Lock loss or ride the wave with 15 years to go?

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Planner01
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Lock loss or ride the wave with 15 years to go?

Post by Planner01 » Fri Mar 20, 2020 11:28 am

I think the market is about to take an even bigger hit in the next few months. I have lost 30% so far, but I have at least 13-15 years until I need that money. Here’s my dilemma:

A. Lock in my losses as it takes longer to recuperate the lower I go.
B. Ride the wave because I have a good while to go.

I am going to make a decision today, I am just not sure what to do. Help me reason please.

retiredjg
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Re: Lock loss or ride the wave with 15 years to go?

Post by retiredjg » Fri Mar 20, 2020 11:29 am

Ride the wave. Locking in the losses is a good way to permanently lose money.

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F150HD
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Re: Lock loss or ride the wave with 15 years to go?

Post by F150HD » Fri Mar 20, 2020 11:31 am

theres like 5000 of these exact same threads each with a different title.

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JoMoney
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Re: Lock loss or ride the wave with 15 years to go?

Post by JoMoney » Fri Mar 20, 2020 11:32 am

I'm very comfortable with taking stock market risk for things > 10 years out.
Whether or not you are is something you'll have to answer for yourself.
Do you really need ALL of the money in 15 years, or is that simply the beginning of withdrawals that could easily go 15+ years beyond that? It's a different scenario if you'll be making periodic withdrawals over time than if you need all of the money as a lump sum at a particular time.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Cheez-It Guy
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Re: Lock loss or ride the wave with 15 years to go?

Post by Cheez-It Guy » Fri Mar 20, 2020 11:32 am

"I think. . ."

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Planner01
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Re: Lock loss or ride the wave with 15 years to go?

Post by Planner01 » Fri Mar 20, 2020 11:34 am

JoMoney wrote:
Fri Mar 20, 2020 11:32 am
Do you really need ALL of the money in 15 years, or is that simply the beginning of withdrawals that could easily go 15+ years beyond that? It's a different scenario if you'll be making periodic withdrawals over time than if you need all of the money as a lump sum at a particular time.
This is an excellent point!

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Re: Lock loss or ride the wave with 15 years to go?

Post by InvestingGeek » Fri Mar 20, 2020 11:36 am

Planner01 wrote:
Fri Mar 20, 2020 11:28 am
I think the market is about to take an even bigger hit in the next few months.
Why do you think that?

I'm in a similar situation but I don't see the point of selling now. Better to keep the stocks I have. Their "price tags" right now might be low but they're still profitable businesses and will provide me with good returns over the long term.

vipertom1970
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Re: Lock loss or ride the wave with 15 years to go?

Post by vipertom1970 » Fri Mar 20, 2020 11:37 am

10+ years, you are holding a winning hand.

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Planner01
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Re: Lock loss or ride the wave with 15 years to go?

Post by Planner01 » Fri Mar 20, 2020 11:39 am

A friend is a wealth manager and gave me some advice about a month ago to change everything to bonds. I didn’t listen and stay the course. Now I am paying the price. He’s now telling me that the Dow might get to 9k by the Summer.
I am indecisive because I have such a long way to go. On the other hand, the deeper the jump the more it will take to recuperate the loss.

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Re: Lock loss or ride the wave with 15 years to go?

Post by snowman » Fri Mar 20, 2020 11:42 am

F150HD wrote:
Fri Mar 20, 2020 11:31 am
theres like 5000 of these exact same threads each with a different title.
I know, right? I don't get it, quite honestly. If it wasn't for the thread where OP with $4M+ NW is worried if he is going to make it, I would have thought this is not BH forum anymore...

chw
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Re: Lock loss or ride the wave with 15 years to go?

Post by chw » Fri Mar 20, 2020 11:45 am

Ride the wave, and re-balance per you IPS. Stay the Course.

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Re: Lock loss or ride the wave with 15 years to go?

Post by sperry8 » Fri Mar 20, 2020 11:45 am

JoMoney wrote:
Fri Mar 20, 2020 11:32 am
I'm very comfortable with taking stock market risk for things > 10 years out.
Whether or not you are is something you'll have to answer for yourself.
Do you really need ALL of the money in 15 years, or is that simply the beginning of withdrawals that could easily go 15+ years beyond that? It's a different scenario if you'll be making periodic withdrawals over time than if you need all of the money as a lump sum at a particular time.
+1

Exactly... so you really only need a portion of your money in 15 years... and if you have a 20 yr time horizon, with dividends re-invested, stocks have never been worse than flat. You should be fine. If it were me, I'd stay the course.
BH contest results: 2019: #233 of 645 | 18: #150 of 493 | 17: #516 of 647 | 16: #121 of 610 | 15: #18 of 552 | 14: #225 of 503 | 13: #383 of 433 | 12: #366 of 410 | 11: #113 of 369 | 10: #53 of 282

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Re: Lock loss or ride the wave with 15 years to go?

Post by lostdog » Fri Mar 20, 2020 12:06 pm

Planner01 wrote:
Fri Mar 20, 2020 11:39 am
A friend is a wealth manager and gave me some advice about a month ago to change everything to bonds. I didn’t listen and stay the course. Now I am paying the price. He’s now telling me that the Dow might get to 9k by the Summer.
I am indecisive because I have such a long way to go. On the other hand, the deeper the jump the more it will take to recuperate the loss.
If you can't handle a 30% drop, you shouldn't be in stocks at all. I'm serious.


"If You Can’t Stomach 50% Declines in Your Investment You Will Get the Mediocre Returns You Deserve"
-Charlie Munger
Global Market Cap Equity || Taxable: VTSAX+VTIAX || IRA: VTWAX

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Re: Lock loss or ride the wave with 15 years to go?

Post by Anon9001 » Fri Mar 20, 2020 12:08 pm

Hello I am not from your country but I suggest switching to Vanguard Global Minimum Volatility if you are scared of further losses. If things do turn out like you suggest you would lost less money investing in this fund than VT. Riding the wave seems like a decent option at this point.

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Re: Lock loss or ride the wave with 15 years to go?

Post by Chuck » Fri Mar 20, 2020 12:12 pm

I was a new investor in 2005. I bought in with a large windfall when the S&P was ~1200. I had to make the same call in 2009 when the S&P dropped to 666. (I did "nothing" in terms of asset allocation, but I was able to sell all my expensive active funds at a loss, and go all-in with index funds.) Today, the S&P is about 2400. 11% per year with dividends and after inflation. Stay the course.

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Re: Lock loss or ride the wave with 15 years to go?

Post by BigWave Dave » Fri Mar 20, 2020 12:14 pm

I got 5yrs to go im riding the wave.

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Re: Lock loss or ride the wave with 15 years to go?

Post by David Jay » Fri Mar 20, 2020 12:15 pm

Anon9001 wrote:
Fri Mar 20, 2020 12:08 pm
Hello I am not from your country but I suggest switching to Vanguard Global Minimum Volatility if you are scared of further losses. If things do turn out like you suggest you would lost less money investing in this fund than VT. Riding the wave seems like a decent option at this point.
The problem with switching now is that one is trading a higher volatility investment for a lower volatility investment in a trough. That has the effect of permanently locking in a portion of effect of the trough.

It could work if one had selected the low volatility before the downturn.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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Re: Lock loss or ride the wave with 15 years to go?

Post by Anon9001 » Fri Mar 20, 2020 12:18 pm

David Jay wrote:
Fri Mar 20, 2020 12:15 pm
Anon9001 wrote:
Fri Mar 20, 2020 12:08 pm
Hello I am not from your country but I suggest switching to Vanguard Global Minimum Volatility if you are scared of further losses. If things do turn out like you suggest you would lost less money investing in this fund than VT. Riding the wave seems like a decent option at this point.
The problem with switching now is that one is trading a higher volatility investment for a lower volatility investment in a trough. That has the effect of permanently locking in a portion of effect of the trough.

It could work if one had selected the low volatility before the downturn.
That is assuming this is the trough. What is the chances that it can't go lower than this? If you read the OP it seems like he is having the viewpoint of it going even lower than this so Vanguard Global Min Vol is probably best for him.

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Re: Lock loss or ride the wave with 15 years to go?

Post by cheese_breath » Fri Mar 20, 2020 12:24 pm

Planner01 wrote:
Fri Mar 20, 2020 11:28 am
I think the market is about to take an even bigger hit in the next few months....
"I think" isn't a good reason to lock in your losses.

"I think" the Lions are going to win next year's Superbowl, but I'm not betting my portfolio on it.
The surest way to know the future is when it becomes the past.

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Re: Lock loss or ride the wave with 15 years to go?

Post by David Jay » Fri Mar 20, 2020 12:26 pm

cheese_breath wrote:
Fri Mar 20, 2020 12:24 pm
"I think" the Lions are going to win next year's Superbowl, but I'm not betting my portfolio on it.
That goes beyond optimism... (as a long-suffering Detroit kitty-cat fan)
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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Re: Lock loss or ride the wave with 15 years to go?

Post by tesuzuki2002 » Fri Mar 20, 2020 12:30 pm

Ride the wave !!!! This is going to creator our economy and markets severely... worse than 2008... But look at how much money we have made since 2008... When this market comes back the opportunity to make money is 10 fold...

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Re: Lock loss or ride the wave with 15 years to go?

Post by David Jay » Fri Mar 20, 2020 12:30 pm

Anon9001 wrote:
Fri Mar 20, 2020 12:18 pm
David Jay wrote:
Fri Mar 20, 2020 12:15 pm
Anon9001 wrote:
Fri Mar 20, 2020 12:08 pm
Hello I am not from your country but I suggest switching to Vanguard Global Minimum Volatility if you are scared of further losses. If things do turn out like you suggest you would lost less money investing in this fund than VT. Riding the wave seems like a decent option at this point.
The problem with switching now is that one is trading a higher volatility investment for a lower volatility investment in a trough. That has the effect of permanently locking in a portion of effect of the trough.

It could work if one had selected the low volatility before the downturn.
That is assuming this is the trough. What is the chances that it can't go lower than this? If you read the OP it seems like he is having the viewpoint of it going even lower than this so Vanguard Global Min Vol is probably best for him.
The math is the same.

We are down 30% and one is locking in at least a part of that decline if one switches to a lower-volatility asset at this point. This is true whether or not the market declines further.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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Cheez-It Guy
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Re: Lock loss or ride the wave with 15 years to go?

Post by Cheez-It Guy » Fri Mar 20, 2020 12:32 pm

BigWave Dave wrote:
Fri Mar 20, 2020 12:14 pm
I got 5yrs to go im riding the wave.
With a handle like that, I'd certainly hope so!

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Re: Lock loss or ride the wave with 15 years to go?

Post by Jebediah » Fri Mar 20, 2020 12:32 pm

70% down seems to be within the realm of possibility in this situation.

Somebody check my math, but doesn't that require about a 230% gain to break even? That could take a very long time.

It's not really locking in a loss. Maybe those "gains" from the past two years weren't real. All that's real is the value of your account today and whether or not holding risky assets is required for your plan to work going forward.

In other words, if you were 100% cash today, would you want/need to buy stocks?
Last edited by Jebediah on Fri Mar 20, 2020 12:33 pm, edited 1 time in total.

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Re: Lock loss or ride the wave with 15 years to go?

Post by cheese_breath » Fri Mar 20, 2020 12:33 pm

David Jay wrote:
Fri Mar 20, 2020 12:26 pm
cheese_breath wrote:
Fri Mar 20, 2020 12:24 pm
"I think" the Lions are going to win next year's Superbowl, but I'm not betting my portfolio on it.
That goes beyond optimism... (as a long-suffering Detroit kitty-cat fan)
Probably longer suffering than you. I was a teenager during the pussy's glory years in the '50s.
The surest way to know the future is when it becomes the past.

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Re: Lock loss or ride the wave with 15 years to go?

Post by MotoTrojan » Fri Mar 20, 2020 12:36 pm

Jebediah wrote:
Fri Mar 20, 2020 12:32 pm
70% down seems to be within the realm of possibility in this situation.

Somebody check my math, but doesn't that require about a 230% gain to break even? That could take a very long time.

It's not really locking in a loss. Maybe those "gains" from the past two years weren't real. All that's real is the value of your account today and whether or not holding risky assets is required for your plan to work going forward.

In other words, if you were 100% cash today, would you want/need to buy stocks?
Yup, 1/0.3 = 3.33333 X return needed to break-even. I don't see it.

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Re: Lock loss or ride the wave with 15 years to go?

Post by BogleBoogie » Fri Mar 20, 2020 12:40 pm

Planner01 wrote:
Fri Mar 20, 2020 11:28 am
I think the market is about to take an even bigger hit in the next few months. I have lost 30% so far, but I have at least 13-15 years until I need that money. Here’s my dilemma:

A. Lock in my losses as it takes longer to recuperate the lower I go.
B. Ride the wave because I have a good while to go.

I am going to make a decision today, I am just not sure what to do. Help me reason please.
13-15 years??? You should be locking in bargains right now.

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Re: Lock loss or ride the wave with 15 years to go?

Post by rbaldini » Fri Mar 20, 2020 12:43 pm

Exiting the market altogether is probably a bad idea. Adjust your AA to be more conservative if you feel that your current AA is too risky. Also, do you need *all* the money in 15 years? Or is this a retirement thing?

Also, "locking in losses" is a bad (fallacious) way to think about it. The money has already been lost; you are poorer than you were a month ago. Get used to it. The proper question is always this: what is the best decision going forward? No one knows, of course, but most of the time, staying invested for 15 years is better than not. Again, adjust your allocation throughout as needed.
Last edited by rbaldini on Fri Mar 20, 2020 12:49 pm, edited 2 times in total.

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Re: Lock loss or ride the wave with 15 years to go?

Post by Oakwood42 » Fri Mar 20, 2020 12:46 pm

retiredjg wrote:
Fri Mar 20, 2020 11:29 am
Ride the wave. Locking in the losses is a good way to permanently lose money.
+1

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Re: Lock loss or ride the wave with 15 years to go?

Post by Oakwood42 » Fri Mar 20, 2020 12:47 pm

BogleBoogie wrote:
Fri Mar 20, 2020 12:40 pm
Planner01 wrote:
Fri Mar 20, 2020 11:28 am
I think the market is about to take an even bigger hit in the next few months. I have lost 30% so far, but I have at least 13-15 years until I need that money. Here’s my dilemma:

A. Lock in my losses as it takes longer to recuperate the lower I go.
B. Ride the wave because I have a good while to go.

I am going to make a decision today, I am just not sure what to do. Help me reason please.
13-15 years??? You should be locking in bargains right now.
+1

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Re: Lock loss or ride the wave with 15 years to go?

Post by jvini » Fri Mar 20, 2020 12:49 pm

F150HD wrote:
Fri Mar 20, 2020 11:31 am
theres like 5000 of these exact same threads each with a different title.
It makes sense because this is very scary. I hope people find answers they are comfortable with.

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Re: Lock loss or ride the wave with 15 years to go?

Post by MotoTrojan » Fri Mar 20, 2020 12:53 pm

jvini wrote:
Fri Mar 20, 2020 12:49 pm
F150HD wrote:
Fri Mar 20, 2020 11:31 am
theres like 5000 of these exact same threads each with a different title.
It makes sense because this is very scary. I hope people find answers they are comfortable with.
Frankly I disagree and think it makes little sense and leaves me shocked at how many people are now timing, jumping ship etc... It seems the fears from many that the general population was getting complacent with a calm market that only climbs are true. It seems there are countless people who had poorly thought out plans which are now crumbling.

It also seems to me that many people fundamentally don't understand how stocks work. They think if more bad news comes out, especially expected news, that stock prices will go down: wrong. Stocks do well or poorly when they exceed or fall-short of expectations, even if the expectations are dismal. This is why Amazon stock may not do well, even if Amazon continues to be the largest retail company in the world for decades to come, while Best Buy could be the top-stock of the decade even if their earnings are dwarfed by Amazon throughout it. More relevant to today's situation, this is why we may learn that there are 1,000,000 cases in the US, and stocks could soar if we were preparing for 100,000,000 and that no longer seems likely.

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Re: Lock loss or ride the wave with 15 years to go?

Post by theorist » Fri Mar 20, 2020 1:19 pm

Planner01 wrote:
Fri Mar 20, 2020 11:28 am
I think the market is about to take an even bigger hit in the next few months. I have lost 30% so far, but I have at least 13-15 years until I need that money. Here’s my dilemma:

A. Lock in my losses as it takes longer to recuperate the lower I go.
B. Ride the wave because I have a good while to go.

I am going to make a decision today, I am just not sure what to do. Help me reason please.
OP, I’m about to turn 50 and am in a roughly similar situation to you in terms of timing of likely retirement. I am staying the course with a 70/30 allocation. History shows that this is usually a good decision; and besides, we are contributing significant amounts of new capital over the next 15 years with our regular 401/457 deposits. This will surely help with the overall recovery and growth of our retirement funds. Hopefully, you can do the same.

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Re: Lock loss or ride the wave with 15 years to go?

Post by F150HD » Fri Mar 20, 2020 1:31 pm

snowman wrote:
Fri Mar 20, 2020 11:42 am
F150HD wrote:
Fri Mar 20, 2020 11:31 am
theres like 5000 of these exact same threads each with a different title.
I know, right? I don't get it, quite honestly. If it wasn't for the thread where OP with $4M+ NW is worried if he is going to make it, I would have thought this is not BH forum anymore...
LOL. Only $4 million? thats it?

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Re: Lock loss or ride the wave with 15 years to go?

Post by FI4LIFE » Fri Mar 20, 2020 1:34 pm

Google "worst stock market drops in US history". Spend some time looking at what happens after these drops. Decide after that.

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Re: Lock loss or ride the wave with 15 years to go?

Post by 7eight9 » Fri Mar 20, 2020 1:55 pm

Planner01 wrote:
Fri Mar 20, 2020 11:28 am
I think the market is about to take an even bigger hit in the next few months. I have lost 30% so far, but I have at least 13-15 years until I need that money. Here’s my dilemma:

A. Lock in my losses as it takes longer to recuperate the lower I go.
B. Ride the wave because I have a good while to go.

I am going to make a decision today, I am just not sure what to do. Help me reason please.
It is a tough call. I was talking with a friend the other day who is in the same situation as you. I told them that there are three choices - sell, hold or double down.

I know what I would likely do in this situation. I know what I did in February. I picked up my ball and went home.

Neither I nor anybody else on this board is going to either reimburse you for your losses if you hold or compensate you for any gains you miss if you sell. Ultimately it is your money and you are responsible for it.

Best of luck in your decision.
I guess it all could be much worse. | They could be warming up my hearse.

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Re: Lock loss or ride the wave with 15 years to go?

Post by deltaneutral83 » Fri Mar 20, 2020 2:30 pm

I can't imagine there are too many successful investors who highlight the time they bailed at a 33% decline as a catalyst to their financial success. The time to bail was weeks ago. And that of course presupposes you lock in a hefty gain by getting back in which most don't.

jvini
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Re: Lock loss or ride the wave with 15 years to go?

Post by jvini » Fri Mar 20, 2020 3:07 pm

MotoTrojan wrote:
Fri Mar 20, 2020 12:53 pm
jvini wrote:
Fri Mar 20, 2020 12:49 pm
F150HD wrote:
Fri Mar 20, 2020 11:31 am
theres like 5000 of these exact same threads each with a different title.
It makes sense because this is very scary. I hope people find answers they are comfortable with.
Frankly I disagree and think it makes little sense and leaves me shocked at how many people are now timing, jumping ship etc... It seems the fears from many that the general population was getting complacent with a calm market that only climbs are true. It seems there are countless people who had poorly thought out plans which are now crumbling.

It also seems to me that many people fundamentally don't understand how stocks work. They think if more bad news comes out, especially expected news, that stock prices will go down: wrong. Stocks do well or poorly when they exceed or fall-short of expectations, even if the expectations are dismal. This is why Amazon stock may not do well, even if Amazon continues to be the largest retail company in the world for decades to come, while Best Buy could be the top-stock of the decade even if their earnings are dwarfed by Amazon throughout it. More relevant to today's situation, this is why we may learn that there are 1,000,000 cases in the US, and stocks could soar if we were preparing for 100,000,000 and that no longer seems likely.
I meant it makes sense that there are lots of similar threads. Not moving out of bonds. Should have been clearer. Sorry to make you go off like that.

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Re: Lock loss or ride the wave with 15 years to go?

Post by HSS » Fri Mar 20, 2020 3:25 pm

I'm 62 and already retired, and am "riding the wave" and rebalancing a little because IMHO the bottom is not knowable and consequently whether one is catching a "falling knife" or being impaled by said "falling knife" at any given time is not knowable either. If the market and the global financial system completely collapses, those of us still alive will be living in caves and throwing rocks at each other anyway. :twisted:

FWIW I'm a long-term investor which has served me well during previous market crises (1987, 2001, 2008). I began this storm with a 64/24/12 portfolio and have been rebalancing /buying a little into mainly Total Market and S&P 500 index funds on down days since the market indices hit about a 10% correction. I've also been adding a little to my relatively small positions in a couple of high-dividend Supermajor oil stocks. My bond position is mainly in high-quality short-intermediate term bond funds (munis in my taxable account).

I plan to keep rebalancing/ buying a little until either the market rebounds to above 10% down and/or my money market cash position gets down to about 5 years worth of emergency living expenses (in my case ~$500K for $100k/year cash living expenses). If I was younger, say 50 years old and still working, I'd more aggressive and maybe keep only about 1 - 2 years of emergency cash living expenses in money market funds.

Other than rebalancing/ buying a little into market index funds the only "big" other thing I'm currently thinking about doing is tax harvesting my 1- 5% losses in my bond funds and moving my bond fund holdings completely into more liquid money market cash because the bond fund yields are so damn low anyway and there doesn't seem to be any upside in the bond fund share prices given that Fed rates are nearly zero.

Sorry for the verbosity but it's therapeutic for me during times like this.

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Re: Lock loss or ride the wave with 15 years to go?

Post by MotoTrojan » Fri Mar 20, 2020 4:17 pm

jvini wrote:
Fri Mar 20, 2020 3:07 pm
MotoTrojan wrote:
Fri Mar 20, 2020 12:53 pm
jvini wrote:
Fri Mar 20, 2020 12:49 pm
F150HD wrote:
Fri Mar 20, 2020 11:31 am
theres like 5000 of these exact same threads each with a different title.
It makes sense because this is very scary. I hope people find answers they are comfortable with.
Frankly I disagree and think it makes little sense and leaves me shocked at how many people are now timing, jumping ship etc... It seems the fears from many that the general population was getting complacent with a calm market that only climbs are true. It seems there are countless people who had poorly thought out plans which are now crumbling.

It also seems to me that many people fundamentally don't understand how stocks work. They think if more bad news comes out, especially expected news, that stock prices will go down: wrong. Stocks do well or poorly when they exceed or fall-short of expectations, even if the expectations are dismal. This is why Amazon stock may not do well, even if Amazon continues to be the largest retail company in the world for decades to come, while Best Buy could be the top-stock of the decade even if their earnings are dwarfed by Amazon throughout it. More relevant to today's situation, this is why we may learn that there are 1,000,000 cases in the US, and stocks could soar if we were preparing for 100,000,000 and that no longer seems likely.
I meant it makes sense that there are lots of similar threads. Not moving out of bonds. Should have been clearer. Sorry to make you go off like that.
Wasn’t directed at you. Just venting but honestly I should be thankful. It’s this irrational behavior that boosts the risk premium.

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Re: Lock loss or ride the wave with 15 years to go?

Post by matti » Fri Mar 20, 2020 4:22 pm

Planner01 wrote:
Fri Mar 20, 2020 11:28 am
I think the market is about to take an even bigger hit in the next few months. I have lost 30% so far, but I have at least 13-15 years until I need that money. Here’s my dilemma:

A. Lock in my losses as it takes longer to recuperate the lower I go.
B. Ride the wave because I have a good while to go.

I am going to make a decision today, I am just not sure what to do. Help me reason please.
I feel you! I'm 40 and would love the chance to scale back work (or even semi-retire) when I'm 55. I, too, am having a difficult time with this crash, as it's the first big one that I've actually paid attention to. (FWIW, I do feel better about things today as I've intentionally avoided the news and most of the BH threads.) I'm at 83/17 and haven't changed anything....I continue to ride it out, despite it being very difficult at times. Selling now might bum me out even more!!

new2bogle
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Re: Lock loss or ride the wave with 15 years to go?

Post by new2bogle » Fri Mar 20, 2020 4:26 pm

tesuzuki2002 wrote:
Fri Mar 20, 2020 12:30 pm
Ride the wave !!!! This is going to creator our economy and markets severely... worse than 2008... But look at how much money we have made since 2008... When this market comes back the opportunity to make money is 10 fold...
Yes. Q1 and Q2 results for lots of sector is going to be abysmal ... tanking the market further. But, once everything is aligned, the snap back is going to be something fierce. You want to make sure you are in the market when it snaps back. 15 years is a long time.

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Re: Lock loss or ride the wave with 15 years to go?

Post by Darth Xanadu » Fri Mar 20, 2020 4:29 pm

Planner01 wrote:
Fri Mar 20, 2020 11:28 am
I think the market is about to take an even bigger hit in the next few months. I have lost 30% so far, but I have at least 13-15 years until I need that money. Here’s my dilemma:

A. Lock in my losses as it takes longer to recuperate the lower I go.
B. Ride the wave because I have a good while to go.

I am going to make a decision today, I am just not sure what to do. Help me reason please.
So....what did you decide to do (or not do)?

Samosa22
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Re: Lock loss or ride the wave with 15 years to go?

Post by Samosa22 » Fri Mar 20, 2020 4:31 pm

I am quite new to this investing thing, stared a few months ago, so take my comment with a mountain of salt:

Getting out of the market now hoping that it will tank further providing an opportunity to re-enter at a cheaper price is a speculation, not an investment. It appears to me, solely based on public information, that the odds of market going down in the coming months are >50%. So, yesterday I "locked in the real loss of Principal" and have set a lower and upper price at which I will re-enter the market. I know I am betting rather than investing, and will be fine with the resultant gains or losses. I guess it helps that I have >15 working years left, my income increased >250% just a year ago, save approx. 40% on a six-figure salary, and my current portfolio is not huge. Good Luck.
Last edited by Samosa22 on Fri Mar 20, 2020 6:45 pm, edited 1 time in total.
Lesson learned from 2008 financial crisis: "In the fury of the final hour, all correlations went to 1".

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Re: Lock loss or ride the wave with 15 years to go?

Post by Calico » Fri Mar 20, 2020 5:04 pm

JoMoney wrote:
Fri Mar 20, 2020 11:32 am
I'm very comfortable with taking stock market risk for things > 10 years out.
Whether or not you are is something you'll have to answer for yourself.
Do you really need ALL of the money in 15 years, or is that simply the beginning of withdrawals that could easily go 15+ years beyond that? It's a different scenario if you'll be making periodic withdrawals over time than if you need all of the money as a lump sum at a particular time.
This isn't my thread but it caught my eye since I may retire in about 15 years or so and was wondering the same thing. In all my worry and questioning about staying the course, I didn't even think about this angle. Thank you for such a good post.
Last edited by Calico on Fri Mar 20, 2020 5:13 pm, edited 1 time in total.

davetopia
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Re: Lock loss or ride the wave with 15 years to go?

Post by davetopia » Fri Mar 20, 2020 5:07 pm

I capitulated today and moved 80% of my non-taxable into VUSXX. I will probably time getting back in wrong, but I'll sleep better for the next few weeks.

fatmike91
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Re: Lock loss or ride the wave with 15 years to go?

Post by fatmike91 » Fri Mar 20, 2020 5:10 pm

Why not do both?


Lock the loss for tax purposes, but stay invested in an appropriate way?


I need to figure out how to do the same thing. I want to simplify and sell. Definitely don't want to pay any capital gains.


/

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Re: Lock loss or ride the wave with 15 years to go?

Post by Call_Me_Op » Fri Mar 20, 2020 5:11 pm

Planner01 wrote:
Fri Mar 20, 2020 11:39 am
A friend is a wealth manager and gave me some advice about a month ago to change everything to bonds. I didn’t listen and stay the course.
What does your written plan say? Does it say that if the market tanks, you should consult a friend as to whether to jump ship?

Be careful not to confuse strategy with outcome.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

96zj
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Re: Lock loss or ride the wave with 15 years to go?

Post by 96zj » Fri Mar 20, 2020 5:17 pm

I'm in the same boat lost 30%, I invested me and my wife life savings into VFIAX starting in Aug 2019. We still have a emergency fund enough for a year, but were both realizing our risk tolerance now. We really want to sell and stop loss, but unsure what we should do? We still have 20 years to go before needing the money we invested. What do you guys suggest?

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Re: Lock loss or ride the wave with 15 years to go?

Post by arizona pokerface » Fri Mar 20, 2020 5:27 pm

96zj wrote:
Fri Mar 20, 2020 5:17 pm
What do you guys suggest?
Don't just do something. Stand there!

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