Did you learn anything from the market correction?

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El Greco
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Re: Did you learn anything from the market correction?

Post by El Greco » Wed Feb 14, 2018 10:28 am

In 35 years of investing it was the first drop I experienced as a Boglehead. For the past 33.5 years I had been 100% stock. I actually now have an asset allocation and rebalanced a couple of times before the drop back to my target AA.

I learned that I felt good about "taking money off the table", "selling high and buying low", etc. Before the drop I was starting to get tempted to let my stocks run a bit more. The drop showed me that I was correct to use discipline and reaffirmed my new belief in maintaining my asset allocation.

I know this will sound like heresy to many on this board, but I see rebalancing as the intelligent way to market time. :D

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DaftInvestor
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Re: Did you learn anything from the market correction?

Post by DaftInvestor » Wed Feb 14, 2018 10:39 am

nisiprius wrote:
Tue Feb 13, 2018 1:08 pm
I learned from a financial columnist that You can no longer trust the 200-day moving average as a stock-market indicator. Just as I learned that I could no longer trust my lucky rabbit's foot when I slipped on the banana peel and fell down the manhole and had the anvil land on me. I learned that the advice from the market timers is to never trust your instincts, you should always follow your system, until your instincts tell you to quit following the system.

I learned that everybody is arguing about "Was this a largely 'technical' pullback that was merely overdue in the wake of a historic rally and an unprecedented stretch of low volatility or does it signal something deeper?" and that nobody knows.

I learned that Nassim Nicholas Taleb's Thanksgiving turkey chart wasn't just a parable.
Image
I re-learned a lot of people don't understand what they are investing in and when someone tells you they are "making a killing on X" - smile and say "that's nice" and stay the course.
After reading the "I'm $110K" in debt thread yesterday I went and looked at message boards to see what folks were saying about VIX and XIV - lots of people saying they lost money; the ETF holders are crooks; talking about lawsuits; etc. Some folks with holding actually were asking fundamental questions ("can someone explain how this investment works again? I didn't think I could lose this much!"). Folks love to brag when they are making money on something they don't fully understand but for some, as soon as they lose money, its someone else's fault.

Invest in what you understand - keep things simple - stay the course.

an_asker
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Re: Did you learn anything from the market correction?

Post by an_asker » Wed Feb 14, 2018 10:54 am

expat wrote:
Tue Feb 13, 2018 4:31 am
was there a correction?
Was there an error?

TonyDAntonio
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Re: Did you learn anything from the market correction?

Post by TonyDAntonio » Wed Feb 14, 2018 11:03 am

I learned that I have a lot more money to lose than I did back in 2008. I'm glad I sold a lot of equities prior to this run up that was not impacted by this drop but my God, some of the one day, paper loss totals were surprising to me. I guess I still have to get use to being rich. 😀. I was consoled by hearing that Buffet 'lost' 5 billion.

JHU ALmuni
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Re: Did you learn anything from the market correction?

Post by JHU ALmuni » Wed Feb 14, 2018 11:17 am

bantam222 wrote:
Tue Feb 13, 2018 2:45 am
Our first market correction (10% decline from peak) after an 8 year bull run

For many recent / young investors, the first real "test" of your AA. 80/20 is a lot of fun when the market is going up every day but not as fun during the last few weeks.

What did you learn from this? Confirmed you are in the correct AA? Or a lesson you need to adjust? 10% swing is a good test for us, a nice "punch in the gut" but not large enough for anyone to really get hurt.

Are you making any adjustments after this week or staying steady?

Personally I experienced losses of 10k and 19k on back to back days and still feeling good so this helped confirm my aggressive AA (100/0) is fine for me. I read somewhere you should be able to buy a car for the amount your portfolio swings in one day... I need to go upgrade my car :D

I learned not to check prices so often and take some profits of the table along the way. Wish the correction is over, but I think that was just a glimpse of the future.

dcw213
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Re: Did you learn anything from the market correction?

Post by dcw213 » Wed Feb 14, 2018 12:43 pm

It was reinforced to me how silly the financial media reactions and attempt to explain drivers are. After a historical run up that everyone thought was over blown (a melt-up as the press called it) it seemed to be broad consensus that a correction would make sense. Then the day it happened people acted like it was a disaster. Lots of commentary too on "record" losses in terms of absolute points. Yes, when numbers are higher it takes larger absolute variances to drive relative changes. I had many thoughts where I wondered how people could make such dramatic statements, particularly considering index levels reverted back to values from 1-2 months ago when everyone was saying how frothy valuations were at the time after a year straight of gains. When I checked my portfolio, only my contributions from Dec and Jan had loss positions so I didn't even TLH!

Additionally, I found many forum responses to be equally puzzling. "I'm loving this correction since I get to buy on sale." So stocks are on sale now but weren't a mere month ago at the same prices? I get that it's an attempt to stay positive while staying the course, but it seems almost as silly to me.

The Wizard
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Re: Did you learn anything from the market correction?

Post by The Wizard » Wed Feb 14, 2018 12:50 pm

Grt2bOutdoors wrote:
Tue Feb 13, 2018 1:20 pm
hilink73 wrote:
Tue Feb 13, 2018 1:08 pm
AlohaJoe wrote:
Tue Feb 13, 2018 3:25 am
bantam222 wrote:
Tue Feb 13, 2018 2:45 am
Our first market correction (10% decline from peak) after an 8 year bull run
There was a correction in 2010 (-16%), a correction in 2011 (-19%), another correction in 2011 (-9.8%), one in 2012 (-9.9%), one in 2015 (-12%), and another one in 2015-2016 (-13%). (All based on the S&P 500.)

So 6 correction (7, if you include the most recent one) during the "8 year bull run".

I learned as much from this correction as I did from the one that was 24 months ago.
Is it over already?
Just asking for a friend...
No, it's not over, it's just getting started.
It's not over until the next market high is reached, correct...
Attempted new signature...

itstoomuch
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Re: Did you learn anything from the market correction?

Post by itstoomuch » Wed Feb 14, 2018 1:07 pm

Have a cash hoard.
Buy low, sell high.
New high today on my Discretionary. Trying to rebalance to more cash.
YMMV :dollar
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

mptfan
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Re: Did you learn anything from the market correction?

Post by mptfan » Wed Feb 14, 2018 1:14 pm

dcw213 wrote:
Wed Feb 14, 2018 12:43 pm
It was reinforced to me how silly the financial media reactions and attempt to explain drivers are. After a historical run up that everyone thought was over blown (a melt-up as the press called it) it seemed to be broad consensus that a correction would make sense. Then the day it happened people acted like it was a disaster. Lots of commentary too on "record" losses in terms of absolute points. Yes, when numbers are higher it takes larger absolute variances to drive relative changes. I had many thoughts where I wondered how people could make such dramatic statements, particularly considering index levels reverted back to values from 1-2 months ago when everyone was saying how frothy valuations were at the time after a year straight of gains.
The media are driven by ratings and the desire to increase viewership and ad revenue, dramatic headlines are good for business.

booch221
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Re: Did you learn anything from the market correction?

Post by booch221 » Wed Feb 14, 2018 1:19 pm

I was bummed that my Vanguard balance was down $100K from January 26.
But It's still up $60K from December 31, 2107.
So I learned: Easy come, easy go...

jordank
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Re: Did you learn anything from the market correction?

Post by jordank » Wed Feb 14, 2018 1:30 pm

I confirmed my belief that no-one really *knows* anything. Whether this was a 'correction', whether it is over, or the beginning of a new bear market - no-one knows... especially all the talking heads on TV who try to explain the reasons behind market movements...

Makes me think of this quote:

An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today. Laurence J. Peter

I did confirm that my current AA is right for me though... I had drifted very close to re-balancing bands recently, so in an effort to keep things right - my 401k contributions over January were 100% in bonds. I am about to max out the 2018 401k space with my next paycheck (I have been putting 100% of the paycheck in)...

End result - my AA is now much closer to my desired ratio - and I didn't have to sell any stock or incur any taxable events getting there.

bargainhuntingking
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Re: Did you learn anything from the market correction?

Post by bargainhuntingking » Wed Feb 14, 2018 1:59 pm

I agree with this guy's perspective on the correction 100%:

"If you're under 40 you should be hoping for another stock plunge, says pundit Josh Brown"

http://www.latimes.com/business/la-fi-m ... story.html

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Fudgie
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Re: Did you learn anything from the market correction?

Post by Fudgie » Wed Feb 14, 2018 5:51 pm

:oops:
Last edited by Fudgie on Fri Jun 08, 2018 6:09 pm, edited 1 time in total.

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AtlasShrugged?
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Re: Did you learn anything from the market correction?

Post by AtlasShrugged? » Wed Feb 14, 2018 6:32 pm

Bogleheads....One thing I learned was to pay attention to 'catastrophizing', meaning, to recognize it and not do it. Larry Swedroe writes about this dangerous behavioral tendency. The media, I have found, are largely guilty of this. They are not doing their Readership any favors.
“If you don't know, the thing to do is not to get scared, but to learn.”

itstoomuch
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Re: Did you learn anything from the market correction?

Post by itstoomuch » Wed Feb 14, 2018 6:48 pm

^ You mean to say that its, "going to rain tomorrow in Oregon?" and that we oughta be prepared for the deluge? :oops:
Details at 5. :annoyed
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

malbecman
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Re: Did you learn anything from the market correction?

Post by malbecman » Wed Feb 14, 2018 7:17 pm

It really is a random walk. Here it is, Feb 14th and the SP500 index closed up 0.94% YTD (but these last ~6 weeks were a pretty wild ride.) :D

DrGoogle2017
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Re: Did you learn anything from the market correction?

Post by DrGoogle2017 » Wed Feb 14, 2018 7:25 pm

I’ve learned that what I thought was conservative, Vanguard Conservative Lifestyle fund , was not so conservative after all, it went down more than the Moderate Lifestyle fund when the market went down, it went up less than the Moderate Lifestyle Strategy when the market was gang buster, it recovered even not as fast when the market rebound. I’m going to get rid of this fund when it really recovers and just stick with the Moderate Lifestyle fund.
Last edited by DrGoogle2017 on Wed Feb 14, 2018 7:26 pm, edited 1 time in total.

itstoomuch
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Re: Did you learn anything from the market correction?

Post by itstoomuch » Wed Feb 14, 2018 7:26 pm

^malbecman,
Certainly beats the Amusement Park rides :annoyed
Immediate target is enough gains to pay for my trip to China-Japan. If all goes well, maybe Friday? :annoyed
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

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Taylor Larimore
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Re: Did you learn anything from the market correction?

Post by Taylor Larimore » Wed Feb 14, 2018 8:15 pm

bantam222 wrote:Did you learn anything from the market correction?
Yes. It reinforces the same thing I learned in dozens of other market corrections:

Stay the course

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

TravelforFun
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Re: Did you learn anything from the market correction?

Post by TravelforFun » Wed Feb 14, 2018 8:22 pm

Why worry about this market correction? All the fundamentals like employment rate, company profit, GDP growth, and inflation are still very good. This market is just taking a break.

TravelforFun

Nearly A Moose
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Re: Did you learn anything from the market correction?

Post by Nearly A Moose » Wed Feb 14, 2018 8:26 pm

dcw213 wrote:
Wed Feb 14, 2018 12:43 pm
It was reinforced to me how silly the financial media reactions and attempt to explain drivers are. After a historical run up that everyone thought was over blown (a melt-up as the press called it) it seemed to be broad consensus that a correction would make sense. Then the day it happened people acted like it was a disaster. Lots of commentary too on "record" losses in terms of absolute points. Yes, when numbers are higher it takes larger absolute variances to drive relative changes. I had many thoughts where I wondered how people could make such dramatic statements, particularly considering index levels reverted back to values from 1-2 months ago when everyone was saying how frothy valuations were at the time after a year straight of gains. When I checked my portfolio, only my contributions from Dec and Jan had loss positions so I didn't even TLH!

Additionally, I found many forum responses to be equally puzzling. "I'm loving this correction since I get to buy on sale." So stocks are on sale now but weren't a mere month ago at the same prices? I get that it's an attempt to stay positive while staying the course, but it seems almost as silly to me.
Yes, it's been maddening to watch this stuff! Ive been popping on CNBC.com etc to check on things, mostly treating this as a current event I should be aware of in case it comes up in business talk, and it's ridiculous to see the hoopla and hyperbole. It actually makes me viscerally angry to read. I think I need to find a new way to get my financial market updates.

To the original question, it didn't really change anything for me.
Pardon typos, I'm probably using my fat thumbs on a tiny phone.

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badbreath
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Re: Did you learn anything from the market correction?

Post by badbreath » Wed Feb 14, 2018 8:33 pm

No, I had already learned in the 08, 09 timeframe that that losing 50% of your portfolio looks bad but just keep on investing.
“While money can’t buy happiness, it certainly lets you choose your own form of misery.” Groucho Marx

Finridge
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Re: Did you learn anything from the market correction?

Post by Finridge » Thu Feb 15, 2018 3:07 am

I learned that tax loss harvesting is fun.

Also, I learned that it's a lot easier and less stressful to tax loss harvest using ETF's then mutual funds.

Money Market
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Re: Did you learn anything from the market correction?

Post by Money Market » Thu Feb 15, 2018 4:08 am

There was a correction?

grettman
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Re: Did you learn anything from the market correction?

Post by grettman » Thu Feb 15, 2018 6:56 am

I learned that many young folks aren’t mentally prepared for large drops. This drop was minor in comparison to those of the past and so far, it is very short lived. Some believe this was a good test of their AA but I would argue it was only a pop quiz at best.

aqan
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Re: Did you learn anything from the market correction?

Post by aqan » Thu Feb 15, 2018 7:17 am

Yup. It confirmed that the market always does the opposite of common concensus. When majority of people predict that market will kerp going up, it goes down and when everyone is panicked and believes that market will keep falling, it starts recovering:)

retiringwhen
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Re: Did you learn anything from the market correction?

Post by retiringwhen » Thu Feb 15, 2018 7:39 am

Nspirius, I started using marketwatch for the first time in decades to watch the market this month. I made the change due to the horribly ill-advised changes at google. Headlines like that one were the reason I dumped it the first time. Their click-bait is Buzzfeed level trolling.

carguyny
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Re: Did you learn anything from the market correction?

Post by carguyny » Thu Feb 15, 2018 7:52 am

I learned that my instincts still work after a nearly 20 year career as an investor. I sent my team an email on 1/26 at 1:45pm with a 3 word subject of "Sell, Sell, Sell". I reduced my equity exposure by 50% at market close.

There was no signal to me other than the speed of the move on 1/26. It also reminded me why I don't like active management as so much of the performance has to come from guy feel.

I had been planning on only buying bonds to reduce my equity exposure going forward, this just meant I accelerated that adjustment.

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midareff
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Re: Did you learn anything from the market correction?

Post by midareff » Thu Feb 15, 2018 7:59 am

carguyny wrote:
Thu Feb 15, 2018 7:52 am
I learned that my instincts still work after a nearly 20 year career as an investor. I sent my team an email on 1/26 at 1:45pm with a 3 word subject of "Sell, Sell, Sell". I reduced my equity exposure by 50% at market close.

There was no signal to me other than the speed of the move on 1/26. It also reminded me why I don't like active management as so much of the performance has to come from guy feel.

I had been planning on only buying bonds to reduce my equity exposure going forward, this just meant I accelerated that adjustment.
Some of have taxable accounts that have been in place a long time. Sell, sell, sell and come April 15, 2019, it will be pay, pay, pay.

remomnyc
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Re: Did you learn anything from the market correction?

Post by remomnyc » Thu Feb 15, 2018 8:02 am

I recently transitioned from 80/20 to 70/30 to 55/45 because I will ER (early retire) in a few months. I had been wondering if 55/45 was too conservative. I learned it was not.

TravelforFun
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Re: Did you learn anything from the market correction?

Post by TravelforFun » Thu Feb 15, 2018 8:14 am

carguyny wrote:
Thu Feb 15, 2018 7:52 am
I learned that my instincts still work after a nearly 20 year career as an investor. I sent my team an email on 1/26 at 1:45pm with a 3 word subject of "Sell, Sell, Sell". I reduced my equity exposure by 50% at market close.

There was no signal to me other than the speed of the move on 1/26. It also reminded me why I don't like active management as so much of the performance has to come from guy feel.

I had been planning on only buying bonds to reduce my equity exposure going forward, this just meant I accelerated that adjustment.
When are you getting back in?

TravelforFun

carguyny
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Re: Did you learn anything from the market correction?

Post by carguyny » Thu Feb 15, 2018 9:10 am

TravelforFun wrote:
Thu Feb 15, 2018 8:14 am

When are you getting back in?

TravelforFun
I'm already back in, but just differently:
- I purchased some very short maturity munis (AA/A rated) that were being panic sold (1.75% average yield, 3%+ pre-tax equivalent, maturity of June).
- I went short volatility and long the market by selling SPY puts at which I collected premium on and took the S&P 500 to the 200-day moving average level, where it should bounce (and did). If it didn't bounce, I was very happy with that entry point. I also did a similar trade on few individual companies in the option market
- I purchased about 20 individual value stocks equal weighty

My FI allocation got a bulk of the money as I was way (2 years) overdue for re-balancing.

The lesson if I hadn't of picked it right would have been to re-balance more often!

destinationnc
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Re: Did you learn anything from the market correction?

Post by destinationnc » Thu Feb 15, 2018 9:23 am

I learned how much peace of mind having an emergency fund fully funded brings me that I don't worry about these drops.

Houe
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Re: Did you learn anything from the market correction?

Post by Houe » Thu Feb 15, 2018 10:15 am

I was surprised by the number of posts/threads on bogleheads that suggested people are either timing or were thinking about timing the market.

DVMResident
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Re: Did you learn anything from the market correction?

Post by DVMResident » Thu Feb 15, 2018 10:48 am

Reflecting on this last correction, I really enjoying my balanced funds. Work and family life was busy during the correction. Still is. I don't have the mental band width to watch re-balancing bands. Automating the process is really nice during corrections. :sharebeer

livesoft
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Re: Did you learn anything from the market correction?

Post by livesoft » Thu Feb 15, 2018 1:00 pm

Houe wrote:
Thu Feb 15, 2018 10:15 am
I was surprised by the number of posts/threads on bogleheads that suggested people are either timing or were thinking about timing the market.
Rebalancing has a huge component of market timing in it. This is why I think those rebalancing by algorithms "studies" will never be able to show significant benefits to rebalancing: They never study the optimal way.

People around here are so fearful of being accused of market timing and being sure to not sell on a dip that they fear rebalancing when the market does dip and buying equities. And it is even harder to sell bond funds that have lost 1% to 2% in order to buy equity funds that have lost 5% to 10%.
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El Greco
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Re: Did you learn anything from the market correction?

Post by El Greco » Thu Feb 15, 2018 11:48 pm

Unread post by livesoft » Thu Feb 15, 2018 1:00 pm

Houe wrote: ↑Thu Feb 15, 2018 10:15 am
I was surprised by the number of posts/threads on bogleheads that suggested people are either timing or were thinking about timing the market.
Rebalancing has a huge component of market timing in it. This is why I think those rebalancing by algorithms "studies" will never be able to show significant benefits to rebalancing: They never study the optimal way.

People around here are so fearful of being accused of market timing and being sure to not sell on a dip that they fear rebalancing when the market does dip and buying equities. And it is even harder to sell bond funds that have lost 1% to 2% in order to buy equity funds that have lost 5% to 10%.
How about holding balanced funds? Do they demonstrate the benefits of rebalancing? My understanding is they rebalance every day, which should take the "human fearful" element out of it.

stocknoob4111
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Re: Did you learn anything from the market correction?

Post by stocknoob4111 » Fri Feb 16, 2018 12:06 am

booch221 wrote:
Wed Feb 14, 2018 1:19 pm
I was bummed that my Vanguard balance was down $100K from January 26.
But It's still up $60K from December 31, 2107.
So I learned: Easy come, easy go...
I would not be bummed about having a million dollar portfolio lol! congrats. I'm halfway there but hope to get to that point.

clown
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Re: Did you learn anything from the market correction?

Post by clown » Fri Feb 16, 2018 1:32 am

Retired couple here. 5 years spending amount held in cash. The rest is 100% stocks. We wont have to sell equities in a down market unless it lasts longer than 5 years, which is historically highly unlikely.

Watching the market's moves is much like going to a tennis game. You sit in the stands and watch the ball go back and forth with no real concern about the short-term outcome.

We encourage our adult children to buy especally during corrections.

lynneny
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Re: Did you learn anything from the market correction?

Post by lynneny » Fri Feb 16, 2018 1:38 am

Yes, I did. I planned to reduce my long-time 60/40 asset allocation to 50/50 by the time I retired.

I failed at that because 1) the stock market went up so much the last couple years that even though I kept rebalancing, my AA stayed at about 60/40; and 2) I was laid off at the end of the year, so retirement came a couple years earlier than intended.

I'm taking the market drop as a warning to get my AA back on track, and taking advantage of the market being back up, at least temporarily, to re-balance closer to 50-50.

As a very new retiree (I'm still getting used to the idea), I have concerns now that I didn't back in 2007-2008, about whether I'm retiring into an upcoming bear market, with sequence of returns risk. I should be ok, and will be moving to a LCOL area in the next year, but I definitely have a different perspective than when I was working.

donfairplay
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Re: Did you learn anything from the market correction?

Post by donfairplay » Fri Feb 16, 2018 1:42 am

I learned that there is such a thing called a "termination event" in the ETF ticker XIV. Honestly had no idea about it.

I also re-learned that while my portfolio went down a little, things could have been worse, a lot worse, such as this trader's case:

https://www.marketwatch.com/story/xiv-t ... 2018-02-06
Marketwatch article February 7, 2018: XIV trader: ‘I’ve lost $4 million, 3 years of work and other people’s money’

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pennstater2005
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Re: Did you learn anything from the market correction?

Post by pennstater2005 » Fri Feb 16, 2018 2:36 am

I learned I'm really good at ignoring all stock tickers and people.

I knew it was happening I was just hoping that not everyone and their brother would feel the need to tell me.

They did.
“If you think nobody cares if you're alive, try missing a couple of car payments.” – Earl Wilson

tmcc
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Re: Did you learn anything from the market correction?

Post by tmcc » Fri Feb 16, 2018 6:10 am

I finally learned to stop messing with 3x index etfs [for now]

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F150HD
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Re: Did you learn anything from the market correction?

Post by F150HD » Fri Feb 16, 2018 6:46 am

I am wondering what the next phase of the market cycle is.

Considering we've had multiple corrections in the past X years (prior post in this thread), when (according to historical trends) is a 'recession' and larger pullback expected here?

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czeckers
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Re: Did you learn anything from the market correction?

Post by czeckers » Fri Feb 16, 2018 6:46 am

People would freak out less if they tracked number of shares owned rather than the value of those shares.
The Espresso portfolio: | | 16% LCV, 16% SCV, 16% EM, 8% Int'l Value, 8% Int'l Sm, 8% US REIT, 8% Int'l REIT, 20% Inter-term US Treas | | "A journey of a thousand miles begins with a single step."

Jim85
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Re: Did you learn anything from the market correction?

Post by Jim85 » Fri Feb 16, 2018 7:05 am

TG2 wrote:
Tue Feb 13, 2018 12:58 pm
Everything I needed to know I learned in October, 1987.
^This. As a young inexperienced investor I sold some in '87 and locked in those loses. Never again. This time I thought my AA would drift enough that I'd buy the dip. Never happened.

livesoft
Posts: 61498
Joined: Thu Mar 01, 2007 8:00 pm

Re: Did you learn anything from the market correction?

Post by livesoft » Fri Feb 16, 2018 7:48 am

El Greco wrote:
Thu Feb 15, 2018 11:48 pm
How about holding balanced funds? Do they demonstrate the benefits of rebalancing? My understanding is they rebalance every day, which should take the "human fearful" element out of it.
I have a lot of respect for the Vanguard LifeStrategy and Target Retirement funds. I do believe they demonstrate the benefits of rebalancing and perform extremely well. As long as one locates them in tax-advantaged accounts, they are a superb solution for investors.
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retiringwhen
Posts: 286
Joined: Sat Jul 08, 2017 10:09 am
Location: New Jersey, USA

Re: Did you learn anything from the market correction?

Post by retiringwhen » Fri Feb 16, 2018 8:19 am

I learned that I should have read livesoft's TLH thread earlier!

I recently completed a one year major simplification to a virtually complete 3-fund portfolio, but I hadn't considered how to handle TLH situations when I have the same funds in several taxable and tax-deferred accounts. On top of that I completed much of the last steps of simplification all within the the period of DEC and JAN. I had (in the past tense now) a very nice opportunity to TLH, but i did not have a plan to deal with wash sale considerations with my IRAs and 401(K). I finally came up with a plan over the weekend, but by Monday most of the opportunity was gone. I am ready for the next event. :?

Now, I know which funds I can exchange to to avoid part of the wash sales and I am going to be continuously careful about periodic buys in the retirement accounts to leave larger windows without risk of wash sales on the three funds.

TG2
Posts: 192
Joined: Sat Nov 25, 2017 6:50 pm

Re: Did you learn anything from the market correction?

Post by TG2 » Fri Feb 16, 2018 5:09 pm

Jim85 wrote:
Fri Feb 16, 2018 7:05 am
TG2 wrote:
Tue Feb 13, 2018 12:58 pm
Everything I needed to know I learned in October, 1987.
^This. As a young inexperienced investor I sold some in '87 and locked in those loses. Never again. This time I thought my AA would drift enough that I'd buy the dip. Never happened.
I was able to realize quickly that the only people who truly lost money were the ones who sold and locked in losses, so I didn't even do that. Still, it would have been a very cheap lesson. I had put my first $4,000 into the market in January, so my loss on a bad day the last couple weeks dwarfed my entire "portfolio" value on Black Monday. :D

mariezzz
Posts: 142
Joined: Mon Oct 02, 2017 11:02 pm

Re: Did you learn anything from the market correction?

Post by mariezzz » Fri Feb 16, 2018 7:50 pm

Bacchus01 wrote:
Tue Feb 13, 2018 8:05 am
Wait. Something happened?

Exactly. An exceptionally good 2017, followed by a ridiculously exuberant January, followed by a drop of just barely 10%, which if you ignore January's ridiculous exuberance, was <5% drop, and now at least half of that drop has covered. And we're getting all excited and saying this was a correction? Technically it might be, but I am pretty skeptical.

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