I can't take this anymore=) I'm selling stocks and buying bonds!

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knowledge
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by knowledge »

Alex GR wrote: Tue Nov 13, 2018 4:16 pm My portfolio has gone down by $12000 over the past few days. I know people on here say it's a blip on the radar, but when I think about what I have to go through to earn $12k ($12k = two months of STRESSFUL hard work) it doesn't seem that trivial any more.
Have you thought about how many months you DON'T have to work with the gains you've made in other times? If you're like everyone else, you don't and (quite naturally) you suffer from loss aversion. There's not much you can do about it, but things like IPSs, rebalancing bands, are constructed to fight this urge - consider using them.

And try to remember the upsides as well.
Admiral
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Admiral »

WanderingDoc wrote: Tue Nov 13, 2018 6:40 pm
Alex GR wrote: Tue Nov 13, 2018 4:16 pm Hi everyone,
With all the swings up and down recently I am finding that it's too much volatility for me. My portfolio has gone down by $12000 over the past few days. I know people on here say it's a blip on the radar, but when I think about what I have to go through to earn $12k ($12k = two months of STRESSFUL hard work) it doesn't seem that trivial any more.
I have sold some of my VBR, also selling some VOE and VOO.
I decided to increase international exposure slightly from 14% to 17%.
But of course I am reallocating into BIV. The question is, are you guys finding it hard to keep buying BIV(when rebalancing) considering it keeps going down? It has decreased in value by about $40k for me since I started the portfolio.
Here is what my portfolio will look like when I finish all adjustments. What do you think?

VOO Vanguard 500 Index Fund 33%
VOE Vanguard Mid-Cap Value ETF 5%
VBR Vanguard Small-Cap Value ETF 10%
POGRX PRIMECAP Odyssey Growth Fund 5%
BIV Vanguard Intermediate-Term Bond ETF 22%
PONAX PIMCO Income Fund Class D 8%
VXUS Vanguard Total International Stock ETF International 15%
VWO Vanguard FTSE Emerging Markets ETF International 2%
I'm a simple person. I, too, don't like volatility and drama. Since the beginning of this year, monthly rent checks from my properties and quarterly distributions from passive investments came in like clockwork. Month after month. The value "effectively portfolio value" is meaningless to me when the income keeps flowing in, tenants keep paying my expenses and mortgage, and I will legally pay no taxes on rental income. Don't like portfolio swings? I suggest you look into real estate investing. As an interesting aside, I spent more time this year reading this forum than managing my real estate business.
WanderingDoc: Can you manage to post to a single thread w/o sounding like a real-estate huckster? What does this "advice" have to do with the OP's post?

OP: If your AA is not suitable, I suggest redirecting future contributions to adjust it, rather than locking in a loss (if that's truly what it is). If it makes you feel any better, there are posters on the forum who see losses many times that amount and who understand that stocks fall as well as rise, often in large amounts. They stay the course.
Fallible
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Fallible »

Alex GR wrote: Tue Nov 13, 2018 4:16 pm ...
With all the swings up and down recently I am finding that it's too much volatility for me. ...
As I read your posts on previous threads, this well-known quote came to mind: “If you don’t know who you are, this is an expensive place to find out.”

The "place" is the stock market and here's an article from WSJ columnist Jason Zweig explaining it. The quote is from the '60s, the article was written in 2014, but as you can see, not much has changed in the stock market as far as overall volatility and uncertainty - and never will. Nor will this key rule in investing: "Know yourself."

http://jasonzweig.com/the-most-expensiv ... o-you-are/
Last edited by Fallible on Wed Nov 14, 2018 1:51 pm, edited 1 time in total.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
WanderingDoc
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by WanderingDoc »

Admiral wrote: Wed Nov 14, 2018 1:28 pm
WanderingDoc wrote: Tue Nov 13, 2018 6:40 pm
Alex GR wrote: Tue Nov 13, 2018 4:16 pm Hi everyone,
With all the swings up and down recently I am finding that it's too much volatility for me. My portfolio has gone down by $12000 over the past few days. I know people on here say it's a blip on the radar, but when I think about what I have to go through to earn $12k ($12k = two months of STRESSFUL hard work) it doesn't seem that trivial any more.
I have sold some of my VBR, also selling some VOE and VOO.
I decided to increase international exposure slightly from 14% to 17%.
But of course I am reallocating into BIV. The question is, are you guys finding it hard to keep buying BIV(when rebalancing) considering it keeps going down? It has decreased in value by about $40k for me since I started the portfolio.
Here is what my portfolio will look like when I finish all adjustments. What do you think?

VOO Vanguard 500 Index Fund 33%
VOE Vanguard Mid-Cap Value ETF 5%
VBR Vanguard Small-Cap Value ETF 10%
POGRX PRIMECAP Odyssey Growth Fund 5%
BIV Vanguard Intermediate-Term Bond ETF 22%
PONAX PIMCO Income Fund Class D 8%
VXUS Vanguard Total International Stock ETF International 15%
VWO Vanguard FTSE Emerging Markets ETF International 2%
I'm a simple person. I, too, don't like volatility and drama. Since the beginning of this year, monthly rent checks from my properties and quarterly distributions from passive investments came in like clockwork. Month after month. The value "effectively portfolio value" is meaningless to me when the income keeps flowing in, tenants keep paying my expenses and mortgage, and I will legally pay no taxes on rental income. Don't like portfolio swings? I suggest you look into real estate investing. As an interesting aside, I spent more time this year reading this forum than managing my real estate business.
WanderingDoc: Can you manage to post to a single thread w/o sounding like a real-estate huckster? What does this "advice" have to do with the OP's post?

OP: If your AA is not suitable, I suggest redirecting future contributions to adjust it, rather than locking in a loss (if that's truly what it is). If it makes you feel any better, there are posters on the forum who see losses many times that amount and who understand that stocks fall as well as rise, often in large amounts. They stay the course.
It's a very actionable solution to the problem that was presented. Not comfortable with volatility and balance going up and down too much. Getting into assets that produce cash flow is one such solution.
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.
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Starchild
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Starchild »

Selling now locks in your loss. However, if you feel these index’s will never go up again, however unlikely, then sell. Otherwise at least wait till you break even again to sell if you haven’t the belly for it.
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GerryL
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by GerryL »

We haven't heard back from OP Alex in days. What are the odds that he is just trolling us? Throw a bomb post into the forum and then watch (or not) as everyone wastes time responding and getting into spats.
Admiral
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Admiral »

WanderingDoc wrote: Wed Nov 14, 2018 1:47 pm
Admiral wrote: Wed Nov 14, 2018 1:28 pm
WanderingDoc wrote: Tue Nov 13, 2018 6:40 pm
Alex GR wrote: Tue Nov 13, 2018 4:16 pm Hi everyone,
With all the swings up and down recently I am finding that it's too much volatility for me. My portfolio has gone down by $12000 over the past few days. I know people on here say it's a blip on the radar, but when I think about what I have to go through to earn $12k ($12k = two months of STRESSFUL hard work) it doesn't seem that trivial any more.
I have sold some of my VBR, also selling some VOE and VOO.
I decided to increase international exposure slightly from 14% to 17%.
But of course I am reallocating into BIV. The question is, are you guys finding it hard to keep buying BIV(when rebalancing) considering it keeps going down? It has decreased in value by about $40k for me since I started the portfolio.
Here is what my portfolio will look like when I finish all adjustments. What do you think?

VOO Vanguard 500 Index Fund 33%
VOE Vanguard Mid-Cap Value ETF 5%
VBR Vanguard Small-Cap Value ETF 10%
POGRX PRIMECAP Odyssey Growth Fund 5%
BIV Vanguard Intermediate-Term Bond ETF 22%
PONAX PIMCO Income Fund Class D 8%
VXUS Vanguard Total International Stock ETF International 15%
VWO Vanguard FTSE Emerging Markets ETF International 2%
I'm a simple person. I, too, don't like volatility and drama. Since the beginning of this year, monthly rent checks from my properties and quarterly distributions from passive investments came in like clockwork. Month after month. The value "effectively portfolio value" is meaningless to me when the income keeps flowing in, tenants keep paying my expenses and mortgage, and I will legally pay no taxes on rental income. Don't like portfolio swings? I suggest you look into real estate investing. As an interesting aside, I spent more time this year reading this forum than managing my real estate business.
WanderingDoc: Can you manage to post to a single thread w/o sounding like a real-estate huckster? What does this "advice" have to do with the OP's post?

OP: If your AA is not suitable, I suggest redirecting future contributions to adjust it, rather than locking in a loss (if that's truly what it is). If it makes you feel any better, there are posters on the forum who see losses many times that amount and who understand that stocks fall as well as rise, often in large amounts. They stay the course.
It's a very actionable solution to the problem that was presented. Not comfortable with volatility and balance going up and down too much. Getting into assets that produce cash flow is one such solution.
Sure. And to a man with a hammer every problem looks like a nail.
stocknoob4111
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by stocknoob4111 »

goingup wrote: Wed Nov 14, 2018 10:05 am Had that same thought. The SP500 has had cumulative gains of nearly 40% over last 3 years (ending Oct. 31). Vanguard's Balanced Fund's cumulative 3 yr gains close to 24%. Trying to understand the scenario whereby someone could lose 3 years of gains during this minor pullback. :confused
Had been contributing to my 401k since 2013, that balance had reached around $140k or so, I had done really well with my 401k, but then I put in about $350k of new money in Jan... I have 20% in International and 25% in Bonds both are doing very poorly this year. I do realize staying the course is important but I would rather the market just crash or go up, I hate this 5% up, 5% down sideways movement forever. If I crashes I can DCA for a while and lower my basis, if it goes up then I will get some gains.

Currently I am down around 5% from the highest point, yes, percentage wise not a whole lot but in absolute dollar terms that's around $30,000 from first week of Oct. Heck, that is more than the brand new car I bought recently, crazy! :shock:
delamer
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by delamer »

GerryL wrote: Wed Nov 14, 2018 2:05 pm We haven't heard back from OP Alex in days. What are the odds that he is just trolling us? Throw a bomb post into the forum and then watch (or not) as everyone wastes time responding and getting into spats.
His OP was yesterday around 5 pm — hardly days.
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GerryL
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by GerryL »

delamer wrote: Wed Nov 14, 2018 2:15 pm
GerryL wrote: Wed Nov 14, 2018 2:05 pm We haven't heard back from OP Alex in days. What are the odds that he is just trolling us? Throw a bomb post into the forum and then watch (or not) as everyone wastes time responding and getting into spats.
His OP was yesterday around 5 pm — hardly days.
Guess this thread just makes it seem like days and days and days. :(
GrowthSeeker
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by GrowthSeeker »

Alex GR wrote: Tue Nov 13, 2018 4:16 pm My portfolio has gone down by $12000 over the past few days.
That is a valid way of looking at it.
But here are two other valid ways of looking at it:
(1) Think time instead of money:
Look at your exact portfolio value now.
Look back in time at your portfolio value vs time.
How many weeks/months/years ago was your portfolio value equal to what it is today? That way you focus not on how many dollars were lost but how many months were lost. It is a different perspective.

(2) How many dollars did you gain on the last upswing? How many hours of work was that equivalent to?

I hope this is helpful for you and perhaps others.

[edit] at regarding asset allocation, I like the idea of taking the amount of portfolio drop it would take to feel really bad, multiply that percentage by 2 and that is your ideal percent in stocks you should be. So if you're cool with a 50% drop then go 100% stocks. If you're only OK with a 20% drop, then go 40% stocks.
Last edited by GrowthSeeker on Wed Nov 14, 2018 3:54 pm, edited 1 time in total.
Just because you're paranoid doesn't mean they're NOT out to get you.
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Toons
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Toons »

Sounds like you did the right thing
For You.
Congratulations.
:mrgreen:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
delamer
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by delamer »

GerryL wrote: Wed Nov 14, 2018 2:21 pm
delamer wrote: Wed Nov 14, 2018 2:15 pm
GerryL wrote: Wed Nov 14, 2018 2:05 pm We haven't heard back from OP Alex in days. What are the odds that he is just trolling us? Throw a bomb post into the forum and then watch (or not) as everyone wastes time responding and getting into spats.
His OP was yesterday around 5 pm — hardly days.
Guess this thread just makes it seem like days and days and days. :(
You make a good point. :|
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Phineas J. Whoopee
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Phineas J. Whoopee »

To pretend real estate values don't fluctuate is no better nor worse than pretending securities values don't change. Pretending so may make a person feel more comfortable - and yet it fluctuates.
PJW
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stemikger
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by stemikger »

If there is one message I want you to listen to it's this. I said STAY THE COURSE thousands of times and I meant it every time. ~ John Bogle
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!
dh
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by dh »

"I can't take this anymore" seems to be more of an asset allocation issue than a stock market issue. Yes, OP your feelings are real and you need to do what you can to relax and sleep well at night (if you aren't sleeping you are not being your 100% self). So, do what you need to do. Yet going forward, I think you need to always expect the market to crash. I believe people call it stress testing your portfolio. Only have money in stocks that you don't need for 15 years (meaning you won't cash it out regardless of market conditions). Rather, as you remain in the accumulation stage focus on buying more units.

Wade Pfau has some wonderful advice. One key idea is to have a conservative portfolio at retirement (because you need the money and you are not putting more money into the market), use bonds and let the stock percentage grow to provide for the long term. I know you are not in the retirement, but the concept makes sense at any stage of your investing career (e.g., are you buying, or do you need the money now).

I wish you the best in finding that asset allocation where you aren't watching your portfolio so closely. Yes, it is all your money but it isn't all money that you need today. Hang in there!!! You are among friends at this site. :sharebeer
MisterMister
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by MisterMister »

Good for you you have not sold yet. I hope that's still the case.

I was about 75/25 stocks to cash (not bonds) until the lowest point in October when I lost faith and nerve and sold the vast bulk of my stocks (down to 25/75).

On the plus side, that money had been invested for over 20 years so even with the dip it was a very good return.
On the down side was the sale was about 60-70K off peak valuation.

I am in my middle sixties and retired, but if you have time and a belief that the market will recover you just need to re-balance. Intermediate and long-term bond funds don't look good to me personally because I think they may be beaten up by continuing rate increases. There are some ultra-short term bond funds you could consider or actual Treasuries if you are worried about rates too. You can get almost 2.4 % for 13-week Treasury bills and the proceeds are not taxed at the state level. Earning 2.4% isn't much but it's better than losing 2.4%. Personally, I am going even shorter term than 13-weeks right now until I have a better feel for rates.

Just don't panic, think carefully about what you will do, develop a plan and act. 2008 went beyond panic for me, but I didn't sell. Had I sold then I would probably have stayed out of the market and I would have been in no position to retire now.
rgs92
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by rgs92 »

It's necessary to look at percentages rather than amounts. My Vanguard Balanced Index has dropped 2.43% since the peak in January of this year.
That is not exactly a disturbing amount.
Of course, on a million dollars, that would be over $24,000, but that's a minor fluctuation on a million dollar portfolio.
And that's the price of the million growing to 2 or 3 million in a 10 or 20 years.
If it just went up monotonically, you would be lucky to have 1.2 to 1.4 million dollars.
basspond
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by basspond »

I can only give you guidance on my personal history. When the market went down or unstable I kept buying which gave me some assets on the cheap and my portfolio more then recovered in less then two years. I have talked to several people who sold in the .com downturn and the financial crisis. They could have kicked themselves because not only did they loose money but they got back in at a higher price. They now have to work several more years to make up those panicked decisions. Good luck.
smectym
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by smectym »

TheOscarGuy wrote: Tue Nov 13, 2018 4:23 pm
Alex GR wrote: Tue Nov 13, 2018 4:16 pm Hi everyone,
With all the swings up and down recently I am finding that it's too much volatility for me. My portfolio has gone down by $12000 over the past few days. I know people on here say it's a blip on the radar, but when I think about what I have to go through to earn $12k ($12k = two months of STRESSFUL hard work) it doesn't seem that trivial any more.
I have sold some of my VBR, also selling some VOE and VOO.
I decided to increase international exposure slightly from 14% to 17%.
But of course I am reallocating into BIV. The question is, are you guys finding it hard to keep buying BIV(when rebalancing) considering it keeps going down? It has decreased in value by about $40k for me since I started the portfolio.
Here is what my portfolio will look like when I finish all adjustments. What do you think?

VOO Vanguard 500 Index Fund 33%
VOE Vanguard Mid-Cap Value ETF 5%
VBR Vanguard Small-Cap Value ETF 10%
POGRX PRIMECAP Odyssey Growth Fund 5%
BIV Vanguard Intermediate-Term Bond ETF 22%
PONAX PIMCO Income Fund Class D 8%
VXUS Vanguard Total International Stock ETF International 15%
VWO Vanguard FTSE Emerging Markets ETF International 2%
I think you need to stop looking at your portfolio so much. I am guessing this is taxable account, if yes, what is the purpose of this money -- retirement, college education? What is the time horizon? If it is 10+ years, why do you care about daily/monthly/yearly swings?

I have a general rule -- unless I am rebalancing (once a year) to keep my AA, I don't look at my 401(k) when market is down :D I don't need the money until decades, so what is the point in stressing about it now?
I understand Oscarguys’s point. However, advocating that investors remain deliberately ignorant of what is happening in their portfolio is bad guidance. With investing comes responsibility. The responsibility doesn’t lie with Vanguard or another firm, or with Bogle or another guru, or with a strategy deemed sacred such as buy-and-hold, or with anyone or -where but the investor. Moreover, often (perhaps more often than not) others such as spouse, kids, or other loved ones or beneficiaries are counting on the responsible investor to not drive the portfolio off the cliff (including by falling asleep at the wheel). Therefore, investors are responsible for regular monitoring of the portfolio. In times of market stress this duty is enhanced, not attenuated or negated.

Smectym
smectym
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by smectym »

knowledge wrote: Wed Nov 14, 2018 1:25 pm
Alex GR wrote: Tue Nov 13, 2018 4:16 pm My portfolio has gone down by $12000 over the past few days. I know people on here say it's a blip on the radar, but when I think about what I have to go through to earn $12k ($12k = two months of STRESSFUL hard work) it doesn't seem that trivial any more.
Have you thought about how many months you DON'T have to work with the gains you've made in other times? If you're like everyone else, you don't and (quite naturally) you suffer from loss aversion. There's not much you can do about it, but things like IPSs, rebalancing bands, are constructed to fight this urge - consider using them.

And try to remember the upsides as well.
I’m not advocating any selling.

However, to the extent an investor elects to lighten up on equity exposure in this environment, take a look at just parking the proceeds in short-term treasuries or a money market fund rather than switching from stocks to a broad-based bond fund or ETF. Because if your motive in selling equities is to reduce risk, then why trade equity risk for bond risk when you can get a fair-to-middling yield while taking little (short end of the treasury curve) or no (Federal money market fund) risk?

Smectym
TheOscarGuy
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by TheOscarGuy »

smectym wrote: Thu Nov 15, 2018 2:04 am
Therefore, investors are responsible for regular monitoring of the portfolio. In times of market stress this duty is enhanced, not attenuated or negated.

Smectym
What does monitoring portfolio really mean? If you are not tinkering with it, if you are not adjusting/changing asset allocation periodically, what else would you do with it?
Jordan4FI
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Jordan4FI »

It might be my fault, I am really hoping & wishing for more of a down turn this coming year.... I am selling a property and dumping all my equity into the market, I am just starting my 2nd year of really intentional investing towards my path to FI.. I need some low low share prices for a while so I can catch up.

Sorry..
Olemiss540
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Olemiss540 »

smectym wrote: Thu Nov 15, 2018 2:18 am
knowledge wrote: Wed Nov 14, 2018 1:25 pm
Alex GR wrote: Tue Nov 13, 2018 4:16 pm My portfolio has gone down by $12000 over the past few days. I know people on here say it's a blip on the radar, but when I think about what I have to go through to earn $12k ($12k = two months of STRESSFUL hard work) it doesn't seem that trivial any more.
Have you thought about how many months you DON'T have to work with the gains you've made in other times? If you're like everyone else, you don't and (quite naturally) you suffer from loss aversion. There's not much you can do about it, but things like IPSs, rebalancing bands, are constructed to fight this urge - consider using them.

And try to remember the upsides as well.
I’m not advocating any selling.

However, to the extent an investor elects to lighten up on equity exposure in this environment, take a look at just parking the proceeds in short-term treasuries or a money market fund rather than switching from stocks to a broad-based bond fund or ETF. Because if your motive in selling equities is to reduce risk, then why trade equity risk for bond risk when you can get a fair-to-middling yield while taking little (short end of the treasury curve) or no (Federal money market fund) risk?

Smectym
You are inheriting risk on the inflation side of the table by shortening your bond duration.

Quit pretending to know the future with regards to bond yields and begin to understand that bond risk is minimized as long as the bonds duration matches your personal timeframes.

If you dont sell a bond fund, the NAV will NOT matter, and you will get the advantages of the rising rates in your RECEIVED dividends.

Enjoy your exciting 2% yields while we get near double through maintaining the course. I dont give a hoot about my 401k value this week, but what the value will be in 15 years. You can trade bond durations every month thinking you are smarter than the market while I am on cruise control.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.
Valuethinker
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Valuethinker »

Jordan4FI wrote: Thu Nov 15, 2018 8:14 am It might be my fault, I am really hoping & wishing for more of a down turn this coming year.... I am selling a property and dumping all my equity into the market, I am just starting my 2nd year of really intentional investing towards my path to FI.. I need some low low share prices for a while so I can catch up.

Sorry..
Equities are a good long term bet. They are not a good short term bet.

If your time horizon is less than 5-10 years (could be 10+) you want to think carefully before going all in. And given what American stocks have done 2008-18, it doesn't look like the optimal timing.

I rode the dot com bubble down from May 2000 to March 2003 (employer stock - I was a paper millionaire). The only time I sold was as part of a crystallization in redundancy. The last stock I sold at something like 5% of the peak price.

Each quarter would bring new "buying opportunities" and brief rallies, then further falls. Each time, stocks were "cheaper than ever". That's what Japan has been for nearly 30 years - a buying opportunity. For bear markets to end, everyone has to have thrown in the towel and have no interest in putting more money into the asset class.

You'll find that with bear markets. They have these rallies, and then they sink back and worse. It's only after the fact that you figure out whether you really hit the bottom or whether it was just a pause on the way down (or on the way back up).
Morgan Dollar 1921
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Morgan Dollar 1921 »

GerryL wrote: Wed Nov 14, 2018 2:05 pm We haven't heard back from OP Alex in days. What are the odds that he is just trolling us? Throw a bomb post into the forum and then watch (or not) as everyone wastes time responding and getting into spats.
Yes, I decided early in reading this that I was not gonna read the entire thread to find out what was left out. Down 12000, OK, what percentage of your portfolio are you down?

We structure percentages of allocation, but only look at dollars when the market goes up or down???

How much (%) are you up in 1 yr, 3 yr, 5 yr, and what is your drop % wise compared to the market % wise. Do what you want but $12000 is not a lot if your portfolio is $800K. Good luck.
Morgan Dollar 1921
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Morgan Dollar 1921 »

rgs92 wrote: Wed Nov 14, 2018 10:58 pm It's necessary to look at percentages rather than amounts. My Vanguard Balanced Index has dropped 2.43% since the peak in January of this year.
That is not exactly a disturbing amount.
Of course, on a million dollars, that would be over $24,000, but that's a minor fluctuation on a million dollar portfolio.
And that's the price of the million growing to 2 or 3 million in a 10 or 20 years.
If it just went up monotonically, you would be lucky to have 1.2 to 1.4 million dollars.
Good points, good advice.
Nowizard
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Nowizard »

Others have said this in different ways, but it is helpful to consider that when we are many years away from retirement that a downturn is ultimately a positive as long as we continue to invest since we purchase new shares at a lower price. You have probably heard Buffett's comment to the effect that one should be wary when everyone else is purchasing and greedy when they are not. Of course, if your current allocation is causing sleepless nights, then to become more conservative is a personal choice. Even that, however, is one to ideally consider when your portfolio is accelerating rather than diminishing.
I suspect each of us, whether consciously or not, have arrived at a way we deal with our anxiousness in times like this and that there might even be benefit in having a thread on that issue. It would be rather difficult for most of us to have arrived at the point of reducing the issue to either staying the course or making changes based on the realization that our risk tolerance was challenged without moving through some steps to arrive at that point. There are several phrases I use that keep me from making purely emotional moves, though that was not the case when much younger. As with all complex issues, there are guidelines on how to respond, but nuance related to our personal circumstances.

Tim
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Alex GR
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Alex GR »

Hi Everyone,
WOW! I checked the forum and was amazed to see all the replies.
I can only say what was probably said many times before: This is a great forum!
I'll try to reply to questions. I would also like to thank everyone who responded.

Several people have asked how I reacted when the portfolio was going up. Unfortunately this is fairly new money, so I did not have that benefit.
retire2022
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by retire2022 »

Alex GR

How many years have you invested? Have you checked your cost basis? Are you ahead or below? When I started 1987 crash was less than what I had put in, and so was in 2000 and in 2008 and ten years later. Today I'm way ahead of my cost basis and near retirement. Even if there is a crash say 25%-40% I will be ahead.
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Phineas J. Whoopee
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Phineas J. Whoopee »

retire2022 wrote: Thu Nov 15, 2018 7:13 pm Alex GR

How many years have you invested? Have you checked your cost basis? Are you ahead or below? When I started 1987 crash was less than what I had put in, and so was in 2000 and in 2008 and ten years later. Today I'm way ahead of my cost basis and near retirement. Even if there is a crash say 25%-40% I will be ahead.
Setting aside the topic of capital gain taxes what difference does what you paid long ago make to your situation today? You have what you have, it's worth what it's worth. The present may be a result of the past, but the past doesn't change what is today.

If you paid $100,000 over time and your investments are worth $500,000 today, and I paid $600,000 yesterday for investments that are worth $500,000 today, we are in the same present situation with assets worth $500,000 each.

PJW
retire2022
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by retire2022 »

PJW

I think it should leave it up to the original poster it does matter if the OP decides to sell will impact this decision and it depends on their age and cost basis.
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nedsaid
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by nedsaid »

Alex GR wrote: Tue Nov 13, 2018 4:16 pm Hi everyone,
With all the swings up and down recently I am finding that it's too much volatility for me. My portfolio has gone down by $12000 over the past few days. I know people on here say it's a blip on the radar, but when I think about what I have to go through to earn $12k ($12k = two months of STRESSFUL hard work) it doesn't seem that trivial any more.
I have sold some of my VBR, also selling some VOE and VOO.
I decided to increase international exposure slightly from 14% to 17%.
But of course I am reallocating into BIV. The question is, are you guys finding it hard to keep buying BIV(when rebalancing) considering it keeps going down? It has decreased in value by about $40k for me since I started the portfolio.
Here is what my portfolio will look like when I finish all adjustments. What do you think?

VOO Vanguard 500 Index Fund 33%
VOE Vanguard Mid-Cap Value ETF 5%
VBR Vanguard Small-Cap Value ETF 10%
POGRX PRIMECAP Odyssey Growth Fund 5%
BIV Vanguard Intermediate-Term Bond ETF 22%
PONAX PIMCO Income Fund Class D 8%
VXUS Vanguard Total International Stock ETF International 15%
VWO Vanguard FTSE Emerging Markets ETF International 2%
You are running into the psychological experience we all have as our portfolios get larger and larger. You could have a modest drop in percentage terms in your portfolio balance but in dollar terms could be thousands of dollars. A few thoughts. Maybe you were too aggressively invested. Perhaps you just look at your portfolio balance too often. Maybe you need to talk to folks who have been at this a while and realize that the angst you feel is perfectly normal. Good luck.
A fool and his money are good for business.
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Mr Winston
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Mr Winston »

There is always another person on the other side of a trade. Right? So while one person feels like it is time to get sell the other person thinks it is time to buy. Why do people see the same information yet come to different conclusions? I guess If I knew that I would have gold carpets. :D

I do feel for you... I face the same quandary. On paper I lost over $50,000 in two days a couple weeks back. I've decided I am not selling. In a year I will either be kicking myself or falsely thinking I am the greatest investor in the world. (Watch out Warren, I am coming at ya.) No one promised me that this investment thing was going to be easy, even though it has been a little easier for the past 10 years.

All the best for whatever decision you make. After all it is your decision!
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Nicolas »

Mr Winston wrote: Thu Nov 15, 2018 8:53 pm There is always another person on the other side of a trade. Right? So while one person feels like it is time to get sell the other person thinks it is time to buy. Why do people see the same information yet come to different conclusions? I guess If I knew that I would have gold carpets. :D

I do feel for you... I face the same quandary. On paper I lost over $50,000 in two days a couple weeks back. I've decided I am not selling. In a year I will either be kicking myself or falsely thinking I am the greatest investor in the world. (Watch out Warren, I am coming at ya.) No one promised me that this investment thing was going to be easy, even though it has been a little easier for the past 10 years.

All the best for whatever decision you make. After all it is your decision!
Some people sell because they have to sell, regardless of market conditions. Maybe they're settling an estate or have to come up with money quick for their own personal reasons. So it's not necessarily true that both sides of the trade have opposite opinions of whether it's a good time to buy or sell.
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MossySF
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by MossySF »

Alex GR wrote: Thu Nov 15, 2018 3:43 pm Several people have asked how I reacted when the portfolio was going up. Unfortunately this is fairly new money, so I did not have that benefit.
It's an unfortunately fact that in order to participate in the ups, you also have to participate in the downs. It's usually about a ratio of 2:1 -- maybe 2.5:1.

Now if you had come to this forum and asked before you had put your money in, you'd have gotten "some" opinions that the bull market was long in the tooth and a 2-3 year DCA schedule might make you feel better to invest a large lump sum.

If it's just your regular paycheck savings, it's just noise. In a few years, the red on the graph can't even been seen.
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unclescrooge
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by unclescrooge »

Alex GR wrote: Tue Nov 13, 2018 4:16 pm Hi everyone,
With all the swings up and down recently I am finding that it's too much volatility for me. My portfolio has gone down by $12000 over the past few days. I know people on here say it's a blip on the radar, but when I think about what I have to go through to earn $12k ($12k = two months of STRESSFUL hard work) it doesn't seem that trivial any more.
I have sold some of my VBR, also selling some VOE and VOO.
I decided to increase international exposure slightly from 14% to 17%.
But of course I am reallocating into BIV. The question is, are you guys finding it hard to keep buying BIV(when rebalancing) considering it keeps going down? It has decreased in value by about $40k for me since I started the portfolio.
Here is what my portfolio will look like when I finish all adjustments. What do you think?

VOO Vanguard 500 Index Fund 33%
VOE Vanguard Mid-Cap Value ETF 5%
VBR Vanguard Small-Cap Value ETF 10%
POGRX PRIMECAP Odyssey Growth Fund 5%
BIV Vanguard Intermediate-Term Bond ETF 22%
PONAX PIMCO Income Fund Class D 8%
VXUS Vanguard Total International Stock ETF International 15%
VWO Vanguard FTSE Emerging Markets ETF International 2%
I would replace PONAX with a Treasury bond fund. PONAX is 40% junk bonds, and likely to be very volatile.
Especially if we go into recession over the next couple of years.
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Alex GR
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Alex GR »

Nestegg_User wrote: Tue Nov 13, 2018 5:31 pm also retired (@ ~ 45/50/5), but for me rather than bond funds I’ve been adding individual treasuries and CD’s (max 2 yr maturity, beyond doesn’t make sense to me) then at least if you hold on until maturity you get the gains.

That you are feeling that way now OP does mean that you need to further evaluate your risk tolerance and allocation.
Nestegg_User,
Thanks for your reply. I've gotten several replies indicating that BIV may not be the best choice. I am thinking splitting the bond portion 50/50 between BIV and another "more guaranteed" product. The problem is, the returns are just too low on all the ones I've looked it. What is the actual name of the instrument(individual treasuries), what s the ROI and how do I buy it? Thanks!
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Alex GR
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Alex GR »

stimulacra wrote: Tue Nov 13, 2018 5:33 pm Not quite sure if I follow, you say you've lost (according to your math) about 6.6 months of your hard work in terms of dollars in your bond allocation (BIV) since you've started your portfolio and you want to sell your equities at a loss to buy more?

If I were in your position I would consider directing all new cash flows, dividends and interest payments, either into additional shares of BIV or cash.

When do you rebalance? I would adjust your asset allocation then, rather then during an emotional moment.

Isn't there a famous thread here where a prominent boglehead couldn't take it anymore back in 2008 and cashed out a significant amount of their portfolio at the bottom? The thread was useful to read because it served as a sobering time capsule of the emotional stakes involved, the uncertainty, and during the later posts, useful reflection and insights to take away.

When you retire, how will you manage weekly swings to your portfolio that represents years of salary or expenses?
stimulacra,
Yes, exactly! That's the dilemma. "Stay the course" means stick to your allocation no matter what. So even though BIV has been going down, I need to keep buying it to return to the selected allocation. (Not all the time of course, just at the time of annual rebalance)
It's a bit difficult as BIV just keeps going down since I started investing. So I was wondering if bogleheads are finding it difficult psychologically to keep doing this.
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Phineas J. Whoopee
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Phineas J. Whoopee »

Alex GR wrote: Fri Nov 16, 2018 3:42 pm ...
It's a bit difficult as BIV just keeps going down since I started investing. So I was wondering if bogleheads are finding it difficult psychologically to keep doing this.
In terms of are finding it difficult, today, no, not me. When I first started in taxable (there was a weird tax-advantaged retirement program where I worked that I was already investing in, but had little to no control over), and phoned in for the automated price report one day after the purchase took effect, and heard I had a very small loss in one of three funds I felt terrible. I did nothing, but I felt terrible.

Now, all these years later, I'm used to it so no, psychologically I am not, as opposed to was not long ago, finding it difficult psychologically.

Early in your investing lifetime, probably even for a large chunk of it, your total portfolio value will be much more strongly affected by your new contributions than by market fluctuations. It took me a long time to get to that point.

PJW
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Earl Lemongrab
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Earl Lemongrab »

Alex GR wrote: Fri Nov 16, 2018 3:42 pm Yes, exactly! That's the dilemma. "Stay the course" means stick to your allocation no matter what. So even though BIV has been going down, I need to keep buying it to return to the selected allocation. (Not all the time of course, just at the time of annual rebalance)
It's a bit difficult as BIV just keeps going down since I started investing. So I was wondering if bogleheads are finding it difficult psychologically to keep doing this.
Why is it a problem? The share prices of bond funds are LOWER and the yield is HIGHER. They're a much better buy than a year ago, when you were seemingly happy to have them.

I don't know what to tell you. The short term volatility isn't much in the grand scheme. If you don't check every day, then you won't know how much you've "lost". I built my portfolio and invested a bunch of cash in fall of 2007 - right before one the worst bear markets in history. Now there was volatility that gives you pause. I had a plan, executed the plan, and retired in January of this year.
robertmcd
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by robertmcd »

Best week in 19 months for US treasury bonds due to falling oil prices and dovish comments from the Fed. Especially intermediate term treasuries. Fed hikes getting less and less likely as the cracks keep showing.
Elysium
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Elysium »

Alex GR wrote: Fri Nov 16, 2018 3:42 pm
stimulacra wrote: Tue Nov 13, 2018 5:33 pm Not quite sure if I follow, you say you've lost (according to your math) about 6.6 months of your hard work in terms of dollars in your bond allocation (BIV) since you've started your portfolio and you want to sell your equities at a loss to buy more?

If I were in your position I would consider directing all new cash flows, dividends and interest payments, either into additional shares of BIV or cash.

When do you rebalance? I would adjust your asset allocation then, rather then during an emotional moment.

Isn't there a famous thread here where a prominent boglehead couldn't take it anymore back in 2008 and cashed out a significant amount of their portfolio at the bottom? The thread was useful to read because it served as a sobering time capsule of the emotional stakes involved, the uncertainty, and during the later posts, useful reflection and insights to take away.

When you retire, how will you manage weekly swings to your portfolio that represents years of salary or expenses?
stimulacra,
Yes, exactly! That's the dilemma. "Stay the course" means stick to your allocation no matter what. So even though BIV has been going down, I need to keep buying it to return to the selected allocation. (Not all the time of course, just at the time of annual rebalance)
It's a bit difficult as BIV just keeps going down since I started investing. So I was wondering if bogleheads are finding it difficult psychologically to keep doing this.
Hi Alex GR,

You may find some of these threads helpful:

viewtopic.php?t=32044

viewtopic.php?f=10&t=33249
Nicolas
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Nicolas »

stimulacra wrote: Tue Nov 13, 2018 5:33 pm Not quite sure if I follow, you say you've lost (according to your math) about 6.6 months of your hard work in terms of dollars in your bond allocation (BIV) since you've started your portfolio and you want to sell your equities at a loss to buy more?

If I were in your position I would consider directing all new cash flows, dividends and interest payments, either into additional shares of BIV or cash.

When do you rebalance? I would adjust your asset allocation then, rather then during an emotional moment.

Isn't there a famous thread here where a prominent boglehead couldn't take it anymore back in 2008 and cashed out a significant amount of their portfolio at the bottom? The thread was useful to read because it served as a sobering time capsule of the emotional stakes involved, the uncertainty, and during the later posts, useful reflection and insights to take away.

When you retire, how will you manage weekly swings to your portfolio that represents years of salary or expenses?
viewtopic.php?t=25126
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Alex GR
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Alex GR »

retiredjg wrote: Tue Nov 13, 2018 5:52 pm Alex Gr, you set your portfolio up a little over a year ago at 73% stocks and 27% bonds. Within a few weeks, you were nervous about it because your portfolio took a dive of $7k. At that time you wondered if you needed to make a change but you decided to stick with it.

You are now considering setting your portfolio up at 70% stocks and 30% bonds which is no different from 73/27. And your post starts out with "I can't take this any more". These are not the actions or the words of an investor who is comfortable with how his assets are invested.

It seems obvious to me that you have set your asset allocation more aggressive than your temperament can tolerate.

When we actually have a correction or real bear market, you are going to be miserable and you will do one of two things. You will try to gut it out which means your health and family life and work life is going to suffer for a few years.....or you will sell at the worst possible moment and lose a boatload of money forever.

Even more likely is that you'll do both - be miserable for a few years trying to gut it out and then sell at the worst possible time. It's tough to recover from that kind of loss in your 40s.

I think you should immediately reallocate your portfolio to something more reasonable like 60% stocks and 40% bonds. Or maybe even 55/45. Yes, that would be a conservative portfolio but not ultra conservative. It is not even "age in bonds" which many people recommend.

Another alternative is to pay an advisor to keep you from doing stupid stuff. You might be able to have a slightly more aggressive portfolio but you would be paying for that to occur. The only advisory service I would suggest is the one at Vanguard. Their costs are rock bottom low and they will not steer you into products that are not in your best interest.

My view of your situation is that you have unknowingly set yourself up for failure. This is not because you are stupid. It is because you did not know your own tolerance for risk when you made those earlier decisions.

Many people don't get it right the first time. You can really know until it is tested. However these little "stress tests" should be talking to you loud and clear and you should be listening and reducing your portfolio risk by a lot more than you are considering right now.

Hope this does not sound harsh, but this is how I read your post.
retiredjg,
Thank you for remembering all the details.
No, this does not sound harsh because you're absolutely right.
A big part of the problem is I don't have stable income and I don't know what the future holds. So I am not adding funds to this portfolio and cannot adjust the allocation by simply buying more bonds as several people have suggested. So I have a decent size portfolio but no stable income coming in.
The good news is that I am sold on "stay the course" principal. I won't sell and go to cash no matter what. I was only talking about changing allocation because these swings seemed like they're too large. Picture this- I am saving $1 coupons and living frugally and at the same time the balance is down by $12k in a matter of days.

Some great links to old threads have been posted in response to my question (two posts above this one). I am taking time to carefully study the details.
Thanks!
retiredjg
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by retiredjg »

Alex GR wrote: Sat Nov 17, 2018 11:37 am I was only talking about changing allocation because these swings seemed like they're too large. Picture this- I am saving $1 coupons and living frugally and at the same time the balance is down by $12k in a matter of days.
I think you need to change your allocation. "Stay the course" is only good plan if you start from the right place. I don't think you did.

It appears to me your allocation is too aggressive either because you were too aggressive to begin with or because your situation has changed. That IS NOT the time to stay the course. That is the time to move to a place where you are comfortable. And plan to stay there by staying the course.

Moving to just 30% bonds is not a move from your prior position. You need to move more in my opinion.
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Nestegg_User
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by Nestegg_User »

Alex GR wrote: Sat Nov 17, 2018 11:37 am
retiredjg wrote: Tue Nov 13, 2018 5:52 pm Alex Gr, you set your portfolio up a little over a year ago at 73% stocks and 27% bonds. Within a few weeks, you were nervous about it because your portfolio took a dive of $7k. At that time you wondered if you needed to make a change but you decided to stick with it.

You are now considering setting your portfolio up at 70% stocks and 30% bonds which is no different from 73/27. And your post starts out with "I can't take this any more". These are not the actions or the words of an investor who is comfortable with how his assets are invested.

It seems obvious to me that you have set your asset allocation more aggressive than your temperament can tolerate.

When we actually have a correction or real bear market, you are going to be miserable and you will do one of two things. You will try to gut it out which means your health and family life and work life is going to suffer for a few years.....or you will sell at the worst possible moment and lose a boatload of money forever.

Even more likely is that you'll do both - be miserable for a few years trying to gut it out and then sell at the worst possible time. It's tough to recover from that kind of loss in your 40s.

I think you should immediately reallocate your portfolio to something more reasonable like 60% stocks and 40% bonds. Or maybe even 55/45. Yes, that would be a conservative portfolio but not ultra conservative. It is not even "age in bonds" which many people recommend.

Another alternative is to pay an advisor to keep you from doing stupid stuff. You might be able to have a slightly more aggressive portfolio but you would be paying for that to occur. The only advisory service I would suggest is the one at Vanguard. Their costs are rock bottom low and they will not steer you into products that are not in your best interest.

My view of your situation is that you have unknowingly set yourself up for failure. This is not because you are stupid. It is because you did not know your own tolerance for risk when you made those earlier decisions.

Many people don't get it right the first time. You can really know until it is tested. However these little "stress tests" should be talking to you loud and clear and you should be listening and reducing your portfolio risk by a lot more than you are considering right now.

Hope this does not sound harsh, but this is how I read your post.
retiredjg,
Thank you for remembering all the details.
No, this does not sound harsh because you're absolutely right.
A big part of the problem is I don't have stable income and I don't know what the future holds. So I am not adding funds to this portfolio and cannot adjust the allocation by simply buying more bonds as several people have suggested. So I have a decent size portfolio but no stable income coming in.
The good news is that I am sold on "stay the course" principal. I won't sell and go to cash no matter what. I was only talking about changing allocation because these swings seemed like they're too large. Picture this- I am saving $1 coupons and living frugally and at the same time the balance is down by $12k in a matter of days.

Some great links to old threads have been posted in response to my question (two posts above this one). I am taking time to carefully study the details.
Thanks!
since you appear to be in commissioned sales, which can have quite variable income swings, you need to think of your regular income as being more “emerging markets”- like and have a more conservative portfolio mix (there’s old threads on that). It’s very clear that your portfolio is too equity heavy for your tolerance. (you need to get to the more proper tolerance first and then stop looking at your portfolio as often).

AFA your treasuries question; I buy them from my brokerage where both new issues and second party sales are available. for some issues, the rates are better than CD’s for maturities under two years, while I use CD’s for two years and haven’t found going out longer to be worth the risk.
stimulacra
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by stimulacra »

Alex GR wrote: Fri Nov 16, 2018 3:42 pm
stimulacra wrote: Tue Nov 13, 2018 5:33 pm Not quite sure if I follow, you say you've lost (according to your math) about 6.6 months of your hard work in terms of dollars in your bond allocation (BIV) since you've started your portfolio and you want to sell your equities at a loss to buy more?

If I were in your position I would consider directing all new cash flows, dividends and interest payments, either into additional shares of BIV or cash.

When do you rebalance? I would adjust your asset allocation then, rather then during an emotional moment.

Isn't there a famous thread here where a prominent boglehead couldn't take it anymore back in 2008 and cashed out a significant amount of their portfolio at the bottom? The thread was useful to read because it served as a sobering time capsule of the emotional stakes involved, the uncertainty, and during the later posts, useful reflection and insights to take away.

When you retire, how will you manage weekly swings to your portfolio that represents years of salary or expenses?
stimulacra,
Yes, exactly! That's the dilemma. "Stay the course" means stick to your allocation no matter what. So even though BIV has been going down, I need to keep buying it to return to the selected allocation. (Not all the time of course, just at the time of annual rebalance)
It's a bit difficult as BIV just keeps going down since I started investing. So I was wondering if bogleheads are finding it difficult psychologically to keep doing this.
The majority of the time I've rebalanced, I'm selling off small caps, mid caps, or emerging, and buying back into bonds (which usually goes down in value).

I don't think twice about it. I just keep slogging away at work and save what I can.

If you have a diversified portfolio, some parts will always go up and some parts will go down.
delamer
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by delamer »

I was just catching up with reading “The Big Picture” blog. I found this quote from Barry Ritholtz in an article about buy-and-hold strategies (he is pro) and immediately thought of this thread:
A portfolio that is 60 percent equities and 40 percent fixed income should suffer drawdowns of about 26 percent to 28 percent in markets that get cut in half, such as 1973-74 or 2008-09. If you cannot live through a 25 percent pullback in the value of your portfolio, you have no business owning stocks.
Here’s the article: https://ritholtz.com/2018/11/whats-miss ... critiques/
smectym
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Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Post by smectym »

TheOscarGuy wrote: Thu Nov 15, 2018 6:35 am
smectym wrote: Thu Nov 15, 2018 2:04 am
Therefore, investors are responsible for regular monitoring of the portfolio. In times of market stress this duty is enhanced, not attenuated or negated.

Smectym
What does monitoring portfolio really mean? If you are not tinkering with it, if you are not adjusting/changing asset allocation periodically, what else would you do with it?
TheOscarGuy, good question. My answer is that while I agree that in a great many market scenarios, conventional buy-and-hold-and-stay-the-course wisdom pertains, that still doesn’t give the responsible investor a free pass to not keep a close eye on assets, the preservation of which may be critical not only for the investor but for his spouse and other loved ones.

Extreme market scenarios may (strike that, will) emerge which require the investor to take a decision in favor of capital preservation. The boglehead way doesn’t give the investor a license for complacency or an excuse that will fly with spouse and children in the event of catastrophic losses.

Smectym
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