Holy stock market Batman!

[Miss Prim]

Went to check my portfolio today and we are down another $100,000 in one day!  So far we are $240,000 plus from our high!  We are 71 and 75 and have always ridden the market up and down, but now I am getting nervous!  What are people doing who don't have a long time to make this back up?  We are retired 10 years now and rely on our 4% distributions to live on as we only have SS, no pensions. 

   Miss Prim

[Gone Fishing]

What is your bond/stock split?

[MoseyingAlong]

Miss Prim,

When was your portfolio last at its current value? If it's like mine, maybe early last year (May 2024).
Where you okay then?

Hopefully you have some fixed income in your portfolio. This is exactly why I have a CD/bond ladder. The next 7 years of withdrawals are in fixed, very safe instruments.

If the treasury bills aren't worth anything when they mature, we will all have bigger issues than how our portfolios are doing.

[HPstache]

Went to check my portfolio today and we are down another $100,000 in one day!  So far we are $240,000 plus from our high!  We are 71 and 75 and have always ridden the market up and down, but now I am getting nervous!  What are people doing who don't have a long time to make this back up?  We are retired 10 years now and rely on our 4% distributions to live on as we only have SS, no pensions. 

   Miss Prim

Did you do anything when your portfolio dropped 30%+ in a couple of weeks in 2020?

[wenchsenior]

I've always had nerves of steel, but given that we are 3 years from retirement but my husband is very possibly going to fired this coming month (federal scientist), I moved about 350K of our 1.7 M cash to bonds and cash over the past month and the rest from about 90% stocks to about 70% stocks. Really feeling glad I did that.

[Zamboni]

Sorry to read that, Miss Prim. I hope you have enough to ride this out and not lock in the recent losses.

[Chris Pascale]

It's unnerving, but you are smart and can get through it. You have before.

[Dicey]

It's unnerving, but you are smart and can get through it. You have before.

^This^

Since you asked: what we're doing is Nothing. Before the election, we upped our equities position to 80%. Oof. However, we still hold about $550k in cheap mortgages on our rentals. If we consider them bonds, the ratio isn’t as crazy as it seems. We have a DB pension, rental income, and about two years of expenses in cash. At some point, we will collect SS, but who knows how much it will be?

The advice to stay the course has always worked in the past. I can't predict the future, but I'm going to stick to the plan.

[Rob_bob]

I looked at my portfolio, I'm down <3% from one year ago and still a little positive back to mid Apr. last year and I have been living off my stock heavy account since 2020.

[Telecaster]

Since you asked: what we're doing is Nothing.

Sound advice, I believe.   The options are to go to cash or to ride it out.   No guarantees which is the correction option, but most likely going to cash is the wrong choice.  When in doubt, do nothing is the best advice when it comes to investing.   

[Sandi_k]

Since you asked: what we're doing is Nothing.

Sound advice, I believe.   The options are to go to cash or to ride it out.   No guarantees which is the correction option, but most likely going to cash is the wrong choice.  When in doubt, do nothing is the best advice when it comes to investing.

Another option is to convert to Roth. More shares at a cheaper price, which means a lower tax hit.

I think I will convert a big chunk after April 15th; I don't want to pay estimated taxes this month, on top of taxes due for 2024. And then the second tranche in November, depending on whether the tax rates look to revert to pre-2017 levels, as currently planned.

[Dicey]

Since you asked: what we're doing is Nothing.

Sound advice, I believe.   The options are to go to cash or to ride it out.   No guarantees which is the correction option, but most likely going to cash is the wrong choice.  When in doubt, do nothing is the best advice when it comes to investing.

Another option is to convert to Roth. More shares at a cheaper price, which means a lower tax hit.

I think I will convert a big chunk after April 15th; I don't want to pay estimated taxes this month, on top of taxes due for 2024. And then the second tranche in November, depending on whether the tax rates look to revert to pre-2017 levels, as currently planned.

Great idea!

[DoubleDown]

What's funny/weird (but not really) is how we deal with FIRE naysayers who are asking a thousand versions of, "What will you do if?!" For example, what will you do if there's a recession that lasts 5-10 years? What will you do if the stock market goes down 50% and stays there? What will you do if you have a catastrophic health event? Our answer is generally some version of, "I have saved enough so that I can live the rest of my life without working, and can handle any reasonable/foreseeable events short of the collapse of the entire U.S. government and economy."

And now here we are, or at least possibly heading.

It is important to note, however, that I wouldn't change anything. Working forever or beyond your number needed to FIRE wouldn't make it any better, it would only make it worse that you didn't do the things you wanted to do. Having a job will be immaterial in the scenario of a collapse of society or nationalization of all money. Having accumulated wealth may at least provide some sort of advantage, and having resilience and life skills would definitely be very important.

[Miss Prim]

Thank you all for talking me down off the cliff!  I looked up my asset allocation with Fidelity and I am 78%Domestic  Stocks, 12% bonds, 1% Foreign stock, 7% short-term and 2% unknown.  I guess I got a little too aggressive with my portfolio!  We also have some funds with Edward Jones that my husband inherited and I know we are invested aggressively with them because this was money that we are going to pass on to our kids.  It is after tax money. 

I do have enough in short term to do my distributions this year, so thank goodness for that!  I forgot, we also hold a land contract with my son as we sold him our house.  He pays us roughly $1800 a month.  I did convert $50,000 last year to 2 Roth IRAs.  I was planning on converting more this year to Roth, so I will definitely do that.  Meanwhile, do you think I should change my portfolio to be less aggressive?    Miss Prim

[Sibley]

The other side of the equation is your expenses. Is there fluff in your budget you can cut if necessary? Or changes you could make if you needed to? Don't do anything crazy yet, but consider your options.

In the meantime, don't watch the market.

[reeshau]

Meanwhile, do you think I should change my portfolio to be less aggressive?    Miss Prim

Yes, I do; simply because your current positioning seems to be causing you to lose sleep.  Whatever is "right" is not a single answer,  but part of a unique answer for each person, that includes a lifetime blend of saving, spending, and experiences / achievements.

Reducing your projected growth may have some consequence you can foresee.  Maybe it just means less inheritance for your kids.  But you don't need to sacrifice now for things like that.  Take care of yourself, make sure you aren't causing yourself ulcers, then do the most good you can for others.

If you are in your 70's, and are participants here, you can probably put enough in CD's or TIPs to fund yourself to your personal life expectancy, plus some.  Anything more aggressive than that is for "want to haves," whether that is personal enjoyment, family, or charity.  Putting it all into absolutely safe investments is extreme, but perhaps putting your core spending into such an arrangement (or, hold your boos, an immediate annuity) could put your mind at ease.

[FLBiker]

I've always had nerves of steel, but given that we are 3 years from retirement but my husband is very possibly going to fired this coming month (federal scientist), I moved about 350K of our 1.7 M cash to bonds and cash over the past month and the rest from about 90% stocks to about 70% stocks. Really feeling glad I did that.

We're in a similar spot.  We're close to FI, and were accumulating cash (~$150K CAD) to pay off our mortgage as we approach RE.  I was laid off last month, though, so we're keeping that to cover expenses until the dust settles.  Like you, I'm very glad to have that on hand right now.  It's probably overkill (we had another ~$50K CAD as our normal emergency fund) but it gives some peace of mind.

[wenchsenior]

I've always had nerves of steel, but given that we are 3 years from retirement but my husband is very possibly going to fired this coming month (federal scientist), I moved about 350K of our 1.7 M cash to bonds and cash over the past month and the rest from about 90% stocks to about 70% stocks. Really feeling glad I did that.

We're in a similar spot.  We're close to FI, and were accumulating cash (~$150K CAD) to pay off our mortgage as we approach RE.  I was laid off last month, though, so we're keeping that to cover expenses until the dust settles.  Like you, I'm very glad to have that on hand right now.  It's probably overkill (we had another ~$50K CAD as our normal emergency fund) but it gives some peace of mind.

Yeah, I didn't even blink during the 2008 or Covid crashes and normally am all in on stocks; it goes against all my normal instincts to not pour money in during a market meltdown, but we were also stockpiling cash preparatory to retiring and with the administration engaged in slashing gov't jobs either illegally or totally without normal procedures (under 'normal' downsizing my husband's job would never be at risk but this is a free for all with zero predictability), things felt wildly different.

[Heckler]

1% Foreign stock

You are always welcome to increase your global diversification.  I was going to suggest to invest into Canada, but I'd rather look at VEA which is global, with only 10% of it to your northerly neighbours.

https://investor.vanguard.com/investment-products/etfs/profile/vea#portfolio-composition

[Chris Pascale]

1% Foreign stock

You are always welcome to increase your global diversification.  I was going to suggest to invest into Canada, but I'd rather look at VEA which is global, with only 10% of it to your northerly neighbours.

https://investor.vanguard.com/investment-products/etfs/profile/vea#portfolio-composition

I don't know. Do these guys look trustworthy?

[Heckler]

Definitely would not trust them further than I can hit a puck.

They’re also trailing in the polls by 7%

[Dave1442397]

We also have some funds with Edward Jones that my husband inherited and I know we are invested aggressively with them because this was money that we are going to pass on to our kids.

You might want to check into the charges on those accounts. As part of my job I can see their fee structure, and I personally wouldn't keep any money there. You may be ok, but you may also be much better off moving that money to Fidelity.

[evme]

We also have some funds with Edward Jones that my husband inherited and I know we are invested aggressively with them because this was money that we are going to pass on to our kids.

You might want to check into the charges on those accounts. As part of my job I can see their fee structure, and I personally wouldn't keep any money there. You may be ok, but you may also be much better off moving that money to Fidelity.

Yeah, don't Edward Jones advisors operate on a commission basis? So they get a cut of every trade you make and are thus incentivized to have you trading frequently?

[ATtiny85]

We also have some funds with Edward Jones that my husband inherited and I know we are invested aggressively with them because this was money that we are going to pass on to our kids.

You might want to check into the charges on those accounts. As part of my job I can see their fee structure, and I personally wouldn't keep any money there. You may be ok, but you may also be much better off moving that money to Fidelity.

Yeah, don't Edward Jones advisors operate on a commission basis? So they get a cut of every trade you make and are thus incentivized to have you trading frequently?

They have enough ways to drain your accounts that you are bound to like one of them…

If I had money I wanted to pass to my kids, EJ is not the way to do it. Hmm, unless the kids are EJ “advisors” I guess.

The impact of 1% fees, not even taking the other costs such as taxes into account, is incomprehensible over the long term. The amount you are forfeiting, for almost no gain, is simply wild. Plenty of fancy color graphics out there.

ETA this BH thread

Boglehead EJ rant

[GuitarStv]

1% Foreign stock

You are always welcome to increase your global diversification.  I was going to suggest to invest into Canada, but I'd rather look at VEA which is global, with only 10% of it to your northerly neighbours.

https://investor.vanguard.com/investment-products/etfs/profile/vea#portfolio-composition

I don't know. Do these guys look trustworthy?

Yes?