What did you learn from the 2/24 sell off?

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ruralavalon
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Re: What did you learn from the 2/24 sell off?

Post by ruralavalon »

chocolateolive wrote: Tue Feb 25, 2020 7:56 pm Is this drop even worth buying?

Or do bogleheads recommend to wait for an even bigger drop to start buying?
I do not recommend waiting for a drop to buy. Do not try to time the market.

I invested regularly every pay period no matter what the market was doing, and always contributed more whenever I had extra money to invest.
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Re: What did you learn from the 2/24 sell off?

Post by DesertDiva »

pharmermummles wrote: Wed Feb 26, 2020 9:35 am
DesertDiva wrote: Wed Feb 26, 2020 9:00 am I learned that I’m glad I never embraced the FIRE movement.
I can't imagine why. If the market doesn't make the RE part as easy, you're still better off with your efforts towards FI than if you hadn't saved as much.
I'm glad I haven't Retired Early, saw my portfolio drop, panic, and apply for a part-time job as a barista while trying to work my way back into the job market.
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Re: What did you learn from the 2/24 sell off?

Post by chipperd »

Zetorman wrote: Wed Feb 26, 2020 4:27 am
corysold wrote: Tue Feb 25, 2020 10:24 am I learned I'm glad I switched to Fidelity. They were so kind to lock out my account so I couldn't even think about panic selling. What a great company and amazing customer service.
Made me laugh......a lot!
Ha! Same. Not that Fidelity would do this in to serve their own self interests at all (sarcasm).
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Re: What did you learn from the 2/24 sell off?

Post by Green Street »

I learned that I still develop anxiety to invest when the market drops. -8% in a couple days. Deployed a lot of cash into VTSAX. Definitely ready for more.
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Re: What did you learn from the 2/24 sell off?

Post by taojaxx »

magicrat wrote: Tue Feb 25, 2020 10:53 am I learned that days like yesterday are good days to check the value of my physical gold to get some good feelings :)
You sure about that?
:)
DB2
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Re: What did you learn from the 2/24 sell off?

Post by DB2 »

willthrill81 wrote: Tue Feb 25, 2020 11:06 am
If you practice buy-and-hold, that's what you have to be prepared to do. It's a simple strategy, but it's not easy, not for most anyway.
Agreed and I think it's very difficult for most to do when most of their allocation is equity. It seems to me when AA is something like ~40% or less in equity people can stomach it through a 50% market drop because then maybe their portfolio has only dropped 10-15%.
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ruralavalon
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Re: What did you learn from the 2/24 sell off?

Post by ruralavalon »

DB2 wrote: Wed Feb 26, 2020 12:10 pm
willthrill81 wrote: Tue Feb 25, 2020 11:06 am
If you practice buy-and-hold, that's what you have to be prepared to do. It's a simple strategy, but it's not easy, not for most anyway.
Agreed and I think it's very difficult for most to do when most of their allocation is equity. It seems to me when AA is something like ~40% or less in equity people can stomach it through a 50% market drop because then maybe their portfolio has only dropped 10-15%.
Staying the course of is easier with good diversification.

We are age 74, retired, no pension, with 50% in bonds, in Vanguard Intermediate-term Bond Index Fund (VBILX) which despite the big drop is up 3.69% year to date.
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brainstem
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Re: What did you learn from the 2/24 sell off?

Post by brainstem »

I learned once again that there are market inefficiencies -- namely Wall Street is complacent about the threats (of the corona virus) and when they could no longer ignore the threat, everyone rushed to the exit --
Sort of like the crash of 2008-9 when everyone ignored the warning signs of the debt derivatives
Last edited by brainstem on Wed Feb 26, 2020 12:41 pm, edited 1 time in total.
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HomerJ
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Re: What did you learn from the 2/24 sell off?

Post by HomerJ »

wolf359 wrote: Wed Feb 26, 2020 10:07 am
pharmermummles wrote: Wed Feb 26, 2020 9:35 am
DesertDiva wrote: Wed Feb 26, 2020 9:00 am I learned that I’m glad I never embraced the FIRE movement.
I can't imagine why. If the market doesn't make the RE part as easy, you're still better off with your efforts towards FI than if you hadn't saved as much.
I don't understand some people's hostility to FIRE movement on this board. If you're not into saving and investing, or saving for retirement, then why are you here? You get to pick your timeframe, your targeted retirement income level, and how you fund it. All the techniques are the same. This is choose your own adventure.

Getting out at 60? Good for you.
Getting out at 50? Good for you.
Getting out at 40? You did really well. Good for you.
Getting out at 30? Wow, don't know how I'd fill my time, but good for you.
Getting out at 16? …um,.... Not sure how that's.. ..hmm.. Good luck?
I think the reference was to retiring at 35, with just enough for bare-bones survival at 4% withdrawals, and then a market crash happens. A lot FIRE people have never experienced a full crash, and their plans may not be robust enough to survive them.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
grog
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Re: What did you learn from the 2/24 sell off?

Post by grog »

The drop yesterday got me wondering how much insider trading goes on with this sort of thing.
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catdude
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Re: What did you learn from the 2/24 sell off?

Post by catdude »

lkar wrote: Tue Feb 25, 2020 2:26 pm
catdude wrote: Tue Feb 25, 2020 2:04 pm I learned that I'm glad I re-balanced a few weeks ago
Why? Serious question.

When are you going to need the money? Unless the answer is "later this year" you can't possible know at the moment whether the decision to rebalance was a good one or a bad one yet. Or unless you market time on the way up and the way down and have a point at which you will lock in the gains you made on this short term move. Like, if you rebalance back right now, you did good, but at what cost? Maybe you're trying to catch a falling knife!

But the point remains, other than short term psychic satisfaction or unless you are actually in or very retirement and needing to draw this money now, you really cannot say whether, at the point at which it matters, that equities are going to be higher or lower than the point at which you sold them a few weeks ago.

If these are short term assets and you are in retirement, then congratulations. But I think the point still stands for many who see market drops right after they sell retirement assets and think "wow, I did great."
I freely admit I got lucky! At least in the short term... as you say, there's no telling how things will work out long-term. My move was partly a re-balancing, and partly a move to a more conservative asset allocation. My target AA had been 55% stocks / 45% bonds. When I checked my portfolio a few weeks ago, I saw that I was at 59/41.

Given that I'm turning 65 this summer, I felt that it was time to go to "age minus 10 in bonds"... so I re-set my AA to 45% stocks / 55% bonds. I sold a sizable chunk of Total Stock Market, and moved the $$$ to Total Bond Market. This will be my AA going forward and I have no plans at all to tinker with it for the foreseeable future. I'm not dumb enough to think I can time the market on a consistent basis.
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SandysDad
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Re: What did you learn from the 2/24 sell off?

Post by SandysDad »

Well for me, prior to the sell off Mon and Tuesday, I thought the market was NOT adequately including the effect on China and the global economy of the China shut down. Ignoring all the comments about valuation levels, hysteria, etc....it just seemed it was kind of like "facts don't matter". From what I could see all this month. China was "shut down". OF COURSE it would effect profits, the economy and eventually stocks.

So what did I DO? I rebalanced within my IPS bands. I did this last week and earlier this month. Some call it timing. I called it "COMMON SENSE".

What i DID NOT DO? I did not react monday or tuesday (or today) to the gyrations of the market.

The notion that "stay the course" = "never take action" is for rubes. THINK: 2nd largest economy in the world is shut down for weeks and no clear path to reopening? WHY WOULDN'T ONE REBALANCE AND ADJUST?

Ignore hype and hysteria and market movements. Pay attention to FACTS.
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HomerJ
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Re: What did you learn from the 2/24 sell off?

Post by HomerJ »

SandysDad wrote: Wed Feb 26, 2020 2:12 pmThe notion that "stay the course" = "never take action" is for rubes. THINK: 2nd largest economy in the world is shut down for weeks and no clear path to reopening? WHY WOULDN'T ONE REBALANCE AND ADJUST?
Because the 2nd largest economy had not been totally shut down for weeks, just parts of it, and there WAS a possible clear path to reopening quickly. No one was sure yet.

You guessed correctly. Congrats.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
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Re: What did you learn from the 2/24 sell off?

Post by pharmermummles »

HomerJ wrote: Wed Feb 26, 2020 12:38 pm
wolf359 wrote: Wed Feb 26, 2020 10:07 am
pharmermummles wrote: Wed Feb 26, 2020 9:35 am
DesertDiva wrote: Wed Feb 26, 2020 9:00 am I learned that I’m glad I never embraced the FIRE movement.
I can't imagine why. If the market doesn't make the RE part as easy, you're still better off with your efforts towards FI than if you hadn't saved as much.
I don't understand some people's hostility to FIRE movement on this board. If you're not into saving and investing, or saving for retirement, then why are you here? You get to pick your timeframe, your targeted retirement income level, and how you fund it. All the techniques are the same. This is choose your own adventure.

Getting out at 60? Good for you.
Getting out at 50? Good for you.
Getting out at 40? You did really well. Good for you.
Getting out at 30? Wow, don't know how I'd fill my time, but good for you.
Getting out at 16? …um,.... Not sure how that's.. ..hmm.. Good luck?
I think the reference was to retiring at 35, with just enough for bare-bones survival at 4% withdrawals, and then a market crash happens. A lot FIRE people have never experienced a full crash, and their plans may not be robust enough to survive them.
Then in that case I'll agree. Although that seems like just RE, not FIRE. Anyone planning to last ~60 years on a 4% bare bones withdrawal rate is playing with napalm. A 50/50 portfolio has like a 35% failure rate over 60 years with 4% withdrawals historically.
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Re: What did you learn from the 2/24 sell off?

Post by sailaway »

pharmermummles wrote: Wed Feb 26, 2020 2:45 pm
HomerJ wrote: Wed Feb 26, 2020 12:38 pm
wolf359 wrote: Wed Feb 26, 2020 10:07 am
pharmermummles wrote: Wed Feb 26, 2020 9:35 am
DesertDiva wrote: Wed Feb 26, 2020 9:00 am I learned that I’m glad I never embraced the FIRE movement.
I can't imagine why. If the market doesn't make the RE part as easy, you're still better off with your efforts towards FI than if you hadn't saved as much.
I don't understand some people's hostility to FIRE movement on this board. If you're not into saving and investing, or saving for retirement, then why are you here? You get to pick your timeframe, your targeted retirement income level, and how you fund it. All the techniques are the same. This is choose your own adventure.

Getting out at 60? Good for you.
Getting out at 50? Good for you.
Getting out at 40? You did really well. Good for you.
Getting out at 30? Wow, don't know how I'd fill my time, but good for you.
Getting out at 16? …um,.... Not sure how that's.. ..hmm.. Good luck?
I think the reference was to retiring at 35, with just enough for bare-bones survival at 4% withdrawals, and then a market crash happens. A lot FIRE people have never experienced a full crash, and their plans may not be robust enough to survive them.
Then in that case I'll agree. Although that seems like just RE, not FIRE. Anyone planning to last ~60 years on a 4% bare bones withdrawal rate is playing with napalm. A 50/50 portfolio has like a 35% failure rate over 60 years with 4% withdrawals historically.
According to firecalc, a 75/25 portfolio has an 82% success rate at 60 years.
Ornery Old Guy
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Re: What did you learn from the 2/24 sell off?

Post by Ornery Old Guy »

grog wrote: Wed Feb 26, 2020 12:44 pm The drop yesterday got me wondering how much insider trading goes on with this sort of thing.
My bet is the people at the top - the heads of the big companies - aren’t as smart as you think and are as greedy as you think. Not so much collaboration as much as they assumed the market would stay up and panicked when it went down.
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sometimesinvestor
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Re: What did you learn from the 2/24 sell off?

Post by sometimesinvestor »

J.P.Morgan ws correct:The market will fluctuate
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JoeRetire
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Re: What did you learn from the 2/24 sell off?

Post by JoeRetire »

corp_sharecropper wrote: Tue Feb 25, 2020 11:25 pm What I learned: bogleheads.org disappointed me. I'm disappointed with the hysteria and drama of a few bad days that I have to sift through to find more calm/measured discussions that teach me finance/investing. The facade of "stay the course" appears to be just that, a facade for many, and I'm not sure I want to be exposed to the FUD of all the summertime soldiers when things are not going exactly according to fantasy. I probably should have known better and hope that this is really just a "squeaky wheel"/silent majority scenario. I will console myself with the knowledge that all these sunshine patriots will help juice up my portfolio when they buy back into the market when we're 3/4ths of the way to the next peak (which may very well be soon... Or not. Either way).
I understand and mostly with your sentiment, but I do think it's a bit unfair. I wouldn't expect everyone here to have exactly the same opinion, nor react to news in exactly the same way.

Clearly we see huge differences in strongly held opinions regarding social security claiming strategy, paying off cheap mortgages, market timing, appropriate asset allocation, etc, etc.

It really shouldn't be a surprise nor should it be disappointing if not everyone actually buys into a "stay the course" philosophy. It is easy to say, but much harder to do when the going gets even moderately "tough".
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UpperNwGuy
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Re: What did you learn from the 2/24 sell off?

Post by UpperNwGuy »

I learned that no matter what the market does, as long as do nothing, I have the same number of shares as I had before the excitement began.
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Re: What did you learn from the 2/24 sell off?

Post by GaryA505 »

I learned that the stock market went down that day.
althea
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Re: What did you learn from the 2/24 sell off?

Post by althea »

Learned that i control the market. :happy :happy

put in my Roth and some extra cash laying around last Friday. Texted my buddy to watch out for the huge drop Monday, just playing around.

then BOOM.

But doesn't bother me. AA is set and nobody has any clue what will happen tomorrow. Won't touch anything for ~20 years.
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Re: What did you learn from the 2/24 sell off?

Post by ponyboy »

I learned my wife was pregnant. Seriously...2 lines showed up on the pregnancy test. Do I have the market sell off to thank? Probably. Now we have to worry about dodging the coronavirus till october. Not sure if there are any effects on a prego chick. Oh, and we had an italy trip planned for May...guess thats getting cancelled. What a year so far.
Last edited by ponyboy on Wed Feb 26, 2020 4:31 pm, edited 1 time in total.
Finridge
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Re: What did you learn from the 2/24 sell off?

Post by Finridge »

For those of you who are younger and just starting out, or even if you're well into the investing game but have years to go before retirement--you should learn to love bear markets.

As Peter Bernstein, M.D. says in his excellent "The Four Pillars of Investing" (a book often recommended here):

"The very best thing that can happen to a retiree is to have a run of good years right off the bat. In that case, you’ll be sitting on a wad of assets that you likely won’t be able to spend, no matter how low returns are later.

The opposite is true for young savers: they should be praying for a bear market so that they can accumulate shares cheaply before they retire. The worst thing that can happen to savers is to have a prolonged period of high prices, which means that they will have acquired expensive shares that are likely to have poor returns in retirement. "


William J. Bernstein. The Four Pillars of Investing: Lessons for Building a Winning Portfolio (Kindle Locations 3895-3896). McGraw-Hill Professional. Kindle Edition.
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ruralavalon
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Re: What did you learn from the 2/24 sell off?

Post by ruralavalon »

ponyboy wrote: Wed Feb 26, 2020 4:29 pm I learned my wife was pregnant. Seriously...2 lines showed up on the pregnancy test. Do I have the market sell off to thank? Probably. Now we have to worry about dodging the coronavirus till october. Not sure if there are any effects on a prego chick. Oh, and we had an italy trip planned for May...guess thats getting cancelled. What a year so far.
Congratulations :D .
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Re: What did you learn from the 2/24 sell off?

Post by Ocean77 »

ponyboy wrote: Wed Feb 26, 2020 4:29 pm I learned my wife was pregnant. Seriously...2 lines showed up on the pregnancy test. Do I have the market sell off to thank? Probably. Now we have to worry about dodging the coronavirus till october. Not sure if there are any effects on a prego chick. Oh, and we had an italy trip planned for May...guess thats getting cancelled. What a year so far.
Well congratulations! Just look forward to your new one, all the other things do not matter. But yes keep dodging the corona virus, and not just till October, but after that, very much too!
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BroIceCream
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Re: What did you learn from the 2/24 sell off?

Post by BroIceCream »

I learned that I got lucky. 3 days before, I had an automatic sale of employee stock (ESPP), and had some cash that just settled.
It went right into the market today at [sale] prices.
Whether the market goes up or down, I'm good in the long run.
If I have cash to invest, I invest.
GAAP
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Re: What did you learn from the 2/24 sell off?

Post by GAAP »

1. Days with big drops are good days to do Roth Conversions (of the dropping stuff).

2. The same would be true of TLH, if appropriate.

3. The "news" makes a small drop sound a lot bigger than it is.
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ame
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Re: What did you learn from the 2/24 sell off?

Post by ame »

I learned I am tempted to buy when the market is only “a few” %s down from the all-time high.

I rebalanced, by selling bonds, to my desired 401K US large cap %. I bought $10700 of large cap on Monday and then $5350 yesterday. My initial plan was to rebalance with future contributions.
Enganerd
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Re: What did you learn from the 2/24 sell off?

Post by Enganerd »

lkar wrote: Wed Feb 26, 2020 10:29 am
Enganerd wrote: Tue Feb 25, 2020 8:45 pm
TomCat96 wrote: Tue Feb 25, 2020 7:09 pm
wolf359 wrote: Tue Feb 25, 2020 3:33 pm
watchnerd wrote: Tue Feb 25, 2020 1:47 pm

Of course it can efficient and late.

People get new information to add to the previous information, draw new conclusions.

The information landscape is not the same as it was 2 weeks ago.

Efficient is not the same as prophetic.
One of the opportunities to make money is when you know that what all the experts believe, is wrong.

The danger is that markets can be irrational for a very long time before you get proven right. It takes courage to bet against the crowd.

The big change this week is that bad news is blowing up in multiple places simultaneously.

We'll see what happens.
Have you seen the analyses? These financial analysts weren't taking into account what the experts were saying.
That's the shocking thing.

But it makes sense. It's all too human. You're a financial analyst. You're not going to move hundreds of millions of portfolio funds based on epidemiologist consensus--especially for a one time event like this.

You're going to instead go through your usual stuff. Assign a probability to low severity of COVID-19, assign a high probability, treat everything as an independent variable. Run Monte Carlo simulations.

It is all too human to follow what it is you already know. Epidemiologists were saying this would be a worldwide spread weeks ago. And only in the last two days has the market priced things in significantly.

This is data point I don't think we should ignore. It shows how the market works. It shows the market is made of people, filled with their own biases. Rapid to incorporate data they understand, slow to comprehend things they do not.
The market was LATE to react to the coronavirus. Mainstream media did seem to be downplaying (instead of the usual negativity bias sensationalism) so one could see why the market was not responding even though credible epidemiologists were sounding the alarm. It was enough I felt I had to do something. But being a convinced stay the course boglehead, I only moved a bit of money out of my emerging market tilt.

Of course now I am simultaneously regretting I did not pull more money out of equities and also tempted to redeploy my funds in case the market recovers. So what I have learned so far is that you do need to be right twice for market timing and for me it induces more stress and anxiety than disciplined buy and hold. I winced as the market continued to climb after I initially sold my position and now I stress over whether or not to buy back in or watch to see if the market drops further.
1. There is an easy solution for this dilemma. It is one frequently espoused by those who follow certain core principals often associated with a guy called Jack Bogle.

2. Next time the market may react EARLY. Nobody knows nothing.
1. I intended to illustrate a benefit of buy and hold over market timing with my post. The terms winced and stress are probably a bit too strong, but to time one does have to take action at least twice. These 2 decisions can cause anxiety over whether the trade was executed at the "right" time. Obviously we can see that this recent market behavior has also caused stress to strict buy and holders. Probably because opting not to sell, or alter the course, is actually a decision in itself.

2. I agree with the first sentence. I agree with the investing implications of the second sentence. But one could know that plenty of people (market participants) were ignorant of the draconian measures China had taken to quarantine large populations and the logical cautions from credible epidemiologists. Then the investor could decide to act on that information and place a bet (thinking in probabilities, obviously no one has a crystal ball) that the market would move in a particular manner.
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TheTimeLord
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Re: What did you learn from the 2/24 sell off?

Post by TheTimeLord »

LRDave wrote: Tue Feb 25, 2020 9:08 pm
TheTimeLord wrote: Tue Feb 25, 2020 10:26 am Today I am learning whistling in the graveyard is a popular BH hobby. Just kidding I already knew it.
I'm pretty sure it is whistling PAST the graveyard.....
That is the saying, but which do you think is more appropriate for the current situation?
Last edited by TheTimeLord on Wed Feb 26, 2020 8:29 pm, edited 1 time in total.
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aqan
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Re: What did you learn from the 2/24 sell off?

Post by aqan »

I doubt you can learn anything from one down day in the market. You will have something to learn when you see this in the rear view mirror in an year or two.. that might just be that ‘it’s better not to react to one down day in the market’
lkar
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Re: What did you learn from the 2/24 sell off?

Post by lkar »

Enganerd wrote: Wed Feb 26, 2020 8:11 pm1. I intended to illustrate a benefit of buy and hold over market timing with my post. The terms winced and stress are probably a bit too strong, but to time one does have to take action at least twice. These 2 decisions can cause anxiety over whether the trade was executed at the "right" time. Obviously we can see that this recent market behavior has also caused stress to strict buy and holders. Probably because opting not to sell, or alter the course, is actually a decision in itself.

2. I agree with the first sentence. I agree with the investing implications of the second sentence. But one could know that plenty of people (market participants) were ignorant of the draconian measures China had taken to quarantine large populations and the logical cautions from credible epidemiologists. Then the investor could decide to act on that information and place a bet (thinking in probabilities, obviously no one has a crystal ball) that the market would move in a particular manner.
On 1, I see your intention better. I think any casual investor who sees each day of not selling as a decision is really in a tough place. I think we all understand it is true intellectually, but most of us have trained ourselves to see each daily balance as a datapoint along the spectrum of time between when we bought and when we sell. And an investor who has the kind of brain that looks at a balance on a particular day and thinks "I have that much money, what should I do with it" is going to have a rough ride unless he or she gets lucky or has the discipline to look rarely.

Your point about needing to make two decisions is right. There are some posts in this thread where people are celebrating the fact that they rebalanced a few days ago, which is a curious phenomenon. The net benefit of having sold stock a few days ago for bonds cannot be judged right now, unless the same investor turned around and rebalanced back again the other way today. That investor did in fact do very well. But, I'd submit, in the long run unless it was a one time thing, that investor is going to have more bad examples of trading in the future. The retirement investor who rebalanced a couple of days ago may very well end up worse off when it comes time to start selling those bonds he or she bought instead of keeping stock. We cannot know.

2. I don't agree and will never agree with your second point. One may guess correctly. But the idea that there are inefficient dummies out there who are making it easy pickings for the rest of us is just a fallacy. I firmly believe that. I always so clear in hindsight but the idea that one can really calculate these probabilities and consistently take the house side of the bet in real time looking forward? Well, I just reject the idea.
Last edited by lkar on Wed Feb 26, 2020 8:59 pm, edited 1 time in total.
milktoast
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Re: What did you learn from the 2/24 sell off?

Post by milktoast »

I learned that it's hard to resist buying RBD. Especially on the 2nd RBD in a row.

But my IPS has specific criteria for buying on RBD, and they were not met on Monday or Tuesday. But if we have another RBD, the spreadsheet tells me exactly what to buy at 30 minutes before close - so I'm ready.

BTW. I'm pretty happy about my ability to stick to plan. Bought $575 worth of total international on Monday with cash in settlement fund that should have been invested at deposit, but wasn't because I was waiting for the next deposit to bring it up to above $1000. So gave in to some temptation but didn't fire the large trade in my IPS.
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Re: What did you learn from the 2/24 sell off?

Post by latesaver »

I learned what it feels like to see your investments increase during a bull market and then get pummeled in a couple days.

i was reminded the stock market takes the stairs up and the elevator down.

I was reminded that a 3% drop cost me the same as a TSLA model 3.

I was reminded that basic algebra can give you an estimate of a person's capital at risk if you know a) % allocation in a two or three fund portfolio and b) that they could have bought a TSLA model 3 given a 3% drop.

that's about it.
thekro
Posts: 107
Joined: Wed Jul 30, 2008 12:06 pm

Re: What did you learn from the 2/24 sell off?

Post by thekro »

watchnerd wrote: Tue Feb 25, 2020 7:48 pm
thekro wrote: Tue Feb 25, 2020 6:04 pm I learned that my all weather portfolio held up great! long term government bonds ( EDV and TLT 25% ) along with (gold 25%) and (25% cash) gave me a great day even though the my total stock market index (VTI) 25% had a bad day. Yesterday my portfolio hit a record high!
You hold both EDV & TLT?

I'm curious why not just picking one.
I hold EDV in IRA accounts and TLT in taxable accounts but I do have a small amount of EDV in taxable account as well because years back when I tax loss harvested TLT It just keep going up and I could never get back to all TLT. At the time I was thinking if EDV went down I would switch back to TLT after 30 days but didn't happen. EDV is less tax efficient than TLT so better in IRA. I try to keep things as simple as possible holding only 4 asset classes including cash as one of them. Nothing is as simple as I wish for example I have a few sweep MM accounts, Treasury only from years past before the new Federal sweep went into law. But still (cash) For gold I have GLD, IAU again as a result or tax loss harvesting and I hold physical gold bars, Eagles and Buffalo. All and all I love my portfolio. Here is a sample I made for a friend to use as a template.. https://docs.google.com/spreadsheets/d/ ... sp=sharing
wolf359
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Re: What did you learn from the 2/24 sell off?

Post by wolf359 »

HomerJ wrote: Wed Feb 26, 2020 12:38 pm
wolf359 wrote: Wed Feb 26, 2020 10:07 am
pharmermummles wrote: Wed Feb 26, 2020 9:35 am
DesertDiva wrote: Wed Feb 26, 2020 9:00 am I learned that I’m glad I never embraced the FIRE movement.
I can't imagine why. If the market doesn't make the RE part as easy, you're still better off with your efforts towards FI than if you hadn't saved as much.
I don't understand some people's hostility to FIRE movement on this board. If you're not into saving and investing, or saving for retirement, then why are you here? You get to pick your timeframe, your targeted retirement income level, and how you fund it. All the techniques are the same. This is choose your own adventure.

Getting out at 60? Good for you.
Getting out at 50? Good for you.
Getting out at 40? You did really well. Good for you.
Getting out at 30? Wow, don't know how I'd fill my time, but good for you.
Getting out at 16? …um,.... Not sure how that's.. ..hmm.. Good luck?
I think the reference was to retiring at 35, with just enough for bare-bones survival at 4% withdrawals, and then a market crash happens. A lot FIRE people have never experienced a full crash, and their plans may not be robust enough to survive them.
Except that that doesn't describe the FIRE movement. A 4% SWR will be sufficient for 30 years. It will DEFINITELY support a full crash of 20%+ which may last for 2-3 years. I think a 4% SWR requires flexibility and backup plans, but it actually works in most cases. (You just have to be ready if you're in one of those years that it doesn't work.) I believe that 2000 was one of those years, and the thread following those retirees shows that they STILL haven't run out of money!

Unlike most traditional retirees, FIRE retirees are voluntary. Companies aren't pushing them out the door because they consider them too old or too expensive. If they don't have sufficient resources to support their desired level of income, they don't pull the cord. What you consider bare-bones survival is the budget most middle-income people in the US are living on.

FIRE retirees also have an advantage that older retirees don't have. Since they're younger, they have more human capital. (That is, they're still able to go back to work if the retirement fails.) That may not be an option for someone in their 80's.

It's definitely true that a lot of FIRE people have never experienced a full crash. But that's true for most non-FIRE people as well. It's possible to be a fully trained fiduciary financial advisor with a decade's worth of experience and still have missed 2008.

I'd expect that if someone knew the value of saving and investing for retirement, it'd be a Boglehead. How individuals apply those lessons is up to the individual. That's why it's called PERSONAL finance. If they save and invest early, it is possible to retire early.

Personally, I'd recommend trying to hit your minimum retirement numbers as soon in life as possible. Then you're financially independent (FI) and working by choice, which is very liberating. Achieving FI doesn't mean you should quit. If you then continue a normal career because you enjoy it, you will become wealthy as your nest egg continues to grow and is more than enough. And if you're seeking early retirement, I'd personally choose a target income higher than the US median to give a buffer. But that's me, who has to have 3 backup plans.
chipperd
Posts: 896
Joined: Sat Sep 24, 2011 5:58 am
Location: here and now

Re: What did you learn from the 2/24 sell off?

Post by chipperd »

wolf359 wrote: Thu Feb 27, 2020 9:06 am
HomerJ wrote: Wed Feb 26, 2020 12:38 pm
wolf359 wrote: Wed Feb 26, 2020 10:07 am
pharmermummles wrote: Wed Feb 26, 2020 9:35 am
DesertDiva wrote: Wed Feb 26, 2020 9:00 am I learned that I’m glad I never embraced the FIRE movement.
I can't imagine why. If the market doesn't make the RE part as easy, you're still better off with your efforts towards FI than if you hadn't saved as much.
I don't understand some people's hostility to FIRE movement on this board. If you're not into saving and investing, or saving for retirement, then why are you here? You get to pick your timeframe, your targeted retirement income level, and how you fund it. All the techniques are the same. This is choose your own adventure.

Getting out at 60? Good for you.
Getting out at 50? Good for you.
Getting out at 40? You did really well. Good for you.
Getting out at 30? Wow, don't know how I'd fill my time, but good for you.
Getting out at 16? …um,.... Not sure how that's.. ..hmm.. Good luck?
I think the reference was to retiring at 35, with just enough for bare-bones survival at 4% withdrawals, and then a market crash happens. A lot FIRE people have never experienced a full crash, and their plans may not be robust enough to survive them.
Except that that doesn't describe the FIRE movement. A 4% SWR will be sufficient for 30 years. It will DEFINITELY support a full crash of 20%+ which may last for 2-3 years. I think a 4% SWR requires flexibility and backup plans, but it actually works in most cases. (You just have to be ready if you're in one of those years that it doesn't work.) I believe that 2000 was one of those years, and the thread following those retirees shows that they STILL haven't run out of money!

Unlike most traditional retirees, FIRE retirees are voluntary. Companies aren't pushing them out the door because they consider them too old or too expensive. If they don't have sufficient resources to support their desired level of income, they don't pull the cord. What you consider bare-bones survival is the budget most middle-income people in the US are living on.

FIRE retirees also have an advantage that older retirees don't have. Since they're younger, they have more human capital. (That is, they're still able to go back to work if the retirement fails.) That may not be an option for someone in their 80's.

It's definitely true that a lot of FIRE people have never experienced a full crash. But that's true for most non-FIRE people as well. It's possible to be a fully trained fiduciary financial advisor with a decade's worth of experience and still have missed 2008.

I'd expect that if someone knew the value of saving and investing for retirement, it'd be a Boglehead. How individuals apply those lessons is up to the individual. That's why it's called PERSONAL finance. If they save and invest early, it is possible to retire early.

Personally, I'd recommend trying to hit your minimum retirement numbers as soon in life as possible. Then you're financially independent (FI) and working by choice, which is very liberating. Achieving FI doesn't mean you should quit. If you then continue a normal career because you enjoy it, you will become wealthy as your nest egg continues to grow and is more than enough. And if you're seeking early retirement, I'd personally choose a target income higher than the US median to give a buffer. But that's me, who has to have 3 backup plans.
Yes yes and yes. Esp: "Personally, I'd recommend trying to hit your minimum retirement numbers as soon in life as possible. Then you're financially independent (FI) and working by choice, which is very liberating."
"A portfolio is like a bar of soap, the more it's handled, the less there is." Dr. William Bernstein
RadAudit
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Re: What did you learn from the 2/24 sell off?

Post by RadAudit »

I learned that in all probability there will be another sell-off right behind it.

Early this AM, the DOW and S&P 500 were both in correction territory.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The cavalry isn't coming, kids. You are on your own.
mptfan
Posts: 6362
Joined: Mon Mar 05, 2007 9:58 am

Re: What did you learn from the 2/24 sell off?

Post by mptfan »

RadAudit wrote: Thu Feb 27, 2020 10:20 am Early this AM, the DOW and S&P 500 were both in correction territory.
What is a "correction?"
Wanderingwheelz
Posts: 885
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Re: What did you learn from the 2/24 sell off?

Post by Wanderingwheelz »

mptfan wrote: Thu Feb 27, 2020 10:30 am
RadAudit wrote: Thu Feb 27, 2020 10:20 am Early this AM, the DOW and S&P 500 were both in correction territory.
What is a "correction?"
10% lower than the all time high is considered a correction.

Incidentally this is the fastest 10% correction ever. As in, EVER. As long as the S&P closes below 3,047 before the end of Monday, which it sure appears it’s going to do today.
Ocean77
Posts: 274
Joined: Wed Oct 23, 2019 3:20 pm

Re: What did you learn from the 2/24 sell off?

Post by Ocean77 »

Wanderingwheelz wrote: Thu Feb 27, 2020 10:37 am
mptfan wrote: Thu Feb 27, 2020 10:30 am
RadAudit wrote: Thu Feb 27, 2020 10:20 am Early this AM, the DOW and S&P 500 were both in correction territory.
What is a "correction?"
10% lower than the all time high is considered a correction.

Incidentally this is the fastest 10% correction ever. As in, EVER. As long as the S&P closes below 3,047 before the end of Monday, which it sure appears it’s going to do today.
Don't be so quick. It may not be the fastest correction. For example, if the S&P drops another 400 points or so today, then it won't be. Because then it would not be a correction at all, it would be a bear market. And not the fastest one at that, either (on Black Monday it dropped by 22% on a single day).
ilovedogs
Posts: 211
Joined: Thu Sep 27, 2007 8:00 am

Re: What did you learn from the 2/24 sell off?

Post by ilovedogs »

What did I learn from the 2/24 sell off? (And 25)

1) It was time to invest money in my Roth that was in a money market account.

2) I don't think I want to buy a house this year, because I am not interested in protecting the cash I put aside for it. I'm going to buy sales in equities.
mptfan
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Joined: Mon Mar 05, 2007 9:58 am

Re: What did you learn from the 2/24 sell off?

Post by mptfan »

Wanderingwheelz wrote: Thu Feb 27, 2020 10:37 am Incidentally this is the fastest 10% correction ever. As in, EVER.
Umm... you should google "Black Monday." (Hint...it happened in 1987)
NotYourAverageJones
Posts: 81
Joined: Thu Nov 01, 2018 5:12 am

Re: What did you learn from the 2/24 sell off?

Post by NotYourAverageJones »

That seeing a 3 day $300k reduction in our portfolio in 2020 is not nearly as stressful as seeing a $30k one was back in 2008. :wink: Stay the course and buy more during a fire sale.
Wanderingwheelz
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Joined: Mon Mar 04, 2019 9:52 am

Re: What did you learn from the 2/24 sell off?

Post by Wanderingwheelz »

mptfan wrote: Thu Feb 27, 2020 11:23 am
Wanderingwheelz wrote: Thu Feb 27, 2020 10:37 am Incidentally this is the fastest 10% correction ever. As in, EVER.
Umm... you should google "Black Monday." (Hint...it happened in 1987)
Fastest 10% correction directly AFTER AN ALL TIME HIGH.

Did I leave that out of my original comment? If I did, I shouldn’t have. Sorry for the seemingly obvious mistake, as it read.
Last edited by Wanderingwheelz on Thu Feb 27, 2020 12:02 pm, edited 1 time in total.
tesuzuki2002
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Joined: Fri Dec 11, 2015 12:40 pm

Re: What did you learn from the 2/24 sell off?

Post by tesuzuki2002 »

That I am no buying at September 2019 levels!!

I'd like to go back to August 2015 levels to be honest!!!
mptfan
Posts: 6362
Joined: Mon Mar 05, 2007 9:58 am

Re: What did you learn from the 2/24 sell off?

Post by mptfan »

Wanderingwheelz wrote: Thu Feb 27, 2020 11:53 am
mptfan wrote: Thu Feb 27, 2020 11:23 am
Wanderingwheelz wrote: Thu Feb 27, 2020 10:37 am Incidentally this is the fastest 10% correction ever. As in, EVER.
Umm... you should google "Black Monday." (Hint...it happened in 1987)
Fastest 10% correction FROM AN ALL TIME HIGH.
Are you saying that because the market did not start from an all time high when it dropped 22% on Black Monday, therefore it was not a correction? Do you have a source for your assertion that unless the market starts from an all time high, any drop of greater than 10% is not considered a correction? Did you make up that definition?
Wanderingwheelz
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Re: What did you learn from the 2/24 sell off?

Post by Wanderingwheelz »

mptfan wrote: Thu Feb 27, 2020 12:01 pm
Wanderingwheelz wrote: Thu Feb 27, 2020 11:53 am
mptfan wrote: Thu Feb 27, 2020 11:23 am
Wanderingwheelz wrote: Thu Feb 27, 2020 10:37 am Incidentally this is the fastest 10% correction ever. As in, EVER.
Umm... you should google "Black Monday." (Hint...it happened in 1987)
Fastest 10% correction FROM AN ALL TIME HIGH.
Are you saying that because the market did not start from an all time high when it dropped 22% on Black Monday, therefore it was not a correction? Do you have a source for your assertion that unless the market starts from an all time high, any drop of greater than 10% is not considered a correction? Did you make up that definition?
No. I did not say that nor was I even implying anything that you just wrote. Relax.
mptfan
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Re: What did you learn from the 2/24 sell off?

Post by mptfan »

When I asked what was a correction, you wrote the following...
Wanderingwheelz wrote: Thu Feb 27, 2020 10:37 am 10% lower than the all time high is considered a correction.
So I am confused, was Black Monday a correction or not? The market dropped 22% in one day, but it did not start from an all time high.
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TheTimeLord
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Re: What did you learn from the 2/24 sell off?

Post by TheTimeLord »

mptfan wrote: Thu Feb 27, 2020 12:07 pm When I asked what was a correction, you wrote the following...
Wanderingwheelz wrote: Thu Feb 27, 2020 10:37 am 10% lower than the all time high is considered a correction.
So I am confused, was Black Monday a correction or not? The market dropped 22% in one day, but it did not start from an all time high.
What he is trying to explain to you is that the correction/bear market that Black Monday was a part of started long before October 19th.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]
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