Author Topic: Really trying not to panic  (Read 8241 times)

ACyclist

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Re: Really trying not to panic
« Reply #50 on: November 22, 2018, 11:53:58 AM »
HAHA.  I meant 65/35

LOL

clifp

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Re: Really trying not to panic
« Reply #51 on: November 22, 2018, 03:44:37 PM »
Maybe panic is too extreme of a word.  Fret might be more accurate.  Sorry to be dramatic. 
So, in March we came down about 10 grand.  I believe we came down about the same amount this time, only there is a lot more money in there.  Strange. 

The asset allocation of 75/35 feels right I guess.  I would probably fret if I dropped the retirement funds too low in equities.  Then, I would worry about not being aggressive enough.  :)

All I was trying to convey is that seeing the numbers go down, when you work so hard to build them up. 

Currently, ALL of my salary is being saved.  I don't quite make enough to max catch up 403b and do my medical ins stuff.  Out of my partners salary, we save half of his.  Actually, it is probably more, as I don't count the amount our companies give us in retirement.  My math was quick and dirty.

So, you set a number of what you think you need to leave work.  If you reach that, and the stock market tanks...I guess you end up working longer?

You're doing a great job saving, better than I did.  65/35 is perfectly fine AA for both the accumulation and also in retirement.  The one disadvantage of getting a substantial nest is the paper loss suddenly seem more important.   If you only have 20K saved a week or a month where your portfolio drops 5% or 10% is only 1,000-2,000, a week or two salary when you have $200K it is 10-20K paper loss that months of work, and when you have $2 million that's a $100-$200K that's a year or two.  In reality, more savings is obviously better than less and you should worry less.

. When I was working I viewed these perfectly normal dips as buying opportunities. But that's not how many people are wired.  I will say that once you are retired, market dips are more nerve wracking and the bear market of 2008/9 was downright scary. Since there isn't a way of rationalizing it. "Damn, I'll just have to work an extra year.".   So the one thing you may seriously want to consider in retirement is a different AA.  If you are nervous now while still working, you might need a more conservative AA like 50/50 in retirement. Which does mean you'll probably want to work and extra year or two.

sol

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Re: Really trying not to panic
« Reply #52 on: November 22, 2018, 05:12:28 PM »
I often wondered how people that started investing in the last 10 years will react when / if SHTF because many are ill prepared and have seen such amazing gains in stocks and real estate that they feel invincible.

Not only did I start investing in the last ten years, I just retired right before the current dip.  I should really be the poster child for MMM forum members who are freaking out right now.

Instead, I've been checking the market a whole lot less than I used to.  It's all just noise, at this point.  Our account balances fluctuate every day by an amount that is months of our normal spending.  I only need my assets to last approximately 20 years, so even if they were to average zero percent return for the next two decades I could still pull roughly 5% per year and survive it. 

Basically, if you're following the 4% rule in retirement, any year that the markets return more than 0% is just bonus money.  Over decades, the CAGR has always been positive, no exceptions.  It will all work itself out eventually, so why stress?

Exflyboy

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Re: Really trying not to panic
« Reply #53 on: November 23, 2018, 09:10:40 AM »
My only issue is I have to raise cash before the end of the year to set our MAGI where we need it to be ($30K).

I'd rather not do that when the market is tanking.. But if it is I will simply pull the money from Bond funds rather than stocks.

terran

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Re: Really trying not to panic
« Reply #54 on: November 23, 2018, 09:20:50 AM »
My only issue is I have to raise cash before the end of the year to set our MAGI where we need it to be ($30K).

I'd rather not do that when the market is tanking.. But if it is I will simply pull the money from Bond funds rather than stocks.

If all you're trying to do it raise your MAGI and not spend the money you can just capital gain harvest by selling investments with capital gains and immediately buy the same investments back again. There's no waiting period for capital gains harvesting like there is for capital loss harvesting. The brokerage may have rules against this with certain mutual funds (I know Fidelity won't let you sell within 30 days of buying their funds in the same account, not sure about the reverse) but ETFs wouldn't have this issue.

Exflyboy

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Re: Really trying not to panic
« Reply #55 on: November 23, 2018, 09:24:12 AM »
My only issue is I have to raise cash before the end of the year to set our MAGI where we need it to be ($30K).

I'd rather not do that when the market is tanking.. But if it is I will simply pull the money from Bond funds rather than stocks.

If all you're trying to do it raise your MAGI and not spend the money you can just capital gain harvest by selling investments with capital gains and immediately buy the same investments back again. There's no waiting period for capital gains harvesting like there is for capital loss harvesting. The brokerage may have rules against this with certain mutual funds (I know Fidelity won't let you sell within 30 days of buying their funds in the same account, not sure about the reverse) but ETFs wouldn't have this issue.

Agreed.. What I should have explained was that I also need to top up our cash fund by about $25k. Selling 25k's worth of VTSAX in our taxable account will generate about $11k in AGI... This brings our MAGI up to $30k.

markbike528CBX

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Re: Really trying not to panic
« Reply #56 on: November 23, 2018, 09:25:13 AM »
Maybe panic is too extreme of a word.  Fret might be more accurate.  Sorry to be dramatic. 
....snip...

All I was trying to convey is that seeing the numbers go down, when you work so hard to build them up. 
....snip...
Look on the bright side, your click-baity thread title drew out lots of responses from forum old-timers who have been where you’re at now.   
Yep, it’s irritating to be down on your investments, but nothing more than that in the accumulation phase.

nihilism122

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Re: Really trying not to panic
« Reply #57 on: November 23, 2018, 12:54:26 PM »
Why would you panic?  The SP 500 is basically flat over the past 12 months.  Keep buying. 

Reader

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Re: Really trying not to panic
« Reply #58 on: November 24, 2018, 01:55:15 AM »
I only need my assets to last approximately 20 years, so even if they were to average zero percent return for the next two decades I could still pull roughly 5% per year and survive it. 
i'm curious.. your profile says you're 41 and you need your assets to last for only 20 years? how does that work out?

smoghat

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Re: Really trying not to panic
« Reply #59 on: November 24, 2018, 08:20:05 AM »
I put some money in bonds in 2016 simply because everyone told me to. It was dumb. I donít see how I will ever get that money back.

Iím actually pretty happy now because I put about 1/4 of my stash into consumer staples instead of VTSAX, figuring that the recession would start in 2017. Well I was wrong. Consumer staples have been doing pretty badly, part of what Morgan Stanley and early leader in the ďrolling sectoral bear market.Ē Now they are doing significantly better, finally delivering real gains. Every correction is unique. It may be that this one will happen in stages. If so, then my strategy will have paid off. If not, oh well, Iím still FIREíd and my spend will have to go down.

sol

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Re: Really trying not to panic
« Reply #60 on: November 24, 2018, 09:27:32 AM »
i'm curious.. your profile says you're 41 and you need your assets to last for only 20 years? how does that work out?

I'm almost 42, and my spouse is a little older than I am.  In approximately 2038, we will have access to social security and pension income that equals our anticipated inflation adjusted expenses.  This biggest chunk of that income actually starts in 2033, with other smaller pieces showing up later.  I have a spreadsheet.
« Last Edit: November 24, 2018, 09:30:37 AM by sol »

AdrianC

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Re: Really trying not to panic
« Reply #61 on: November 24, 2018, 10:38:53 AM »
I put some money in bonds in 2016 simply because everyone told me to. It was dumb. I donít see how I will ever get that money back.

Putting money in bonds wasn't the dumb part.

Having some money in bonds is just fine, especially if you're FIRE. It's in our plan to have X years expenses in stable assets. No regrets. I remember 08/09. We were down 50% of net worth. It was brutal.

Texconsin

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Re: Really trying not to panic
« Reply #62 on: November 24, 2018, 01:05:46 PM »
The asset allocation of 75/35 feels right I guess.

Investing 110%, a bold strategy!

I like it when I'm teamed with a co-worker who gives 110%, requiring me to give just 90.

Texconsin

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Re: Really trying not to panic
« Reply #63 on: November 24, 2018, 01:35:04 PM »
I'm not a big fan of bonds...they seem zero-sum to me.  Right now, I'm finding 12 month 3.0% APY CDs attractive, until rates go even higher.  Also, I just sold my old home, have the new (to me) one at 3.25% for 30 (could have done 2.75% for 15, but 3.25% is cheap money and the flexibility is priceless) and I parked $150K of the sales proceeds into a 60-day deal with Capital One that pays 2.0% interest plus $1K bonus, giving me over 6%, short-term and time to find the next deal out there.  I expect to have a lot of time [and a decent cash-out of my 80/20 401(k)] in my upcoming retirement to play the banks (for a change) for safe returns, until P/E ratios get real again.  I'm not rich and I won't get rich in fixed instruments, but I'm not going to let FOMO derail my retirement...if only the market can hold out for 6 more months, until I'm out of the 401(k)!!!

John Galt incarnate!

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Re: Really trying not to panic
« Reply #64 on: November 28, 2018, 01:15:45 PM »
No more repeats of 2008.

So, you people in VTSAX and the like, how do you deal with seeing thousands down?  Tens of thousands down?

It hurts right?

I used to deal with a volatile stock  market by looking at a poster as described below.

I don't worry about  stock-market volatility anymore because as  a seasoned investor I know the market's   zigs and zags, its fluctuations,  are  inevitable.

I advise  jittery investors (friends and family members) to get a  graph  of historical stock-market returns, one  with a regression line, and have it enlarged.

I tell them 1,2, and 3.

1. Make it a big poster.

2, Pin it to the wall of your office, workshop, bedroom, etc.

3. Pay attention to the regression line's positive slope to ease the jitters.

HAPPY INVE$TING!
« Last Edit: November 28, 2018, 01:22:47 PM by John Galt incarnate! »

Exflyboy

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Re: Really trying not to panic
« Reply #65 on: November 28, 2018, 03:28:55 PM »
Looks like it "zigged" pretty good today.

of course thats because I sold $35k's worth of VTASX 2 days ago...:)

Mighty-Dollar

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Re: Really trying not to panic
« Reply #66 on: November 28, 2018, 08:21:29 PM »
DOW up 617 points today. This is looking more and more like the head fake of 2015 - 2016 and the head fake of early 2018. Like Lucy pulling the football away from Charlie Brown. The suckers sell. Selling after it has already dropped 10% is a fool's game. You're suppose to sell into strength if you're going to sell. Buy low, sell high.

Exflyboy

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Re: Really trying not to panic
« Reply #67 on: November 28, 2018, 10:29:09 PM »
DOW up 617 points today. This is looking more and more like the head fake of 2015 - 2016 and the head fake of early 2018. Like Lucy pulling the football away from Charlie Brown. The suckers sell. Selling after it has already dropped 10% is a fool's game. You're suppose to sell into strength if you're going to sell. Buy low, sell high.

Or when you need to top up your cash reserves as in my case