What did you learn from 2018 in the markets?

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carol-brennan
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What did you learn from 2018 in the markets?

Post by carol-brennan » Sun Jan 27, 2019 8:01 am

One interesting aspect of the human condition is that we all draw different conclusions from the same experience, yet we can probably learn something from everyone else's interpretation of what they went through.

With that preamble, what did you learn from the market in 2018?

Here are my takeaways:

1. Market timing may be foolish, but you can have a better chance of success if you do not follow the herd but instead recognize when averages are extremely above or below historical figures. It was really tough to step aside during the runups in late 2017/early 2018, but doing so allowed me to come out with a gain in 2018 rather than a loss. Can I repeat this? Doubtful, but what I learned is that you do have to tune out the noise (positive or negative) and acknowledge actual data that aligns with your gut.

2. Be fearful when others are greedy. Did someone say that already? ;)

3. When in doubt, make sure your asset allocation aligns with your risk tolerance.

4. Know your risk true risk tolerance. Base that knowledge on past experience with your behavior in up and down markets. If you don't have much experience, you'll probably pay for lack of it at some point.

Your personal lessons?

Dandy
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Re: What did you learn from 2018 in the markets?

Post by Dandy » Sun Jan 27, 2019 8:27 am

Just reinforced that risk is in dollars not percentages and that a long bull market tends to dull the dollars at risk perception. Periodically, you need a reminder that your equity dollars can decline 50% several times in your investment lifetime. You can "know" this but still not fully appreciate it. Also, how a sudden deep decline feels different in retirement vs in the accumulation stage.

Rus In Urbe
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Re: What did you learn from 2018 in the markets?

Post by Rus In Urbe » Sun Jan 27, 2019 8:36 am

I have always been an aggressive investor and that has paid off for me. I contribute regularly, don't market-time, and STC, all the Boglehead stuff. We made it through the Great Recession by continuing to invest regularly. On fairly modest teaching salaries, we've amassed 28x expenses (over and above primary RE).

In 2018, I found myself two years before retirement.

Our overall position is that, in retirement, my SO's RMDs and SS will almost cover our basics until my own RMDs kick in in another five years. But we want to do some traveling in the next five years while we can. For that we need a little more cash and I don't want to be fretting about the market ups and downs. So every time the 2017-8 market "felt" high, and I spotted a tasty CD (2.5-3.4%), I scrapped off another 20k or 40k and tucked it away into a CD. I've never been one to go on "feelings," or to market time, but that's what I did. The CD ladder I built eventually constituted about 7% of our net worth, so it put us in a slightly more conservative position overall. (We still hold aggressive funds that are balanced by other conservative ones).

Now I'm 10 months away from retirement. The roiling of the market hasn't disturbed me at all!

Sure, market declines feel different in retirement than in the accumulation phase, as @Dandy points out above. But even if markets tank, dividends will continue to buy equities at a discount. I have a solid plan going forward and in my own little way, I've found a path that works for me. We have enough.

I'm sure there are others who could have made more money on the money we have. But....

What I learned in 2018? :mrgreen: After all these years, I know what I'm doing. :beer
I'd like to live as a poor man with lots of money. ~Pablo Picasso

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Toons
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Re: What did you learn from 2018 in the markets?

Post by Toons » Sun Jan 27, 2019 8:44 am

Nothing new under the sun.
Business as usual.

:happy
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mancich
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Re: What did you learn from 2018 in the markets?

Post by mancich » Sun Jan 27, 2019 8:45 am

Not a lot. Just to make sure you have an AA you are comfortable with so you don't do something dumb when the volatility spikes.

GuySmiley
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Re: What did you learn from 2018 in the markets?

Post by GuySmiley » Sun Jan 27, 2019 8:46 am

My main lesson in 2018 was learning about Bogleheads! I learned that my wife is more risk-averse than I realized, and I learned a little about bonds and asset allocation. All good things to know.

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Tycoon
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Re: What did you learn from 2018 in the markets?

Post by Tycoon » Sun Jan 27, 2019 8:46 am

That investors still resemble a large school of fish darting back and forth, driven by the whims of emotion. Or more accurate, a herd of sheep being driven by sheep dogs.
Emotionless, prognostication free investing. Ignoring the noise and economists since 1979. Getting rich off of "smart people's" behavioral mistakes.

Tdubs
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Re: What did you learn from 2018 in the markets?

Post by Tdubs » Sun Jan 27, 2019 8:53 am

In 2017, I was about 95% in the market and paid no attention to my investments, but I could see the fence--about 7 years from retirement. I looked online for advice and found BH. I realized my risk, rebalanced to about 60/40, and I'm very glad I did.

So in 2018, I learned what BHers have known all along.

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Cyclesafe
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Re: What did you learn from 2018 in the markets?

Post by Cyclesafe » Sun Jan 27, 2019 8:57 am

I'd second the concept that dollars at risk, perhaps expressed as multiples of obligations, is a better measure of risk than percentages. I also realized that whatever the market does in the short term, its impact on the longer term when I actually need to cash out, is probably minimal - if I continue to believe that equities will continue to trend upwards. I came to these conclusions in 2018 and feel much better for them. Ignore the noise!
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staythecourse
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Re: What did you learn from 2018 in the markets?

Post by staythecourse » Sun Jan 27, 2019 9:03 am

carol-brennan wrote:
Sun Jan 27, 2019 8:01 am
Doubtful, but what I learned is that you do have to tune out the noise (positive or negative) and acknowledge actual data that aligns with your gut.
Again it reinforces that folks in good times and bad confuse luck with skill. Please read the BHB and BSB studies and see if you are superior to the 100 top pension fund managers in the world since their market timing ended up with a negative alpha OR was it just dumb luck.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

livesoft
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Re: What did you learn from 2018 in the markets?

Post by livesoft » Sun Jan 27, 2019 9:07 am

I learned that behavioral finance traps were alive and well at Bogleheads.org in 2018 just like in past years and probably in future years.
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Tdubs
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Re: What did you learn from 2018 in the markets?

Post by Tdubs » Sun Jan 27, 2019 9:10 am

livesoft wrote:
Sun Jan 27, 2019 9:07 am
I learned that behavioral finance traps were alive and well at Bogleheads.org in 2018 just like in past years and probably in future years.
Elaborate?

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Top99%
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Re: What did you learn from 2018 in the markets?

Post by Top99% » Sun Jan 27, 2019 9:40 am

I learned the stock market can be somewhat decoupled from economic fundamentals. I guess I sort of knew that already but 2018 was the first time I saw it in action.
Adapt or perish

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Ice-9
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Re: What did you learn from 2018 in the markets?

Post by Ice-9 » Sun Jan 27, 2019 11:31 am

I learned that I apparently learned a lot from 2008-9. The markets in the latter part of 2018 weren't fun or anything, but didn't really register as much of a shock for me as all of the buzz I was reading on the internet about it.

Stay the course. It can get way worse than 2018.

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Kenkat
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Re: What did you learn from 2018 in the markets?

Post by Kenkat » Sun Jan 27, 2019 11:41 am

I learned:

That's life (that's life), that's what all the people say
You're ridin' high in April, shot down in May
But I know I'm gonna change that tune
When I'm back on top, back on top in June

— Frank Sinatra (Dean Kay/Kelly Gordon)

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travelogue
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Re: What did you learn from 2018 in the markets?

Post by travelogue » Sun Jan 27, 2019 11:50 am

Some years are frustrating. The markets are unpredictable.

Even if you time the market correctly on one side (reduce equity exposure, e.g.) it's maddeningly hard and emotionally taxing to decide when to reverse course (increase equity exposure, e.g.).

Savings rate is critical. Control expenses.

Pay down debt.

Have a long term focus and stay the course.

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Nate79
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Re: What did you learn from 2018 in the markets?

Post by Nate79 » Sun Jan 27, 2019 12:10 pm

I learned that like in the past, novice investors are frightened at the smallest decline. 2018 was a minor blimp.

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travelogue
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Re: What did you learn from 2018 in the markets?

Post by travelogue » Sun Jan 27, 2019 12:13 pm

Nate79 wrote:
Sun Jan 27, 2019 12:10 pm
2018 was a minor blimp.
As opposed to a Total Hindenburg :P

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willthrill81
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Re: What did you learn from 2018 in the markets?

Post by willthrill81 » Sun Jan 27, 2019 12:16 pm

My risk tolerance is indeed high; I thought that it was beforehand.

"A year in the market is just noise."
- Paul Merriman

I knew this already, but 2018 demonstrated that just because asset classes like stocks and bonds are historically uncorrelated (basically), this does not mean that both can't go down (or up) at the same time. There weren't many places to 'hide' in 2018.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

H-Town
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Re: What did you learn from 2018 in the markets?

Post by H-Town » Sun Jan 27, 2019 12:18 pm

carol-brennan wrote:
Sun Jan 27, 2019 8:01 am
1. Market timing may be foolish, but ...

Your personal lessons?
1) People still try to market timing and still find ways to justify why they do it. There's always "but" after "market timing is foolish".

2) People still tinker with their portfolio on the quest of maximizing return or minimizing loss (or both). They play with their portfolio to find a perfect mix of international stock & U.S. stock, stock & bonds, real estates & cryptocurrencies, etc. They might need a daily reminder that some who set-it-and-forget-it will likely end up with a bigger return.

3) Many people still don't know how to TLH, afraid of TLH, or for some reasons keep asking questions without trying it out themselves... Why don't they pay Wealthfront or Betterment to do it for them? You either observe how roboadvisor do it for you a couple of times and learn from it, or just let the roboadvisor do it for it.

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bengal22
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Re: What did you learn from 2018 in the markets?

Post by bengal22 » Sun Jan 27, 2019 12:26 pm

Agree with the "nothing new under the sun" Solomon quote.
Relearned that day to day market gyrations have absolutely no impact on my day to day living.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley

LeisureLee
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Re: What did you learn from 2018 in the markets?

Post by LeisureLee » Sun Jan 27, 2019 12:43 pm

I learned that the markets are sometimes only open for half days when I tried to buy on December 24th just before 1pm Pacific time. :/ I also learned that I should take the tax hit to rebalance once in a while, and not just redirect new investments (been buying almost exclusively bonds this year trying to get back toward target AA). It also appears that each year I'm a little less intimidated by the usual fluctuations, which is good. =)

sf_tech_saver
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Re: What did you learn from 2018 in the markets?

Post by sf_tech_saver » Sun Jan 27, 2019 1:00 pm

I learned to love a 50/50 after-tax portfolio!

At 40 my primary challenge is to continue a high savings/earning rate in a high cost of living environment. When the company I worked at finally had its IPO in 2018 I was terrified of starting to invest at what felt like a potentially 'high' water mark environment. As my lock up day approached every article was about "never been a bull market that lasted this long!" It was frankly daunting to go from the tax-free autopilot of Vanguard 2045 investing in 401k the last 5 years to material after tax investing..... :shock:

In some ways I got very lucky, the first October correction correlated with the week my first sales settled. After reading far too many Bogleheads posts and getting great advice I settled on a DCA into a 50/50 AA.

Is holding target 2045 in 401k and 50/50 VTI/CA-MBonds technically correct? No, its not. But it got me incredibly comfortable with piling every extra penny I can into it and my overall savings rate is 80% (per Wealthfront which I maintain a small account in for the dashboard). Buying 50/50 gives me extreme confidence as I'm simultaneously increasing my stable monthly income, as well as my long term upside.

I've further gamed my own emotions by mentally bucketing any savings from income into my bond growth (buying income with income) and equity compensation into VTI (equity for equity).

The magic of this portfolio for me is how excited I am to save. Despite a turbulent market I've divorced myself from the day to day results and am putting a focus on earning and saving more with the right AA for me.

I plan to rebalance every November on the anniversary of the start of this portfolio. If it grows large enough over time I may allow the equity portion to eventually run to 60-70% at most.
VTI is a modern marvel

2015
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Re: What did you learn from 2018 in the markets?

Post by 2015 » Sun Jan 27, 2019 1:19 pm

It is never wise to keep one's head buried in the sand of investing. The most clever portfolio and investing strategy in the world won't help when the rest of the complex adaptive system you live in starts acting up (i.e., you lose your job and it suddenly seems as if there are no jobs to be had).

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Re: What did you learn from 2018 in the markets?

Post by pasadena » Sun Jan 27, 2019 1:37 pm

I learned that the decisions I made a few years ago regarding my AA were good. I am comfortable with where it is, even in a (admittedly very short - so far) market downturn.

My reactions ranged from "meh" to "please keep going down, I have a big chunk of cash coming your way in January". I watched the markets with mild interest and a good bit of curiosity.

I also learned how to TLH.

livesoft
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Re: What did you learn from 2018 in the markets?

Post by livesoft » Sun Jan 27, 2019 1:54 pm

Tdubs wrote:
Sun Jan 27, 2019 9:10 am
livesoft wrote:
Sun Jan 27, 2019 9:07 am
I learned that behavioral finance traps were alive and well at Bogleheads.org in 2018 just like in past years and probably in future years.
Elaborate?
Take a look at https://www.bogleheads.org/wiki/Behavioral_pitfalls for a list of pitfalls.

We could create a Behavioral Pitfalls BINGO game card where players fill out squares with links to posts at Bogleheads.org that demonstrate a pitfall. A game could be played every week. The winner is the first person to post a verified 5-in-a-row game card that did not include their own posts.
Wiki This signature message sponsored by sscritic: Learn to fish.

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arcticpineapplecorp.
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Re: What did you learn from 2018 in the markets?

Post by arcticpineapplecorp. » Sun Jan 27, 2019 1:59 pm

nothing I didn't know already, but many people either forget or never really knew--that is, that markets have on average fallen by around 14% in any point in a year, but despite these intrayear losses, markets can still go up more than they go down. The takeaway is don't focus on the short term. Investing is a marathon, not a sprint.

Image

source:
https://am.jpmorgan.com/blob-gim/138340 ... cale=en_US
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oldzey
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Re: What did you learn from 2018 in the markets?

Post by oldzey » Sun Jan 27, 2019 2:06 pm

I learned (while away on my first sabbatical from academia this fall) that I am human, as it was very difficult to resist tinkering with my portfolio.

During my next sabbatical (or retirement in 15-20 years), I will have to focus less on the market noise and focus more on "Staying The Course."

I did have a lot of fun TLH ETFs, though. :twisted:
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

pdavi21
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Re: What did you learn from 2018 in the markets?

Post by pdavi21 » Sun Jan 27, 2019 2:20 pm

You can't learn anything from the "markets". You can learn more from toothless Joe, your friendly neighborhood meth addict.
"We spend a great deal of time studying history, which, let's face it, is mostly the history of stupidity." -Stephen Hawking

Dave111
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Re: What did you learn from 2018 in the markets?

Post by Dave111 » Sun Jan 27, 2019 4:21 pm

Just another year, small investment loss, small gain in net worth. A year that will be easily forgotten before too long.

marcopolo
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Re: What did you learn from 2018 in the markets?

Post by marcopolo » Sun Jan 27, 2019 4:41 pm

carol-brennan wrote:
Sun Jan 27, 2019 8:01 am
One interesting aspect of the human condition is that we all draw different conclusions from the same experience, yet we can probably learn something from everyone else's interpretation of what they went through.

With that preamble, what did you learn from the market in 2018?

Here are my takeaways:

1. Market timing may be foolish, but you can have a better chance of success if you do not follow the herd but instead recognize when averages are extremely above or below historical figures. It was really tough to step aside during the runups in late 2017/early 2018, but doing so allowed me to come out with a gain in 2018 rather than a loss. Can I repeat this? Doubtful, but what I learned is that you do have to tune out the noise (positive or negative) and acknowledge actual data that aligns with your gut.

I am not sure about this one. The historical record of people being able reliably profit from "actual data that aligns with your gut" has not been particularly good. It is not clear if it is the data or the gut that leads one astray.

Are you sure you are drawing the right conclusion from a one-time right call?
Once in a while you get shown the light, in the strangest of places if you look at it right.

minimalistmarc
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Re: What did you learn from 2018 in the markets?

Post by minimalistmarc » Sun Jan 27, 2019 4:47 pm

I confirmed my high risk tolerance.
I loved being 100% equities all world and just feeding it come what may.
I have a dark side and was hoping for a mega crash for 5 years to accumulate.

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Will do good
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Re: What did you learn from 2018 in the markets?

Post by Will do good » Sun Jan 27, 2019 5:28 pm

arcticpineapplecorp. wrote:
Sun Jan 27, 2019 1:59 pm
nothing I didn't know already, but many people either forget or never really knew--that is, that markets have on average fallen by around 14% in any point in a year, but despite these intrayear losses, markets can still go up more than they go down. The takeaway is don't focus on the short term. Investing is a marathon, not a sprint.

Image

source:
https://am.jpmorgan.com/blob-gim/138340 ... cale=en_US
Downloaded this chart as a reminder, thank you!

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Nate79
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Re: What did you learn from 2018 in the markets?

Post by Nate79 » Sun Jan 27, 2019 5:33 pm

2018 wasn't even bad so I don't even know why there is a thread about it.

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Re: What did you learn from 2018 in the markets?

Post by KlangFool » Sun Jan 27, 2019 5:34 pm

staythecourse wrote:
Sun Jan 27, 2019 9:03 am
carol-brennan wrote:
Sun Jan 27, 2019 8:01 am
Doubtful, but what I learned is that you do have to tune out the noise (positive or negative) and acknowledge actual data that aligns with your gut.
Again it reinforces that folks in good times and bad confuse luck with skill. Please read the BHB and BSB studies and see if you are superior to the 100 top pension fund managers in the world since their market timing ended up with a negative alpha OR was it just dumb luck.

Good luck.
+1,000.

KlangFool

Independent George
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Re: What did you learn from 2018 in the markets?

Post by Independent George » Sun Jan 27, 2019 5:40 pm

The most important thing I learned is that any paper losses in your tax deferred accounts are far less important than your paycheck. As long as you are still employed, it's really not difficult to stick to ride out the market swings. If you are laid off, things start to look very different.

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Re: What did you learn from 2018 in the markets?

Post by Trader Joe » Sun Jan 27, 2019 5:42 pm

carol-brennan wrote:
Sun Jan 27, 2019 8:01 am
One interesting aspect of the human condition is that we all draw different conclusions from the same experience, yet we can probably learn something from everyone else's interpretation of what they went through.

With that preamble, what did you learn from the market in 2018?

Here are my takeaways:

1. Market timing may be foolish, but you can have a better chance of success if you do not follow the herd but instead recognize when averages are extremely above or below historical figures. It was really tough to step aside during the runups in late 2017/early 2018, but doing so allowed me to come out with a gain in 2018 rather than a loss. Can I repeat this? Doubtful, but what I learned is that you do have to tune out the noise (positive or negative) and acknowledge actual data that aligns with your gut.

2. Be fearful when others are greedy. Did someone say that already? ;)

3. When in doubt, make sure your asset allocation aligns with your risk tolerance.

4. Know your risk true risk tolerance. Base that knowledge on past experience with your behavior in up and down markets. If you don't have much experience, you'll probably pay for lack of it at some point.

Your personal lessons?
No personal lessons learned. 2018 was just another year.

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Re: What did you learn from 2018 in the markets?

Post by bikechuck » Sun Jan 27, 2019 5:55 pm

I learned to be grateful for historical accidents and for diversification.

I worked for an employer for 27 years that used TIAA for our retirement plan before they foolishly moved to another provider. Fortunately I was able to leave what I had at TIAA and overtime I concentrated my holdings in "TIAA Traditional" and "TIAA Real Estate". They returned 4.0% and 4.6% respectively in 2018 in a year when my stock and bond funds lost money.

I worked for McDonald's in the 1980s and while I began whittling my holdings in their stock down when I retired in 2017 (waiting to take advantage of the NUA tax provisions), I still had a fair amount of their stock in 2018 and it too had a good year when my stock and bond funds lost money.

Approx 40 years ago I had a year when I was able to fund an IRA with $2,500 during years when my wife had dropped out of the work force and we were stretching one income over a family of four. Not knowing what I was doing I let a bank invest it in a fixed annuity. Approx five years ago my TIAA adviser noticed that it was paying 4.5% and he encouraged me to call and learn more about it. I learned that it pays a guaranteed minimum 4.5%, that I can add money to it which also earns a guaranteed minimum 4.5%. I am past a waiting period so I can withdraw money from it at any time and I can pass it along to me heirs. I added money to it a couple of years ago so it too had a positive return in 2018.

I wish I could say that all of the above worked out due to my skills and ability as an investor but that would be a bald faced lie. I was simply blessed by a series of historical accidents and they all helped cushion me in a down year.

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Re: What did you learn from 2018 in the markets?

Post by Tdubs » Sun Jan 27, 2019 6:01 pm

bikechuck wrote:
Sun Jan 27, 2019 5:55 pm
I learned to be grateful for historical accidents and for diversification.

I worked for an employer for 27 years that used TIAA for our retirement plan before they foolishly moved to another provider. Fortunately I was able to leave what I had at TIAA and overtime I concentrated my holdings in "TIAA Traditional" and "TIAA Real Estate". They returned 4.0% and 4.6% respectively in 2018 in a year when my stock and bond funds lost money.
Did the same. My best choices this year.

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Re: What did you learn from 2018 in the markets?

Post by Phineas J. Whoopee » Sun Jan 27, 2019 6:04 pm

willthrill81 wrote:
Sun Jan 27, 2019 12:16 pm
...
I knew this already, but 2018 demonstrated that just because asset classes like stocks and bonds are historically uncorrelated (basically), this does not mean that both can't go down (or up) at the same time. There weren't many places to 'hide' in 2018.
Indeed. That's the very definition of being uncorrelated.

PJW

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JoeRetire
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Re: What did you learn from 2018 in the markets?

Post by JoeRetire » Sun Jan 27, 2019 6:07 pm

carol-brennan wrote:
Sun Jan 27, 2019 8:01 am
Your personal lessons?
I learned nothing new in 2018.

As far as I can tell, nothing really new occurred. Been there, done that, currently using the t-shirt to wipe down my car.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.

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Davinci
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Re: What did you learn from 2018 in the markets?

Post by Davinci » Sun Jan 27, 2019 6:16 pm

Take a look at https://www.bogleheads.org/wiki/Behavioral_pitfalls for a list of pitfalls.

We could create a Behavioral Pitfalls BINGO game card where players fill out squares with links to posts at Bogleheads.org that demonstrate a pitfall. A game could be played every week. The winner is the first person to post a verified 5-in-a-row game card that did not include their own posts.
Great insight and comments livesoft! We certainly so a lot of pitfalls in 2018. For example on heard behavior, we saw a lot of threads of 100% equities and overconfidence increasing to 100% equities during bull periods earlier in the year. Once the market started to drop to bear those disappeared and we started to see more on 60/40 allocation.
" Simplicity is the ultimate sophistication" Leonardo Da Vinci.

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Re: What did you learn from 2018 in the markets?

Post by willthrill81 » Sun Jan 27, 2019 6:19 pm

Phineas J. Whoopee wrote:
Sun Jan 27, 2019 6:04 pm
willthrill81 wrote:
Sun Jan 27, 2019 12:16 pm
...
I knew this already, but 2018 demonstrated that just because asset classes like stocks and bonds are historically uncorrelated (basically), this does not mean that both can't go down (or up) at the same time. There weren't many places to 'hide' in 2018.
Indeed. That's the very definition of being uncorrelated.

PJW
And yet it still seemed to catch some people off guard that both TSM and TBM had real losses for the year.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

Shamb3
Posts: 76
Joined: Mon Apr 09, 2018 8:58 pm

Re: What did you learn from 2018 in the markets?

Post by Shamb3 » Sun Jan 27, 2019 6:19 pm

I learned that I better go get that gold medallion signature to automate my taxable investing at vanguard.
I had most of the taxable money I was planning to invest still in my bank account in December.
I got excited and made my buy order through TD Ameritrade on the 22nd and got lucky it went through on the 24th.

So instead of relying on me to do it, or getting extremely lucky, I better automate it.

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Phineas J. Whoopee
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Joined: Sun Dec 18, 2011 6:18 pm

Re: What did you learn from 2018 in the markets?

Post by Phineas J. Whoopee » Sun Jan 27, 2019 6:23 pm

willthrill81 wrote:
Sun Jan 27, 2019 6:19 pm
Phineas J. Whoopee wrote:
Sun Jan 27, 2019 6:04 pm
willthrill81 wrote:
Sun Jan 27, 2019 12:16 pm
...
I knew this already, but 2018 demonstrated that just because asset classes like stocks and bonds are historically uncorrelated (basically), this does not mean that both can't go down (or up) at the same time. There weren't many places to 'hide' in 2018.
Indeed. That's the very definition of being uncorrelated.

PJW
And yet it still seemed to catch some people off guard that both TSM and TBM had real losses for the year.
That is also true. There's this fiction out there that bonds and stocks are negatively correlated, combined with a lack of understanding, at least in terms of correlation, that zero is neither a positive nor a negative number.

PJW

samsdad
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Re: What did you learn from 2018 in the markets?

Post by samsdad » Sun Jan 27, 2019 6:45 pm

I learned to not buy the dip.

I learned to automate and ignore.

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rh00p
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Re: What did you learn from 2018 in the markets?

Post by rh00p » Sun Jan 27, 2019 10:26 pm

I learned not to watch CNBC. Again.
Preparing for the worst. Hoping for the best.

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oldzey
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Location: Land of Lincoln

Re: What did you learn from 2018 in the markets?

Post by oldzey » Sun Jan 27, 2019 10:47 pm

rh00p wrote:
Sun Jan 27, 2019 10:26 pm
I learned not to watch CNBC. Again.
+1

Same goes for Yahoo Finance.
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

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TheTimeLord
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Re: What did you learn from 2018 in the markets?

Post by TheTimeLord » Sun Jan 27, 2019 10:56 pm

livesoft wrote:
Sun Jan 27, 2019 1:54 pm
Tdubs wrote:
Sun Jan 27, 2019 9:10 am
livesoft wrote:
Sun Jan 27, 2019 9:07 am
I learned that behavioral finance traps were alive and well at Bogleheads.org in 2018 just like in past years and probably in future years.
Elaborate?
Take a look at https://www.bogleheads.org/wiki/Behavioral_pitfalls for a list of pitfalls.

We could create a Behavioral Pitfalls BINGO game card where players fill out squares with links to posts at Bogleheads.org that demonstrate a pitfall. A game could be played every week. The winner is the first person to post a verified 5-in-a-row game card that did not include their own posts.
And risk destroying the contrarian indictor that is the Bogleheads forum. That could be costly.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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TheTimeLord
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Re: What did you learn from 2018 in the markets?

Post by TheTimeLord » Sun Jan 27, 2019 10:59 pm

People love to act they calm while whistling in a graveyard.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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