What to do in a crash

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owenmia
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What to do in a crash

Post by owenmia » Thu Jul 25, 2019 10:09 pm

So I understand that I am in it for 15 years and you lose by selling in a correction or crash.

So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?

It seems straightforward. Don’t sell no matter what.

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fortfun
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Re: What to do in a crash

Post by fortfun » Thu Jul 25, 2019 10:13 pm

owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So I understand that I am in it for 15 years and you lose by selling in a correction or crash.

So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?

It seems straightforward. Don’t sell no matter what.
Buy, it's on sale. At least keep DCAing. Rebalance (sell bonds and buy stock).

Topic Author
owenmia
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Re: What to do in a crash

Post by owenmia » Thu Jul 25, 2019 10:14 pm

Sell bonds and buy stocks. That makes sense.

But the rule is never sell your stocks when it is down no matter what. I need to read up on this.
Last edited by owenmia on Thu Jul 25, 2019 10:16 pm, edited 1 time in total.

telecaster
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Re: What to do in a crash

Post by telecaster » Thu Jul 25, 2019 10:15 pm

I auto save and invest each month, and that wouldnt change. If there is a big crash, I would take the extra principal only payments I make on my mortgage each month and buy more equities each month until the market recoups. I would also rebalance to get back to my correct asset allocation.

I wouldn't do anything else except look a little harder at other ways to scrounge up more cash and invest it (but that is a pretty normal thing for me to do even when the market is doing well)

heyyou
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Re: What to do in a crash

Post by heyyou » Thu Jul 25, 2019 11:08 pm

Succinctly, don't do anything.
With an adequate emergency fund, there is no need to sell.
If necessary, sell from bonds first instead of causing permanent losses by selling stock fund shares at depressed prices.

Below is my logic about why crashes are a normal part of stock fund investing:
Consider reading some of the behavioral finance books, since it is a little bit comforting to realize that our own fears are both common and well known enough to be labeled by the psychologists. As usual, the phrase "it is simple, but not easy" is part of the description of tolerating a stock market crash.

On a different level, the uncertainty about when, and how bad the crashes are, is exactly why stock investing pays more than bond investing. Risk and reward are intertwined. A crash is not an aberration, it is just a delayed then sudden readjustment of prices.

One retirement researcher suggests starting retirement with a dozen years of spending in bond funds, and spending it, to buffer any stock crashes during the critical first decade of a thirty year retirement. See how the stock crashes are just an expected part of being a long term investor in equity funds?

How about the analogy of using freeways to commute quicker, except when there is a car crash, which is not an unexpected event, but we all have to tolerate/adapt to the results of the crash when it does occur? We can't just turn around and skip work for the rest of the day.

retiredflyboy
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Re: What to do in a crash

Post by retiredflyboy » Thu Jul 25, 2019 11:30 pm

Turn off the news and enjoy friends and family .
Facts are stubborn things. Everything works until it doesn’t.

chuppi
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Re: What to do in a crash

Post by chuppi » Fri Jul 26, 2019 12:45 am

I recently got 250K HELOC. My credit union offered it with no closing cost and so I took it. I never intend to draw the money and definitely won't bother for minor corrections. It is there if I want to buy stocks on the cheap.

teelainen
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Re: What to do in a crash

Post by teelainen » Fri Jul 26, 2019 12:47 am

owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So I understand that I am in it for 15 years and you lose by selling in a correction or crash.

So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?

It seems straightforward. Don’t sell no matter what.
Don't look at the account value balance. Just look at the number of shares you own.

anoop
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Re: What to do in a crash

Post by anoop » Fri Jul 26, 2019 1:09 am

owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So I understand that I am in it for 15 years and you lose by selling in a correction or crash.

So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?

It seems straightforward. Don’t sell no matter what.
Grab some popcorn and subscribe to the thread "US stocks in free fall".

MoneyMarathon
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Re: What to do in a crash

Post by MoneyMarathon » Fri Jul 26, 2019 1:59 am

owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So, in a crash, what do you do?
The answer is "nothing" or "rebalance," but that's an incomplete answer. What you want to do to be ready "in a crash" is what you do right now, which is to create and to stick with your investment plan.

https://www.bogleheads.org/wiki/Investm ... _statement

If you think you might not handle a crash well, bring up your allocation to bonds now. For example, someone at 100% stocks could easily go to 90% / 10% bonds or 80% / 20% bonds right now and keep it there, if that fits their risk tolerance. If that helps them stay the course, it almost certainly is better in the long run than if they kept their 100% stocks that they were fickle about just holding.

HawkeyePierce
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Re: What to do in a crash

Post by HawkeyePierce » Fri Jul 26, 2019 4:46 am

retiredflyboy wrote:
Thu Jul 25, 2019 11:30 pm
Turn off the news and enjoy friends and family .
I think this is the best answer. Financial "news" like CNBC, Fox Business, etc is just entertainment meant to scare and enthrall. ESPN at the stock exchange.

I didn't even realize there was a drop in the markets last December because I steadfastly avoid TV news.

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dogagility
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Re: What to do in a crash

Post by dogagility » Fri Jul 26, 2019 4:57 am

owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So I understand that I am in it for 15 years and you lose by selling in a correction or crash.

So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?

It seems straightforward. Don’t sell no matter what.
Rebalance as needed to your pre-crash asset allocation.
Keep investing according to your pre-crash asset allocation.
Turn off Bogleheads, TV news, internet news.
Go for a nightly walk, run, canoe sojourn, bike.
Buck up, little camper. :D
Taking "risk" since 1995.

msk
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Re: What to do in a crash

Post by msk » Fri Jul 26, 2019 5:14 am

30% fall from peak I buy one-year Call Options on a million $ worth of SPY (=SP500). Cost is $50k that I raise from my brokerage margin. Continued fall to 40%, buy another, similar bunch of Calls. Repeat every 10% further fall. Sooner or later sanity returns and I make some $. Last two crashes I made $50k net on one and $100k on the other. Cannot now recall which was which. Emotions drive the massive, rapid dives in the market. But sanity always returns, slowly. If the return to sanity takes much longer then I may lose $. But so far one-year Calls was OK. Enough rebound within a year to at least pay back the margin loan, if it took much longer to go back to peak. I do not hold bonds hence I use margin.

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meowcat
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Re: What to do in a crash

Post by meowcat » Fri Jul 26, 2019 5:24 am

owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So I understand that I am in it for 15 years and you lose by selling in a correction or crash.

So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?

It seems straightforward. Don’t sell no matter what.
Yes, it's that simple. You already know the answer.
More people should learn to tell their dollars where to go instead of asking them where they went. | -Roger Babson

remomnyc
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Re: What to do in a crash

Post by remomnyc » Fri Jul 26, 2019 5:37 am

owenmia wrote:
Thu Jul 25, 2019 10:14 pm
But the rule is never sell your stocks when it is down no matter what. I need to read up on this.
Where did you hear this rule? You should absolutely sell stocks when they're down to rebalance or tax loss harvest in taxable accounts.

NotWhoYouThink
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Re: What to do in a crash

Post by NotWhoYouThink » Fri Jul 26, 2019 7:18 am

Hang up the phone.

Oh, a market crash! If you are working and living off your paycheck there is no reason to sell anything except to rebalance. Adjust your contributions to buy whatever is down, likely stocks. If your investments are all in tax advantaged accounts there is no opportunity for tax loss harvesting, but you can do rebalancing in your retirement accounts.

And read some books, take some walks, visit friends and family. It will pass.

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JPH
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Re: What to do in a crash

Post by JPH » Fri Jul 26, 2019 7:24 am

If you are worried you could cut your expenses a bit.
While the moments do summersaults into eternity | Cling to their coattails and beg them to stay - Townes Van Zandt

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Wiggums
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Re: What to do in a crash

Post by Wiggums » Fri Jul 26, 2019 7:31 am

I’d do nothing and go on with my normal daily routine.

jrbdmb
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Re: What to do in a crash

Post by jrbdmb » Fri Jul 26, 2019 8:02 am

MoneyMarathon wrote:
Fri Jul 26, 2019 1:59 am
owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So, in a crash, what do you do?
The answer is "nothing" or "rebalance," but that's an incomplete answer. What you want to do to be ready "in a crash" is what you do right now, which is to create and to stick with your investment plan.

https://www.bogleheads.org/wiki/Investm ... _statement

If you think you might not handle a crash well, bring up your allocation to bonds now. For example, someone at 100% stocks could easily go to 90% / 10% bonds or 80% / 20% bonds right now and keep it there, if that fits their risk tolerance. If that helps them stay the course, it almost certainly is better in the long run than if they kept their 100% stocks that they were fickle about just holding.
Another very good answer. If you are at 90% stocks now and you are fearful you will panic during a crash and sell, then perhaps 90% stocks is not for you. Try to determine what asset allocation lets you sleep at night, and then stick to that. (Although you never really know until that correction hits.)

Rus In Urbe
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Re: What to do in a crash

Post by Rus In Urbe » Fri Jul 26, 2019 8:22 am

telecaster » Thu Jul 25, 2019 11:15 pm
I auto save and invest each month, and that wouldnt change. If there is a big crash, I would take the extra principal only payments I make on my mortgage each month and buy more equities each month until the market recoups. I would also rebalance to get back to my correct asset allocation.
teelainen
Don't look at the account value balance. Just look at the number of shares you own.
Yes and Yes.
:thumbsup :thumbsup :thumbsup

---Make sure your AA is appropriate and that in a, let's say, 50% downturn, you wouldn't panic....run those numbers and test them with your emotions....).

---Do everything to make sure your employment is secure.

---And when you hear the omininous echo, "This Time It's Different!," just laugh. Continue your automatic investments from your paycheck and ignore those around you who are panic-selling.

This is a very good question to ask and a good thing to think about before it happens. Since downturns are inevitable.

STC. Good luck. :beer Rus
I'd like to live as a poor man with lots of money. ~Pablo Picasso

BlackStrat
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Re: What to do in a crash

Post by BlackStrat » Fri Jul 26, 2019 8:27 am

completely ignore the market while DCA-ing into it.

Then look back in 10 years and exclaim "whoa - I lost hundreds of thousands of dollars in that last crash 5 years ago"!

ignorance is bliss

nick evets
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Re: What to do in a crash

Post by nick evets » Fri Jul 26, 2019 10:12 am

Cheer up. Recognize that a 50% loss in value will require a 100% gain to recover, so it's going to be a while....Crash will only take a month, and you've got to wait years going forward....

In the meantime you'll be cheered by posts from people who: 1) "saw it coming because XYZ, so they went all to cash...." and 2) "bought back in at the market low." :)

H-Town
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Re: What to do in a crash

Post by H-Town » Fri Jul 26, 2019 10:16 am

owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So I understand that I am in it for 15 years and you lose by selling in a correction or crash.

So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?

It seems straightforward. Don’t sell no matter what.
1) People tend to learn the hard way. So this is a perfect time to learn some lessons. Sit down and objectively examine what you have done and what can you do better. Revise your IPS, your behavior, and/or your habits, if applicable.

2) Since you're 15 years away, be thankful because this is your chance to supercharge your portfolio. Then, be considerate with retiree folks as it's an unfortunate time for them.

3) Closely keep track of all our expenses and direct all the discretionary expenses to investing, if possible.

4) TLH and tax planning. This is where you make your money...

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Sandtrap
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Re: What to do in a crash

Post by Sandtrap » Fri Jul 26, 2019 10:18 am

Metaphorically:

The various trees in your orchard (retirement funds/assets/etc) are giving less fruit, some less than others.
And, the value of the trees and therefore you total orchard has dropped dramatically.
Do you sell the trees, or just keep harvesting fruit and adapt to the temprarily seasonal lower yields and value?

This also works with chickens, eggs, and chicken coups.

j
Wiki Bogleheads Wiki: Everything You Need to Know

MotoTrojan
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Re: What to do in a crash

Post by MotoTrojan » Fri Jul 26, 2019 10:20 am

You’re only investing for 15 years? Or you’ll start withdrawing in 15 years? Those are vastly different.

levocap
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Re: What to do in a crash

Post by levocap » Fri Jul 26, 2019 10:23 am

Also dont forget to tax loss harvest - you are going to need it when the market rebounds!

WhiteMaxima
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Re: What to do in a crash

Post by WhiteMaxima » Fri Jul 26, 2019 10:34 am

Do nothing if you already have a 100% of equity. Do rebalance if you have a set AA (for example 80/20). Do buying if you are already in cash.

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White Coat Investor
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Re: What to do in a crash

Post by White Coat Investor » Fri Jul 26, 2019 10:43 am

owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So I understand that I am in it for 15 years and you lose by selling in a correction or crash.

So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?

It seems straightforward. Don’t sell no matter what.
Keep buying as per your regular buying schedule. Keep rebalancing due to your regular rebalancing schedule. Stop opening statements. Stop watching the news.

You might enjoy going back and reading some threads on this forum from 2008 to give you a sense of what it feels like:

viewtopic.php?t=25126

viewtopic.php?t=28103
viewtopic.php?t=103135
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

wolf359
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Re: What to do in a crash

Post by wolf359 » Fri Jul 26, 2019 10:56 am

chuppi wrote:
Fri Jul 26, 2019 12:45 am
I recently got 250K HELOC. My credit union offered it with no closing cost and so I took it. I never intend to draw the money and definitely won't bother for minor corrections. It is there if I want to buy stocks on the cheap.
During the last crash, credit card companies reduced available credit. Credit unions and banks reduced or eliminated HELOCs that weren't currently in use. This strategy might work in a normal crash, but it didn't work in 2008 when everybody realized that the previous risk ratings were garbage and tightened credit and credit standards significantly.

Also, it's a risk. If you lose your job in a big enough economic downturn, then being unable to pay back a HELOC could cost you your house.

I had an untapped HELOC in 2008, but the credit union closed it on me. It surprised me because my credit was high throughout (no issues, no job loss, and significant home equity.)

anon_investor
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Re: What to do in a crash

Post by anon_investor » Fri Jul 26, 2019 10:58 am

Make sure you have a well funded emergency fund to eliminate any chance of you needing to tap your investment assets.

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abuss368
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Re: What to do in a crash

Post by abuss368 » Fri Jul 26, 2019 10:59 am

owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So I understand that I am in it for 15 years and you lose by selling in a correction or crash.

So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?

It seems straightforward. Don’t sell no matter what.
Based on the question it may be a very good idea to read a few very good books on investing. I would consider John Bogle - The Little Book of Common Sense Investing, any Jack Bogle books, John Brennan - Straight Talk on Investing, and The Bogleheads Guides - all three of them.

You will be well informed and rewarded.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

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abuss368
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Re: What to do in a crash

Post by abuss368 » Fri Jul 26, 2019 11:01 am

owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So I understand that I am in it for 15 years and you lose by selling in a correction or crash.

So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?

It seems straightforward. Don’t sell no matter what.
Based on the question it may be a very good idea to read a few very good books on investing. I would consider John Bogle - The Little Book of Common Sense Investing, any Jack Bogle books, John Brennan - Straight Talk on Investing, and The Bogleheads Guides - all three of them.

You will be well informed and rewarded.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

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abuss368
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Re: What to do in a crash

Post by abuss368 » Fri Jul 26, 2019 11:02 am

You should stay the course, keep investing, and rebalance!

Tune out the noise and investment porn!
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

wolf359
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Re: What to do in a crash

Post by wolf359 » Fri Jul 26, 2019 11:03 am

owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So I understand that I am in it for 15 years and you lose by selling in a correction or crash.

So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?

It seems straightforward. Don’t sell no matter what.
This is the right question to ask.

Also, make sure your asset allocation is correct BEFORE the crash (for example, right now while the market is close to or making new highs.) Boosting your bond allocation AFTER the crash just locks in losses. Do it now.

Make sure your emergency fund is fully funded now.

Read the old Boglehead threads from what people were talking about and thinking in 2008 during the last crash.

Read "The Great Depression, A Diary" by Benjamin Roth. Your library should have it. That says what one investor did and observed during one of the biggest crashes.

Update your ISP, so you know what you had planned back when things were calm.

JW-Retired
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Re: What to do in a crash

Post by JW-Retired » Fri Jul 26, 2019 11:33 am

owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?
What's worked extremely well for me in the 2002 & 2008 crashes is to just never sell bonds to re-balance. I only re-balanced on the high equity side or with new money if I had some. This leaves you with very little to worry about doing.:D

Tax loss harvest between equities but don't mess with those bond holdings. If the stocks never come back you will still have that solid floor of bond assets.
JW
Retired at Last

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abuss368
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Re: What to do in a crash

Post by abuss368 » Fri Jul 26, 2019 11:51 am

JW-Retired wrote:
Fri Jul 26, 2019 11:33 am
owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?
What's worked extremely well for me in the 2002 & 2008 crashes is to just never sell bonds to re-balance. I only re-balanced on the high equity side or with new money if I had some. This leaves you with very little to worry about doing.:D

Tax loss harvest between equities but don't mess with those bond holdings. If the stocks never come back you will still have that solid floor of bond assets.
JW
Excellent advice. Leave your dry powder. I bought rebalanced into equities with new money. In hindsight it was a very smart strategy.

Thank you Jack Bogle for teaching us to stay the course!
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

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owenmia
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Re: What to do in a crash

Post by owenmia » Fri Jul 26, 2019 10:12 pm

jrbdmb wrote:
Fri Jul 26, 2019 8:02 am
MoneyMarathon wrote:
Fri Jul 26, 2019 1:59 am
owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So, in a crash, what do you do?
The answer is "nothing" or "rebalance," but that's an incomplete answer. What you want to do to be ready "in a crash" is what you do right now, which is to create and to stick with your investment plan.

https://www.bogleheads.org/wiki/Investm ... _statement

If you think you might not handle a crash well, bring up your allocation to bonds now. For example, someone at 100% stocks could easily go to 90% / 10% bonds or 80% / 20% bonds right now and keep it there, if that fits their risk tolerance. If that helps them stay the course, it almost certainly is better in the long run than if they kept their 100% stocks that they were fickle about just holding.
Another very good answer. If you are at 90% stocks now and you are fearful you will panic during a crash and sell, then perhaps 90% stocks is not for you. Try to determine what asset allocation lets you sleep at night, and then stick to that. (Although you never really know until that correction hits.)
Yes I have gone to 70/30 from 90/10 and back tested it. The earnings are not hurt that badly going from 90/10 to 70/30. And I tested how each would be affected by a 35% drop.

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owenmia
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Re: What to do in a crash

Post by owenmia » Fri Jul 26, 2019 10:13 pm

nick evets wrote:
Fri Jul 26, 2019 10:12 am
Cheer up. Recognize that a 50% loss in value will require a 100% gain to recover, so it's going to be a while....Crash will only take a month, and you've got to wait years going forward....

In the meantime you'll be cheered by posts from people who: 1) "saw it coming because XYZ, so they went all to cash...." and 2) "bought back in at the market low." :)
Haha yeah.

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owenmia
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Re: What to do in a crash

Post by owenmia » Fri Jul 26, 2019 10:15 pm

abuss368 wrote:
Fri Jul 26, 2019 10:59 am
owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So I understand that I am in it for 15 years and you lose by selling in a correction or crash.

So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?

It seems straightforward. Don’t sell no matter what.
Based on the question it may be a very good idea to read a few very good books on investing. I would consider John Bogle - The Little Book of Common Sense Investing, any Jack Bogle books, John Brennan - Straight Talk on Investing, and The Bogleheads Guides - all three of them.

T

You will be well informed and rewarded.
Thanks, will do.

Topic Author
owenmia
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Re: What to do in a crash

Post by owenmia » Fri Jul 26, 2019 10:18 pm

abuss368 wrote:
Fri Jul 26, 2019 11:02 am
You should stay the course, keep investing, and rebalance!

Tune out the noise and investment porn!
Agreed. This stuff is SO addictive. Thinking about the money, shifting the money rethinking allocation. It is a drug.

vipertom1970
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Re: What to do in a crash

Post by vipertom1970 » Fri Jul 26, 2019 10:27 pm

owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So I understand that I am in it for 15 years and you lose by selling in a correction or crash.

So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?

It seems straightforward. Don’t sell no matter what.
I did not do anything the last 2008-2009 crash except DCA and bought more shares for the same amount of $$ and now my over all is over 300% higher then 2008-2009. I was 100% in equites until I turned 50 couple days ago and now 60/40.

TaxingAccount
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Re: What to do in a crash

Post by TaxingAccount » Fri Jul 26, 2019 11:01 pm

.....
Last edited by TaxingAccount on Tue Aug 13, 2019 3:00 pm, edited 1 time in total.

GCD
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Re: What to do in a crash

Post by GCD » Fri Jul 26, 2019 11:12 pm

Looking back, I was down 12% in 2008 and up 29% in 2009. I just kept buying. Nothing fancy.

stocknoob4111
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Re: What to do in a crash

Post by stocknoob4111 » Sat Jul 27, 2019 12:40 am

It already crashed in December, I did nothing.

HenryPorter
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Re: What to do in a crash

Post by HenryPorter » Sat Jul 27, 2019 1:12 am

In market dip or worse, a crash, there is great opportunity to convert a traditional IRA to a Roth one, if the taxes work out for you.

gmc4h232
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Re: What to do in a crash

Post by gmc4h232 » Sat Jul 27, 2019 6:25 am

Tax loss harvest (TLH) in taxable accounts. If you don’t know how, just wait for a correction then all the posts on the forum will be about TLH and Livesoft will be feverishly trying to answer everyone’s wash sale questions.

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Sandtrap
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Re: What to do in a crash

Post by Sandtrap » Sat Jul 27, 2019 7:30 am

owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So I understand that I am in it for 15 years and you lose by selling in a correction or crash.

So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?

It seems straightforward. Don’t sell no matter what.
1. do nothing
2. re-evaluate portfolio and holdings, check to see if it is time to change allocation if you are on a "glide slope". Make this correction either with new funds slowly or, if the move is toward a higher "fixed" allocation, then let it drift a bit to that.
3. Check to see if it is time to rebalance anyway, do so with new funds over time.
4. Expenses come out of EF (larger the better) and fixed holdings, etc.
5. Don't panick.
6. Don't fiddle or tweak the portfolio.
7. Sell when things need to be sold per your IPS. It depends.

j
Wiki Bogleheads Wiki: Everything You Need to Know

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dogagility
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Re: What to do in a crash

Post by dogagility » Sat Jul 27, 2019 7:55 am

owenmia wrote:
Fri Jul 26, 2019 10:18 pm
abuss368 wrote:
Fri Jul 26, 2019 11:02 am
You should stay the course, keep investing, and rebalance!

Tune out the noise and investment porn!
Agreed. This stuff is SO addictive. Thinking about the money, shifting the money rethinking allocation. It is a drug.
What I find addicting is seeing our portfolio increase in value and determining the best way to achieve return over the long term.
I think about investing but am detached psychologically from our portfolio at the same time.
Taking "risk" since 1995.

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abuss368
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Re: What to do in a crash

Post by abuss368 » Sat Jul 27, 2019 8:26 am

owenmia wrote:
Fri Jul 26, 2019 10:15 pm
abuss368 wrote:
Fri Jul 26, 2019 10:59 am
owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So I understand that I am in it for 15 years and you lose by selling in a correction or crash.

So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?

It seems straightforward. Don’t sell no matter what.
Based on the question it may be a very good idea to read a few very good books on investing. I would consider John Bogle - The Little Book of Common Sense Investing, any Jack Bogle books, John Brennan - Straight Talk on Investing, and The Bogleheads Guides - all three of them.

T

You will be well informed and rewarded.
Thanks, will do.
It has served me well. I have every Jack Bogle, Jack Brennan, Vanguard, and Bogleheads book in hard cover and mint on our bookshelf. I have referred to them countless times over the years as questions arise.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

Helo80
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Re: What to do in a crash

Post by Helo80 » Sat Jul 27, 2019 8:29 am

owenmia wrote:
Thu Jul 25, 2019 10:09 pm
So I understand that I am in it for 15 years and you lose by selling in a correction or crash.

So, in a crash, what do you do? What are the temptations and thought proccess s that occur and what are the mistakes commonly made?
Easy --- just keep your regular contribution pattern as you did when times were good.

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