Author Topic: Anyone a forced seller yet?  (Read 2263 times)

vand

  • Handlebar Stache
  • *****
  • Posts: 1532
  • Location: UK
Anyone a forced seller yet?
« on: March 21, 2020, 03:55:13 AM »
Anyone having to sell any assets yet?

For those folk already FIRE'd, have you had to liquidate anything yet to meet your living requirements? Or is everyone still living on their cash buffers? If so, how long before you need to sell?


renata ricotta

  • Pencil Stache
  • ****
  • Posts: 701
Re: Anyone a forced seller yet?
« Reply #1 on: March 21, 2020, 10:02:51 AM »
If the following worst-case scenario happens, I will be forced to sell at a (likely huge) loss in about 2.5-3 months.

- I am furloughed or laid off tomorrow and never collect another cent of paycheck
- My roommate is also furloughed tomorrow and immediately cannot pay his half of the rent, leaving me to pay the entire amount (I'm the only one on the lease so it's my responsibility whether he pays or not)
- Neither of us is eligible for any direct government aid

bthewalls

  • Bristles
  • ***
  • Posts: 338
  • Location: ireland/northern ireland
Re: Anyone a forced seller yet?
« Reply #2 on: March 21, 2020, 10:04:36 AM »
no shame in getting a part time job to prevent forced selling!

renata ricotta

  • Pencil Stache
  • ****
  • Posts: 701
Re: Anyone a forced seller yet?
« Reply #3 on: March 21, 2020, 10:15:55 AM »
no shame in getting a part time job to prevent forced selling!

True, I should have added "unable to get a part time job" or unemployment to the worst case list.

Although I would probably really pause before taking a part time temp job as a grocery store stocker or Amazon warehouse worker (the main types of jobs that are hiring right now). There are thousands of bartenders, fitness instructors, etc. out there who are suddenly out of work and need those jobs more than I do to cover essentials. Even though I'd hate to sell at a loss, I still have $400k+ in investments to draw on even after the stash has been decimated. I'm in a much better place than lots and lots and LOTS of people.

bthewalls

  • Bristles
  • ***
  • Posts: 338
  • Location: ireland/northern ireland
Re: Anyone a forced seller yet?
« Reply #4 on: March 21, 2020, 10:49:05 AM »
live frugal and sell minimum, and just accept it?  there will be many years when you are gaining more that the 7%....isnt all accounted for the the fire returns of 3.5% withdrawl?  Better years will return that loss.

keep in mind when a country reaches maximum covid infection, the population are immune within a number of weeks






effigy98

  • Pencil Stache
  • ****
  • Posts: 515
Re: Anyone a forced seller yet?
« Reply #5 on: March 21, 2020, 12:17:25 PM »
Forced to sell almost all stock at 30 cape during peak fear in China as that caused me to lose sleep. Have 2% only in company stock. Macrovoices podcast made this very clear it had a strong possibility of turning onto this. Have only short term treasuries and gold left as I recently got out of long bonds. Been using sqqq on up days then selling in down with a small percent and that has worked well so far. Up 34% for the year so far. Maybe others can hedge with sqqq to recoup some losses. Fed is going to keep this pattern going it looks like.

Sent from my Pixel 3a using Tapatalk
« Last Edit: March 21, 2020, 12:20:54 PM by effigy98 »

vand

  • Handlebar Stache
  • *****
  • Posts: 1532
  • Location: UK
Re: Anyone a forced seller yet?
« Reply #6 on: March 21, 2020, 12:25:19 PM »
Forced to sell almost all stock at 30 cape during peak fear in China as that caused me to lose sleep. Have 2% only in company stock. Macrovoices podcast made this very clear it had a strong possibility of turning onto this. Have only short term treasuries and gold left as I recently got out of long bonds. Been using sqqq on up days then selling in down with a small percent and that has worked well so far. Up 34% for the year so far. Maybe others can hedge with sqqq to recoup some losses. Fed is going to keep this pattern going it looks like.

Sent from my Pixel 3a using Tapatalk

So not really a forced seller, then, more a not-so-humble bragger :)

effigy98

  • Pencil Stache
  • ****
  • Posts: 515
Re: Anyone a forced seller yet?
« Reply #7 on: March 21, 2020, 12:29:18 PM »
Forced to sell almost all stock at 30 cape during peak fear in China as that caused me to lose sleep. Have 2% only in company stock. Macrovoices podcast made this very clear it had a strong possibility of turning onto this. Have only short term treasuries and gold left as I recently got out of long bonds. Been using sqqq on up days then selling in down with a small percent and that has worked well so far. Up 34% for the year so far. Maybe others can hedge with sqqq to recoup some losses. Fed is going to keep this pattern going it looks like.

Sent from my Pixel 3a using Tapatalk

So not really a forced seller, then, more a not-so-humble bragger :)
Pretty much. Was forced to sell in 2000 and 2008 at the bottom to keep housing. Not going thru that again. House is paid off this time around at the outrageous pushback on this forum and yolo 100% stocks bs.

Sent from my Pixel 3a using Tapatalk
« Last Edit: March 21, 2020, 12:32:11 PM by effigy98 »

waltworks

  • Magnum Stache
  • ******
  • Posts: 4977
Re: Anyone a forced seller yet?
« Reply #8 on: March 21, 2020, 12:38:26 PM »
I was lucky/paranoid enough (because of a move to a new house coinciding with the birth of our 3rd kid) to have a huge (like 4-5 years) emergency fund when SHTF.

I am continuing to invest my planned $1500/week, no forced selling likely for a long time. If we get to that point, my guess is there's nobody left to sell the stock to/company doesn't exist anymore anyway.

I am kicking myself a little for moving out of our (paid off) house with a rental apartment into a $200k more expensive place without one. Ah, hindsight...

-W
« Last Edit: March 21, 2020, 01:10:25 PM by waltworks »

utaca

  • Stubble
  • **
  • Posts: 101
Re: Anyone a forced seller yet?
« Reply #9 on: March 21, 2020, 01:09:19 PM »
Forced to sell almost all stock at 30 cape during peak fear in China as that caused me to lose sleep. Have 2% only in company stock. Macrovoices podcast made this very clear it had a strong possibility of turning onto this. Have only short term treasuries and gold left as I recently got out of long bonds. Been using sqqq on up days then selling in down with a small percent and that has worked well so far. Up 34% for the year so far. Maybe others can hedge with sqqq to recoup some losses. Fed is going to keep this pattern going it looks like.

Sent from my Pixel 3a using Tapatalk

So not really a forced seller, then, more a not-so-humble bragger :)
Pretty much. Was forced to sell in 2000 and 2008 at the bottom to keep housing. Not going thru that again. House is paid off this time around at the outrageous pushback on this forum and yolo 100% stocks bs.

Sent from my Pixel 3a using Tapatalk

I was in school during 2008 so it didn't affect me but I still always thought the "yolo 100% stock bs" as you so finely put it was based on a profound lack of self-knowledge about risk tolerance. I'm not even tempted to sell now because I've used an extremely conservative asset allocation for someone in the accumulation phase (at least according to those who are now considering panic selling). 

Malcat

  • Walrus Stache
  • *******
  • Posts: 8355
Re: Anyone a forced seller yet?
« Reply #10 on: March 21, 2020, 03:10:11 PM »
no shame in getting a part time job to prevent forced selling!

True, I should have added "unable to get a part time job" or unemployment to the worst case list.

Although I would probably really pause before taking a part time temp job as a grocery store stocker or Amazon warehouse worker (the main types of jobs that are hiring right now). There are thousands of bartenders, fitness instructors, etc. out there who are suddenly out of work and need those jobs more than I do to cover essentials. Even though I'd hate to sell at a loss, I still have $400k+ in investments to draw on even after the stash has been decimated. I'm in a much better place than lots and lots and LOTS of people.

Also, someone with a lot of assets can afford to hunker down and worry about going back to work when there's less risk.

There's no urgency.

bwall

  • Handlebar Stache
  • *****
  • Posts: 1141
Re: Anyone a forced seller yet?
« Reply #11 on: March 22, 2020, 01:22:26 PM »
Anyone having to sell any assets yet?

For those folk already FIRE'd, have you had to liquidate anything yet to meet your living requirements? Or is everyone still living on their cash buffers? If so, how long before you need to sell?

If anyone needs to sell less than two months into a bear market then they should have their mustacheian-card revoked.

AdrianC

  • Handlebar Stache
  • *****
  • Posts: 1149
  • Location: Cincinnati
Re: Anyone a forced seller yet?
« Reply #12 on: March 22, 2020, 01:53:04 PM »
Anyone having to sell any assets yet?

For those folk already FIRE'd, have you had to liquidate anything yet to meet your living requirements? Or is everyone still living on their cash buffers? If so, how long before you need to sell?

If anyone needs to sell less than two months into a bear market then they should have their mustacheian-card revoked.
That kinda what I was thinking. Iíll have to start selling stocks sometime in about 2027, assuming we donít tighten our belts a bit.

vand

  • Handlebar Stache
  • *****
  • Posts: 1532
  • Location: UK
Re: Anyone a forced seller yet?
« Reply #13 on: March 22, 2020, 02:08:00 PM »
Anyone having to sell any assets yet?

For those folk already FIRE'd, have you had to liquidate anything yet to meet your living requirements? Or is everyone still living on their cash buffers? If so, how long before you need to sell?

If anyone needs to sell less than two months into a bear market then they should have their mustacheian-card revoked.

Why? If you FIREd let's say last summer with whatever portfolio mix you saw fit and and emergency-fund of cash, why would you not be drawing down on your portfolio month by month?

Does this downturn qualify as an emergency to dip into your emergency fund? I thought an emergency was when you hot water heater exploded, not when your portfolio goes for a walk.

marty998

  • Walrus Stache
  • *******
  • Posts: 7310
  • Location: Sydney, Oz
Re: Anyone a forced seller yet?
« Reply #14 on: March 22, 2020, 02:08:33 PM »
Forced to sell almost all stock at 30 cape during peak fear in China as that caused me to lose sleep. Have 2% only in company stock. Macrovoices podcast made this very clear it had a strong possibility of turning onto this. Have only short term treasuries and gold left as I recently got out of long bonds. Been using sqqq on up days then selling in down with a small percent and that has worked well so far. Up 34% for the year so far. Maybe others can hedge with sqqq to recoup some losses. Fed is going to keep this pattern going it looks like.


So not really a forced seller, then, more a not-so-humble bragger :)
Pretty much. Was forced to sell in 2000 and 2008 at the bottom to keep housing. Not going thru that again. House is paid off this time around at the outrageous pushback on this forum and yolo 100% stocks bs.


Good for you. I too had trouble with the 100% stocks line. Nothing has given me more piece of mind over the last 5 years than effectively having a paid off roof over my head.

MonkeyJenga

  • Walrus Stache
  • *******
  • Posts: 8887
  • Location: the woods
Re: Anyone a forced seller yet?
« Reply #15 on: March 22, 2020, 02:11:42 PM »
Anyone having to sell any assets yet?

For those folk already FIRE'd, have you had to liquidate anything yet to meet your living requirements? Or is everyone still living on their cash buffers? If so, how long before you need to sell?

If anyone needs to sell less than two months into a bear market then they should have their mustacheian-card revoked.

I never got a card in the first place, you're welcome to it. :P

I got over-ambitious with charitable donations, and then a large medical bill came up. I sold a couple grand worth of investments to shore up my checking account. Going to start looking for a job this week, but I always planned to go back to work for the presidential campaign.

bthewalls

  • Bristles
  • ***
  • Posts: 338
  • Location: ireland/northern ireland
Re: Anyone a forced seller yet?
« Reply #16 on: March 22, 2020, 02:48:02 PM »
Anyone having to sell any assets yet?

For those folk already FIRE'd, have you had to liquidate anything yet to meet your living requirements? Or is everyone still living on their cash buffers? If so, how long before you need to sell?

If anyone needs to sell less than two months into a bear market then they should have their mustacheian-card revoked.

so true.....people got greedy and didnt keep a prudent cash reserve.....most of use middle aged learned in 2008.....now its their turn to learn

bwall

  • Handlebar Stache
  • *****
  • Posts: 1141
Re: Anyone a forced seller yet?
« Reply #17 on: March 22, 2020, 02:55:11 PM »
Anyone having to sell any assets yet?

For those folk already FIRE'd, have you had to liquidate anything yet to meet your living requirements? Or is everyone still living on their cash buffers? If so, how long before you need to sell?

If anyone needs to sell less than two months into a bear market then they should have their mustacheian-card revoked.

Why? If you FIREd let's say last summer with whatever portfolio mix you saw fit and and emergency-fund of cash, why would you not be drawing down on your portfolio month by month?

Does this downturn qualify as an emergency to dip into your emergency fund? I thought an emergency was when you hot water heater exploded, not when your portfolio goes for a walk.

In the above hypothetical the person still hasn't thought out the 4% rule very well or planned well in advance.

Here's how I plan on doing it when I'm RE (currently FI), if I'm 100% in stocks. This downturn has just confirmed for me that this is the way to go:

1) Have a cash position worth two years' expenses, drawing down the portfolio month by month.

2) When the market drops X%, stop drawing down.

3) Ride out the bear market.

Alternatively, if I'm in stocks and bonds, when the bear hits I stop selling stocks and live from the bonds. Then rebalance as close to the bottom as I can.

I think that this topic has been discussed at length on other threads.

Buffaloski Boris

  • Handlebar Stache
  • *****
  • Posts: 2121
Re: Anyone a forced seller yet?
« Reply #18 on: March 22, 2020, 05:11:15 PM »
Anyone having to sell any assets yet?

For those folk already FIRE'd, have you had to liquidate anything yet to meet your living requirements? Or is everyone still living on their cash buffers? If so, how long before you need to sell?

If anyone needs to sell less than two months into a bear market then they should have their mustacheian-card revoked.

so true.....people got greedy and didnt keep a prudent cash reserve.....most of us middle aged learned in 2008.....now its their turn to learn

Learn we did. Interesting to watch it happen all over again.  Lots of folks are in denial.  I'm wondering if the hit is going to be just as bad. It was pretty darn bad in Ireland last time. 

vand

  • Handlebar Stache
  • *****
  • Posts: 1532
  • Location: UK
Re: Anyone a forced seller yet?
« Reply #19 on: March 23, 2020, 01:17:02 AM »
Anyone having to sell any assets yet?

For those folk already FIRE'd, have you had to liquidate anything yet to meet your living requirements? Or is everyone still living on their cash buffers? If so, how long before you need to sell?

If anyone needs to sell less than two months into a bear market then they should have their mustacheian-card revoked.

Why? If you FIREd let's say last summer with whatever portfolio mix you saw fit and and emergency-fund of cash, why would you not be drawing down on your portfolio month by month?

Does this downturn qualify as an emergency to dip into your emergency fund? I thought an emergency was when you hot water heater exploded, not when your portfolio goes for a walk.

In the above hypothetical the person still hasn't thought out the 4% rule very well or planned well in advance.

Here's how I plan on doing it when I'm RE (currently FI), if I'm 100% in stocks. This downturn has just confirmed for me that this is the way to go:

1) Have a cash position worth two years' expenses, drawing down the portfolio month by month.

2) When the market drops X%, stop drawing down.

3) Ride out the bear market.

Alternatively, if I'm in stocks and bonds, when the bear hits I stop selling stocks and live from the bonds. Then rebalance as close to the bottom as I can.

I think that this topic has been discussed at length on other threads.

No, it hasn't.

There is nothing in the 4% "rule" that says how large your cash buffer should be, or when it should be used.

If you are living off your portfolio then at SOME point you are going to have to sell some assets when the market is depressed. That is simply inevitable.

What I am getting at is that this is possibly the first time, or at least since 2008-09, that anyone still living off their portfolio will need to sell into a market that is -20% down or more.

we talk about SORR all the time. Is anyone actually now living it?

We agree that real-life plans usually include a bit of fat to try minimizing the impact of things like this. So what I am trying to get at is, is anyone simply ignoring the market and carrying on with their drawdown plan and selling into this bear market, or does this actually demonstrate that the 4% rule is thrown out of the window along with everything else when the SHTF.

It's very popular to say that you can't time the market on this forum, yet people trying to delay drawing down from their portfolios and living on their cash buffer are  unwittingly doing just that. The risk in blowing through your 6 month cash reserve immediately is that 6 months from now the S&P is at 1200 and now you have to sell many more units to meet your living expenses that you can no longer delay. The piper must be paid.
« Last Edit: March 23, 2020, 01:25:40 AM by vand »

bwall

  • Handlebar Stache
  • *****
  • Posts: 1141
Re: Anyone a forced seller yet?
« Reply #20 on: March 23, 2020, 06:32:32 AM »
Anyone having to sell any assets yet?

For those folk already FIRE'd, have you had to liquidate anything yet to meet your living requirements? Or is everyone still living on their cash buffers? If so, how long before you need to sell?

If anyone needs to sell less than two months into a bear market then they should have their mustacheian-card revoked.

Why? If you FIREd let's say last summer with whatever portfolio mix you saw fit and and emergency-fund of cash, why would you not be drawing down on your portfolio month by month?

Does this downturn qualify as an emergency to dip into your emergency fund? I thought an emergency was when you hot water heater exploded, not when your portfolio goes for a walk.

In the above hypothetical the person still hasn't thought out the 4% rule very well or planned well in advance.

Here's how I plan on doing it when I'm RE (currently FI), if I'm 100% in stocks. This downturn has just confirmed for me that this is the way to go:

1) Have a cash position worth two years' expenses, drawing down the portfolio month by month.

2) When the market drops X%, stop drawing down.

3) Ride out the bear market.

Alternatively, if I'm in stocks and bonds, when the bear hits I stop selling stocks and live from the bonds. Then rebalance as close to the bottom as I can.

I think that this topic has been discussed at length on other threads.

No, it hasn't.

I'd encourage you to look around the forum or read MMM's posts. That's how I came up with the above plan.

I'm not smart enough to think of that myself. Conversely, if I were smart enough to think of it, then so are the even smarter people on these boards. And, they'll have wanted to talk about it. So, I'd encourage you to educate yourself instead of arguing that you can't find something.

magnet18

  • Bristles
  • ***
  • Posts: 321
Re: Anyone a forced seller yet?
« Reply #21 on: March 23, 2020, 06:52:52 AM »
Anyone having to sell any assets yet?

For those folk already FIRE'd, have you had to liquidate anything yet to meet your living requirements? Or is everyone still living on their cash buffers? If so, how long before you need to sell?

If anyone needs to sell less than two months into a bear market then they should have their mustacheian-card revoked.


Just listened to big-earn on a podcast and changed my mind on that

Using a cash bucket and emptying it before pulling out of stocks is a form of market timing, and could end up worst than having had that in the portfolio, as you might empty that bucket right when stocks hit rock bottom and be forced to realize all your losses at maximum loss, rather than getting some out on the way down. 

Continuing drawdown rather than a cash bucket is like inverse dollar cost averaging


There are also a lot of people that keep tiny emergency funds, instead investing it woth the plan of using roth contributions/taxable as an emergency find if SHTF.
Math says they'll come out right majority of the time, but if that's their plan they may now need to put their money where their mouth is
« Last Edit: March 23, 2020, 06:55:51 AM by magnet18 »

the_gastropod

  • Bristles
  • ***
  • Posts: 334
  • Age: 35
  • Location: Brooklyn, NY
Re: Anyone a forced seller yet?
« Reply #22 on: March 23, 2020, 07:00:50 AM »
I'd encourage you to look around the forum or read MMM's posts. That's how I came up with the above plan.

I'm not smart enough to think of that myself. Conversely, if I were smart enough to think of it, then so are the even smarter people on these boards. And, they'll have wanted to talk about it. So, I'd encourage you to educate yourself instead of arguing that you can't find something.

My man.  The condescending attitude and the no-true-scotsmaning really arenít needed. If you have links to share, please share them. But what youíre describing absolutely contradicts my understanding of what MMM (and any other ďyou canít time the marketĒ believers) recommend. Hereís a video where MMM talks about emergency funds being unnecessary for people who are FI: https://m.youtube.com/watch?v=tFpJrqp0l_4

BTDretire

  • Magnum Stache
  • ******
  • Posts: 3075
Re: Anyone a forced seller yet?
« Reply #23 on: March 23, 2020, 07:27:47 AM »
 I have not been forced to sell.
 Retired 1-1/2 years, 65 and 60 years old.
 I did sell $126k near the end of 2019, it was for 2020 expenses.
(over 1/2 is for kids college tuition)
This was LTCGs from a taxable account, I expect to pay 0% tax.
 I also sold $250k in tax deferred accounts on Mar 3, 2020, because of Covid 19.
 I sold these tax deferred accounts when VTSAX was down 11% from it's peak.
 It is now down another 24% since I sold.
 I won't know if this was a good plan until I re-buy, if I buy below
what I sold for, I did good, if I wait to long...
Selling was not part of my long term investing plan. Opps!