2008 crash - any witnesses who didnt adjust investing?

[nugget]

My investment era began only years later - so i wonder if there are some people here that had their passive index investment sorted out before the crash and stoically sticked to it until well after?

[Hula Hoop]

That's what I did.  Didn't adjust anything.  Money mostly in vanguard stock index funds for the last 18 years.  I imagine there are a lot of us like this here.

[Villanelle]

I started investing in about 2001.  I did nothing in 2008, including not even checking my balances.  I found it quite easy to be unconcerned.  I was in my early 20s and knew I was decades away from withdrawing anything. 

[kendallf]

I stuck to my contributions and stayed fully invested in stocks throughout.  I wasn't thrilled but I had a job, a house, and nothing about those numbers on a screen changed my day to day life.  I have contributed at least 10% of my salary during all of these years, trending up the last few as I found MMM and a more frugal lifestyle.

Just went and looked at account balances, for fun:

10/12/2007 (top):  100 <-- let's call this 100 to scale the numbers...
3/6/2009 (bottom): 58

I lost more than 50% during this period but I was contributing as well. 

3/6/2010: 100

Took 3 years to regain my previous peak, with continuous investment.  I think I was putting in 10% of my salary with the match during this whole period.

3/12/2013 (S&P back to 10/12/2007 top): 148

Today: 439

I just wish I'd been putting in heavier amounts during all of those years.. including the ones on the way down.  I'd be retired now, instead of looking at 3 years from now.

[DragonSlayer]

I've been through the 92, 99, 01, and 08 recessions since I started working. Never changed anything. FIRED several years ago, so I have moved some things into safer arenas, but other than that, nothing. I just kept contributing as much as I could and held the course. I'll do it again if it comes to that (but I do have a larger chunk now in cash/bonds than I used to).

[cats]

I only started investing in early 2007, so 2008 was kind of scary for me, to say the least!  I had sunk a pretty large (for me, at the time--I was 25) chunk of my cash into index funds and they had all sunk like lead balloons.  I was still kind of figuring out WTF an investment strategy was, but I did max out my IRA contributions in 2008, and according to my Vanguard history, I set up a monthly auto-invest of $25 (which seemed like a good amount at the time....I was in grad school!) in late 2008.

[CowboyAndIndian]

Never made any changes.

Using kendallf notations, 100 being the number at the peak of the market. I only keep track of my assets at the end of the year.

• 12/31/2007: 100
• 12/31/2008: 65.9
• 12/31/2009: 99
• 12/31/2010: 118

[Basenji]

Yep, we've been investing since the 90s. The automated train of monthly deposits to our investments (at that time mainly indexed mutual funds in 401k, IRAs--now it's a bit different) chugged right along. We lost a lot of value, but knew the really stupid move would be to get out. The only adjustments we've made over the years is to increase the monthly amount as raises were received. After I discovered MMM, I did a full review of our accounts and shifted our AA a bit--to more stocks because DH has a military retirement which counts as the "bond" part of our portfolio per this: https://the-military-guide.com/present-value-estimate-of-a-military-pension/
and this:
https://forum.mrmoneymustache.com/post-fire/what-has-workednot-worked-for-you-guys-who-have-been-fire-for-10-yrs/msg702130/#msg702130

Lazy and invisible wealth management worked great for us.

[RWTL]

I remember it well.  I got excited when the 2008 crash hit  - I told everyone at work to put anything extra they had into the market since everything was on sale.  That's what I did.  I didn't have much, but got 10K together and added it in. 

I remember sitting at lunch with someone who said, "You're going to make a lot of money some day."

I'm not sure I would be as excited today since I'm hoping to retire in the next three years.

[Candace]

Definitely. Just basically held up my (metaphorical) hand and said "I'm not looking...I'm not looking..." and didn't do anything differently.

[bacchi]

It seems so long ago but, yes, I stuck with the plan.

I did play with housing futures in 2006? -- betting on the housing drop -- but the market remained irrational longer than I could stay solvent.

[secondcor521]

Me too.

I was 100% stocks from at least 1987 through 2016, and have always been above 90% stocks since then.  Currently at 93% with lazy intentions to move to 97% or so.

I admit that there was a time, probably in the late fall of 2008 or early spring of 2009, when I thought to myself, "Well, heck, they might be right and this time might be different and maybe it's all going to collapse."  But I figured if that was the case then my goose was cooked anyways so I might as well stay the course.  So I did.

Like everyone else, my portfolio recovered and probably tripled from 2009 to today.  It helped a lot that I was saving 60% of my salary from 2009 through 2016.

[Fru-Gal]

I didn't touch anything. I didn't know much but I knew from an earlier experience with my first job that cashing out a retirement account was heavily penalized and not all that enjoyable. So when in 2008 my account dropped by half I didn't do anything (at the time it was in a target date fund). Not only that, we were going through other major $$ struggles at the time, and someone even urged me to cash out. Thank goodness I didn't.

According to Vanguard, over the last 10 years I've had a 10% return. As of 2018 I am 100% equities because I won't touch it, plus I need the money to last a very long time.

[PDXTabs]

I was like that.

[Fru-Gal]

(Ironically, I decided to go 100% equity in September 2018 or so. So that was a bit painful, but I had made my bed!)

[ctuser1]

I never changed anything either.

My then 401k was all in Fidelity Contra (no index fund option back then in my 401k).

I saw my portfolio go from $70k to $30k at one point of time (approximate figures from memory, may not be exact).

To be fair, retirement seemed so far out at that point that I did not care much about retirement accounts at that time. I had a piddly sum total of $15k in non-retirement accounts - all in cash. So nothing to worry about that either.

I was a consultant back then and my firm will lay you off if you did not keep yourself billable above a certain level for the entire year. I was far more concerned about that and was constantly lobbying for projects, even shitty ones, to keep myself billable. The most vivid memory I have from that time was that I was non-billable for a few weeks, and wrote an email to a particularly shitty director asking for projects. This is the guy I had confronted and basically said FU (using more polite/professional language) just over a year ago.

I am not sure I will be able to act so nonchalantly towards investments if my portfolio went poof today. I am much closer to retirement, I have much more to lose, AND investments would likely occupy much more mind-space today than they did back then!

[Andy R]

Seen plenty of comments on bogleheads of people who went through either 2000 or 2008 and talked of their experience and it has made them more conservative. Also some threads there of people freaking out.

[AnswerIs42]

I started investing seriously in about 2006 or 2007. At the time, I remember thinking to myself "It's a shame the stock market is so high at the moment. What we need is a nice big recession so I can pick up some bargains."

When it happened, I really took it investing up a gear, I cut back on spending and every spare penny went in. Gave a serious start to the stache.

If it were to happen today, I'd be losing a lot more money though. Still like to think I'd stay the course and not sell anything.

[MustacheAndaHalf]

I actually found the years before the dot-com bust to be more difficult.  Everyone formed investment clubs for stock picking - not indexing.  I even saw friends teaming up.  On the one hand investing interests me - but on the other stock picking doesn't.  So that social pressure was rough.

When the 2008 crisis hit, it was rough - but you should keep in mind everyone else is going through the same thing.  Your returns look bad, but they're just as bad as most people's.  It was also startling to see how correlated U.S. and international were during the crash.  But I waited out until the recovery.

Usually during a crash the worst thing you can do is "lock it in", and go to cash... and then miss the recovery.  So I didn't do that - I stuck with index funds.  It may also help to read about historical stock performance, so you know how likely it is that a dramatic recovery could happen at any time after the crash.

[dmc]

I retired in 2007.  I did change my investments at that time to a more conservative 60/40 or so.  I was a little concerned during the next few years but stayed the course.  Unfortunately I was not able to add much as I had no income, but I wasn’t worried enough to go back to work.  I did hold off on any big purchases during that time.

I just turned 62 and I’m currently around 55/45.  I do rebalance accationally, but nothing drastic.  My net worth is double what it was in 2007,  and I’ve been living good.

[Zamboni]

Ah, you all were so good in 2008!

It was before I found this site or learned anything about investing, so I'll admit that I heard about things crashing, panicked a bit, and moved some (20%?) of my stash around. I can't even tell you how I moved it, honestly, because I had no clue what I was doing. I don't even remember if I did an exchange or just changed by future purchase ratios, but at least I didn't just go to cash . . . it's more like I changed some of it to more conservative funds. Thankfully I only moved things in my then current employer's 401K, because I didn't know how to change my IRA, which had more money in it at the time. That's how clueless I was!

The good news is that my little freak out tinkering day didn't really do much and I fully recovered along with everything else. At the time, my boss came through our area and said "well, Warren Buffet says he's buying stocks right now, so that's what I'm going to do." I remember googling Warren Buffet, lol. That tiny random little thing probably saved me from completely fucking up and pulling it out at the worst time!

[ctuser1]

Ah, you all were so good in 2008!

It's survivorship bias common to any investment topic!!

There were as many people, if not more, who panicked and underperformed the market! They are not represented on this topic, or in any other discussion about the panic of 2008.

Many of them simply quit investing and decided stocks are evil! They are not going to come and participate in a forum board related to investing. Some of them are probably just too embarrassed to speak out!

[Blueberries]

Retirement?  Didn't change a thing.

[Villanelle]

I retired in 2007.  I did change my investments at that time to a more conservative 60/40 or so.  I was a little concerned during the next few years but stayed the course.  Unfortunately I was not able to add much as I had no income, but I wasn’t worried enough to go back to work.  I did hold off on any big purchases during that time.

I just turned 62 and I’m currently around 55/45.  I do rebalance accationally, but nothing drastic.  My net worth is double what it was in 2007,  and I’ve been living good.

I had zero problem staying the course in 2008, and I'd have zero problem doing it now.  But I'll admit that I might be sweating it if I was in the first few years of actually drawing down, and fearing the dreaded SoR problems.  I'd like to think I wold still continue on with my plan, but I'm sure I'd at least be paying attention and feeling a little anxiety, neither of which I did in 2008! 

[Maenad]

Ah, you all were so good in 2008!

It's survivorship bias common to any investment topic!!

There were as many people, if not more, who panicked and underperformed the market! They are not represented on this topic, or in any other discussion about the panic of 2008.

This is true as well. We've self-selected to be the ones that stuck it out. How many of the "that's it, I'm out" crowd are still posting at BH or er.org?

I just closed my eyes and didn't look at my Vanguard balance. The market drop wasn't even the scary part - the really bad part was what looked like the imminent collapse of the global financial system. It was terrifying thinking of what could happen to the very systems we all depend on every day to make, sell, and buy things.

I just figured that 1) if it happened, the spendthrifts were going to be in worse shape than me [so quit my bitchin'], and b) if/when the world pulled out of the recession I'd be better off having bought all the way down and back up. But I won't lie and say it was easy - it was clinging to the hope that this time it wouldn't really be catastrophically different.

[markbike528CBX]

Ah, you all were so good in 2008!

It's survivorship bias common to any investment topic!!

There were as many people, if not more, who panicked and underperformed the market! They are not represented on this topic, or in any other discussion about the panic of 2008.

This is true as well. We've self-selected to be the ones that stuck it out. How many of the "that's it, I'm out" crowd are still posting at BH or er.org?

I just closed my eyes and didn't look at my Vanguard balance. The market drop wasn't even the scary part - the really bad part was what looked like the imminent collapse of the global financial system. It was terrifying thinking of what could happen to the very systems we all depend on every day to make, sell, and buy things.

I just figured that 1) if it happened, the spendthrifts were going to be in worse shape than me [so quit my bitchin'], and b) if/when the world pulled out of the recession I'd be better off having bought all the way down and back up. But I won't lie and say it was easy - it was clinging to the hope that this time it wouldn't really be catastrophically different.

+1 Surviviorship bias is strong on this topic.
However, that means you the reader can discover common threads of investing success.

I lost 50% of my net worth in the 2008 crash.
I'd been at the tail end of the 2000-2003 slump, so I knew not to panic.
Seeing 401k balances drop below my contributions was tough, but my attitude was" it is too late to panic".  I followed my PLAN, even though it had me buy starting at only 20% down.
By March 2009, my last cash got me one share BRK.B, EXACTLY at the bottom.

[Zamboni]

The worst part of the 2008 crash for me was how many people were being laid off in the following 2 years, and how few companies were hiring, especially in 2009. Some of those laid-off folks were forced to sell some of their investments in the down market just to survive. . . many of us would end up doing that.

Edited to add: I guess that's why we are stashing for FIRE!

[fattest_foot]

It's survivorship bias common to any investment topic!!

There were as many people, if not more, who panicked and underperformed the market! They are not represented on this topic, or in any other discussion about the panic of 2008.

This is true as well. We've self-selected to be the ones that stuck it out. How many of the "that's it, I'm out" crowd are still posting at BH or er.org?

I just closed my eyes and didn't look at my Vanguard balance. The market drop wasn't even the scary part - the really bad part was what looked like the imminent collapse of the global financial system. It was terrifying thinking of what could happen to the very systems we all depend on every day to make, sell, and buy things.

I just figured that 1) if it happened, the spendthrifts were going to be in worse shape than me [so quit my bitchin'], and b) if/when the world pulled out of the recession I'd be better off having bought all the way down and back up. But I won't lie and say it was easy - it was clinging to the hope that this time it wouldn't really be catastrophically different.
[/quote]

My thought has always been if the financial system ever collapses, the money you pull out is worthless anyway so who cares? May as well let it ride.

For 2008 we didn't have very much and weren't even considering early retirement so it just sat there.

[Bateaux]

We're possibly looking at the beginning of the next crash right now.   Hang in there and don't sell at a loss.  Keep your cash ready to buy and increase your investing all the way down and all the way back up.  Time and patience pays. 

[Rdy2Fire]

Retirement or the idea of it was far off I left everything as is, I wish I would have actually put more in the market but at the time had other things going on that needed the $$

[DeniseNJ]

I was delighted.  Didn't change anything, just kept investing in my 401K as much as I could.  Didn't have anything extra to buy with so just stayed the course.  But I was happy that the small amount I could spend was buying stock at a good price.

And this was well before MMM, but I still knew a bargain when I saw one.

[FIRE@50]

I didn't do anything different in 2008. Just kept buying every two weeks like I plan to do during the next recession. I remembered a guy that I worked with at a different job telling me in 2002 how many more shares he was able to buy in his 401k because prices were so low.

[nugget]

That's a lot of really nice stories, thanks :)
may they help the younger generation to stay course^^

[erutio]

Started working in late 2008, so I didn't really experience that crash.   I've luckily enjoyed a bull market basically my entire working career so far.

I know people don't consider Nov-Dec 2018 a stock market crash, more of a correction, but's it's the closest to a crash I've experienced.  Despite my retirement accounts dropping ~200k, I stayed the course and kept contributing.  If that is any indication, hopefully that means I'll continue such behavior in a longer bear market.

Do people not consider late 2018 a crash?

[secondcor521]

Do people not consider late 2018 a crash?

There's no real agreed upon definition of a "crash".

A stock market correction is a fall of 10% from the previous high.  A bear market is a fall of 20% or more from the previous high.  For historical reasons these definitions are based on closing prices only, not intraday.  And some people are strict about the 20% number and others say 19.9% is "close enough" and would include it.  Finally, it depends on which index you look at - sometimes the S&P will be in correction territory but not the Dow, or vice versa.

I believe late 2018 was a fall of more than 20% on an intraday basis but not a closing basis for at least one if not more of the three main US indices.

[Imma]

The worst part of the 2008 crash for me was how many people were being laid off in the following 2 years, and how few companies were hiring, especially in 2009. Some of those laid-off folks were forced to sell some of their investments in the down market just to survive. . . many of us would end up doing that.

Edited to add: I guess that's why we are stashing for FIRE!

I was one of those. I had just turned 18 and my small investments were still managed by my mother who worked in banking and followed her bank's official investment policy (=expensive managed funds). This money was supposed to help me pay for college and consisted of birthday / Christmas money and money I earned by babysitting and summer jobs. I don't know the exact amount but IT was probably around 10k before the crash and I sold it off bit by bit every time I needed money, all in all probably for 6k.

I don't blame my mother because she followed the guidelines from work. It's just bad luck. I didn't lose a fortune, I was always going to have to work throughout college. It actually got me interested in investing. Looking back, the money shouldn't have been invested at all and certainly not in stocks.

This time around I have a good job and low costs. Even if I would have to take a big paycut during the next recession, it would be unlikely I'd have to sell unless something really bad happens (one fulltime minimum wage is technically enough for us to live off). In the worst case scenario I might not be able to take advantage of the   sales.

[MustacheAndaHalf]

Besides survivorship bias between the average person and more experienced investors, there's an additional bias: embarrassment.  Those who feel good about what they did are more likely to post than those who felt bad about it.

When the crash hits... remember re-balancing!

[YttriumNitrate]

Do people not consider late 2018 a crash?

I don't.

Late 2018 felt completely different than late 2008. 2008 had proverbial blood in the streets with unemployment doubling, massive companies going under, and trillions in house value vanishing trapping people in their homes. While there will always be the fear de jour amongst the pema-bears (e.g., trade war with China is trendy these days) in 2008 it seems that even generally optimistic people had become fearful.

[h82goslw]

Do people not consider late 2018 a crash?

No....not even remotely close to a crash

[ctuser1]

For those with no memory or experience of 2008 - it was a "systemic risk" event, not just a vanilla bear market. Such events usually don't happen more often than once in 2 to 3 generations. Before 2008, last time such systemic meltdown happened was in 1932!!

By this token, maybe we should expect another meltdown sometime after 2070 or so? Perhaps from Libra being hacked, leading to people losing confidence?

2018 Dec was not only NOT a crash, it was not even a textbook bear market (>20% down close)!!

2008 winter - 2009 Spring had unusual effects all over the main street. Sometime in that 2008 winter, I once drove down I476 in Pennsylvania for more than 100 miles in the middle of the day and encountered only 2 cars coming from the other direction!! NYC bound Metro north trains suddenly became almost empty during peak office hours.

Frankly, I remember being worried about keeping my job much more than the investment account!!

Let's hope such "crash" does not repeat for at least a couple of more generations yet!!

<Fixed Typo. Should be I476 - Penn Turnpike, not I485. Though I know Charlotte, where I485 is, with it's high reliance on banking, must have been similarly impacted.>

[Buffaloski Boris]

Do people not consider late 2018 a crash?

Oh gosh no. That little escapade wasn’t even a blip on the radar. As compared to 2008 when there was serious concern that money market funds would break the buck. Counterparty risk where there was concern that the banking system would break down. Bail outs all over the place. Mortgages being foreclosed right and left.

Wild times. And it doesn’t look to me like any lasting lessons were learned. Other than maybe the financial institutions figuring out better ways to socialize their losses.

[ctuser1]

As compared to 2008 when there was serious concern that money market funds would break the buck.

They did break the buck right after Lehman went poof!!

https://www.investopedia.com/articles/economics/09/money-market-reserve-fund-meltdown.asp

[brooklynmoney]

I was smart enough to hold but then did some dumb speculative shit like buying SH in March 2009. I did sell my financials out of spite.

[bacchi]

2008 winter - 2009 Spring had unusual effects all over the main street. Sometime in that 2008 winter, I once drove down I485 in Pennsylvania for more than 100 miles in the middle of the day and encountered only 2 cars coming from the other direction!! NYC bound Metro north trains suddenly became almost empty during peak office hours.

Frankly, I remember being worried about keeping my job much more than the investment account!!

Whoa. On the other side of the country, the tech market was, if not strong, at least stable. I don't recall any fear of losing a job.

The dot-bomb was of course entirely different. There was probably 20% tech unemployment in the Bay Area ~2003.

[harvestbook]

I just kept putting into my 401k at work. I literally didn't even know how to log in and check it, so I never even knew how much I had, or even what I had. It was only a few years ago that I found a paper statement showing the three funds I was in. I never gave it a thought because I didn't really pay attention to investing--it was all just an abstraction to me.

I was also wholly oblivious to the possibility of losing my job. There were some layoffs all around me but I never felt vulnerable. But I do remember some of the older workers closer to retirement were walking around gray-faced.

[ctuser1]

Whoa. On the other side of the country, the tech market was, if not strong, at least stable. I don't recall any fear of losing a job.

The dot-bomb was of course entirely different. There was probably 20% tech unemployment in the Bay Area ~2003.

Huh! Dot bomb was mild for us!! At least there was not much impact to the main street!!

In 2007, I was hawking some POC code I cobbled up at work to suck up trade data from multiple exchanges using Fix protocol. It became quite successful for what started out as a 2-week POC and was sold by my employer to a couple of hedge funds as a "mini product" in 2007. Such functionality is common in most banking systems now - not so at that time.

By 2008 beginning we were eyeing the big fish. We even got a meeting at Bear Sterns!!

And then things hit us like a ton of brick!!

Jan-2008 - I was imagining myself to be on the quick track to partner.
Dec-2008 - there was such a massive carnage around me (80% of the headcount in my office was let go) that I was worried about "when" my turn will come, not whether!!

[brooklynmoney]

Ugh I remember the job loss fear. My colleague and I would say to each other “just one more quarter we have to make it though just one more” every quarter for about 2 years!

[gmdv]

Moved half my IRA into cash as the market started to drop,  bought back in a month later.   I think I sold at $11, missed the bottom at $7 due to time restriction,  and bought back at $9.  Should have sold everything,  but I had too little and was too nervous at the time.

[SimpleLifer]

At the time I was nearly at the $1M mark.  By mid-2000's I was moving things around, so I was becoming a little more conservative with "stock picks".  But overall, I was cringe-worthy clueless.

I kept horrible records back then, but I remember the throat punch well. 

How much did I lose? I don't know, but it was a LOT.  Back then I just never looked at my accounts "set it and forget it".  I think that helped.

Did I stay the course?  Yes!  I kept contributing, and did not sell a single thing!

When did my portfolio recover?  I have no idea.

This time around, I feel better prepared...mostly invested in index funds. No matter how bad it gets, I will definitely stay the course...

[EscapeVelocity2020]

To the OP - why do you only want to hear from folks that didn't adjust?  I went through the dot com bubble and 9/11, 2008 seemed like a good time to take some risk off the table since I finally was back ahead again but couldn't short the obvious real estate bubble and I didn't want to buy a mansion...