just have a plan to never look at your investments and you'll be fine, especially if time is on your side.

[gerardc]

What I'm curious about is what you think at that time, what does the media narrative look like, what are other people justifications for selling, what do prospects about the future look like, etc.?

[Inquisitive1]

Hmmm what memories this brings back... at one point in March 2009 our portfolio was down close to 45%. Fortunately heading into the big dip we were close to 40% cash and took advantage of the opportunities, got the last of the cash to work in Jan 2009. More luck than skill, had a couple of small stock holdings go to zero which is humbling, again fortunately most investment was in the index fund and the market hasn't gone to zero for several hundred years... well that is what I remember telling myself.

We didn't sell anything but it sure tested our resolve, it really helped that we had a paid for house and I had secure gov. job. It is one thing to read about what one should do during such a stockmarket sale and quite another to be able to do it! No way to practice this either, reading helps particularly market history helps me.

The media narrative was absolutely horrid with all the normal stories about the death of capatilism and the like by shortsighted journos. Probably the worst I remember was being on the train home from work and sitting in front of a lady who clearly had just went into the city to visit a broker or the like and talking to a family member about loosing not just all her capital but also having a remaining debt for some kind of structured product that had just blown up. Her realisation of the huge error she had made and the helplessness in her voice will be with me for a long time.
The uncertainty at the time was huge but as equity investors that is what we get paid to accept, eventually sometimes.

Cheers,

[markbike528CBX]

posting to follow
TL;DR.  Estimate 30 to 50% If had waited 5weeks, potentially much less.
  Details to follow  when I get near a real keyboard.

[gooki]

60%

[dude]

2008 -- 401k was at $171,752 on Dec. 31, 2007.  At the end of 2008, I was down -28.69%, and balance was $141,281 (this despite having pumped another $15,500 into it that year). However, by the end of 2009, with a 21.6% rebound (and another $16,500 dumped in), it was above 2007's high, sitting at $197,218. I didn't panic, didn't sell, just let the market run its course.  The last time I looked (last Friday), my account was sitting at $665,103.  Buy and hold, invest long-term, use cheap index funds -- this strategy has worked beautifully for me so far.

[HeadedWest2029]

Just dodged the dot come bust by starting work in 2002. However, 2007-08 was real enough.  Not so much with investments, but more EVERYONE worried about losing their job or actually losing their job.  Mentally navigating 2008 was way easier to manage gainfully employed.  Before I bothered to learn efficient investing I do remember calling my financial adviser about "safer" alternative investments.  A good FA would have slapped me and told me to stay the course because the markets were dirt cheap, instead he appeased my delusion and offered to get me into gold.  Luckily I ignored my fears and his advice and stayed the course.  This was probably the best thing to happen to me in a number of ways because I realized I could ditch the FA and get into index funds.  No value added

[Vegasgirl]

OP got me curious so I went back and looked at an account that I was minimally contributing to ($100 pp = $2600 year) I never was really watching it because it was always just going to be just extra money for spending in retirement.

Closed on 12/31/2007 with $27,130
Closed on 12/31/2008 with $18,519 (31.7% drop)
Closed on 12/31/2009 with $28,223 (includes my $2600 contribution for the year)

Closing yesterday 7/24/2017 $127,012.88

Wow - I'm just letting it roll !! I've got at least 12 years before I touch it. 

[honeybbq]

I lost around 6 figures in 2008 (the usual 30-40% people are quoted). I still "feel" like I haven't recovered, even though when I do the math I have. And then some.

[twell1]

36% from crash in 2007-2008.

[Dances With Fire]

36% from crash in 2007-2008.

^^^ Very close to this as well. Low 6 figure loss in 2008.

Roughly 2+ years to recoup the portfolio balance.

Many who sold missed out on an incredible bull run since then....

[Loren Ver]

I lost about 80% of my rather awesome college fund in the early 2000s.  Unfortunately I was going to college at the time and needed to pull money out at a horrible time.  After that I switched to student loans while it recovered.  Then, slowly over the years, it recovered some and paid off all the loans   For a few years it acted as a vacation fund.  Now the remaining is part of my retirement portfolio.

This single experience taught me a lot about finance, the loan system, how to work the system, and how to bounce back.    Now when the market is crashing out, I just stop checking it and keep putting money in at the sale price.  Usually for a year or two, then when I get around to checking it, it seems to have recovered.

I hope my fortitude is the same when I finally pull the work plug.

LV

[Clean Shaven]

I really only started investing anything around 2000, on the cusp of the dot-com crash -- most $ was going to paying off student loans and trying to save cash for the first house down payment.

By the time of the housing crash, I had around $120K in IRA and 401k accounts.  I think it dropped around 35-40% at its depths.  Kept on investing, didn't withdraw anything.  Luckily, income started increasing a lot (new job) from 2008 to present, so I've been able to sock away a lot during the bull run.

As I'm approaching FIRE, I've been slowly shifting to a little more conservative mix overall between my and my spouse's investments.  We're at around 70/30 stock/bond mix, and I'm investigating whether I want to make that more like 60/40, then slowly let it rise back to 70/30 over the long run.  (The "reverse glide path" idea that Kitces and others discuss.)

[obstinate]

Mine hasn't ever lost very much value. This is part of why I'm waiting to drop down to sub full time. I want to build up more of a  safety margin. That there's just so much I want to get done at work right now, far more than I actually have time to do.

[EscapeVelocity2020]

I don't know if I'd say I weathered it or if it weathered me, but I went from roughly $324,234.69 invested assets Feb 29, 2000 down to $142,434.73 Aug 31, 2001 (56% drop).  Took me until October 2004 to reach even, and I was only basically back to even with the amount I'd contributed at that point.  That was a painful lesson about being overly concentrated in individual tech stocks (especially Cisco Systems, ugh). 

Hit $1,014,399 May 2008 and fell to $755,162 by March 2009 (26% drop), the limited drop was mainly due to sheltering some of my gains.  I knew I was ahead of the game again and didn't want to blow it!  Sucked to lose even more money this time around, but recovered my losses by June 2009 (which is shocking to look at in retrospect, the bounce off the bottom was huge!  If you blinked, you missed it, and many people thought they'd wait for a pull-back to jump in...). 

Things have been better than I could've dreamed of since those dark days and I find myself singing Life's Been Good from time to time, although I'm too Mustachian to spend like Joe Walsh. 

Don't know what advice I'd give to people other than what I see already out there - 100% index funds initially on your way to the number and then shelter some when you see fit, which is obviously the hard part.  Paraphrased from Bogleheads, 'continuously assess your willingness, need, and ability to take risk to set a target asset allocation and re-balance (or adjust contribution allocation) periodically.'  That's about as simple and complicated as the accumulation phase seems to be.  Having experience losing a lot of money on paper (imagine a 50% drop) really helps assess your ongoing 'willingness, need, and ability' to hold equities.

Of course, you can mess around with 5 - 10% of your portfolio if that floats your boat or try to load up on dividend stocks.  Maybe add real estate... but, most of these things tend to underperform and/or encourage active investing.  Index funds are the right mix of 'boring enough not to follow too closely' and 'exciting enough to squeeze the finances and buy as much of as you can'. 

[okits]

This thread got me curious.  In 2007-2009 I didn't even open my investment statements.  I didn't have a lot invested, though, so less to fret over.

From Feb 2015-Feb 2016, lost 16%.  Back up by Feb 2017.  It felt like a big chunk but we were saving a decent amount so that blunted the immediate effect of the investment losses on our NW numbers.

[markbike528CBX]

The real data (update of the PTFollow above).

8/4/08   700105 --- much of this was newly in stocks according to my Plan as the market had already gone down 20% (my trigger). 
                            Prior in cash waiting for -20%
11/20/08   485400    -31%  Ouch, but too late now (I was on a field job at this point).
3/15/09   455854  bottom, I think I bought 1 share of BRK.B near this point.  Out of investible cash at that point.  All dry powder used up.
9/10/09   719000 back to even in about a year.

Don't forget the blip in '11

  7/7/11   1009042
10/1/11     824600  -18%
  2/3/12   1025000 back to even