Share what worked in your plan during the crisis

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TheTimeLord
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Share what worked in your plan during the crisis

Post by TheTimeLord »

A lot of people seem to be re-evaliuating and modifying their plans based on recent events. For those who feel their plans performed well what is a key or two that you can share.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]
theorist
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Re: Share what worked in your plan during the crisis

Post by theorist »

Maybe this is trivial and obvious, but what worked for me so far during the drawdown is my asset allocation. I have 30% in bonds. At times I’ve felt it is too conservative. At times, too aggressive. But by and large, that allocation has kept me comforted. Even on the 10% + down day, I was thinking “well I basically have more than 10 years in fixed income, which will not be hit nearly as hard as equities no matter what.” And on up days, I’ve enjoyed almost 3/4 of the (pretty impressive) gains.

So while many advocate a more aggressive stance for those who have the ability to take risk (which we do), and others advocate age in bonds (I’m 49 and well under that), this compromise has worked out very well for me. I now have my own personal answer to the “why bother with bonds” threads.
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yangtui
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Re: Share what worked in your plan during the crisis

Post by yangtui »

70/30 3-fund portfolio (no plans to touch for 25 to 30 years), incredibly secure six figure salary, and no debt. I also have a lot of cash that could probably keep me going for multiple years if I lost my income. Most of this is earmarked to help me purchase a house at a later date though. My portfolio did drop by a material amount but I do not care. If in 30 years it is still down that is another story. When the music stopped in 2009 I did not have a chair to sit in. I refuse to allow that to happen to me again.
livesoft
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Re: Share what worked in your plan during the crisis

Post by livesoft »

Rebalancing on RBDs worked for me. That was part of my plan that has worked in the past, worked this time, and will work in the future.
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NotTooDeepLearning
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Re: Share what worked in your plan during the crisis

Post by NotTooDeepLearning »

I have my age in bonds plus automatic contributions and rebalancing. These things have made it very easy to stay the course in my 401k. I also have a small play money account where I can exercise my desire to "do something" without touching my retirement accounts.
Last edited by NotTooDeepLearning on Sat Mar 28, 2020 1:33 pm, edited 1 time in total.
wootwoot
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Re: Share what worked in your plan during the crisis

Post by wootwoot »

We always keep a stock of toilet paper and paper towels that we buy when Amazon has a sale. Little did we know that these would become hot commodities. Going forward we will continue to take advantage of sales on these items.
HawkeyePierce
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Re: Share what worked in your plan during the crisis

Post by HawkeyePierce »

My usual emergency planning has been invaluable. I was able to avoid the crowds and panic-buying because I was already well-stocked with food provisions, water, medical supplies and cleaning supplies.

https://www.ready.gov/plan

On the financial side, I have no debt, high income and a very high savings rate. Keeping my lifestyle in check has allowed me to save considerably, so even though my job looks secure, I won't need to panic if I suddenly get laid off.
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physixfan
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Re: Share what worked in your plan during the crisis

Post by physixfan »

~60% long term treasury bond funds in my portfolio really helped.
aristotelian
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Re: Share what worked in your plan during the crisis

Post by aristotelian »

Long Term Treasuries did well. I only have a small amount in my Roth IRA because there is no LTT option in my employer plan. Possibly I should increase LTT in my Roth and increase stock in other accounts. I was letting the tax tail wag the dog.
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Re: Share what worked in your plan during the crisis

Post by Irisheyes »

Lots o' cash in the form of stable value funds, CDs and MMs.

33/33/33 allocation roughly before this thing hit.

Bonds did not "work" in terms of providing some kind of ballast as their gyrations scared the heck out of me. I expect equities to plummet, bonds not so much. My large cash cushion was the only thing that made me secure enough to be able to stay the course with the whole portfolio.
Last edited by Irisheyes on Sat Mar 28, 2020 1:46 pm, edited 1 time in total.
mega317
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Re: Share what worked in your plan during the crisis

Post by mega317 »

I feel I had properly assessed my risk tolerance ahead of time, so when the inevitable happened, I didn't really have many emotions. I think this is really hard to do, if not impossible for someone who hasn't been through a large stock drop. Another thing is simplicity.
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gator15
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Re: Share what worked in your plan during the crisis

Post by gator15 »

When I saw my portfolio drop drastically in Dec 2018 and a panic came over me I knew my asset allocation was way too aggressive. At that point, I was 90%+ stocks. Now I’m down to 70% stocks and this recent bear market has shown me Im comfortable with this asset allocation.
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TheTimeLord
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Re: Share what worked in your plan during the crisis

Post by TheTimeLord »

gator15 wrote: Sat Mar 28, 2020 2:01 pm When I saw my portfolio drop drastically in Dec 2018 and a panic came over me I knew my asset allocation was way too aggressive. At that point, I was 90%+ stocks. Now I’m down to 70% stocks and this recent bear market has shown me Im comfortable with this asset allocation.
Did you change your allocation quickly or slowly over time?
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Dottie57
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Re: Share what worked in your plan during the crisis

Post by Dottie57 »

theorist wrote: Sat Mar 28, 2020 1:04 pm Maybe this is trivial and obvious, but what worked for me so far during the drawdown is my asset allocation. I have 30% in bonds. At times I’ve felt it is too conservative. At times, too aggressive. But by and large, that allocation has kept me comforted. Even on the 10% + down day, I was thinking “well I basically have more than 10 years in fixed income, which will not be hit nearly as hard as equities no matter what.” And on up days, I’ve enjoyed almost 3/4 of the (pretty impressive) gains.

So while many advocate a more aggressive stance for those who have the ability to take risk (which we do), and others advocate age in bonds (I’m 49 and well under that), this compromise has worked out very well for me. I now have my own personal answer to the “why bother with bonds” threads.
+1
Triple digit golfer
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Re: Share what worked in your plan during the crisis

Post by Triple digit golfer »

Bonds.
Dottie57
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Re: Share what worked in your plan during the crisis

Post by Dottie57 »

Irisheyes wrote: Sat Mar 28, 2020 1:45 pm Lots o' cash in the form of stable value funds, CDs and MMs.

33/33/33 allocation roughly before this thing hit.

Bonds did not "work" in terms of providing some kind of ballast as their gyrations scared the heck out of me. I expect equities to plummet, bonds not so much. My large cash cushion was the only thing that made me secure enough to be able to stay the course with the whole portfolio.
QQ. Do you know the contents of the stable value fund. The SV in my 401k holds 33% corporate bonds plus 38% MB’s/abs. I’ve been exchanged 1/3 of it for an intermediate TIPS fund . The info about the SV contents just became available late last year or this year in 401k provider.
drk
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Re: Share what worked in your plan during the crisis

Post by drk »

1. Long-term Treasury funds (thanks, vineviz!)
2. A 60/40 allocation (I save about 3x expenses every year, so gains don't move the needle that much)
3. Not rushing to rebalance back to stocks
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Rowan Oak
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Re: Share what worked in your plan during the crisis

Post by Rowan Oak »

Now and in the past, rebalancing on the way down. Buy, hold and rebalance. I use new contributions first and if it's not enough I sell bonds and buy stocks. If it's a really bad day or week I'm usually buying low cost, total stock market index funds. I also tax loss harvest when I have the opportunity.

But none of this has anything to do with this particular crisis. It's just part of my Investment policy statement (IPS) I wrote years ago.
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carminered2019
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Re: Share what worked in your plan during the crisis

Post by carminered2019 »

I prepared long time ago to weather major crisis.

1. ZERO debt
2. no mortgage
3. low yearly expenses
4. 2 years of EF
5. accept 50% hair cut with 96% equities
6. see any major correction as a blue light special with new money.
7. flexible spending(my spending could go from 0>>>100 or 100>>>0)
Last edited by carminered2019 on Sat Mar 28, 2020 6:35 pm, edited 2 times in total.
EnjoyIt
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Re: Share what worked in your plan during the crisis

Post by EnjoyIt »

1) Living through 2008/2009 without freaking out even though I had very little invested compared to today.
2) Having an asset allocation that matches my risk tolerance.
3) Tax loss harvesting. This one allows me to do something positive. Doing something feels good.
4) Rebalancing. Again, makes me feel like I am doing something positive.

So far so good. I'll let you know how this works out when all this ends.
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ruralavalon
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Re: Share what worked in your plan during the crisis

Post by ruralavalon »

Age 74, retired, no pension or annuity. We have no debt. We have no emergency fund. We have a joint taxable account, 2 Roth IRAs, and my rollover IRA.

What worked is:
1) our 50/50 asset allocation, we sleep very well at night;
2) my Required Minimum Distributions (RMDs) are taken automatically every month proportionally from all funds in my rollover IRA, which almost eliminates the need to rebalance;
3) I rebalanced once from bonds to U.S. stocks inside my rollover IRA;
4) all dividends are automatically reinvested; and
5) the portfolio is just 4 funds.

The portfolio basically takes care of itself.
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Murgatroyd
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Re: Share what worked in your plan during the crisis

Post by Murgatroyd »

Living below your means is the all weather strategy.
BoggledHead2
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Re: Share what worked in your plan during the crisis

Post by BoggledHead2 »

Being honest about my risk tolerance
Having an honest / appropriate asset allocation
Referring back to those 2 things and rebalancing accordingly.

All I worry about is my behavior and my savings rate - I can’t control anything else, so I don’t waste time worrying about anything else.

38% of my gross pay is invested in accordance with my risk tolerance/AA

People need to look in the mirror and pick an honest, objective AA for their risk tolerance.
L82GAME
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Re: Share what worked in your plan during the crisis

Post by L82GAME »

65/35 AA (Eq/Bnd), three fund portfolio. I was worried during the mania that it was too conservative; now I SWAN despite current conditions. And I’m very grateful to have an EF. I continue DCA purchases every two weeks via my 457. Otherwise, nothing has changed since slipping from the precipice.
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Shallowpockets
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Re: Share what worked in your plan during the crisis

Post by Shallowpockets »

Murgatroyd wrote: Sat Mar 28, 2020 3:41 pm Living below your means is the all weather strategy.
Yes, and doing over time. A lifestyle.Then it becomes second nature. When the s##t hits the fan there is no need for course correction. Oh, it is hitting the fan now.
No need for AA change when all that is extra with a LBYM.
L82GAME
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Re: Share what worked in your plan during the crisis

Post by L82GAME »

Shallowpockets wrote: Sat Mar 28, 2020 4:00 pm
Murgatroyd wrote: Sat Mar 28, 2020 3:41 pm Living below your means is the all weather strategy.
Yes, and doing over time. A lifestyle.Then it becomes second nature. When the s##t hits the fan there is no need for course correction. Oh, it is hitting the fan now.
No need for AA change when all that is extra with a LBYM.
+1! My only regret is that I arrived late in life to the wisdom of LBYM. But I finally arrived there nonetheless...
“Simplicity is the ultimate sophistication.” - Lao Tzu
mortfree
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Re: Share what worked in your plan during the crisis

Post by mortfree »

I didn’t do much of anything.

Bought a few shares of VTI early on the way down and continued my 401k contributions and purchases.

Raised my cash position with a bonus.

However, as best I can tell the crisis isn’t over.
Church Lady
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Re: Share what worked in your plan during the crisis

Post by Church Lady »

I was very glad I had stocked paper goods (such as TP), sanitizer, and canned goods. It's good to have a stock pile. Make note of things you can't buy today; that is what to stock.

Oddly enough, in my neck of the woods, the only meat products available are hams and seafood. Everything else is picked clean! Even tofu is sold out. So a source of protein....

"By the time they announce it, it will be too late".

Financially, long term treasuries and gold helped me keep my sanity. Harry Browne's Permanent Portfolio.

Good luck to all!
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WoodSpinner
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Re: Share what worked in your plan during the crisis

Post by WoodSpinner »

I am pleased the way my allocations of Short and Long Treasuries worked — at least so far.

Also, the investment I have made in building tools and automation has really helped me easily understand where my portfolio stands and how much Re-balancing I can do.

Lastly and more importantly, my wife is not worried at all about the market gyrations and our finances. Going over our IPS has really paid great emotional dividends.

WoodSpinner
Irisheyes
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Re: Share what worked in your plan during the crisis

Post by Irisheyes »

Dottie57 wrote: Sat Mar 28, 2020 2:14 pm
Irisheyes wrote: Sat Mar 28, 2020 1:45 pm Lots o' cash in the form of stable value funds, CDs and MMs.

33/33/33 allocation roughly before this thing hit.

Bonds did not "work" in terms of providing some kind of ballast as their gyrations scared the heck out of me. I expect equities to plummet, bonds not so much. My large cash cushion was the only thing that made me secure enough to be able to stay the course with the whole portfolio.
QQ. Do you know the contents of the stable value fund. The SV in my 401k holds 33% corporate bonds plus 38% MB’s/abs. I’ve been exchanged 1/3 of it for an intermediate TIPS fund . The info about the SV contents just became available late last year or this year in 401k provider.
Interesting.

I hold the TSP G fund. In addition, I hold the TIAA-CREF Traditional Annuity. Now that you ask, I realize that though I know what's in the G fund, I have no clue about the TIAA Traditional. :oops:
gator15
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Re: Share what worked in your plan during the crisis

Post by gator15 »

TheTimeLord wrote: Sat Mar 28, 2020 2:02 pm
gator15 wrote: Sat Mar 28, 2020 2:01 pm When I saw my portfolio drop drastically in Dec 2018 and a panic came over me I knew my asset allocation was way too aggressive. At that point, I was 90%+ stocks. Now I’m down to 70% stocks and this recent bear market has shown me Im comfortable with this asset allocation.
Did you change your allocation quickly or slowly over time?
I changed it immediately. Up to that point, I wasn’t concerned about my asset allocation. I viewed my savings rate and contributions as being more important than my AA. What I failed to realize is at that point my potential yearly gains/losses were beginning to equal my yearly contributions. It no longer made sense for me to take the amount of risk I was taking so I adjusted my AA. What’s interesting is in Jan 2019, I was 2/3rds of the way from reaching my retirement goal. Fair to say that’s not the case now. I’m not worried though. I adjusted my AA in Dec 18 to something I was comfortable with and you have to live with the results.
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leeks
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Re: Share what worked in your plan during the crisis

Post by leeks »

Target date funds, with automatic contributions, have worked just fine in our retirement and college savings funds. I haven't paid close attention to recent changes in value and don't really care.

We have substantial home purchase savings (NYC) and are very glad those funds were sitting in a boring money market account. We would have cared if that fund lost money. We might want to jump on a home this year if there are good prices on offer.

We have emergency funds which have not been needed but have provided comfort to know that we would be okay if the primary earner suddenly lost his income (although it is not likely).

We were able to leave the city, renting a car and a furnished home in a rural location to ride this out (and yes we self-quarantined to protect others from potential exposure). While we we probably won't contribute to our home purchase savings during these months, we can afford to pay rent in two places for a while and absorb the other extra expenses out of our monthly income. So keeping fixed expenses well below our monthly income has worked.

We have me as primarily a stay-at-home parent and that has made the school closures a non-issue for us in terms of work/income.
CascadiaSoonish
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Re: Share what worked in your plan during the crisis

Post by CascadiaSoonish »

Glad we've always kept a cash reserve, even when there are mixed opinions on how necessary that is when there are other funds (e.g., taxable investments) available. Because we drew down the taxable a few months ago (lucky) to pay for some commercial real estate improvements, so when the SHTF we still had cash reserves as a backstop.

Also elected to take a refund on our 2019 returns rather than prepaying 2020 estimateds. Happy that money is sitting in our account too.
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Sandtrap
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Re: Share what worked in your plan during the crisis

Post by Sandtrap »

Retired couple.
No SS (yet), no annuities, no pensions.
Hybrid (2 fundish) LMP at 35/65
R/E income properties
Large cash reserves (CD's, MM, etc)
No debt

Slept well but still a bit surprised at such a large paper loss from 2/20/2020.

After the eventual recovery, will be shifting to 30/70, increase cash reserves, continue LMP structure, shift "fixed" underlying funds around a bit.
If there is a significant R/E downturn, will increase rental holdings.

j :happy
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macheta
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Re: Share what worked in your plan during the crisis

Post by macheta »

Last August I started getting nervous about losing my job. As a result, I started saving my extra money in a HYSA instead of applying extra to my mortgage payment. My EF went up from 16k to 39k. My HYSA is 1.7% APR and my home loan is 2.99 APR. Paying off the house instead of investing it was an emotional decision. Saving it instead of paying off the house was also an emotional decision. This ended up being a good move considering the position we are in today.
Misenplace
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Re: Share what worked in your plan during the crisis

Post by Misenplace »

Soon after I discovered this forum, I stumbled upon and read most of this thread:
A time to EVALUATE your jitters

It made me think pretty long and hard as we worked on our IPS for the early years of our retirement. The plan we came to:

1) No debt
2) 2 years of bare bones expenses in high yield CD ladders
3) 20 years in bond (mix of total bond market and some TIPs)
4) TLH as opportunity arises, but stay invested.

It's worked so far, but we are not through this, and I haven't yet re-balanced to replenish our stocks. I'm not in a hurry to do that, and we are not that far away from our bands. Also, I had to use the above list to calm my spouse that we were OK. However, feeling angst for many others who are facing hard times.
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celia
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Re: Share what worked in your plan during the crisis

Post by celia »

vipertom1970 wrote: Sat Mar 28, 2020 2:26 pm I prepared long time ago to weather major crisis.

1. ZERO debt
2. no mortgage
3. low yearly expenses
4. 2 years of EF
5. accept 50% hair cut with 96% equities
6. see any major correction as a blue light special with new money.
7. flexible spending(my spending could go from 0>>>100 or 100>>>0)
+1 basically, but with 2 pensions and 2 SS, the part we don’t spend goes into savings.
Ferdinand2014
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Re: Share what worked in your plan during the crisis

Post by Ferdinand2014 »

Excellent question. Lots of cash on hand and eliminated any decisions regarding my investments: I only own 1 mutual fund FXAIX (Fidelity 500 index fund), do not have an asset allocation, do not rebalance, do not own ETF's and keep all of my accounts on weekly automatic contributions. Zero decisions and plenty of cash equals zero unforced errors.
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nolapepper
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Re: Share what worked in your plan during the crisis

Post by nolapepper »

Extra cash savings and HELOC helped this time! I have been wanting to get an equity line of credit but did not have time to get it done. When BOA had the no cost deal earlier this year, I jumped on it. With this extra money at hand, I feel more secure.

I did use the HELOC to max out our Roth IRA this week to take advantage of the low price. I normally buy in January but I run out of cash due to unexpected expenses and my CD won't mature until October.

Well, it turns out the bank is wavering the early withdrawal penalty. I was able to withdraw some funds to pay back my HELOC within a week.
nix4me
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Re: Share what worked in your plan during the crisis

Post by nix4me »

I have 99% stocks and 1% cash. Has worked great, i still automatically buy every week. What i have learned is i would like more cash, so i will be supersizing my E-fund going forward. I ignore the panic and keep buying - no issue.
jory1804
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Re: Share what worked in your plan during the crisis

Post by jory1804 »

What worked for me was keeping the bond portion of my AA primarily in long-term treasuries.

I understood that with treasuries, I was accepting lower yield than munis/corporates/MBS in order to be compensated if the economy crashed. That’s what I wanted my bonds to do for me, and they did exactly that.
New Providence
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Re: Share what worked in your plan during the crisis

Post by New Providence »

Might want to wait for the crisis to end to answer this question. It is just the beginning.
SevenBridgesRoad
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Re: Share what worked in your plan during the crisis

Post by SevenBridgesRoad »

TheTimeLord wrote: Sat Mar 28, 2020 12:51 pm A lot of people seem to be re-evaliuating and modifying their plans based on recent events. For those who feel their plans performed well what is a key or two that you can share.
Plan working well so far. We are a recently retired married couple. Elements of our plan are listed, but because you asked for one or two keys, I've bolded those...OK, I chose three...but I think the entire plan is important and fits together.

1) Variable Percentage Withdrawal method, using the Retirement Sheet (see wiki)
2) No debt, own our home (makes us anti-fragile)
3) A SS strategy (wife taking hers now, I'm delaying mine, when I start my benefit her spousal benefit will be higher than hers is now)
4) Single premium annuities x 2, deferred start date until next year (I'll be 65). Acts as a self-made pension.
5) Single Target Date Fund VTINX 30/70 equity/bond, mirrored across taxable and tax advantaged
6) Three years expenses in cash ( could easily stretch further if needed)
7) Live below means, now and entire career
8) Comfortable with a simple, good enough plan
dewey
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Re: Share what worked in your plan during the crisis

Post by dewey »

Stay the Course is what works for me. Assuming you're at home with your AA (I'm 71 and 50/50) then stick to the plan, re-balance according to plan. Not much else to add. In years past during these stomach churning episodes I learned from so many veterans on this site to sit tight, and stay the course. I have several friends and relatives who are in Vanguard but only understand low cost index investing. They don't grasp the rest. And they've called me and called Vanguard in a panic, multiple times, wanting to get out. Sell and go. Between Vanguard and me we've helped them understand the moment, but they need to learn more. Basically what they've learned is their AA is too rich with equity funds--but they really haven't learned it to be honest. They felt like smart investors the last chunk of years and I kept saying this too will change. Markets rise and fall. Stay the course.
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grabiner
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Re: Share what worked in your plan during the crisis

Post by grabiner »

The most important thing I did was having a well-planned Investment Policy Statement, so that I had records of my decisions before the crisis of what to do, and when. I made two significant financial moves, both based on decisions from years ago. I paid off almost all of my mortgage because it finally made sense to do so, and I did this without pulling out of the stock market; stock-market declines allowed me to sell a lot of stock, and I sold an equal amount in bonds to buy stock in my employer plan. And I went over the rebalancing limit for my bond position, so I sold more bonds to buy stock in my employer plan, in order to get back to the correct allocation.
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sambb
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Re: Share what worked in your plan during the crisis

Post by sambb »

i took the advice of many here who saw a massive once-in-a-lifetime black swan problem in january and pulled back before the crash. will rebalance/reallocate depending on risk tolerance in the future at much lower prices than january 2020. worried more about health and welfare of the public than personal finance
BrownEyedGirl_27
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Re: Share what worked in your plan during the crisis

Post by BrownEyedGirl_27 »

Ferdinand2014 wrote: Sat Mar 28, 2020 9:41 pm Excellent question. Lots of cash on hand and eliminated any decisions regarding my investments: I only own 1 mutual fund FXAIX (Fidelity 500 index fund), do not have an asset allocation, do not rebalance, do not own ETF's and keep all of my accounts on weekly automatic contributions. Zero decisions and plenty of cash equals zero unforced errors.
Thank you for sharing. Also, I love your tagline!
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Re: Share what worked in your plan during the crisis

Post by honduranhurricane »

Having a cash allocation helped me. Able to deploy into risk assets in increments.
ge1
Posts: 550
Joined: Sat Apr 28, 2012 8:15 pm

Re: Share what worked in your plan during the crisis

Post by ge1 »

I realized in 2008/09 that we had too much in equities, so over the years i decreased our allocation to stocks to 40% due to low need to take risk and valuation concerns. That low allocation to stocks allowed me to buy stocks opportunistically in the last 2 weeks (and in most cases sell them again after the run up this week).

We also sold our 2nd home earlier in the year, as wanted to lower our fixed expenses.
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Noobvestor
Posts: 5653
Joined: Mon Aug 23, 2010 1:09 am

Re: Share what worked in your plan during the crisis

Post by Noobvestor »

Taking risks on the stock side, staying safe (Treasuries, I Bonds, EE Bonds, TIPS, cash) on the bond/fixed income side
Tax loss harvesting along the way so I've got losses to offset gains from other rebalancing
Having at least some mixture of things in tax-advantaged accounts for rebalancing purposes
Having a solid investment plan in place up front so I don't make emotional decisions
Answering other peoples' questions on the forum to distract me from focusing on losses
Rebalancing pretty frequently to feel like I'm 'doing something' while still sticking with my plan (whether it pays off, who knows)
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe
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