Ok fellow bogleheads, was the correction scary or nothing?

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Phineas J. Whoopee
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by Phineas J. Whoopee » Wed Mar 07, 2018 5:57 pm

CnC wrote:
Wed Mar 07, 2018 5:18 pm
...
And yes, I was hoping for some sort of formula where I could see ahh X% correction makes the typical person feel "_____" I could then judge my feelings against that point to see where my risk tolerance is. I still feel that is the case, since you can apply a similar formula to nearly every thing in life. (I'm an engineer by the way)
Hi CnC (Computer numerical control?)

There is a contradiction between engineering and investing.

In engineering we know the curvature of the earth, the force of gravity, and the rate of corrosion of common materials. That's how one can design and build a suspension bridge, including writing a preventative maintenance schedule.

In investing we do not know the equivalents of curvature of the earth, force of gravity, and corrosion rates. There is no optimization. There is only tinkering.

In engineering one does not know whether the suspension bridge one designed and built for car and truck traffic will be repurposed, many years later and after all the engineers involved who recommend against the change have retired, for freight rail.

We know even less about human responses, and cannot quantify them for any individual (although across populations we can make some predictions).

I think you are asking for that which does not and inherently cannot exist.

I hope that's helpful.

PJW
Last edited by Phineas J. Whoopee on Wed Mar 07, 2018 6:03 pm, edited 1 time in total.

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by LiterallyIronic » Wed Mar 07, 2018 5:58 pm

dogagility wrote:
Wed Mar 07, 2018 5:42 pm
I was 25 years from retirement in 2008. That was also a non-event for me because I trusted the economy would rebound before I retired... given its history.
2008 was a massive event for people like me. I graduated from university in December 2008. Sure, I knew the economy would eventually rebound, but what good does that do for me if I'm fresh out of school and working in a call center to pay the bills, with no money to invest during the run-up and fewer jobs available because of people delaying retirement in order to recover or competing with us young folk for the entry level jobs despite them having years of experience and us none?

Doesn't make it easy when the economy's bottom drops out right when you're supposed to get your career going. But, boy was I able to start investing in 2016 after I missed most of the run-up. So that's perfect.

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by dknightd » Wed Mar 07, 2018 6:12 pm

Risk tolerance is hard to define, and will change as you age.
I assume you have googled it, but in case not
https://www.google.com/search?q=risk+to ... irefox-b-1

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Re: Ok fellow bogelheads, was the correction scary or nothing?

Post by KlangFool » Wed Mar 07, 2018 6:13 pm

CnC wrote:
Wed Mar 07, 2018 4:02 pm

But from the sounds of the majority here, nothing means anything until you are in the throes of a major recession and have lost your job. :confused it makes estimating your risk tolerance a bit tough doesn't it?
CnC,

<<you are in the throes of a major recession and have lost your job.>>

Houston Oil Bust, Texas Saving & Loan Crisis, Asian Currency Crisis, Telecom Bust, 2008/2009 recession.

I had been through a few. And, it still does not mean I am emotionally ready for the next one. In any case, I make sure that I am financially ready.

Historically, the US has at least one recession every 10 years since 1836. The last recession was 2007/2009. So, by historical trend, we should have one recession between now and 2019.

KlangFool

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by montanagirl » Wed Mar 07, 2018 6:22 pm

I don't time the market or anything like that but I did manage to get to 50/50 AA finally. :wink:

Or rather, 48/48 with the rest in cash to get me to 70 next Feb.

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by Soon2BXProgrammer » Wed Mar 07, 2018 6:24 pm

there was a correction?

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Phineas J. Whoopee
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Re: Ok fellow bogelheads, was the correction scary or nothing?

Post by Phineas J. Whoopee » Wed Mar 07, 2018 6:36 pm

KlangFool wrote:
Wed Mar 07, 2018 6:13 pm
...
Historically, the US has at least one recession every 10 years since 1836. The last recession was 2007/2009. So, by historical trend, we should have one recession between now and 2019.
...
I haven't checked your claim about 1836, although among other things there was a very long recession, called the long depression at the time, a term which, like recession vs. depression, didn't sound as bad as the previous word panic, between 1873 and by some measures 1896.

In any event, an average from the past is not predictive of particulars in the future. One hundred year floods can occur multiple times in a single year.

Reification

PJW
Last edited by Phineas J. Whoopee on Wed Mar 07, 2018 6:40 pm, edited 1 time in total.

aristotelian
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by aristotelian » Wed Mar 07, 2018 6:39 pm

Nothing like 2008. In part, after the run last year I was expecting a flat market this year, and it just went higher than I thought before reverting. It felt like giving back paper gains. Still, I won't lie. Any time the market drops it is stressful.

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by Doom&Gloom » Wed Mar 07, 2018 6:41 pm

I had scarier corrections from my 9th grade algebra teacher.

KlangFool
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Re: Ok fellow bogelheads, was the correction scary or nothing?

Post by KlangFool » Wed Mar 07, 2018 7:07 pm

Phineas J. Whoopee wrote:
Wed Mar 07, 2018 6:36 pm
KlangFool wrote:
Wed Mar 07, 2018 6:13 pm
...
Historically, the US has at least one recession every 10 years since 1836. The last recession was 2007/2009. So, by historical trend, we should have one recession between now and 2019.
...
I haven't checked your claim about 1836, although among other things there was a very long recession, called the long depression at the time, a term which, like recession vs. depression, didn't sound as bad as the previous word panic, between 1873 and by some measures 1896.

In any event, an average from the past is not predictive of particulars in the future. One hundred year floods can occur multiple times in a single year.

Reification

PJW
PJW,

You can check the list.

https://en.wikipedia.org/wiki/List_of_r ... ted_States

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by Fallible » Wed Mar 07, 2018 7:11 pm

CnC wrote:
Wed Mar 07, 2018 5:18 pm
...
... why even talk about risk tolerance if there is no method of gauging it until after the fact? ..
Risk tolerance is about emotions - emotions such as fear and greed that can rule the markets. And it's about individual emotions, your own unique emotions. Investors need to understand their emotions so they can better control them and achieve the discipline necessary (the "emotional framework" that Warren Buffett champions) to set a course that is right for them and then hold it.
Bogleheads® wiki | Investing Advice Inspired by Jack Bogle

MJW
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by MJW » Wed Mar 07, 2018 7:12 pm

Let us also not forget the "Panic of 1792." Perhaps some Bogleheads can share how they weathered that one.

:wink:

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randomizer
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Re: Ok fellow bogelheads, was the correction scary or nothing?

Post by randomizer » Wed Mar 07, 2018 7:16 pm

Scott S wrote:
Wed Mar 07, 2018 5:28 pm
randomizer wrote:
Wed Mar 07, 2018 4:38 pm
I wasn't scared by what happened. I'm scared about what could happen. The big gains of 2017 seem like irrational exuberance to me. Now the reality is settling in, or starting to. I expect markets to remain flat, or lose any near-term gains they make and perhaps more over the next year or two.
I think that sentiment is behind a lot of the jitters this year. The feeling that the market is at a top and vulnerable to perturbations caused by outrageous things in the news. That the market more or less comes back the day after each wild news event is seeming like a new pattern for 2018.

(Not that it affects what I do outside of rebalancing, though.)
Yeah, I get that. It hasn't led me to change anything about my plan either. I just sit there and grumble about how we never learn, but I stay the course.
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Re: Ok fellow boggelheads, was the correction earlier this year scary?

Post by MindBogler » Wed Mar 07, 2018 7:32 pm

Minderbinder wrote:
Wed Mar 07, 2018 3:46 pm
I had a similar experience with 2000-01. It just really didn't resonate in my consciousness because I had no assets worth worrying about anyways and entry-level positions were fine.
That is when I learned my first lesson. I started investing in 1998 through a financial advisor. He had me invested almost 100% in a tech sector fund. My savings was absolutely decimated and the fund was shuttered. I think my loss was something on the order of 70-80%. I found Vanguard, indexing, and diversification soon afterwards, fired my FA and began managing my own destiny. I haven't looked back since. The only silver lining is that it occured very early in my investing journey when I still had a lot of time to regain lost ground. It really hurt when it happened but in hindsight, I "lost" many more dollars (not %) during 2007-2008 and much more in this last pullback and didn't bat an eye.

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by Toons » Wed Mar 07, 2018 7:49 pm

Scary?
Lol,,,,
Scared of what?
Boo! :mrgreen:
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by 2pedals » Wed Mar 07, 2018 8:01 pm

Spooky not scary. Spooky is fun and interesting, scary is not fun. Spooky for going up so steady for most of 2017 with a steep run up at the beginning of 2018 and it was like someone turned off the amplifier controls.

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by Dantes » Wed Mar 07, 2018 8:15 pm

The thread title uses the past tense. Like whatever it was is over.

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Alexa9
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by Alexa9 » Wed Mar 07, 2018 8:17 pm

If you're 100% equities about to retire, it might give you a little reality check. Or maybe you've got an iron stomach 8-)

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by AlohaJoe » Wed Mar 07, 2018 8:27 pm

CnC wrote:
Wed Mar 07, 2018 2:53 pm
As I said it's the first time that I have "lost" money since I started and I'm trying to get a feel for where this lies on the scale from yawn to white knuckle.
You weren't invested in 2016?

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pennstater2005
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by pennstater2005 » Wed Mar 07, 2018 8:29 pm

It was something. Just not scary. Sort of expected, maybe?
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by Sandtrap » Wed Mar 07, 2018 8:32 pm

Rebalanced with new money just before the correction. Shucks.
Bought more International after.
Glad that my allocation is conservative.
Oh well. Move on.
j

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fishandgolf
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by fishandgolf » Wed Mar 07, 2018 8:42 pm

Most seasoned investors were expecting this......most season investors came out unscathed.......

If you're not a seasoned investor............these things will help you become.....

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by Taylor Larimore » Wed Mar 07, 2018 8:49 pm

Was the correction earlier this year scary?
CnC:

When I was younger and had never heard of Jack Bogle, this correction would have scared me. I would probably have sold our stocks and gone to cash.

Now, at my age 94, I have gone through scores of "corrections" and about a dozen bear markets (a decline of at least 20%). I have paid almost no attention to this latest decline--except to advise Bogleheads to "Stay-the-course."

My asset allocation is key: Money that I cannot afford to lose is in Vanguard Total Bond Market Index Fund -- The rest is in stocks. I sleep like a baby.

Thank you, Jack!

Best wishes
Taylor
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by blaugranamd » Wed Mar 07, 2018 8:50 pm

What correction? :confused
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by Sandtrap » Wed Mar 07, 2018 8:51 pm

Taylor Larimore wrote:
Wed Mar 07, 2018 8:49 pm
Was the correction earlier this year scary?
CnC:

When I was younger and had never heard of Jack Bogle, this correction would have scared me. I would probably have sold our stocks and gone to cash.

Now, at my age 94, I have gone through scores of "corrections" and about a dozen bear markets (a decline of at least 20%). I have paid almost no attention to this latest decline--except to advise Bogleheads to "Stay-the-course."

My asset allocation is key: Money that I cannot afford to lose is in Vanguard Total Bond Market Index Fund -- The rest is in stocks. I sleep like a baby.

Thank you, Jack!

Best wishes
Taylor
Priceless!
Will pass on to DW and son.
thanks again, Taylor
mahalo,
jim

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by Marylander1 » Wed Mar 07, 2018 8:53 pm

It's interesting that the term "correction" now always means a drop to the financial press. When something has been undervalued, isn't it also a correction when it rises?

Marylander1

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by WanderingDoc » Wed Mar 07, 2018 8:57 pm

CnC wrote:
Wed Mar 07, 2018 2:53 pm
Hey guys, I know the mantra time in the market not timing, and don't react to the market fluctuations. I am not concerned about any of that.


I just an interested in how the market correction felt to fellow boggelheads here. I'm pretty young (32) and I while I have been investing for a while I got serious about it early last year.


This is the first time since I started paying attention that my accounts went down across the board. So I wanted to guage my feelings and if anything I felt relieved that the dropped a bit and seemed to level out without a major recession.

I realize that this was a correction, not a crash. But the media being what they are is acting like this was a big deal.


I guess my question is this, was this a negligible blip that no reasonable person had any reaction to? Or does the fact that I felt ok about the dip mean my asset allocation is on target with my risk tolerance?


As I said it's the first time that I have "lost" money since I started and I'm trying to get a feel for where this lies on the scale from yawn to white knuckle.
I am hoping for a 30-40% correction by end of 2018. I may not get my wish, but I WILL get it by 2020 :)
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by oriol » Thu Mar 08, 2018 4:15 am

WanderingDoc wrote:
Wed Mar 07, 2018 8:57 pm
I am hoping for a 30-40% correction by end of 2018. I may not get my wish, but I WILL get it by 2020 :)
What makes you so sure the market will decline 30-40% by 2020? Serious question, what's your rationale?

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by saveinvestbecomefree » Thu Mar 08, 2018 7:52 am

I'll add an additional perspective. I agree this last "correction" was nothing. But even a big, extended drop when you're young is often easy to handle emotionally. You have a lot of "human capital" and time to use a drop to your financial advantage. Plus your contributions compared to the portfolio value is high. If you do lose your job, it's much more likely you can get another equivalent job in a relatively short time period. If you are near or in retirement with a big portfolio, the same drop could feel very differently. Your risk tolerance and emotions can change over time because your time horizon for needing the money changes. And it's usually not easy to go back to work at anything like your previous salary.

I speculated on individual tech stocks and got hammered in 2001. No problem emotionally. I also sailed through 2008 easily despite a six figure value drop, putting as much new income in stocks as I could. Generally my risk tolerance is very high. I've been 100% stocks for my entire working career. Now I'm considering early retirement with a much larger portfolio and less desire to "go back to work" if things go badly. I'm still 75% in stocks but have set aside 25% for sequence of returns risk. It actually bothers me to not be fully invested and I expect to increase equities over time again but I don't want to be fully invested after a big run-up and face a big drop right when a big emotional change like retirement & moving could be happening.

Risk tolerance is personal and changes depending on your personal circumstances as well.

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Re: Ok fellow bogelheads, was the correction scary or nothing?

Post by Olemiss540 » Thu Mar 08, 2018 8:14 am

Scott S wrote:
Wed Mar 07, 2018 5:28 pm
randomizer wrote:
Wed Mar 07, 2018 4:38 pm
I wasn't scared by what happened. I'm scared about what could happen. The big gains of 2017 seem like irrational exuberance to me. Now the reality is settling in, or starting to. I expect markets to remain flat, or lose any near-term gains they make and perhaps more over the next year or two.
I think that sentiment is behind a lot of the jitters this year. The feeling that the market is at a top and vulnerable to perturbations caused by outrageous things in the news. That the market more or less comes back the day after each wild news event is seeming like a new pattern for 2018.

(Not that it affects what I do outside of rebalancing, though.)
This "feeling" of being at market peak and at the brink of low or negative returns is MUCH more dangerous to one's future portfolio value than the feelings encountered during a recession.

Timing the market's peak is just as hard as timing it's trough, and just as financially devastating. Fear mongering about "market exuberance" drives many more intelligent people from a proven buy and hold strategy than holding through a recession ever will.

We need to quit propagating this and start enjoying the good days as much as we learn to accept the bad. Realize none of us know nothing that isn't spoon fed to us through a media outlet of some sort.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

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Re: Ok fellow boggelheads, was the correction earlier this year scary?

Post by Dottie57 » Thu Mar 08, 2018 8:20 am

Minderbinder wrote:
Wed Mar 07, 2018 3:21 pm
CnC wrote:
Wed Mar 07, 2018 3:13 pm
Perhaps, but has that happened in our lifetime? 1999 was nothing like that, 2008 was nothing like that. Do we really need a second great depression for us to get a grasp on how much risk we can handle? That seems a bit far fetched, because plain and simple everyone will have lost nearly everything.
2008 was absolutely like that.

When you've got the head of the Fed and Treasury meeting with the biggest banks in the world trying to figure out how to stop the meltdown of the entire financial sector over the course of one weekend, it is a very scary feeling.
+1

I was terrified. It looked like the whole system could fail. I've changed my asset allocation to 50/50.

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by WanderingDoc » Thu Mar 08, 2018 5:00 pm

oriol wrote:
Thu Mar 08, 2018 4:15 am
WanderingDoc wrote:
Wed Mar 07, 2018 8:57 pm
I am hoping for a 30-40% correction by end of 2018. I may not get my wish, but I WILL get it by 2020 :)
What makes you so sure the market will decline 30-40% by 2020? Serious question, what's your rationale?
Markets don't go up indefinitely. There are bull and bear markets. And bubbles. We are/were in the 2nd longest bull market in history. A 10-20% slow and painful bear market will effectively be good enough, that will do just fine. People that think markets can just keep going up despite phony market fundamentals, companies that are valued in the billions which produce negative cash flows year after year. This won't last. I had the foresight to not to put a significant amount of capital into equities, and 2018 has already had poor returns. This is only the beginning though.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by CantPassAgain » Thu Mar 08, 2018 5:22 pm

WanderingDoc wrote:
Thu Mar 08, 2018 5:00 pm
oriol wrote:
Thu Mar 08, 2018 4:15 am
WanderingDoc wrote:
Wed Mar 07, 2018 8:57 pm
I am hoping for a 30-40% correction by end of 2018. I may not get my wish, but I WILL get it by 2020 :)
What makes you so sure the market will decline 30-40% by 2020? Serious question, what's your rationale?
Markets don't go up indefinitely. There are bull and bear markets. And bubbles. We are/were in the 2nd longest bull market in history. A 10-20% slow and painful bear market will effectively be good enough, that will do just fine. People that think markets can just keep going up despite phony market fundamentals, companies that are valued in the billions which produce negative cash flows year after year. This won't last. I had the foresight to not to put a significant amount of capital into equities, and 2018 has already had poor returns. This is only the beginning though.
I'll never understand why people make statements like the above with such confidence. Is it ego or what?

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by oriol » Thu Mar 08, 2018 6:48 pm

CantPassAgain wrote:
Thu Mar 08, 2018 5:22 pm
WanderingDoc wrote:
Thu Mar 08, 2018 5:00 pm
oriol wrote:
Thu Mar 08, 2018 4:15 am
WanderingDoc wrote:
Wed Mar 07, 2018 8:57 pm
I am hoping for a 30-40% correction by end of 2018. I may not get my wish, but I WILL get it by 2020 :)
What makes you so sure the market will decline 30-40% by 2020? Serious question, what's your rationale?
Markets don't go up indefinitely. There are bull and bear markets. And bubbles. We are/were in the 2nd longest bull market in history. A 10-20% slow and painful bear market will effectively be good enough, that will do just fine. People that think markets can just keep going up despite phony market fundamentals, companies that are valued in the billions which produce negative cash flows year after year. This won't last. I had the foresight to not to put a significant amount of capital into equities, and 2018 has already had poor returns. This is only the beginning though.
I'll never understand why people make statements like the above with such confidence. Is it ego or what?
Perhaps it's the blind belief in the cyclicity of the debt cycle? To be honest, I wouldn't argue with that, but I wouldn't venture to try and time it either. Not with my own money anyway.

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by spammagnet » Thu Mar 08, 2018 6:57 pm

CnC wrote:
Wed Mar 07, 2018 2:53 pm
I just an interested in how the market correction felt to fellow boggelheads here.
What correction?

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by hilink73 » Thu Mar 08, 2018 7:01 pm

CnC wrote:
Wed Mar 07, 2018 2:53 pm

yawn
This.

(In crypto, this is daily volatility. I love it.)

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burt
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Re: Ok fellow boggelheads, was the correction earlier this year scary?

Post by burt » Thu Mar 08, 2018 7:08 pm

Minderbinder wrote:
Wed Mar 07, 2018 3:28 pm
wolf359 wrote:
Wed Mar 07, 2018 3:24 pm
Actually, that WAS 2008.

A recession is when a lot of people are losing their jobs.
A depression is when you lost your job, too.

Even during a recession, many people are facing their own private depressions.

If you were working at a dot com in the late 1990's, that also described the tech crash.
I really hope to never see a situation like that again. I know recessions will happen but in September 2008 it really felt like the entire world was about to implode. It was absolutely terrifying to lose a huge part of your nest egg at the same time literally EVERYONE you knew was talking about losing jobs, homes, etc. It was completely unavoidable. It hung over everything.

It makes you appreciate you have A LOT more risk in terms of careers, housing, etc than a number in a spreadsheet indicates about your stock portfolio. In some ways you can stress test the latter but the reality is it doesn't come in a vacuum. That 60%+ loss comes at the same time your own job is at risk and there are a flood of people now competing against you for a new one.

On one hand I'm jealous of people who didn't have front row seats to that experience, on another I pity them.
+1

2008 was damn scary.
I don't know of many brave people during the firestorm of 2008.
I had a front row seat... age 52, new job, relocation, couldn't sell home, life time savings down 40%, new company considering bankruptcy.
I consider myself lucky to have survived 2008.
2008 may be the reason why my investments are more conservative than most.

burt

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by Slacker » Thu Mar 08, 2018 7:22 pm

Not scary, just an annoyance for my spouse.

She had already bought all her Roth IRA funds for the year about 2 weeks before the correction at about a 7-8% premium compared to the lower prices.

I simply reminded her that 10 years from now, such a small difference will have been meaningless noise and that I was slower to max my Roth IRA so I was able to get the lower prices such that we got the average of pricing between the market lows I snagged and the much higher prices she paid.

I was wondering if it would be prolonged like 2016 -> was considering adjusting my 401K contributions to "front load" the account a bit, but it ended very quickly and didn't drop very much. Certainly nothing like 2008/early2009.

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by CantPassAgain » Thu Mar 08, 2018 7:25 pm

Why is everyone comparing February's drop with 2008? What about February 2016, September 2015, August 2011, and July 2010? Those were all worse than what happened a few weeks ago. Are people's memories that short? All you gotta do is click on a chart of the S&P 500 and look at it.

Slacker
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Re: Ok fellow boggelheads, was the correction earlier this year scary?

Post by Slacker » Thu Mar 08, 2018 7:27 pm

burt wrote:
Thu Mar 08, 2018 7:08 pm

2008 was damn scary.
I don't know of many brave people during the firestorm of 2008.
I had a front row seat... age 52, new job, relocation, couldn't sell home, life time savings down 40%, new company considering bankruptcy.
I consider myself lucky to have survived 2008.
2008 may be the reason why my investments are more conservative than most.

burt
In march 2009 (with a very small 401K account) I decided the S&P500 looked pretty dang low so now was as good a time as any and sold all my bonds to buy VFINX (vanguard S&P500). I don't think I had more than about 10% or 15% of my 401K in bonds so it was only about $3000-$4500...

Guess it's easy to make those calls with such a low balance at a relatively young age.

CantPassAgain
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by CantPassAgain » Thu Mar 08, 2018 7:35 pm

oriol wrote:
Thu Mar 08, 2018 6:48 pm
CantPassAgain wrote:
Thu Mar 08, 2018 5:22 pm
WanderingDoc wrote:
Thu Mar 08, 2018 5:00 pm
oriol wrote:
Thu Mar 08, 2018 4:15 am
WanderingDoc wrote:
Wed Mar 07, 2018 8:57 pm
I am hoping for a 30-40% correction by end of 2018. I may not get my wish, but I WILL get it by 2020 :)
What makes you so sure the market will decline 30-40% by 2020? Serious question, what's your rationale?
Markets don't go up indefinitely. There are bull and bear markets. And bubbles. We are/were in the 2nd longest bull market in history. A 10-20% slow and painful bear market will effectively be good enough, that will do just fine. People that think markets can just keep going up despite phony market fundamentals, companies that are valued in the billions which produce negative cash flows year after year. This won't last. I had the foresight to not to put a significant amount of capital into equities, and 2018 has already had poor returns. This is only the beginning though.
I'll never understand why people make statements like the above with such confidence. Is it ego or what?
Perhaps it's the blind belief in the cyclicity of the debt cycle? To be honest, I wouldn't argue with that, but I wouldn't venture to try and time it either. Not with my own money anyway.
The problem is if this person is right he/she will think it is because of their amazing intellect and will probably tell us so, and if they are wrong he/she probably wont ever mention it again. That's why prognostications (good or bad) about the stock market are so annoying. And the statement "I had the foresight to not to put a significant amount of capital into equities, and 2018 has already had poor returns" gimme a break...as of close today the S&P 500 has a price return of almost 2.5% year to date. And it's only March 8th. Even so, who brags about something like that? 2 months in the stock market is NOISE, they didn't correctly call anything.

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BrandonBogle
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by BrandonBogle » Thu Mar 08, 2018 9:13 pm

Soon2BXProgrammer wrote:
Wed Mar 07, 2018 6:24 pm
there was a correction?
Honestly, that was my reaction too.

I am in my 30s, have a 75/25 AA, and update my spreadsheet maybe every two weeks or so. I didn’t even notice the correction, but I did see the numbers go down. Oh well, that’s part of the process. And thus, to me this means I also have an AA I can live with.

jeffh19
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by jeffh19 » Thu Mar 08, 2018 11:28 pm

I wish it would have dropped more. I'm pissed at Vanguard because their website and app crashed when I was trying to dump money in the market. I never did (more so than my normal DCA) and I'm ticked about it lol

It made me feel a little better about myself because even though it wasn't a big drop at all in the grand scheme, all I could think about was dumping money in and had no worries about freaking out about all the money I just lost on paper or anything like that, because I know it's long term and I have no plans for that money for years.

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by Lafder » Thu Mar 08, 2018 11:48 pm

It was scary for me. Not terrifying, but unsettling and concerning indeed! Definitely not nothing. It made me look at financial news which I usually avoid.

At the same time, I hoped it would be an opportunity to rebalance.

Unfortunately, my AA had gotten a little stock heavy due to market performance, though I was not at a level I needed to rebalance (I hate selling to rebalance). So after the big to me drop in February, I recalculated my AA and discovered that the "correction" had brought my AA in line with my IPS so there was still no need to rebalance.

I know a big drop would be an opportunity to rebalance. I am more than 10 years from retirement. But I realized with the recent drop, that I get a bit paralyzed and I was afraid to rebalance in case it dropped even more..............

I am surprised most responders are so non effected by the drop in February. I wonder if early responders to the question were so confident that those of us who were unsettled are reluctant to admit it!

lafder

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by TropikThunder » Fri Mar 09, 2018 12:03 am

CantPassAgain wrote:
Thu Mar 08, 2018 5:22 pm
WanderingDoc wrote:
Thu Mar 08, 2018 5:00 pm
oriol wrote:
Thu Mar 08, 2018 4:15 am
WanderingDoc wrote:
Wed Mar 07, 2018 8:57 pm
I am hoping for a 30-40% correction by end of 2018. I may not get my wish, but I WILL get it by 2020 :)
What makes you so sure the market will decline 30-40% by 2020? Serious question, what's your rationale?
Markets don't go up indefinitely. There are bull and bear markets. And bubbles. We are/were in the 2nd longest bull market in history. A 10-20% slow and painful bear market will effectively be good enough, that will do just fine. People that think markets can just keep going up despite phony market fundamentals, companies that are valued in the billions which produce negative cash flows year after year. This won't last. I had the foresight to not to put a significant amount of capital into equities, and 2018 has already had poor returns. This is only the beginning though.
I'll never understand why people make statements like the above with such confidence. Is it ego or what?
Stock market is predictably cyclical, but real estate never goes down. :twisted:
I don't think that, Mr. Over-confidence does.

Edited to add snarky emoticon. :D

SGM
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by SGM » Fri Mar 09, 2018 5:25 am

It was not scary. If I were younger I would want lower evaluations and with job security would be 100% in the market. As a retiree I have a somewhat more conservative asset allocation. It seems that large daily even hourly swings will be the norm at least for a while. I was not one of those who was bored when the market went up steadily most every day in 2017.

German Expat
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by German Expat » Fri Mar 09, 2018 5:54 am

It didn't even hit my re balancing bands. So not scary but also with the huge run up before it didn't go far enough back to be really scary. I just compared it to 1 year ago and was still way up.

The only thing good to know was that I did not change anything and kept the course while it was not so clear if it just goes down a bit or a lot more. I was ready to re balance but would not have changed anything else.

tibbitts
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by tibbitts » Fri Mar 09, 2018 8:15 am

I don't understand the "was" terminology. How do we determine "was" vs. "is"? If you say 10% is a correction, and you go down 10.1% and then back to being down 9.9%, is that "was"?

scone
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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by scone » Fri Mar 09, 2018 8:26 am

Seeing some volatility in the market made me feel like things were getting back to normal. Last year's extreme quiet was kind of weird.
"My bond allocation is the amount of money that I cannot afford to lose." -- Taylor Larimore

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Re: Ok fellow bogleheads, was the correction scary or nothing?

Post by prairieman » Fri Mar 09, 2018 9:21 am

The downturn was a little scary for me, and served as a reminder that my portfolio had grown heavy in stock compared to my preferred AA. After the bounce back I readjusted back to 50:50. Banking some of my chips (converting stocks to bonds) gave me a good feeling that profits from the market run up over the past few years were now real - not just on paper.

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