Reaction to Market

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yousha
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Reaction to Market

Post by yousha » Wed Oct 24, 2018 6:36 pm

Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.

ThePrince
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Re: Reaction to Market

Post by ThePrince » Wed Oct 24, 2018 6:39 pm

What is your alternative?

Dottie57
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Re: Reaction to Market

Post by Dottie57 » Wed Oct 24, 2018 7:33 pm

Be glad it is only a paper loss.

I’ve lost about 50k..... it was worse during Great Recession.

DoctorPhysics
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Re: Reaction to Market

Post by DoctorPhysics » Wed Oct 24, 2018 7:42 pm

Discount shopping now. I am in it for the long run.

Automatic investment plan on 401k and taxable. Today I bought more.

*******************
Be fearful when others are greedy. Be greedy when others are fearful.
- Warren Buffet

Our favorite holding period is forever.
-Warren Buffet
*******************

MotoTrojan
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Re: Reaction to Market

Post by MotoTrojan » Wed Oct 24, 2018 7:49 pm

yousha wrote:
Wed Oct 24, 2018 6:36 pm
Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
Didn’t you make much more than that in 2017?

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LadyGeek
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Re: Reaction to Market

Post by LadyGeek » Wed Oct 24, 2018 7:51 pm

This thread is now in the Investing - Help with Personal Investments forum (investment planning).

Consider changing your asset allocation. See the wiki: Risk tolerance
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baconavocado
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Re: Reaction to Market

Post by baconavocado » Wed Oct 24, 2018 7:55 pm

Looks like bonds held their value.

letsgobobby
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Re: Reaction to Market

Post by letsgobobby » Wed Oct 24, 2018 7:56 pm

yousha wrote:
Wed Oct 24, 2018 6:36 pm
Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
Market isn't even down ten percent. Are you sure your risk reward ratio is appropriate?

TRC
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Re: Reaction to Market

Post by TRC » Wed Oct 24, 2018 8:02 pm

I didn't realize the market dropped till I saw this post. I've guess I've really tuned out the noise lately.

cdu7
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Re: Reaction to Market

Post by cdu7 » Wed Oct 24, 2018 8:03 pm

When you say 100k paper loss today, I’m assuming that means that today specifically you lost that much. Assuming you were 100% equities you should have only lost about 3% today, meaning you have a 3 million + portfolio? Are you invested heavily in individual stocks or do you just have a large equity heavy portfolio?

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MP123
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Re: Reaction to Market

Post by MP123 » Wed Oct 24, 2018 8:07 pm

letsgobobby wrote:
Wed Oct 24, 2018 7:56 pm
yousha wrote:
Wed Oct 24, 2018 6:36 pm
Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
Market isn't even down ten percent. Are you sure your risk reward ratio is appropriate?
Not to mention most indexes are still up for the year...

TheDDC
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Re: Reaction to Market

Post by TheDDC » Wed Oct 24, 2018 8:19 pm

Still enough time to go to cash with Ally for your fixed income portion. :) I just did this with my taxable account for the required two months and would still be keeping it all in equities if the Ally offer were not tempting. I don't consider this market timing, just luck!

-TheDDC

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arcticpineapplecorp.
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Re: Reaction to Market

Post by arcticpineapplecorp. » Wed Oct 24, 2018 8:34 pm

cdu7 wrote:
Wed Oct 24, 2018 8:03 pm
When you say 100k paper loss today, I’m assuming that means that today specifically you lost that much. Assuming you were 100% equities you should have only lost about 3% today, meaning you have a 3 million + portfolio? Are you invested heavily in individual stocks or do you just have a large equity heavy portfolio?
my thoughts exactly. if you are worried when the market falls 3% then you obviously are taking too much risk. But what is the appropriate amount then? Because even if you are a conservative investor with say 30% in stocks you can see a 6%+ drop during a bear market (i.e. a 20% drop X 30% equities = a 6% loss).
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

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nisiprius
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Re: Reaction to Market

Post by nisiprius » Wed Oct 24, 2018 8:41 pm

baconavocado wrote:
Wed Oct 24, 2018 7:55 pm
Looks like bonds held their value.
Indeed.

Image

US stocks (S&P 500, brown), -3%.
International stocks (VXUS, black), -2.3%
Bonds (BND, blue), 0%. Flat as a pancake.

One day means absolutely nothing, but do notice that international stocks dropped almost as much as US stocks, while bonds did nothing at all.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

sunny5885
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Re: Reaction to Market

Post by sunny5885 » Wed Oct 24, 2018 8:46 pm

It honestly depends on your spacific timeframe. I am a relatively young 33 only been in the investing game 10 years. With that said for me I keep my perspective and focus on the long-game. Downturns and dollar cost averaging is my frend. I say let's keep this going the more down days the better.

In all seriousness markets go up and down, it takes time to adjust to that but you must, to really make good investmens and money. We've been in a bull market for 9-10 years a little volitilty is expected and in my opinion welcome :happy

Others may have different views.

iamthewalrus
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Re: Reaction to Market

Post by iamthewalrus » Wed Oct 24, 2018 8:59 pm

MP123 wrote:
Wed Oct 24, 2018 8:07 pm
letsgobobby wrote:
Wed Oct 24, 2018 7:56 pm
yousha wrote:
Wed Oct 24, 2018 6:36 pm
Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
Market isn't even down ten percent. Are you sure your risk reward ratio is appropriate?
Not to mention most indexes are still up for the year...
The major US indexes just crossed into negative for year to date, both S&P500 and Dow Jones are below where they were on January 1st.

carguyny
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Re: Reaction to Market

Post by carguyny » Wed Oct 24, 2018 9:04 pm

Best thing you could do is look at your asset allocation and adjust as necessary based on your reaction to the last few weeks. Hard to tell if this is the start of a 50%+ drop or a minor correction. Make sure you're positioned for either.

am
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Re: Reaction to Market

Post by am » Wed Oct 24, 2018 9:18 pm

carguyny wrote:
Wed Oct 24, 2018 9:04 pm
Best thing you could do is look at your asset allocation and adjust as necessary based on your reaction to the last few weeks. Hard to tell if this is the start of a 50%+ drop or a minor correction. Make sure you're positioned for either.
I will stay the course and tune out the noise. But I admit, that I have less enthusiasm for investing into my taxable account. Don’t care about my tax deferred inves,nets as much, Maybe better to spend more than taxable? Seems like when the market is going down, it’s like throwing your money into the garbage disposal. But in the back of my mind I know that this is a better time to buy than earlier in the year. I’m hoping in the next 10 years it will work out.

HEDGEFUNDIE
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Re: Reaction to Market

Post by HEDGEFUNDIE » Wed Oct 24, 2018 9:22 pm

Should have held some EDV.

Only thing in my portfolio that is up today.

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vineviz
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Re: Reaction to Market

Post by vineviz » Wed Oct 24, 2018 9:24 pm

HEDGEFUNDIE wrote:
Wed Oct 24, 2018 9:22 pm
Should have held some EDV.

Only thing in my portfolio that is up today.
VGLT was up today as well.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

TonyDAntonio
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Re: Reaction to Market

Post by TonyDAntonio » Wed Oct 24, 2018 9:27 pm

VZ did well yesterday and today. I got that one.

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MossySF
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Re: Reaction to Market

Post by MossySF » Wed Oct 24, 2018 9:34 pm

$100K paper loss on 3% drop means $700K gain last year .. probably $1M-$1.5M over the last 5+ years.

You take the bad with the good.

WanderingDoc
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Re: Reaction to Market

Post by WanderingDoc » Wed Oct 24, 2018 9:36 pm

yousha wrote:
Wed Oct 24, 2018 6:36 pm
Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
This is nothing. Just the tip of the iceberg. Strap on your helmet and hold on tight! :o
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

WanderingDoc
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Re: Reaction to Market

Post by WanderingDoc » Wed Oct 24, 2018 9:38 pm

ThePrince wrote:
Wed Oct 24, 2018 6:39 pm
What is your alternative?
There are alternatives. Here's one: all of my real estate rental and partnership checks came in for Oct '18. 10-15% return on cash, regardless of the value of the asset.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

KlangFool
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Re: Reaction to Market

Post by KlangFool » Wed Oct 24, 2018 9:40 pm

yousha wrote:
Wed Oct 24, 2018 6:36 pm
Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
yousha,

If you lose 100K with 3% market drop, you have 3+ million in stock.

A) You are a very lucky person to have that much money.

B) Why are you keeping 3 million in stock?

<<the appropriate risk reward ratio.>>

C) It is a time like this that you find out what is an appropriate AA for you.

KlangFool

letsgobobby
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Re: Reaction to Market

Post by letsgobobby » Wed Oct 24, 2018 10:03 pm

am wrote:
Wed Oct 24, 2018 9:18 pm
carguyny wrote:
Wed Oct 24, 2018 9:04 pm
Best thing you could do is look at your asset allocation and adjust as necessary based on your reaction to the last few weeks. Hard to tell if this is the start of a 50%+ drop or a minor correction. Make sure you're positioned for either.
I will stay the course and tune out the noise. But I admit, that I have less enthusiasm for investing into my taxable account.
I truly don't understand this. Wouldn't you be more excited to invest with prices down 8-13%?

cali
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Re: Reaction to Market

Post by cali » Wed Oct 24, 2018 10:08 pm

what is the "risk reward ratio" ? i see mentioned here?

Just on my Fidelity account I lost about $35K today. Since early Oct I lost $109K. I had just over $1mill.
That does not include my Vanguard acct that I use for work.


I was aggressive this year and planned to reallocate end of summer to be more diversified. Wanted to meet with an advisor since retirement is 5-10 yrs. Unfortunatly Life got in the way with a very ill family member and didn't pay attention to my portfolio for months…. Now this.. not sure what to do at this point.

UniversityEmployee9
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Re: Reaction to Market

Post by UniversityEmployee9 » Wed Oct 24, 2018 10:11 pm

cali wrote:
Wed Oct 24, 2018 10:08 pm
what is the "risk reward ratio" ? i see mentioned here?

Just on my Fidelity account I lost about $35K today. Since early Oct I lost $109K. I had just over $1mill.
That does not include my Vanguard acct that I use for work.


I was aggressive this year and planned to reallocate end of summer to be more diversified. Wanted to meet with an advisor since retirement is 5-10 yrs. Unfortunatly Life got in the way with a very ill family member and didn't pay attention to my portfolio for months…. Now this.. not sure what to do at this point.
Don't fret over it. Markets fluctuate. I'd go ahead and make the AA adjustments you were planning already if I were you.

UpperNwGuy
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Re: Reaction to Market

Post by UpperNwGuy » Wed Oct 24, 2018 10:13 pm

yousha wrote:
Wed Oct 24, 2018 6:36 pm
Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
Wow! Congratulations! I wish my portfolio were large enough to have experienced a $100,000 paper loss today.

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MP123
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Re: Reaction to Market

Post by MP123 » Wed Oct 24, 2018 10:16 pm

iamthewalrus wrote:
Wed Oct 24, 2018 8:59 pm
MP123 wrote:
Wed Oct 24, 2018 8:07 pm
letsgobobby wrote:
Wed Oct 24, 2018 7:56 pm
yousha wrote:
Wed Oct 24, 2018 6:36 pm
Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
Market isn't even down ten percent. Are you sure your risk reward ratio is appropriate?
Not to mention most indexes are still up for the year...
The major US indexes just crossed into negative for year to date, both S&P500 and Dow Jones are below where they were on January 1st.
Indeed. I was checking trailing 12 months.

Thanks for catching that.

Beehave
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Re: Reaction to Market

Post by Beehave » Wed Oct 24, 2018 10:21 pm

I'm not sure I'm credentialed to be the defender of "the Philosophy" for "the Organization," but here's my take:

The "Philosophy" of the "Organization" is:

(1) Set an allocation ratio of riskier to less risky assets that meets your risk-tolerance level.
(2) Rebalance when the ratio gets out of whack.

There have been significant recent gains. Rebalancing during the course of those gains would have served to take some off the table.
Rebalancing now (if called for) would take some of those gains and redeploy them into the market.
This is known as selling high and buying low.

Anyone not following this method probably should not be lamenting it. Anyone following this policy and lamenting it because of the last few days probably needs to reassess their allocation ratios. Moreover, they should be thankful that it was only a 3% daily loss that provided them with this very special form of knowledge, namely self-knowledge, that such notables as Socrates and Buddha valued most of all.

am
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Re: Reaction to Market

Post by am » Wed Oct 24, 2018 10:25 pm

letsgobobby wrote:
Wed Oct 24, 2018 10:03 pm
am wrote:
Wed Oct 24, 2018 9:18 pm
carguyny wrote:
Wed Oct 24, 2018 9:04 pm
Best thing you could do is look at your asset allocation and adjust as necessary based on your reaction to the last few weeks. Hard to tell if this is the start of a 50%+ drop or a minor correction. Make sure you're positioned for either.
I will stay the course and tune out the noise. But I admit, that I have less enthusiasm for investing into my taxable account.
I truly don't understand this. Wouldn't you be more excited to invest with prices down 8-13%?
I think it is a typical investor reaction but is overridden by my years of boglehead experience and knowledge.

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stemikger
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Re: Reaction to Market

Post by stemikger » Wed Oct 24, 2018 10:27 pm

It was a non-event. I didn't even look at my portfolio yet.

I'm all in the balanced index fund, so I let Vanguard do all the heavy lifting and rebalance to 60/40. Didn't even have to get off the couch.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

SoAnyway
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Re: Reaction to Market

Post by SoAnyway » Wed Oct 24, 2018 11:07 pm

yousha wrote:
Wed Oct 24, 2018 6:36 pm
Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
If you care about a $100k paper loss in the equity markets on a single day, OP, I highly recommend that you continue to educate yourself and revisit some of the excellent resources on this website re. the (lower-case) philosophy of the BH (no capital-O, "Organization") community. Personally, I'm sure I probably had a healthy 6-figure "paper loss" over the last week. I couldn't care less, due to my circumstance-appropriate AA and strategy. I had similar days in '87/'00/'07. Yawn. Stay the course.

I recognize it's not always easy to follow when the market tanks. For that reason, please review this post from nisiprius.
Nothing in this post constitutes legal or medical advice. | Consult your attorney or physician to verify if/how anything stated might or might not be applicable to your specific situation.

2015
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Re: Reaction to Market

Post by 2015 » Wed Oct 24, 2018 11:39 pm

letsgobobby wrote:
Wed Oct 24, 2018 10:03 pm
am wrote:
Wed Oct 24, 2018 9:18 pm
carguyny wrote:
Wed Oct 24, 2018 9:04 pm
Best thing you could do is look at your asset allocation and adjust as necessary based on your reaction to the last few weeks. Hard to tell if this is the start of a 50%+ drop or a minor correction. Make sure you're positioned for either.
I will stay the course and tune out the noise. But I admit, that I have less enthusiasm for investing into my taxable account.
I truly don't understand this. Wouldn't you be more excited to invest with prices down 8-13%?
Indeed. Stocks are finally on sale. No sense (to keep on) paying department store prices.

Flyer24
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Re: Reaction to Market

Post by Flyer24 » Wed Oct 24, 2018 11:41 pm

Interested to see your portfolio if a 2.4% drop means $100K. Percentage wise it wasn’t that big of a drop today.

heyyou
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Re: Reaction to Market

Post by heyyou » Wed Oct 24, 2018 11:48 pm

Max SS starts in 18 months. Ten plus years of additional WDs is in bond funds. I suppose that my equities lost in today's market fluctuation, but since the portfolio is not cap weighted, just each fund in the slice and dice portfolio, I may have lost less than someone with more growth exposure, while they would have done much better recently. Risk and reward take turns leading the market.

I just mistyped into "portfoolio." I like that as a new word implying an unsuitable allocation.

Dottie57
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Re: Reaction to Market

Post by Dottie57 » Thu Oct 25, 2018 12:14 am

letsgobobby wrote:
Wed Oct 24, 2018 10:03 pm
am wrote:
Wed Oct 24, 2018 9:18 pm
carguyny wrote:
Wed Oct 24, 2018 9:04 pm
Best thing you could do is look at your asset allocation and adjust as necessary based on your reaction to the last few weeks. Hard to tell if this is the start of a 50%+ drop or a minor correction. Make sure you're positioned for either.
I will stay the course and tune out the noise. But I admit, that I have less enthusiasm for investing into my taxable account.
I truly don't understand this. Wouldn't you be more excited to invest with prices down 8-13%?
I think it depends on where you are regarding retirement. 10 yearsago I was 51 and had two opposing reactions. Sold 30k of stocks, but then turned around and upped my 401k contributions to stock funds. Rather bizarre. The stories on the main page of the newspaper really scared me.


Right now I am closely following weekly results, but currently do not have fears for the system. Also at a 50/50 allocation in retirement. No earning new mney to put in. However if the market are still down in january, I’ll be doing roth conversions right away.

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Dale_G
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Re: Reaction to Market

Post by Dale_G » Thu Oct 25, 2018 12:51 am

If "paper losses" make people feel better, so be it. I mark to market and my losses were real losses.

There is the story of the guy at the track who watched his horse come in dead last. Asked how much he lost, he looked at his betting slip and said, "It's only a paper loss".

Dale
Volatility is my friend

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Hawaiishrimp
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Re: Reaction to Market

Post by Hawaiishrimp » Thu Oct 25, 2018 1:17 am

I am 60% cash as of end of Sept. Waiting for buying opportunity. I expect 40% drop this time. I could be wrong, but I placed my AA accordingly because of the high PE.
I save and invest my money, so money can make money for me, so I don't have to make money eventually.

tesuzuki2002
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Re: Reaction to Market

Post by tesuzuki2002 » Thu Oct 25, 2018 1:29 am

The Sky is falling!!!

Topic Author
yousha
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Re: Reaction to Market

Post by yousha » Thu Oct 25, 2018 4:25 am

Dale_G wrote:
Thu Oct 25, 2018 12:51 am
If "paper losses" make people feel better, so be it. I mark to market and my losses were real losses.

There is the story of the guy at the track who watched his horse come in dead last. Asked how much he lost, he looked at his betting slip and said, "It's only a paper loss".

Dale SO TRUE!

BanquetBeer
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Re: Reaction to Market

Post by BanquetBeer » Thu Oct 25, 2018 5:55 am

I logged in 3 times over the last couple days.. bought $3000 in 529 for the new baby. Unfortunately I always front load the purchases.

Would be nice to know the future but don’t beat yourself up over what you could/should have done. Just plan your path forward.

I have sold stocks once to change allocation back when it was free (no income). In the many years since then I change allocation by dividends and new investment.

Valuethinker
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Re: Reaction to Market

Post by Valuethinker » Thu Oct 25, 2018 7:10 am

yousha wrote:
Wed Oct 24, 2018 6:36 pm
Difficult to follow the Philosophy aspired by the Organization after today's dumpster dive even with the appropriate risk reward ratio. $100,000 paper loss today.
If it is difficult, then you have the wrong asset allocation. Markets dropped what, 3%? That's not a real loss.

It's when one has lost 20% (definition of when a correction becomes a bear market), 35% (2000 -03, probably), 50% (2008-09). Then, it really will feel like a loss. I've never had to survive a general market crash of 70%+ but those who were investing in the UK in the mid 1970s had precisely that.

That's true whether you lose 10k of a 30k portfolio, or 100k of a 300k, or 1m of 3m. In my case, it was more or less to lose 90% of say $1m portfolio (employer's stock in the dot com crash).

MikeG62
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Re: Reaction to Market

Post by MikeG62 » Thu Oct 25, 2018 7:20 am

carguyny wrote:
Wed Oct 24, 2018 9:04 pm
Hard to tell if this is the start of a 50%+ drop or a minor correction. Make sure you're positioned for either.
There have been only two bear markets with US stock market declines (as measured by the S&P500) in excess of 50% ('29-'32 down 86% and '07-'09 down 56%). One would have to have an incredibly pessimist outlook to think we could be on the precipice of another 50%+ decline.

BTW, not suggesting you are saying that is likely or possible, just that declines of that magnitude are more like black swan events.

Could this turn into a bear market, with a decline in excess of 20%, absolutely possible and would not discount it (especially given the approach of the current US administration to trade negotiations).
Real Knowledge Comes Only From Experience

Bacchus01
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Re: Reaction to Market

Post by Bacchus01 » Thu Oct 25, 2018 7:23 am

Meh. I’m down about $150k in Oct

Just got a big raise at work
Record sales and profit year means record bonus in April
Did a little Tax Loss Harvesting
Helping my son sort through the college process
Everyone is healthy

Meh

remomnyc
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Re: Reaction to Market

Post by remomnyc » Thu Oct 25, 2018 7:40 am

I check the market for TLH opportunities. Until last week, I hadn't had any since 2016. I TLH'd last week and again yesterday. No need to rebalance because I am still within my bands. I was excited to TLH since I am living off my assets now and happy to bank some tax loss carry forwards to use against future capital gains I will be cashing in.

P.S. I noticed that my portfolio value decreased more in absolute dollars this month than during the entire last 50% decline because my portfolio is that much larger. That made me smile.

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Re: Reaction to Market

Post by z3r0c00l » Thu Oct 25, 2018 7:52 am

3% is not an especially bad day in stocks. It does rank as one of top 20 worst point declines, but that is only because the market is so much higher today than it was years ago. -7% is required to break the top 20 bad day list, and we have not had one of those in 10 years.

https://en.wikipedia.org/wiki/List_of_l ... al_Average

lostdog
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Re: Reaction to Market

Post by lostdog » Thu Oct 25, 2018 8:00 am

Debt free, house paid off. Honestly not phased one bit. For accumulation stage it's a win-win up or down. Now if I was close to FULL retirement I better have bonds or cash available for a few years of a bear market but I am not at this stage yet.

carguyny
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Re: Reaction to Market

Post by carguyny » Thu Oct 25, 2018 11:50 am

MikeG62 wrote:
Thu Oct 25, 2018 7:20 am
carguyny wrote:
Wed Oct 24, 2018 9:04 pm
Hard to tell if this is the start of a 50%+ drop or a minor correction. Make sure you're positioned for either.
There have been only two bear markets with US stock market declines (as measured by the S&P500) in excess of 50% ('29-'32 down 86% and '07-'09 down 56%). One would have to have an incredibly pessimist outlook to think we could be on the precipice of another 50%+ decline.

BTW, not suggesting you are saying that is likely or possible, just that declines of that magnitude are more like black swan events.

Could this turn into a bear market, with a decline in excess of 20%, absolutely possible and would not discount it (especially given the approach of the current US administration to trade negotiations).
It's always 100% possible that one could be underway - is it probable? Probably not, but I've been a fund manager for about 20 years - I never met anyone at the time who thought that 10/9/2007 was going to be the high that we gave back over 50% and retraced back to the 11/6/1996 close.

Locked