A time to EVALUATE your jitters

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GoldenFinch
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Re: A time to EVALUATE your jitters

Post by GoldenFinch » Sun Mar 20, 2016 8:17 pm

linenfort wrote:
mickeyd wrote:Here we are once again.

Financial crisis is averted and the S&P500 is back to where it started in January. All hair fires seem to have been extinguished.

Next topic, "What's your favorite color?"


Dare I say red?


Red is good for tax loss harvesting.


:beer

gmaynardkrebs
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Re: A time to EVALUATE your jitters

Post by gmaynardkrebs » Sun Mar 20, 2016 9:10 pm

linenfort wrote:
mickeyd wrote:Here we are once again.

Financial crisis is averted and the S&P500 is back to where it started in January. All hair fires seem to have been extinguished.

Next topic, "What's your favorite color?"


Dare I say red?

Dare you say Fed?
Last edited by gmaynardkrebs on Mon Mar 21, 2016 3:11 pm, edited 1 time in total.

jrinvestor
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Re: A time to EVALUATE your jitters

Post by jrinvestor » Mon Mar 21, 2016 2:17 pm

Jeff Albertson wrote:from the Economist's Buttonwood:
Elroy Dimson, Paul Marsh and Mike Staunton of the London Business School are the acknowledged experts on global investment returns, having compiled data covering 22 countries over more than a century. As of February 2013, the longest period of negative real returns from US equities was 16 years. But it was 19 years for global equities (and 37 for world ex-US), 22 for Britain, 51 for Japan, 55 for Germany and 66 for France. Such periods are much longer than most small investors would have the patience to wait.

http://www.economist.com/blogs/buttonwood/2016/01/investing


Wow, 66 years of a negative real return for France. You could have money invested for you at birth and have less in real terms when you retire.

I knew about the US data, but did not realize that it was so different in other countries. I wonder if this data includes dividends - the author of the Economist article addresses that dividends were not included in a previous analysis with the FTSE 100. If it doesn't include dividends, that would be a huge problem with the study.

gmaynardkrebs
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Re: A time to EVALUATE your jitters

Post by gmaynardkrebs » Mon Mar 21, 2016 3:18 pm

jrinvestor wrote:
Jeff Albertson wrote:from the Economist's Buttonwood:
Elroy Dimson, Paul Marsh and Mike Staunton of the London Business School are the acknowledged experts on global investment returns, having compiled data covering 22 countries over more than a century. As of February 2013, the longest period of negative real returns from US equities was 16 years. But it was 19 years for global equities (and 37 for world ex-US), 22 for Britain, 51 for Japan, 55 for Germany and 66 for France. Such periods are much longer than most small investors would have the patience to wait.

http://www.economist.com/blogs/buttonwood/2016/01/investing


Wow, 66 years of a negative real return for France. You could have money invested for you at birth and have less in real terms when you retire.

I knew about the US data, but did not realize that it was so different in other countries. I wonder if this data includes dividends - the author of the Economist article addresses that dividends were not included in a previous analysis with the FTSE 100. If it doesn't include dividends, that would be a huge problem with the study.

Shiller says 97% of equity investors agree with the statement that "in the long run, stocks will outperform bonds." That makes the following the more important "money quote" from the Buttonwood article IMO:

The real paradox for long-run equity investing is that as more people believe that equities are the best investment, valuations rise and the likelihood of equities outperforming decreases.

protagonist
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Re: A time to EVALUATE your jitters

Post by protagonist » Tue May 17, 2016 10:32 pm

gmaynardkrebs wrote:
jrinvestor wrote:
Jeff Albertson wrote:from the Economist's Buttonwood:
Elroy Dimson, Paul Marsh and Mike Staunton of the London Business School are the acknowledged experts on global investment returns, having compiled data covering 22 countries over more than a century. As of February 2013, the longest period of negative real returns from US equities was 16 years. But it was 19 years for global equities (and 37 for world ex-US), 22 for Britain, 51 for Japan, 55 for Germany and 66 for France. Such periods are much longer than most small investors would have the patience to wait.

http://www.economist.com/blogs/buttonwood/2016/01/investing


Wow, 66 years of a negative real return for France. You could have money invested for you at birth and have less in real terms when you retire.

I knew about the US data, but did not realize that it was so different in other countries. I wonder if this data includes dividends - the author of the Economist article addresses that dividends were not included in a previous analysis with the FTSE 100. If it doesn't include dividends, that would be a huge problem with the study.

Shiller says 97% of equity investors agree with the statement that "in the long run, stocks will outperform bonds." That makes the following the more important "money quote" from the Buttonwood article IMO:

The real paradox for long-run equity investing is that as more people believe that equities are the best investment, valuations rise and the likelihood of equities outperforming decreases.


I would suspect that, over the extreme long haul, anything you invest in is essentially a zero-sum game.
Stocks have probably outperformed everything else since the industrial revolution, since this has likely been the period of greatest growth in the history of civilization. This is what leads us to our conclusion that stocks outperform bonds which outperform cash.
Will that continue to be the case? Empires rise and fall, markets boom and bust, and if any given investment modality outperformed inflation by even a relatively small amount over long enough periods of time, it would become unsustainable.
Ultimately, when dealing with the future, anything can happen. This example of France is sobering.

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Fieldsy1024
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Re: A time to EVALUATE your jitters

Post by Fieldsy1024 » Thu May 19, 2016 6:33 am

I don't have jitters, I am just disappointed my 401k/+ Roth isn't really moving up or down.

As someone new to this, should I be happy since I hear other people losing lots of money.

I'm in the 3 fund and my 401k is something many people suggested on here. Basically Index Funds.

bgscms
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Re: A time to EVALUATE your jitters

Post by bgscms » Thu May 19, 2016 6:43 am

I'm learning to stay the course and don't listen to the noise as I approach my retirement next month. Thank you for the time to explain your charts for all of us to understand.

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dandypandys
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Re: A time to EVALUATE your jitters

Post by dandypandys » Thu May 19, 2016 6:52 am

I am the same, from April 1st and May 1st compared as pretty much the same number. There is a great forum http://forum.mrmoneymustache.com/ where some people are doing challenges-- i am in the 100-200k one, and noticed other people were at a stand still too- made me feel a bit better- that i wasnt doing anything wrong.

gmaynardkrebs
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Re: A time to EVALUATE your jitters

Post by gmaynardkrebs » Thu May 19, 2016 7:51 am

bgscms wrote:I'm learning to stay the course and don't listen to the noise as I approach my retirement next month. Thank you for the time to explain your charts for all of us to understand.

I've never been sure how one distinguishes "noise" from "signal" in the case of markets.

Johnnie
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Re: A time to EVALUATE your jitters

Post by Johnnie » Sat May 28, 2016 9:47 pm

Just discovered the site, and enjoying very much. Nisprius is excellent.

N: "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."

Since discovering bogle-type thinking fairly recently, and coincidentally reading Taleb's The Black Swan, I have a new guru for all things related to the future: Sergeant Schultz, "I know nuh-thing!"

Image

Every time I catch myself thinking I know something about what's going to happen I hear Schultzie snickering in the background.
Last edited by Johnnie on Sat Apr 22, 2017 9:37 am, edited 1 time in total.
"I know nothing."

Dulocracy
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Re: A time to EVALUATE your jitters

Post by Dulocracy » Tue Jun 28, 2016 10:11 am

Johnnie wrote:Every time I catch myself thinking I know something about what's going to happen I hear Schultzie snickering in the background.


That is a nice built-in safety net you have there!
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.

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Taylor Larimore
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Nisiprius offers common sense

Post by Taylor Larimore » Tue Jun 28, 2016 10:34 am

Nisiprius:

When stay-the-course becomes difficult, you provide common sense into our psyche.

Thank you and best wishes
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

MindBogler
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Re: A time to EVALUATE your jitters

Post by MindBogler » Tue Jun 28, 2016 7:53 pm

This too shall pass.

db_et
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Re: A time to EVALUATE your jitters

Post by db_et » Mon Jul 11, 2016 8:42 pm

MindBogler wrote:This too shall pass.



Emotionally, (at least for me) it helps to put some visual quantification into the "stay the course" strategy. I did the analysis below right after the "Brexit" market blip for my sake and mostly to prevent me from doing something other than "stay the course". Putting statements like "stay the course", "buy and hold" , "dont panic", etc into a more visual perspective has definitely helped me avoid acting on emotion during the past 15 years or so (started investing utilizing buy and hold since 2003). The plots below use historical (granted no guarantee of future trends) S&P500 data and show probability of losing money or making money in the market vs years of "buy and hold" for an entire Monte Carlo of the S&P500 starting in 1871 till 2015. Bottom line is that the probability of losing money rapidly approaches zero if you stay in the market for 15+ years regardless of which time period you select with the historical S&P500 data set.

From another thread :

https://www.bogleheads.org/forum/viewtopic.php?f=10&t=194916

db

MSDOGS1976
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Re: A time to EVALUATE your jitters

Post by MSDOGS1976 » Fri Aug 12, 2016 8:07 am

gmaynardkrebs wrote:
bgscms wrote:I'm learning to stay the course and don't listen to the noise as I approach my retirement next month. Thank you for the time to explain your charts for all of us to understand.

I've never been sure how one distinguishes "noise" from "signal" in the case of markets.


Me either. And when you are retired, it's not so easy to tune out the noise no matter how many charts are thrown at you. When I was young, much easier.

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Taylor Larimore
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"noise" and "signal?"

Post by Taylor Larimore » Fri Aug 12, 2016 12:58 pm

I've never been sure how one distinguishes "noise" from "signal" in the case of markets.


They are the same.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

dbr
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Re: "noise" and "signal?"

Post by dbr » Fri Aug 12, 2016 1:07 pm

Taylor Larimore wrote:
I've never been sure how one distinguishes "noise" from "signal" in the case of markets.


They are the same.

Best wishes.
Taylor


Good way to put it. I was thinking about what to say about the concept of a signal in markets and wasn't sure how to put it.

MindBogler
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Re: A time to EVALUATE your jitters

Post by MindBogler » Mon Aug 29, 2016 1:46 pm

MindBogler wrote:This too shall pass.

2 months later... what happened again?

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Portfolio7
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Re: A time to EVALUATE your jitters

Post by Portfolio7 » Tue Sep 06, 2016 2:41 pm

MSDOGS1976 wrote:
gmaynardkrebs wrote:
bgscms wrote:I'm learning to stay the course and don't listen to the noise as I approach my retirement next month. Thank you for the time to explain your charts for all of us to understand.

I've never been sure how one distinguishes "noise" from "signal" in the case of markets.


Me either. And when you are retired, it's not so easy to tune out the noise no matter how many charts are thrown at you. When I was young, much easier.


That last sentence is striking, and something I've wondered about. Am 50, and to a large degree I feel invincible in the market right now. I feel like everyone is worried beyond what makes any sense (I read a lot of history - markets are virtually always unstable and crazy), and I just keep riding that ugly donkey up the wall of worry. 10 or 15% drop? no biggie. I'll get it back. Even if I don't, nobody else will either, and cost of living will adjust to some degree.

Lately though I've been thinking about the other side of that coin, the first 5 years of retirement, when sequence of returns risk is so critical to long term financial health. It must be nerve-wracking to watch it all unfold, even if you are in good shape overall. Talk about the lottery! It makes me more determined than ever to explore longevity annuities (which I'll likely when I retire, in another decade or so.)
An investment in knowledge pays the best interest.

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VictoriaF
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Re: A time to EVALUATE your jitters

Post by VictoriaF » Tue Sep 06, 2016 4:36 pm

Portfolio7 wrote:
MSDOGS1976 wrote:
gmaynardkrebs wrote:
bgscms wrote:I'm learning to stay the course and don't listen to the noise as I approach my retirement next month. Thank you for the time to explain your charts for all of us to understand.

I've never been sure how one distinguishes "noise" from "signal" in the case of markets.


Me either. And when you are retired, it's not so easy to tune out the noise no matter how many charts are thrown at you. When I was young, much easier.


That last sentence is striking, and something I've wondered about. Am 50, and to a large degree I feel invincible in the market right now. I feel like everyone is worried beyond what makes any sense (I read a lot of history - markets are virtually always unstable and crazy), and I just keep riding that ugly donkey up the wall of worry. 10 or 15% drop? no biggie. I'll get it back. Even if I don't, nobody else will either, and cost of living will adjust to some degree.

Lately though I've been thinking about the other side of that coin, the first 5 years of retirement, when sequence of returns risk is so critical to long term financial health. It must be nerve-wracking to watch it all unfold, even if you are in good shape overall. Talk about the lottery! It makes me more determined than ever to explore longevity annuities (which I'll likely when I retire, in another decade or so.)


Tuning out noise (and signal) in retirement is easy if you have sizable assets in safe fixed income that covers most of your expenses.

Victoria
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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blueblock
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Re: A time to EVALUATE your jitters

Post by blueblock » Tue Sep 06, 2016 5:49 pm

Portfolio7 wrote:Lately though I've been thinking about the other side of that coin, the first 5 years of retirement, when sequence of returns risk is so critical to long term financial health. It must be nerve-wracking to watch it all unfold, even if you are in good shape overall. Talk about the lottery!


While you may be right about the lottery, I'm 16 months into retirement and can tell you that it is not at all nerve-wracking, simply because I will adjust my spending as warranted. I cannot find Taylor's exact quote, but it went something like this: "we spent more in the good years and less in the not-so-good years."

I don't know if I'm typical, but something changed in my thinking when I retired. Once I pulled the trigger, it became less about planning and more about working with the proverbial hand I'm dealt.

protagonist
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Re: A time to EVALUATE your jitters

Post by protagonist » Tue Sep 06, 2016 9:01 pm

VictoriaF wrote:Tuning out noise (and signal) in retirement is easy if you have sizable assets in safe fixed income that covers most of your expenses.

Victoria


+1

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Re: A time to EVALUATE your jitters

Post by letsgobobby » Tue Sep 06, 2016 10:40 pm

Portfolio7 wrote:
Lately though I've been thinking about the other side of that coin, the first 5 years of retirement, when sequence of returns risk is so critical to long term financial health. It must be nerve-wracking to watch it all unfold, even if you are in good shape overall. Talk about the lottery! It makes me more determined than ever to explore longevity annuities (which I'll likely when I retire, in another decade or so.)

In short, this is why Wade Pfau recommended having your lowest stock allocation around the date of retirement; then slowly increasing thereafter. Your greatest sensitivity to sequence of return risk is immediately following retirement, because your time horizon is longest. As you age, your time horizon shortens (sad to say); thus sequence of return matters less. If I recall this argument depended on sufficient assets to begin with.

I'm kind of coming around to it. I'm 60/40 age 42; don't see any imminent changes in the near future. But just in the 5-10 years before retirement I will probably cut way down to 50/50 or even 40/60 unless my portfolio is a very large multiple of expenses; then if sequence of returns are favorable and it looks likely we will outlive our portfolio, we will increase equity allocation again 5-10 years after retirement.

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Re: A time to EVALUATE your jitters

Post by Lieutenant.Columbo » Tue Sep 13, 2016 7:34 pm

letsgobobby wrote:...Wade Pfau recommended having your lowest stock allocation around the date of retirement; then slowly increasing thereafter. Your greatest sensitivity to sequence of return risk is immediately following retirement, because your time horizon is longest. As you age, your time horizon shortens (sad to say); thus sequence of return matters less...
...
...we will increase equity allocation again 5-10 years after retirement.
Very interesting. Two questions:

1. you will "increase equity allocation again 5-10 years after retirement": is this when Pfau says one should start increasing stock allocation?

2. does Pfau make any correction to his general recommdation regarding when to increase % of syocks based on what was the subject's "age on retirement day"?

thank you
Last edited by Lieutenant.Columbo on Sun Sep 25, 2016 11:29 am, edited 1 time in total.
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Re: A time to EVALUATE your jitters

Post by lordmetroid » Sun Sep 25, 2016 10:48 am

My philosophy is to never loose my initial capital.

If the stock market falls below my initial investment. I will sell all equity and then place a repurchase order at the same price. If the prices keeps falling, I will lower follow behind with my repurchase order. When the prices turns up again, I will have the purchase order to buy at an equal or more favorable price. I may not hit the perfect bottom and I will of course lose some capital in commission costs but I accept that as the price to pay for ease of mind and security that my hard earned money will not vanish forever in a Japan scenario.

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Re: A time to EVALUATE your jitters

Post by ram » Sun Sep 25, 2016 5:54 pm

Nisiprius,
Somehow I had missed reading this thread till today but agree with many others that it is an excellent post. I recall being apprehensive in 2008-2009 but continued to invest in stocks right through the downturn. I do not recall the 2011 dip at all but when I looked at my records I had maintained my fairly high stock allocation between 1.1.2011 to 12.31.2011. More recently I bought stocks during the dips in Feb this year and during Brexit.

Yesterday we had invited a friend who is a few years older than me for a farewell dinner. He is moving to a warmer place in the south where he will practice (medicine) for a few more years at a somewhat slower pace and may potentially retire at the same location.

My wife who is normally not interested in financial discussions was today open to reviewing "where we are". After reviewing our numbers we decided that we need to work another at least 8 - 10 years but perhaps not at the same hectic pace. Shortly thereafter I saw this post and read it from top to bottom.

It reinforces our plan to gradually become more conservative as we come closer to retirement age. Thank you for the great service that you provide all of us.
Ram

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Lieutenant.Columbo
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Re: A time to EVALUATE your jitters

Post by Lieutenant.Columbo » Sun Sep 25, 2016 5:59 pm

ram wrote:we decided that we need to work another at least 8 - 10 years but perhaps not at the same hectic pace
why not keep the same pace and retire sooner than in 8-10 yrs?
Lt. Columbo: Well, what do you know. Here I am talking with some of the smartest people in the world, and I didn't even notice!

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ram
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Re: A time to EVALUATE your jitters

Post by ram » Sun Sep 25, 2016 6:11 pm

We like our work 80% of the time. But a few years ago the number was more like 90%. Slowing the pace may get it back up there. At least that is the hope.
Ram

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Re: A time to EVALUATE your jitters

Post by Lieutenant.Columbo » Sun Sep 25, 2016 6:33 pm

ram wrote:We like our work 80% of the time. But a few years ago the number was more like 90%. Slowing the pace may get it back up there. At least that is the hope.
it is actually a good idea:
titrating the highest volume of work that still allows Not hating work more than 10% of the time :wink:
Lt. Columbo: Well, what do you know. Here I am talking with some of the smartest people in the world, and I didn't even notice!

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Re: A time to EVALUATE your jitters

Post by aboose » Thu Oct 06, 2016 11:05 pm

I find this interesting right now, as people seem to be panicking about the market being overvalued and/or stagnant.

I won't touch my investments or shift my strategy. But I will be curious to see what will happen. A lot of people make it seem like a crash or downturn is inevitable in the near future. I wonder if they're right. It sure seems like it sometimes. and I keep chugging...

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Re: A time to EVALUATE your jitters

Post by dbr » Fri Oct 07, 2016 8:50 am

aboose wrote:I find this interesting right now, as people seem to be panicking about the market being overvalued and/or stagnant.

I won't touch my investments or shift my strategy. But I will be curious to see what will happen. A lot of people make it seem like a crash or downturn is inevitable in the near future. I wonder if they're right. It sure seems like it sometimes. and I keep chugging...


Looking at a long term price chart of the S&P 500, for which such data exists, might lend perspective to the inevitability of "crashes" and downturns and various other thoughts about what the stock market does.

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Re: A time to EVALUATE your jitters

Post by DavidRoseMountain » Sun Oct 09, 2016 6:56 pm

I mine as well go all in equities, I rode the 2008/2009 stock collapse with concern but not panic. I even bought more equities at that time. If math and not emotion can be my guide I should be ok.

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Re: A time to EVALUATE your jitters

Post by mcblum » Sat Oct 29, 2016 7:45 am

A wonderful post!
Bonds!!? Those stinking' Bonds!!? I've never been so happy to have my Bonds. I might rebalance in November if it needs it
thanks, Marty

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Flymore
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Re: A time to EVALUATE your jitters

Post by Flymore » Sat Oct 29, 2016 7:56 am

If the fed's supporting stocks and putting pressure on bonds with rising interest rates then why own bonds? :confused

http://www.reuters.com/article/us-usa-f ... SKCN11Z2WI

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Re: A time to EVALUATE your jitters

Post by mcblum » Sat Oct 29, 2016 8:00 am

I'd rater be down 7.5% than 15%
Marty

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Re: A time to EVALUATE your jitters

Post by Miriam2 » Sat Oct 29, 2016 2:03 pm

Jonathan Clements just posted his October 28, 2016, newsletter and he suggests it is a good time for us to hold our Financial Fire Drill, focusing on 3 key questions:

This Is a Test, This Is Only a Test

THE CURRENT GRUDGING economic recovery is in its seventh year and the stock market rally is in its eighth year. Here I earn nobody’s admiration by stating the obvious: These things don’t go on forever—but nobody knows when the music will stop.

That makes this a good time to hold a financial fire drill. Focus on three key questions. How would you react if the stock market dropped 30% next week? Would a market plunge derail your upcoming financial goals? How would you cope if an economic downturn put your job at risk?

This first question is about emotional fortitude, while the second and third questions are practical ones—but all three have profound implications for how you position your portfolio.

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Re: A time to EVALUATE your jitters

Post by unwitting_gulag » Tue Dec 06, 2016 4:43 pm

dbr wrote:Looking at a long term price chart of the S&P 500, for which such data exists, might lend perspective to the inevitability of "crashes" and downturns and various other thoughts about what the stock market does.


Good point. But here's a long-term chart that terrifies me: http://www.macrotrends.net/2324/sp-500- ... chart-data

Granted, this chart ignores dividends - which until recently were a huge component of cumulative annual returns. But stipulating that, the message of this chart is that from the late 1920s through the market's nadir of 1982, the inflation-adjusted rate of return has been... zero! In other words, for all of their gyrations and reversals, bull markets and bear markets, American stocks have been a good inflation-hedge for a period of 50+ years - but have done no better than that!

Then came the halcyon time of the 1980s and 1990s, when the stock market burgeoned. Today, so much of our intuition about compound-returns, about geometric progressions and the value of time-in-the-market, is rooted in the experience of the 1980s and 1990s. But in the bigger picture, that time was unusually good... just as, thus far, the 21st century has been unusually bad.

Indeed, I'd argue that the real stressor isn't the flash-crashes and the sporadic 10% declines that we've had every few months over the past two years; it isn't even the Great Recession and the crash of 2007-2009. It isn't Taleb's "black swans". No, the real problem is that crashes and corrections have been coming only on the heals of bare minimum recoveries. They haven't followed strong increases to fresh highs. We've not had enough good white swans.

Look at where we are today, vs the year 2000... not just in the American stock market, but overseas, and especially in Europe. There's little cause thus far to be ebulliently proud of the 21st century. Maybe subsequent decades will treat us more handsomely, and even a 17-year-period is just "noise". Maybe. But tell that to investors in the mid 1920s, and again to their grandchildren in 1982.

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Re: A time to EVALUATE your jitters

Post by HomerJ » Tue Dec 06, 2016 5:00 pm

unwitting_gulag wrote:
dbr wrote:Looking at a long term price chart of the S&P 500, for which such data exists, might lend perspective to the inevitability of "crashes" and downturns and various other thoughts about what the stock market does.


Good point. But here's a long-term chart that terrifies me: http://www.macrotrends.net/2324/sp-500- ... chart-data

Granted, this chart ignores dividends - which until recently were a huge component of cumulative annual returns.


It's a useless and meaningless chart then.

But stipulating that, the message of this chart is that from the late 1920s through the market's nadir of 1982, the inflation-adjusted rate of return has been... zero!


Cherry-picked dates. Starting at a high point, ending at a low point, AND the low point is right after 5 years of double-digit inflation.

Look at where we are today, vs the year 2000... not just in the American stock market, but overseas, and especially in Europe. There's little cause thus far to be ebulliently proud of the 21st century. Maybe subsequent decades will treat us more handsomely, and even a 17-year-period is just "noise". Maybe. But tell that to investors in the mid 1920s, and again to their grandchildren in 1982.


No one here invested all their money in 2000. And even if they did, it's returned 2%-3% real. But all the money invested in 1996, and 1997, and 1998, and 1999, and 2001, and 2002, and 2003, and 2004, etc. has returned a lot more. Most of here on these boards have gotten rich over the past 17 years. I'm quite ebullient about the 21st century so far.

And the grandchildren in 1982 were also quite rich thanks to their grandparents investing in the 1920s.
Last edited by HomerJ on Mon Dec 12, 2016 3:46 pm, edited 1 time in total.

Nowizard
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Re: A time to EVALUATE your jitters

Post by Nowizard » Sat Dec 10, 2016 10:15 am

Part of the timeliness of this great post relates to one of the last paragraphs. Though the post focused on the degree of discomfort investors were feeling at the time, it also mentioned remembering that time if the market roared back. That has happened, and the comment about rebalancing and lowering risk is prudent if great discomfort was experienced earlier.

Tim

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Taylor Larimore
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Index only charts?

Post by Taylor Larimore » Sat Dec 10, 2016 12:06 pm

unwitting_

I agree with you that performance charts without dividends are "useless" -- Even worse, they are misleading.

Best wishes.
Taylor
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Re: A time to EVALUATE your jitters

Post by selftalk » Mon Dec 12, 2016 3:33 pm

I have read that dividends comprise 44% of the total return.

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Re: A time to EVALUATE your jitters

Post by Sandtrap » Sat Jan 28, 2017 9:16 am

Newbie here.
I have just read the first original post of this thread by "nisiprius" (2011) and amazed at how applicable it is now (Jan 2017) as it was about 6 years ago.
Thank you "nisiprius" for writing it. :sharebeer
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Re: A time to EVALUATE your jitters

Post by Barry Barnitz » Sat Jan 28, 2017 2:02 pm

HI:

Just to note. We have transcribed the original Nisiprius posting on the site's affiliate blog, Financial Page | A Bogleheads® blog.

A time to EVALUATE your jitters | Financial Page.

regards,
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Re: A time to EVALUATE your jitters

Post by stemikger » Sat Jan 28, 2017 2:05 pm

Nisi because of the length of your post, I will not be able to read it now, but I know it will not disappoint.

Thank you for taking the time to educate all of us.

Steve
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Re: A time to EVALUATE your jitters

Post by heanbean » Fri Apr 07, 2017 9:56 am

What an excellent read!

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Re: A time to EVALUATE your jitters

Post by selftalk » Sun Apr 09, 2017 7:13 pm

Yep. That`s the way it has been. Not peeking solves the issue of not experiencing fear as Mr. Bogle would most probably say.

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Re: A time to EVALUATE your jitters

Post by sambb » Sun Apr 09, 2017 8:03 pm

sometimes tolerating the risk helps, but sometimes it can be fatal (Japan hasnt recovered in several decades).
Past performance does not guarantee future results. Stay the course usually works, but not always.
War worldwide, widespread pestilence, breakdown of economics, generational shifts, can change things. But most likely it would be something we cant predict.

Im staying the course, but I dont believe that it always works, because sometimes it doesnt.

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Re: A time to EVALUATE your jitters

Post by dwickenh » Sun Apr 09, 2017 9:43 pm

sambb wrote:sometimes tolerating the risk helps, but sometimes it can be fatal (Japan hasnt recovered in several decades).
Past performance does not guarantee future results. Stay the course usually works, but not always.
War worldwide, widespread pestilence, breakdown of economics, generational shifts, can change things. But most likely it would be something we cant predict.

Im staying the course, but I dont believe that it always works, because sometimes it doesnt.


Seems it has always worked if you can live long enough to reap the rewards. I am not sure there is an alternative that guarantees success.
I agree with your statement, I just choose to be an optimist.

Best wishes for your investments,

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

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Re: A time to EVALUATE your jitters

Post by GLState » Wed Apr 12, 2017 8:21 am

Investing in Japan would only have been "fatal" if we invested our total wealth at the very high. Looking only at previous highs on charts gives a false impression of what an investor would actually experience. Look at the chart of the Nikkei and imagine investing 5% of our pay every week over the last 40 years rather than only considering the fall from the price apex. Granted, it would not have been a great investment, but it would not have been "fatal". And, if we had a diversified portfolio of stocks and bonds, Japan's performance would have a minor effect.

We should not measure our portfolio's by how much we've "lost" since the most recent high, buy how much we've gained over what we have invested. Our portfolios are going to be in a drawdown condition most of our investing lifetimes.

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Re: A time to EVALUATE your jitters

Post by MindBogler » Sat Jun 24, 2017 2:29 pm

A Japanese investor with a reasonable allocation to global stocks would have ended up just fine. Japan is exhibit A on why international diversification is important for all investors.

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