I freaked out…now what?

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evonboeck
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I freaked out…now what?

Post by evonboeck » Thu May 21, 2020 1:44 pm

I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments. I was down like 8% for year. I would be even to 2% up for the year as things stand today. My investments were about a 50/50 allocation. My logic at the time was to convert everything over to one account and use the 3/4 fund approach going forward. I was planning on retiring in March of 21. Given how bad things were and still are, I decided to stay out of the market until after October of this year. Now I’m wondering if I was nuts to sell. I have to get back in at some point. Getting back in scary at this point. Who understands how this market is going up? I will become unemployed at the end of May, making it harder to make a big move.

When I do put it back in would you go all in (on bad downturn) or weekly for 8-10 weeks? Anybody else freak out this year? Did you get back in? Any advice?

I’ve told everyone in my family over and over not to sell based on fear. Thank God they listened to me.

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1789
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Re: I freaked out…now what?

Post by 1789 » Thu May 21, 2020 1:49 pm

How much money you are talking about? How long you don't need to use this money? I would imagine you should keep buying more than usual, not fear and move out, or sell your bonds to buy stocks in that downturn. But no one can predit where the market will be in October. If i you dont need money for next 10 years, i would put them all tomorrow. But maybe you need to start with 60% bonds and 40% stocks so you don't act on changing again?
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Re: I freaked out…now what?

Post by bloom2708 » Thu May 21, 2020 1:55 pm

How old are you?

If you were 60/40 BC (Before Covid), perhaps you are now a 40/60 AD (After coviD) person?

You have to invest the money not needed in the short term for the length of your (hopefully) 30 year + retirement.

Get back in. Maybe it is 30/70. The stock portion may go lower here in the next 6-12 months. Nobody knows.
"We are here to provoke thoughtfulness, not agree with you." Unknown Boglehead

Ed 2
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Re: I freaked out…now what?

Post by Ed 2 » Thu May 21, 2020 2:01 pm

evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments. I was down like 8% for year. I would be even to 2% up for the year as things stand today. My investments were about a 50/50 allocation. My logic at the time was to convert everything over to one account and use the 3/4 fund approach going forward. I was planning on retiring in March of 21. Given how bad things were and still are, I decided to stay out of the market until after October of this year. Now I’m wondering if I was nuts to sell. I have to get back in at some point. Getting back in scary at this point. Who understands how this market is going up? I will become unemployed at the end of May, making it harder to make a big move.

When I do put it back in would you go all in (on bad downturn) or weekly for 8-10 weeks? Anybody else freak out this year? Did you get back in? Any advice?

I’ve told everyone in my family over and over not to sell based on fear. Thank God they listened to me.
Looks like your portfolio was too aggressive to your risk tolerance. You have to be more conservative than . Do you know that you not only 8% down for the year? You didn’t include those realized capital gains you will have to pay tax on for all this years. Sorry, but you need to get back to drawing board.
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel

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arcticpineapplecorp.
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Re: I freaked out…now what?

Post by arcticpineapplecorp. » Thu May 21, 2020 2:03 pm

evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments. I was down like 8% for year. I would be even to 2% up for the year as things stand today. My investments were about a 50/50 allocation. My logic at the time was to convert everything over to one account and use the 3/4 fund approach going forward. I was planning on retiring in March of 21. Given how bad things were and still are, I decided to stay out of the market until after October of this year. Now I’m wondering if I was nuts to sell. I have to get back in at some point. Getting back in scary at this point. Who understands how this market is going up? I will become unemployed at the end of May, making it harder to make a big move.
wow. there's a lot here. You were scared and sold. Now you regret selling because you realize you'd have made money had you stayed still. So the lesson is...?

You want to move to three fund, but haven't.

You wanted to stay out of the market until after October (not sure how you came to that date/decision). Is that the month the coronavirus goes away forever and it's safe to invest again?

You're still scared. But you feel you need to act.

Do you? If so, why?

Tough place to be.

Who understands how the market "has" gone up (not "is" going up). See, you're talking present/future, but I'm talking past. We only know what did happen. We never know what's going to happen. You could put money back in and it could rise or it could fall. Both options are perfectly reasonable.

So you're dealing with two possible regrets:
1. you don't put the money in and miss a run up.
2. you put the money in and the market tanks.

which is your greater regret?

What was different about things now, since you never sold before (and presumably, you've dealt with declines in the past)? Was it the suddenness of the decline and the amount in a short time?

How would you have felt in 1987 when the stock market lost 23% in one day? Would you have sold too? The market recovered a year later. ya just never know. that's why you can't change your long term plan due to short term events. Do that now, you'll do that forever.

Pick an allocation and stick with it. Write up an IPS and stick with it. Review it periodically to stay on track:
https://www.bogleheads.org/wiki/Investm ... _statement

Understand how your allocation will result in losses. You should understand if you hold 50% stock and the stock market loses 50% your portfolio will fall 25%. See? So hold as much in stock as you are willing to lose in the short term. And no more. Take as much risk as you have the need, ability and willingness to accept, but no more.
evonboeck wrote:
Thu May 21, 2020 1:44 pm
When I do put it back in would you go all in (on bad downturn) or weekly for 8-10 weeks? Anybody else freak out this year? Did you get back in? Any advice?
I don't believe in market timing so I don't participate in that. I have an IPS and I stick to that. I invest when I have money and rebalance if necessary back to my stated allocation. If you want to be 50/50 then just be 50/50 and be done with it. What happens after that has nothing to do with what you did before that. If you want to be 50/50 but you're not, ask yourself why you're not where you want to be.
evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve told everyone in my family over and over not to sell based on fear. Thank God they listened to me.
now you only need to listen to yourself!
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

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nisiprius
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Re: I freaked out…now what?

Post by nisiprius » Thu May 21, 2020 2:10 pm

Mostly these are questions only you can answer.

$10,000 invested in the Vanguard Balanced Index Fund, VBIAX, on 2/20/2020, would have been worth $7,722 on 3/23/2020. VBIAX is 60/40 and yours is 50/50 so portfolio would have fallen less. You might go back and see that what the number really as. Let's say you sold when the value of your portfolio had dropped about 20%. That's a simple fact.

Stocks fell about 35% over that same time period, which is not all that rare. There have been two declines of about 50% within the last twenty years.

I think a reasonable planning hypothesis is that you will do the same thing if the same thing happens again. After all, you had resolved not to sell based on fear, so you now know that you can make such a resolution and do it anyway. What might be useful, rather than saying "I shouldn't have done that," is to try to remember as best you can what was happening mentally, so you won't fall back into thinking "I will just resolve not to do that again."

If we assume that the stock market can drop -50%--there is no particular reason to think it can't drop more, since it has, but it is one planning number--and that you can tolerate a -20% drop, then that suggests that your stock allocation shouldn't exceed 40/60.

"I am not in this world to live up to your expectations and you are not in this world to live up to mine." Decide what your risk tolerance is, and don't be influenced by what anyone else says it "should" be.

My suggestion, and that's all it is, is that you buy something right away--"get back on the horse"--but not the full amount. Perhaps choose a fund like Vanguard LifeStrategy Conservative (which is 40/60) and invest 1/5th of your cash in it right away, and then another 1/5th every month, or something like that. The stock market is going to fluctuate and some of those purchases will be at better times than others, and it is quite possible that there could be a -50% drop any time. But at least you won't be staking your whole live savings on one particular moment in time.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

palanzo
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Re: I freaked out…now what?

Post by palanzo » Thu May 21, 2020 2:14 pm

arcticpineapplecorp. wrote:
Thu May 21, 2020 2:03 pm
evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve told everyone in my family over and over not to sell based on fear. Thank God they listened to me.
now you only need to listen to yourself!
I'm sure you can see the benefit to your family of having someone like yourself help them in these times. One suggestion is to find an "investment buddy" who can encourage you in difficult times.

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BL
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Re: I freaked out…now what?

Post by BL » Thu May 21, 2020 2:15 pm

Start buying some equities now and on a regular basis. For example, 5% on the first of the month for 6 months would bring you back to 30% equities. Then pause and rethink whether you want another 10% equities.

Also look at possibilities for your fixed income. What is it in now? Maybe you can find some CDs or savings accounts online with decent interest rates. 2% seems pretty high for now. You might want some short-term bonds and/or intermediate bonds for your fixed income.

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Re: I freaked out…now what?

Post by Northern Flicker » Thu May 21, 2020 2:17 pm

Crisis = opportunity. Now that you are out, you have an opportunity to design an asset allocation that is appropriate for your situation and that you can live with through thick and thin. Focus on that, and then you can get back in. You may want to consider something like Vanguard Personal Advisor Services if you are unclear how to proceed with developing a suitable asset allocation.
Last edited by Northern Flicker on Thu May 21, 2020 4:42 pm, edited 1 time in total.
Risk is not a guarantor of return.

Ed 2
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Re: I freaked out…now what?

Post by Ed 2 » Thu May 21, 2020 2:18 pm

palanzo wrote:
Thu May 21, 2020 2:14 pm
arcticpineapplecorp. wrote:
Thu May 21, 2020 2:03 pm
evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve told everyone in my family over and over not to sell based on fear. Thank God they listened to me.
now you only need to listen to yourself!
I'm sure you can see the benefit to your family of having someone like yourself help them in these times. One suggestion is to find an "investment buddy" who can encourage you in difficult times.
Or like in my life experience find one who is trying to beat the market all the time so you can see what happens to market timers. I have known one who never learns , very stubborn and overconfident person.
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel

Northern Flicker
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Re: I freaked out…now what?

Post by Northern Flicker » Thu May 21, 2020 2:18 pm

BL wrote:
Thu May 21, 2020 2:15 pm
Start buying some equities now and on a regular basis. For example, 5% on the first of the month for 6 months would bring you back to 30% equities. Then pause and rethink whether you want another 10% equities.

Also look at possibilities for your fixed income. What is it in now? Maybe you can find some CDs or savings accounts online with decent interest rates. 2% seems pretty high for now. You might want some short-term bonds and/or intermediate bonds for your fixed income.
Starting to re-invest before developing an asset allocation is not a good idea.
Risk is not a guarantor of return.

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arcticpineapplecorp.
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Re: I freaked out…now what?

Post by arcticpineapplecorp. » Thu May 21, 2020 2:19 pm

Remember that a 90% decline is just an 80% decline that falls another 50%.
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

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cashboy
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Re: I freaked out…now what?

Post by cashboy » Thu May 21, 2020 2:23 pm

based on your post, i would suggest that you set a period of time where you don't do anything related to this subject (1 week, 2 weeks, 1 month, etc. - you pick the duration but pick it and stick to it). this provides some scheduled 'down time' for you to relax.

during this period of 'doing nothing' time read the many posts on market timing gone bad here on BH to see what advice is offered. then, work on a plan and document it.

after the doing nothing time period ends you should be well informed, calm, and have a plan to act on.


thanks for sharing!

good luck moving forward from here!

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Three-Fund Portfolio: FSPSX - FXAIX - FXNAX (with slight tilt of CDs - CASH - Canned Beans - Rice - Bottled Water)

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Re: I freaked out…now what?

Post by deltaneutral83 » Thu May 21, 2020 2:32 pm

The decision to sell on March 13 was brilliant, S&P shot up like a rocket that day only to lose 17% over the next 10 calendar days. The not having a plan and not getting in March 23 is the bad part. A lot of people don't even get the first part right which OP did. You can now see a successful market timing strategy involves two different time frames to trade correctly for you to win all the while keeping your emotions in check on the "in between." Ask a few brokerages and they will tell you, however, that the longer the "in between" time frame is, the lower the probability that the person gets back in at all until years later when the market has more than likely totally recovered with record gains.

For all the sports fans, the odds of correctly picking a 2 game "parlay" against the spread typically pays 2.6x to 1. Meaning if you bet $100 and both of your teams cover, you win $260. There is a reason it pays well, because it doesn't happen very often and Vegas makes plenty of money over time taking these bets because if one of the two events fails, the bet fails. Absolutely no way I'd do that with real money with the stock market via market timing. The best thing that can happen to a market timer IMO is to have market go up 1-3% after the sale and have them realize it was dumb and jump back in and never do it again with a small haircut. The market falling immediately after is exactly what is needed for a successful market time but so often the psychology takes over in place of the math.

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Re: I freaked out…now what?

Post by jjface » Thu May 21, 2020 2:45 pm

The way I see dilemmas like these is you have to ignore past decisions. Consider yourself a new investor. Write a plan if you have to to help you stick to it next time.

Today if you had $x how would you want to invest it? 3 fund portfolio with 40:60? Then do so today.

Past mistakes are past mistakes. You can dwell on them but there is no reversing the decision. It isn't too bad as you only lost a little. A lesson learnt. Had you invested when it had dropped to the lows you might have been patting yourself on the back but it goes to highlight the dangers of trying to time the market.

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Re: I freaked out…now what?

Post by Fallible » Thu May 21, 2020 2:48 pm

evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments. I was down like 8% for year. I would be even to 2% up for the year as things stand today. My investments were about a 50/50 allocation. ... I was planning on retiring in March of 21. Given how bad things were and still are, I decided to stay out of the market until after October of this year. Now I’m wondering if I was nuts to sell. I have to get back in at some point. Getting back in scary at this point. Who understands how this market is going up? I will become unemployed at the end of May, making it harder to make a big move. ..
Some questions:

_you planned to retire in March of next year, but you will become unemployed the end of this month. Is that correct?
_your age?
_emergency savings?
_how much money can you afford to 'lose' in another market downturn before you'll need the money?
_any other financial information needed to help determine an asset allocation you can stay with when you get back in the market?

Thanks.
The first principle is that you must not fool yourself – and you are the easiest person to fool. ~Richard Feynman

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Re: I freaked out…now what?

Post by 123 » Thu May 21, 2020 2:50 pm

evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments...
Any 401k or IRA accounts can be traded in without tax consequence. If you held any taxable investments and those were sold you will need to determine the tax consequences of those sales. If you had embedded taxable gains in taxable accounts and liquidated then some of the proceeds may need to be earmarked for tax payments for 2020.
The closest helping hand is at the end of your own arm.

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Re: I freaked out…now what?

Post by nanameg » Thu May 21, 2020 2:56 pm

evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments. I was down like 8% for year. I would be even to 2% up for the year as things stand today. My investments were about a 50/50 allocation. My logic at the time was to convert everything over to one account and use the 3/4 fund approach going forward. I was planning on retiring in March of 21. Given how bad things were and still are, I decided to stay out of the market until after October of this year. Now I’m wondering if I was nuts to sell. I have to get back in at some point. Getting back in scary at this point. Who understands how this market is going up? I will become unemployed at the end of May, making it harder to make a big move.

When I do put it back in would you go all in (on bad downturn) or weekly for 8-10 weeks? Anybody else freak out this year? Did you get back in? Any advice?

I’ve told everyone in my family over and over not to sell based on fear. Thank God they listened to me.
I did the same. And got back in 3 wks after. Just dump it back in at a more conservative allocation... I went from 60/40 to 45/55. Find something comfortable and just get back in you’ll feel much much better. Don’t prolong the agony... get back in at a conservative allocation now.

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Re: I freaked out…now what?

Post by Rosencrantz1 » Thu May 21, 2020 3:11 pm

evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments. I was down like 8% for year. I would be even to 2% up for the year as things stand today. My investments were about a 50/50 allocation. My logic at the time was to convert everything over to one account and use the 3/4 fund approach going forward. I was planning on retiring in March of 21. Given how bad things were and still are, I decided to stay out of the market until after October of this year. Now I’m wondering if I was nuts to sell. I have to get back in at some point. Getting back in scary at this point. Who understands how this market is going up? I will become unemployed at the end of May, making it harder to make a big move.

When I do put it back in would you go all in (on bad downturn) or weekly for 8-10 weeks? Anybody else freak out this year? Did you get back in? Any advice?

I’ve told everyone in my family over and over not to sell based on fear. Thank God they listened to me.
You're in good company. From my reading on this forum, there's been a lot of folks who 'freaked out'. In my opinion, before you do anything, you need to do a 'gut check' and carefully evaluate your risk tolerance and set your asset allocation accordingly. From the sounds of it, a 50/50 allocation was a bit stock heavy for you - so, I'd think something with less in the way of equities would be a good starting point.

I've read on this site that the 'lump sum' investment style beats DCAing in about 2/3rds of the time. Don't know if that's absolutely true - but, it seems to be accepted here on BH (so, it's likely true).

Again, in my view, the key is correctly setting your AA so that you avoid freaking out the next time the market seriously drops. Best of luck to you.

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Re: I freaked out…now what?

Post by ddurrett896 » Thu May 21, 2020 3:16 pm

“Be greedy when others are fearful, and fearful when others are greedy.”

All in today.

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Re: I freaked out…now what?

Post by FelixTheCat » Thu May 21, 2020 3:26 pm

evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments.

My investments were about a 50/50 allocation.
You have the wrong AA for you since you sold based on fear. Maybe 40/60 is a better AA for your tolerance level.
Felix is a wonderful, wonderful cat.

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Re: I freaked out…now what?

Post by yohac » Thu May 21, 2020 3:37 pm

evonboeck wrote:
Thu May 21, 2020 1:44 pm
My logic at the time was to convert everything over to one account and use the 3/4 fund approach going forward.
I suggest you dump it all into a single Life Strategy or Target Retirement fund, then try hard to forget about it. Otherwise the next really bad stretch will tempt you to tinker some more.

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arcticpineapplecorp.
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Re: I freaked out…now what?

Post by arcticpineapplecorp. » Thu May 21, 2020 3:46 pm

"I'm twisted up inside but nonetheless I feel the need to say...Don't know the future but the past is getting clearer every day."

--"Rewind" by I Fight Dragons
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

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Re: I freaked out…now what?

Post by Candor » Thu May 21, 2020 3:49 pm

You need to be honest with yourself and ask what will you do if you put all or some of the money back into the market and it proceeds to drop 10-20% soon after which could easily happen. Of course it could also drop much more than that. You are in a tough position but I would suggest to DCA over a period of time up to a conservative aa that you can live with through thick or thin. I would start asap with the first installment to get back in the game.

grettman
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Re: I freaked out…now what?

Post by grettman » Thu May 21, 2020 3:55 pm

You sold when your portfolio was at an 8% decline?

Am I reading that correctly?

That kind of a decline is called “normal” for most investors.

whereskyle
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Re: I freaked out…now what?

Post by whereskyle » Thu May 21, 2020 3:59 pm

evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments. I was down like 8% for year. I would be even to 2% up for the year as things stand today. My investments were about a 50/50 allocation. My logic at the time was to convert everything over to one account and use the 3/4 fund approach going forward. I was planning on retiring in March of 21. Given how bad things were and still are, I decided to stay out of the market until after October of this year. Now I’m wondering if I was nuts to sell. I have to get back in at some point. Getting back in scary at this point. Who understands how this market is going up? I will become unemployed at the end of May, making it harder to make a big move.

When I do put it back in would you go all in (on bad downturn) or weekly for 8-10 weeks? Anybody else freak out this year? Did you get back in? Any advice?

I’ve told everyone in my family over and over not to sell based on fear. Thank God they listened to me.
Hey, 8% down for the year ain't too shabby after that great bull run! So don't worry too much about it and do not act out of FOMO. I would say you need to take some time to assess which allocation you can stick with going forward. If you are confident in a 50/50 allocation, then you need to take a deep breath and envision this all happening again and it being even worse: can you really accept the fact that 50% of your portfolio could be cut in half? If you can do that, it's just up to you to make that deal with yourself that the numbers going down do not matter because you are prepared for that eventuality and that is just part of how investing works. If you can't accept that, you'll need to choose a more conservative allocation and rely more on bonds or consider other options for funding your retirement.

Good luck, and again, don't feel too bad about exiting after an 8% drop. You've done well. Shake it off and start from the beginning as far as planning your financial future so you can have an Investment Policy that you will stick to.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle

S_Track
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Re: I freaked out…now what?

Post by S_Track » Thu May 21, 2020 4:44 pm

evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments. I was down like 8% for year.
I am curious, when you decided to sell, did you consider just adjusting your AA rather than going all to cash? I remember and interview with Bogle where he said, if you are getting real nervous do a small adjustment to your AA to let off a little steam. Good luck with your new plan.

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evonboeck
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Re: I freaked out…now what?

Post by evonboeck » Thu May 21, 2020 5:00 pm

arcticpineapplecorp. wrote:
Thu May 21, 2020 2:03 pm
evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments. I was down like 8% for year. I would be even to 2% up for the year as things stand today. My investments were about a 50/50 allocation. My logic at the time was to convert everything over to one account and use the 3/4 fund approach going forward. I was planning on retiring in March of 21. Given how bad things were and still are, I decided to stay out of the market until after October of this year. Now I’m wondering if I was nuts to sell. I have to get back in at some point. Getting back in scary at this point. Who understands how this market is going up? I will become unemployed at the end of May, making it harder to make a big move.
wow. there's a lot here. You were scared and sold. Now you regret selling because you realize you'd have made money had you stayed still. So the lesson is...?

You want to move to three fund, but haven't. When I go back in I plan to move to a 3 fund approach Total Stock 35%, Intl 10%, 55% bonds. Only because I don't see any real clear chocies other than bonds. During this process I moved all my money from Vanguard to Schwab which took some time. I prefer Schwab's website and customer service.

You wanted to stay out of the market until after October (not sure how you came to that date/decision). Is that the month the coronavirus goes away forever and it's safe to invest again? In my mind things will be clearer then, however I understand you can't time the market.

You're still scared. But you feel you need to act. No, I'm frustrated because I had a plan and changed it based on fear. I'm really just sharing what seems to be a stupid mistake, but now I don't know how to get back in. The logical person in me knows that I should cost average my way back in now over the next 6 months.
Do you? If so, why? No I don't. No I don't have to get back in now and will not need any of this money for more than 18 months.

Tough place to be.

Who understands how the market "has" gone up (not "is" going up). See, you're talking present/future, but I'm talking past. We only know what did happen. We never know what's going to happen. You could put money back in and it could rise or it could fall. Both options are perfectly reasonable.

So you're dealing with two possible regrets:
1. you don't put the money in and miss a run up.
2. you put the money in and the market tanks.

which is your greater regret? 2 that could happen on top of 1

What was different about things now, since you never sold before (and presumably, you've dealt with declines in the past)? Was it the suddenness of the decline and the amount in a short time? I stated that I sold on 3/13, it was actually the I think 3/12. Huge loss that day. I think it was very near the bottom. In the past I knew I had many years to make up the money, now not so much. I'm still contributing to solo 401K/HSA/Roth etc...

How would you have felt in 1987 when the stock market lost 23% in one day? Would you have sold too? The market recovered a year later. ya just never know. that's why you can't change your long term plan due to short term events. Do that now, you'll do that forever. I didn't sell in 87 but didn't have much money then

Pick an allocation and stick with it. Write up an IPS and stick with it. Review it periodically to stay on track: Good advice, probably exactly what I need to do. I'll check out the link, but I do need to get back in first. I'm assuming ISP is a plan. I hope the link has examples
https://www.bogleheads.org/wiki/Investm ... _statement

Understand how your allocation will result in losses. You should understand if you hold 50% stock and the stock market loses 50% your portfolio will fall 25%. See? So hold as much in stock as you are willing to lose in the short term. And no more. Take as much risk as you have the need, ability and willingness to accept, but no more.

evonboeck wrote:
Thu May 21, 2020 1:44 pm
When I do put it back in would you go all in (on bad downturn) or weekly for 8-10 weeks? Anybody else freak out this year? Did you get back in? Any advice?

I don't believe in market timing so I don't participate in that. I have an IPS and I stick to that. I invest when I have money and rebalance if necessary back to my stated allocation. If you want to be 50/50 then just be 50/50 and be done with it. What happens after that has nothing to do with what you did before that. If you want to be 50/50 but you're not, ask yourself why you're not where you want to be.

evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve told everyone in my family over and over not to sell based on fear. Thank God they listened to me.

now you only need to listen to yourself!


In summary, I'm near retirement(60) and have 900K that I need to get back in the market. 80% of it pretax. In my mind I need to pick a date and start cost averaging back in (w/3 fund approach). Somehow that date is still somewhere in October for me or at least at some major downturn. If anyone has a better idea I'm all ears.
Thanks for the feedback.

Topic Author
evonboeck
Posts: 48
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Re: I freaked out…now what?

Post by evonboeck » Thu May 21, 2020 5:04 pm

palanzo wrote:
Thu May 21, 2020 2:14 pm
arcticpineapplecorp. wrote:
Thu May 21, 2020 2:03 pm
evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve told everyone in my family over and over not to sell based on fear. Thank God they listened to me.
now you only need to listen to yourself!
I'm sure you can see the benefit to your family of having someone like yourself help them in these times. One suggestion is to find an "investment buddy" who can encourage you in difficult times.
Good advice

Topic Author
evonboeck
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Re: I freaked out…now what?

Post by evonboeck » Thu May 21, 2020 5:16 pm

cashboy wrote:
Thu May 21, 2020 2:23 pm
based on your post, i would suggest that you set a period of time where you don't do anything related to this subject (1 week, 2 weeks, 1 month, etc. - you pick the duration but pick it and stick to it). this provides some scheduled 'down time' for you to relax.

during this period of 'doing nothing' time read the many posts on market timing gone bad here on BH to see what advice is offered. then, work on a plan and document it.

after the doing nothing time period ends you should be well informed, calm, and have a plan to act on.


thanks for sharing!

good luck moving forward from here!

:sharebeer
Thanks, good suggestion.

Topic Author
evonboeck
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Re: I freaked out…now what?

Post by evonboeck » Thu May 21, 2020 5:22 pm

Fallible wrote:
Thu May 21, 2020 2:48 pm
evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments. I was down like 8% for year. I would be even to 2% up for the year as things stand today. My investments were about a 50/50 allocation. ... I was planning on retiring in March of 21. Given how bad things were and still are, I decided to stay out of the market until after October of this year. Now I’m wondering if I was nuts to sell. I have to get back in at some point. Getting back in scary at this point. Who understands how this market is going up? I will become unemployed at the end of May, making it harder to make a big move. ..
Some questions:

_you planned to retire in March of next year, but you will become unemployed the end of this month. Is that correct?
_your age?
_emergency savings?
_how much money can you afford to 'lose' in another market downturn before you'll need the money?
_any other financial information needed to help determine an asset allocation you can stay with when you get back in the market?

Thanks.
I had really planned to semi-retire in 3/1/21. I'm self-employed and believe that I can pick up new 3-6 month contracts for the next few years if needed. I own my house and have a little passive income. I wan't have a typical Bogglehead retirement, but I just don't need a lot of money. Live in a low cost area too.

Topic Author
evonboeck
Posts: 48
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Re: I freaked out…now what?

Post by evonboeck » Thu May 21, 2020 5:25 pm

grettman wrote:
Thu May 21, 2020 3:55 pm
You sold when your portfolio was at an 8% decline?

Am I reading that correctly?

That kind of a decline is called “normal” for most investors.
You are correct sir.

Topic Author
evonboeck
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Re: I freaked out…now what?

Post by evonboeck » Thu May 21, 2020 5:30 pm

whereskyle wrote:
Thu May 21, 2020 3:59 pm
evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments. I was down like 8% for year. I would be even to 2% up for the year as things stand today. My investments were about a 50/50 allocation. My logic at the time was to convert everything over to one account and use the 3/4 fund approach going forward. I was planning on retiring in March of 21. Given how bad things were and still are, I decided to stay out of the market until after October of this year. Now I’m wondering if I was nuts to sell. I have to get back in at some point. Getting back in scary at this point. Who understands how this market is going up? I will become unemployed at the end of May, making it harder to make a big move.

When I do put it back in would you go all in (on bad downturn) or weekly for 8-10 weeks? Anybody else freak out this year? Did you get back in? Any advice?

I’ve told everyone in my family over and over not to sell based on fear. Thank God they listened to me.
Hey, 8% down for the year ain't too shabby after that great bull run! So don't worry too much about it and do not act out of FOMO. I would say you need to take some time to assess which allocation you can stick with going forward. If you are confident in a 50/50 allocation, then you need to take a deep breath and envision this all happening again and it being even worse: can you really accept the fact that 50% of your portfolio could be cut in half? If you can do that, it's just up to you to make that deal with yourself that the numbers going down do not matter because you are prepared for that eventuality and that is just part of how investing works. If you can't accept that, you'll need to choose a more conservative allocation and rely more on bonds or consider other options for funding your retirement.

Good luck, and again, don't feel too bad about exiting after an 8% drop. You've done well. Shake it off and start from the beginning as far as planning your financial future so you can have an Investment Policy that you will stick to.
When I think about 2007-2009, this is a great perspective. I didn't sell then. Also went through a divorce in 2009. It was so bad I stopped looking! Maybe I should slowly get back in now.

jibantik
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Re: I freaked out…now what?

Post by jibantik » Thu May 21, 2020 5:32 pm

Well, I hope all the market timing "bogleheads" are happy. These are the kinds of things you will have to live with. If people come to these forums and see bogleheads freaking out and timing the market, they are going to think they can do the same thing.

We should be steadfast and set a GOOD example. It's shameful to look back at the reactions many had on this forum.

Topic Author
evonboeck
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Re: I freaked out…now what?

Post by evonboeck » Thu May 21, 2020 5:45 pm

S_Track wrote:
Thu May 21, 2020 4:44 pm
evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments. I was down like 8% for year.
I am curious, when you decided to sell, did you consider just adjusting your AA rather than going all to cash? I remember and interview with Bogle where he said, if you are getting real nervous do a small adjustment to your AA to let off a little steam. Good luck with your new plan.
Wow, this is great advice. I'll add this to my plan. Makes so much sense. I sold on the 12th (almost bottom) the market was up like a wopping 8% the next day. The very next day my emotional state would have been fine.

I've never sold before. I guess I'm so close to retirement I just let my fear get the best of me. There will be times like this again. There always is. And even with all of this great advice I still feel like the market is going to tank to the tune of 30% if we have round 2 of c-19. I don't know why I can't let this go. Even if we have round 2 I don't what will happen and even if it does it will fine in the long run. Thanks for sharing!

finite_difference
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Re: I freaked out…now what?

Post by finite_difference » Thu May 21, 2020 5:50 pm

You forgot the cardinal rule. Stay the course.

50/50 AA is pretty optimal. What were you afraid of, a 50% crash? You’d still have 75% of your portfolio. Or maybe you haven’t saved enough?
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh

jibantik
Posts: 389
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Re: I freaked out…now what?

Post by jibantik » Thu May 21, 2020 5:50 pm

evonboeck wrote:
Thu May 21, 2020 5:45 pm
S_Track wrote:
Thu May 21, 2020 4:44 pm
evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments. I was down like 8% for year.
I am curious, when you decided to sell, did you consider just adjusting your AA rather than going all to cash? I remember and interview with Bogle where he said, if you are getting real nervous do a small adjustment to your AA to let off a little steam. Good luck with your new plan.
Wow, this is great advice. I'll add this to my plan. Makes so much sense. I sold on the 12th (almost bottom) the market was up like a wopping 8% the next day. The very next day my emotional state would have been fine.

I've never sold before. I guess I'm so close to retirement I just let my fear get the best of me. There will be times like this again. There always is. And even with all of this great advice I still feel like the market is going to tank to the tune of 30% if we have round 2 of c-19. I don't know why I can't let this go. Even if we have round 2 I don't what will happen and even if it does it will fine in the long run. Thanks for sharing!
It doesn't make sense. It would have been better than what you did, but still not good. Just set an AA that you won't need to adjust and STAY THE COURSE.

Get back in the market with an AA you can handle ASAP. Then, do NOTHING.

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evonboeck
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Re: I freaked out…now what?

Post by evonboeck » Thu May 21, 2020 5:51 pm

nanameg wrote:
Thu May 21, 2020 2:56 pm
evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments. I was down like 8% for year. I would be even to 2% up for the year as things stand today. My investments were about a 50/50 allocation. My logic at the time was to convert everything over to one account and use the 3/4 fund approach going forward. I was planning on retiring in March of 21. Given how bad things were and still are, I decided to stay out of the market until after October of this year. Now I’m wondering if I was nuts to sell. I have to get back in at some point. Getting back in scary at this point. Who understands how this market is going up? I will become unemployed at the end of May, making it harder to make a big move.

When I do put it back in would you go all in (on bad downturn) or weekly for 8-10 weeks? Anybody else freak out this year? Did you get back in? Any advice?

I’ve told everyone in my family over and over not to sell based on fear. Thank God they listened to me.
I did the same. And got back in 3 wks after. Just dump it back in at a more conservative allocation... I went from 60/40 to 45/55. Find something comfortable and just get back in you’ll feel much much better. Don’t prolong the agony... get back in at a conservative allocation now.
You went all out and all back in?

reln
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Re: I freaked out…now what?

Post by reln » Thu May 21, 2020 5:54 pm

evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments. I was down like 8% for year. I would be even to 2% up for the year as things stand today. My investments were about a 50/50 allocation. My logic at the time was to convert everything over to one account and use the 3/4 fund approach going forward. I was planning on retiring in March of 21. Given how bad things were and still are, I decided to stay out of the market until after October of this year. Now I’m wondering if I was nuts to sell. I have to get back in at some point. Getting back in scary at this point. Who understands how this market is going up? I will become unemployed at the end of May, making it harder to make a big move.

When I do put it back in would you go all in (on bad downturn) or weekly for 8-10 weeks? Anybody else freak out this year? Did you get back in? Any advice?

I’ve told everyone in my family over and over not to sell based on fear. Thank God they listened to me.
Get in stay in.

bondsr4me
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Re: I freaked out…now what?

Post by bondsr4me » Thu May 21, 2020 6:01 pm

I think you really need to do a self-assessment of your risk tolerance.
Risk meaning: risk of market volatility causing you to panic again and risk of losing money.

It may pay for you to find a fee-only CFP to talk to and coach you.

The worst thing you could do is repeat what you have done.

We are in very uncertain times and it may pay for you to stay out of the market to keep your sanity.

I wish you well. Emotions are usually our biggest enemy when it comes to investing; especially in turbulent times.

Good luck.

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galeno
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Re: I freaked out…now what?

Post by galeno » Thu May 21, 2020 6:06 pm

Yes you blew it. Don't repeat it. Ever.

We have a rule that we've kept since Jan 2006. Only touch our port once per year. In early January. This year we broke that rule.

But we did the exact OPPOSITE of what you did. We started the year at 40/60. The BEAR took us to 35/65. So on March 31 we over-rebalanced to 45/65 (we bought 28% more stocks). We are now at 47/53. These buys are up by 13%.

Our port is down 1.9% YTD. Down 5.0% from its peak value.

Unless the markets fall off a cliff again, this didn't seem like a real bear market.
Last edited by galeno on Thu May 21, 2020 6:22 pm, edited 1 time in total.
USA-NRA. TER = 0.47%. Expected real CAGR = 2.00%. AWR = 4.00%.: Port: 50% World Stocks + 15% TIPS + 15% Corps + 15% US Treas + 5% CASH.

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whodidntante
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Re: I freaked out…now what?

Post by whodidntante » Thu May 21, 2020 6:17 pm

Unless your oncologist just told you to get your affairs in order, or you're at a point where a SPIA and some bonds makes all kinds of sense, do not go to 0% stocks. And maybe not even then.

You must decide upon your asset allocation and buy in today, my son. That'll be ten hail Bogles and make a V across your chest on the way out.

gr7070
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Re: I freaked out…now what?

Post by gr7070 » Thu May 21, 2020 6:48 pm

I think some sole searching is more important than anything at this moment.

You plan to retire in 1 year, but you can't stomach an 8% dip?

Unless you have way, way more money than you'll ever need and can thus go ridiculously conservative with your AA, you're going to have an uncomfortable relationship with your finances for the next many decades.

I'd do a little more reading on withdrawals. On market swings, expected drops, historic occurrences, length of bears, etc. Maybe more knowledge could combat irrational fears/actions.

Good luck. If you've planned well you'll be fine for the next many decades. You just need to grasp that fact.

nanameg
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Re: I freaked out…now what?

Post by nanameg » Thu May 21, 2020 7:18 pm

evonboeck wrote:
Thu May 21, 2020 5:51 pm
nanameg wrote:
Thu May 21, 2020 2:56 pm
evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments. I was down like 8% for year. I would be even to 2% up for the year as things stand today. My investments were about a 50/50 allocation. My logic at the time was to convert everything over to one account and use the 3/4 fund approach going forward. I was planning on retiring in March of 21. Given how bad things were and still are, I decided to stay out of the market until after October of this year. Now I’m wondering if I was nuts to sell. I have to get back in at some point. Getting back in scary at this point. Who understands how this market is going up? I will become unemployed at the end of May, making it harder to make a big move.

When I do put it back in would you go all in (on bad downturn) or weekly for 8-10 weeks? Anybody else freak out this year? Did you get back in? Any advice?

I’ve told everyone in my family over and over not to sell based on fear. Thank God they listened to me.
I did the same. And got back in 3 wks after. Just dump it back in at a more conservative allocation... I went from 60/40 to 45/55. Find something comfortable and just get back in you’ll feel much much better. Don’t prolong the agony... get back in at a conservative allocation now.
You went all out and all back in?
I did!

I did use an advisor thru the PAS ...I filled out the questionnaire, talked to him and used the plan he set out.

I may simplify even further. I keep getting torn between just using the two fund or three fund portfolio. The PAS puts you in a 4 fund portfolio like the TDF. I don’t think the PAS is all that useful long term but I needed some handholding to get back in.

randomguy
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Re: I freaked out…now what?

Post by randomguy » Thu May 21, 2020 7:19 pm

FelixTheCat wrote:
Thu May 21, 2020 3:26 pm
evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments.

My investments were about a 50/50 allocation.
You have the wrong AA for you since you sold based on fear. Maybe 40/60 is a better AA for your tolerance level.
You really think 40/60 would have made a difference? I doubt 10/90 would have. Fear isn't rational. Being 7% down instead of 8% isn't going to change anything. You are going to be afraid no matter what happens.

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arcticpineapplecorp.
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Re: I freaked out…now what?

Post by arcticpineapplecorp. » Thu May 21, 2020 7:20 pm

whodidntante wrote:
Thu May 21, 2020 6:17 pm
You must decide upon your asset allocation and buy in today, my son. That'll be ten hail Bogles and make a V across your chest on the way out.
+1
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

nanameg
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Re: I freaked out…now what?

Post by nanameg » Thu May 21, 2020 7:48 pm

randomguy wrote:
Thu May 21, 2020 7:19 pm
FelixTheCat wrote:
Thu May 21, 2020 3:26 pm
evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments.

My investments were about a 50/50 allocation.
You have the wrong AA for you since you sold based on fear. Maybe 40/60 is a better AA for your tolerance level.
You really think 40/60 would have made a difference? I doubt 10/90 would have. Fear isn't rational. Being 7% down instead of 8% isn't going to change anything. You are going to be afraid no matter what happens.
I think more knowledge helps quell fear. Reading this forum and the wiki here helps. Fear isn’t rational ...but more knowledge can help quell fear during the next negative market event. As does reading this forum.

nanameg
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Re: I freaked out…now what?

Post by nanameg » Thu May 21, 2020 7:58 pm

jibantik wrote:
Thu May 21, 2020 5:32 pm
Well, I hope all the market timing "bogleheads" are happy. These are the kinds of things you will have to live with. If people come to these forums and see bogleheads freaking out and timing the market, they are going to think they can do the same thing.

We should be steadfast and set a GOOD example. It's shameful to look back at the reactions many had on this forum.
I think people come here to learn and it’s ok if they don’t know what they’re doing! There’s no shame involved! Or shouldn’t be. People make mistakes and sometimes they make them repeatedly. I think honesty on this forum is what matters...not always “ getting it right”.

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wander
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Re: I freaked out…now what?

Post by wander » Thu May 21, 2020 10:58 pm

If you have 50/50 portfolio and you freaked out, then increase bond to 60-70 or 80%. Whichever is your comfort level. My portfolio was 80% stock, but I didn't feel anything when the market dropped. That was a benefit of hanging out here for too long. :happy

annu
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Re: I freaked out…now what?

Post by annu » Thu May 21, 2020 11:10 pm

evonboeck wrote:
Thu May 21, 2020 5:51 pm
nanameg wrote:
Thu May 21, 2020 2:56 pm
evonboeck wrote:
Thu May 21, 2020 1:44 pm
I’ve never sold on fear in my life and know better, but on 3/13 I sold 100% of my investments. I was down like 8% for year. I would be even to 2% up for the year as things stand today. My investments were about a 50/50 allocation. My logic at the time was to convert everything over to one account and use the 3/4 fund approach going forward. I was planning on retiring in March of 21. Given how bad things were and still are, I decided to stay out of the market until after October of this year. Now I’m wondering if I was nuts to sell. I have to get back in at some point. Getting back in scary at this point. Who understands how this market is going up? I will become unemployed at the end of May, making it harder to make a big move.

When I do put it back in would you go all in (on bad downturn) or weekly for 8-10 weeks? Anybody else freak out this year? Did you get back in? Any advice?

I’ve told everyone in my family over and over not to sell based on fear. Thank God they listened to me.
I did the same. And got back in 3 wks after. Just dump it back in at a more conservative allocation... I went from 60/40 to 45/55. Find something comfortable and just get back in you’ll feel much much better. Don’t prolong the agony... get back in at a conservative allocation now.
You went all out and all back in?
I took out in mid/late feb, have not gotten back in yet. Still contributing but money going to MM, and have been taking care of mortgage a bit more.

You mentioned October to get back in, my $.02, elections are in November, and also this winter will be interesting, personally not worried about missing even if market goes back to January level before end of year. Especialy if there is change of guard after elections, scorched earth policy is not out of question as far as politics goes.
Also all the money that has been dumped, needs to come from somewhere.
I made the move due to Covid concerns, knowing fed has been very aggressive, maybe could have stayed in as well, with maybe 10/15% down right now, but now that I am out, will stay put until after elections. And will also see how things pan out after reopening of states.

You are really close to cutoff of even high rate, but fidelity has some mm funds with higher rates but minimum is 1mill maybe looking into those is good idea.

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