A time to EVALUATE your jitters

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HomerJ
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Re: A time to EVALUATE your jitters

Post by HomerJ » Sun Aug 07, 2011 9:02 pm

nisiprius wrote:Pure awesomeness... with charts!


Best. Post. Ever.

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Post by HomerJ » Sun Aug 07, 2011 9:06 pm

pkcrafter wrote: It's not just the loss, but a substantial loss coupled with the major pressure and interference of panic and noise from the media and other investors that creates fear and doubt..and failure.


Excellent point!

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Re: A time to EVALUATE your jitters

Post by nisiprius » Mon Aug 08, 2011 5:10 am

livesoft wrote:Good stuff. Thanks for the commentary. However, I'm surprised you did not show a chart of 2010 about a year ago, but instead you started further back. From April 2010 to July 2010, there was also lots of gnashing of teeth when the market dropped 15%. August 2010 was not too pretty either.
You're right, and something has been nagging at me and I realize what it is.

Morningstar's charting program must be slightly buggy in how it handles the very last days when it's charting long periods of time. It should have plotted a little hook at the end, same size as the one in 2010. Something like this, where I copied a sliver of the 2010 dip and pasted it onto the end.

Image
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Post by SMP » Mon Aug 08, 2011 7:10 am

Hi Nisiprius

Don’t often post but just had to thank you for those words of wisdom.

Regards

Steve

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Post by dickenjb » Mon Aug 08, 2011 7:49 am

Without a doubt the most insightful and influential post I have ever read on an internet board. Thank you, nisiprius.

This post definitely belongs in the wiki or stickied or something. A "black swan" of posts (in the good sense!). Definitely +3 sigma in post quality.

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Post by staythecourse » Mon Aug 08, 2011 8:12 am

ClaireTN wrote:Thank you. I've struggled to understand risk tolerance. I've been looking for a formula, something that can tell me with certainty what my exposure to the stock market should be. This post helps me more than anything else I've read to grasp that *uncertainty* is at the heart of the matter.

I do hope this post goes into the wiki for the topic on risk tolerance.


The easiest way to view risk in the conventional terms when deciding on how much risk to take is what I call Percent Maximum Drop (PMD). This basically states the drop of a portfolio can be 50% of the % dedicated to equities. For ex: A 80/20 split is fine if you are okay with experiencing a 40% drop in your portfolio. It is an easy rule of thumb and easy to understand.

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

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Post by BTDT » Mon Aug 08, 2011 11:06 am

Thank you nisiprius, excellent article, you are one of the reasons I spend so much time here. :beer
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Post by LH » Mon Aug 08, 2011 12:14 pm

Awesome post : )

And one final thought. If we're lucky, and the stock market comes back at least part way and seems to stabilize for a while... or if it comes roaring back and soars (yes, that' could happen, too)... don't forget how you feel right now. If you feel that you are close to the edge of your risk tolerance right now, then you have too much in stocks. If you manage to tough it out and we get a calm spell, don't forget how you feel now and at least consider making an adjustment then.


I would put in the comment, that its important to judge how you feel right now, versus how you will feel in the future when things are good. Its basically the same thing as nispirius. But you cannot just judge on how you feel right now, to now if you have too much stock, you have to judge compared to how you would feel later in different times. If you feel bad now, even close to the edge, you do not necessarily have too much stocks.

You should not take action based on feeling in one moment of time, especially if that results in selling low, having bought high.

The real mechanistic action/no action criteria I use is:

If you go higher bonds now (during a period of loss, or high fear), especially if that results in selling low having bought high, then you cannot go back when you feel better (and you will feel better when we are in the midst of another 80s 90s bull run) and sell bonds and buy stock high again.

If you have just screwed up, cannot hack actual volatility, have too much stocks, then capitulate, fine, we are all human. raise bonds, lower stocks, based on your feel. Stay the course thereafter.

But that should bind you. You cannot reverse that in the future, based on your feelings. That should be the mechanistic balance for the human overweighting the current time/feeling.

You sold stock low, when times "felt" tough, on a later provern rationalization that your "objective" "risk tolerance" is not high as you though it was. Ok, sells some stocks, go into bonds....

Then when you feel better, say like you felt in 2007, for a nice reminder of how absolutely meaningless our feelings are, or maybe even better feeling of the late 880s, 90s, 17 percent gains year after year, then what happens?

If its, oh hey, I have risk tolerance again. No. You do not. Its like going to be some sort of rationalization you come up with, but really, you just feel better, and being human, want to buy stocks again. Its just an excuse for buying on feeling. Which is an expectant recipe for disaster.

Mechanistically, you have gotten into stocks high, sold them low, feeling bad... then feeling good because stocks are expensive, bought them back again high.

bad.

Time is a smear. Investing is a smear. We unfortunately only really FEEL the current time, the current dow number, the current emotion or weather (cloudy=sad, low dow=sad) or whatever. We will financially live through and our performance depends on all of our alloted time slice though. And our feelings based on this current "now" infinitesimally small time slice, really do significantly influence our thinking (really hard to separate out thinking/rationalization/emotion, can really be only approximated ex post) over the long term where the results and summation of feeling and finance take place.

For an extreme example, these people 20 years old people at say, 100 bonds. They will feel like suckers, and rightly so, I posit, if the stock market booms again like 80s and 90s. They will expectantly reverse course, and buy stocks when times are good. Buy stocks high. Almost certainty, because they made an expectant error being 100 percent bonds at 20s(barring high wealth, and even then 10 percent stocks likely lowers volatility), When the should have bought stocks NOW, and held them. The only thing holding them back, was the sad stock emotion, which will be the other way, even ecstatic stock emotion.

So to reiterate, If you want to go higher bonds now, only do it as a one way street, never lower your bond percentage again. think how you will feel in the good times. Put yourself in the 80s 90s, bull market frame of mind. Imagine stocks booming. Imagine how you will feel if you go too high in bonds now on that one possible path, your collegues get boats, bigger houses, lear jets, private islands, whatever the level. You will not, you missed a lot of the easy money in the next stock boom.

Do way overweight one slice of time of emotion. Do not expectantly buy high, sell low as you are programmed to do.

think.

Time is a smear. The good the bad. booms busts. Make a plan that is good (never perfect) through all of them, because you cannot tell what is coming. Divorce yourself from current time. When times are great, think about possible bad times, when times feel real bad, think about the coming good times.

Just realize, our feelings mean nothing in terms of financial performance, and barring luck, are actually out to do us serious expectant financial harm.

Humans never are "stupid" self examined when they sell low having bought high, there is always a reason/rationalization. There is no real way to know if its reason or a rationalization. The limitation of not going higher in the stock/bond ratio after having gone lower though, can make one much more sure it was not just typical human behavioralism/fear/buy high-sell low dressed up in whatever rationalization feels best to you at a given time.

If you go higher bonds now on current feel, only do it will the caveat you will never go back. That will mechanistically force you to not just base it on how you feel now, but how you feel later during good times as well.

Any portfolio, is going to feel really bad at times under whatever path we will end up taking out of all possible paths. If you try to make it feel better going forward, by adjusting based on current feelings, that are based on the recent past, that is a recipe for disaster. You have to judge your risk tolerance, based on a smear of your feelings over time.

Sorry for the length repetition, certainly could benefit from editing, hope that was intelligible/helpful to some,

LH
Last edited by LH on Mon Aug 08, 2011 12:36 pm, edited 1 time in total.

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Post by salecat0709 » Mon Aug 08, 2011 12:35 pm

Nisiprius...I lurk a lot and post seldom on this board. I have to say this is one of the best posts I've read in the years I have been reading here. I like to think that, with the help of the knowledgeable people here, I have thought my situation through and have a good idea of my financial risk tolerance but times like this can be scary. Thank you for adding some sanity in your well thought out post.

Salecat

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Post by dbr » Mon Aug 08, 2011 12:38 pm

It is a great post but it is so fundamental to investing it is hard to imagine anyone putting money into stocks that does not have these pictures fully in mind. To need to see this now is scary.

But, good job.

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Post by HomerJ » Mon Aug 08, 2011 12:55 pm

LH wrote:Sorry for the length repetition, certainly could benefit from editing, hope that was intelligible/helpful to some,


Also an excellent post.

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Post by tolerable2323 » Mon Aug 08, 2011 2:00 pm

I remember back in 2007-8 were I was 100 stocks. Even tho my portfolio was much smaller back then I was out of my comfort zone. Times like theses, is where I really appreciate this forum for persuading me to change my portfolio 70/30.


It sucks that stocks have lost about 15 percent in a short period time however, am totally in my comfort zone now.

Thank you Forum!

joel

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Post by nisiprius » Mon Aug 08, 2011 2:05 pm

LH wrote:If you have just screwed up, cannot hack actual volatility, have too much stocks, then capitulate, fine, we are all human. raise bonds, lower stocks, based on your feel. Stay the course thereafter.

But that should bind you. You cannot reverse that in the future, based on your feelings. That should be the mechanistic balance for the human overweighting the current time/feeling....

[When stocks boom later] If its, oh hey, I have risk tolerance again. No. You do not. Its like going to be some sort of rationalization you come up with, but really, you just feel better, and being human, want to buy stocks again. Its just an excuse for buying on feeling. Which is an expectant recipe for disaster.
Well said.
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Post by fuermcs » Tue Aug 09, 2011 9:43 am

And with various indices up 2-4% today, the day after, we see first paragraphs like this, from Reuters:

"After opening higher, stocks almost immediately lost gains, with the Dow briefly turning negative. However, they then bounced off those lows and returned solidly positive."

In other words, Everything was terrible yesterday! But today stocks opened higher! But they quickly lost those gains! But after that they zipped back up again!

You can read that daily, or you can extrapolate that over a year(s). That's what the stock market does. It goes up and down. C'est la market.

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Post by LynnC » Tue Aug 09, 2011 10:10 am

GREAT post, nisi!

I agree, this should be into the "archives".

LynnC

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Post by exoilman » Tue Aug 09, 2011 10:25 am

I am printing Nisi and LH posts for my notebook. :thumbsup

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Re: A time to EVALUATE your jitters

Post by chipmonk » Tue Aug 09, 2011 11:45 am

Fantastic post, nisiprius... I'm very grateful to you for writing it.

It's odd, but most of my "jitters" are of a technical rather than an emotional nature, if you will. How do I rebalance and TLH with the market bouncing up and down? Should I do it almost every day, and if so how do I get around Vanguard's frequent trading rules?

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Post by livesoft » Tue Aug 09, 2011 11:55 am

nisiprius, you need to submit this as an Op-Ed article to the NYTimes. :)
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Post by fishnskiguy » Tue Aug 09, 2011 11:59 am

Maybe the best post in the short history of Bogleheads.org.

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Post by renditt » Tue Aug 09, 2011 12:29 pm

Can we make this mandatory reading for every new joiner on this forum :)

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Post by second-guesser » Tue Aug 09, 2011 12:45 pm

LH wrote - [ Sorry for the length repetition, certainly could benefit from editing, hope that was intelligible/helpful to some, ]

Great post LH about the emotions of investing. Thank you.

S-G

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Post by rallycap » Tue Aug 09, 2011 1:13 pm

Great post! When I finally decided to make the leap to investing on my own, I did all my reading and research and finally settled on an asset allocation I believed was in my comfort zone. I knew at some point this would be put to a test. I just didn't realize it would be so soon. This post is exactly what people like me need to here from time to time, and why I feel fortunate to have found the bogleheads. Thanks!

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Post by Noobvestor » Tue Aug 09, 2011 8:18 pm

Since apparently I am by far not the only person who thinks this OP is made of awesome, I'm going to ask: Nis, (or anyone else) mind if I try turning it into some kind of a Wiki page? I'm not sure how, yet, or whether it will involve the same or similar-but-remade charts, but ... open to suggestions (or criticisms). I realize we *can* just bookmark and link back to this, but if there's a place for it to be more permanently visible, I think it should be.
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Post by Barry Barnitz » Tue Aug 09, 2011 9:35 pm

Noobvestor wrote:Since apparently I am by far not the only person who thinks this OP is made of awesome, I'm going to ask: Nis, (or anyone else) mind if I try turning it into some kind of a Wiki page? I'm not sure how, yet, or whether it will involve the same or similar-but-remade charts, but ... open to suggestions (or criticisms). I realize we *can* just bookmark and link back to this, but if there's a place for it to be more permanently visible, I think it should be.


If Nisi grants you approval to use his work as the basis of a wiki page, please go ahead and be bold. Remember,with wiki, everyone can pitch in to craft the page.

regards,
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Post by nisiprius » Wed Aug 10, 2011 5:31 am

Noobvestor wrote:Mind if I try turning it into some kind of a Wiki page?
Sure.
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Post by neverknow » Wed Aug 10, 2011 5:52 am

nisiprius wrote:I'm blushing, thanks for all the kind words, glad people appreciated it.


I'd like to see this! Just kidding. Nice job!

I particularly like the long term S&P chart. I either have so much stress in my life the markets bad behavior hasn't yet to phase me, or - I actually do have an allocation that is okay for me (as I've been doing this for 30 years, I assure you this relative peace comes and goes -- maybe it is just my moment?)

Or -
Why Zebras Don't Get Ulcers by Robert M. Sapolsky
(go through the boglehead amazon link)

I'm going to go to a course on the matter, but my brother suggests the reason is that zebras go to the watering hole and see the lion reflection in the water. In the next 3 minutes they will run for their lives and either get eaten, or not, and go back to munching grass. Us humans are not zebras and our stress goes on 24/7.

I had to ratchet back my allocation because frankly the world seems lion infested and I'm getting tired.

"Nisi - what's black and white and red all over?" (a blushing zebra)
neverknow

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Post by nisiprius » Wed Aug 10, 2011 7:26 am

neverknow wrote:I particularly like the long term S&P chart.
It's not really an S&P chart. It's the chart for Massachusetts Investors Trust (MITTX), a stock-based mutual fund, one of the very few mutual funds older than Wellington.
"Nisi - what's black and white and red all over?" (a blushing zebra)
Oh, heavens, that takes me back to grade school. I trust everyone's aware that it's a riff on an older riddle to which the answer is "a newspaper" (read all over). Aha, Wikipedia has a short article about it: http://en.wikipedia.org/wiki/Newspaper_riddle
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Post by novastepp » Wed Aug 10, 2011 9:44 am

Great post. Rings truer with each passing day.

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Post by ryuns » Wed Aug 10, 2011 10:11 am

I'm evaluating my jitters--present! Though I have no interest in doing anything about them. Still, I find myself reflecting that the jitters are here because this is something serious (globalizationmeltdownOHnoes). And it very well might be. Point is that in retrospect, every time the markets get nuts, there seems to be some great reason why, and the market tells us we should worry about them and that freaks us out a little.
An inconvenience is only an adventure wrongly considered; an adventure is an inconvenience rightly considered. -- GK Chesterton

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Post by aja8888 » Wed Aug 10, 2011 12:10 pm

Nisi, great post and thanks for the "wake up call".

I forwarded this post to several of my friends and associates in the oil business who are fretting about the steep price decline in crude that just occurred, but is in the shadows of the market news.
Last edited by aja8888 on Wed Aug 10, 2011 2:01 pm, edited 1 time in total.

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Post by chaz » Wed Aug 10, 2011 12:14 pm

"While recent events have been unsettling, history tells us that "staying the course" can be the wisest approach during times of market volatility and economic uncertainty."
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Post by norookie » Wed Aug 10, 2011 12:17 pm

LonePrairie wrote:Excellent post, nisiprius.
:D X2
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Post by Leesbro63 » Wed Aug 10, 2011 12:25 pm

Midday Wednesday and I just saw this post, as equities are again having another difficult day.

THIS IS AN EXCELLENT POST, WORTH SAVING

My concern is that it REALLY IS DIFFERENT this time...with all the debt that we've never seen before except in 3rd world countries. That being said, the solution to the debt COULD BE TO PRINT MONEY AND INFLATE. In which case remember that STOCKS DID BEST during WIEMAR GERMANY. So even if we are seeing stuff that is truly different this time, the solutions available COULD still favor equities over bonds. My point being that staying the course is the prudent course of action.

One more slightly comforting point: While this COULD be like Japan 1989, let's remember that equities were much more highly valued (P/E) when their 20+ year "malaise" started as compared to today in America/Europe

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Post by bschultheis » Wed Aug 10, 2011 1:05 pm

Same here - midday Wednesday and I just saw this post. Way to go nisiprius. You are a star. While I always try to catch your posts - this one is the best.

bill

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Post by nisiprius » Wed Aug 10, 2011 4:33 pm

Wow. Thank you, all.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Post by Rosebud » Wed Aug 10, 2011 4:48 pm

Nisiprius and LH - Excellent posts! I read them on Monday, but went back today to print them for future reference.

Thanks very much.

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Post by jdiff » Wed Aug 10, 2011 6:03 pm

Thanks for an excellent and timely post......very well stated, and the graphs are a bonus!!

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Post by jimkinny » Thu Aug 11, 2011 5:28 am

I decided to stay away from this website several days ago because of all of the noise on it. I was reading Oblivious Investor's blog and there was a link to this post. Good job.

Allan Roth wrote an article about 1-2 years ago in which he expressed the wish that we could bottle the fear of 2008/2009. Then, when the stock markets are rising, we could open that bottle and remember the fear.

I really like the thoughts expressed by Jack Bogle in the link provided by Taylor several days ago. To paraphrase Mr. Bogle, in time of crisis, don't do anything, just stand there. Keep a long term perspective and ignore the noise.

Best wishes,

Jim

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Post by SunDevil » Thu Aug 11, 2011 9:17 am

renditt wrote:Can we make this mandatory reading for every new joiner on this forum :)


Yes, perhaps we need a sticky filled with "comfort literature in times of crisis."

Very eloquent, Nisiprius. Thank you.

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Post by allsop » Thu Aug 11, 2011 9:54 am

jimkinny wrote:Allan Roth wrote an article about 1-2 years ago in which he expressed the wish that we could bottle the fear of 2008/2009. Then, when the stock markets are rising, we could open that bottle and remember the fear.


This is very good advice and from time to time I try remind myself what I felt and thought at that time when the outlook is starting to look rosy, or black, for that matter.

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Loss Harvesting

Post by Billo » Fri Aug 12, 2011 10:41 am

A silver lining to the cloud of market twists like we've seen the last few months is tax loss harvesting. I inherited a bunch of stock with lots and lots of unrealized gains (one holding is 3M stock that was bought in 1946!), so I am looking for as many losses as I can find.

So one thing to do when all is bleak is to look through your holdings to see if there are some with losses that can be taken by selling the holding and replacing it with something that is similar. The "wash sale" rule prevents you from replacing with something that is "substantially identical," and the definition of that is not so clear, especially when you are dealing with index funds/ETFs. Also, since moving stuff around will mess up your balance, count on rebalancing 30 days later when the wash sale rule no longer applies to get back on track.

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Post by Default User BR » Fri Aug 12, 2011 5:40 pm

I inherited a bunch of stock with lots and lots of unrealized gains (one holding is 3M stock that was bought in 1946!), so I am looking for as many losses as I can find.

You should have received a step-up in basis when you inherited the stocks. The old basis isn't relevant anymore.


Brian

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Post by Billo » Fri Aug 12, 2011 7:57 pm

Not when the holdings are from a trust. Look it up.

Billo
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Post by mac240 » Sat Aug 13, 2011 8:52 pm

Amazing post. I am wondering how I can get a "novella-sized" printout of Nisiprius's "top" ("best"?) posts.

I navigated to "find all posts by Nisiprius" and became paralyzed by the sheer number (!) and I can't think of a reasonable way to sift through them, or even to find them all.

Hmm..

Maybe Nisiprius will write the novella (a-hem).

(Actually it's already written. Each post can be a mini-chapter. You can self-publish a book these days electronically - just cut and paste and you can sell it on Amazon.)

OR he could provide links to the "top 10" posts he is most proud of (or that are "most memorable" to him, etc.)

OR one or more member(s) might be willing to provide a link to one or more favorite Nisiprius post(s) from the past.

There has to be a way.

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Re: A time to EVALUATE your jitters

Post by airahcaz » Sun Aug 14, 2011 8:54 am

nisiprius wrote:I want to say this carefully. This is not an optimistic "stay the course" post and it's not a pessimistic "OMG do something" post. It's directed at people who are feeling very uncomfortable. I want to point out some things to think about, things that are hopefully truisms that everyone can see are correct once they're pointed out.

Your investment plan needs to be in tune with your own personal willingness to take financial risk. Your tolerance for financial risk is what it is. Only you know what it is. Nobody else can tell you what it should be. Different people are really and truly different. And your tolerance for financial risk is not necessarily the same as your tolerance for other kinds of risk.

You may not know what stock market risk is really like, and you may not know what your own risk tolerance really is. This is, if nothing else, a good opportunity to assess both.

What we have today is about a 10-15% decline in the S&P over the last month or so, coupled with a feeling of seismic shifts in the financial world. A sense that the earth is moving under our feet. A sense that events are happening that are going to make it into the history books. The general mood is summarized in this headline:

El-Erian: downgrade heralds new era

Heralds new era! Strong stuff. Let's not argue about whether it's true or not, let's agree that it feels that way right now. Like there's been a turning point, a division between an old era and a new era, and therefore past history is no longer a guide to the future.

And here's my point: it always feels that way. That's always what a big downturn feels like. It's not a number, 10% or 15%. It's a sense that there's been a break, the ground has shifted, the rules have changed.

We love drama and after the fact the reality often turns out to be boring. Imagine thinking that, see, it wasn't so bad! But that's later. And sometimes it is a turning point and sometimes it is that bad.

When you're deciding what your risk tolerance is, it's not a tolerance for the number 10 or the number 15 or the number 25. It's not a tolerance for an "A" turning into a "+". It's a tolerance for accepting genuinely-scary, nothing-like-this-has-ever-happened-before, heralds-a-new-era news events.

Now, the next set of truisms. Nobody knows what's going to happen. No, really. I don't care what the best experts are saying or what the futures do or what happens tonight in Asia. On Monday, stocks might shoot right back up. Or they might plunge some more. Or they might diddle around for weeks leaving us all on tenterhooks and then plunge some more, Or not.

We see this:

Image

Well, we really don't know what will happen. It might be almost nothing... it might be like the start of this period in 1998 and it could bounce back in a few months.

Image

It might be the start of another 50% plunge like 2008-2009. Awful, but over in a couple of years.

Image

It might be like the start of this period in 1937 when stocks plunged about 50% as in 2008-9, but didn't come back for about a decade. (I'm using a long-lived stock market mutual fund as a proxy for "the market," but it's close enough).

Image

It might be like Japan in 1990, down for two decades and still down.

Image

But not to overweight the pessimism, let me add one more chart. Where's last week's plunge? When I expand the scale, it's actually there. The data being plotted includes it. But apparently it's so tiny it just gets rounded off or vanishes at screen pixel resolution!

Image

The point is, the last few weeks were a time when some risk showed up, and your job is to process it. The temptation is to deal with the discomfort by choosing a prediction. Don't. Your job is to confront the reality of that uncertainty, that you do not know what will happen, and can only make the roughest guesses as to the likelihood of all these scenarios.

Hopefully, you can say "well, yeah, I knew all that. I'd much rather see the market go up and I feel anxious, but I'm able to stay the course."

Unfortunately, if you look at all this and conclude that your exposure to the stock market is higher than your risk tolerance, there aren't any good options. It is absolutely a personal decision. The only sure way to reduce stock market risk substantially is to cut back on your stock allocation. Diversification, fiddling around with different flavors of stock, it's all bandaids. When stocks plunge, they plunge. So the S&P drops 50% and your portfolio drops 46%, big deal.

And when the stock market is falling, you can't cut back on your stock market risk without locking in a loss. It's a tough one and a personal decision. You absolutely have to measure one against the other. It's crazy to even suggest a course of action to anyone else and I'm not going to try.

What I'm saying is that this is a good time for evaluation. The risk is here. Don't exaggerate it--we all love drama, but reality is usually more boring than we expect. Don't brush it aside, look it in the eye as carefully as you can. And then look at how you really feel about it--not how you'd like to feel or how you think you're supposed to feel.

And one final thought. If we're lucky, and the stock market comes back at least part way and seems to stabilize for a while... or if it comes roaring back and soars (yes, that' could happen, too)... don't forget how you feel right now. If you feel that you are close to the edge of your risk tolerance right now, then you have too much in stocks. If you manage to tough it out and we get a calm spell, don't forget how you feel now and at least consider making an adjustment then.


the final chart takes into account the japan chart as well?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)

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Leesbro63
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Post by Leesbro63 » Sun Aug 14, 2011 1:30 pm

Another post mentions a Japan comparison as well. But from what I read, the Nikkei was at 78 times earnings when it peaked in 1989 while the S&P is now at 12x forward earnings and 14 times trailing.

Can someone confirm that this is correct (or not)?

morgandaniel20
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Post by morgandaniel20 » Tue Aug 16, 2011 7:39 am

Great post nisiprius, excellent analysis and great info. Thanks for sharing info with us.

airahcaz
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Japan

Post by airahcaz » Tue Aug 16, 2011 8:39 am

Can anyone opine on how the Japanese chart is taken into account, or if it is just for demonstration?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)

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VictoriaF
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Nobel prize for Nisiprius

Post by VictoriaF » Wed Aug 17, 2011 4:25 pm

bearwolf wrote:Nisiprius for President! You rock man.

BearWolf

Alternatively, Nisiprius should receive the 2011 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.

Victoria

P.S. I have missed this recent market drama because I was away with limited access to the Internet. That was very fortunate. While those with the access to the news were preparing for a cataclysm, my greatest worry was to get into the Catacombs before they have closed for the day.
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Re: Nobel prize for Nisiprius

Post by baw703916 » Wed Aug 17, 2011 4:31 pm

VictoriaF wrote: P.S. I have missed this recent market drama because I was away with limited access to the Internet. That was very fortunate. While those with the access to the news were preparing for a cataclysm, my greatest worry was to get into the Catacombs before they have closed for the day.


Getting back out is also important! :D

Brad
Most of my posts assume no behavioral errors.

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