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Learning, Sharing, and Teaching => Investor Alley => Topic started by: a plan comes together on January 20, 2016, 01:19:06 PM

Title: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: a plan comes together on January 20, 2016, 01:19:06 PM
I get the whole "eventually the market always goes up" argument and trying to time it can result in losses. However, I'm in a situation here that is tearing me to shreds:

1. I had planned on early retiring at some point this year.
2. I missed the entire ride up. At the start of last year, I piled my entire net worth into investments, despite understanding we were at historically high valuations (foolish, in retrospect).
3. I've held tight since, despite the downturns. But this market now seems intent on going straight to hell with crazy overreactions to stupid shit (China is less than 1% of all U.S. exports!!!!!! WTF?!!?!). There is zero good news that has any sustained impact and the downturn has "seemingly" just started - we're still at a high valuation level.
4. My only hope for saving my retirement this year (and potentially years ahead) is to sell today and buy back in at a lower level that could get me back to par. I'd be happy to just recoup my losses and then play it smarter in the future by finding ways to protect the downside.
5. I don't think I have 2, 3, 4+ more years of work left in me to get back to the point I was at last year.

I realized I f'ed myself over on waiting until the peak to buy in and then planning to retire shortly after. Rare scenario, but shit happens. I'm literally watching my hard work and hopes and dreams vanish with each day. My plan is falling apart. Talk to me, please.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: okits on January 20, 2016, 01:43:41 PM
How about some more details (living expenses, passive income streams, age, job situation)?  From your OP my initial thought is to quit your FT job, get a non-stressful PT side gig to generate a bit of cash to help cover living expenses, and to leave your investments alone.  So far, the only way you've possibly f-ed yourself was by picking an investment plan you couldn't fully commit to through market fluctuations.  If the plan behind your investment approach is good, do not succumb to panic now. 
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: sol on January 20, 2016, 01:51:05 PM
The market is down a notch, so you need to be working and buying, not quitting and selling.  Now is the time to keep your job going and continue to invest every dollar you can.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: BarkyardBQ on January 20, 2016, 01:56:07 PM
I don't think you have a solid enough understanding of the market to retire yet. You should be able to handle a 20% or whatever downturn, and if you can't your plan needs work, and backup/safety nets like part time income, rentals, or a stash large enough that 20% doesn't make you blink. This self preservation/sell-all mentality in retirement will get you back in a cubicle pretty quickly if it goes badly.

If you can't retire this year, don't. If you have enough FU money and hate your day job, go find a nice part time job and ride it out. Time > Money

You should also read here for Sequence of Returns Risk, http://www.madfientist.com/safe-withdrawal-rate/
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: frugledoc on January 20, 2016, 01:59:32 PM
I assume you didn't put your entire net worth into equities 1 year pre retirement?  Bonds/CDs, anything to reflect your low risk personality/life situation
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: FIRE47 on January 20, 2016, 02:10:09 PM
Personally I have to disagree with the keep buying crowd here, if you did just put your entire life savings into equities right before retiring what's done is done you cant chase your losses and let it ride - sure maybe give it another couple weeks (even better - a set limit) to see if it bounces but after that cut your losses, stocks could go up or down or sideways from here regardless of the current valuation - you are still 100% equities and a few months from retirement. In a best case you recoup your losses in a few months and are back where you were. In a worst case your retirement is delayed 10 years or more.

Personally I think you need to sell or at least come up with a better AA for you situation. Your age and health factor into this if you are old or cannot continue working for much longer (which your post hinted at) you really need to think about a better plan then riding out 100% equities and crossing your fingers.

Sometimes if you've already won (you just said you were able to retire) you have to take some chips off the table and stop playing the game, assuming you can cover inflation, future costs etc.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: a plan comes together on January 20, 2016, 02:17:40 PM
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I assume you didn't put your entire net worth into equities 1 year pre retirement?  Bonds/CDs, anything to reflect your low risk personality/life situation

Not all, but the large majority. Net, I'm down about $150K (15%), however.

Quote
I don't think you have a solid enough understanding of the market to retire yet. You should be able to handle a 20% or whatever downturn, and if you can't your plan needs work, and backup/safety nets like part time income, rentals, or a stash large enough that 20% doesn't make you blink. This self preservation/sell-all mentality in retirement will get you back in a cubicle pretty quickly if it goes badly.

If you can't retire this year, don't. If you have enough FU money and hate your day job, go find a nice part time job and ride it out. Time > Money

I can handle 20% (if I get out now). What I can't handle (and many people here prob. couldn't handle without major adjustments like working a few more years) is 40%+.

Quote
The market is down a notch, so you need to be working and buying, not quitting and selling.  Now is the time to keep your job going and continue to invest every dollar you can.
Is now really the time to invest every new dollar earned, given my situation? Valuations are still at historically high levels and we could drop another 30% easily.

Quote
How about some more details (living expenses, passive income streams, age, job situation)?  From your OP my initial thought is to quit your FT job, get a non-stressful PT side gig to generate a bit of cash to help cover living expenses, and to leave your investments alone.  So far, the only way you've possibly f-ed yourself was by picking an investment plan you couldn't fully commit to through market fluctuations.  If the plan behind your investment approach is good, do not succumb to panic now. 
1. I'm at about 4% SWR, $1M NW.
2. 36
3. job situation is a long story, but I have almost nothing left in the tank after being at same employer for 9 miserable years.
4. $30k/year living expenses
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: WerKater on January 20, 2016, 02:19:11 PM
4. My only hope for saving my retirement this year (and potentially years ahead) is to sell today and buy back in at a lower level that could get me back to par. I'd be happy to just recoup my losses and then play it smarter in the future by finding ways to protect the downside.
Where did you get this crystall ball that is telling you that the markets will continue to go down significantly? Will it also tell you when the bottom is reached?
Your previous attempts at timing the market seem not to have gone too well. Why do you think this time you will be right?

Your plan is not falling apart. But you can make it fall apart by selling now. Then, I almost guarantee, you will miss out on the market going up again at some point.
But you should adapt your plan. That is what us Mustachians do. We are flexible. We adapt. Nobody promised you an easy ride here.  So stop the panic talk, work a bit longer, keep investing and then retire happily. Don't try to rely on crazy speculation that the market will continue to drop and that you can predict where it will stop.

Alternative: Sell everything now, with unlimited orders. Tell all your friends to do the same. So that I can buy it all up at even lower prices (yes, I know, the effect would actually be unnoticeable, but one can dream...)
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: merula on January 20, 2016, 02:21:49 PM
If you sell everything, you lock in your losses. If you stick with your holdings, they will earn money. Maybe not this year, but the stock market ALWAYS recovers, even when the talking heads say "This time is different."

If you're nervous and don't feel like buying low (which doesn't make objective sense but can make a certain amount of sense if your initial asset allocation wasn't the right fit for you, which it definitely sounds like), then start putting your savings somewhere that you do feel comfortable in an effort to rebalance without selling.

You can't time the market consistently, no one can, and anyone who claims to is trying to get your money. But if you hold, you'll be fine. And don't just trust me on that, here's the math: http://awealthofcommonsense.com/worlds-worst-market-timer/

Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: FIRE47 on January 20, 2016, 02:24:25 PM
Quote
I assume you didn't put your entire net worth into equities 1 year pre retirement?  Bonds/CDs, anything to reflect your low risk personality/life situation

Not all, but the large majority. Net, I'm down about $150K (15%), however.

Quote
I don't think you have a solid enough understanding of the market to retire yet. You should be able to handle a 20% or whatever downturn, and if you can't your plan needs work, and backup/safety nets like part time income, rentals, or a stash large enough that 20% doesn't make you blink. This self preservation/sell-all mentality in retirement will get you back in a cubicle pretty quickly if it goes badly.

If you can't retire this year, don't. If you have enough FU money and hate your day job, go find a nice part time job and ride it out. Time > Money

I can handle 20% (if I get out now). What I can't handle (and many people here prob. couldn't handle without major adjustments like working a few more years) is 40%+.

Quote
The market is down a notch, so you need to be working and buying, not quitting and selling.  Now is the time to keep your job going and continue to invest every dollar you can.
Is now really the time to invest every new dollar earned, given my situation? Valuations are still at historically high levels and we could drop another 30% easily.

Quote
How about some more details (living expenses, passive income streams, age, job situation)?  From your OP my initial thought is to quit your FT job, get a non-stressful PT side gig to generate a bit of cash to help cover living expenses, and to leave your investments alone.  So far, the only way you've possibly f-ed yourself was by picking an investment plan you couldn't fully commit to through market fluctuations.  If the plan behind your investment approach is good, do not succumb to panic now. 
1. I'm at about 4% SWR, $1M NW.
2. 36
3. job situation is a long story, but I have almost nothing left in the tank after being at same employer for 9 miserable years.
4. $30k/year living expenses

Ok this changes things given your age - the portfolio really isnt the issue here its probably finding another job. You cant really afford to sell everything at only 36 - how will you fund a 60 year retirement? Given your horizon it is going to come back eventually. I'd worry more about the job situation than the portfolio.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: BarkyardBQ on January 20, 2016, 02:26:36 PM
You could start caching your next 2 years expenses with current income and stop investing, so you don't have to withdrawal from a down portfolio. If you were going to retire this year, wouldn't that be the first thing you do... Save 30k in the last few months before pulling the trigger; or would you quit and the following week pull out 1-12 months income? I plan on saving my first year or 2 of needed expenses in my final months of work and leaving the portfolio alone.

http://www.nytimes.com/interactive/2016/your-money/stock-market-tips.html?smid=tw-nytimes&smtyp=cur&_r=1
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Frankies Girl on January 20, 2016, 02:26:48 PM
If you sell now while it's down all you're doing is locking in the losses. That is a supremely boneheaded move. You will not save your retirement for this year. You're acting out of desperation and fear and blind panic. Is that how you want to start your retirement? Sounds awful. Calm down, deep breaths and resign yourself to holding on until the market is on an upswing and SAVE MORE MONEY for a cash cushion so you won't be in this predicament again.

Did you have a year or two cash or CD ladder savings in place to weather downturns? This should have been a given since you seem to be a pretty conservative/risk adverse person. So scale back your investing right now (but don't sell anything!!) and figure this next year is all about increasing your cash holdings to avoid the panic of selling off when the market goes down. If you have cash/CDs to tap (at least one year's living expenses is recommended, but more is always better), it will make the whole "the market is crashing!" feeling a little less panicky for you.

It doesn't matter if you put in the largest chunk of money last year "when the market was at its highest." The market will go back up and in a few years/decade, that one time high will be far behind and a mere blip on the chart.

I quit my job last spring. I worked at a place that paid me well and likely would never be able to go back to, so quitting was closing the door completely as far as I was concerned; I could find similar work pretty easily but it would be a fraction of what I was making at that place. Since then, I've seen the market go down, down, down. I've lost over 80K so far and figure it's going to lose some more before too much longer. Guess what? I'm not panicking and I'm not selling off things. I threw in the last of dry powder a few weeks ago and now am just kind of sad I don't have any more to invest. I have stop gaps in place to ensure I won't be out on the street (plan A, plan B and even a plan C... right now we're on plan A).


If you really don't think you can work another year or two where you are, then look for another job that isn't as stressful. My plan B is a part time job doing something fun and easy - possibly freelancing, but more like retail or waiting tables. I did it in my college days and I have no issues with the idea of doing something that I can walk away from in a year if it gets to be boring or too much like hard work.

The sky is not falling, despite what all the hysterical news sources are touting. Stop listening to the noise and try to look at the big picture. The market drops sometimes. The market goes into a bear sometimes. It's natural and healthy and to be expected many more times in your lifetime. If you had a plan in place to retire this year, you should have also had some secondary (or tertiary) plans in the pipe as well for occasions such as this. I'd suggest you also check out Dr. Doom's drawdown series (http://livingafi.com/2014/05/09/drawdown-part-1-the-basics/) to see how portfolios might weather the market during downturns as it might help give you some other ideas.

But if the worst for you is that you might have to delay quitting your job for a year or even two... you're still way ahead of most of the population out there. You should be looking at it from the positive side, not the negative. Buckle down and stay the course.

Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: a plan comes together on January 20, 2016, 03:07:02 PM
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Where did you get this crystall ball that is telling you that the markets will continue to go down significantly? Will it also tell you when the bottom is reached?
Your previous attempts at timing the market seem not to have gone too well. Why do you think this time you will be right?

We're at a CAPE of 23.55, which is 47% above the historical median, even after the recent decline. Nobody knows for sure, you are correct. But, I'd feel much more comfortable plowing more money into the market right now if we were at a CAPE below the median (vs. 47% above).
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: a plan comes together on January 20, 2016, 03:16:16 PM
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Ok this changes things given your age - the portfolio really isnt the issue here its probably finding another job. You cant really afford to sell everything at only 36 - how will you fund a 60 year retirement? Given your horizon it is going to come back eventually. I'd worry more about the job situation than the portfolio.

I agree, it is essential for me to find other income sources, and if I stay in the market and we dip another 20% I'll prob. need to move to another job (would be a massive pay cut from current job based on going market value).

If I sell, I realize I cannot go income-less at age 36 for the rest of my life. I would prob. take the approach of:
1. using cash in other ways outside of equities (likely real estate and self-employment income)
2. getting back in to the market at a lower valuation (yes, I realize this is market timing and could totally blow up in my face)
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Eric on January 20, 2016, 03:56:39 PM
If you're on the verge of selling everything to move to cash, you're never going to make it in retirement.  You're 36 years old.  You can expect to see approximately 20-30 more of these 10% dips throughout your lifetime, with at least a handful of actual real drops in the 30-40% range.  If you can't handle a 10% dip while you have a steady income, how in the hell are you going to handle one while you're relying on your investments to sustain you? 
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Financial.Velociraptor on January 20, 2016, 04:15:35 PM
I'm down substantially this year but I derive about 95% of my budget from passive interest, distributions, and dividends.  I have to sell very little to cover the rest and am actually covering the shortfall with covered calls right now.  I think it is your asset allocation that is suspect, then. 

If you were 60/40 bonds/stocks, you'd have a substantial portion of your budget coming in as cash payments, be seeing less volatility, and probably sleeping better at night.  If I get my way, I'll continue to massage my asset allocation to include every larger exposure to debt and debt like instruments.  I have no interest in a moonshot.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: capitalninja on January 20, 2016, 04:28:57 PM
I get the whole "eventually the market always goes up" argument and trying to time it can result in losses. However, I'm in a situation here that is tearing me to shreds:

---snip---

I realized I f'ed myself over on waiting until the peak to buy in and then planning to retire shortly after. Rare scenario, but shit happens. I'm literally watching my hard work and hopes and dreams vanish with each day. My plan is falling apart. Talk to me, please.

What are you invested in? That would be helpful to know before knowing what action to take next.

If you're invested in good index funds that pay dividends, I'd say to just let it ride. 1M invested should easily produce 30 - 40k per year in dividend income which if reinvested will help you reach retirement that much faster.

Selling is probably the worst thing that you could do right now; especially considering that you currently have a source of income and thus don't really need this money. More than likely you will regret selling in less than a year if you do.

Ultimately you'll have to do what works well for you but please give it some deep thought first. If everyone is selling and screaming that the sky is falling, 99.9999999% of the time you want to do the opposite of that.

My 10 cents.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: faramund on January 20, 2016, 04:52:10 PM
The question about dividends is very pertinent.

If you have 1M in shares, and your living expenses are 30K, the dividend must come very close to covering those expenses. Even if it was say 2%, that'd give you 20K, and you would have to sell 10K of your shares to live on.. I assume that's pretty much what you had planned on doing anyway. If you didn't want to sell the shares (in which case what was your previous plan?) - can't you find a fairly easy alternate income that at least owns 10K.

(of course if your dividend is 3% - I really don't see what your problem is)
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: robartsd on January 20, 2016, 04:54:10 PM
I'm assuming you're 100% in a stock mutual fund. You need a good mix of bonds for money you plan to use in the next few years. Rather than selling any stock, I'd buy a bond mutual fund to complement what you currently have with any new investment money you come up with. If the funds are in the same account, you can probably even have your dividends from the stock fund automatically reinvested in the bond fund to move your asset allocation transition even faster.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Jsn on January 20, 2016, 05:15:13 PM
Quote
"Warren [Buffett], it strikes me that if you did nothing else you never sell. That is, if you can grit your teeth through and just disregard short-term declines in the market or even long-term declines in the market, you will come out well. I mean you just stick all your money in stocks and go home and don’t look at your portfolio you’ll do far better than if you try to trade it.”  – Alan Greenspan
(emphasis mine.)

As merula has already suggested, how's a good time to re-read http://awealthofcommonsense.com/worlds-worst-market-timer/
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: a plan comes together on January 20, 2016, 05:52:56 PM
Quote
"Warren [Buffett], it strikes me that if you did nothing else you never sell. That is, if you can grit your teeth through and just disregard short-term declines in the market or even long-term declines in the market, you will come out well. I mean you just stick all your money in stocks and go home and don’t look at your portfolio you’ll do far better than if you try to trade it.”  – Alan Greenspan
(emphasis mine.)

As merula has already suggested, how's a good time to re-read http://awealthofcommonsense.com/worlds-worst-market-timer/

You had me until "Alan Greenspan" ;-)
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: sirdeets on January 20, 2016, 05:56:43 PM
My thoughts are - if you sell it all right now - and have the standard of living you are after with the current balance - do it.

There was an interesting paper I read a while back about people to retire, they goes against a lot of what you read ("have your age in bonds", etc).

The basics of the paper was that if you're close to retirement, and don't have enough to me happy on, go ahead and pump into risky assets.

If you're close to retirement, and have a sum you are happy with, go ahead and go safe, as its not worth the risk at this point.

Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Financial.Velociraptor on January 20, 2016, 06:08:28 PM
Is there a breakdown of actual budget needs in this thread yet?  I saw approx 1MM in market (perhaps 850k now that market is down?)  I have some debt and debt like options that would provide 50k plus on 850k

Municipal bond closed end funds (tax exempt) IIM, IQI, NEA, NIO: yield about 6% at current price.  7.5% after tax equivalent for 25% tax bracket.

JRO, floating rate closed end fund.  Yields 7.5% taxable with upside income potential from rising Fed rates.

JPS, closed end preferred shares fund.  Yields 7.8% taxable.

GIM, short duration intl. bond fund yields 5% taxable.

BDCL, closed end business development company fund.  Yields 21.82% taxable!

HNW, closed end fund with 80% investment grade debt securities.  Yields 9.78% taxable.

Say you settle for a blended average of 6% yield from debt and debt like instruments: 850k * .06 = 51k annual income, some of which is tax exempt. 

To my way of thinking, an income allocation makes a huge difference to your stability.  It doesn't do much for you if there is hyperinflation though.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: capitalninja on January 20, 2016, 06:27:45 PM
Reacting to volatility as the masses do (Buy high and Sell low) will make and keep you poor.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Another Reader on January 20, 2016, 07:15:48 PM
What you are facing is "sequence of returns" risk.  Retiring into a market where you suffer significant losses after reaching your "target" amount often leads to failure, especially when you need to withdraw closer to 3.5 or 4 percent to cover your net income needs and taxes.  In my view, the time to sell would have been before the decline, which you could not have predicted anyway.

All of these folks that retired early in the last few years retired into positive sequences of returns.  Most of their portfolios grew much faster than whatever percentage they withdrew.  Some folks successfully lived off only the income produced or even less.  They are in a position to survive a 20 percent or greater drop in value.  You are not.

In your shoes, I would resign myself to working in some capacity for a few more years to make up the difference between a conservative withdrawal rate on a shrunken portfolio and your income needs, including taxes.  Once your portfolio recovers to the point where you feel it can support a withdrawal rate that is comfortable for you, then I would think about full retirement.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: faramund on January 20, 2016, 07:19:10 PM
There's another option, if the dividend from your current index isn't enough. Is there an index that has a higher dividend.

For example,

Down here in Australia, there are two Vanguard indexes I use
VAS , which is an all company index (dividend 3.x%)
VHY,   which is a collection of high yielding companies (dividend 5.x%).

Over the time of their existence VHY has tended to outperform VAS by about 1% a year, though its been the reverse of this in the last couple of years. So in overall terms (dividend+growth) they're pretty similar.

Surely there's something equivalent in the US.

So if you could transfer a large proportion of your money into a high yielding index, that combined with your remaining stocks - should be able to get you a dividend high enough to live on - and you would still have the usual dividend advantages, namely that they tend to grow with the economy and inflation.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: GrowingTheGreen on January 20, 2016, 07:29:47 PM
Get your shit together. In a psychological sense. You knew this would happen. Everyone said the market will go down and that you'll have to resist every impulse to sell. Well. Here we are. Take a deep breath and ride it out.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: horsepoor on January 20, 2016, 07:40:16 PM
I won't respond on what you should do with your investments, but it seems like the answer is to find a more agreeable way to make 30k and quit the job.  You don't need to stash any more, so you can afford to downshift in a big way.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: thriftyc on January 20, 2016, 07:47:57 PM
Ride it out and get a fun part time job - live lean and stay the course.   In my own case I am 40% bonds and 60% equities - lets me sleep at night while rebalancing when stocks are on sale. Find an allocation that works for YOU longterm.

Another option - is to still quit your shit job that you hate (and a job you hate is a shit job) and change careers through a 1 or 2 year college program to something much lower stress that you love to do.  (personal trainer, physio assistant, pharmacy assistant whatever)  Do that for 5 fun years - then retire.

You have options BECAUSE of the position you are in  - utilize them and enjoy life.

I utilized mine and walked out on my shit job last week to semi FIRE and work a fun part time job on about the same NW as you.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: TheOldestYoungMan on January 20, 2016, 08:38:23 PM
You said at the beginning you were hoping to retire sometime this year but had not retired yet.  Worst case scenario you do have to wait a little longer.

Best case scenario you wake up tomorrow, realize that this has been the worst opening to a year ever, and whew, now that that's out of the way, just acknowledge that a few of those years of retirement you'll have to put in a few extra shifts at the ice cream place you decided was a decent part-time gig.

I found out the market was going down today because some coworkers were trying to grief me about my investing.  In a panic I logged in to check my investments...nope, more shares today than the last time I checked it, and since I wasn't planning on selling any shares soon, I haven't lost anything.

You haven't lost anything either friend.  Keep plowing money in, watch the dollar cost averaging work, the dividend re-investing.  Remember that controlling costs is all you really have control over.

As long as you can live frugally, you can survive any downturn.

If I was FI already and a January like this was happening, I'd be a little annoyed honestly.

Looks like I'd need to earn about $7k of spending money through effort this year! Shit! That'll take me like a whole month!  Or I'll have to airbnb my place while I'm travelling!  Such a hassle!

One month working out of twelve!  Knew I should have put off FIRE for four more years!  *rollseyes*

The volatility of the markets over the past ~18 months is certainly a thing though.

Go read the dr. doom post about what it's like to be invested in 100% equities and then rethink your asset allocation.

Do.Not.Buy.High.And.Sell.Low.  Just don't!  That's all I can say.  There's no "stopping the losses" or "minimizing the damage" that can be achieved by doing that.  The damage is done.  It will bounce back.  Keep contributing, look at number of shares in the account instead of number of dollars, and happiness will be improved.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: MasterStache on January 21, 2016, 08:02:15 AM
The market is down a notch, so you need to be working and buying, not quitting and selling.  Now is the time to keep your job going and continue to invest every dollar you can.

+1

The "soon to retire" folks at work here are freaking out and wanting to sell. Meanwhile I am scraping every penny I can together to buy more. Even part of my wife's car fund was invested. 

I don't understand the OPs thought process. Did you assume the markets were always going to go up? Especially right after you bought in?
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: a plan comes together on January 21, 2016, 08:38:59 AM
Lots of responses here - too many for me to respond to individually (damn day job) - and I appreciate all of them.
I'm calming down a tad.

To those w/ sentiments like, "markets don't always go up, what did you expect?" - yes, I know, volatility is good, markets fluctuate, in the long run markets trend upward, yadayadayada - trust me, I get it. It can be difficult to completely remove emotion and personal situation:
1. will to continue job/career is near zero
2. I have only experienced declines in invested net worth, which is a huge gut punch
3. I have almost zero cushion (if you believe in the 4% rule) and a big drop right before retirement with a long recovery could be catastrophic

On top of that, you throw in some rational observances:
1. CAPE is 47% above median. Valuation of this market is high, by any historical measure, with much more downside than upside (and it tends to head back to the mean): http://www.multpl.com/shiller-pe/
2. We are in year 7, one of the longest bull runs in history
3. Every bull run comes to an end
4. Fed is starting to raise rates
5. The world is awash in cheap oil
6. US market is now somehow directly correlated to China's volatility
7. QE has ended
8. World growth has stagnated
9. No inflation to speak of

A lot of signs point to significant declines, which goes back to my 'zero cushion' comment earlier.

However, as of today, I haven't liquidated anything yet. A few things I'm going to do:
1. I need to gameplan and try to take emotion out of this. Obviously, my risk profile is not quite what I was thinking it was and I need to rationally figure out how to diversify
2. I need to keep earning income in some way until I build a bigger cushion to better weather declines
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: zephyr911 on January 21, 2016, 08:57:17 AM
Side work?

Fun job?

You don't have much of a safety margin, you say. Well, just making $20K a year is like slapping an extra $450K on top of your Stash. Do something silly you always thought would be fun but would never give you the lifestyle you wanted. Be a barista or a tour guide. Or look at part-time work, consulting, etc, in your current field.

Or, if nothing else, at least look for a new job in your current field to ease the burnout. You're FI, or nearly so, and you can afford to take some risks if you're willing to compensate for losses. Don't let this situation trap you.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: HBFIRE on January 21, 2016, 10:16:29 AM
Sounds to me like you need to reevaluate your risk tolerance and asset mix.  If this minor correction makes you freak out, then your asset mix is too risky.  This current correction is nothing, and is going to happen may times during your life.  If you can't handle the swings, increase your bond %.  You might want to consult with a good money manager, one who will evaluate your goals and risk tolerance to  advise you on a proper balance of assets.  Yes, it will cost some $, but seems to me you need to do this and it would be well worth it.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: GrowingTheGreen on January 21, 2016, 10:33:21 AM
Lots of responses here - too many for me to respond to individually (damn day job) - and I appreciate all of them.
I'm calming down a tad.

To those w/ sentiments like, "markets don't always go up, what did you expect?" - yes, I know, volatility is good, markets fluctuate, in the long run markets trend upward, yadayadayada - trust me, I get it. It can be difficult to completely remove emotion and personal situation:
1. will to continue job/career is near zero
2. I have only experienced declines in invested net worth, which is a huge gut punch
3. I have almost zero cushion (if you believe in the 4% rule) and a big drop right before retirement with a long recovery could be catastrophic

On top of that, you throw in some rational observances:
1. CAPE is 47% above median. Valuation of this market is high, by any historical measure, with much more downside than upside (and it tends to head back to the mean): http://www.multpl.com/shiller-pe/
2. We are in year 7, one of the longest bull runs in history
3. Every bull run comes to an end
4. Fed is starting to raise rates
5. The world is awash in cheap oil
6. US market is now somehow directly correlated to China's volatility
7. QE has ended
8. World growth has stagnated
9. No inflation to speak of

A lot of signs point to significant declines, which goes back to my 'zero cushion' comment earlier.

However, as of today, I haven't liquidated anything yet. A few things I'm going to do:
1. I need to gameplan and try to take emotion out of this. Obviously, my risk profile is not quite what I was thinking it was and I need to rationally figure out how to diversify
2. I need to keep earning income in some way until I build a bigger cushion to better weather declines

Right there in your list of 9 reasons why your world is about to end. There it is. You didn't state it, but therein the problem lays. You've convinced yourself that the only direction from here is down. You sound link Jim Cramer on Mad Money (dunno if he's still on TV--canceled cable). You're regurgitating every damn news headline out there. Quit reading about this shit dude. I think that's your big problem. Just stop googling it!

Yes. There are negative signs.  What's the other option? Sell and lock in your losses? Warren Buffet would slap you across the face and call you a dummy-head.

Get a part time gig, wait it out, and listen to what everyone on here is saying. It's all great advice. I have no idea why you aren't going to pursue the part time job and let your principal grow.

Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Full Beard on January 21, 2016, 11:05:15 AM
If you had some type of terminal illness I would say that could be a case for selling everything and just enjoying life.  Otherwise, I would just ride it out and ignore the noise.  You're in such a great position at just 36 years old with close to a million dollars.  This is definitely a first world problem.  I have a friend serving in the peace corps in Africa.  After talking to him about the living conditions over there it really makes me appreciate just how good we have it. 

Go get a part-time job or just take a year off and unwind...you can afford it.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: sol on January 21, 2016, 11:42:10 AM
peace corps in Africa.  After talking to him about the living conditions over there it really makes me appreciate just how good we have it. 

Yes, it's easy to lose perspective.

AAAaGH, my investments are down 15%, and now I'm going to have to postpone my annual vacation to the Carribbean!  The heated floor in my master bathroom and walk in closet still works great, but I'm not sure I can afford to upgrade to granite bathroom counters with undermount sinks this month, because now I have to invest more while stocks are cheap instead of blowing that money on a bathroom!  My life is shit! 

What's that you say?  A child dies of malnutrition or diarrhea every nineteen seconds?  How can that possibly matter if I don't have granite countertops in my bathroom?  It's the stock market's fault that I can't afford to help those kids, damn this recession!
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Mr. Green on January 21, 2016, 12:07:26 PM
Quote
I don't think you have a solid enough understanding of the market to retire yet. You should be able to handle a 20% or whatever downturn, and if you can't your plan needs work, and backup/safety nets like part time income, rentals, or a stash large enough that 20% doesn't make you blink. This self preservation/sell-all mentality in retirement will get you back in a cubicle pretty quickly if it goes badly.

If you can't retire this year, don't. If you have enough FU money and hate your day job, go find a nice part time job and ride it out. Time > Money

I can handle 20% (if I get out now). What I can't handle (and many people here prob. couldn't handle without major adjustments like working a few more years) is 40%+.

Quote
The market is down a notch, so you need to be working and buying, not quitting and selling.  Now is the time to keep your job going and continue to invest every dollar you can.
Is now really the time to invest every new dollar earned, given my situation? Valuations are still at historically high levels and we could drop another 30% easily.
No one can tell you what to do obviously but I think you're off your rocker. A 40% drop would essentially be a repeat of 2008. Sorry, not happening. You couldn't sell me on that with all the numbers in the world; there's just too many positive things happening. But that's my opinion. I think you really need to take the historical stuff with a grain of salt. We just went through the worst recession in 80 years and things don't just smooth back out to historical norms the next year like nothing happened. How do you know CAPE won't continue to stay above the average? Also, recessions don't appear for no reason and there is about as much compelling data to argue for things continuing to go up, as there is data to argue for a downturn. Big corporate profits. Jobs growth. Wages starting to increase.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Rubic on January 21, 2016, 01:29:51 PM
FWIW, if you're selling today, I may be on the opposite side of your trade (i.e. I'm buying).

Not being snarky, but some people don't have the temperament for the volatility of equities.  One of my close relatives lost 50% of his net worth in 2009 because he sold everything -- despite my pleading -- only to later obsess over his missed gains between 2010-2015.  Once he'd sold, he was waiting for the market to drop back to his sell price to buy back in. Never did.

Now, in addition to having lost half his net worth in 2009, he's compounding the problem of his remaining savings by keeping it all in low-yielding CDs.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: MLKnits on January 21, 2016, 01:42:01 PM
Honestly, OP, you're in a dream position, because your annual spending is so low. You can quit your job, find something--or hell, a series of somethings--that earn you $30 (or a bit less, even), sell only enough to cover the difference and any taxes, and your $1M will just keep growing in the meantime.

Go be a barista! Go teach English in South Korea! Go tutor elementary-school kids in math! Go be a temp! Your current job/career suck, but dude: you're free. You badass'd your way to not needing that level of income, probably ever again. Why are you working so much as another day?
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Interest Compound on January 21, 2016, 02:42:20 PM
Here's a fun post from over at Bogleheads:

https://www.bogleheads.org/forum/viewtopic.php?f=10&t=182194

---------------------------------

There's a lot of chatter now that we're in the first correction in some years. Just for some perspective I pulled up S&P closing prices since 1986, a little over 30 years.

Here's the worst 150 days:
1. 19-Oct-1987   -20.47 (Black Monday)
2. 15-Oct-2008   -9.03
3. 1-Dec-2008   -8.93
4. 29-Sep-2008   -8.79
5. 26-Oct-1987   -8.28
6. 9-Oct-2008   -7.62
7. 27-Oct-1997   -6.87
8. 31-Aug-1998   -6.80
9. 8-Jan-1988   -6.77
10. 20-Nov-2008   -6.71
11. 8-Aug-2011   -6.66
12. 13-Oct-1989   -6.12
13. 19-Nov-2008   -6.12
14. 22-Oct-2008   -6.10
15. 14-Apr-2000   -5.83
16. 7-Oct-2008   -5.74
17. 20-Jan-2009   -5.28
18. 5-Nov-2008   -5.27
19. 12-Nov-2008   -5.19
20. 16-Oct-1987   -5.16
21. 6-Nov-2008   -5.03
22. 17-Sep-2001   0.00
23. 10-Feb-2009   -4.91
24. 11-Sep-1986   -4.81
25. 4-Aug-2011   -4.78
26. 15-Sep-2008   -4.71
27. 17-Sep-2008   -4.71
28. 2-Mar-2009   -4.66
29. 17-Feb-2009   -4.56
30. 18-Aug-2011   -4.46
31. 10-Aug-2011   -4.42
32. 14-Apr-1988   -4.35
33. 12-Mar-2001   -4.32
34. 20-Apr-2009   -4.28
35. 5-Mar-2009   -4.25
36. 30-Nov-1987   -4.18
37. 14-Nov-2008   -4.17
38. 3-Sep-2002   -4.15
39. 2-Oct-2008   -4.03
40. 24-Aug-2015   -3.94
41. 22-Oct-1987   -3.92
42. 20-May-2010   -3.90
43. 6-Oct-2008   -3.85
44. 27-Aug-1998   -3.84
45. 4-Jan-2000   -3.83
46. 19-Jul-2002   -3.83
47. 22-Sep-2008   -3.82
48. 9-Nov-2011   -3.67
49. 15-Nov-1991   -3.66
50. 4-Aug-1998   -3.62
51. 03-Dec-1987   -3.53
52. 24-Mar-2003   -3.52
53. 30-Mar-2009   -3.48
54. 27-Feb-2007   -3.47
55. 23-Feb-2009   -3.47
56. 24-Oct-2008   -3.45
57. 4-Jun-2010   -3.44
58. 3-Apr-2001   -3.44
59. 5-Aug-2002   -3.43
60. 9-Sep-2008   -3.41
61. 10-Jul-2002   -3.40
62. 14-Jan-2009   -3.35
63. 29-Jan-2009   -3.31
64. 22-Jul-2002   -3.29
65. Dec 18, 2015   -3.26
66. 6-May-2010   -3.24
67. 27-Sep-2002   -3.23
68. 5-Feb-2008   -3.20
69. 22-Sep-2011   -3.19
70. Aug 21, 2015   -3.19
71. 27-Oct-2008   -3.18
72. 20-Dec-2000   -3.13
73. 4-Feb-2010   -3.11
74. 20-Sep-2001   -3.11
75. 29-Jun-2010   -3.10
76. 6-Jun-2008   -3.09
77. 8-Mar-1996   -3.08
78. 21-Oct-2008   -3.08
79. 07-Jul-1986   -3.07
80. 22-Jun-2009   -3.06
81. 30-Sep-1998   -3.05
82. 18-Feb-2000   -3.04
83. 6-Aug-1990   -3.02
84. 1-Oct-1998   -3.01
85. 19-Sep-2002   -3.01
86. 7-Jan-2009   -3.00
87. 23-Aug-1990   -3.00
88. 4-Sep-2008   -2.99
89. 9-Jan-1998   -2.97
90. 9-Aug-2007   -2.96
91. Sep 1, 2015   -2.96
92. 1-Aug-2002   -2.96
93. 14-Oct-1987   -2.95
94. 21-Sep-2011   -2.94
95. 7-Nov-2007   -2.94
96. 26-Jun-2008   -2.94
97. 4-Dec-2008   -2.93
98. 24-Jan-2003   -2.92
99. 2-Jul-2009   -2.91
100. 17-Jan-2008   -2.91
101. 09-Nov-87   -2.89
102. 16-Jul-2010   -2.88
103. 29-Jan-2002   -2.86
104. 11-Dec-2008   -2.85
105. 3-Oct-2011   -2.85
106. 11-Aug-2010   -2.82
107. 30-Oct-2009   -2.81
108. 15-Oct-1999   -2.81
109. 2-Jan-2001   -2.80
110. 1-Nov-2011   -2.79
111. 24-Jan-2000   -2.76
112. 28-Jan-2000   -2.75
113. 9-Oct-2002   -2.73
114. 11-Apr-1997   -2.73
115. 08-Jan-1986   -2.73
116. 29-Feb-2008   -2.71
117. 18-Jul-2002   -2.70
118. 23-Jul-2002   -2.70
119. 06-Oct-1987   -2.70
120. 13-May-2009   -2.69
121. 23-Mar-1999   -2.69
122. 20-Jan-1988   -2.68
123. 9-Oct-1990   -2.67
124. 9-Sep-2011   -2.67
125. 3-Aug-2007   -2.66
126. 18-Nov-1986   -2.64
127. 1-Nov-2007   -2.64
128. 5-Jan-2001   -2.62
129. 15-Aug-1997   -2.59
130. 22-Jan-1990   -2.59
131. 10-Sep-1998   -2.58
132. 14-Mar-2001   -2.58
133. 10-Mar-2003   -2.58
134. 17-Nov-2008   -2.58
135. 1-Oct-2009   -2.58
136. Sep 28, 2015   -2.57
137. 7-Mar-2000   -2.56
138. 19-Oct-2007   -2.56
139. 28-Dec-1987   -2.56
140. 2-Aug-2011   -2.56
141. 12-Oct-2000   -2.55
142. 17-Sep-1998   -2.55
143. 15-Jul-1996   -2.54
144. 2-Sep-2011   -2.53
145. 11-Dec-2007   -2.53
146. 20-Jun-2013   -2.50
147. 30-Sep-2011   -2.50
148. 13-Jan-2016   -2.50
149. 15-Jan-2008   -2.49
150. 19-May-2003   -2.49

Somewhat arbitrarily, we've had a bad run of 13 trading days, down 9.5%. Here's a sampling of bad 13-day stretches since 1986:
19-Oct-1987   -31.31
27-Oct-1997   -9.65
4-Aug-1998   -9.66
4-Sep-1998   -11.31
22-Mar-2001   -10.86
21-Sep-2001   -15.92
22-Jan-2009   -10.78
14-Apr-2000   -10.07
23-Jul-2002   -19.35
17-Sep-2008   -9.86
20-Nov-2008   -25.19
3-Mar-2009   -16.63
21-Jan-2009   -9.83
8-Aug-2011   -16.69
25-Aug-2015   -10.11
15-Jan-2016   -9.53


On a more positive note, best 50 days:
1. 13-Oct-2008   11.58
2. 28-Oct-2008   10.79
3. 21-Oct-1987   9.10
4. 23-Mar-2009   7.08
5. 13-Nov-2008   6.92
6. 24-Nov-2008   6.47
7. 10-Mar-2009   6.37
8. 21-Nov-2008   6.32
9. 24-Jul-2002   5.73
10. 30-Sep-2008   5.42
11. 29-Jul-2002   5.41
12. 20-Oct-1987   5.33
13. 16-Dec-2008   5.14
14. 28-Oct-1997   5.12
15. 8-Sep-1998   5.09
16. 3-Jan-2001   5.01
17. 29-Oct-1987   4.93
18. 20-Oct-2008   4.77
19. 16-Mar-2000   4.76
20. 9-Aug-2011   4.74
21. 15-Oct-2002   4.73
22. 11-Aug-2011   4.63
23. 10-May-2010   4.40
24. 5-Apr-2001   4.37
25. 21-Jan-2009   4.35
26. 18-Sep-2008   4.33
27. 30-Nov-2011   4.33
28. 16-Oct-2008   4.25
29. 18-Mar-2008   4.24
30. 15-Oct-1998   4.17
31. 4-Nov-2008   4.08
32. 12-Mar-2009   4.07
33. 19-Sep-2008   4.03
34. 24-Feb-2009   4.01
35. 14-Aug-2002   4.00
36. 1-Oct-2002   4.00
37. 2-Dec-2008   3.99
38. 11-Oct-2002   3.91
39. 26-Aug-2015   3.90
40. 24-Sep-2001   3.90
41. 5-Dec-2000   3.89
42. 18-Apr-2001   3.89
43. 1-Sep-1998   3.86
44. 8-Dec-2008   3.84
45. 9-Apr-2009   3.81
46. 8-May-2002   3.75
47. 17-Jan-1991   3.73
48. 11-Mar-2008   3.71
49. 5-Jul-2002   3.67
50. 5-Dec-2008   3.65

---------------------------------

I don't know what you take from this, but I can't help but look and see how almost all the BEST days, came shortly after some of the WORST days. You can't predict the future, so don't make bets with your portfolio that hinge on your predictions being accurate. The current price, by definition, is what the totality of all investors think the price should be. Don't trick yourself into thinking you know more than them. If they thought the price should be lower, again by definition, it would already be lower.

"Prices in the marketplace are by definition the right price." ~Alan Greenspan, former Chairman of the Federal Reserve

Don't do anything stupid.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Kaspian on January 21, 2016, 02:55:31 PM
Never mind CAPE, Shiller, P/E ratios, valuations, corrections, and all that other nonsense.  You must have a proper personal investment plan and you must do a risk tolerance assessment and answer those questions honestly.  There is no shame (at all!) in havng a 50% bond allocation if that's necessary for your peace of mind.  (That's actually what Bogle has!)  Last year everyone was screaming, "100% equities--the only way to go, wha-hooo!  I can take it!"  Yeah, well shit--it's easy to be say you're brave when everything's going well.   
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: forestj on January 21, 2016, 06:07:36 PM
Just offering a bit of perspective...

If I had as much money as you do in equities, I would snap my fingers, kick back, and open a beer. I would be thinking...

Quote
I'm FREE!!!! After all that hard work, it finally PAID OFF! I don't have to work any more. I can just sit on my savings, and even if the market drops 70% from my peak at 1M, and I lose 700k, I'll still have enough to retire.  I can withdraw enough money every year to pay rent, buy good food, and keep myself entertained with several different hobbies. I can go do whatever I want, and work for myself, on my own projects and ideas until the cows come home!! THIS IS GREAT!!! I'M FREE!!!

I don't know if you are supporting several other people, if you are tied to a HCOL area, or what, but I don't think you should let yourself be tied down, I don't think your should let your $30,000k  a year hang over your head and cause anxiety. Slash it! Make it $15,000k a year! Work part time to make it $10,000 a year. Just let go of your ego, zoom out a bit, and bask in the immense freedom that your wealth offers you. You are a Millionaire!! You don't have to spend it! You can do whatever the hell you want!
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Financial.Velociraptor on January 21, 2016, 06:12:29 PM
OP should consider: Since 1950, stocks have experienced 147 pullbacks of 5% or more, 40 corrections of 10% or more, 19 drops of 15% or more, 11 bear markets of 20% or more, and just five crashes of more than 30%.

That comes out to a:
5% drop every 5 months
10% drop every 20 months
15% drop every 41 months
20% drop every 71 months
30% drop every 156 months

If you have a long retirement horizon, you absolutely *must* be able to weather volatility.  Drops of the current size come frequently.  If you can't stomach it, your asset allocation has too little fixed income.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: okiedoke on January 22, 2016, 10:55:40 AM
OP should consider: Since 1950, stocks have experienced 147 pullbacks of 5% or more, 40 corrections of 10% or more, 19 drops of 15% or more, 11 bear markets of 20% or more, and just five crashes of more than 30%.

That comes out to a:
5% drop every 5 months
10% drop every 20 months
15% drop every 41 months
20% drop every 71 months
30% drop every 156 months

If you have a long retirement horizon, you absolutely *must* be able to weather volatility.  Drops of the current size come frequently.  If you can't stomach it, your asset allocation has too little fixed income.

This.  It sounds like, somehow, you accumulated nearly $1mm without having it invested in anything besides cash until last year?  Is that right?  That's pretty weird, unless you came into some kind of windfall, but whatever. 

If so, then the problem for you is, this is your first time with a drawdown.  You're  a volatility virgin.  As Buffett has said, “There are certain things that cannot be adequately explained to a virgin either by words or pictures.”

What you didn't know (because you simply *can't know* what it feels like to actually lose money in the market until you have money in the market to lose) is that every damn time there is a 10% pullback, there are dozens of reasons why the world is ending, this time is different, etc.  Your first time or two it's hard to tune them out -- which is why you've made a parade of horribles in your last post.  But you've got to do it.   I must imagine that it feels worse, or more urgent/desperate/different, when your first time through that comes on the eve of a planned retirement -- because you feel like the stakes are higher, and you can't buy into the dip as much.  That, however, I can only imagine, because I'm not that close to FIRE myself.

Anyway, you still haven't spelled out your asset allocation (% stocks / bonds / cash) and dividend rate yet.  Until you do that I don't think we can really help you in this forum.  It's quite possible that you have too much in equities for your risk tolerance.  But guess what?  You can't really ever know your risk tolerance until you know what it feels like to lose money in the market.  Consider that the gift of this minor market blip.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: dude on January 22, 2016, 11:08:17 AM
Relevant article today:

http://www.bloombergview.com/articles/2016-01-22/corrections-bear-markets-recessions-and-crashes
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: okits on January 22, 2016, 12:06:14 PM
Relevant article today:

http://www.bloombergview.com/articles/2016-01-22/corrections-bear-markets-recessions-and-crashes

I liked that.  Very level-headed.

Interest Compound, Financial.Velociraptor, thanks for posting those numbers, they give some nice context.

okiedoke - WB's virgin quote = hilarious (and apt).

From another thread:

I am beginning to realize that many people on this forum are going to have a rude awakening when they face their first major downturn.  Seems like a lot of people here have only experienced 2010-2015 and have no idea what a 2007-2009 feels like.

Or for that matter, 2001-02. I started investing in 1999. Think about what my investing life looks like! I'm currently roughly 75/25 (110-age in stocks in 5% increments down every 5 years). I managed not to sell during the worst parts of 2002 or 2009, even when everyone was convinced this really was the big one and we were all doomed (in fact I increased my inputs). But the little bit of bonds helped me get through the worst of it. And despite a relatively low income (and really only getting seriously started in 2003) I'm now looking at close to 500k. I should like to add this:

I made most of my money via the investments I made during those stock market crashes.

That last line says it all.  Imagine if s/he had panic-sold to preserve capital, or even just halted investment of new cash.  That account would not be half a million-ish now.  Her greatest gains are from when she bought low.  Good enough to say "buying opportunity!" during a correction, but even better are people's stories of the reward from staying invested and continuing to buy during those corrections.

OP - I hope you've continued to calm and are closer to a revised investment plan that's sensible and suitable for you.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: robartsd on January 22, 2016, 01:41:20 PM
My wife and I first invested in March 2008. We were both nervous about the economy. I chose a fund with just 1/3 equities, she went 100% bonds. We didn't touch (or even really look at) our funds for a few years (we were investing an insurance windfall in Roth IRAs before filling out our FAFSAs for the coming school year). After weathering the 08-09 losses and profiting from the recovery, we both felt comfortable increasing our allocation of stocks. I'm still significantly more agressive than she is (and struggle somewhat with how much is my risk tolerance vs. how much I feel I should compensate for her adversion to risk). Our investments are still small (our primary finacial goal over the past few years was emliminating debts with rates over 5% - we're still torn a bit between investing for retirement vs. saving for a down payment on a house).
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: BFGirl on January 22, 2016, 04:20:49 PM
I invested about 940K since August of 2014, so I have bought in at high valuations.  Of that investment I'm probably 35% equities and rest bonds/cash.  Despite being advised to allocate more toward equities, I knew my stomach couldn't handle the large drops.  I'm 5 years to retirement and my stomach has hurt even with my limited exposure, so I understand a little bit of what you are going through.  So, you may want to reconsider your asset allocation to something that is easier for you to handle.  On the practical side, if you quit your job now, you have enough assets that you are not going to starve.  Maybe you need a 6 month-1 year break to figure out something that you would enjoy doing that can supplement your investment income.  During the next 40+ years you probably have to live, I'll bet you will find something that you like doing that can earn you some extra money if you need it. :)

I was close to selling my equities this week but resisted and bought instead :)
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: robartsd on January 22, 2016, 04:34:44 PM
I'm probably 35% equities and rest bonds/cash. ... I'm 5 years to retirement...
That's perhaps slightly more conservative than conventional advice for where you should be 5 years prior to retirement, but not far off that mark. Of course it is very conservative for the conventional advice for someone who still has at least a third of their working years ahead of them (which 5 years could easily be in a FIRE plan).
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: a plan comes together on January 22, 2016, 07:00:26 PM
I didn't sell, FWIW.

However, I want to debate a few things that sounded a bit (don't hate me...) "herdish" on this thread.
Quote
If you sell now, you're only locking in your losses. Stocks are on sale, you should be buying, not selling.

There is a few interesting things here:
1. equities always go up: While this is true over the short history of the stock market, it hasn't been true over the last 15 years. We are pretty just over flat. Many folks completely dismissed the CAPE valuation of the market as historically insignificant. Well, you can't look at the market's history and think that "stocks always go up" while simultaneously dismissing the historical tendencies of the market to return to a lower valuation when high or higher valuation when low.

I do agree that over time, market's will likely trend upward with dividends, growth, and some inflation. However, in a high-debt, low-growth, low-inflation environment, that upward trend could be extremely minimal. Just look at the last 15 years. What ground-breaking inventions are going to kick global-growth into high gear? The freakin' internet, smartphones, renewable energy advances, and globalization have barely made a blip!

Let's just imagine that valuation does account for something (we're 47% above median right now). If we assume global growth of 2%, inflation of 1%, dividends of 2%, it could take us 9 years of zero equity gains just to get back to the median valuation. And that assumes no major recessions.

What if there are additional major recessions and we get occasional growth propped up only by low interest rates/debt? Can we really rely on equities to ignore the last 15 years and return to their old ways?

2. the market is down, so stocks are on sale: Are they? Compared to yesterday, stocks are lower in price, but are they truly a sale? Have you ever gone in to Macy's to find a $40 shirt that was 50% off and think, "hmmmm...  that's a good deal because it was once $80. I should buy it." - then a month later, you see the same shirt at Costco for $20 not even on sale? Overpriced shirts on sale aren't necessarily worth their previous marked-up price. The only price that matters is what people are willing to buy and sell an equity for (today's price). No more, no less.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: BFGirl on January 22, 2016, 08:13:08 PM
I'm probably 35% equities and rest bonds/cash. ... I'm 5 years to retirement...

Yes, it is conservative, but I will have a pension in 5 years and I'm more concerned about hedging inflation than in significantly growing my assets.
That's perhaps slightly more conservative than conventional advice for where you should be 5 years prior to retirement, but not far off that mark. Of course it is very conservative for the conventional advice for someone who still has at least a third of their working years ahead of them (which 5 years could easily be in a FIRE plan).
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: sol on January 22, 2016, 08:19:56 PM
While this is true over the short history of the stock market, it hasn't been true over the last 15 years.

What?  How does your math work on that?

Today's S&P500 close was ~1907, a value that it last crossed in October of 2014.  No one would ever claim the market always goes up over periods of 15 MONTHS, which is the period over which it was currently declined, thanks to the recent mini-crash.  15 years ago it was definitely lower.  Also 2 years ago, 5 years ago, 10 years ago, and 20 years ago.  And that's without even accounting for dividends, just looking at raw index price. 

You're struggling with volatility, I get that.  But if you can't handle a single 15 month period over which stocks are net negative before dividends, you shouldn't be investing in stocks.  That kind of drop happens with alarming regularity on the way to that 9% CAGR.  Get used to it.

Quote
you can't look at the market's history and think that "stocks always go up"

Watch me!  I'm going to look at this chart which visualizes that 9% CAGR, and then I'm going to think to myself "man, stocks always go up!"

(http://www.joelichtenberg.com/wp-content/uploads/2012/08/sp1.jpg)

There, I did it.  I said it to myself, and it felt goooood.

Quote
What ground-breaking inventions are going to kick global-growth into high gear? The freakin' internet, smartphones, renewable energy advances, and globalization have barely made a blip!

Do you think those things will have no further effect on corporate earnings in the future?  All possible future value has already been extracted from them? 

You seriously can't think of any possible future technologies or developments which could contribute to future economic growth?  I can list like five before blinking.  Let's start with the fact that 85% of the world's population is still living in pre-1925 America and has a glorious century of prosperity coming their way.

Quote
Let's just imagine that valuation does account for something (we're 47% above median right now).

You're looking at long term median, including periods over which PE10 was much lower than it has been for the past 30 years.  If you look at the past three decades, instead of the post WWI era, you'll get a very different picture.

And for an even rosier view?  Try looking at forward looking PE instead of backwards looking PE.  Suddenly things aren't so bleak after all.

Quote
2. the market is down, so stocks are on sale: Are they?

Yes, they are.  Don't think of stocks as a shirt you buy once and then consume.  Think of them like what they are, fractional ownership of a profit-generating business.  Stop speculating on future price fluctuations and instead remember that what you're really buying is a portion of the profits those companies will generate, or in the case of an index, a portion of GDP that will flow into your personal bank account.  When you can buy that cash flux for less than you could yesterday then it is on sale because you're effectively getting a higher return on your investment (more of GDP flowing to you) than you were willing to get yesterday for the same price.  Rejoice!
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Interest Compound on January 22, 2016, 10:13:57 PM
(https://i.sli.mg/2wFRq5.png)

You still don't get it. I'd recommend heeding Sol's advice, seriously...you have no business investing in stocks right now. Not until you change your mindset and realize you don't have the knowledge you think you do. This is a ticking timebomb waiting to happen.

Here's another fun post  (https://www.bogleheads.org/forum/viewtopic.php?t=85022#p1217334)from Bogleheads:

---------------------------------

With all the bearish posts recently I thought that it was time to update and repost this list that I have posted before to put the current situation into perspective

Selected world events.

1900's San Francisco Earthquake, Russian revolution and rise of communism, multiple regional wars, President McKinley Assassinated

1910's World war one, influenza epidemic, Armenian Genocide, Daylight Saving Time Introduced, The Chinese Revolution, KKK reemerges with over 4 million members, Titanic

1920's Stock market crash, prohibition and gangsters, Teapot Dome Scandal, Scopes (Monkey) Trial, Hoover Appointed FBI Director

1930's Spanish Civil War, Hitler rises to power, Depression, Dust Bowl, Bonnie and Clyde,

1940's World War two, birth of the Bomb, Pearl Harbor, Hiroshima and Nagasaki, Gandhi Assassinated, Joseph Stalin, the Holocaust, Japanese American internment camps, Berlin Airlift

1950's The Cold War and Korea, McCarthy, Civil rights movement unrest, Credit Card Introduced, apartheid, London Smog of 1952 kills 12,000, Rosa Parks, Sputnik starts space race, Great Leap Forward

1960's Vietnam, assignations, riots in the streets, rise of drugs, Bay of Pigs, Cuban Missile Crisis, Berlin Wall, Northeast Blackout, Cultural Revolution, Chappaquiddick, Charles Manson

1970's More Vietnam, Stagflation, double digit inflation, Gas lines, Nixon, Three Mile Island. Pol Pot, Kent State, U.S. Drops gold standard, Lebanon, Jonestown Massacre, Iran Hostages

1980's S&L crash/scandal, Black Monday stock crash (Oct 87), Iran Hostages, more inflation, emergence of AIDS, Falkland Islands, Moonies, Bhopal India, New Coke, Iran-Contra Scandal, Exxon Valdez

1990's Kuwait war, Rodney King L.A. Riots, Yugoslavia, Bosnia, Clinton scandal/impeachment, Waco Texas, Rwandan Genocide, Lorena Bobbit, Mad Cow Disease, Columbine High School

2000's Dot Com Crash, 9/11, Iraq, Hurricanes, Oil price spike, Afghanistan, financial bailouts, severe recession, housing bubble.

2010's Gulf oil spill, Unemployment

It is easy to lose sight that the current problems stand a pretty good chance of being like all the past problems in that the most likely outcome is that while some people are terribly hurt, the rest of the world continues on even though it may change.

I guess since then you could add the Euro/Greece Crises, fallout from the Arab Spring, and the Japanese Earthquake/Tsunami but it might take a bit more time to see how important they turn out to be.

---------------------------------

Stock market performance during this time:

(https://i.sli.mg/mYGkm6.png)
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: PhysicianOnFIRE on January 22, 2016, 10:32:20 PM
15 years ago, the S&P 500 was at 1160.  It has increased 73%.  That's not great for 15 years, BUT

20 years ago, the S&P 500 was at 645.  It has increased ~300% since then, AND

25 years ago, the S&P 500 was at 375.  It has increased ~ 500% since then. 

We've had 2 of the 3 biggest drops in modern history in the last 15 years.  Is that the new norm?  Time will tell, I guess.

In the meantime, I will stay the course.

-PoF
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: faramund on January 22, 2016, 10:49:05 PM
Down here in Australia, shares are on a low PE and high dividend, so its very much the reverse of the US.

When shares inevitably go crazy and PEs go up and dividends go down, I won't buy any more shares, and will put money into paying off my mortgage and investment loans, until the market crashes - and then I'll buy in again. This has been my basic strategy for the last 10 years or so.

But I won't sell off when the market does go crazy/booms, the market can be 'wrong' for a very long time, and who am I to say the market is wrong, and I know better. Profits might increase to make up the difference, and there will certainly be dividends along the way. If I did sell off, I'd also be liable for capital gains tax.

Many would call this market timing, but so be it.

In contrast, what you did was buy with a high CAPE, and presumably you had your reasons for thinking that was a good idea, but to now drop all those reasons because prices have dropped, seems inconsistent. If anything, as you thought buying with a high CAPE was appropriate, now with a lower CAPE, it should seems even more appropriate. There are always reasons for and against buying shares - many of those haven't changed over the last few months, but presumably your weighting of those reasons has changed (and not necessarily for logical reasons).

Studies seem to indicate, that if you buy stocks at the wrong time, and they then drop, if the shares are held, and not sold, the end result is still very good. Selling out after a fall, is usually very bad.

So in summary, I don't think its wise to buy stocks when they are expensive/booming, but I think its even worse to sell out after a drop. In contrast, usually after a drop, 'when there's blood in the street' is often one of the best times to buy.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: CanuckExpat on January 23, 2016, 12:15:39 AM
Threads like this remind me, make a plan to hold reasonable proportions of all three (whatever that may mean for you), stick to your plan
(http://i.imgur.com/tbRVDP3.png?1) (http://quote.morningstar.com/fund/chart.aspx?t=VBTLX&region=USA&culture=en-US&statePara=%7Bsecurities%3A%5B%7Bn%3A%22Vanguard%20Total%20Bond%20Market%20Index%20Adm%22%2Cids%3A%22FOUSA02TYI%7C0P000033YC%7CCU%24%24%24%24%24USD%7C1%7C1%7CFO%7C2001-11-12%7C%7C%7Cfalse%7CUSA%7C19%22%7D%2C%7Bn%3A%22Vanguard%20Total%20Stock%20Mkt%20Idx%20Adm%22%2Cids%3A%22FOUSA00L83%7C0P00002YGZ%7CCU%24%24%24%24%24USD%7C1%7C1%7CFO%7C2000-11-13%7C%7C%7Cfalse%7CUSA%7C19%22%7D%2C%7Bn%3A%22Vanguard%20Total%20Intl%20Stock%20Index%20Inv%22%2Cids%3A%22FOUSA00KIR%7C0P00002XS3%7CCU%24%24%24%24%24USD%7C1%7C1%7CFO%7C1996-4-29%7C%7C%7Cfalse%7CUSA%7C19%22%7D%5D%2CchartType%3A%22GrowthChart%22%2Crange%3A%222001-11-12%7C2016-1-22%22%2Cperiod%3A10%2Cregion%3A%22USA%22%2Ctc%3A%22USD%22%2CisD%3A%220%22%2CisR%3A%220%22%2CrM%3A3%2Cscale%3A%221%22%2CbMenu%3A%22%22%2Csma%3A%220%2C0%2C0%22%7D)
Hope you don't encounter "this time is different" for real :)
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Stagleton on January 23, 2016, 04:04:54 AM
MMM had a good twitter post:

Quote
Stock market is DROPPING! Probably a good time to SELL! (your car, so you can replace with a bike and use proceeds to buy more index funds)
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Another Reader on January 23, 2016, 05:23:44 AM
Another thing to consider is how much money or assets you would need to have if you were invested in something other than a portfolio of stocks and bonds.  What would your safe withdrawal rate be if you were invested in FDIC-insured CD's spread around a group of banks?  How much would you need in real estate and of which type to generate the same income as the 4 percent withdrawal rate of a $1MM paper asset portfolio?

People accept the risk and volatility of a paper asset portfolio because over time it seems to allow you to use a higher percentage of your total portfolio every year compared to cash in the bank or treasury paper.  Such a portfolio, over time, has held up to inflation better than cash - it provides growth and income.  It does not require the knowledge, skill, time, or risks of a real estate portfolio.

However, in your shoes, with the desire to retire a short time after investing, I would not have taken on the volatility risk you did.  Yes, the sequence of returns worked out well for folks that took the plunge over the last few years.  Those that retired in 2009-2013 with $1MM portfolios are now in general sitting on significantly larger portfolios. They won the sequence of returns lottery and can easily withstand a 20 or 30 percent drop in portfolio value. 

For someone with a short time horizon, the sequence of returns risk is too high for my comfort level to invest as you did.  I would step back now and evaluate my risk tolerance.  You may find it more advantageous to hold a different portfolio than a 25 year-old with a 20 year accumulation window.  As you go forward, you may want to think more like an older person and invest more conservatively and aim for a higher number. 
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Retire-Canada on January 23, 2016, 07:13:30 AM
For someone with a short time horizon, the sequence of returns risk is too high for my comfort level to invest as you did.

The OP would like to FIRE at 36 given how long their retirement will be they've still got a long investment time horizon to deal with and they'll need strong growth from their portfolio for it to survive 50yrs+.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Rubic on January 23, 2016, 08:14:54 AM
World war one, influenza epidemic, Armenian Genocide, Daylight Saving Time Introduced, The Chinese Revolution, KKK reemerges with over 4 million members, Titanic

If DST didn't kill off the US stock market, then it's virtually indestructible.  ;-)
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Interest Compound on January 23, 2016, 08:46:52 AM
World war one, influenza epidemic, Armenian Genocide, Daylight Saving Time Introduced, The Chinese Revolution, KKK reemerges with over 4 million members, Titanic

If DST didn't kill off the US stock market, then it's virtually indestructible.  ;-)

Haha, yes some of these are quite silly. But so is the idea that you can time the market and move to all cash, because the issues of today are unprecedented. I hope the list gets that point across :)
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Another Reader on January 23, 2016, 09:05:20 AM
The OP has a short time to structure her portfolio before retirement.  Once she is retired, she has 50 years to make adjustments.  Since $1MM is the minimum she needs, i.e. no major downturn in the first couple of years, she needs to have a lower volatility, more stable portfolio at the outset.  Once she is a few years into retirement and the portfolio growth has increased her margin of safety, then she can afford to take on volatility.

If she is down 15 percent immediately after retiring, the chance of failure are higher.  For example, if the portfolio drops to $850,000 the day after she retires, her first year withdrawal is $40,000/$850,000, or 4.7 percent.  If the market goes nowhere for a year, her second year withdrawal is $40,000 (no inflation included)/$810,000, or 4.9 percent.  A third year of a bear market with no growth requires $40,000/$770,000, or 5.2 percent.  If the bear market ends after three years, she has $730,000 left and needs $270,000 or a 37 percent gain just to get back to her starting point.  I'm personally not willing to absorb that risk.  Volatility in my opinion is for those that have a higher margin of safety.

The folks that were shooting for $1MM and won the sequence of returns lottery are sitting at numbers 30 percent or more above their initial target.  They can afford that 15 percent drop followed by a flat market and not risk failure.  The OP cannot. 
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Mr. Green on January 23, 2016, 11:23:15 AM
The OP has a short time to structure her portfolio before retirement.  Once she is retired, she has 50 years to make adjustments.  Since $1MM is the minimum she needs, i.e. no major downturn in the first couple of years, she needs to have a lower volatility, more stable portfolio at the outset.  Once she is a few years into retirement and the portfolio growth has increased her margin of safety, then she can afford to take on volatility.

If she is down 15 percent immediately after retiring, the chance of failure are higher.  For example, if the portfolio drops to $850,000 the day after she retires, her first year withdrawal is $40,000/$850,000, or 4.7 percent.  If the market goes nowhere for a year, her second year withdrawal is $40,000 (no inflation included)/$810,000, or 4.9 percent.  A third year of a bear market with no growth requires $40,000/$770,000, or 5.2 percent.  If the bear market ends after three years, she has $730,000 left and needs $270,000 or a 37 percent gain just to get back to her starting point.  I'm personally not willing to absorb that risk.  Volatility in my opinion is for those that have a higher margin of safety.

The folks that were shooting for $1MM and won the sequence of returns lottery are sitting at numbers 30 percent or more above their initial target.  They can afford that 15 percent drop followed by a flat market and not risk failure.  The OP cannot.
So pick up a part-time job to help stem the loss the first year or couple years. I really hope no one here is planning to hit their target amount and then retire with the intention of blindly withdrawing 4% of that amount for the rest of their lives. I want to FIRE in the middle of the year. I'm very cognizant of what the market is doing right now because I know that negative returns the first few years are the biggest risk to a stash not going the distance. But I'm burnt out. The chances of me keeping my career another couple years to make up the loses are zero. One of the things I love about mustachianism is the resiliency based on the fact that, because we have our financial ducks in order, we don't require a high income. I could go work at Lowe's part time for a year or two to help reduce the mount I have to pull from my stash. I'm a fair handy guy so the idea of working in a home improvement store will be a novelty for me for at least 6 months. I'll learn about all kinds of tools and things I haven't bothered to spent time on because I'm busy. The OP could absolutely do something similar if she desired.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Rubic on January 23, 2016, 12:08:29 PM
I'm a fair handy guy so the idea of working in a home improvement store will be a novelty for me for at least 6 months. I'll learn about all kinds of tools and things I haven't bothered to spent time on because I'm busy.

Another possibility would be some part-time work as a handyman.  Depending on where you live, people might pay you $50/hr for incredibly simple home repair tasks.  This could even be combined with working part-time at a hardware store.

Source:  I worked in a big box hardware store during my high school years.

Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Interest Compound on January 24, 2016, 07:07:11 AM
I'm a fair handy guy so the idea of working in a home improvement store will be a novelty for me for at least 6 months. I'll learn about all kinds of tools and things I haven't bothered to spent time on because I'm busy.

Another possibility would be some part-time work as a handyman.  Depending on where you live, people might pay you $50/hr for incredibly simple home repair tasks.  This could even be combined with working part-time at a hardware store.

Source:  I worked in a big box hardware store during my high school years.

This is a great option. I know a few people who decided to get into photography as a hobby. Within a month they were booking paid gigs. Just two paid gigs a month, as a beginner doing something they love, would drop someone who FIRE'd on a million dollars, down from a 4% withdrawal rate to 3%.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Retire-Canada on January 24, 2016, 07:22:32 AM
I really hope no one here is planning to hit their target amount and then retire with the intention of blindly withdrawing 4% of that amount for the rest of their lives.

I see less flexibility in a lot of people's plans than I would want. When you look at how much less you have to work/save/invest/worry with a few adjustments in your FIRE plan it seems crazy to me more people don't have that as part of their tool kit.

Doing something you enjoy for $20K/yr if and when needed....which may only be 6-18 months during a crash that happens during those vulnerable early FIRE years.......is like saving and investing an extra $500K. That would take me so long it would be a silly trade of time to try and pad my FIRE account with that sort of buffer and then blindly take a %WR out vs. having a few options should market conditions warrant.

If you hate your current line or work and you are talking about a small amount of replacement income there are lots of options that are low stress and can be aligned with your interests.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Heckler on January 24, 2016, 08:31:46 AM
I'm always amazed how a significant number of investors see "the market" as S&P500. 

This is "The Market"

http://www.assante.com/advisors/pmoore/documents/AndexWallCANENG.pdf

Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Interest Compound on January 24, 2016, 12:31:18 PM
Another relevant post on stock market performance over the last 15 years from over at Bogleheads:

https://www.bogleheads.org/forum/viewtopic.php?f=10&t=182894

--------------------------------------

I don't think you've done the math. You're saying that on a gut feeling.

Almost every cent you put into the market over the past 15 years is worth a lot more today.

The money you invested in Jan 2001 - has made 5% a year
The money you invested in Jan 2002 - has made 7% a year
The money you invested in Jan 2003 - has made 9% a year
The money you invested in Jan 2004 - has made 7% a year
The money you invested in Jan 2005 - has made 7% a year
The money you invested in Jan 2006 - has made 6% a year
The money you invested in Jan 2007 - has made 6% a year
The money you invested in Jan 2008 - has made 7% a year
The money you invested in Jan 2009 - has made 15% a year
The money you invested in Jan 2010 - has made 12% a year
The money you invested in Jan 2011 - has made 10% a year
The money you invested in Jan 2012 - has made 11% a year
The money you invested in Jan 2013 - has made 9% a year
The money you invested in Jan 2014 - has made 2% a year
The money you invested in Jan 2015 - has lost 7% this year

I'm not sure what you're expecting out of the stock market. Those are some pretty good numbers.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: HBFIRE on January 25, 2016, 01:50:08 PM

1. equities always go up: While this is true over the short history of the stock market, it hasn't been true over the last 15 years.

What data are you looking at?  I think you're a wee bit off.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: faramund on January 25, 2016, 02:52:39 PM

1. equities always go up: While this is true over the short history of the stock market, it hasn't been true over the last 15 years.

What data are you looking at?  I think you're a wee bit off.
What data are you looking at?  I think you're a wee bit off (are you including dividends)
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Stache-O-Lantern on January 25, 2016, 05:01:05 PM
You seem worried about the CAPE too.  Although it is historically high, there is academic debate about the reliability of the CAPE.  Another famous economist, Jeremy Siegel, has criticized the CAPE before due to accounting changes in the 1990's that may have substantially affected how earnings are calculated.  I haven't read about it in depth, but i think the gist of it is that when the changes happened, companies had to count as expenses things that weren't before, meaning that earnings comparisons (and hence CAPE) before and after that accounting change are not apples to apples.  If you google "shiller siegel CAPE" you'll get a bunch of links about this debate.

The CAPE has only been below it's median one time in the last 20+ years (around late 2008-early2009).  It's interesting, but it's not really a tradeable indicator.  Not that you should be trading on indicators!  The markets done great in the last 20+ years.  Don't try to time the CAPE or the market.

If you sell your equities now, it is not likely you will be able to time it right getting back in.  And you sound like you already believe down deep that stocks are a good bet in the long term.  If a correction of this magnitude makes you want to sell, it's unlikely that a bigger drop like 2008-09 would put you in the mood to buy.  Do oil prices right now make you want to go all in on oil?  If not, why would you feel any different about equities in that situation?
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: 2Birds1Stone on January 25, 2016, 05:29:53 PM
This is 2016, the market keeps on dropping.

Past performance is not an indicator of future performance.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Cougar on January 26, 2016, 07:29:37 AM

a plan comes together, i have two words for you; preserve capital.

almost every post in this thread is a buy and holder. unfortunately for them, that's a horrible strategy. DYK that nearly 95% of the time the market is trying to make up what it has lost and only 5% of the time it is making new highs.

now, all these guys are going to tell you i'm trying to time the mkt and that doesnt work; but neither does continuing to hold when we are heading into a recession and look at any data and it will tell you this.

-baltic dry index at record lows.
-retails sales declining
-companies laying off staff in all industries
-store closings
-avg person having less disposable income

i could go on and on but what tells you things are improving economically ?

now, china at the beginning of the year was something no one could have foreseen but every attempt to rally back from the low as failed and been weaker than professional money mgrs have expected. now, we are extremely oversold; so a rally to 1950  s and p should happen and maybe even 2000 but i doubt it; there is too much weakness.

personally, i have been in a lot of cash and bonds since last may and will increase that on any rally. the mkt high was 2130 s and p and we have been making lower lows ever since, the trend is down and there is no news anywhere that i see that's going to send it back up. there is nothing sending oil back up unless a war in the middle east starts and wages arent increasing which would encourage people to spend more or did you not see the story that 50% of the country is now making 30k per year ?

i could go on and on here, but i'm generally disregarded; so i'm going to go back to working and leave this thread be.

but you should pursue the knowledge to see if you think a recession is coming and if so, stocks are going to continue to lose and see what you think the drop will be (i think at least 25% and we're already down over 10; so that's probably optimistic) and decide how many years you want to work to replace it.

i have a couple of good free resources to help if you want to expand your knowledge on managing into a recession, you can pm me and i will send them.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: FIRE47 on January 26, 2016, 09:12:38 AM

a plan comes together, i have two words for you; preserve capital.

almost every post in this thread is a buy and holder. unfortunately for them, that's a horrible strategy. DYK that nearly 95% of the time the market is trying to make up what it has lost and only 5% of the time it is making new highs.

now, all these guys are going to tell you i'm trying to time the mkt and that doesnt work; but neither does continuing to hold when we are heading into a recession and look at any data and it will tell you this.

-baltic dry index at record lows.
-retails sales declining
-companies laying off staff in all industries
-store closings
-avg person having less disposable income

i could go on and on but what tells you things are improving economically ?

now, china at the beginning of the year was something no one could have foreseen but every attempt to rally back from the low as failed and been weaker than professional money mgrs have expected. now, we are extremely oversold; so a rally to 1950  s and p should happen and maybe even 2000 but i doubt it; there is too much weakness.

personally, i have been in a lot of cash and bonds since last may and will increase that on any rally. the mkt high was 2130 s and p and we have been making lower lows ever since, the trend is down and there is no news anywhere that i see that's going to send it back up. there is nothing sending oil back up unless a war in the middle east starts and wages arent increasing which would encourage people to spend more or did you not see the story that 50% of the country is now making 30k per year ?

i could go on and on here, but i'm generally disregarded; so i'm going to go back to working and leave this thread be.

but you should pursue the knowledge to see if you think a recession is coming and if so, stocks are going to continue to lose and see what you think the drop will be (i think at least 25% and we're already down over 10; so that's probably optimistic) and decide how many years you want to work to replace it.

i have a couple of good free resources to help if you want to expand your knowledge on managing into a recession, you can pm me and i will send them.

Could be right, could be wrong - the thing is the pessimistic case always sounds smarter than the optimistic one for most things especially the markets. There's always a wall of worry to contend with, when in the last 10 years has there not been a laundry list of doom and gloom headlines and various indicators at all times?

When will you get back in? Of course anyone could trump a buy and hold investor if they knew how to time things perfectly - therein lies the problem.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: WerKater on January 26, 2016, 10:07:31 AM

almost every post in this thread is a buy and holder. unfortunately for them, that's a horrible strategy.
Please back this up with historical data.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Kaspian on January 26, 2016, 10:16:11 AM
This is 2016, the market keeps on dropping.

Past performance is not an indicator of future performance.

I'll trust history over prediction, thanks.

I'm not sure what you're expecting out of the stock market. Those are some pretty good numbers.

Agreed!!
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Bracken_Joy on January 26, 2016, 10:19:24 AM
Following, as I'm enjoying the discussion quite a bit.

IMO, finance types come up will all sorts of indexes and metrics just to obfuscate the field. It's like law- it can't be simple or the experts wouldn't make any money. And PS- I did get a minor in accounting. It taught me about A- the magic of compounding interest and B- academic/professional elitism. Don't let someone panic you just because they're trying to make themselves relevant in a field which increasingly does not need them.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Rubic on January 26, 2016, 10:54:18 AM
i have a couple of good free resources to help if you want to expand your knowledge on managing into a recession, you can pm me and i will send them.

Here is the list of the last four recessions I've snoozed through since investing in US equities:
Source: https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States

It's not quite true that I entirely snoozed through the last one, as prices got so cheap that I went on a bit of a buying spree in 2009, but otherwise I just sat on my ass.  I also avoided paying capital gains tax.  If I live long enough, I fully expect to sit through 3-4 more recessions.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: partgypsy on January 26, 2016, 12:01:21 PM
I think you are in a good position. So you are totally burned out in your job. You are young, I'm assuming relatively healthy. Quit and take a month off. Get a job being a runner in a restaurant. Just live your life for a year and set your asset allocation, fund on automatic and take a break looking at them.
I don't know how you accrued so much at your age, and while when you entered the market is not ideal, you have a lot to work with.

Seems like others have been more successful than I have been. I started investing in retirement around 2000. Between what I (and my employer) invested and my current balance, my return has been what, 2, 3%? First Vanguard, and now in TSP, with a 60/40 or 65/35 stock/bond split. But as I don't really have another alternative so will continue to invest in stocks. In my case historic returns, still waiting to see them. And no I did not get out during the recession. 
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Eric on January 26, 2016, 03:00:24 PM
almost every post in this thread is a buy and holder. unfortunately for them, that's a horrible strategy.

Huh?  Is this a serious statement?
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Mr. Green on January 26, 2016, 03:16:09 PM
almost every post in this thread is a buy and holder. unfortunately for them, that's a horrible strategy.

Huh?  Is this a serious statement?
People don't know what they don't know. It's the only thing I can think of. Troll, maybe?
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: sol on January 26, 2016, 03:37:18 PM
almost every post in this thread is a buy and holder. unfortunately for them, that's a horrible strategy.

Huh?  Is this a serious statement?

Serious?  Yes, I think so.

Factual?  No, definitely not.

But it takes all kinds, I suppose.  If everyone believed that the market always goes up, there would rarely be any sellers for this B&H investor to profit from.  Idiots and doomsayers play a vital role in our markets.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: faramund on January 26, 2016, 04:55:16 PM
almost every post in this thread is a buy and holder. unfortunately for them, that's a horrible strategy.

Huh?  Is this a serious statement?

Serious?  Yes, I think so.

Factual?  No, definitely not.

But it takes all kinds, I suppose.  If everyone believed that the market always goes up, there would rarely be any sellers for this B&H investor to profit from.  Idiots and doomsayers play a vital role in our markets.
I sortof understand the sentiment. I follow economic news fairly closely, and last year, I thought with China showing signs of slowing down, and the Fed intending to raise, it looked like the future was a bit poor for shares. But given, if I sold out, I'd have to pay capital gains costs, transaction costs, miss out on any dividends, and ... I've often had similar thoughts in the past and nothing really happened... I just kept doing what I always do, kept adding to my share holdings.

The statement that was first made doesn't really mean much. Many people can get lucky once, unless an overall pattern of behavior can be shown, its not very significant.

For example, I could say that, in 2014 and 2015, I bought shares in SENETAS corporation, and since then its quadrupled in value, aren't I a GOD OF INVESTING!!!!

Whereas in reality, I own shares in about 50 companies, and SENETAS is my best performing holding. In contrast, my worst has lost around 90% of its value, and on average, all the shares have grown at about 7% a year, over the last two years. Its easy to cherry pick results - but they don't mean anything!
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: cloudsail on January 26, 2016, 04:59:36 PM
almost every post in this thread is a buy and holder. unfortunately for them, that's a horrible strategy.

Huh?  Is this a serious statement?
People don't know what they don't know. It's the only thing I can think of. Troll, maybe?

Hard to believe but I think the majority of the population actually think this way.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: CATman on January 26, 2016, 10:03:39 PM
Based on your expenses what's stopping you from hitting your retirement goal of this year, quitting a job you hate and going to do something part time or even full time that pays less, but you wouldn't dread every day. Maybe something a bit more fun and engaging. It sounds to me like you have significant enough savings to ride out the current dip in the market and supplement with part time work.

As the hitchiker's guide to the galaxy puts it, DON'T PANIC
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Woody Viet on January 27, 2016, 08:37:37 AM
As others have said you are having a very strong emotional response to the current panic. It's natural, many people are feeling the same way as you.

While stocks are down heavily you still have your dividend income. Nominal dividends almost never decrease. So that income stream is safe. You have nothing to worry about there. In our current low inflation environment that probably means your real dividends will remain stable as well. So that gives you, what, 20k a year of guaranteed post retirement income? Can you make up the shortfall with a part time job? Without considering dividend income can you over all of your expenses by moving to a less irksome job? Will your post retirement spending be lower than your current expenditures? All things to consider.

I'm in a similair situation to you. I have lots of dividends but I came late to the party (only been in the market since 2011, and none of it was in the USA). So now after almost 4 years I'm almost flat, only dividends have kept me up. It feels rough but you have to believe that the world isn't going to end. In the long run that huge diversified pool of businesses you own is going to do very well indeed. The odds on that happening are a near certainty. You just need some patience and emotional strength
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Kaspian on January 27, 2016, 08:47:07 AM
Really good article today for those interested in (i.e., who've never been through) a bear market:

http://www.reuters.com/article/us-global-markets-bears-idUSKCN0V51QW (http://www.reuters.com/article/us-global-markets-bears-idUSKCN0V51QW)

Quote
Dominic Wallington, chief investment officer at RBC Global Asset Management (UK) said financial markets are human constructs subject to human frailties and that bear markets bring out the behavioral traits of 'cognitive dissonance' in investors.

That is the unease an individual feels holding two or more contradictory ideas at the same time, doing something that goes against one or more of those beliefs, or when faced with new information that conflicts with these already-held views.

"They can do silly things," Wallington said. "What creates bear markets differs, but the process that investors go through is the same. You'll get denial because people think that the old paradigm holds."
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Retire-Canada on January 27, 2016, 08:55:08 AM
Really good article today for those interested in (i.e., who've never been through) a bear market:

http://www.reuters.com/article/us-global-markets-bears-idUSKCN0V51QW (http://www.reuters.com/article/us-global-markets-bears-idUSKCN0V51QW)

Quote
Dominic Wallington, chief investment officer at RBC Global Asset Management (UK) said financial markets are human constructs subject to human frailties and that bear markets bring out the behavioral traits of 'cognitive dissonance' in investors.

That is the unease an individual feels holding two or more contradictory ideas at the same time, doing something that goes against one or more of those beliefs, or when faced with new information that conflicts with these already-held views.

"They can do silly things," Wallington said. "What creates bear markets differs, but the process that investors go through is the same. You'll get denial because people think that the old paradigm holds."

"Lacking sufficient information to make an informed decision, I only suggest you don't make wild unsubstantiated guesses with your portfolios."

^^ from the link. Good advice.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Rubic on January 27, 2016, 09:16:48 AM
Quote
"Lacking sufficient information to make an informed decision, I only suggest you don't make wild unsubstantiated guesses with your portfolios."

I used to say:  In bear markets, money returns to its rightful owners.  ;-)
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Kaspian on January 27, 2016, 09:28:26 AM
Quote
"Lacking sufficient information to make an informed decision, I only suggest you don't make wild unsubstantiated guesses with your portfolios."

I used to say:  In bear markets, money returns to its rightful owners.  ;-)

Nice--I like that!!  I try to keep in mind that for every sell I make there's somebody on the other end buying it.   And do I really think I'm smarter than them?  Probably not.  That Mexican standoff usually keeps my finger off the trigger.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Stagleton on January 27, 2016, 12:22:46 PM
Recently I got the idea to look at how many units of something you have rather than the market value of them. If you are in a mindset to accumulate wealth, I think it makes sense to look at how many units of VTSAX you have rather than the price. If you can buy more than yesterday, the item went on sale and now you can afford more. Just keep buying, IMO.

Maybe owning a house or apartment is similar; if you accumulate a house, stop worrying about it's market value after the acquisition  (if it's something you bought to own vs. flip). As long as you enjoy it and it works for you, you shouldn't be worried with the everyday market value.

Of course, maybe I'm wrong, but if you tell someone to stay inside so he or she won't get hit by a car, are you giving good advice? I.E. being safe isn't always a safe or good choice.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Ambergris on January 27, 2016, 12:48:12 PM
almost every post in this thread is a buy and holder. unfortunately for them, that's a horrible strategy.

Oh, absolutely. It's an appalling strategy. It guarantees your money goes down whenever the market goes down, all the way.

It also guarantees your money goes up whenever the market goes up, all the way.

In other words, "buy and hold" is like Democracy: to paraphrase Winston Churchill, it is "the worst possible strategy except for all the others".

Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: MidWestLove on January 27, 2016, 01:54:53 PM
As others told you - the absolute dumbest thing you can do right now is sell. turn off any financial "news", calm the expletive down , and turn on the intelligence I am sure you have turning off emotional baggage that is currently hounding you.

I, as you, considering 'retiring' this year due to combination of very high job stress (for high pay job) and layoff that is incoming. I also struggle with 'paper loss' that is 40% more than yours in dollar terms. A lot of people may panic, it is acting on that panic that is dangerous.  Instead I accelerated 401k withholding (to max it out prior to layoff) and now considering funding IRAs for this year (crazy I know, at the time I am expected to preserve every cent of cash as I am preparing to have no income). I also do not want to go through song and dance of another recruiting procedure and spend few more years in the grind so future will come

from another member of 'retire  in 2016' club...
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Kaspian on January 27, 2016, 01:56:38 PM
Recently I got the idea to look at how many units of something you have rather than the market value of them. If you are in a mindset to accumulate wealth, I think it makes sense to look at how many units of VTSAX you have rather than the price.

That's a really good way to look at it.  I've mostly stopped noticing current market value as well and focus in primarily on my saving rate.  That's the number I have real control of.  I see my portfolio balance more like I would a screwy clock--on any given day it could be anything!  So why bother?  (But trust me--I'll very much notice when the FIRE date comes stumbling along.) 

Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: aspiringnomad on January 27, 2016, 05:14:13 PM
Concerning the current state of the business cycle, here's an excellent analysis arguing that the most useful leading indicator, residential investment, has some room to run. Many of you probably know the blog and its focus on the real estate market, but I find his occasional analyses of broader macroeconomic conditions to be as consistently measured, and as fact-based as anything I've seen anywhere, and I have access to Wall Street bank and broker newsletters through work. Anyway, tl;dr version of the post: The business cycle has likely not reached its peak if residential investment holds as a leading indicator of recessions.

http://www.calculatedriskblog.com/2016/01/private-investment-and-business-cycle.html

I post this to reassure the OP and as info for others who might be interested, but regardless of what indicators say, I'm firmly in the buy and hold camp with most everyone else here.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: merula on January 28, 2016, 11:14:48 AM
Will everyone please stop reassuring all the prophets of doom, destruction and "This time is different!"?

I need to have someone on the other side of my buy transactions.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: zephyr911 on January 28, 2016, 12:50:53 PM
Concerning the current state of the business cycle, here's an excellent analysis arguing that the most useful leading indicator, residential investment, has some room to run. Many of you probably know the blog and its focus on the real estate market, but I find his occasional analyses of broader macroeconomic conditions to be as consistently measured, and as fact-based as anything I've seen anywhere, and I have access to Wall Street bank and broker newsletters through work. Anyway, tl;dr version of the post: The business cycle has likely not reached its peak if residential investment holds as a leading indicator of recessions.

http://www.calculatedriskblog.com/2016/01/private-investment-and-business-cycle.html

I post this to reassure the OP and as info for others who might be interested, but regardless of what indicators say, I'm firmly in the buy and hold camp with most everyone else here.
My current area of interest bears this out. It hasn't really come off the bottom much (we lag dem big spendalicious coastal cities) but job growth is pushing inventory down and signs of a runup are growing.

Will everyone please stop reassuring all the prophets of doom, destruction and "This time is different!"?

I need to have someone on the other side of my buy transactions.
Ever read that book? It's on my wish list.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Geekenstein on January 28, 2016, 05:49:06 PM
Will everyone please stop reassuring all the prophets of doom, destruction and "This time is different!"?

I need to have someone on the other side of my buy transactions.

The evil side of me supports this sentiment.

Hopefully the OP now has a better handle on their risk tolerance and time horizon, and when the market rises can adjust accordingly.  This is the expensive and frustrating way to learn these things.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: dinkhelpneeded on January 29, 2016, 04:55:07 AM
For people with such poor risk appetites - I recommend real estate/rental property that is in a reasonably good area.

You don't "see" the markets fluctuate much, only if its severe enough. If the rental throws off the 30K you need to retire post vacancy calculations, then you should never have to sell it.

You need to diversify.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: zephyr911 on January 29, 2016, 07:26:36 AM
For people with such poor risk appetites - I recommend real estate/rental property that is in a reasonably good area.

You don't "see" the markets fluctuate much, only if its severe enough. If the rental throws off the 30K you need to retire post vacancy calculations, then you should never have to sell it.

You need to diversify.

I feel like everyone should have some rental exposure. Just one good house can provide a substantial portion of the average FIRE income requirement (see MMM's AA). Yeah, it can be lumpy, so you need some cash reserves, but it's a great hedge, among other things.

With rentals as my primary FIRE income, my risk tolerance in IRAs will always be above average, and no amount of market insanity will dissuade me when it's time to start my new life.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: merula on January 29, 2016, 10:54:39 AM
Will everyone please stop reassuring all the prophets of doom, destruction and "This time is different!"?

I need to have someone on the other side of my buy transactions.
Ever read that book? It's on my wish list.

I had never heard of it, but it's now on my goodreads list. Thanks! Plus, in searching my library, I came across another one that looks like an interesting read: https://www.goodreads.com/book/show/11106024-markets-never-forget-but-people-do
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Jack on January 29, 2016, 11:10:16 AM
For people with such poor risk appetites - I recommend real estate/rental property that is in a reasonably good area.

You don't "see" the markets fluctuate much, only if its severe enough. If the rental throws off the 30K you need to retire post vacancy calculations, then you should never have to sell it.

You need to diversify.

I feel like everyone should have some rental exposure. Just one good house can provide a substantial portion of the average FIRE income requirement (see MMM's AA). Yeah, it can be lumpy, so you need some cash reserves, but it's a great hedge, among other things.

With rentals as my primary FIRE income, my risk tolerance in IRAs will always be above average, and no amount of market insanity will dissuade me when it's time to start my new life.

It's off-topic, but I'll mention that the only thing that's making it hard for me to add real estate to my AA is that I'd currently have to forego maxing my tax-advantaged accounts to do it. Once I'm able to max those accounts and have another $20K/year left over for other investment, then I'd be able to get into real estate.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: robartsd on January 29, 2016, 02:24:54 PM
It's off-topic, but I'll mention that the only thing that's making it hard for me to add real estate to my AA is that I'd currently have to forego maxing my tax-advantaged accounts to do it. Once I'm able to max those accounts and have another $20K/year left over for other investment, then I'd be able to get into real estate.
It is possible to invest in real estate in tax advantaged accounts (and I'm not just talking REITs). It may not be easy to set up, precludes DIY repairs and management, and may be difficult to finance; but investment properties are allowed in an self-directed IRA.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Financial.Velociraptor on January 29, 2016, 03:10:02 PM
It's off-topic, but I'll mention that the only thing that's making it hard for me to add real estate to my AA is that I'd currently have to forego maxing my tax-advantaged accounts to do it. Once I'm able to max those accounts and have another $20K/year left over for other investment, then I'd be able to get into real estate.
It is possible to invest in real estate in tax advantaged accounts (and I'm not just talking REITs). It may not be easy to set up, precludes DIY repairs and management, and may be difficult to finance; but investment properties are allowed in an self-directed IRA.

http://www.forbes.com/sites/deborahljacobs/2012/06/06/how-to-invest-your-ira-in-real-estate-gold-and-alternative-assets/#570ef7c14881 (http://www.forbes.com/sites/deborahljacobs/2012/06/06/how-to-invest-your-ira-in-real-estate-gold-and-alternative-assets/#570ef7c14881)
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Geekenstein on January 29, 2016, 03:21:30 PM

I feel like everyone should have some rental exposure. Just one good house can provide a substantial portion of the average FIRE income requirement (see MMM's AA). Yeah, it can be lumpy, so you need some cash reserves, but it's a great hedge, among other things.

With rentals as my primary FIRE income, my risk tolerance in IRAs will always be above average, and no amount of market insanity will dissuade me when it's time to start my new life.

I think there are a couple of reasons more people don't do this:

1. It's work.  Even if you farm the management of it out, you still have work to do.  Not everyone has the time to do it right.
2. It's not something just anyone can do.  Without detailing all of the things you need to do right to have a decently performing rental, it's not easy.

I know that's not new information, and those may be absolutely stupid-sounding reasons, but they are real.  Unless one is in a position to dedicate themselves to being a successful landlord it's something that can go badly, and wind up being an expensive mess.


http://www.forbes.com/sites/deborahljacobs/2012/06/06/how-to-invest-your-ira-in-real-estate-gold-and-alternative-assets/#570ef7c14881 (http://www.forbes.com/sites/deborahljacobs/2012/06/06/how-to-invest-your-ira-in-real-estate-gold-and-alternative-assets/#570ef7c14881)

Nice link, thanks!!
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Jack on January 29, 2016, 04:32:13 PM
It's off-topic, but I'll mention that the only thing that's making it hard for me to add real estate to my AA is that I'd currently have to forego maxing my tax-advantaged accounts to do it. Once I'm able to max those accounts and have another $20K/year left over for other investment, then I'd be able to get into real estate.
It is possible to invest in real estate in tax advantaged accounts (and I'm not just talking REITs). It may not be easy to set up, precludes DIY repairs and management, and may be difficult to finance; but investment properties are allowed in an self-directed IRA.

http://www.forbes.com/sites/deborahljacobs/2012/06/06/how-to-invest-your-ira-in-real-estate-gold-and-alternative-assets/#570ef7c14881 (http://www.forbes.com/sites/deborahljacobs/2012/06/06/how-to-invest-your-ira-in-real-estate-gold-and-alternative-assets/#570ef7c14881)

Oops, I forgot to mention: I've previously looked into that possibility, and the "no DIY repairs and management" part is a deal breaker for me.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: LadyStache in Baja on January 29, 2016, 09:20:14 PM
Love this thread.  I like to read stuff like this to program my brain ahead of time so that when I lose a substantial amount of money in a downturn at some point in the future, I'll remember to ride it out!  commenting to follow
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: WerKater on January 30, 2016, 05:55:55 AM
1. It's work.  Even if you farm the management of it out, you still have work to do.  Not everyone has the time to do it right.
2. It's not something just anyone can do.  Without detailing all of the things you need to do right to have a decently performing rental, it's not easy.

I know that's not new information, and those may be absolutely stupid-sounding reasons, but they are real.  Unless one is in a position to dedicate themselves to being a successful landlord it's something that can go badly, and wind up being an expensive mess.

At least the second reason is not stupid at all, it's what is keeping me from investing in real estate. There are places (like where I live) where it is simply hard to impossible to find rentals that are cash-flow positive. I certainly haven't been able to find any. Sure, they might exist, but it lokks like it will take an awful amount of effort to find one (if they exist). And then you still run the risk that you overlooked something seriously wrong with one of the very few properties that you would be able to buy. So for me: Thanks but no thanks. I'll take the volatility of the stock market over this kind of risk an day.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Retire-Canada on January 30, 2016, 07:29:36 AM
I think there are a couple of reasons more people don't do this:

1. It's work.  Even if you farm the management of it out, you still have work to do.  Not everyone has the time to do it right.
2. It's not something just anyone can do.  Without detailing all of the things you need to do right to have a decently performing rental, it's not easy.

I know that's not new information, and those may be absolutely stupid-sounding reasons, but they are real.  Unless one is in a position to dedicate themselves to being a successful landlord it's something that can go badly, and wind up being an expensive mess.


Those are reasons that temper my interest. I'd also add having high local house prices. I live on an island and the 100yr cottage I live in costs $420K+. Buying property to rent out is hard and the ratio of cost vs. rent is not favourable.

I'm not keen on buying somewhere other than where I live so my thought is to invest in REITs for additional RE exposure without the hassles.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: zephyr911 on February 02, 2016, 10:30:09 AM
I think there are a couple of reasons more people don't do this:

1. It's work.  Even if you farm the management of it out, you still have work to do.  Not everyone has the time to do it right.
2. It's not something just anyone can do.  Without detailing all of the things you need to do right to have a decently performing rental, it's not easy.

I know that's not new information, and those may be absolutely stupid-sounding reasons, but they are real.  Unless one is in a position to dedicate themselves to being a successful landlord it's something that can go badly, and wind up being an expensive mess.
I don't dispute any of that. I just feel like a community where people are willing to put so much time and energy into learning, planning, and executing financial strategies should be pretty low on people who actually find #1 and #2 to be full-on dealbreakers.

Or maybe I just don't adequately count up all the time and energy I've put into it, because I (personally) like it so much that I don't think of most of it as work... xD
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Scandium on February 02, 2016, 10:54:01 AM
I think there are a couple of reasons more people don't do this:

1. It's work.  Even if you farm the management of it out, you still have work to do.  Not everyone has the time to do it right.
2. It's not something just anyone can do.  Without detailing all of the things you need to do right to have a decently performing rental, it's not easy.

I know that's not new information, and those may be absolutely stupid-sounding reasons, but they are real.  Unless one is in a position to dedicate themselves to being a successful landlord it's something that can go badly, and wind up being an expensive mess.
I don't dispute any of that. I just feel like a community where people are willing to put so much time and energy into learning, planning, and executing financial strategies should be pretty low on people who actually find #1 and #2 to be full-on dealbreakers.

Or maybe I just don't adequately count up all the time and energy I've put into it, because I (personally) like it so much that I don't think of most of it as work... xD

Those two points are dissuading me from RE as well. Yeah, I'm sure I've spend a decent amount of time reading about investing, DIY home repair, or finding the cheapest phone provider. But that's usually done in 10 min chunks when I feel like it. And kinda something I'd have to do anyway. With a house to maintain, two adults at work ~10 hrs/day and a child I don't want to (and my wife definitely don't) have to spend weekends dealing with skumbag renters, toilet leaks, painting walls etc etc. It's a nice idea and I've looked into it, but really can't be bothered to sacrifice my valuable time, and a $50k+ down payment, for something that may or may not cash flow (around here i think most don't).

And speaking of losses. Considering the house repairs, maintenance and upgrades we have done I can easily see sinking $5k into your rental every now and then, equivalent to the losses my Roth have taken this year.. Hopefully you get some back, but still have to deal with major drops in value/expenses/surprises, just of a different kind.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Cougar on February 02, 2016, 11:31:19 AM
Love this thread.  I like to read stuff like this to program my brain ahead of time so that when I lose a substantial amount of money in a downturn at some point in the future, I'll remember to ride it out!  commenting to follow


Then enjoy this read:
http://www.zerohedge.com/news/2016-02-02/numbers-are-hedge-funds-furiously-dumped-rally-selling-was-biggest-nearly-two-years (http://www.zerohedge.com/news/2016-02-02/numbers-are-hedge-funds-furiously-dumped-rally-selling-was-biggest-nearly-two-years)

"The Numbers Are In: Hedge Funds Furiously Dumped The Rally; Selling Was "Biggest In Nearly Two Years"

There are signs like this everywhere that the smart guys/big boys are getting out, just follow zerohedge for a week.

Discard my post if you wish, but what macroeconomics anywhere say the global economy is not slowing ?

Histories suggest a bad January means a bad year and every 10% you lose; you need to have to wait for a 20% gain to be even again.


ok, i'm out of this thread again; the buy and hold and dollar costs avg preaching here just frustrates me so much; imo the mantra for the mmm crowd should be capital preservation; i do not know why it isn't.

Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: sol on February 02, 2016, 11:43:03 AM
every 10% you lose; you need to have to wait for a 20% gain to be even again.

I think you failed 7th grade math.

I also think you failed sophomore econ, but that's a more forgivable offense.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: FLBiker on February 02, 2016, 11:45:23 AM
ok, i'm out of this thread again; the buy and hold and dollar costs avg preaching here just frustrates me so much; imo the mantra for the mmm crowd should be capital preservation; i do not know why it isn't.

I may be too late, but I'm wondering what you mean exactly (strategywise) by capital preservation, other than market timing (ie getting out before you know it's going to drop).
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: merula on February 02, 2016, 11:50:31 AM
every 10% you lose; you need to have to wait for a 20% gain to be even again.

I think you failed 7th grade math.

I also think you failed sophomore econ, but that's a more forgivable offense.

Is this a severe misinterpretation of needing an 11% gain to make up for a 10% loss? If you lose $10 on a $100 investment, you'll then need to gain $10 on your remaining $90, which is 11%?

Also, how is selling low preserving capital? smh
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Interest Compound on February 02, 2016, 11:51:43 AM
every 10% you lose; you need to have to wait for a 20% gain to be even again.

$100 - 10% = $90

$90 + 20% = $108

(http://cdn.meme.am/instances/500x/56493278.jpg)
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Interest Compound on February 02, 2016, 12:44:29 PM
There are signs like this everywhere that the smart guys/big boys are getting out, just follow zerohedge for a week.

This is a very interesting comment, which offers a good thought experiment for the newbies of the thread. What's the best sign that some people are selling? Market price. Simply looking at a graph shows us that people are getting out. But what else does it show us?

(https://i.sli.mg/xAofCo.png)

Remember, for every dollar that's selling, there's a corresponding dollar that's buying. So for every "smart guy/gal or big boy/girl" who is getting out, another one is getting in at that exact point! Who are you to know that one half is smarter than the other half? What information do you think you have, that they don't?

The only way to win, is not to play. When buying an index, you are mathematically guaranteed to beat or match 50% of all dollars invested in the market. You will never underperform.

If you're looking at one particular year, sure, there's a chance you can beat the market on your own. But over the long term with the index, you're beating 50% of all invested dollars this year, then beating 50% of all invested dollars next year, and the year after that...every single year for the rest of your life.

If you're trying to beat this, even one bad year can make it almost impossible to catch up. Losing 50% one year, means you need to gain 100% next year just to break even. If you do 10% better than the index one year, then do 10% worse than the index the next year, you will still end up with less money than simply choosing the index.

It seems counterintuitive, but the opposite has the same result. Do 10% worse than the index one year, then 10% better than the index the next year, and you are still behind the index.

When looking at the long term, you're beating significantly more than 50%, you're beating almost everybody. The compounding effects of bad years make it incredibly difficult to beat the index long-term.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: zephyr911 on February 02, 2016, 01:45:53 PM
Those two points are dissuading me from RE as well. Yeah, I'm sure I've spend a decent amount of time reading about investing, DIY home repair, or finding the cheapest phone provider. But that's usually done in 10 min chunks when I feel like it. And kinda something I'd have to do anyway. With a house to maintain, two adults at work ~10 hrs/day and a child I don't want to (and my wife definitely don't) have to spend weekends dealing with skumbag renters, toilet leaks, painting walls etc etc. It's a nice idea and I've looked into it, but really can't be bothered to sacrifice my valuable time, and a $50k+ down payment, for something that may or may not cash flow (around here i think most don't).

And speaking of losses. Considering the house repairs, maintenance and upgrades we have done I can easily see sinking $5k into your rental every now and then, equivalent to the losses my Roth have taken this year.. Hopefully you get some back, but still have to deal with major drops in value/expenses/surprises, just of a different kind.
What you just listed are a bunch of good reasons for the 50% rule of thumb. Outsource everything, and you get (on average) half of your scheduled rent. And only if it still beats the market after allowing for all those deductions does it make for an ideal investment. If nothing in your area qualifies, then staying out of the market is the right idea.
I'm gung-ho about it because there's no shortage of such properties here, and the entry fee is only $10-15K in some cases.

I may be too late, but I'm wondering what you mean exactly (strategywise) by capital preservation, other than market timing (ie getting out before you know it's going to drop).
Guys, this isn't rocket science. Cougar is right - all you have to do to beat the market is develop psychic powers. If you can't figure out how to do that, your only solution is 100% bank CDs, and save 100x your FIRE spending.

Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Eric on February 02, 2016, 01:56:25 PM
There are signs like this everywhere that the smart guys/big boys are getting out, just follow zerohedge for a week.

This is a very interesting comment, which offers a good thought experiment for the newbies of the thread. What's the best sign that some people are selling? Market price. Simply looking at a graph shows us that people are getting out. But what else does it show us?

The only problem with the graph is that it assumes that anyone following zerohedge still had money in the market in 2016.  Everyone at zerohedge knew that the crash was right around the corner in 2013.  And 2014.  And 2015.

If you followed zerohedge for the right week, you'd know that you could've avoided all of the losses of the last month by simply avoiding the gains of the last few years.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: zephyr911 on February 02, 2016, 02:01:10 PM
...you could've avoided all of the losses of the last month by simply avoiding the gains of the last few years.

I'm fuckin' dyin' here! xD #$%^&
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: robartsd on February 02, 2016, 02:18:32 PM
Remember that hedge fund managers are somewhat constrained by the emotional reactions to the markets of their investors. If they have more money being divested than invested in their fund, they have to make up the difference. Who knows, they may even be personally buying while their fund sells.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: zephyr911 on February 02, 2016, 02:36:02 PM
Remember that hedge fund managers are somewhat constrained by the emotional reactions to the markets of their investors. If they have more money being divested than invested in their fund, they have to make up the difference. Who knows, they may even be personally buying while their fund sells.
I should hope they would, with all that extra commission all of a sudden.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: AdrianC on February 02, 2016, 03:37:22 PM
(https://i.sli.mg/2wFRq5.png)


And that works out to about 2.3% annualized after inflation, dividends reinvested.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: AdrianC on February 02, 2016, 03:43:03 PM
Remember that hedge fund managers are somewhat constrained by the emotional reactions to the markets of their investors. If they have more money being divested than invested in their fund, they have to make up the difference. Who knows, they may even be personally buying while their fund sells.
I should hope they would, with all that extra commission all of a sudden.

Fund managers charge a % of assets under management.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Full_Beard on February 02, 2016, 04:45:00 PM
(https://i.sli.mg/2wFRq5.png)


And that works out to about 2.3% annualized after inflation, dividends reinvested.
Well, your point is a good one. But of course you can pick and choose a time period to modify the results. For example, if I expand that period and go from 1/1/1995 through 12/31/2015, the annualized return (adjusted for inflation and with dividends reinvested), I get 7.08% annual return. A good viewpoint:

http://www.nytimes.com/interactive/2011/01/02/business/20110102-metrics-graphic.html
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: AdrianC on February 03, 2016, 05:17:35 AM
Well, your point is a good one. But of course you can pick and choose a time period to modify the results. For example, if I expand that period and go from 1/1/1995 through 12/31/2015, the annualized return (adjusted for inflation and with dividends reinvested), I get 7.08% annual return. A good viewpoint:

http://www.nytimes.com/interactive/2011/01/02/business/20110102-metrics-graphic.html

Nice chart. It says to me "save more".
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Rollin on February 03, 2016, 06:33:29 AM
So while we are all on the ship deciding if we should throw A Plan Comes Together (the OP) a life ring, call the Coast Guard, or see if he (or she?) can swim, has anyone heard from APCT?  Last post was 1/22/16.  It would be great to hear how he (or she?) is doing.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: SevenSeas on February 04, 2016, 03:39:58 AM
This is the best time to BUY - not to SELL!
I was trying to increase my cash reserves in the last 6 months. But with this small correction, I put it all in :) Mmm discount prices. I love to save more during these periods too for an added bonus :).
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: AdrianC on February 04, 2016, 05:26:55 AM
This is the best time to BUY - not to SELL!

It's a better time to buy.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: zephyr911 on February 04, 2016, 07:17:00 AM
So while we are all on the ship deciding if we should throw A Plan Comes Together (the OP) a life ring, call the Coast Guard, or see if he (or she?) can swim, has anyone heard from APCT?  Last post was 1/22/16.  It would be great to hear how he (or she?) is doing.
Sold it all, partying with the proceeds

Fund managers charge a % of assets under management.
Oh, I'm a dumbass. Oh well.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Jsn on December 24, 2017, 11:43:17 PM
I'm reviving this old thread to illustrate the power of staying the course.

This fellow invested in the market in January of 2015. By early 2016 he was convinced he'd "missed the entire ride up" and that "this market now seems intent on going straight to hell". To him, it was obvious that "I f'ed myself over on waiting until the peak to buy in...I'm literally watching my hard work and hopes and dreams vanish with each day."

Today's total S&P return since January 2015, dividends reinvested? 36.984%.


I get the whole "eventually the market always goes up" argument and trying to time it can result in losses. However, I'm in a situation here that is tearing me to shreds:

1. I had planned on early retiring at some point this year.
2. I missed the entire ride up. At the start of last year, I piled my entire net worth into investments, despite understanding we were at historically high valuations (foolish, in retrospect).
3. I've held tight since, despite the downturns. But this market now seems intent on going straight to hell with crazy overreactions to stupid shit (China is less than 1% of all U.S. exports!!!!!! WTF?!!?!). There is zero good news that has any sustained impact and the downturn has "seemingly" just started - we're still at a high valuation level.
4. My only hope for saving my retirement this year (and potentially years ahead) is to sell today and buy back in at a lower level that could get me back to par. I'd be happy to just recoup my losses and then play it smarter in the future by finding ways to protect the downside.
5. I don't think I have 2, 3, 4+ more years of work left in me to get back to the point I was at last year.

I realized I f'ed myself over on waiting until the peak to buy in and then planning to retire shortly after. Rare scenario, but shit happens. I'm literally watching my hard work and hopes and dreams vanish with each day. My plan is falling apart. Talk to me, please.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: bacchi on December 24, 2017, 11:55:32 PM
I hope he didn't sell. He sounded like he was on the ropes.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: sol on December 25, 2017, 09:37:12 AM
Awesome.  Rereading this whole thread was awesome.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: JAYSLOL on December 25, 2017, 09:54:09 AM
Wow, I just read this whole thread.  10/10, HUGE respect to the vast majority that posted fantastic advice, I really hope the OP followed it!  The MMM community really does have a good handle on things.  Also enjoyed Cougars guest appearance of doom and gloom and misguided advice, which may have scared me a couple years ago, but thanks to Top Is In, Red Dow and now this I think I'm fully up to date with my Emotional Financial Decisions vaccinations.   
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: itchyfeet on December 25, 2017, 03:49:27 PM
Awesome read. Great lesson on market timing. I’d love to hear an honest update from the OP.

Did they sell? Have they re-entered the market yet? Are they still waiting for the correction that “must happen”?

Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Indexer on December 25, 2017, 09:50:50 PM
Just checked and OP hasn't been active since Oct 2016, but the last investment related post I saw was the one where he said he wasn't going to sell.

We can hope for the best.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: BTDretire on December 26, 2017, 01:49:43 PM
I only scanned the posts, but I didn't see anyone ask what he invested in to be down 15% while VTSAX is up 32%,
from the beginning of last year.
So, did you invest in no-load mutual funds or individual stocks?
 Most here go for total market risk not individual stock risk.
  EDIT:
 OOPs! I see the OP posted in Jan, 2016, so I his -15%, but if he stayed
is say, VTSAX he's up 32% since his post.
 Hope he did.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Mr. Green on December 26, 2017, 04:55:10 PM
Someone should put together a compilation thread of some of these market timing threads as a "WARNING! Read these examples before considering timing the market." There are some great examples of how emotions can kill a portfolio.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: itchyfeet on December 26, 2017, 05:03:12 PM
Someone should put together a compilation thread of some of these market timing threads as a "WARNING! Read these examples before considering timing the market." There are some great examples of how emotions can kill a portfolio.

And these are people selling during a raging bull market. Wait until the market turns bear and I am sure we will see masses of people selling after the market turns.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: powskier on December 27, 2017, 12:21:18 AM
Someone should put together a compilation thread of some of these market timing threads as a "WARNING! Read these examples before considering timing the market." There are some great examples of how emotions can kill a portfolio.

And these are people selling during a raging bull market. Wait until the market turns bear and I am sure we will see masses of people selling after the market turns.

Looking forward to that! Could use some discount buying.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: BTDretire on December 27, 2017, 06:37:28 AM
I'm going to sell when the top is in, we should have a thread about "the top is in!"  ;-)
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: Moonwaves on December 27, 2017, 06:41:01 AM
Really interesting to read this and a good reminder that an emotional approach to investing is probably best avoided.

I've only recently started investing and am only investing a tiny amount in an ETF monthly savings plan. It freaked me out a lot when that ETF proceeded to go down in value what felt like every day* for the first six or seven months. But because I knew from MMM that these things happen, I just kept telling myself to stick with it. Even for my measly (now) €459, I found it really tough to not feel like I'd made a massive mistake. At 1 million, I would definitely have been freaking out. And this thread is a timely reminded that now that I've dipped my toes in the water again, I really need to sit down and draw up a proper investment plan for myself so that as I have (hopefully) more in invest in the next few years, I'll know exactly how I want to do that.

Hope the OP managed to stick with it but most of all that they managed to get out of their job. Getting out of a toxic work situation is life-changing!


*I don't purposely check it but I do generally log on to my current account most days and it's with the same bank and shown on the start page when I log in.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: DavidAnnArbor on January 01, 2018, 07:51:06 AM
Definitely fasten the seatbelts, it's always a bumpy ride up.
Title: Re: About to sell everything. Talk me off the ledge (or push me off) please!
Post by: PizzaSteve on January 01, 2018, 09:46:58 AM
Just checked and OP hasn't been active since Oct 2016, but the last investment related post I saw was the one where he said he wasn't going to sell.

We can hope for the best.
+1
Happy New Years Investors.  Speculators can fuss away their time on fruitless endeavours, while we can own our share of the global economy and ride the tides like calm, zen surfers.  When the waves come surf, when a crash happens, hop on the board and paddle back out, patiently waiting for the next wave.