Yes,
In general, we are not going to let a temporary situation like a market drop fundamentally change how we are doing things. The goal is to just not SELL ALL THE THINGS at the low. Since we are reasoning adults in the family, and I am in change of the finances, we don't sell when things are very low unless we HAVE TO and then only what we MUST.
As pointed out- market crashes only last a set period of time. In our family we have chosen to plan for ~2 years, as I think the average is 18 months. We can run longer than that if needed. We have the ability to run very lean and still be very content.
Now a 70% drop isn't overly common, but I have to entertain this idea for several reasons:
1. Our money has three forms: our stache is in equities, in cash, and money markets.
The money in equities is to grow, the money in cash is to be spent (~1years worth), and the money market is the emergency fund (extra mortgage payments (~2 years), out of pocket maximums for medical insurance, etc).
2. Several of our investment are quite risky and have a lot of volatility on them so they swing more than the market. If the market drops 35%, it isn't uncommon for them to drop 70%. The same happens in reverse. We have a high risk tolerance and don't panic. These are the investments we choose to live off of year by year as they re-grow splendidly and are taxable accounts. During great market downturns, they tank fast, but recover quickly.
3. We have other investment that are less volatile, but are more like you S&P500 so not what most would consider less risky. They usually don't crash has hard, but can also take longer to recover.
If all our investments really tank and are going to remain suppressed for an unknown period of time, we would start by not taking anything out of the market and reducing spending. Then we can pick and choose which investments have fallen the least or recovered the most if we need to sell something, like to hit our ACA minimums for the year.
In March 2020, when the market was going wonky due to Covid, we thought it might tank for the year, so we picked a fund that was still up 10% and pulled out enough to hit our income minimum for ACA, just in case we went into a tailspin. Now that didn't happen, and waiting would have proven to have been much smarter, but we made the right call for the right reason with the information we had at the time. If I had to do it again, I'd make the same call.
Loren