Author Topic: Novice question: what happens the year your investments tank?  (Read 8764 times)

moustacheverte

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Hi mustachians!

I am new to this and about to move all my savings to indexes mutual funds (mostly) and bonds (10%).

I understand this method produces the best returns over 10 year periods, but since you live on the interests when you are FIREd, what happens when another 2008 hits us? The typical portfolio tanked 20-30% around that time, generating no interest to live on for a year. How do you "live" through that? What money do you live on? If you start eating away at the principal, you will then get less money to spend forever after.

Thanks,
« Last Edit: March 13, 2015, 06:55:01 AM by moustacheverte »

jlajr

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Re: Novice question: what happens the year your investments tank?
« Reply #1 on: March 13, 2015, 06:08:11 AM »
That's a great question and one I've had myself.

I think MMM might recommend not relying on one asset class (stocks) for all of your planned post-FIRE, pre-pension income. If you diversify into bonds, real estate, or lending clubs (just examples; I'm not recommending anything), then you might be able to mitigate stock index volatility.

Also, he might say that, because you will have already built in so much cushion into your stash and lifestyle, you should be able to lower your monthly expenses when necessary.

moustacheverte

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Re: Novice question: what happens the year your investments tank?
« Reply #2 on: March 13, 2015, 06:18:38 AM »
I understand this method produces the best returns over 10 year periods
Sorry to burst your bubble but if that is the case you don't understand or are very unspecific by what you mean with best returns.

That is indeed my understanding. On a given year, you might do +10% or -20% but in the longer term (i.e. 10 year periods) you'll get about 7% per year before inflation.

If I misunderstood, please do burst my bubble and give more explanations so I avoid a potentially costly mistake?

nereo

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Re: Novice question: what happens the year your investments tank?
« Reply #3 on: March 13, 2015, 06:19:28 AM »
I suggest that you read up on the Trinity study, but the short answer is this:

In most historical cases you can withdraw money even during very bad down markets and you will be just fine.  The reason has to do what the markets do on average.
Adjusted for inflation and including dividends, the SP500 has returned about 7-8% annually over almost all 20+ year periods.  If you are using a 4% WR on average your portfolio will keep growing.  However, there have been years when the market drops 30%, and years when it gains almost 40%. Most of the time big drops which reduce your overall principle are then overshadowed by big gains which increase your portfolio.  The biggest worry is that a large market drop will occur very early into your retirement, when you haven't gotten the advantage of it increasing slightly.  Even then, though, most of the time it will still recover.

A key way to mitigate the uncertainty is to be flexible.  When you retire, if the market takes a huge drop, consider cutting expenses back a bit, or earning some money through a part-time job.  For someone living off of $40k in retirement, as little as an extra $5k/year in reduced spending or extra income could allow all portfolios to survive the worst historical market conditions and come out smelling like roses on the other side.  Another methods is to save up even more money, and use a WR that's even smaller.  A portfolio with a 3% WR has never failed during any time period.  The downside is that reaching such a large portfolio may require working several years longer than you otherwise would.

Hope that helps.  Remember that when we talk about historical scenarios, we're talking about all periods of the SP500's performance over the last 100+ years.  It's always possible that the next 20, 30, 40 years might yield market conditions that are worse than any previous 20, 30 or 40 year period.  again, that's where flexibility comes in.

Frankies Girl

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Re: Novice question: what happens the year your investments tank?
« Reply #4 on: March 13, 2015, 06:20:24 AM »
There are two schools of thought on typical drawdown methods.

One, have some reserves (2+ years) worth of living expenses in cash (CD ladders or high interest savings account) to turn to when markets are bad, to avoid selling your funds low, and also allow the main portfolio to rebuild. Most serious crashes usually recover within 2 years. Once your portfolio is back at break-even, you can start using it again to draw living expenses and also to replenish your cash buffers. And you should be able to tell if that two year cash buffer is going to need to last a bit longer, and reduce expenses during this time as well to make it stretch.

The other method is to just reduce expenses as much as possible to minimize the sell off, but still tap your investments to fund your living expenses. Holding a mix of funds  - stocks and bonds - is supposed to help balance out things, as the typical thought is during bad times for stocks, the bond funds will be performing okay, so you would draw from the better performing bond funds and leave the ones hit  time to recover.

I liked Dr. Doom's drawdown series for a good explanation on the methodology.

http://livingafi.com/2014/05/09/drawdown-part-1-the-basics/


lostamonkey

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Re: Novice question: what happens the year your investments tank?
« Reply #5 on: March 13, 2015, 06:25:08 AM »
When you are FIRE, during bad years you could try being more frugal and decreasing your living costs. You can also rebalance by selling bonds and buying stocks. That being said, the studies behind the 4% rule took into account market downturns, and still got an extremly high success rate withdrawing 4% of your original Stache at FIRE date+inflation since FIRE date regardless of economic conditions.
« Last Edit: March 13, 2015, 06:26:51 AM by lostamonkey »

Retire-Canada

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Re: Novice question: what happens the year your investments tank?
« Reply #6 on: March 13, 2015, 06:31:34 AM »
What money do you live on? If you start eating away at the principal, you will then get less money to spend forever after.

Like other's have noted be flexible:

- have some liquid assets that are not tied up in stocks [cash, money market, term deposits, etc...]
- have the ability to reduce costs [put off house repairs, trips, eat less fancy]
- have a line of credit available at a modest interest rate
- have part-time work options to earn a few $$ during any rough times in the market

My FIRE budget has 25% of optional stuff I can drop for a year or two without any awful lifestyle impact. I can drop another 25% by tightening my belt and putting off bigger expenses until my stocks recover.

If I live to the same age range as my parents I expect a 50yr+ FIRE. For the first decade I won't take more money out than my investments make adjusted for inflation. In fact I'll always take less so they still grow. These first years are critical for the long-term success of my FIRE plan and doing some part-time work is easy.

As time rolls on I'll be less concerned since my realistic investment horizon is shrinking, gov't benefits will start to kick in and folks spend less as they age which I assume will be true for me.

-- Vik

ShoulderThingThatGoesUp

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Re: Novice question: what happens the year your investments tank?
« Reply #7 on: March 13, 2015, 06:37:06 AM »
Also, when the economy is really bad, everything costs less (unless you have a Venezuela problem in which case nobody is FI).

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Re: Novice question: what happens the year your investments tank?
« Reply #8 on: March 13, 2015, 06:39:13 AM »
You might like this MMM post "It's All About the Safety Margin" http://www.mrmoneymustache.com/2011/10/17/its-all-about-the-safety-margin/

Travis

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Re: Novice question: what happens the year your investments tank?
« Reply #9 on: March 13, 2015, 10:47:38 AM »
Quote
I understand this method produces the best returns over 10 year periods, but since you live on the interests when you are FIREd, what happens when another 2008 hits us?

You're probably not going to just live off interest when you retire.  To hedge against downturns many FIRE portfolios will have fewer stocks than when they were accumulating their staches which means you're going to eat into principle even if just a little bit.

lise

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Re: Novice question: what happens the year your investments tank?
« Reply #10 on: March 13, 2015, 10:59:33 AM »
As others have said diversify to cash / bonds. 
But I would say don't wait for the day you retire, start doing it 1-3 years before you're FIRE date to ease your mind about the market all of sudden tanking the month after you retire.


Bearded Man

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Re: Novice question: what happens the year your investments tank?
« Reply #11 on: March 13, 2015, 11:17:40 AM »
Diversify, diversify, diversify.

Numbers Man

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Re: Novice question: what happens the year your investments tank?
« Reply #12 on: March 13, 2015, 11:35:44 AM »
What happens when your investments tank? It sucks! Diversify your investments and educate yourself so you don't buy high and sell low in a panic.

morning owl

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Re: Novice question: what happens the year your investments tank?
« Reply #13 on: March 13, 2015, 12:17:02 PM »
Another option is to invest in dividend-paying stocks and live off the dividends (which is the approach I'm taking.) When I initiate a new purchase, I look for companies which held or raised their dividends during the Great Recession. If anything like that happens again, I'd like to know that the dividend payments are likely to be solid.

Since most of those companies have divs in the 3-4% range, the 4% safe withdrawal rate should be covered by the dividends alone. (Especially considering the fact that most of these companies raise their dividends every year.)

Kiwi Mustache

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Re: Novice question: what happens the year your investments tank?
« Reply #14 on: March 13, 2015, 12:25:34 PM »
If you are going to be a net buyer of stocks (or any other asset) when the price is depressed you should be happy. You are buying things for a cheaper price. You should only be upset if the price goes down if you intend to sell it.

nereo

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Re: Novice question: what happens the year your investments tank?
« Reply #15 on: March 13, 2015, 01:03:20 PM »
As others have said diversify to cash / bonds. 
But I would say don't wait for the day you retire, start doing it 1-3 years before you're FIRE date to ease your mind about the market all of sudden tanking the month after you retire.
Shifting your portfolio into cash/bonds has historically been a really BAD, incredibly risky way to fund a lengthy retirement.  Cash has lost out to inflation virtually every single year and bonds have beaten stocks only a handful of 10 year periods.
Having some bonds can reduce volatility.  Keeping the majority in bonds/cash would be a fools errand IMO, unless you have such a large 'stach that you can afford a sub 2% WR.  Even then, why wouldn't you keep it invested in the market and partake in some philanthropy?

Eric

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Re: Novice question: what happens the year your investments tank?
« Reply #16 on: March 13, 2015, 01:11:18 PM »
The short answer is, you do nothing.  2008 was not a big deal, considering that the market recovered very quickly.  It's a large drop followed by a prolonged period of malaise that's bad.  Now that's easy to say with hindsight, and harder to put into practice.  So you'll probably intuitively cut expenditures and attempt to bring in a little extra income.  But you can see now that it wouldn't have been necessary.

Another option is to invest in dividend-paying stocks and live off the dividends (which is the approach I'm taking.) When I initiate a new purchase, I look for companies which held or raised their dividends during the Great Recession. If anything like that happens again, I'd like to know that the dividend payments are likely to be solid.

Since most of those companies have divs in the 3-4% range, the 4% safe withdrawal rate should be covered by the dividends alone. (Especially considering the fact that most of these companies raise their dividends every year.)

Well, you could do that, but you're taking on extra risk for no benefit, so I doubt you should be recommending that approach to others.  Once you understand that selling shares or collecting dividends are equivalent, then there's no real reason to favor dividends.  See this post by skyrefuge for a better explanation than I can provide.

http://forum.mrmoneymustache.com/investor-alley/ive-decided-on-vanguard-but-need-some-help-please/msg584803/#msg584803

lise

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Re: Novice question: what happens the year your investments tank?
« Reply #17 on: March 13, 2015, 01:13:08 PM »
As others have said diversify to cash / bonds. 
But I would say don't wait for the day you retire, start doing it 1-3 years before you're FIRE date to ease your mind about the market all of sudden tanking the month after you retire.
Shifting your portfolio into cash/bonds has historically been a really BAD, incredibly risky way to fund a lengthy retirement.  Cash has lost out to inflation virtually every single year and bonds have beaten stocks only a handful of 10 year periods.
Having some bonds can reduce volatility.  Keeping the majority in bonds/cash would be a fools errand IMO, unless you have such a large 'stach that you can afford a sub 2% WR.  Even then, why wouldn't you keep it invested in the market and partake in some philanthropy?

I meant to say two years of living expenses in to cash/bonds 1-3 years before you're FIRE.

Eric

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Re: Novice question: what happens the year your investments tank?
« Reply #18 on: March 13, 2015, 01:20:29 PM »
As others have said diversify to cash / bonds. 
But I would say don't wait for the day you retire, start doing it 1-3 years before you're FIRE date to ease your mind about the market all of sudden tanking the month after you retire.
Shifting your portfolio into cash/bonds has historically been a really BAD, incredibly risky way to fund a lengthy retirement.  Cash has lost out to inflation virtually every single year and bonds have beaten stocks only a handful of 10 year periods.
Having some bonds can reduce volatility.  Keeping the majority in bonds/cash would be a fools errand IMO, unless you have such a large 'stach that you can afford a sub 2% WR.  Even then, why wouldn't you keep it invested in the market and partake in some philanthropy?

I meant to say two years of living expenses in to cash/bonds 1-3 years before you're FIRE.

Check this out:

https://www.kitces.com/blog/research-reveals-cash-reserve-strategies-dont-work-unless-youre-a-good-market-timer/

lise

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Re: Novice question: what happens the year your investments tank?
« Reply #19 on: March 13, 2015, 01:27:32 PM »
As others have said diversify to cash / bonds. 
But I would say don't wait for the day you retire, start doing it 1-3 years before you're FIRE date to ease your mind about the market all of sudden tanking the month after you retire.
Shifting your portfolio into cash/bonds has historically been a really BAD, incredibly risky way to fund a lengthy retirement.  Cash has lost out to inflation virtually every single year and bonds have beaten stocks only a handful of 10 year periods.
Having some bonds can reduce volatility.  Keeping the majority in bonds/cash would be a fools errand IMO, unless you have such a large 'stach that you can afford a sub 2% WR.  Even then, why wouldn't you keep it invested in the market and partake in some philanthropy?

I meant to say two years of living expenses in to cash/bonds 1-3 years before you're FIRE.

Check this out:

https://www.kitces.com/blog/research-reveals-cash-reserve-strategies-dont-work-unless-youre-a-good-market-timer/

It's psychologically appealing to me ;-) 

morning owl

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Re: Novice question: what happens the year your investments tank?
« Reply #20 on: March 13, 2015, 01:34:34 PM »

Another option is to invest in dividend-paying stocks and live off the dividends (which is the approach I'm taking.) When I initiate a new purchase, I look for companies which held or raised their dividends during the Great Recession. If anything like that happens again, I'd like to know that the dividend payments are likely to be solid.

Since most of those companies have divs in the 3-4% range, the 4% safe withdrawal rate should be covered by the dividends alone. (Especially considering the fact that most of these companies raise their dividends every year.)

Well, you could do that, but you're taking on extra risk for no benefit, so I doubt you should be recommending that approach to others.  Once you understand that selling shares or collecting dividends are equivalent, then there's no real reason to favor dividends.  See this post by skyrefuge for a better explanation than I can provide.

http://forum.mrmoneymustache.com/investor-alley/ive-decided-on-vanguard-but-need-some-help-please/msg584803/#msg584803

Perhaps dividend growth investing isn't for everyone, but if you're willing to do spend a bit of time investigating, then I'd argue that it's worth looking into, at least. As I mentioned, I only purchase companies who did NOT cut their dividends during the recession. So the post you quoted above doesn't really apply. Also, I buy companies whose dividend payout ratio is at or under 50%. So their earnings would have to drop a hell of a lot before dividend cuts are forced.

Everyone's approach to investing is different -- you (and many on this board) seem to prefer index investing, but that doesn't mean it's for everyone, either. To each their own.

ETA: does the chart in the link you've posted include reinvested dividends? If not then it is a tad misleading...
« Last Edit: March 13, 2015, 01:53:02 PM by morning owl »

NoraLenderbee

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Re: Novice question: what happens the year your investments tank?
« Reply #21 on: March 13, 2015, 01:37:38 PM »
Also, when the economy is really bad, everything costs less (unless you have a Venezuela problem in which case nobody is FI).

That wasn't the case in the 1970s. Look up "stagflation."

boarder42

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Re: Novice question: what happens the year your investments tank?
« Reply #22 on: March 13, 2015, 01:45:05 PM »

Another option is to invest in dividend-paying stocks and live off the dividends (which is the approach I'm taking.) When I initiate a new purchase, I look for companies which held or raised their dividends during the Great Recession. If anything like that happens again, I'd like to know that the dividend payments are likely to be solid.

Since most of those companies have divs in the 3-4% range, the 4% safe withdrawal rate should be covered by the dividends alone. (Especially considering the fact that most of these companies raise their dividends every year.)

Well, you could do that, but you're taking on extra risk for no benefit, so I doubt you should be recommending that approach to others.  Once you understand that selling shares or collecting dividends are equivalent, then there's no real reason to favor dividends.  See this post by skyrefuge for a better explanation than I can provide.

http://forum.mrmoneymustache.com/investor-alley/ive-decided-on-vanguard-but-need-some-help-please/msg584803/#msg584803

Perhaps dividend growth investing isn't for everyone, but if you're willing to do spend a bit of time investigating, then I'd argue that it's worth looking into, at least. As I mentioned, I only purchase companies who did NOT cut their dividends during the recession. So the post you quoted above doesn't really apply. Also, I buy companies whose dividend payout ratio is at or under 50%. So their earnings would have to drop a hell of a lot before dividend cuts are forced.

Everyone's approach to investing is different -- you (and many on this board) seem to prefer index investing, but that doesn't mean it's for everyone, either. To each their own.

and your portfolio is diversified into how many companies??? yeah thats what i thought not diversified enough so you're just costing your self.

Eric

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Re: Novice question: what happens the year your investments tank?
« Reply #23 on: March 13, 2015, 01:47:35 PM »

Another option is to invest in dividend-paying stocks and live off the dividends (which is the approach I'm taking.) When I initiate a new purchase, I look for companies which held or raised their dividends during the Great Recession. If anything like that happens again, I'd like to know that the dividend payments are likely to be solid.

Since most of those companies have divs in the 3-4% range, the 4% safe withdrawal rate should be covered by the dividends alone. (Especially considering the fact that most of these companies raise their dividends every year.)

Well, you could do that, but you're taking on extra risk for no benefit, so I doubt you should be recommending that approach to others.  Once you understand that selling shares or collecting dividends are equivalent, then there's no real reason to favor dividends.  See this post by skyrefuge for a better explanation than I can provide.

http://forum.mrmoneymustache.com/investor-alley/ive-decided-on-vanguard-but-need-some-help-please/msg584803/#msg584803

Perhaps dividend growth investing isn't for everyone, but if you're willing to do spend a bit of time investigating, then I'd argue that it's worth looking into, at least. As I mentioned, I only purchase companies who did NOT cut their dividends during the recession. So the post you quoted above doesn't really apply. Also, I buy companies whose dividend payout ratio is at or under 50%. So their earnings would have to drop a hell of a lot before dividend cuts are forced.

Everyone's approach to investing is different -- you (and many on this board) seem to prefer index investing, but that doesn't mean it's for everyone, either. To each their own.

Are you sure you read the post?  DivCorp continued to pay the same dividend amount in the example.

Also, there's no guarantees that companies that didn't cut their dividend during the last recession won't in the next recession.  That's a false measure of security you're betting on.

And of course you're welcome to invest how you like.  I'm only pointing out that a dividend strategy actually increases your risk by reducing your diversification for zero extra benefit.  Which is why it's probably not a great thing to recommend to others.

Kaspian

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Re: Novice question: what happens the year your investments tank?
« Reply #24 on: March 13, 2015, 01:53:30 PM »
...what happens when another 2008 hits us?

We buy even more!  Because.... Umm.... That's what we do?

morning owl

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Re: Novice question: what happens the year your investments tank?
« Reply #25 on: March 13, 2015, 02:03:23 PM »

Another option is to invest in dividend-paying stocks and live off the dividends (which is the approach I'm taking.) When I initiate a new purchase, I look for companies which held or raised their dividends during the Great Recession. If anything like that happens again, I'd like to know that the dividend payments are likely to be solid.

Since most of those companies have divs in the 3-4% range, the 4% safe withdrawal rate should be covered by the dividends alone. (Especially considering the fact that most of these companies raise their dividends every year.)

Well, you could do that, but you're taking on extra risk for no benefit, so I doubt you should be recommending that approach to others.  Once you understand that selling shares or collecting dividends are equivalent, then there's no real reason to favor dividends.  See this post by skyrefuge for a better explanation than I can provide.

http://forum.mrmoneymustache.com/investor-alley/ive-decided-on-vanguard-but-need-some-help-please/msg584803/#msg584803

Perhaps dividend growth investing isn't for everyone, but if you're willing to do spend a bit of time investigating, then I'd argue that it's worth looking into, at least. As I mentioned, I only purchase companies who did NOT cut their dividends during the recession. So the post you quoted above doesn't really apply. Also, I buy companies whose dividend payout ratio is at or under 50%. So their earnings would have to drop a hell of a lot before dividend cuts are forced.

Everyone's approach to investing is different -- you (and many on this board) seem to prefer index investing, but that doesn't mean it's for everyone, either. To each their own.

Are you sure you read the post?  DivCorp continued to pay the same dividend amount in the example.

Also, there's no guarantees that companies that didn't cut their dividend during the last recession won't in the next recession.  That's a false measure of security you're betting on.

And of course you're welcome to invest how you like.  I'm only pointing out that a dividend strategy actually increases your risk by reducing your diversification for zero extra benefit.  Which is why it's probably not a great thing to recommend to others.

And likewise, you can invest however you like! I believe people should invest in the way that makes sense for them and keeps them engaged. I don't believe you have understood my argument -- I am not investing in a way that poses much risk to me. When I look at the top 5 holdings of VTSAX, these are the types of companies that I buy for myself. I make every attempt to diversify, as well. So in essence, I am saving myself the MER of a fund, and doing something that I find more interesting than investing in an index. If I'm interested in the process, then I am more likely to stay involved and engaged in the long term.

The OP asked how to live off of investments in the case of a recession. I have given this a lot of thought myself, and is one of the reasons I prefer dividend investing, and would recommend it. Just because YOU would not recommend DGI does not mean that no one else should do so. I am simply recommending what works for me -- I am leaving it up to the OP to make their own decisions, as should you.

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Re: Novice question: what happens the year your investments tank?
« Reply #26 on: March 13, 2015, 02:15:48 PM »
The OP asked how to live off of investments in the case of a recession. I have given this a lot of thought myself, and is one of the reasons I prefer dividend investing, and would recommend it. Just because YOU would not recommend DGI does not mean that no one else should do so. I am simply recommending what works for me -- I am leaving it up to the OP to make their own decisions, as should you.

I'm only pointing out that receiving dividends is mathematically equivalent to selling shares.  Therefore, focusing on dividends doesn't actually do anything special to help you in case of a recession.  There's nothing magical about a dividend payment.  Dividend payment or not, you'll be in the exact same boat.  (again, see skyrefuge's linked post for math)  So while you're free to focus on that, because they're equivalent it's not really helping you through a recession.

morning owl

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Re: Novice question: what happens the year your investments tank?
« Reply #27 on: March 13, 2015, 02:30:37 PM »
Eric, sorry, I assumed you were recommending index investing (VTSAX) vs. buying individual companies.

I understand that dividends come at the expense of the company reinvesting its own capital. I'm not sure how it works in the US, but in Canada you can live off of up to $50k per person per year without paying income tax due to various dividend credits. So maybe dividends are not 'magical,' but this is another motivating factor for me. I'd rather have 50k a year in tax-free dividends than have to sell off companies at what COULD be inopportune times (as per OPs post), or have to pay tax on capital gains in the 'better' years. Whether the market is good or bad, I'm interested in a steady income and minimal (or zero) taxes. I buy companies with track records for doing so.

Given all of this, IMO your point about the added risk and 'zero extra benefit' of dividend investing is false. For me I see equal (or lower) risk than in investing in pure growth stocks, and the added major benefits of semi-predictable, stable income and lower (zero) taxes.

moustacheverte

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Re: Novice question: what happens the year your investments tank?
« Reply #28 on: March 15, 2015, 08:37:17 PM »
If you are going to be a net buyer of stocks (or any other asset) when the price is depressed you should be happy. You are buying things for a cheaper price. You should only be upset if the price goes down if you intend to sell it.

This is not true anymore when you are retired. You don't buy any more stocks/bonds, you're living off the interests.

moustacheverte

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Re: Novice question: what happens the year your investments tank?
« Reply #29 on: March 15, 2015, 08:38:39 PM »
...what happens when another 2008 hits us?

We buy even more!  Because.... Umm.... That's what we do?

When you are retired, you don't buy anymore, you just live off the interest. So a drop in the interest rate means you have less money to live on, hence my original question

moustacheverte

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Re: Novice question: what happens the year your investments tank?
« Reply #30 on: March 15, 2015, 08:40:26 PM »
Thank you all for your answers, it was very helpful!

Ricky

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Re: Novice question: what happens the year your investments tank?
« Reply #31 on: March 15, 2015, 08:51:23 PM »
You start a blog about frugality and retiring early, monetize it, and then talk about how great stocks are even though your income doesn't rely on Mr. Market? *Ahem*, MMM.

Truthfully though, just keep withdrawing regularly. You might want to be careful in a really bad year or if there are consecutively bad years, but in general, it all washes out.

Another option is to own real estate. People may not always shop at Walmart and Target, or buy Apple phones, but they will still demand housing.

In my opinion you should always live below your means and have a minimum savings rate of 20% even when retired, so yes, you're still buying stocks when they're on sale.

boarder42

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Re: Novice question: what happens the year your investments tank?
« Reply #32 on: March 16, 2015, 05:34:57 AM »
and really as most have stated it isnt too big a deal unless it happens the first 5 years you're retired.  if you make it thru the first 5 with out a 2008 your odds are very good you will be fine.  barring total market collapse. if it does happen you should be able to find a job if you really need extra cash.  You arent too far removed from the work force.