What did you learn from 2018 in the markets?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Topic Author
carol-brennan
Posts: 277
Joined: Thu Dec 27, 2018 2:19 pm

What did you learn from 2018 in the markets?

Post by carol-brennan »

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
Posts: 6701
Joined: Sun Apr 25, 2010 7:42 pm

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

Post by Dandy »

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
Posts: 701
Joined: Sat Dec 09, 2017 1:12 pm

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

Post by Rus In Urbe »

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
User avatar
Toons
Posts: 14459
Joined: Fri Nov 21, 2008 9:20 am
Location: Hills of Tennessee

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

Post by Toons »

Nothing new under the sun.
Business as usual.

:happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
mancich
Posts: 1217
Joined: Fri Sep 05, 2014 2:05 pm

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

Post by mancich »

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
Posts: 190
Joined: Fri Aug 10, 2018 6:02 am

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

Post by GuySmiley »

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.
User avatar
Tycoon
Posts: 1625
Joined: Wed Mar 28, 2012 7:06 pm

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

Post by Tycoon »

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
Posts: 1819
Joined: Tue Apr 24, 2018 7:50 pm

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

Post by Tdubs »

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.
User avatar
Cyclesafe
Posts: 1474
Joined: Wed Dec 31, 2014 12:03 pm

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

Post by Cyclesafe »

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!
"Plans are useless; planning is indispensable.” (Dwight Eisenhower) | "Man plans, God laughs" (Yiddish proverb)
staythecourse
Posts: 6993
Joined: Mon Jan 03, 2011 8:40 am

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

Post by staythecourse »

carol-brennan wrote: Sun Jan 27, 2019 7:01 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
Posts: 85971
Joined: Thu Mar 01, 2007 7:00 pm

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

Post by livesoft »

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.
Wiki This signature message sponsored by sscritic: Learn to fish.
Tdubs
Posts: 1819
Joined: Tue Apr 24, 2018 7:50 pm

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

Post by Tdubs »

livesoft wrote: Sun Jan 27, 2019 8:07 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?
User avatar
Top99%
Posts: 465
Joined: Sat Apr 22, 2017 9:30 am
Location: Austin, TX

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

Post by Top99% »

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
User avatar
Ice-9
Posts: 1579
Joined: Wed Oct 15, 2008 12:40 pm
Location: MD

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

Post by Ice-9 »

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.
User avatar
Kenkat
Posts: 9539
Joined: Thu Mar 01, 2007 10:18 am
Location: Cincinnati, OH

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

Post by Kenkat »

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)
User avatar
travelogue
Posts: 259
Joined: Sat Aug 12, 2017 4:29 pm

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

Post by travelogue »

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.
User avatar
Nate79
Posts: 9354
Joined: Thu Aug 11, 2016 6:24 pm
Location: Delaware

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

Post by Nate79 »

I learned that like in the past, novice investors are frightened at the smallest decline. 2018 was a minor blimp.
User avatar
travelogue
Posts: 259
Joined: Sat Aug 12, 2017 4:29 pm

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

Post by travelogue »

Nate79 wrote: Sun Jan 27, 2019 11:10 am 2018 was a minor blimp.
As opposed to a Total Hindenburg :P
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

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

Post by willthrill81 »

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.
The Sensible Steward
H-Town
Posts: 5876
Joined: Sun Feb 26, 2017 1:08 pm

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

Post by H-Town »

carol-brennan wrote: Sun Jan 27, 2019 7:01 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.
Time is the ultimate currency.
User avatar
bengal22
Posts: 2146
Joined: Sat Dec 03, 2011 5:20 pm
Location: Ohio

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

Post by bengal22 »

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
Posts: 164
Joined: Mon Jan 05, 2015 5:52 pm

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

Post by LeisureLee »

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. =)
User avatar
sf_tech_saver
Posts: 448
Joined: Sat Sep 08, 2018 9:03 pm

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

Post by sf_tech_saver »

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
Posts: 2906
Joined: Mon Feb 10, 2014 1:32 pm

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

Post by 2015 »

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).
pasadena
Posts: 2336
Joined: Sat Jul 02, 2016 1:23 am
Location: PNW

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

Post by pasadena »

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
Posts: 85971
Joined: Thu Mar 01, 2007 7:00 pm

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

Post by livesoft »

Tdubs wrote: Sun Jan 27, 2019 8:10 am
livesoft wrote: Sun Jan 27, 2019 8:07 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.
User avatar
arcticpineapplecorp.
Posts: 15014
Joined: Tue Mar 06, 2012 8:22 pm

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

Post by arcticpineapplecorp. »

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
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
User avatar
oldzey
Posts: 1743
Joined: Sun Apr 13, 2014 8:38 pm
Location: Land of Lincoln

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

Post by oldzey »

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
Posts: 1296
Joined: Sat Jan 30, 2016 3:04 pm

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

Post by pdavi21 »

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
Posts: 10
Joined: Fri Jan 25, 2019 10:53 am
Location: Florida

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

Post by Dave111 »

Just another year, small investment loss, small gain in net worth. A year that will be easily forgotten before too long.
marcopolo
Posts: 8411
Joined: Sat Dec 03, 2016 9:22 am

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

Post by marcopolo »

carol-brennan wrote: Sun Jan 27, 2019 7:01 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
Posts: 1632
Joined: Fri Jul 24, 2015 4:38 pm

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

Post by minimalistmarc »

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.
User avatar
Will do good
Posts: 1138
Joined: Fri Feb 24, 2012 7:23 pm

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

Post by Will do good »

arcticpineapplecorp. wrote: Sun Jan 27, 2019 12:59 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!
User avatar
Nate79
Posts: 9354
Joined: Thu Aug 11, 2016 6:24 pm
Location: Delaware

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

Post by Nate79 »

2018 wasn't even bad so I don't even know why there is a thread about it.
KlangFool
Posts: 31426
Joined: Sat Oct 11, 2008 12:35 pm

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

Post by KlangFool »

staythecourse wrote: Sun Jan 27, 2019 8:03 am
carol-brennan wrote: Sun Jan 27, 2019 7:01 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
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry
Independent George
Posts: 1590
Joined: Wed Feb 17, 2016 11:13 am
Location: Chicago, IL, USA

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

Post by Independent George »

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.
Trader Joe
Posts: 2697
Joined: Fri Apr 25, 2014 6:38 pm

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

Post by Trader Joe »

carol-brennan wrote: Sun Jan 27, 2019 7:01 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.
bikechuck
Posts: 1466
Joined: Sun Aug 16, 2015 9:22 pm

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

Post by bikechuck »

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.
Tdubs
Posts: 1819
Joined: Tue Apr 24, 2018 7:50 pm

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

Post by Tdubs »

bikechuck wrote: Sun Jan 27, 2019 4:55 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.
User avatar
Phineas J. Whoopee
Posts: 9675
Joined: Sun Dec 18, 2011 5:18 pm

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

Post by Phineas J. Whoopee »

willthrill81 wrote: Sun Jan 27, 2019 11:16 am ...
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
User avatar
JoeRetire
Posts: 15381
Joined: Tue Jan 16, 2018 1:44 pm

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

Post by JoeRetire »

carol-brennan wrote: Sun Jan 27, 2019 7:01 amYour 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.
This isn't just my wallet. It's an organizer, a memory and an old friend.
User avatar
Davinci
Posts: 202
Joined: Sun Oct 14, 2018 3:36 am

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

Post by Davinci »

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.
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

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

Post by willthrill81 »

Phineas J. Whoopee wrote: Sun Jan 27, 2019 5:04 pm
willthrill81 wrote: Sun Jan 27, 2019 11:16 am ...
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.
The Sensible Steward
Shamb3
Posts: 82
Joined: Mon Apr 09, 2018 8:58 pm

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

Post by Shamb3 »

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.
User avatar
Phineas J. Whoopee
Posts: 9675
Joined: Sun Dec 18, 2011 5:18 pm

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

Post by Phineas J. Whoopee »

willthrill81 wrote: Sun Jan 27, 2019 5:19 pm
Phineas J. Whoopee wrote: Sun Jan 27, 2019 5:04 pm
willthrill81 wrote: Sun Jan 27, 2019 11:16 am ...
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
Posts: 758
Joined: Sat Jan 02, 2016 5:20 pm

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

Post by samsdad »

I learned to not buy the dip.

I learned to automate and ignore.
User avatar
rh00p
Posts: 176
Joined: Fri Jan 11, 2019 12:21 am

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

Post by rh00p »

I learned not to watch CNBC. Again.
Preparing for the worst. Hoping for the best.
User avatar
oldzey
Posts: 1743
Joined: Sun Apr 13, 2014 8:38 pm
Location: Land of Lincoln

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

Post by oldzey »

rh00p wrote: Sun Jan 27, 2019 9:26 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
User avatar
TheTimeLord
Posts: 12092
Joined: Fri Jul 26, 2013 2:05 pm

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

Post by TheTimeLord »

livesoft wrote: Sun Jan 27, 2019 12:54 pm
Tdubs wrote: Sun Jan 27, 2019 8:10 am
livesoft wrote: Sun Jan 27, 2019 8:07 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]
User avatar
TheTimeLord
Posts: 12092
Joined: Fri Jul 26, 2013 2:05 pm

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

Post by TheTimeLord »

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]
Post Reply