Downturn? Has there been a downturn?

[nisiprius]

Downturn? Has there been a downturn?



I'm not seeing a downturn. Wait a second, let me get my glasses...



Oh, this downturn. What about it?

[Everlast311]

And then some enterprising chap overlays a chart from 1929, says "Look where we are!" and gets 300k Youtube followers. Avoid the Noid!

[jbowman]

My prediction is that it will be more noticeable in the coming weeks.

This prediction is worth exactly as much as what you paid for it.

[arcticpineapplecorp.]

VTI is DOWN 6% ytd and VXUS is UP 6% ytd:

https://testfol.io/?s=fHRTEqlJdwo

so i guess it depends on what/where you're investing.

also, we spend most of our time in drawdowns:



source: https://www.oncoursefp.com/files/vector ... _final.pdf

[Gopherever]

You’re so good. So good.

[MindBogler]

Downturn? Has there been a downturn?



I'm not seeing a downturn. Wait a second, let me get my glasses...



Oh, this downturn. What about it?

Nothing, other than I won't be surprised if it drops another 25-30%. I also won't be surprised if it rips another 20%.

[Nelly0]

At this point I’m actually hoping for a big downturn. I’m 38 years old and probably have 15 years minimum before I retire. I’d like to get it out of the way now so I can stop hearing about the incoming downturn all the time.

[exodusNH]

At this point I’m actually hoping for a big downturn. I’m 38 years old and probably have 15 years minimum before I retire. I’d like to get it out of the way now so I can stop hearing about the incoming downturn all the time.

The problem is that it could last a decade+. From ~2000-2013 the S&P 500 basically returned nothing. You first had the dotcom crash followed by the GFC.

That puts you at 51, within shooting distance and at the age where workplace discrimination becomes an issue, even though it's illegal.

[Nelly0]

At this point I’m actually hoping for a big downturn. I’m 38 years old and probably have 15 years minimum before I retire. I’d like to get it out of the way now so I can stop hearing about the incoming downturn all the time.

The problem is that it could last a decade+. From ~2000-2013 the S&P 500 basically returned nothing. You first had the dotcom crash followed by the GFC.

That puts you at 51, within shooting distance and at the age where workplace discrimination becomes an issue, even though it's illegal.

This is very true although it seems like a worst case scenario that I can’t plan around. In the meantime I’ll continue to save and invest as much as I can and hope for the best!

[syc]

Downturn? Has there been a downturn?



I'm not seeing a downturn. Wait a second, let me get my glasses...



Oh, this downturn. What about it?

The vertical scale on your graph is logarithmic. To be fair and accurate, plot it on a simple arithmetic scale and see what it looks like.

[livesoft]

Downturn? Has there been a downturn?

...
I'm not seeing a downturn. Wait a second, let me get my glasses...

...
Oh, this downturn. What about it?

So it appears that everyone has a chance to get out before a downturn happens. Nice!

[White Coat Investor]

Crystal ball so cloudy. I should take this thing back and ask for a refund.

[Nicolas]

The S&P 500 was down 10% from its all-time high intraday today so technically it’s a correction. We haven’t had one of those in awhile so it was time.

[baconavocado]

Barely noticeable for anyone who invested a windfall in VTI in 2002 and left it there.

[snailderby]

Timely reminder. Thanks for the perspective, nisiprius.

[Oddball]

“A journey of a thousand miles begins with a single step”

[VanGar+Goyle]

Downturn? Has there been a downturn?

I'm not seeing a downturn. Wait a second, let me get my glasses...

Of course there was a market downturn. It is not going up, or flat.
You may quibble about how much is a major downturn, but it looks like it ( VTI or VOO ) turned down at least 9 times yesterday.
If you invested in VFIAX Vanguard 500 index mutual fund, like Bogle advised, then turns down happen less often.

[RickBoglehead]

Saying there isn't a downturn in the market, and implying all is well, is simply ridiculous [unnecessary comment removed - moderator Kendall]. Anyone can show that over a long period of time, this is a blip. What is the point? It is still a downturn.

A full blown recession is not out of the question, significant inflation as well. To say that "all is well" is simply silly.

[bombcar]

I wish brokerages had an option to show “total return graph” as just a straight line. The angle would change a bit, but not much.

The reason it’s not worth talking about is that it’s not actionable- if you actually truly believe the market can’t be timed. And talking about it just makes you worry about it which makes you want to time it.

[BiggerSaver]

As I think back to 2022 (two quarters of negative GDP, down stocks and bonds, certain industries shrinking post COVID, etc.), there were knives falling everywhere.

Have enough liquidity for a job loss.

Diversify enough so you can sleep well (enough).

Avoid social media, or at least limit it.

I speak from personal experience!

[MorgansRun]

This is policy driven, not market driven. One tweet can send the markets up or down by a crazy amount.

[HooCares]

The answer is that yes there has been a downturn in both price and sentiment. While we can’t know how much of what’s going on that’s out in the open used to happen behind closed doors, it’s hard to ignore reality. That said, it’s impossible to predict the future. International holders may finally get a laugh in, for a little while at least.

[dogagility]

Oh, this downturn. What about it?

Just what I've been thinking too. Much ado about nothing.

[Tycoon]

Chasing emotions is not the way to wealth.

[ROIGuy]

Crystal ball so cloudy. I should take this thing back and ask for a refund.

You can borrow my Magic 8 ball. It works better than most Wall Street experts.

[HighLonesome]

As usual, just media hype. This time with a purpose.

[Kendall]

A political reference has been removed. Please keep the discussion focused on actionable investment decisions such as asset allocation and the behavioral aspects of investing.

[prioritarian]

Downturn? Has there been a downturn?



I'm not seeing a downturn. Wait a second, let me get my glasses...



Oh, this downturn. What about it?

Downturns are very common because STOCKS ARE RISKIER THAN BONDS. I think recency bias has led some (many?) forum commentators to forget this.



https://awealthofcommonsense.com/2022/0 ... orrection/

[prioritarian]

Chasing emotions is not the way to wealth.

I think being in touch with your emotions (rather than repressing them) is important when investing in wall street's casino.

[DSBH]

Not sure about downturn, but rebalancing and/or Roth conversion opportunities for some ...

[gunny]

Just what I've been thinking too. Much ado about nothing.

That really depends on one's specific situation and is therefore a huge oversimplification. Not everyone is decades away from retirement.

[rockstar]

We’re doomed. The sky is falling. Hockey for all.

[nisiprius]

...The vertical scale on your graph is logarithmic. To be fair and accurate, plot it on a simple arithmetic scale and see what it looks like...

Wow, that's the first time ever I've heard someone say that. Because the effect of compounding is multiplicative, a logarithmic scale is almost always the correct choice. But it's just un-checking one box in testfolio.io, so why not?

Source

...The vertical scale on your graph is logarithmic. To be fair and accurate, plot it on a simple arithmetic scale and see what it looks like...

Wow, that's the first time I've ever heard someone say that. Because the effect of compounding is multiplicative, a logarithmic scale is almost always the correct choice. But it's just un-checking one box in testfol.io, so why not? Happy to oblige.

Source



I don't think that adds much to our understanding.

My point is that in the context of the way investment grows on itself and compounds over time, what we have seen in the last few days, what has actually happened so far, isn't very much.

I personally kind of expect a crash, but as I sometimes say to a neighbor, "Hey, I've been wrong about absolutely everything so far, so why not this time, too?"

[jason2459]

Saying there isn't a downturn in the market, and implying all is well, is simply ridiculous [unnecessary comment removed - moderator Kendall]. Anyone can show that over a long period of time, this is a blip. What is the point? It is still a downturn.

A full blown recession is not out of the question, significant inflation as well. To say that "all is well" is simply silly.

If you just stand there, all is well.

[Parkinglotracer]

At age 65 and at the start of 2025 with EVERYTHING in consideration including the politics we can’t talk about, I went 50/50 AA with our low 7 figure portfolio. Bonds are mainly in short term treasury ladder paying 4.2 % or so. This is what we need to keep our sanity, sleep well at night, and protect ourselves at this point in retirement. We have a cola mil pension and SS. If I was younger I would stay the course with a 65/35 or 80/20 portfolio. Capitalism will survive. As an ex military person who has served around the world I prefer to see us work in union with our traditional allies. Insane.

[life_force_prana]

VTI is DOWN 6% ytd and VXUS is UP 6% ytd:

https://testfol.io/?s=fHRTEqlJdwo

so i guess it depends on what/where you're investing.

also, we spend most of our time in drawdowns:



source: https://www.oncoursefp.com/files/vector ... _final.pdf

This is a great chart. To me what strikes as interesting is the worst case number of years it took for sp500 to hit the next all-time high, that was roughly (eyeballing) 15 years during the great depression and about 5 years during GFC. That seems like a good way to determine how much fixed income one should plan for. 10 years on average in cash-type fixed income (MM, HYSA, CD, TIPS/Tbills individual bonds in ladders, etc.) should atleast be a consideration for most in/at/near retirees?

[rkhusky]

Not sure about downturn, but rebalancing and/or Roth conversion opportunities for some ...

Not much here. At one point I was almost 1% over my stock allocation and now am 0.5% under. But I should probably check out my US/Int’l ratio, perhaps there’s something there.

Edit: nope, US barely down 1% compared to Int’l.

[quantAndHold]

At this point I’m actually hoping for a big downturn. I’m 38 years old and probably have 15 years minimum before I retire. I’d like to get it out of the way now so I can stop hearing about the incoming downturn all the time.

The problem is that it could last a decade+. From ~2000-2013 the S&P 500 basically returned nothing. You first had the dotcom crash followed by the GFC.

That puts you at 51, within shooting distance and at the age where workplace discrimination becomes an issue, even though it's illegal.

This is exactly what happened to me. I was 38 in 1999.

I just kept plugging away, knowing it would all work out eventually. The run up after 2008, which happened during my highest earning and saving years MADE me, and I retired comfortably at 53.

That said, I’m not (yet) concerned about this small drawdown. However, as a retiree, I am very concerned about the economic and political factors that are driving this drawdown. This is not just business as usual.

[RickBoglehead]

It's basically impossible to really discuss how this is different given that all references to why it's different are removed by the moderators.

My point is simple - this is different. Burying your head in the sand saying "all is well" will get you looking like Kevin Bacon in Animal House.

[rkhusky]

It's basically impossible to really discuss how this is different given that all references to why it's different are removed by the moderators.

My point is simple - this is different. Burying your head in the sand saying "all is well" will get you looking like Kevin Bacon in Animal House.

Every time is different, so it’s all the same. People seem to have forgotten Covid a short 5 years ago. This is a drop in the bucket compared to Covid - our stores still have plenty of toilet paper (perhaps TP availability would make a good economic indicator).

[HighLonesome]

This is policy driven, not market driven. One tweet can send the markets up or down by a crazy amount.

And that never happened before? Come on man! You need to turn the channel.

[HighLonesome]

It's basically impossible to really discuss how this is different given that all references to why it's different are removed by the moderators.

My point is simple - this is different. Burying your head in the sand saying "all is well" will get you looking like Kevin Bacon in Animal House.

Sounds like you are hoping its different, because, well you know.

[BV3273]

It looks like a blip.

[Nelly0]

The problem is that it could last a decade+. From ~2000-2013 the S&P 500 basically returned nothing. You first had the dotcom crash followed by the GFC.

That puts you at 51, within shooting distance and at the age where workplace discrimination becomes an issue, even though it's illegal.

This is exactly what happened to me. I was 38 in 1999.

I just kept plugging away, knowing it would all work out eventually. The run up after 2008, which happened during my highest earning and saving years MADE me, and I retired comfortably at 53.

That said, I’m not (yet) concerned about this small drawdown. However, as a retiree, I am very concerned about the economic and political factors that are driving this drawdown. This is not just business as usual.

If we end up with a stagnant / flat market for the next 10-15 years this will be my hope. I’ll continue to chug along and make my normal contributions and hope for strong performance at the right time.

[life_force_prana]

It's basically impossible to really discuss how this is different given that all references to why it's different are removed by the moderators.

My point is simple - this is different. Burying your head in the sand saying "all is well" will get you looking like Kevin Bacon in Animal House.

You said it. It is hard to argue how this is very different without getting moderated. When people say everytime it feels different, or point towards past scary times (WW1,2, covid, gfc, etc.) also felt different at that time, I feel people miss what is very different this time. I really hope I am wrong.

[tesuzuki2002]

At this point I’m actually hoping for a big downturn. I’m 38 years old and probably have 15 years minimum before I retire. I’d like to get it out of the way now so I can stop hearing about the incoming downturn all the time.

The problem is that it could last a decade+. From ~2000-2013 the S&P 500 basically returned nothing. You first had the dotcom crash followed by the GFC.

That puts you at 51, within shooting distance and at the age where workplace discrimination becomes an issue, even though it's illegal.

Having a stagnant market for 13 years would be a bit defeating and also AMAZING at the same time... Being able to buy in for 13 years without price increases would be a blessing..... retire with a solid egg and watch the 5-7% gains every year despite spending 2-4%... All growth and no eating into principle...

Doesn't really work like this... but it's all about riding the wave... PE ratios have been hitting all time highs for a couple of year .. govt spending and low rate have really juiced things.. Market valuations are thru the roof,, I don't like seeing numbers disappear from my portfolio, but I can but more shares now...

[Fallible]

It seems a good point about keeping perspective, though it may not be of much help to investors who've taken on too much risk and for whom just one downturn reveals their true risk tolerance.

[RickBoglehead]

It's basically impossible to really discuss how this is different given that all references to why it's different are removed by the moderators.

My point is simple - this is different. Burying your head in the sand saying "all is well" will get you looking like Kevin Bacon in Animal House.

You said it. It is hard to argue how this is very different without getting moderated. When people say everytime it feels different, or point towards past scary times (WW1,2, covid, gfc, etc.) also felt different at that time, I feel people miss what is very different this time. I really hope I am wrong.

You are not wrong.

[KneePartsPro]

It's basically impossible to really discuss how this is different given that all references to why it's different are removed by the moderators.

My point is simple - this is different. Burying your head in the sand saying "all is well" will get you looking like Kevin Bacon in Animal House.

Every time is different, so it’s all the same. People seem to have forgotten Covid a short 5 years ago. This is a drop in the bucket compared to Covid - our stores still have plenty of toilet paper (perhaps TP availability would make a good economic indicator).

+1. It's the same kind of different that it has always been. The Covid example, to me, is a good one because if anything felt, seemed, or looked different it was the period in time surrounding that event.

[HighLonesome]

It seems a good point about keeping perspective, though it may not be of much help to investors who've taken on too much risk and for whom just one downturn reveals their true risk tolerance.

This is what I think is happening when I read all of the "the time its different" posts. Hubris prevents them from admitting they had the wrong AA.

Thanks to BH I am very, very happy with my AA and no issues with what is happening now. I am at the end of my first year of retirement.