How did you get through the market crash in 08-09

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Meaty
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Re: How did you get through the market crash in 08-09

Post by Meaty »

BerkeleyChris wrote:i viewed it as a buying opportunity. everything was on sale and I bought as much as i could. and, when thinking about what i had that I "lost" in the crash, i thought about having another ~40 years to bounce back...
+1. I even sold a car (downsized) so I could invest more. Literally did that when the DOW hit 7k
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Re: How did you get through the market crash in 08-09

Post by max12377 »

I have to say I was absolutely astonished at how quickly things rebounded. During a market downturn there is no guarantee as to the time frame it will take for a rebound. No one knows. Personally, I ended up putting all new contributions into 100% stocks when things went south. On a side note, I also learned what the term 'moral hazard' meant.
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Re: How did you get through the market crash in 08-09

Post by Call_Me_Op »

I sat tight in my retirement account but I am guilty of some market timing in taxable. I sold my stocks in Sept 08 and bought them back between Dec 08 and March 09. I also purchased several TIPS at fire-sale prices (in Sept and Oct 08), with YTM's over 3%. Overall, I made-out well. However, I have a more developed plan now, and in the next melt-down I plan to add to my equity position.
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Re: How did you get through the market crash in 08-09

Post by Green Nut »

I increased my 401k contribution a few percentage points because at that time I wasn't maxed. I looked at balances daily, found out my stomach was tougher than I thought. It was actually comical with some guys around here, looking under stacks of papers or books -" hey maybe your lost money is under here". I was just glad I still had a job since 2008 was a tough one around here, I think we had 1/3 the typical workforce.
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Re: How did you get through the market crash in 08-09

Post by Flashes1 »

I sat tight, but was admittedly depressed watching my net worth drop 50%. I looked at what I could have bought with that money, and froze. Fortunately, I didn't sell, but it was a scary 6 months. I have a little different perspective because I'm in banking, and watching some of the most storied and venerable names like Merrill, Lehman, Wachovia, and National City go down was terrifying. The global economy was in full melt-down mode. Without the swift intervention of the Fed, we were looking at the Great Depression Part 2, and I'm still not sure that we won't be back there again someday when all this new debt needs repaid.
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Re: How did you get through the market crash in 08-09

Post by IlliniDave »

dipsylala wrote:I started investing at the beginning of 2013. It has been great so far. However, I read that it's very difficult to stay the course during a market crash. I don't think I will sell my shares in a market crash, but maybe it's easier said than done. I am sure that most of the bogleheads here did not panic and just held on to the their shares. I'd like to know how you got through the 08-09 market crash psychologically. I can imagine the following cases:

(1) It is so wonderful to pick up great businesses at such a bargain price. Please keep going down! (I guess most people here felt this way?)
(2) Oh, my 1 million just shrunk to half a million! I cannot sleep well at night, but I'll hold on to my shares.
(3) The world is going to end, so I'm going to sell everything.

Please comment on how you felt during the crash. I do think a lot of the newbies will benefit from your experience.
It was an unusual time for me because I had gone through a divorce in late 2007-early 2008. As a result my assets were deployed in a very conservative manner (while the settlement/QDRO stuff was pending). I jumped back into stocks once the post-divorce financial torpor cleared, which luckily was either 3/11 or 3/12 of 2009. So I waded in while the herd was running for the hills. That bit of good luck somewhat blunted the combination of investment losses in late 2007 and the inevitable financial setback of marital dissolution. Forgetting about the "personal" stuff, it was an 18-month period where I, figuratively speaking, felt sick to my stomach a lot regarding all things financial.
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Re: How did you get through the market crash in 08-09

Post by Johm221122 »

I rebalanced, I even added a few percentage to my stocks.My biggest regret was having high yield bonds and they dropped also.Lesson learned take risk on stock side

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Re: How did you get through the market crash in 08-09

Post by Grasshopper »

For me the stars were in perfect alignment. I had retired in 2006, at the time MMF were paying 5% which was all I needed to make my numbers work. I never take anymore risk with money than I have too. I also downsized my home in 2006 at the top of the RE market. I just happen to be sitting on lots of cash in my taxable and Wellesley in my tax deferred/free accounts. It was 9/2010 before I started buying high dividend yield stocks to try to get a decent return. Today I still use Wellesley for tax deferred/free, and total stock and total international in my taxable.
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midareff
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Re: How did you get through the market crash in 08-09

Post by midareff »

Bought as much as I could and held my nose.
Achelois
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Re: How did you get through the market crash in 08-09

Post by Achelois »

I had a knot in my stomach, but kept on with my regular investing and waited it out.
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TheTimeLord
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Re: How did you get through the market crash in 08-09

Post by TheTimeLord »

Bought a lot of dividend paying stocks, MREITs and MLPs, stayed a little too long at that party but did fine. Also moved money to the sidelines before things got bad, unfortunately lost track of it and didn't reinvest as quickly as I should have. Although I have a fairly high risk and pain tolerance by all measures I was not as smart or brave or clairvoyant as many in this thread. And while I have not got the full 178% rally (who did unless 100% equity) I did pretty well with my average annual return for the past 5 years. 2013 was the year I suffered for being a tad slow and holding too much dividend generation but ended up with a low/mid double digit gain.
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Re: How did you get through the market crash in 08-09

Post by Call_Me_Op »

Flashes1 wrote: Fortunately, I didn't sell, but it was a scary 6 months. I have a little different perspective because I'm in banking, and watching some of the most storied and venerable names like Merrill, Lehman, Wachovia, and National City go down was terrifying. The global economy was in full melt-down mode. Without the swift intervention of the Fed, we were looking at the Great Depression Part 2, and I'm still not sure that we won't be back there again someday when all this new debt needs repaid.
I think some people either forget how close we came to the brink, or didn't really understand what was going on. There was a genuine possibility that the economy was collapsing, along with our hard-earned savings. There really was no guarantee that there would be a recovery in asset values any time soon. It is important to keep this experience in mind when people are recommending 100% equities.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein
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TheTimeLord
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Re: How did you get through the market crash in 08-09

Post by TheTimeLord »

Call_Me_Op wrote:
Flashes1 wrote: Fortunately, I didn't sell, but it was a scary 6 months. I have a little different perspective because I'm in banking, and watching some of the most storied and venerable names like Merrill, Lehman, Wachovia, and National City go down was terrifying. The global economy was in full melt-down mode. Without the swift intervention of the Fed, we were looking at the Great Depression Part 2, and I'm still not sure that we won't be back there again someday when all this new debt needs repaid.
I think some people either forget how close we came to the brink, or didn't really understand what was going on. There was a genuine possibility that the economy was collapsing, along with our hard-earned savings. There really was no guarantee that there would be a recovery in asset values any time soon. It is important to keep this experience in mind when people are recommending 100% equities.
+1
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scone
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Re: How did you get through the market crash in 08-09

Post by scone »

To me, at the time, it seemed like the end of the world. It wasn't just the stock market, I thought we might see the collapse of the international financial system, perhaps the collapse of capitalism itself. I was a history major in school, and visions of a massive planet-wide Great Depression II filled my mind. With more than six billion lives at stake, the magnitude of the potential chaos terrified me. A system as massively interconnected, yet fragile, as this one proved to be, seemed doomed.

And yet we survived. Is the system more resilient than I thought, or did we just get lucky?
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Sheepdog
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Re: How did you get through the market crash in 08-09

Post by Sheepdog »

Scone's comment awakened my thoughts then. I was retired and living off of my savings and SS only and that can be scary. Why not panic in downturns? Many do after all, but history says that they lose in the long run. From a book by John Merrill, "Outperforming the Market" is a table showing that a diversified portfolio of stocks, bonds, and cash, and held for approximately five years, would have enabled an investor to survive and eventually prosper during the worst bear market of all time.

Using a moderate risk portfolio of 47% domestic stocks; 47% 5-year Treasuries; and 6% Cash; here is what would have happened to a diversified $1,000,000 portfolio on September 1, 1929 (the market peak).
YEAR END PORTFOLIO VALUE
1929 $863,000
1930 $769,000
1931 $598,000 (Note from me: I admit it would have been psychologically difficult to stay in, but look what happens.)
1932 $603,000
1933 $842,000
1934 $901,000
1935 $1,124,000
1936 $1,339,000
Other reasonably diversified allocations also would have survived intact. For example, a 67% stock/28% bond/and 5% cash portfolio had a low of $416,000 in 1932 but was worth $1,195,000 at the end of 1936.
Market drops have always recovered.
I truly believed that 2009 would not be worse than that, so I closed my eyes and told myself not to panic.
I did make one change, though. I set up a money market/short term bond cushion to cover 3 years of expected distributions for expenses so that I would not have to sell a stock containing fund the next time it happens. I did and I have.
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Re: How did you get through the market crash in 08-09

Post by chaz »

Stayed the course!
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Re: How did you get through the market crash in 08-09

Post by Random Musings »

Rebalanced. Actually, rebalanced and a little extra but have taken that extra off the table.

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Re: How did you get through the market crash in 08-09

Post by lazyday »

Agree it is much better to look to old threads than to ask after the fact. Memories are faulty even without cognitive dissonance.

All the "plan B" stuff at the time just floored me. I knew that people have a normal human reaction to mass panic, and tend to buy high sell low, but didn't realize just how extreme.

You can find a few people happy to buy, but very much in the minority. You might find a post or two from me about my buying garbage bank stocks, posted before they went bankrupt or shareholders were otherwise cleaned out. On another forum, someone held lots of BoA and retirement was cut short. Buying in a panic doesn't always work out.

Buying a small value or microcap index would have worked pretty well if you managed to time it right. But it didn't have to. The economy and stock market could have been much worse, and taken decades to recover.

I would not count on being different from other people until you've experienced it. And even if you are, that's no guarantee of success.
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Re: How did you get through the market crash in 08-09

Post by John3754 »

Call_Me_Op wrote:I think some people either forget how close we came to the brink, or didn't really understand what was going on. There was a genuine possibility that the economy was collapsing, along with our hard-earned savings. There really was no guarantee that there would be a recovery in asset values any time soon. It is important to keep this experience in mind when people are recommending 100% equities.
I think this is a very important point, I see far too many posts here that say things like "I'm extremely risk tolerant and am 100% equities because I know that if the market crashes it will all come back within a few years".

This, in my opinion, demonstrates a very poor understanding of what equity risk really is.
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Re: How did you get through the market crash in 08-09

Post by Dandy »

I retired in 2008 at age 60 a few months before things fell apart. I had enough to pretty much guarantee a good retirement. I had 2/3 of my financial assets in my former company's 401k and 2/3 or that was in their Stable Value fund. I was pretty much a stay the course investor in the accumulation phase.

The crash of 2008 started to send my retirement assets from having enough to maybe not -- There were rumors that my company was going to file for chapter 11. So my pension, health insurance and possibly by stable value fund seemed at risk. I had witnessed some severe drops in the past but nothing like the blood in the water in 2008/09. Did I panic - yes. I rolled over my 401k to Vanguard - things were so bad that I wondered if the check from my employer would clear.

I put all the 401k money into Vanguard's Admiral money market fund. I didn't touch my taxable money or IRA's. I told my wife I was sacrificing future growth for some current stability. In a month or so I started a DCA into the Total Stock Market Fund and as the market started to rebound often added a bit more. I have no regrets. Despite withdrawing money to supplement my retirement income for 6 years + years my assets are much higher than when I retired - they would have been higher but I would not have slept well for a year or two. With virtually no meaningful earning power I was not going to put my "number" at risk. I have since lowered my equity allocation and increased my "no risk" CD type allocation to better match my retired risk tolerance.

In 2008 forget about getting a job near my recent earnings - you couldn't even get a part time job as an entry level teller, forget about selling your house there were no buyers and the value was sinking like a stone. Even though I acted quickly I probably lost about 20%+ of my financial assets. The market environment clearly had me on edge but the thing that really spooked me was the threat of chapter 11 and going from having my number to not having it.

What I learned is that retirement risk tolerance can be different, there is no guarantee of future earning power or the ability to sell your house when you want to or at a price that you think. Those were pretty much givens before 2008 unless you lived during the crash of 1929. Also, there are times when government guaranteed products are king.
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Re: How did you get through the market crash in 08-09

Post by livesoft »

Since I had been investing through previous market crashes like 1987 and 2000, I hoped that the outcome of 08-09 would be pretty much the same. My records show that I rebalanced and tax-loss harvested all the way to the bottom. I came close to losing a 7-figure amount by the time the bottom was reached, but fortunately I did not join that club.

In any event, experience was the pablum that helped me get through. I haven't reviewed my posts from that period, but I hope I've written the same thing now that I wrote back then.
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Re: How did you get through the market crash in 08-09

Post by Nowizard »

Having invested for many years, the prime issue is experience with up and down markets. That does not mean there is no anxiety since there are always some who say "This time is different," but history says it is not different. The one specific things that really helped are to do two things before any recession. The two things are diversification and, for me, to look at the overall percentile rating of my funds. If that percentile is less than 50, I know I have a portfolio of funds doing well by comparison to their benchmarks. That, in combination with having at, or above, market return is consoling. The specific thought when in a recession but with a portfolio percentile below 50 is my mantra..........."Sometimes you make the most by losing the least." Having a portfolio that goes down less in terms of percentage than the market is the example. Our portfolio is in the neighborhood of 60/40, and we did go down during the recession, but not to the extent of the market.

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Re: How did you get through the market crash in 08-09

Post by feh »

dipsylala wrote: (2) Oh, my 1 million just shrunk to half a million! I cannot sleep well at night, but I'll hold on to my shares.
We didn't sell, and continued funding retirement accounts. Ideally, we would've rebalanced, but I wasn't a boglehead at the time.

It wasn't fun, but we didn't freak out.
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Re: How did you get through the market crash in 08-09

Post by Bacchus01 »

I did: nothing.

I didn't change my allocation, I didn't change my contributions, I didn't change my portfolio at all. I rode it out and everything was fine.

What I WOULD have done differently:
- I would have cashed my stock options when I felt I should have in late 2008 (but didn't because my company advised against it because I had "insider" information that later turned out to not be insider information and thus I should have cashed $350K that was later worth about $2,500).
- I would have rebalanced my AA into more equities when they were down
- I would have TLH, a lot
- I would have been more involved in my taxable accounts

If I had done the 4 steps above, I would probably be $2M ahead. Instead, I'm only $1M ahead :)
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Re: How did you get through the market crash in 08-09

Post by MnD »

Same story in 1987, 2000/01 and 2008/09.
When my allocation moved outside my allowable range, sold bonds and bought stocks until asset allocation was rebalanced. Also did some tax loss harvesting.
In 1987 I didn't have to sell anything - my balances were so small and the market recovery was so fast it took only 2-3 months of investing new money in 100% stocks to restore my asset allocation to pre-crash levels.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
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Re: How did you get through the market crash in 08-09

Post by dowse »

I was over 80% in stocks just before the crash. It made me realize I had too much in stock funds for my risk tolerance. I waited until the fall of '09, when the market had recovered to the point that my retirement plan turned green with the various calculators I like to use, then I rebalanced to 60/40 stocks/bonds (funds). AA has stayed within my band ever since. Now, when I contemplate a market crash, I look at what would happen to my plan if the market goes all the down to March 2009 levels. I'm still ok in that case, so I sleep fine. I just wouldn't leave as much to my heirs. I do get a bit bothered by major market declines, but in the end my rational mind wins out and I don't make any rash moves.
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Re: How did you get through the market crash in 08-09

Post by technovelist »

Call_Me_Op wrote:
Flashes1 wrote: Fortunately, I didn't sell, but it was a scary 6 months. I have a little different perspective because I'm in banking, and watching some of the most storied and venerable names like Merrill, Lehman, Wachovia, and National City go down was terrifying. The global economy was in full melt-down mode. Without the swift intervention of the Fed, we were looking at the Great Depression Part 2, and I'm still not sure that we won't be back there again someday when all this new debt needs repaid.
I think some people either forget how close we came to the brink, or didn't really understand what was going on. There was a genuine possibility that the economy was collapsing, along with our hard-earned savings. There really was no guarantee that there would be a recovery in asset values any time soon. It is important to keep this experience in mind when people are recommending 100% equities.
Most people forget very quickly once the crisis is past. They remember when the next crisis hits, of course. :oops:
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Boglenaut
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Re: How did you get through the market crash in 08-09

Post by Boglenaut »

I went back and checked my saved spreadsheets. It looks like I increased my bond allocation by 1% a year just like I planned.

I did a lot of re-balancing into stocks. My account value was less than 1/3 of what it is today. :shock: :shock: :shock:

I did have some sleepless nights. But it paid off! :moneybag :moneybag :moneybag

I was reading a Bogleheads forum at that time, but not yet a registered member.
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Re: How did you get through the market crash in 08-09

Post by englishgirl »

I did nothing. BUT I was worried. And probably should have been doing something like rebalancing. I may or may not have rebalanced once, early on, and then stopped. I can't remember exactly. I didn't sell, and I stayed the course with respect to the money I invest with every paycheck, but I would have been better off had I rebalanced more. I did not have the mental fortitude to back up the truck.

I recall that I had no problems staying the course through late 2008. After all, I knew downturns happen, and I figured the market would bounce back fairly quickly. What got me stressed though was when it didn't seem to be bouncing back. December stretched to January which stretched to February which stretched to March. I remember some charts showing all the big stock downturns, and only the Great Depression seemed to have lasted longer. People were worried that this time it really was different, and we were sliding into the Great Depression mark II. There were layoffs at work, and it did really feel like the whole economy might be crashing. A coworker came to me to tell me that her and her husband's financial advisor had told them to cash out NOW, and she wanted to pass the message along. That shook me, I have to admit.
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Re: How did you get through the market crash in 08-09

Post by Rob5TCP »

I did freak, but partially from what I learned here and in 2000, I didn't sell. I didn't re-balance. One move I did make was to load up on TIPS (thank you Larry and Mel), which had a real yield over 3% on the long term, and at one point close to 4% on the short to mid term length. Though obviously not as advantageous as buying equities, I did sleep better at night. And the return on the TIPS were terrific. I still have about 25% of the TIPS left, the rest I sold over parts of 2012 and early 2013.
Overall I am obviously pleased with the outcome.
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Re: How did you get through the market crash in 08-09

Post by edge »

I kept my normal buying and rebalanced into equities 3x as per target bands.
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Re: How did you get through the market crash in 08-09

Post by Clearly_Irrational »

nisiprius wrote:And, we thought of it in terms of "what are the chances of a complete financial collapse?" Lehman Brothers had been around before I was born, before my father was born, and before my grandfather was born. It had been around for 150 years. Its collapse was a once-in-150-year event. The eight or nine other collapses, so many I lost count, were also events, none of which I ever expected to see happen my lifetime. And when Bernanke and Paulson appeared on television, despite their best efforts, they looked scared to me--and Paulson has subsequently acknowledged that he was very scared, I was not projecting.
I was short the market at that time and even so I was starting to get very scared. When the money market funds started to break the buck and it looked like there would be a huge panic we appeared to be on the edge of the abyss. I remember at one point thinking that it might be time to go down and clean out my bank accounts before they started freezing everything, a day or two before I actually went to do so they announced the backstop of the money market funds and shortly after the bank bailout and things went from crazy to merely very bad.
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zzcooper123
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Re: How did you get through the market crash in 08-09

Post by zzcooper123 »

The whole melt-down seemed so stupid and unnecessary, that I really didn't pay attention until 2009. Guess I kept waiting for a rebound for so long it actually happened. Tried to throw all the cash I had into Stocks, but didn't have much to put in. Should have tax loss harvested more aggressively. Back then I wasn't listening to the guru of TLH...livesoft.
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Re: How did you get through the market crash in 08-09

Post by HongKonger »

I was holding individual stocks only that I had bought in the 08 run up. I simply didn't look at them. I recall many very late nights spent watching Bloomberg and seeing what was happening on the US market with my mouth literally agape and then going into work the next morning feeling sick and lost and having clients pull their marketing budgets, friends get laid off, read about businesses closing and seeing the Asian markets tank all around me. I will never forget that feeling - it felt like the 2003 SARS crisis all over again.
Oddly, I do recall thinking that I should be buying megacaps like McDonalds and Coca-Cola (I hadn't discovered indexing back then), but I didn't know any better than the next person when/where or indeedif it would all end, so I didn't.

My holdings from that time never recovered their 30% losses. I finally held my nose and sold them last year.
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gasman
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Re: How did you get through the market crash in 08-09

Post by gasman »

Gritted my teeth. Stuck to my plan. Rebalanced per my IPS. Knowing that according to history it was the best course. But I did not do it gladly or happily at the time. Many months of dysphoria.
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Re: How did you get through the market crash in 08-09

Post by montanagirl »

In Sep 2007 I discovered housing bubble blogs and boy was that ever interesting reading! It seemed like the same thing was happening everywhere...I got so alarmed that after the first dip in October I swept everything into mmkt accounts. I had recently reached 100k, the job was shaky, 10 years from retirement and I knew I couldn't take what was coming. I didn't get back in until 2010 or so and was very cautious.

Yet I had been through similar drops before, like the tech wreck, and told myself that it always comes back, but there's always the danger that it's Different This TIme.
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WallyBird
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Re: How did you get through the market crash in 08-09

Post by WallyBird »

I was aiming for the 401k limit, so I was DCA'ing about $1000 a month. The crash didn't come all at once. I kept throwing money in; my balance didn't sink too badly, and I knew not to look too closely or think about it too much.

I suppose it helped that as much as I hated seeing my account balances decrease, I hate selling at a loss even more. It was retirement money and I knew I didn't plan on needing it for a few decades.

Perhaps more importantly, I had some diversication going. I wasn't full-on Boglehead rebalancing, but I had some international, and I was starting to work on changing to lower cost funds. I'd sold out of a once-famous Invesco fund in 2000, having gotten sick of them paying for stadiums with my money.

Which reminds me: there was this little event in 2001, remember? Compared to that, 2008-2010 was a walk in the park.
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riskreward
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Re: How did you get through the market crash in 08-09

Post by riskreward »

My wife and I were working then and living off the work income. As a result, we were able to stay the course.
Now retired and have to be much more conservative in order to be able to stay the course if it should repeat.
Last thing I want to do is overestimate my risk tolerance and mortally wound my investment results by bailing out at the bottom.
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jfn111
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Re: How did you get through the market crash in 08-09

Post by jfn111 »

I was just looking at my cumulative spread sheet and in 2008 I was down -1% in my main account and up 8% in 2009. I got out of the market because a gold bug friend was harping on me that everything was in a bubble and to protect myself. Who knew he was going to be right. :shock:
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SpartanFan
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Re: How did you get through the market crash in 08-09

Post by SpartanFan »

I retired at age 56 in May 2008 so for me it was a bit unnerving.

I did not, however make any investment changes at the time.
"There's a crack in everything, that's how the light gets in" - Leonard Cohen (RIP)
sschullo
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Re: How did you get through the market crash in 08-09

Post by sschullo »

I did the standard boring stuff--plan ahead for any possible outcome: Learned how to diversify from the 70% loss in the 2000-2002 crash. I was prepared by diversifying and most importantly, having the stock/bond split appropriate for my age, 30 stock/70 bonds. Lost only 11.5% in 2008 by sticking with the plan and I got high single and low double-digit returns since. I am happy.
Never in the history of market day-traders’ has the obsession with so much massive, sophisticated, & powerful statistical machinery used by the brightest people on earth with such useless results.
likegarden
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Re: How did you get through the market crash in 08-09

Post by likegarden »

I thought that the economy would rebound after the market reached bottom, so I rebalanced close to the bottom.
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Aptenodytes
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Re: How did you get through the market crash in 08-09

Post by Aptenodytes »

2008-2009 coincided with the time I discovered this forum and its approach to investing. It also coincided with the inheritance of an IRA that was invested in a crazy mix of individual stocks. So I was doing major surgery to the inherited IRA and fine tuning my own original retirement portfolio. All that kept me plenty busy during the crash, which was probably good.

I started building my portfolio in 1992. When the market dropped in 2000-2003 I didn't give it much thought, though that period did teach me the value of having both spouses on the same page risk-wise, because my wife did freak out then. We shifted to a new allocation we were both willing to stick with and have had no investing differences of opinion since.
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market timer
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Re: How did you get through the market crash in 08-09

Post by market timer »

Copious amounts of good beer, later followed by even greater amounts of cheap beer.
rai
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Re: How did you get through the market crash in 08-09

Post by rai »

I did nothing, iow I kept what I had, fortunately I was making excess money to contribute to 'make up' the losses.

I was too high on stocks like 90% and maybe more than that so I lost every bit of the market. I recall days when my losses were tens of thousands, didn't like that much, but i figured like Buffett would say, time to buy is when others are selling. I knew that good companies were being dragged down with the bad, so I just kept my stocks and gobbled up whatever I could afford. I made out real well.



Since then, I have tilted something more towards bonds but still low side 25% at my current age 48.
Last edited by rai on Tue Mar 11, 2014 2:34 pm, edited 2 times in total.
"Life is what happens to you while you're busy making other plans" - John Lennon. | | "You say that money, isn't everything | But I'd like to see you live without it." - Silverchair
sschullo
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Re: How did you get through the market crash in 08-09

Post by sschullo »

market timer wrote:Copious amounts of good beer, later followed by even greater amounts of cheap beer.
Beer timing, a new strategy! :-)
Never in the history of market day-traders’ has the obsession with so much massive, sophisticated, & powerful statistical machinery used by the brightest people on earth with such useless results.
mall0c
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Re: How did you get through the market crash in 08-09

Post by mall0c »

At first I was scared but I stayed the course. Then things got a little ridiculous. At S&P 700 I was looking for quick sources of cash. I sold my one year old Audi A3 in 2009 so that I could buy stocks with it. Today I could buy a new S4 with those shares. :-) I wish I had gone 100% equities but I wasn't that courageous, some people on this board were...

In my financial spreadsheet I keep track of a number I like to call the SHTF Multiplier (i.e. how much do I own in stocks today relative to when the sh** hit the fan in 2008 :-). Today my SHTF number is 5.05x and this is even with dialing back risk (I have a lower % in stocks today than in 2008), so god only knows what I'd do this time around. Hopefully about the same thing as last time.
FIRE'd. Mid-40s.
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Re: How did you get through the market crash in 08-09

Post by YDNAL »

dipsylala [OP] wrote:Please comment on how you felt during the crash. I do think a lot of the newbies will benefit from your experience.
I was 56 years old in 2008, and stopped rebalancing in early 2009 after reaching a floor of safer investments - the amount of money that can not be compromised.
  • 1. By March 2009, our overall allocation of investable assets that started at 55/45 Equity/Fixed in late 2007 had shifted to ~40/60 Equity/Fixed.
    2. To give some illustrative perspective, Vanguard S&P 500 VFINX would be cut in 1/2 in 11 months in 2008.

    Code: Select all

    1/2/2008	 $133.22 	$10,000 
    11/20/2008	$69.57 	 $5,222
The crash was scary because it all signaled towards potential complete collapse of the financial system as we know it.
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rai
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Re: How did you get through the market crash in 08-09

Post by rai »

YDNAL wrote:The crash was scary because it all signaled towards potential complete collapse of the financial system as we know it.
That's what I was thinking, at some point in there. But I stuck all in and now I am about 3x my low water mark (with gains as well as new money).

The bad thing for me, was I was too high in stocks but the good thing was I didn't get out of stocks. I know people who got into cash, don't know if/when they ever got back in.
"Life is what happens to you while you're busy making other plans" - John Lennon. | | "You say that money, isn't everything | But I'd like to see you live without it." - Silverchair
MnD
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Re: How did you get through the market crash in 08-09

Post by MnD »

In addition to staying the course on 80/20 and rebalancing all the way to the bottom, I did quite a bit of opportunistic spending.
Bought a new hybrid car under invoice plus big rebate, federal and state hybrid credits and federal sales tax deduction.
Picked up a fancy wood burning insert, did a kitchen remodel, replaced all the windows on the house and took a nice long vacation.
Also refinanced the house as rates that were then at an all-time low. (They did go lower later of course)

The quotes for autos, home improvement supply and contractors and vacation housing/resort in late 2008-2009 were _crazy_ low.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
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