Are any early accumulators thankful for the current correction?

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TheDDC
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Re: Are any early accumulators thankful for the current correction?

Post by TheDDC » Mon Mar 09, 2020 5:32 pm

I’m glad to be able to buy shares at a discount. I’ll be happier when VTSAX/FSKAX go ex-dividend as the divided reinvestment from my extra share quantities will begin to materialize.

-TheDDC
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Jon_PassiveInvestor
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Re: Are any early accumulators thankful for the current correction?

Post by Jon_PassiveInvestor » Mon Mar 09, 2020 5:34 pm

I’m jumping up and down! Just giddy! Have a million in cash for such an event! Bought 10k today vtsax
100% VTSAX in Taxable Account. | 100% VTSAX in Retirement Accounts

Lee_WSP
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Re: Are any early accumulators thankful for the current correction?

Post by Lee_WSP » Mon Mar 09, 2020 5:35 pm

It won’t make a difference if it just rebounds just as fast as 2018, 2015, 1987, and 2011.
Last edited by Lee_WSP on Mon Mar 09, 2020 5:38 pm, edited 1 time in total.

rbaldini
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Re: Are any early accumulators thankful for the current correction?

Post by rbaldini » Mon Mar 09, 2020 5:37 pm

willthrill81 wrote:
Mon Mar 09, 2020 4:50 pm
rbaldini wrote:
Mon Mar 09, 2020 4:15 pm
Let me ask [EDIT] 2 simple question:
1. Let's say person A invests $10k right after an usually large dip in the market. Person B invests $10k on a typical day. Who is expected to have more money exactly 10 years (or whatever long period you wish) from the day that person invested?
1. Person A would be expected to have more money in ten years. This might be demonstrable with a tool like Portfolio Visualizer.
I just pulled monthly SP 500 prices, going back to Jan 1 1927. I then looked at 10 year returns from every first of the month. I asked the question, "what are the 10-year returns following a month that drops 1%, 2%, 5%, 8% and 10% in price?" Basically, do we see better future long term returns after various kinds of bad months? Are they better than average?

The answers: average 10 year returns after a drop are lower than the overall average in every case. This certainly doesn’t support the claim that returns are greater. Did not bother to check significance for that reason.

Data from here: https://finance.yahoo.com/quote/%5EGSPC ... quency=1mo
Last edited by rbaldini on Mon Mar 09, 2020 6:11 pm, edited 1 time in total.

JBTX
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Re: Are any early accumulators thankful for the current correction?

Post by JBTX » Mon Mar 09, 2020 5:55 pm

Forester wrote:
Mon Mar 09, 2020 1:46 pm
I think we might look back on this period, ten years from now, as a golden opportunity to buy Emerging markets / Asian stocks. If one only thinks about the US then it's tempting to think the opportunity went away in the 2010s. 2020s will likely have a weaker US dollar, so a tailwind for other nations.
My gut feeling tells me this may be the case. But I'm often wrong.

UpperNwGuy
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Re: Are any early accumulators thankful for the current correction?

Post by UpperNwGuy » Mon Mar 09, 2020 5:56 pm

I am never thankful for a market decline.

JBTX
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Re: Are any early accumulators thankful for the current correction?

Post by JBTX » Mon Mar 09, 2020 5:57 pm

Jon_PassiveInvestor wrote:
Mon Mar 09, 2020 5:34 pm
I’m jumping up and down! Just giddy! Have a million in cash for such an event! Bought 10k today vtsax

So you are a passive investor waiting to jump into the market at the right moment with a million dollars?

H-Town
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Re: Are any early accumulators thankful for the current correction?

Post by H-Town » Mon Mar 09, 2020 5:58 pm

willthrill81 wrote:
Mon Mar 09, 2020 1:12 pm
We've heard many say that early accumulators should be praying for a market downturn because this results in higher expected forward returns.

That being said, I'm wondering how many early accumulators are actually rejoicing for the current downturn.

Personally, I'm grateful for it because now that our mortgage is paid off, we're about to triple our retirement contributions. A long sideways market would be great for us.
On one hand, my portfolio value reduces 150k+ and counting. Not too excited about it. On the other hand, I can have TLH and my new money will have lower basis. Well, it's not really exciting either.

So it is what it is. Not excited. Not thankful. Just completely detached of any emotions.

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DrPayItBack
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Re: Are any early accumulators thankful for the current correction?

Post by DrPayItBack » Mon Mar 09, 2020 5:59 pm

My annual income increased from ~$65k to ~$440k this year, so yeah, I’m feeling this a bit.

nakedbird226
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Re: Are any early accumulators thankful for the current correction?

Post by nakedbird226 » Mon Mar 09, 2020 6:04 pm

29 here...I wouldn't say I am thankful as my parents literally just retired so this couldn't be worse timing for them. I do find myself thinking/saying...well at least my next 401k contribution will get me some extra shares!

I would definitely not say I am rejoicing, but I do know that if I continue to invest throughout this craziness that I will be better off in the LONG RUN. I have actually already had to start tuning out some negativity from certain friends/family. Panic mode is already setting in for some. I am just trying to ignore as much noise as possible. 100% in equities here and checking my retirement accounts the past two weeks has been interesting ha.

oken
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Re: Are any early accumulators thankful for the current correction?

Post by oken » Mon Mar 09, 2020 6:09 pm

I'm new to this. 40yo and only started looking at investing about 9 months ago. Took my time to read up so missed the slight dip in September, and got cold feet trying to enter the market at highs.

Finally mustered up the courage to dip my feet in Dec 2019, starting a DCA plan that would last about a year.

By end Jan, I was reassessing the plan because of China and wondering what I would do if markets dropped because of it. Now, I'm carrying it out.

It's much easier to buy on dips than on all time highs, but I guess I'll see if I got my AA right if the market keeps going down... Still DCAing, but because I'm also buying on dips, it won't take as long as I first thought...

Candor
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Re: Are any early accumulators thankful for the current correction?

Post by Candor » Mon Mar 09, 2020 6:19 pm

As a late accumulator at 52 who plans to retire in a couple of years I am thankful for the correction if it is a typical correction that bounces back in couple of years or so. Late last year I pulled 25% from equities and bought my first bonds due to the long run up and getting closer to retirement. I have made 2 purchases of equities from bonds during this pullback and will continue to do so if it keeps falling. Time will tell if this is a good move but I am confident it will play out ok and if not my 25% in CD's will see me through. The $$ I am moving right now will not be needed until 60+ so that gives me some time.

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Iowa David
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Re: Are any early accumulators thankful for the current correction?

Post by Iowa David » Mon Mar 09, 2020 6:32 pm

DW and I are both 40 so mid Accumulator Stage.

The unstable market doesn't bother me - it's the longer-term impact of companies missing their financial targets, putting projects & new purchases on hold and layoffs that scare me more.

It's great to have a steady paycheck coming in to support 401Ks and other investments in a dip, but when you're out of a job we'll see how excited folks are about the market correction.
"Just a 1 percent difference in expenses makes an 18 percent difference in returns when compounded over 20 years." The Boglehead's Guide to Investing

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Re: Are any early accumulators thankful for the current correction?

Post by beehivehave » Mon Mar 09, 2020 6:44 pm

Iowa David wrote:
Mon Mar 09, 2020 6:32 pm
DW and I are both 40 so mid Accumulator Stage.

The unstable market doesn't bother me - it's the longer-term impact of companies missing their financial targets, putting projects & new purchases on hold and layoffs that scare me more.

It's great to have a steady paycheck coming in to support 401Ks and other investments in a dip, but when you're out of a job we'll see how excited folks are about the market correction.
No problem - many of those "early accumulators" who are "thankful for a correction" regardless of the cause figure they will inherit their parents' hard-earned savings to invest in the stock market.

Jon_PassiveInvestor
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Re: Are any early accumulators thankful for the current correction?

Post by Jon_PassiveInvestor » Mon Mar 09, 2020 7:06 pm

JBTX wrote:
Mon Mar 09, 2020 5:57 pm
Jon_PassiveInvestor wrote:
Mon Mar 09, 2020 5:34 pm
I’m jumping up and down! Just giddy! Have a million in cash for such an event! Bought 10k today vtsax

So you are a passive investor waiting to jump into the market at the right moment with a million dollars?
Yup, worked wayyyyy too hard for my first million. I’m very conservative active right now.
100% VTSAX in Taxable Account. | 100% VTSAX in Retirement Accounts

MotoTrojan
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Re: Are any early accumulators thankful for the current correction?

Post by MotoTrojan » Mon Mar 09, 2020 7:11 pm

Jon_PassiveInvestor wrote:
Mon Mar 09, 2020 5:34 pm
I’m jumping up and down! Just giddy! Have a million in cash for such an event! Bought 10k today vtsax
You invested 1% of your cash. What are you waiting for?

stoptothink
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Re: Are any early accumulators thankful for the current correction?

Post by stoptothink » Mon Mar 09, 2020 7:18 pm

beehivehave wrote:
Mon Mar 09, 2020 6:44 pm
Iowa David wrote:
Mon Mar 09, 2020 6:32 pm
DW and I are both 40 so mid Accumulator Stage.

The unstable market doesn't bother me - it's the longer-term impact of companies missing their financial targets, putting projects & new purchases on hold and layoffs that scare me more.

It's great to have a steady paycheck coming in to support 401Ks and other investments in a dip, but when you're out of a job we'll see how excited folks are about the market correction.
No problem - many of those "early accumulators" who are "thankful for a correction" regardless of the cause figure they will inherit their parents' hard-earned savings to invest in the stock market.
I am one of those "early accumulators" and I am currently helping out both my (unretired) parents and in-laws financially. Inheritance...that's funny.

Jon_PassiveInvestor
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Re: Are any early accumulators thankful for the current correction?

Post by Jon_PassiveInvestor » Mon Mar 09, 2020 7:39 pm

MotoTrojan wrote:
Mon Mar 09, 2020 7:11 pm
Jon_PassiveInvestor wrote:
Mon Mar 09, 2020 5:34 pm
I’m jumping up and down! Just giddy! Have a million in cash for such an event! Bought 10k today vtsax
You invested 1% of your cash. What are you waiting for?
I’m already 15% in equities. Adding more weekly going forward. Dow 20k here we go!
100% VTSAX in Taxable Account. | 100% VTSAX in Retirement Accounts

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willthrill81
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Re: Are any early accumulators thankful for the current correction?

Post by willthrill81 » Mon Mar 09, 2020 7:48 pm

orhkaf wrote:
Mon Mar 09, 2020 5:02 pm
Last quarter of last year had me worried we were going up too fast. The past several weeks have given me a sigh of relief. I’d rather have this happen now vs when I accumulate more in several years or months.
I was worried this January, said so here, and was quickly mocked by a prominent member.
“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

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Tamarind
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Re: Are any early accumulators thankful for the current correction?

Post by Tamarind » Mon Mar 09, 2020 7:52 pm

Yep. I will get more shares for my next 401k purchase than 2 weeks ago. I'm worried about catching COVID-19 as my lungs are not great, but I'm not worried about my investments.

davebeers
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Re: Are any early accumulators thankful for the current correction?

Post by davebeers » Mon Mar 09, 2020 8:18 pm

Yes, 2008 was our first correction and I thought I was ready until my career became in jeopardy for about 3-4yrs. Fear of employment amidst starting a family and my wife also choosing to stay at home kept me on the sidelines and missed most of the opportunity from 2008-2013.
This time I have a stable job and some capital from 10yrs of consistent investing so i'm looking forward to testing my resolve with a stable job and a supportive spouse.

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Re: Are any early accumulators thankful for the current correction?

Post by Silence Dogood » Mon Mar 09, 2020 8:27 pm

I am an early accumulator and I plan to stay the course.

But let me be clear: I am not rejoicing.

Over 4,000 people - and counting - have died from the coronavirus (which is largely responsible for this market downturn).

I know it may seem distant to us, but real people are suffering.

There are some things in life that are more important than money.

sd323232
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Re: Are any early accumulators thankful for the current correction?

Post by sd323232 » Mon Mar 09, 2020 8:30 pm

I am thankful and yes, i will take this opportunity to the fullest. thank you.

motorcyclesarecool
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Re: Are any early accumulators thankful for the current correction?

Post by motorcyclesarecool » Mon Mar 09, 2020 8:43 pm

willthrill81 wrote:
Mon Mar 09, 2020 1:12 pm
We've heard many say that early accumulators should be praying for a market downturn because this results in higher expected forward returns.

That being said, I'm wondering how many early accumulators are actually rejoicing for the current downturn.

Personally, I'm grateful for it because now that our mortgage is paid off, we're about to triple our retirement contributions. A long sideways market would be great for us.
My AA in our Roth’s and HSA lets me sleep at night, and I learned to stop worrying and trust one of the L-funds for my contributions. DCA for the win!
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

konic
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Re: Are any early accumulators thankful for the current correction?

Post by konic » Mon Mar 09, 2020 8:49 pm

Fixing a mistake on my part regarding looking up YTD returns for VTWAX...

So, I just checked and figured that we are less that 10% down YTD on VTWAX. Plus, long terms bonds have a YTD close to 4%.

On balance, meh...I guess we have a ways to go before a true buying opportunity presents for a balanced portfolio.

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Makaveli
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Re: Are any early accumulators thankful for the current correction?

Post by Makaveli » Mon Mar 09, 2020 9:34 pm

Thankful in regards to this ~20% retreat providing a glimpse into my (untested) risk tolerance. My mind keeps on thinking “buy, buy, buy”. 85:15 EQ to FI is cruising along.

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Re: Are any early accumulators thankful for the current correction?

Post by geerhardusvos » Mon Mar 09, 2020 9:40 pm

willthrill81 wrote:
Mon Mar 09, 2020 1:12 pm
We've heard many say that early accumulators should be praying for a market downturn because this results in higher expected forward returns.

That being said, I'm wondering how many early accumulators are actually rejoicing for the current downturn.

Personally, I'm grateful for it because now that our mortgage is paid off, we're about to triple our retirement contributions. A long sideways market would be great for us.
We have been scrounging to get every last penny of my EF, RSUs, ESPP, MM, bonus, etc. into the market the last couple days. Sold a few personal items for $3000 just to get more in. Hoping to retire in ~10 years, so when I see things dip even 5-10%, I'm excited... And 20-30% drops, well, sign me up!!!

Another windfall on the horizon and hoping the feds don't calm the fears anytime soon! Saying this with the balance knowing there are those who are less fortunate and have been impacted by the current situation
Last edited by geerhardusvos on Mon Mar 09, 2020 9:54 pm, edited 1 time in total.
VTSAX and chill

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geerhardusvos
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Re: Are any early accumulators thankful for the current correction?

Post by geerhardusvos » Mon Mar 09, 2020 9:53 pm

Maven wrote:
Mon Mar 09, 2020 1:49 pm
We might be rejoicing if it weren't for that fact that my DH is in the oil & gas industry with a large percentage of his annual compensation being in RSUs. :(
ouch, that can't feel good, but maybe increase the ESPP and don't sell for 2-5 years... don't lock in the losses right now. oil isn't going anywhere, this is temporary
VTSAX and chill

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willthrill81
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Re: Are any early accumulators thankful for the current correction?

Post by willthrill81 » Mon Mar 09, 2020 9:57 pm

geerhardusvos wrote:
Mon Mar 09, 2020 9:40 pm
willthrill81 wrote:
Mon Mar 09, 2020 1:12 pm
We've heard many say that early accumulators should be praying for a market downturn because this results in higher expected forward returns.

That being said, I'm wondering how many early accumulators are actually rejoicing for the current downturn.

Personally, I'm grateful for it because now that our mortgage is paid off, we're about to triple our retirement contributions. A long sideways market would be great for us.
We have been scrounging to get every last penny of my EF, RSUs, ESPP, MM, bonus, etc. into the market the last couple days. Sold a few personal items for $3000 just to get more in. Hoping to retire in ~10 years, so when I see things dip even 5-10%, I'm excited... And 20-30% drops, well, sign me up!!!

Another windfall on the horizon and hoping the feds don't calm the fears anytime soon! Saying this with the balance knowing there are those who are less fortunate and have been impacted by the current situation
As long as people keep that mentality, this may not turn into a 50% decline.
“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

azanon
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Re: Are any early accumulators thankful for the current correction?

Post by azanon » Mon Mar 09, 2020 10:01 pm

willthrill81 wrote:
Mon Mar 09, 2020 1:12 pm
We've heard many say that early accumulators should be praying for a market downturn because this results in higher expected forward returns.

That being said, I'm wondering how many early accumulators are actually rejoicing for the current downturn.

Personally, I'm grateful for it because now that our mortgage is paid off, we're about to triple our retirement contributions. A long sideways market would be great for us.
I guess you are quite a bit younger than I am. I thought we might be closer. I’m at the point (age 48) where my contributions pale in comparison to my amount invested. The more important aspect of my savings now is ensuring that my cost of living is moderated (because I’m saving the money instead of spending it).

Also no easy way for me to triple my savings since I’m maxing my 401k and iras.

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willthrill81
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Re: Are any early accumulators thankful for the current correction?

Post by willthrill81 » Mon Mar 09, 2020 10:03 pm

azanon wrote:
Mon Mar 09, 2020 10:01 pm
willthrill81 wrote:
Mon Mar 09, 2020 1:12 pm
We've heard many say that early accumulators should be praying for a market downturn because this results in higher expected forward returns.

That being said, I'm wondering how many early accumulators are actually rejoicing for the current downturn.

Personally, I'm grateful for it because now that our mortgage is paid off, we're about to triple our retirement contributions. A long sideways market would be great for us.
I guess you are quite a bit younger than I am. I thought we might be closer. I’m at the point (age 48) where my contributions pale in comparison to my amount invested. The more important aspect of my savings now is ensuring that my cost of living is moderated (because I’m saving the money instead of spending it).

Also no easy way for me to triple my savings since I’m maxing my 401k and iras.
Yes, once your portfolio is earning (or losing) more than your contributions, I don't think that you qualify as an 'early accumulator' anymore.
“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

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H-Dog
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Re: Are any early accumulators thankful for the current correction?

Post by H-Dog » Mon Mar 09, 2020 10:40 pm

I am an early accumulator and definitely excited about this drop. Mostly excited that we are in a fairly good position to be able to take advantage of it a bit if it lasts for some time. We were planning on starting a taxable account with free cash flow this summer.

I did max 401k, HSA early in Jan so we lost some of those gains but I'm doing IRAs now.

Ideally best case for us is if the recession hits for 3-5 years, we keep our jobs and that we start the taxable account this summer with high (for us) biweekly investments. Granted, that probably will not happen.

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Re: Are any early accumulators thankful for the current correction?

Post by Watty » Mon Mar 09, 2020 10:46 pm

willthrill81 wrote:
Mon Mar 09, 2020 1:12 pm
We've heard many say that early accumulators should be praying for a market downturn because this results in higher expected forward returns.
I am retired now but when I was younger I went through several down markets that in retrospect really helped my portfolio.

The problem is that during a recession you are are a lot more likely to be laid off, and there may be few companies hiring in a recession. There were a number of times when I was a lot more concerned about not getting laid off than my portfolio.

I got lucky and was only laid off once in my career and that was not in a recession so I did not have too much trouble finding another job. I saw a lot of people that were not so lucky and getting laid off in a bad job market can be really rough.

There is a saying;

Question: What is the difference between a recession and a depression?

Answer: It is a recession if your neighbor is laid off, it is a depression if you are laid off.

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Re: Are any early accumulators thankful for the current correction?

Post by abuss368 » Tue Mar 10, 2020 8:11 am

Watty wrote:
Mon Mar 09, 2020 10:46 pm

Question: What is the difference between a recession and a depression?

Answer: It is a recession if your neighbor is laid off, it is a depression if you are laid off.
I have never heard that one before. Thank you for sharing.
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Re: Are any early accumulators thankful for the current correction?

Post by tainted-meat » Tue Mar 10, 2020 8:15 am

I wouldn't say I'm thankful for it in that I don't want to see any in the elder (or close to retirement) generation see their savings drop right before or when they need it. That's a bit disheartening.

However, if I continue to invest in my 401k at the lower prices. If I had more to invest now I would but am all tapped out at the moment.

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Re: Are any early accumulators thankful for the current correction?

Post by ReformedSpender » Tue Mar 10, 2020 8:23 am

Lee_WSP wrote:
Mon Mar 09, 2020 5:35 pm
It won’t make a difference if it just rebounds just as fast as 2018, 2015, 1987, and 2011.
Agreed! Accumulators would want to see prices suppressed longer...
Market history shows that when there's economic blue sky, future returns are low, and when the economy is on the skids, future returns are high. The best fishing is done in the most stormy waters.

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Re: Are any early accumulators thankful for the current correction?

Post by grayfox » Tue Mar 10, 2020 8:25 am

willthrill81 wrote:
Mon Mar 09, 2020 1:12 pm
We've heard many say that early accumulators should be praying for a market downturn because this results in higher expected forward returns.

That being said, I'm wondering how many early accumulators are actually rejoicing for the current downturn.
It is not only early accumulators who pray for lower stock valuations. Anyone who is in the market to buy stocks should be rejoicing. The lower the valuation, the higher the expected return. Shiller PE has come down to 26.08.

Meanwhile, bond yields have fallen to record low levels. 30-year Treasury yield-to-maturity YTM is 0.99%, and 30-year TIPS is -0.20%. Shorter maturities are even lower. Treasury are offering loss of purchasing power.

:idea: Only investors are are forced to sell stocks are lamenting the lower valuations.
Sic transit gloria mundi. [STGM]

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Re: Are any early accumulators thankful for the current correction?

Post by onourway » Tue Mar 10, 2020 8:36 am

Yawn. Prices are still higher than they were a year ago. Nobody was all that excited then, let alone selling personal items to get more in the market. Wake me up when we are down 40% or more.

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Re: Are any early accumulators thankful for the current correction?

Post by papito23 » Tue Mar 10, 2020 8:38 am

Silence Dogood wrote:
Mon Mar 09, 2020 8:27 pm
I am an early accumulator and I plan to stay the course.

But let me be clear: I am not rejoicing.

Over 4,000 people - and counting - have died from the coronavirus (which is largely responsible for this market downturn).

I know it may seem distant to us, but real people are suffering.

There are some things in life that are more important than money.
+1

I'm accumulating shares because that's part of being responsible for myself and the future needs of my family, but envisioning my beloved friend (86 years old) dying early or a breadwinner losing their job... that's not something I celebrate.
A thing is right when it tends to preserve the integrity, stability, and beauty of the biotic community. It is wrong when it tends otherwise. -Aldo Leopold's Golden Rule of Ecology

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Re: Are any early accumulators thankful for the current correction?

Post by cpan00b » Tue Mar 10, 2020 8:42 am

Sure it's easy to be excited if you have tons of dry powder, but I don't. I'm an early investor in that I'm just 30 years old but it's not very exciting to see all of my gains essentially evaporate - it's like I wasted the last two years of grinding and working 70+ hours a week and being super frugal and saving 50% of gross income (ok this part is not a waste) but all of the $60k market gains i had just disappeared into thin air definitely feels like it is (I could have essentially just started investing and entered the market today and would be in the same place).

And this is coming from someone fairly conservative for my age group in that I had a 80-20 allocation. I bought some more VTSAX yesterday so I'm at 85-15 now, but all I can hope and pray for is that I continue to be employed at the same salary throughout this bear market so I can keep purchasing at these prices to make my recovery quicker when and if the market starts going back up. I expect the market to probably keep going down over the next few weeks while we get a handle on the virus so I expect I'll be in the red shortly.

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Re: Are any early accumulators thankful for the current correction?

Post by mbasherp » Tue Mar 10, 2020 8:46 am

I don't think you need to be an early accumulator to look on the bright side. Heck, Warren Buffet is certainly thankful for the current correction. I am too, because money that goes into stocks is money that I don't expect to need for at least 5 years.

Even those nearing or in retirement have a bright side: Bonds have had huge appreciation! These folks are more likely to have significant bond allocations than early accumulators and so are more likely to have the stock downside balanced out.

I will be even more thankful if/when we hit that elusive 20% down on a closing basis... just so the world can quit talking about the LONGEST BULL MARKET EVER nonsense!

ryman554
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Re: Are any early accumulators thankful for the current correction?

Post by ryman554 » Tue Mar 10, 2020 9:00 am

Goodness gracious me, those that are "excited about this" really need to look back in history. Just not too long....

Here's my 80/20 investment profile:

Image

We're back to September. A whole 6 months ago... If we're backing up the truck *now*, why weren't we backing up the truck *then*?

This just goes to show us humans see things as relative, when, if you look at things in absolute terms... well, you gain a different perspective (and an appreciation for "stay the course")

cpan00b
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Re: Are any early accumulators thankful for the current correction?

Post by cpan00b » Tue Mar 10, 2020 9:05 am

ryman554 wrote:
Tue Mar 10, 2020 9:00 am
Goodness gracious me, those that are "excited about this" really need to look back in history. Just not too long....

Here's my 80/20 investment profile:

Image

We're back to September. A whole 6 months ago... If we're backing up the truck *now*, why weren't we backing up the truck *then*?

This just goes to show us humans see things as relative, when, if you look at things in absolute terms... well, you gain a different perspective (and an appreciation for "stay the course")
There's a difference though, when it was September, we were at the top with uncertainty about the future. In hindsight now, everyone feels comfortable because we're nearly 20% off of the top. That relative difference is enough because the assumption is that it will eventually go back up those 20% (though it remains to be seen if that recovery period will take a few months or a few years...)

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Re: Are any early accumulators thankful for the current correction?

Post by Dinosaur Dad » Tue Mar 10, 2020 9:09 am

So I'm a year out from retirement so I don't qualify as an "early accumulator." But what I'm thankful for is recently going to 65/35 from my recent 80/20 allocation ... at a time when everyone was so optimistic, everything's sunny, etc.etc. Because I mitigated that risk I have plenty of lower risk assets I can tap without selling...and I might just rebalance a bit depending on what happens.

Yet one more example that nobody knows nothin', and that you can't possibly anticipate what might happen.

Thinking back to my "accumulator" self, I don't think it would have mattered. I was the "tortoise" versus the hare, invested regularly over decades, so the various corrections didn't matter in the long run.
"Take calculated risks - that is quite different from being rash." | General George S. Patton

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siamond
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Re: Are any early accumulators thankful for the current correction?

Post by siamond » Tue Mar 10, 2020 9:24 am

willthrill81 wrote:
Mon Mar 09, 2020 1:12 pm
We've heard many say that early accumulators should be praying for a market downturn because this results in higher expected forward returns.

That being said, I'm wondering how many early accumulators are actually rejoicing for the current downturn.
A large stock crisis (e.g. 30% drop or more) lasting for a while (e.g. more than a few months) is typically good news for young accumulators. The recent ups and downs do not seem to qualify to me. SO FAR.

Check the chart below. Right now, based on the sudden drop of the past few days, feelings are strong to do *something* (Roth conversion or TLH move for retirees; buy, buy, buy for accumulators; etc). Now just imagine that the VTI price had followed the purple line on my graph, to end up with the same price last night (with a 5% gain over one year ago - without accounting for dividends, by the way). Honest question: would you perceive a glaring buy opportunity?

Image

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Re: Are any early accumulators thankful for the current correction?

Post by ryman554 » Tue Mar 10, 2020 9:25 am

cpan00b wrote:
Tue Mar 10, 2020 9:05 am
ryman554 wrote:
Tue Mar 10, 2020 9:00 am
Goodness gracious me, those that are "excited about this" really need to look back in history. Just not too long....

Here's my 80/20 investment profile:

Image

We're back to September. A whole 6 months ago... If we're backing up the truck *now*, why weren't we backing up the truck *then*?

This just goes to show us humans see things as relative, when, if you look at things in absolute terms... well, you gain a different perspective (and an appreciation for "stay the course")
There's a difference though, when it was September, we were at the top with uncertainty about the future. In hindsight now, everyone feels comfortable because we're nearly 20% off of the top. That relative difference is enough because the assumption is that it will eventually go back up those 20% (though it remains to be seen if that recovery period will take a few months or a few years...)
I respectfully disagree 100%. And not because I don't recall much uncertainty in September: that's because I'm senile.

You can argue that a different way... the world supply chain could break due to panic over COVID-19 and we end up in a meltdown ala 2009 and/or 1929. To me, could go either way, since this stuff is not based solely on fact, but on human perception of risk. I'm a lot more scared *now* than I was *then*, that's for sure. And that's not going to make be buy stock today. Even if that's what I did (well, on Friday, see below) because that's what I always do. Because I have a plan and stick to it. If the economy goes south for years as we rebuild globalization... buying now will seem rather rash. Could be the bottom, could be just the beginning. Who's to say?

None of the above does not change the *fact* that we back to where we were six months ago... and if BH philosophy teaches us anything, it's to take emotion out of investing and plow right on through. We absolutely should not be gleefully looking for dry powder to burn, since the dry powder should have already been burnt mathematically. Anything else is market timing. Big no-no, especially since I have a very foggy crystal ball.

Did I rebalance last week? Yes I did. Just like I did every month, except this month was from my crummy bonds to equities instead of the other way around. I like to sell high, even if it's perhaps not mathematically sound. And I will be buying lower in 20 says or so, assuming this is not a flash like Dec 2018 was.

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Re: Are any early accumulators thankful for the current correction?

Post by ryman554 » Tue Mar 10, 2020 9:28 am

siamond wrote:
Tue Mar 10, 2020 9:24 am
willthrill81 wrote:
Mon Mar 09, 2020 1:12 pm
We've heard many say that early accumulators should be praying for a market downturn because this results in higher expected forward returns.

That being said, I'm wondering how many early accumulators are actually rejoicing for the current downturn.
A large stock crisis (e.g. 30% drop or more) lasting for a while (e.g. more than a few months) is typically good news for young accumulators. The recent ups and downs do not seem to qualify to me. SO FAR.

Check the chart below. Right now, based on the sudden drop of the past few days, feelings are strong to do *something* (Roth conversion or TLH move for retirees; buy, buy, buy for accumulators; etc). Now just imagine that the VTI price had followed the purple line on my graph, to end up with the same price last night (with a 5% gain over one year ago - without accounting for dividends, by the way). Honest question: would you perceive a glaring buy opportunity?

Image
No. Thank you for repeating my point ever so much more elegantly.

<note, I do note even see a buying opportunity today, using the real chart, either>

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geerhardusvos
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Re: Are any early accumulators thankful for the current correction?

Post by geerhardusvos » Tue Mar 10, 2020 9:45 am

willthrill81 wrote:
Mon Mar 09, 2020 9:57 pm
geerhardusvos wrote:
Mon Mar 09, 2020 9:40 pm
willthrill81 wrote:
Mon Mar 09, 2020 1:12 pm
We've heard many say that early accumulators should be praying for a market downturn because this results in higher expected forward returns.

That being said, I'm wondering how many early accumulators are actually rejoicing for the current downturn.

Personally, I'm grateful for it because now that our mortgage is paid off, we're about to triple our retirement contributions. A long sideways market would be great for us.
We have been scrounging to get every last penny of my EF, RSUs, ESPP, MM, bonus, etc. into the market the last couple days. Sold a few personal items for $3000 just to get more in. Hoping to retire in ~10 years, so when I see things dip even 5-10%, I'm excited... And 20-30% drops, well, sign me up!!!

Another windfall on the horizon and hoping the feds don't calm the fears anytime soon! Saying this with the balance knowing there are those who are less fortunate and have been impacted by the current situation
As long as people keep that mentality, this may not turn into a 50% decline.
From what I can see, less than 1% in this country have this mindset, so we are going to change the situation by buying
VTSAX and chill

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Re: Are any early accumulators thankful for the current correction?

Post by willthrill81 » Tue Mar 10, 2020 9:52 am

mbasherp wrote:
Tue Mar 10, 2020 8:46 am
I don't think you need to be an early accumulator to look on the bright side. Heck, Warren Buffet is certainly thankful for the current correction.
I wonder whether Warren is interested in buying an airline and a cruise ship company. Royal Caribbean is trading at 40% of what it was a month ago.
mbasherp wrote:
Tue Mar 10, 2020 8:46 am
I will be even more thankful if/when we hit that elusive 20% down on a closing basis... just so the world can quit talking about the LONGEST BULL MARKET EVER nonsense!
I do too, but unless the market falls further, the S&P 500 still will not have reached the needed 20% drop for a bear market to 'officially' begin!
“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

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Re: Are any early accumulators thankful for the current correction?

Post by ValuationsMatter » Tue Mar 10, 2020 9:58 am

Despite the recent major drop of ~20%, current valuations are still on the high end, even if one expects an upward trend in fair valuation metrics; note the current CAPE & TMC/GDP. Earnings & revenues must increase to support the current stock prices, and real earnings growth has been slow to stagnant in recent years. Unless 'extreme valuations' become the new norm, don't expect the market to bounce back very quickly. More reasonably, they'll continue to drop.

Most everyone here acknowledges that the market cannot be timed consistently with precision, and with that in mind the reasonable do not expect to exit the market at a peak. If you acknowledge that, then it stands to reason that as you DCA funds out of your portfolio, the average withdrawal valuations will be average overall. So, that makes the true value of your current portfolio as somewhat less than is currently in there. The old amount you saw at peak is irrelevant. Given the still elevated valuations, my best guess is that the likely fair value of your current stock allocation is 80-90% of its current amount. Should one be thankful that prices are lower but still expensive?

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