Share the love, a fraternal hug for those who's stashes are hurting

[Radagast]

If volatility is causing a severe emotional reaction and making you seriously question keeping the money in the market, your asset allocation may be too aggressive.

+1

It will be interesting to see how many folks currently 100% stock are still there after the next 2008 financial crisis.  I suspect that a great many people will not have the will to actually stick to their current plan.

+2
It is looking like the US and entire world markets will be positive for the year by the end of the day, three months and four days into the year. This year has been boring, average, and typical. To date, there has been no meaningful motion in stock prices in 2018. We have not even had a crash as bad as that awful year, 2015. Scarcely half as bad as the abysmal chasm that was 2016. This is not an emotional support type of situation, because there is no situation.

Eventually, there will be a real event, like 2008-9, the tech bubble, the crash of '87, the inflated bear of 73-4, the great depression, or the 9,000 other market events more significant than what has happened this year.

[PiobStache]

I think the last few months demonstrate just how short term people really think.  People are caterwauling when really the market has only given up the gains of the last 5-6 months.  I'm not saying I don't have concerns, what between picking trade fights, interest rates rising, etc. but many other metrics are good.  Here's what the S&P has returned the last several years: 

Dec. 31, 2017   21.83%
Dec. 31, 2016   11.96%
Dec. 31, 2015   1.38%
Dec. 31, 2014   13.69%
Dec. 31, 2013   32.39%
Dec. 31, 2012   16.00%

I just can't feel like my world is shaken up because we've been about flat YTD.

[Missy B]

Do you think a lot of baby boomers in their 60's are pulling out of the stock markets as they retire and go with a more conservative portfolio?

Nope. They get shit returns if they do that. And sixty is young... and a lot don't have enough saved. They may go more conservative but can't leave the stock market. Preferred shares work for them.
Of the people I know who do their own investing, in their sixties and older, they've been investing a while and feel like they understand/are comfortable with risk. There's no reason for them, with their house paid off and a nice cash buffer, not to be in the markets. When they get too old to manage it well, then they get someone to take over, rather than going to bonds.

[Missy B]

I think the last few months demonstrate just how short term people really think.  People are caterwauling when really the market has only given up the gains of the last 5-6 months.  I'm not saying I don't have concerns, what between picking trade fights, interest rates rising, etc. but many other metrics are good.  Here's what the S&P has returned the last several years: 

Dec. 31, 2017   21.83%
Dec. 31, 2016   11.96%
Dec. 31, 2015   1.38%
Dec. 31, 2014   13.69%
Dec. 31, 2013   32.39%
Dec. 31, 2012   16.00%

I just can't feel like my world is shaken up because we've been about flat YTD.

Yep. Until this year we had a record number of trading sessions without a 1% dip. Extremely smooth sailing, and it seems to me a lot of people have come to expect that to continue, particularly those who haven't been investing longer than this bull market.

[Dicey]

I'm going to add that if you're part of one of those "race to..." threads and recent market activity means technically you don't "belong" there any more, DON'T move back to your old group! You got there before fair and square and your numbers will return again. Keep the faith, keep adding to your stache. Now is not the time to panic or punish yourself for something out of your control.

I hit my highest savings rate ever in 2008 and am FIRE now because of what happened when the market roared back.

Piling on to the group hug.

We've had this discussion on the Race to $250K thread, and I think the consensus was that if it's a small drop and you'll quickly work your way back to the minimum of the next bracket, then stay in the current bracket.

However, if it's a big drop that will take more than a few months to recover from, then most people said they would (begrudgingly) move down to the old bracket. I think most folks view the brackets as "what you have" versus "what you had."

Um nope. You cannot know how long it will take the market to recover. Just stay put and focus on finding ways to save more during the perceived (or actual) downturn. Use the desire to stay at or above a certain benchmark to catapult yourself ahead as the market improves.

Of course, I am the boss of nothing, but who's verifying the numbers, anyway?

ETA: This could read that I think they should be verified, which I absolutely do not. "Who cares?" sounded too flip, but that's kinda what I meant. If someone's fudging numbers, they're only hurting themselves (in their quest for FIRE), no one else on the thread.

[Lis]

This thread has been helpful. I was in college during the last recession (old enough to be aware of what was happening, but I didn't have any investments of my own). Now I'm watching my investments and net worth dip, and even though I know I shouldn't change anything (and I *won't*), I still get grumbly when I log in to PC and see that number. So I'll keep chugging along, throwing money into my 401k and Roth (I'm scheduled to max both out by year end). Just... bleh.

[acroy]

If you are still in earning phase, market declines are a good thing. Buy cheap(er)

watch out, the dip may be over

then again, I hope it is not!!

[MVal]

I'm going to add that if you're part of one of those "race to..." threads and recent market activity means technically you don't "belong" there any more, DON'T move back to your old group! You got there before fair and square and your numbers will return again. Keep the faith, keep adding to your stache. Now is not the time to panic or punish yourself for something out of your control.

I hit my highest savings rate ever in 2008 and am FIRE now because of what happened when the market roared back.

Piling on to the group hug.

Thank you for saying this. I like we should consider ourselves part of whichever level-club regardless of market dips. I'm a bit down because my savings rate is the lowest it's been in about 3 years and this is the "on-sale" time I can't take advantage of very well. I think now is the time for me to work on finding side hustles to increase cash flow so I can get it on this.

The good thing is I just had some HSA money to the tune of 10K sitting unused transferred to an investment account. The funds should become available today or tomorrow so I can cash in on this sale!

[Simpleton]

The market is about 10% off of all time highs, wheras the average bear market leads to about 30-40% declines.

Neither a 10% or 50% decline should cause you stress. Just develop a plan with safety nets and stick to it.

No one reading this will ever starve, so everything will work out in the end!

[JLee]

The market is about 10% off of all time highs, wheras the average bear market leads to about 30-40% declines.

Neither a 10% or 50% decline should cause you stress. Just develop a plan with safety nets and stick to it.

No one reading this will ever starve, so everything will work out in the end!

I am still solidly in my accumulation phase so I'd love it to drop hard for a bit so I can keep buying cheap(er) stocks :D

[DreamFIRE]

I mean, sure, I don't like watching my net worth decrease. But this isn't even a full correction yet (10% drop).

A few posts before yours:

https://forum.mrmoneymustache.com/welcome-to-the-forum/share-the-love-a-fraternal-hug-for-those-who's-stashes-are-hurting/msg1958430/#msg1958430

[BlueMR2]

Loving the volatility!  There's money to be made there.  Despite the overall drop, our "losses" have been fairly low (just finding out now as quarterly statements arrive).  It's really interesting to see some fund making money (especially unexpected ones).  I don't track it day to day, therein lies the path to madness...  :-)