Author Topic: Do You Still Sleep at Night ?  (Read 11890 times)

Le Barbu

  • Handlebar Stache
  • *****
  • Posts: 1051
  • Age: 48
  • Location: Québec
  • I really didn’t say everything I said - Y. B.
Do You Still Sleep at Night ?
« on: October 17, 2014, 01:21:49 PM »
Am I the only one annoyed by those “sleep at night” comments about stock market?

I’m suspecting many members lurking in Investor Alley to not being Mustachian/Badass at all.

Is there a takeover of this forum by the FINANCIAL INDUSTRY peoples losing their job or what?

Shall I remember that we are here because we are juuuuust a bit different than average. We are resilient, we spend only a few, we find solutions to problems, we get information we need, we enjoy being free etc. So, please stop telling us that stock market can lose 30%, 40% or even 50% because IT WILL and we all know about it. Let the so called “professionals” of investing industry telling this BLABLABLA to average peoples, please. I quit them for long now.

Back to the sleep at night thing:

As building my STASH from 1998 till now, I went through many downturns of the market and, most of the time, I was more upset to not being able to put more money toward investing than losing my sleep! The only time I taught about money instead of getting some sleep was when I bought a brand new Civic DX (back in 2002) and when I had a huge house/mortgage (back in 2004). Probably my weakest link is about having some debt, especially non-productive debt…anyway.

On the opposite, I really do like is having a positive and simple cash flow and never kept any emergency fund at all in the last 20 years (OMG!!!! What the Financial Industry would think about it, not having XXmonth/years of spending, idling and sitting still in my checking account). Meanwhile, I maxed out every pension plan and tax sheltered accounts every given year since my first paycheck.

For sure, you have to know YOURSELF a lot to be comfortable with YOUR decisions and YOUR plan to reach YOUR goals. So when I turned out Mustachian last year, I decided to reduce my commute/clown-like-driving-habits by 30% (to be at 35% of average peoples level), I increased my savings by 25% (to be at 500% average people level), I started biking everywhere in town (no % compared to the average because nobody ever do that around me, I’m one of the most Badass in town), I began weight lifting again, I stop dinning out, I spend more time playing with my 2 sons and read books with them etc.

So, when I stop by and post on this forum to get advices from MUSTACHIANS, I expect something else than the common talk that surrounds us in The Matrix. Most of us are here because we have no one else interested enough (eyes glazed over anyone?) around us to talk about those subjects.

I can give an example of useful comment I got here few days ago. I was about to start some leverage investing and asked for Mustachian/Investor comments on the plan I submitted. One of our fellows here, beltim, made me realize that there was maybe another way to go for me. SO I ran the numbers and probabilities* for my situation. The final result turned out to be about the same but WHITOUT leverage. Long story short, I just sold my bonds to increase my stock % (and fortunately, there was a sale on stock this week AND some scary peoples where looking for some bonds I was glad to sell).

And for those advocating they are Buffet-skilled to value and pick stocks, can you also value bonds, cash, gold, oil, corn etc? I need to put my money somewhere to be FI ASAP, keep up with inflation and grow my spending power over time. The best place I find until now is STOCKS MARKET.

Everyone as his own view and idea but we can all save a lot of unuseful post reading if we remind yourself to be juuuuust a bit MUSTACHIAN when posting around here.

*Not possibilities, I really mean PROBABILITIES
« Last Edit: October 17, 2014, 02:11:10 PM by Le Barbu »

surfhb

  • Guest
Re: Do You Still Sleep at Night ?
« Reply #1 on: October 17, 2014, 02:08:43 PM »
I'd be wiling to bet most on this forum weren't investing the last 15 years, too young to care or only started investing the last 6 years or so.   :).

For myself, I'm rather happy now knowing first hand what extreme bear markets can do to someone's net worth when one doesn't have a good investing plan and falls to stick to that plan

Le Barbu

  • Handlebar Stache
  • *****
  • Posts: 1051
  • Age: 48
  • Location: Québec
  • I really didn’t say everything I said - Y. B.
Re: Do You Still Sleep at Night ?
« Reply #2 on: October 17, 2014, 02:20:31 PM »
I agree, but I wish 15 years ago a Mustachian told me to do Index Investing, dont buy bonds untill I hit the 1M$ mark, never buy a new car, buy a small house close to your job etc. I would be FI by now. Unfortunatly, I'ts still 5-10 years away !
« Last Edit: October 17, 2014, 02:22:26 PM by Le Barbu »

Beric01

  • Handlebar Stache
  • *****
  • Posts: 1156
  • Age: 30
  • Location: SF Bay Area
  • Law-abiding cyclist
Re: Do You Still Sleep at Night ?
« Reply #3 on: October 17, 2014, 02:41:01 PM »
I'd be wiling to bet most on this forum weren't investing the last 15 years, too young to care or only started investing the last 6 years or so.   :).

For myself, I'm rather happy now knowing first hand what extreme bear markets can do to someone's net worth when one doesn't have a good investing plan and falls to stick to that plan

I got into the market less than 2 years ago, but I'd be fine if my investments lost half their value in the short term. The important point is to be investing for the long term. Ups and downs, even large ones, are expected to happen.

Terrestrial

  • Bristles
  • ***
  • Posts: 296
Re: Do You Still Sleep at Night ?
« Reply #4 on: October 17, 2014, 04:04:28 PM »
I sleep like a baby.  All the money I invested I don't need anytime soon.  Why worry myself about short term volatility.

Jon_Snow

  • Magnum Stache
  • ******
  • Posts: 3900
  • Location: An Island in the Salish Sea (or Baja)
  • I am no man’s chair.
Re: Do You Still Sleep at Night ?
« Reply #5 on: October 17, 2014, 04:31:49 PM »
I have never slept better.

Though that is probably because I don't have to go to work anymore.

The only thing that might alter my sleep patterns would be if companies I own started cutting or eliminating dividends. As long as the continue to roll in, I will continue to sleep wonderfully.

Retired To Win

  • Handlebar Stache
  • *****
  • Posts: 1494
  • Age: 72
  • Location: Virginia
  • making the most of my time and my money
    • Retired To Win
Re: Do You Still Sleep at Night ?
« Reply #6 on: October 17, 2014, 06:07:45 PM »
I have never slept better.

Though that is probably because I don't have to go to work anymore.

The only thing that might alter my sleep patterns would be if companies I own started cutting or eliminating dividends. As long as the continue to roll in, I will continue to sleep wonderfully.


Same story here!

Beric01

  • Handlebar Stache
  • *****
  • Posts: 1156
  • Age: 30
  • Location: SF Bay Area
  • Law-abiding cyclist
Re: Do You Still Sleep at Night ?
« Reply #7 on: October 17, 2014, 06:25:21 PM »
The only thing that might alter my sleep patterns would be if companies I own started cutting or eliminating dividends. As long as the continue to roll in, I will continue to sleep wonderfully.

And that's why I like index funds. As long as the stock and bond markets continue to operate, I'm fine over the long term.

Le Barbu

  • Handlebar Stache
  • *****
  • Posts: 1051
  • Age: 48
  • Location: Québec
  • I really didn’t say everything I said - Y. B.
Re: Do You Still Sleep at Night ?
« Reply #8 on: October 17, 2014, 07:23:38 PM »
The only thing that might alter my sleep patterns would be if companies I own started cutting or eliminating dividends. As long as the continue to roll in, I will continue to sleep wonderfully.

And that's why I like index funds. As long as the stock and bond markets continue to operate, I'm fine over the long term.

Me to, I wish the 9,000 co. I own across 40 countries stay in business for a while
« Last Edit: October 17, 2014, 07:25:22 PM by Le Barbu »

ScroogeMcDutch

  • 5 O'Clock Shadow
  • *
  • Posts: 86
Re: Do You Still Sleep at Night ?
« Reply #9 on: October 18, 2014, 05:34:10 AM »
Not everyone has the same risk-tolerance and the mindset change also requires some time to adapt to. While I am not saying you, Le Barbu, don't have it, but many people here only recently started investing (myself included) and haven't seen a major downturn yet. I only have 30% of my NW on the stockmarket at the moment, did all the math, did all the scenarios, ran the tax scenarios (which, given that I am dutch, are very different from the US) and picked the one that actually profits a lot by a downturn followed by an upturn. Regardless, watching the market go down did make me a bit queasy, even though it's money I don't need. I still have to find my risk tolerance for amounts that big swinging up and down.

matchewed

  • Magnum Stache
  • ******
  • Posts: 4381
  • Location: CT
Re: Do You Still Sleep at Night ?
« Reply #10 on: October 18, 2014, 10:04:01 AM »
Not everyone has the same risk-tolerance and the mindset change also requires some time to adapt to. While I am not saying you, Le Barbu, don't have it, but many people here only recently started investing (myself included) and haven't seen a major downturn yet. I only have 30% of my NW on the stockmarket at the moment, did all the math, did all the scenarios, ran the tax scenarios (which, given that I am dutch, are very different from the US) and picked the one that actually profits a lot by a downturn followed by an upturn. Regardless, watching the market go down did make me a bit queasy, even though it's money I don't need. I still have to find my risk tolerance for amounts that big swinging up and down.

Well that's easy. It is called an asset allocation. You take an asset allocation which matches your risk tolerance and desired/anticipated return over the long haul. If you find yourself reacting to short term fluctuations you either need to tone down the AA to a more conservative bent, stop paying attention to short term fluctuations, or stop letting short term fluctuations influence your decisions (the second option is generally advisable). :)

ScroogeMcDutch

  • 5 O'Clock Shadow
  • *
  • Posts: 86
Re: Do You Still Sleep at Night ?
« Reply #11 on: October 18, 2014, 10:14:13 AM »
I "forced" the second option by choosing a mutual fund tracking MSCI world / emerging / europe through Vanguard and Northern trust that only trades once a week on friday afternoon, and needs to have buy/sell orders given to them by wednesday. Means that market timing and knee-jerk reactions already have a first hurdle. My AA is definitely something I should work on, currently have 30% stocks, but most of my money is either in a savings account or tied up in relatively profitable loans (4-6% interest, low risk).

Lyssa

  • Bristles
  • ***
  • Posts: 491
  • Location: Germany
Re: Do You Still Sleep at Night ?
« Reply #12 on: October 18, 2014, 11:26:40 AM »
I "forced" the second option by choosing a mutual fund tracking MSCI world / emerging / europe through Vanguard and Northern trust that only trades once a week on friday afternoon, and needs to have buy/sell orders given to them by wednesday.

Interesting, I didn't even know that there are funds trading only once a week.

One more trick to prevent yourself doing something foolish: If you notice during a downturn that you may be about to sell low, intentionally disable your account by entering the password wrong the required amount of times.
« Last Edit: October 18, 2014, 12:50:59 PM by Lyssa »

NinetyFour

  • Walrus Stache
  • *******
  • Posts: 7056
  • Location: Southwestern US
Re: Do You Still Sleep at Night ?
« Reply #13 on: October 18, 2014, 12:26:15 PM »
The daughter of a friend of mine was driving once and noticed that the dashboard indicator showed that she had very little gas left.  This made her quite nervous as she was in the middle of nowhere at the time.  Her solution was to cover up the indicator.  (Eventually, she made it to a gas station before running out of gas.)

I use the same technique during a market downturn.  I don't look.  And I won't look (at my investment accounts) until the markets go up again a considerable amount (or at year's end, if that comes first).

Yes, it took me some time to stop worrying about downturns.  I now have faith that the markets, in general, in time, will go up.  As I am in my 50s, I don't have lots of time like those in their 30s do, but I still do have time to ride out a downturn.  And in the meantime, I have more than enough $$ coming in, so there's nothing for me to worry about.

Now if I could just get my rotator cuff healed up, I might be able to sleep well at night.

AccidentalMiser

  • Pencil Stache
  • ****
  • Posts: 661
  • Age: 52
  • Location: SE Tenn
Re: Do You Still Sleep at Night ?
« Reply #14 on: October 18, 2014, 12:55:07 PM »
Since I never intend to sell another stock, just live off the dividends and pass the stocks on to my kids and charities, I actually love down days.  I wait for my price alert, put in my order, and live my life.

I check my 'folio every day, but I'm just like that.  I don't fret over it any more.

ScroogeMcDutch

  • 5 O'Clock Shadow
  • *
  • Posts: 86
Re: Do You Still Sleep at Night ?
« Reply #15 on: October 18, 2014, 03:48:13 PM »
I "forced" the second option by choosing a mutual fund tracking MSCI world / emerging / europe through Vanguard and Northern trust that only trades once a week on friday afternoon, and needs to have buy/sell orders given to them by wednesday.

Interesting, I didn't even know that there are funds trading only once a week.

One more trick to prevent yourself doing something foolish: If you notice during a downturn that you may be about to sell low, intentionally disable your account by entering the password wrong the required amount of times.

It's a Dutch company. They just trade vanguard and northern trust, and do charge some additional TER (0.5% on international and europa, 0.85% on emerging). Pays itself somewhat that they take care of avoiding a socalled dividend leak that pops up when you are dutch, buy an irish etf that owns american stock which eats away about 0.5% annually as well. Either have to do that, or buy the ETFs in USD on the US stock exchange, which costs us quite a bit in fees.

oldtoyota

  • Magnum Stache
  • ******
  • Posts: 3171
Re: Do You Still Sleep at Night ?
« Reply #16 on: October 18, 2014, 03:52:33 PM »
I agree, but I wish 15 years ago a Mustachian told me to do Index Investing, dont buy bonds untill I hit the 1M$ mark, never buy a new car, buy a small house close to your job etc. I would be FI by now. Unfortunatly, I'ts still 5-10 years away !

Why should one not buy bonds until hitting $1M?

Elderwood17

  • Pencil Stache
  • ****
  • Posts: 525
  • Location: Western North Carolina
Re: Do You Still Sleep at Night ?
« Reply #17 on: October 18, 2014, 05:39:25 PM »
Doesn't bother me that things are on sale right now!  Means I get a little more for my monthly investment and the dividends are buying more shares too.  Unless you need that stock value to pay the bills some time soon, sleep well.

MikeBear

  • Bristles
  • ***
  • Posts: 390
  • Age: 61
  • Location: Michigan
Re: Do You Still Sleep at Night ?
« Reply #18 on: October 18, 2014, 06:25:35 PM »
Now if I could just get my rotator cuff healed up, I might be able to sleep well at night.

FYI, I damaged mine 4 years ago pretty bad (laid down my motorcycle on stonecrete, and I was wearing a short-sleeve shirt, stupid me, lost a lot of skin, and it caused a major outbreak of Shingles) Age 51 at the time. It took 1.5 years for it to heal back to "normal". I almost had surgery, but talked myself out of it a couple times.

The main thing is to keep moving it around without actually forcing it where it hurts you too much. IF you don't do that, you can get something permanent called "frozen shoulder", which I'm told you should avoid at all cost.

Probably the hardest part, is trying to figure out a way to sleep without hurting it. In my case it was my left shoulder, I'm a side sleeper and that's the side I need to lay on.

Le Barbu

  • Handlebar Stache
  • *****
  • Posts: 1051
  • Age: 48
  • Location: Québec
  • I really didn’t say everything I said - Y. B.
Re: Do You Still Sleep at Night ?p
« Reply #19 on: October 18, 2014, 06:46:39 PM »
I agree, but I wish 15 years ago a Mustachian told me to do Index Investing, dont buy bonds untill I hit the 1M$ mark, never buy a new car, buy a small house close to your job etc. I would be FI by now. Unfortunatly, I'ts still 5-10 years away !

Why should one not buy bonds until hitting $1M?

I dont mean this rule is for everyone, at least, it´s mine. For some, bonds are usefull to smooth the ride. For me, it´s just a dragging downforce. I will introduce short gov bonds for about 10% when over 1M$. I dont recommend we should all do the same.

justchristine

  • Bristles
  • ***
  • Posts: 407
Re: Do You Still Sleep at Night ?
« Reply #20 on: October 18, 2014, 07:18:56 PM »
I've started just skipping those threads because I just get frustrated.  If you can't sleep at night because you're worried about your portfolio, then you either don't know how the markets work or you are too aggressive with your asset allocation. 

Personally, I'm sleeping fine.  My net worth is only down 2.3% from its high earlier this year which is just a blip in the grand scheme of things.  Of course, that's propped up a bit my my taxable account which is killing it this year :D

Dicey

  • Senior Mustachian
  • ********
  • Posts: 13714
  • Age: 62
  • Location: NorCal
Re: Do You Still Sleep at Night ?
« Reply #21 on: October 18, 2014, 11:13:24 PM »
Roughly, for every point interest rates rise, bonds drop six points. If you don't understand what this means, don't buy bonds unless/until you do. I'm sure someone with more financial knowledge can "splain" it better than I.

Big Boots Buddha

  • 5 O'Clock Shadow
  • *
  • Posts: 99
  • Age: 39
  • Location: NE China
Re: Do You Still Sleep at Night ?
« Reply #22 on: October 19, 2014, 05:22:32 AM »
Now if I could just get my rotator cuff healed up, I might be able to sleep well at night.

FYI, I damaged mine 4 years ago pretty bad (laid down my motorcycle on stonecrete, and I was wearing a short-sleeve shirt, stupid me, lost a lot of skin, and it caused a major outbreak of Shingles) Age 51 at the time. It took 1.5 years for it to heal back to "normal". I almost had surgery, but talked myself out of it a couple times.

The main thing is to keep moving it around without actually forcing it where it hurts you too much. IF you don't do that, you can get something permanent called "frozen shoulder", which I'm told you should avoid at all cost.

Probably the hardest part, is trying to figure out a way to sleep without hurting it. In my case it was my left shoulder, I'm a side sleeper and that's the side I need to lay on.

Sorry for this de-railment.

Rotator Cuff. I hurt my shoulder 13 months ago and after 3-4 months it felt a lot better. I started lifting and hurt it again 3 months ago but now I think its going to take longer. Maybe it didnt heal all the way.

I've heard these things take forever to heal since its a ball in socket joint with so many small muscles connecting in different directions.

Well boo-hoo. This is going to take patience. I want to lift.

De-railment over.

soccerluvof4

  • Walrus Stache
  • *******
  • Posts: 6046
  • Location: Artic Midwest
  • Retired at 50
    • My Journal
Re: Do You Still Sleep at Night ?
« Reply #23 on: October 19, 2014, 06:04:09 AM »
My lack of sleep at night is not due to my investments , just never been a solid sleeper!

grettman

  • 5 O'Clock Shadow
  • *
  • Posts: 84
Re: Do You Still Sleep at Night ?
« Reply #24 on: October 19, 2014, 06:30:38 AM »
I agree, but I wish 15 years ago a Mustachian told me to do Index Investing, dont buy bonds untill I hit the 1M$ mark, never buy a new car, buy a small house close to your job etc. I would be FI by now. Unfortunatly, I'ts still 5-10 years away !

This quote hits a cord for me.  If anything, there are times a go to bed at night wishing a did more "back then" than I do worrying about the market.  I too wish I had a mustachian guide me when I was younger. 

In fact, when the market takes it on the chin I kinda grin when I go to bed because I am confident in my plan.  It makes me feel easy that I don't need this money for many years to come and that that corrections are natural part of the market place.  I continue to BUY BUY BUY as my plan dictates that I do ---  I also feel good knowing that I have some amount of money in CDs for those "non retirement" plans that I might develop in the future and because it is safe, I am not beholden to the market getting back up there any time soon.

JetBlast

  • Bristles
  • ***
  • Posts: 397
Re: Do You Still Sleep at Night ?
« Reply #25 on: October 19, 2014, 09:07:35 AM »
I sleep just fine. I had the stomach to trim my budget and put it in my 401k during the meltdown in 2008 and 2009 so I'm not too worried about keeping my head in a downturn. My 401k is being added to every two weeks spread between index funds for large, mid, and small caps and I have no intention to change that. I did have to calm my wife down a few days ago when she came to me and said "My vanguard is down over $6,000! What do I do?"  Of course I said do nothing.

YoungInvestor

  • Bristles
  • ***
  • Posts: 411
Re: Do You Still Sleep at Night ?
« Reply #26 on: October 19, 2014, 09:30:33 PM »
Roughly, for every point interest rates rise, bonds drop six points. If you don't understand what this means, don't buy bonds unless/until you do. I'm sure someone with more financial knowledge can "splain" it better than I.

No idea where the above poster got this 6% figure (It actually depends (a lot) on the term of the bond) but anyway, here goes:

The variation in price is highly dependent on the term:

To make a simple example, let's imagine that you buy a bond paying you 100$ in one year (with no coupons in this example) at a 5% rate (You pay 100/1.05 = 95.23$).

Later that day, rates investors want for this type of bonds jump up to 6%. That same bond is now worth 94.33$(100/1.06) if you want to sell it. This is roughly a 1% loss in market value.

Now, pretend that the bond was for 10 years. At 5%, it cost you 61.39$ (100/1.05^10). If the rates go to 6%, it is now worth 55.83$ (Or, roughly, a 10% loss).

God or Mammon?

  • Stubble
  • **
  • Posts: 173
Re: Do You Still Sleep at Night ?
« Reply #27 on: October 20, 2014, 01:11:15 AM »
Am I the only one annoyed by those “sleep at night” comments about stock market?

I’m suspecting many members lurking in Investor Alley to not being Mustachian/Badass at all.

Is there a takeover of this forum by the FINANCIAL INDUSTRY peoples losing their job or what?

Shall I remember that we are here because we are juuuuust a bit different than average. We are resilient, we spend only a few, we find solutions to problems, we get information we need, we enjoy being free etc. So, please stop telling us that stock market can lose 30%, 40% or even 50% because IT WILL and we all know about it. Let the so called “professionals” of investing industry telling this BLABLABLA to average peoples, please. I quit them for long now.

Back to the sleep at night thing:

As building my STASH from 1998 till now, I went through many downturns of the market and, most of the time, I was more upset to not being able to put more money toward investing than losing my sleep! The only time I taught about money instead of getting some sleep was when I bought a brand new Civic DX (back in 2002) and when I had a huge house/mortgage (back in 2004). Probably my weakest link is about having some debt, especially non-productive debt…anyway.

On the opposite, I really do like is having a positive and simple cash flow and never kept any emergency fund at all in the last 20 years (OMG!!!! What the Financial Industry would think about it, not having XXmonth/years of spending, idling and sitting still in my checking account). Meanwhile, I maxed out every pension plan and tax sheltered accounts every given year since my first paycheck.

For sure, you have to know YOURSELF a lot to be comfortable with YOUR decisions and YOUR plan to reach YOUR goals. So when I turned out Mustachian last year, I decided to reduce my commute/clown-like-driving-habits by 30% (to be at 35% of average peoples level), I increased my savings by 25% (to be at 500% average people level), I started biking everywhere in town (no % compared to the average because nobody ever do that around me, I’m one of the most Badass in town), I began weight lifting again, I stop dinning out, I spend more time playing with my 2 sons and read books with them etc.

So, when I stop by and post on this forum to get advices from MUSTACHIANS, I expect something else than the common talk that surrounds us in The Matrix. Most of us are here because we have no one else interested enough (eyes glazed over anyone?) around us to talk about those subjects.

I can give an example of useful comment I got here few days ago. I was about to start some leverage investing and asked for Mustachian/Investor comments on the plan I submitted. One of our fellows here, beltim, made me realize that there was maybe another way to go for me. SO I ran the numbers and probabilities* for my situation. The final result turned out to be about the same but WHITOUT leverage. Long story short, I just sold my bonds to increase my stock % (and fortunately, there was a sale on stock this week AND some scary peoples where looking for some bonds I was glad to sell).

And for those advocating they are Buffet-skilled to value and pick stocks, can you also value bonds, cash, gold, oil, corn etc? I need to put my money somewhere to be FI ASAP, keep up with inflation and grow my spending power over time. The best place I find until now is STOCKS MARKET.

Everyone as his own view and idea but we can all save a lot of unuseful post reading if we remind yourself to be juuuuust a bit MUSTACHIAN when posting around here.

*Not possibilities, I really mean PROBABILITIES

Ok I'll bite and play devil's advocate and argue for the importance of sequence of returns risk and having the proper portfolio allocation for anticipated cash flow needs

You say you started investing in 1998 - not a great time to buy when one looks at the long term chart

If you bought a car in 2002 and a house sometime between 1998 and 2004 (sounds like 2004 but unclear) and had to sell stocks to fund the purchases you were most likely underwater on any equity investments from 1998 until both of those times.  If you strayed from low cost, broad diversified index investments and dabbled in the internet darlings of the time you were even worse off.  So every dollar you plowed into the market was poorly invested because you did not properly anticipate two very common major life cycle purchases.

The average duration (typically defined as sensitivity of price to interest rate change, in this case approximates holding period in which an investor gets his money back) right now for equities is almost 50yrs, and 10yr govt bond is roughly 9 years.  If you need the cash from your investment portfolio anytime soon, it should be heavily weighted towards short term bonds and very little in stocks, otherwise you are gambling on sequence of returns and overestimating the probability the mkt will be up when you need to withdraw the cash in a short period of time.

Le Barbu

  • Handlebar Stache
  • *****
  • Posts: 1051
  • Age: 48
  • Location: Québec
  • I really didn’t say everything I said - Y. B.
Re: Do You Still Sleep at Night ?
« Reply #28 on: October 20, 2014, 04:28:00 AM »
You mean that short gov bonds should return the same in the next 10 years than stock market in the next 50 years ? Not sure I get it...

Why would someone withdraw stock index funds to buy a car (or house) ?

God or Mammon?

  • Stubble
  • **
  • Posts: 173
Re: Do You Still Sleep at Night ?
« Reply #29 on: October 20, 2014, 09:03:57 AM »
Why would someone withdraw stock index funds to buy a car (or house) ?
It sounded like you did, as the outlay for purchasing a new car with cash and paying a big downpmt on a house with a huge mortgage would require such unless you had a huge allocation to cash and short term bonds

Le Barbu

  • Handlebar Stache
  • *****
  • Posts: 1051
  • Age: 48
  • Location: Québec
  • I really didn’t say everything I said - Y. B.
Re: Do You Still Sleep at Night ?
« Reply #30 on: October 20, 2014, 10:44:54 AM »
New car was financed and the house has a huge mortgage.

Now, I will never finance a car again or even worst, buy a new one. We downsized the house in 2007 while moving closer to work and our mortgage will be repaid in about 4 years.

Thats why my cashflow is always improving and I realy dont care about market moves.

Datastache

  • 5 O'Clock Shadow
  • *
  • Posts: 85
Re: Do You Still Sleep at Night ?
« Reply #31 on: October 20, 2014, 10:30:15 PM »
People can post whatever they want. Personally, I'm sleeping just fine. If the market dips, I view it as a sale; if it goes back up again, I enjoy watching the graph of my net worth go up. I'm not planning on dipping into these funds for decades to come.