10 year anniversary of the beginning of the Great Recession

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Mr.BB
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10 year anniversary of the beginning of the Great Recession

Post by Mr.BB » Wed Oct 11, 2017 8:50 am

Last Monday/Tuesday marked the peaked of the 2003 Bull run which was followed by the Great Recession. It has been a long ten years and it's a good reminder to think back (with hindsight) of the financial decisions you made in 2008-2009. A 54% drop in the market can test anyone's resolve, and can really show you how you really feel about your long-term financial plans.
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Re: 10 year anniversary of the beginning of the Great Recession

Post by dumbbunny » Wed Oct 11, 2017 9:25 am

I was on a mission trip (off the grid) in Managua, Nicaragua for 10 days in October 2008. I was forced to stay the course. It was only when I got to airport on my flight back to the states that I found out what had happened. Ten years later, I am still staying the course.
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Re: 10 year anniversary of the beginning of the Great Recession

Post by Mr.BB » Wed Oct 11, 2017 9:32 am

+1 Sometimes it's better to be lucky then smart. :happy
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Re: 10 year anniversary of the beginning of the Great Recession

Post by Sandtrap » Wed Oct 11, 2017 10:15 am

This is why I'm very reluctant (even in retirement) to get completely out of R/E development and income property development. From the 70's to present, it's enabled me to weather many a financial storm. But everyone is different so it does not work for everyone. I just got lucky. :D
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Re: 10 year anniversary of the beginning of the Great Recession

Post by Phineas J. Whoopee » Wed Oct 11, 2017 6:26 pm

My present self is thankful to my younger self for strictly following my investment plan, including rebalancing all the way down and all the way back up.

No good result, however, was sure to happen.

PJW

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Re: 10 year anniversary of the beginning of the Great Recession

Post by 2Birds1Stone » Wed Oct 11, 2017 6:32 pm

My present self is thankful that 10 years ago I had $0 in assets, and $0 in liabilities.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by flyingaway » Wed Oct 11, 2017 6:55 pm

I remember that my wife came home every day and told me that we should get out of the market. I told her it's already too late. We did not do anything.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by bikechuck » Wed Oct 11, 2017 7:20 pm

At the time I was still working (just retired this year). I kept funding my retirement plan buying all the way down and all the way up investing in the same funds that I did pre-recession.

I was not very sophisticated so I did not re-balance. Doing nothing worked out very well and enabled me to retire this summer.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by pollifax » Wed Oct 11, 2017 7:32 pm

We were 100% equities but luckily with not a lot invested yet. We were dumb and just kept contributing the whole time. It eventually worked out, but then we wised up and started reading a lot about Bogle, and Buffett and started lurking on this forum. Now that we have a lot more invested, we are 60/40 and intend to stay the course through thick and thin.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by nodenuff2 » Wed Oct 11, 2017 10:18 pm

I was 58 and looking forward to a comfortable retirement. At the bottom I apologized to my wife for the 50% loss in my 401k and our Ira's. Had open heart surgery that following year but stayed the course 100 equity until I turned 62 then started on a glide path towards 50/40/10 . Market was very good to me . Stopped working at 64. That was 4 years ago.
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Re: 10 year anniversary of the beginning of the Great Recession

Post by tuningfork » Wed Oct 11, 2017 11:07 pm

I entered the Great Recession with a large exposure to stocks (close to 90%) and no emergency fund. Somewhere on the way to the bottom I converted a small amount of stocks to cash to jump start an emergency fund in case my job went away. Otherwise I kept my AA as it was, hung on for the ride, and continued monthly purchases in my 401k and taxable accounts as usual.

I had been "planning" (hoping, actually) to retire at 55 in 2013. Seeing my 401k balance go from 2 commas to 1 in 2008 caused me to push my planned retirement out to 2016. I re-balanced to a more conservative 65/35 sometime around 2011 consistent with someone who wanted to retire in 5 years. As it turned out, the recovery was so quick and strong I was able to achieve early retirement in 2013 according to my original plan.

If I had panicked and moved out of stocks or stopped my regular monthly investing, I would have missed much of the recovery and probably would have had to work a few more years. I was lucky to keep my job the whole time.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by CABob » Thu Oct 12, 2017 12:00 am

Sometimes procrastination works out just fine. I wasn't paying close attention and after I realized what was happening I just stood there. Two and a half years later all was fine with the world.
Bob

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Re: 10 year anniversary of the beginning of the Great Recession

Post by Doc » Thu Oct 12, 2017 8:08 am

Phineas J. Whoopee wrote:
Wed Oct 11, 2017 6:26 pm
My present self is thankful to my younger self for strictly following my investment plan, including rebalancing all the way down and all the way back up.

No good result, however, was sure to happen.

PJW
Sounds like only a very few of us were willing to rebalance into stocks in a falling market. Stay the course does not mean never do anything in my interpretation.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by meowcat » Thu Oct 12, 2017 1:42 pm

I made most of my money during the crash, I just didn't know it at the time.
More people should learn to tell their dollars where to go instead of asking them where they went. | -Roger Babson

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Re: 10 year anniversary of the beginning of the Great Recession

Post by Ricecakes » Thu Oct 12, 2017 5:38 pm

Followed good advice to DCA. Fund purchases were automatic each month debited from checking account. I remember being a little nervous and thinking: “I hope this works...”
Today I am very happy that I got to buy all those shares “on sale” :-)

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Re: 10 year anniversary of the beginning of the Great Recession

Post by MathWizard » Thu Oct 12, 2017 5:56 pm

nodenuff2 wrote:
Wed Oct 11, 2017 10:18 pm
I was 58 and looking forward to a comfortable retirement. At the bottom I apologized to my wife for the 50% loss in my 401k and our Ira's. Had open heart surgery that following year but stayed the course 100 equity until I turned 62 then started on a glide path towards 50/40/10 . Market was very good to me . Stopped working at 64. That was 4 years ago.
I increased my equity allocation to almost 100% during Oct 2008 to Apr 2009. I saw it as a buying opportunity.
I did not apologize to my wife.

She was more of a riverboat gambler than I. She decides her AA and I decide mine.
While I had 10% bonds going into 2008, and she was already all-in.

I have backed off to about 80/20, be she continues to be at 100%. She understands the long-term benefits, and
intends to be in the market for a long time. I'm just a little more cautious. My 20% bonds does represent about 3 years
of expenses, so if stocks really drop and I lose my job, the 20% does help me sleep at night.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by itstoomuch » Thu Oct 12, 2017 6:06 pm

nodenuff2 wrote:
Wed Oct 11, 2017 10:18 pm
I was 58 and looking forward to a comfortable retirement. At the bottom I apologized to my wife for the 50% loss in my 401k and our Ira's. Had open heart surgery that following year but stayed the course 100 equity until I turned 62 then started on a glide path towards 50/40/10 . Market was very good to me . Stopped working at 64. That was 4 years ago.
We too. -40% in a balanced portfolio of 60/40 by Nov 2008.
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Re: 10 year anniversary of the beginning of the Great Recession

Post by bligh » Thu Oct 12, 2017 6:36 pm

I wasn't a boglehead so I didn't fully capitalize on the buying opportunity. I do remember happily maxing out our 401Ks at the time and my wife asking me if that was wise. I remember my reply that this is precisely when you invest as much as possible.

One Regret I have is that my selection of mutual funds was quite random.. a totally uninformed choice based on what looked like a good diversified bunch of things to own.

Another regret is that my savings rate was not as good as it could have been. I was maxing out 401Ks but I could have been investing in taxable. Instead I kept a bunch of cash and indulged in Stock picking. Lost $10K on Wachovia. :oops:

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Re: 10 year anniversary of the beginning of the Great Recession

Post by DanMahowny » Thu Oct 12, 2017 6:50 pm

I lost my job at the same time. During the 1st 12 months of the Great Recession, I went 100% equities.

Been retired ever since.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by VictoriaF » Thu Oct 12, 2017 7:10 pm

In 2007, I became GS15, read The Black Swan, and attended my first national Bogleheads gathering. I was making more money, I was psychologically prepared for low-probability high-impact events, and I've met Bogleheads legends in person. These events have provided me with excellent defense against market calamities that followed. I was unnerved by losing a half of my equity holdings, but the Forum discussions were calming me down. My assets have declined, but I knew that I could work for as long as I wanted and accumulate as much as I needed. And The Black Swan was feeding my intellectual curiosity, taking my mind away from money to higher matters.

I have weathered 2008-2009 pretty well. After a few years, I was back on track for an early retirement. Coming to the Bogleheads events became a ritual. And black swans have evolved into antifragility and many other things.

What I would not say is that I've been tested by the Great Recession and now I am ready for anything. Far from it. I subscribe to Taleb's logic that just as in 2007 we thought of "the worst decline" as 25% and were unprepared for a 50% decline, today we think that 50% is the worst that could happen. We are oblivious to the Crisis of 2018 (or 2019, or something like that) featuring a 60% market decline.

I am very conservatively invested and sleep well at night, except when I take overnight flights in economy. Let it remain the worst of my problems.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by John151 » Thu Oct 12, 2017 10:16 pm

As a conservative investor in my sixties, I was 35% in stocks, and 65% in bonds, when the Great Recession hit. As the stock market tanked, I bought enough shares to keep my stocks at 35%. The fact that I had most of my investments in bonds helped me resist the temptation to sell.

Now that I’m in my seventies, I don’t know if I’d buy more shares during the next market meltdown. I might not be around long enough to enjoy the recovery.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by steve roy » Thu Oct 12, 2017 10:39 pm

By the time '08-'09 rolled around, I had learned enough not to panic and start shifting assets around. So I just rolled through the downturn, not touching anything, just gritting my teeth and trying not to cry myself to sleep every other night.

I retired the tail end of last year. My wife followed suit three months ago. We've accumulated enough that we should do fine for the next thirty years, but the anxiousness never completely leaves, because there's always SOMETHING out there to brood about. But as far as our personal finances and situation go, things are all green meadows and rainbows, and for that we thank the Vanguard stock and bond index funds, and Wellesley.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by lazyday » Fri Oct 13, 2017 3:45 am

VictoriaF wrote:
Thu Oct 12, 2017 7:10 pm
I subscribe to Taleb's logic that just as in 2007 we thought of "the worst decline" as 25% and were unprepared for a 50% decline, today we think that 50% is the worst that could happen. We are oblivious to the Crisis of 2018 (or 2019, or something like that) featuring a 60% market decline.
From the 1929 peak US large stocks lost 80% real.

Returning to the 1982 margin-adjusted CAPE would be more than enough to beat that.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by Call_Me_Op » Fri Oct 13, 2017 6:53 am

Speaking of the Great Recession, anybody know of a good book that covers what happened at the beginning?
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Re: 10 year anniversary of the beginning of the Great Recession

Post by nisiprius » Fri Oct 13, 2017 7:27 am

VictoriaF wrote:
Thu Oct 12, 2017 7:10 pm
...What I would not say is that I've been tested by the Great Recession and now I am ready for anything. Far from it. I subscribe to Taleb's logic that just as in 2007 we thought of "the worst decline" as 25% and were unprepared for a 50% decline, today we think that 50% is the worst that could happen. We are oblivious to the Crisis of 2018 (or 2019, or something like that) featuring a 60% market decline...
Indeed. The most dangerous thing about 2008-2009 is that now we think we know "how it goes." It's not just a question of the depth of the decline but also duration.

It is very important to remember that the actual "V-shaped recovery" we experienced was not a sure thing, and not even widely expected. There were widespread credible concerns about an "L-shaped recovery," and when the Dow--after springing from the 6000's to the 8000's--faltered in the 8000's in late 2009, there were a lot of people using language like "dead cat bounce" and "obvious value trap," and considerable fear that the market was about to crash again.

It's also important to remember that the Great Depression was not really the "7-year bear market" people sometimes say it was. 1935 and 1936 were fabulous years, and by many measures at year-end 1936 for a few months the market had just barely topped previous levels--only to crash again and stay down for another seven years. So you get misleading statements about the "average length of a bear market" because, due to a fluke, the Great Depression is counted as two back-to-back seven-or-eight-year bear markets instead of one fifteen-year bear market.

The recession is now almost far enough in the past that "10-year return" numbers will soon be measuring from near the bottom of the crash, and not from the pre-crash levels, and that will probably spur a wave of unjustified optimism about stocks. Indeed, I am already noticing that people concerned about the bull market having gone too high and too far seem to forget that from 2009 to about 2012, all the market was doing was climbing out of a hole it had fallen into.

Then, too, at ten years old we have now reached the stage where there is a noticeably cohort of people that I just regard as "adult"--not even "young adults"--who do not remember 2008-2009 in any personal way, just as I do not really remember the post-World-War-II inflation--I was alive when it was happening but I didn't even have an allowance!--or the 1987 crash, when I was certainly an adult but didn't have much "skin in the game." (My employer was paying money into a TIAA retirement account but I didn't pay any attention to it).
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Re: 10 year anniversary of the beginning of the Great Recession

Post by Top99% » Fri Oct 13, 2017 7:46 am

I was 46 and while in the end increasing our equity allocation helped us a lot I remember being dismayed with losing membership to the 2 comma club at the bottom. What I remember most was on a business trip in early 2009 the hotel and restaurants were nearly empty. I talked to some of the employees and they were all terribly apprehensive. I work in tech and the 2001 tech bubble crash was actually scarier from an employment perspective.
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Re: 10 year anniversary of the beginning of the Great Recession

Post by azanon » Fri Oct 13, 2017 7:48 am

One thing, though, that always helps me temper my fear of stock bear markets is to take a peek at a graph that depicts asset class real drawdowns over a very long term. Take a look at figure 9 here: http://mebfaber.com/2015/03/02/chapter- ... and-bills/ (you'll have to scroll down a bit).

So from that perspective, a cursory glance at that chart might reveal that bonds actually should scare you more than stocks.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by rkhusky » Fri Oct 13, 2017 7:57 am

I regret not knowing about tax loss harvesting, because I could have taken advantage of it. I rebalanced into stocks multiple times during the downturn because I didn't think the market could go any lower. So ever time the Dow dropped by a couple thousand, I rebalanced.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by Stormbringer » Fri Oct 13, 2017 10:45 am

Mr.BB wrote:
Wed Oct 11, 2017 8:50 am
Last Monday/Tuesday marked the peaked of the 2003 Bull run which was followed by the Great Recession. It has been a long ten years and it's a good reminder to think back (with hindsight) of the financial decisions you made in 2008-2009. A 54% drop in the market can test anyone's resolve, and can really show you how you really feel about your long-term financial plans.
The Great Recession rattled me.

One friend of mine lost his business and his house in bankruptcy. Another went from being a mid eight-figure multi-millionaire to being unable to help save his father's modest home from foreclosure and had to help move him into a trailer. Another lost his six-figure job and came within a few weeks of moving his family into the car and handing his home over to the bank. Fortunately, my tribulations were limited to Wells-Fargo yanking my HELOC in March of 2009, which I had long considered to being my emergency fund.

It did wake me up to the financial house of cards so many people have, and how unevenly these shocks affect people. I've spent the years since trying to build a "fortress balance sheet", and feel that I've made substantial progress towards that.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by 2015 » Fri Oct 13, 2017 10:50 am

rkhusky wrote:
Fri Oct 13, 2017 7:57 am
I regret not knowing about tax loss harvesting, because I could have taken advantage of it. I rebalanced into stocks multiple times during the downturn because I didn't think the market could go any lower. So ever time the Dow dropped by a couple thousand, I rebalanced.
Same. What a lost opportunity.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by Valuethinker » Fri Oct 13, 2017 11:57 am

Call_Me_Op wrote:
Fri Oct 13, 2017 6:53 am
Speaking of the Great Recession, anybody know of a good book that covers what happened at the beginning?
Roger lowenstein's The End of Wall Street. Good overview. Nouriel Roubini's book is a more technical overview (but not super tech). Then Alan Blinders book After the Music Stopped. I would read them in that order.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by Valuethinker » Fri Oct 13, 2017 12:01 pm

Call_Me_Op wrote:
Fri Oct 13, 2017 6:53 am
Speaking of the Great Recession, anybody know of a good book that covers what happened at the beginning?
I should add Michael Lewis The Big Short and also Boomerang. But read Lowenstein first.

The film of the big short and also Margin Call are good, too.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by Mr.BB » Fri Oct 13, 2017 12:53 pm

Call_Me_Op wrote:
Fri Oct 13, 2017 6:53 am
Speaking of the Great Recession, anybody know of a good book that covers what happened at the beginning?
Watch the movie "The Big Short"....GREAT movie, and it explains a lot!
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

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Re: 10 year anniversary of the beginning of the Great Recession

Post by Fallible » Fri Oct 13, 2017 1:09 pm

Valuethinker wrote:
Fri Oct 13, 2017 11:57 am
Call_Me_Op wrote:
Fri Oct 13, 2017 6:53 am
Speaking of the Great Recession, anybody know of a good book that covers what happened at the beginning?
Roger lowenstein's The End of Wall Street. Good overview. Nouriel Roubini's book is a more technical overview (but not super tech). Then Alan Blinders book After the Music Stopped. I would read them in that order.
Yes to Lowenstein's book first, in particular the chapter, "Great Recession," which was the best explanation I'd seen up to that point of what a credit crisis looks like, i.e., a lack of borrowers, about which the Fed could do little. He wrote that the willingness to borrow "rests on faith in the future. In its absence, economies stagnate." People and businesses were overleveraged from the bubble years, he wrote, and "they were uncertain that the future was worth borrowing for."

When you think about that - a future not worth borrowing for - you realize how close we were to financial meltdown.

Another good read is All the Devils Are Here, by Bethany McLean and Joe Nocera. Yet another (and there are many more) that focuses on Main Street is Bull by the Horns by Sheila Bair, then FDIC chairman and among those who saw a crisis coming early on.
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Re: 10 year anniversary of the beginning of the Great Recession

Post by Valuethinker » Sat Oct 14, 2017 6:30 am

Mr.BB wrote:
Fri Oct 13, 2017 12:53 pm
Call_Me_Op wrote:
Fri Oct 13, 2017 6:53 am
Speaking of the Great Recession, anybody know of a good book that covers what happened at the beginning?
Watch the movie "The Big Short"....GREAT movie, and it explains a lot!
The documentary "Inside Job" is also good (Matt Damon narrates). It has been criticized for its slant and for being unfair to some of its interviewees, but it is a good, and clear, movie.

Margin Call is the best depiction I have ever seen about life inside a financial institution (it's Lehman or Bear Sterns, it's never actually stated in the movie)- -the way people talk and act. The technology of CDO's & CDS' etc. is secondary to the film, whereas in The Big Short it is front and centre, and TBS is not the best explanation.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by iceport » Sat Oct 14, 2017 1:10 pm

Though I was deeply concerned by the Great Recession, enough that it probably affected my general outlook on life, I made it through relatively unscathed. The lowest portfolio balance (including new contributions) was about 34% below its prior all-time high. Within one year(!) of the late 2008 crash, the market rebound combined with ongoing contributions had carried my portfolio to a new all-time high. I was able to tax-loss harvest (actually a round trip back to the original fund after 30 days), I re-balanced in January 2009 80% of the way back to my target AA, and all new contributions went to equities until my target AA was fully restored.

Just out of curiosity, I've maintained a running measure of my overall portfolio return (XIRR) since the October 2007 market peak; the current (exactly 10-year) CAGR stands at 5.87%. (Note that the equity allocation transitioned from 70% to 56% over that time period.) That's not bad for a return spanning the Great Recession.

Looking back — a great idea, thanks to the OP for the topic — I attribute this personal success to many things.
  1. My AA at the time included a substantial 30% allocation to fixed income. Compared to the 5-10% fixed income I held for the dot.com bust, the additional ballast was a tremendous psychological benefit.
  2. As of July, 2008, I had implemented a properly diversified, low cost, 100% passive portfolio. Knowing my portfolio was well-designed and that manager risk had been virtually eliminated was another amazing source of confidence.
  3. Back then, I was a minimum of 10 years away from retirement, so I felt there was time to recover.
  4. Daily study of the Boglehead forum was another enormous source of confidence in staying the course. This forum was probably the main reason I was able to keep my emotions in check and focus on the objective implementation of a long term plan.
All that being said, I wholeheartedly agree with nisiprius' cautionary points. The practically "instantaneous" recovery of the Great Recession could easily lead to a false sense of security, even among those of us who were rattled at the time. The next recession may not be nearly as short-lived.
nisiprius wrote:
Fri Oct 13, 2017 7:27 am
The most dangerous thing about 2008-2009 is that now we think we know "how it goes." It's not just a question of the depth of the decline but also duration.

It is very important to remember that the actual "V-shaped recovery" we experienced was not a sure thing, and not even widely expected. There were widespread credible concerns about an "L-shaped recovery," and when the Dow--after springing from the 6000's to the 8000's--faltered in the 8000's in late 2009, there were a lot of people using language like "dead cat bounce" and "obvious value trap," and considerable fear that the market was about to crash again.
"Discipline matters more than allocation.” ─William Bernstein

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Re: 10 year anniversary of the beginning of the Great Recession

Post by Mr.BB » Sat Oct 14, 2017 1:43 pm

Valuethinker wrote:
Sat Oct 14, 2017 6:30 am
Mr.BB wrote:
Fri Oct 13, 2017 12:53 pm
Call_Me_Op wrote:
Fri Oct 13, 2017 6:53 am
Speaking of the Great Recession, anybody know of a good book that covers what happened at the beginning?
Watch the movie "The Big Short"....GREAT movie, and it explains a lot!
The documentary "Inside Job" is also good (Matt Damon narrates). It has been criticized for its slant and for being unfair to some of its interviewees, but it is a good, and clear, movie.

Margin Call is the best depiction I have ever seen about life inside a financial institution (it's Lehman or Bear Sterns, it's never actually stated in the movie)- -the way people talk and act. The technology of CDO's & CDS' etc. is secondary to the film, whereas in The Big Short it is front and centre, and TBS is not the best explanation.
One of my favorite documentary is about retirement and 401k savings,it is called the Retirement Gamble. It was on PBS. Here is the direct link. Well worth an hour of your time. ENJOY!
http://www.pbs.org/wgbh/frontline/film/ ... nt-gamble/
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

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Re: 10 year anniversary of the beginning of the Great Recession

Post by VictoriaF » Sat Oct 14, 2017 2:32 pm

Mr.BB wrote:
Fri Oct 13, 2017 12:53 pm
Call_Me_Op wrote:
Fri Oct 13, 2017 6:53 am
Speaking of the Great Recession, anybody know of a good book that covers what happened at the beginning?
Watch the movie "The Big Short"....GREAT movie, and it explains a lot!
I have not watched the film "The Big Short;" I've read the book. In general, I think you can learn more from a book than from a film. Films tend to reduce the theoretical part (alternatives, descriptions, analyses, decision making) and have fast dialogs from which it may be difficult to discern what the terminology really means and how people are using new financial instruments.

Victoria
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jebmke
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Re: 10 year anniversary of the beginning of the Great Recession

Post by jebmke » Sat Oct 14, 2017 2:39 pm

VictoriaF wrote:
Sat Oct 14, 2017 2:32 pm
Mr.BB wrote:
Fri Oct 13, 2017 12:53 pm
Call_Me_Op wrote:
Fri Oct 13, 2017 6:53 am
Speaking of the Great Recession, anybody know of a good book that covers what happened at the beginning?
Watch the movie "The Big Short"....GREAT movie, and it explains a lot!
I have not watched the film "The Big Short;" I've read the book. In general, I think you can learn more from a book than from a film. Films tend to reduce the theoretical part (alternatives, descriptions, analyses, decision making) and have fast dialogs from which it may be difficult to discern what the terminology really means and how people are using new financial instruments.

Victoria
Given the complexity of the topic, I think they did a reasonable job with the film. I agree thought that to get all the nuance of the technical issues you have to read the book.

The Big Short really only covers the time immediately leading up to the crisis and the collapse. "All the Devils Are Here" is also a good read and starts much earlier and covers some of the decisions made much earlier that built on the derivatives mess.
When you discover that you are riding a dead horse, the best strategy is to dismount.

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Garco
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Re: 10 year anniversary of the beginning of the Great Recession

Post by Garco » Sat Oct 14, 2017 3:44 pm

October 2008 was when I concluded that I shouldn't pursue early retirement. There were other reasons as well, such as that my daughter decided it was better for her to go back to school (for an MBA) for a couple of years than to muddle through the economy. I ended up footing much of the bill for that. But she has done great things since having that degree.

Now that I am actually retired, I'm not nearly as vulnerable to a 2008-like event as I was then (though I'm a lot older and also wouldn't have the same work option now as I did then). The next crash is unlikely to be just like that last one. But I'm also less exposed now than I was then.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by Dottie57 » Sat Oct 14, 2017 3:47 pm

jebmke wrote:
Sat Oct 14, 2017 2:39 pm
VictoriaF wrote:
Sat Oct 14, 2017 2:32 pm
Mr.BB wrote:
Fri Oct 13, 2017 12:53 pm
Call_Me_Op wrote:
Fri Oct 13, 2017 6:53 am
Speaking of the Great Recession, anybody know of a good book that covers what happened at the beginning?
Watch the movie "The Big Short"....GREAT movie, and it explains a lot!
I have not watched the film "The Big Short;" I've read the book. In general, I think you can learn more from a book than from a film. Films tend to reduce the theoretical part (alternatives, descriptions, analyses, decision making) and have fast dialogs from which it may be difficult to discern what the terminology really means and how people are using new financial instruments.

Victoria
Given the complexity of the topic, I think they did a reasonable job with the film. I agree thought that to get all the nuance of the technical issues you have to read the book.

The Big Short really only covers the time immediately leading up to the crisis and the collapse. "All the Devils Are Here" is also a good read and starts much earlier and covers some of the decisions made much earlier that built on the derivatives mess.

Thanks for the info. I really want to understand the situation more.

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Re: 10 year anniversary of the beginning of the Great Recession

Post by Call_Me_Op » Sat Oct 14, 2017 4:46 pm

Mr.BB wrote:
Fri Oct 13, 2017 12:53 pm
Call_Me_Op wrote:
Fri Oct 13, 2017 6:53 am
Speaking of the Great Recession, anybody know of a good book that covers what happened at the beginning?
Watch the movie "The Big Short"....GREAT movie, and it explains a lot!
Thanks guys.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

David Scubadiver
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Re: 10 year anniversary of the beginning of the Great Recession

Post by David Scubadiver » Sat Oct 14, 2017 6:12 pm

Phineas J. Whoopee wrote:
Wed Oct 11, 2017 6:26 pm
My present self is thankful to my younger self for strictly following my investment plan, including rebalancing all the way down and all the way back up.

No good result, however, was sure to happen.

PJW
My present self thanks my younger self for keeping things simple and having no need to rebalance. I am, however, extremely thankful that I did not lose my job during that tumultuous period because it allowed me to throw good money after bad into the furnace that was the market!

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Re: 10 year anniversary of the beginning of the Great Recession

Post by badbreath » Sat Oct 14, 2017 6:41 pm

I do remember the 08-09 time but I was so busy at work that I remember looking at my statements saying that's not good and did nothing but keep on working and investing.

At the time I was 100% S&P 500 and keep on investing in that trough the low and the run up till about 2014 when I put some bonds in the fund. It seemed to worked out even though ignorance of the market.
“While money can’t buy happiness, it certainly lets you choose your own form of misery.” Groucho Marx

richardglm
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Re: 10 year anniversary of the beginning of the Great Recession

Post by richardglm » Sat Oct 14, 2017 7:44 pm

I also want to congratulate all the people who, having stayed the course in 2009, didn't pull all of their money out of equities in 2011 when the market made them whole again. It would have been very easy to say "I made it out from the Great Recession with no losses. I'm not going to risk it again." Or to not put new money in, being afraid that you'd missed the rally.

And again in 2012, 2013, 2014, 2015, 2016, and 2017. There was (and is) a lot of noise about the value of the market and many "crises." But pulling out would have lost opportunity.

Mr.BB
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Re: 10 year anniversary of the beginning of the Great Recession

Post by Mr.BB » Sat Oct 14, 2017 7:46 pm

jebmke wrote:
Sat Oct 14, 2017 2:39 pm
VictoriaF wrote:
Sat Oct 14, 2017 2:32 pm
Mr.BB wrote:
Fri Oct 13, 2017 12:53 pm
Call_Me_Op wrote:
Fri Oct 13, 2017 6:53 am
Speaking of the Great Recession, anybody know of a good book that covers what happened at the beginning?
Watch the movie "The Big Short"....GREAT movie, and it explains a lot!
I have not watched the film "The Big Short;" I've read the book. In general, I think you can learn more from a book than from a film. Films tend to reduce the theoretical part (alternatives, descriptions, analyses, decision making) and have fast dialogs from which it may be difficult to discern what the terminology really means and how people are using new financial instruments.

Victoria
Given the complexity of the topic, I think they did a reasonable job with the film. I agree thought that to get all the nuance of the technical issues you have to read the book.

The Big Short really only covers the time immediately leading up to the crisis and the collapse. "All the Devils Are Here" is also a good read and starts much earlier and covers some of the decisions made much earlier that built on the derivatives mess.
I agree Victoria that books will usually give you way more detail and analysis. For the average person who does not care to try to understand all the technical parts of the markets, it really does do a great job explaining things. I think you would enjoy watching it, if nothing else but as an entertaining movie.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

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