What have you learned from this situation that you will take action on?

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srt7
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Re: What have you learned from this situation that you will take action on?

Post by srt7 »

In no particular order ...
1. Wash hands more often.
2. Touch face less often.
3. Bump up emergency fund.
4. Ignore herd mentality and pay attention to world events. Apparently the world is much smaller than I had imagined.
5. Have more respect for front-line workers (medical, retail, services etc.)
I can't think of anything more luxurious than owning my time. - remomnyc
Waiting_for_Godot
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Re: What have you learned from this situation that you will take action on?

Post by Waiting_for_Godot »

I've read so many posts re: seeing this coming, vs staying the course, and I run the gamut of emotions, from kicking myself for not bailing to testing my nerve to stay the course.

That being said, I have learned more about the dark side of the force (options), and I am tempted, although the profitability window will close on that once volatility calms down, and so I imagine my temptation will subside.

One thing I will definitely take action on... I played poker in college, although had trailed off substantially once I started working. I had a session, such that I put accomplishing 2 life goals prior to allowing myself to play again. Once I return, I not fear making the correct decision at the table... I am down much more than I ever will be playing poker, and will remember this moment in time.
thefireguy
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Re: What have you learned from this situation that you will take action on?

Post by thefireguy »

1) Be nicer to people.
2) Hug my wife and babies a little harder and not complain that we are home.
3) Stay the course.
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StormShadow
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Re: What have you learned from this situation that you will take action on?

Post by StormShadow »

I’ve learned that most people vastly over estimate their risk tolerance.

No wait, I already knew that.
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Harry Livermore
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Re: What have you learned from this situation that you will take action on?

Post by Harry Livermore »

1. I'm really happy with our AA (see attached image- imagine if I just blindly followed VG's "advice?")
2. My income, which has always been variable, is subject to stopping completely in ways that I had not anticipated, so:
3. Our EF needs to be even larger than I had thoughtfully planned for.
Cheers

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TomatoTomahto
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Re: What have you learned from this situation that you will take action on?

Post by TomatoTomahto »

I learned that my boring bucket/floor/quasi-LMP plan of having $3M in fixed income greatly helps sleeping at night.

I learned that TBM doesn’t react as well during an extraordinary market as I would have hoped. But, sufficiently well.

I learned that I should have given more consideration to LTT.

I learned that it’s reassuring that DW didn’t retire when I was encouraging her to do so. :oops:

I learned that our washlet toilets turn a month’s supply of TP into a year’s supply.
I get the FI part but not the RE part of FIRE.
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Sheepdog
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Re: What have you learned from this situation that you will take action on?

Post by Sheepdog »

I learned 'that what I learned and took action on during the Great Recession of 2007-08 is working this time so that I don't need to do anything more.

I lived off of my investments then as I do now.. That was tough as I had to sell stocks and bonds when the market was dropping. I wrote then on this forum,
"When a person must take distributions to meet expenses, and I do monthly, an adequate "cash" account should be maintained so that they don't "have to" sell at market lows. Keep a sizeable cushion. I am doing what I said I would do.....I maintain the "cash" account from which I take distributions at a minimum of 3 years of normal distributions. When the next big downturn occurs, and it will, I will not have to sell any investments for at least 3 years. I won't get caught again. "

You know what? That IS working.
Time is the school in which we learn, time is the fire in which we burn.~ Delmore Schwartz
anon3838
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Re: What have you learned from this situation that you will take action on?

Post by anon3838 »

Sheepdog wrote: Tue Mar 24, 2020 8:50 am I learned 'that what I learned and took action on during the Great Recession of 2007-08 is working this time so that I don't need to do anything more.

I lived off of my investments then as I do now.. That was tough as I had to sell stocks and bonds when the market was dropping. I wrote then on this forum,
"When a person must take distributions to meet expenses, and I do monthly, an adequate "cash" account should be maintained so that they don't "have to" sell at market lows. Keep a sizeable cushion. I am doing what I said I would do.....I maintain the "cash" account from which I take distributions at a minimum of 3 years of normal distributions. When the next big downturn occurs, and it will, I will not have to sell any investments for at least 3 years. I won't get caught again. "

You know what? That IS working.
Sheepdog,

The thread you are referring to is pure gold on this forum, and IMO, every investor should read it in its entirety.

I read the thread in late 2019, and it was a game-changer for me. In January 2020 I went from 100% equities to 70/30; 30% bonds is equivalent to ~7 year's living expenses for me, and I'm still in the accumulating phase.

Thank you again, I hope you and your wife are doing well.
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SmileyFace
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Re: What have you learned from this situation that you will take action on?

Post by SmileyFace »

michaeljc70 wrote: Mon Mar 23, 2020 10:21 am Keep at least 3 weeks of toilet paper in the house. :shock:
This is what I was thinking but we have never paid attention to how much we use so we aren't sure when our existing rolls will run out. We are now closely monitoring when each roll is switched out in each bathroom to monitor when our measly supply will be gone.
quantAndHold
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Re: What have you learned from this situation that you will take action on?

Post by quantAndHold »

I learned how to wash my hands properly.

Also that a well stocked pantry and medicine cabinet is not a mistake. It’s the emergency fund for daily living.

And that I’m not as much of an introvert as I thought I was.

About investing, I learned that our risk tolerance changes over the course of our lifetime. 2008 was no big deal. I kept buying all the way. No problem sleeping at night. I knew before this that my risk tolerance had changed as I got older and retired, and I had adjusted my portfolio accordingly, but I didn’t realize how much it had changed.
Yes, I’m really that pedantic.
JakeyLee
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Re: What have you learned from this situation that you will take action on?

Post by JakeyLee »

I have a feeling that "what we learn" typically just confirm our biases. So let me take a shot: I learned that I do sleep better at night with a paid off house. Aggressively paying off my mortgage a couple years back (instead of buying bonds and taxable investments) has allowed me to have over 1.5 years in living expenses. It's also afforded me the opportunity to make purchases these last couple weeks. I will continue those purchases all the way down. This was something I couldn't pull off in 2008/2009; I mean, other than my pre tax space back then.

So the real lessons learned were from 10-12 years ago. Getting rid of ALL debt was something I knew would pay off someday. I sleep real well nowadays. I refuse to fell guilty about that, whether its on this forum or in real life. Wake me up when we finally get to 50% down, or 60-70%, for that matter. FOMO is real.
LiterallyIronic
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Re: What have you learned from this situation that you will take action on?

Post by LiterallyIronic »

Three lessons for me:

1) Never, under any circumstances, let the emergency fund drop below where it's supposed to be.

2) Keep a two-week supply of canned food (and toilet paper) on hand always.

3) Don't put things off in life. I had been putting off getting a haircut, now the salons are closed. I had been putting off donating our old car to Cars For Kidneys, and now it's stuck here for awhile.
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KSOC
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Re: What have you learned from this situation that you will take action on?

Post by KSOC »

I learned I should have kept my fixed & equities at separate financial institutions. Want to look at my bonds but don't want to see my stock funds right now. Will I take action? No.

I learned I should have paid off the last $10k on my mortgage when I took some stock gains in early February. But I was more wary of tax implications so decided to kick it to later in the year. Will I take action? Nobody knows nothing.

I learned more about Total Bond Market & the corporate risk it holds. Sounds like I'd be more comfortable in the Treasury Fund family. Will I take action? Most likely.
I'm just sitting here watching the wheels go round and round. | Nobody told me there'd be days like these.
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2pedals
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Re: What have you learned from this situation that you will take action on?

Post by 2pedals »

This situation is still on going. I would not form too many lessons learned until it is all over. Maybe more big lessons are to come that will take precedence.
ge1
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Re: What have you learned from this situation that you will take action on?

Post by ge1 »

I didn't learn anything financially. My allocation to stocks was low going into this due to low need to take risk & belief that US markets were overvalued. I have increased my allocation to stock significantly over the last few weeks (from 40% to 70%) and will decrease that again should markets bounce back very quickly. If they don't bounce back soon that is fine too, I'm very comfortable holdings equities at these levels. I still have a healthy cash cushion (2 years worth of expenses). All of these were lessons learned from the financial crisis in 2008/09.

On a personal level I have learned and am learning invaluable lessons: How good it feels to slow down, have more time to read books & play games. How valuable it is to have the time to reach out to old friends and actually focus on the conversations, be it actually talking or exchanging mails or texts. How good it feels to go for a walk, even if not as "efficient" as a high intensity workout. How fortunate we are to have financial security. I could go on and on.
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TheTimeLord
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Re: What have you learned from this situation that you will take action on?

Post by TheTimeLord »

2pedals wrote: Tue Mar 24, 2020 11:29 am This situation is still on going. I would not form too many lessons learned until it is all over. Maybe more big lessons are to come that will take precedence.
I think we have learned not to count on those around us to remain calm. Also learned short termism is rampant.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]
Halicar
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Re: What have you learned from this situation that you will take action on?

Post by Halicar »

I've learned that 12 months of expenses in cash is (for me) the bare minimum, not the target, and that 18 months is probably a better target. I got lucky earlier this year by deciding to increase my cash rather than my investments, and I'm currently at 15 months of expenses.

Also, I'm seeing that when you increase savings by slashing spending, it changes both the numerator and denominator in your "months of expenses in cash" formula and I can increase it fairly quickly.
Agni
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Re: What have you learned from this situation that you will take action on?

Post by Agni »

Paying off the mortgage (recently) helped me sleep better. I had my doubts as I was paying it off aggressively as the market zoomed, no longer! I also learned that I can tolerate a 60-40 stock-bond (I am 45 yrs old) allocation but not more. Finally, I have 1 yr of loving expenses in i-bonds, I will probably raise that to two over the next few years. Overall I felt I am in a decent place and this event, speaking only financially, confirmed my risk tolerance.
friar1610
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Re: What have you learned from this situation that you will take action on?

Post by friar1610 »

As someone remarked above, it may be too early to think we've learned all the lessons we're going to from this crisis, so there may be more to be written.

Thus far I've learned (or been retaught):

- that being in the situation, pension-wise, where I can be aggressive with my allocation but don't have to be, I called it correctly (at least for me) by opting for the latter. I'll be reevaluating my already-conservative AA as this crisis develops/resolves (with a view toward possibly taking a little bit more off the equity table). (It was 48-48-4 when stuff hit the fan).

- that the cause of a financial meltdown can be something non-financial that can be hazardous to your health or even fatal. That means you need to have the plan to support your survivor(s) in place now and documented. Some fuzzy idea of how you'll arrange things to care for them if you pass first in the distant future won't hack it if you suddenly have a fever, a cough and can't breathe. I'm not totally delinquent in this area, but could be better prepared.

- that erring on the side of Treasuries, insured CDs and I-Bonds (as opposed to all TBM or riskier) may cost a bit in fixed income yield but is really just another type of insurance premium. Although I had leaned that way, I may need to lean a bit farther in the safety direction.
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Malingerer
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Re: What have you learned from this situation that you will take action on?

Post by Malingerer »

1) it’s important to have some cash reserves as an emergency fund and then some.
2) I will read more books
On the emotional aspect of investing as I have learned my risk tolerance is not what I thought it was.
3) I will tell myself to “stay the course” every single day
4) I will not read boglehead threads stating they saw this coming and sold unless they can state a specific date of the bottom (half kidding)
5) I won’t read posts about hardship by anyone with a net worth over 1 Million
6) Diversify
bogledogle
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Re: What have you learned from this situation that you will take action on?

Post by bogledogle »

I learned that real crisis money is not gold, silver or bitcoin - it's Toilet Paper!


1) Learn about Tax Loss Harvesting.
2) Maybe don't invest all your life savings in the Stock Market.
3) Don't worry too much that you have that extra cash on top of your emergency fund, that is not in the market.
4) Don't be greedy and rush to invest all of your dry powder too soon when there is a crisis. Market can dip lower than 15 - 20% :)
5) Learn more about real estate, for the upcoming slump.
6) Invest 2% of portfolio in "TP" going forward :beer :oops: (pun)
deanmoriarty
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Re: What have you learned from this situation that you will take action on?

Post by deanmoriarty »

That I need to rethink my fixed income allocation. I am 70/30, and my fixed income was in 50% BND and 50% munis. Moving forward it will likely become 50% cash (HYSA, CDs, I-bonds), 25% BND, 25% munis. Maybe even more cash than 50%.

I'll gladly suffer the cost of inflation but I do want the nominal value of my fixed income portion to not ever go down, it's just too brutal when equities are dropping like crazy and I have to sell bonds at a 10% loss to rebalance...

I clearly underestimated their risk.
michaeljc70
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Re: What have you learned from this situation that you will take action on?

Post by michaeljc70 »

watchnerd wrote: Mon Mar 23, 2020 8:40 pm Absolutely most important thing I've learned that I will take action on:

Pancetta is in short supply under lockdown.

But you can still make spaghetti carbonara using:

SPAM
I always use bacon for carbonara. I prefer it. Guanciale can also be used, but I'm sure it is harder to find than pancetta. I always have bacon in the freezer.
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2pedals
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Re: What have you learned from this situation that you will take action on?

Post by 2pedals »

TheTimeLord wrote: Tue Mar 24, 2020 11:42 am
2pedals wrote: Tue Mar 24, 2020 11:29 am This situation is still on going. I would not form too many lessons learned until it is all over. Maybe more big lessons are to come that will take precedence.
I think we have learned not to count on those around us to remain calm. Also learned short termism is rampant.
I would agree that is true. Some folks that usually act rationally are reacting with emotions. This is something I have experienced in the past though. It usually depends on what emotions are triggered at that time and how well an individual is able to control them. As Taylor has said, understand your maximum tolerable loss.
Slacker
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Re: What have you learned from this situation that you will take action on?

Post by Slacker »

1. Have at least 3-4 weeks supply of consumables on hand at all times.
2. Follow the urgings of my spouse to go ahead and horde like others instead of thinking it silly and just causes supplies to be disrupted for people doing their normal shopping, lest we become one of those just trying to buy supplies on a normal routine and find all shelves emptied out.
3. I can only rebalance in my 401K account twice a month, have a little more patience in a big event so I don't rebalance too soon.
4. (no action on this) our stock allocation of 85/15 is completely appropriate for us, we have enough E-Fund for our situation
InvestingGeek
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Re: What have you learned from this situation that you will take action on?

Post by InvestingGeek »

Agni wrote: Tue Mar 24, 2020 12:19 pm Paying off the mortgage (recently) helped me sleep better. I had my doubts as I was paying it off aggressively as the market zoomed, no longer!
I'm starting to think that way too but it still feels like dead money once it goes into the house.
Finally, I have 1 yr of loving expenses in i-bonds, I will probably raise that to two over the next few years.
Ibonds huh? I like to keep my loving expenses in maintaining a fit body, a healthy diet and a positive and happy outlook. Works wonders for me but everyone's needs are different ;-) :D .
JPatch
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Re: What have you learned from this situation that you will take action on?

Post by JPatch »

What I’m learning:

Having an emergency fund that can last me for 2 years is incredibly comforting.

Sometimes portfolio decline is the least “distressing” thing going on. Health worry, working from home with 2 toddlers and a 1st grader, seeing huge industries shut down suddenly. These things are more than just portfolio numbers fluctuating...
Monsterflockster
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Re: What have you learned from this situation that you will take action on?

Post by Monsterflockster »

corp_sharecropper wrote: Mon Mar 23, 2020 10:11 am I feel like nearly everyone except maybe the most ultimately financially secure people have learned something about themselves, their financial circumstances, or their outlook due to the unusual nature of the present crisis. I certainly have.

I have learned that the urge to optimize every last penny to be invested needs to be resisted. EF cash is boring, but it is no joke, and very few people (I'm talking bogleheads) truly have enough to feel truly at peace.. I know I don't, I fully intend to rectify this to the best of my abilities, even at the expense of long term retirement savings, until I'm at 1.5-2yrs of expenses... So I have a ways to go. This annoys me, as it means I can't aggressively jump into the market at these levels, but if I don't do it this will keep happening every "crisis".

I will likely keep contributing to get my 401k match, and also allocate the initial EF savings to Roth IRAs and HSAs, although drawing on those would be emotionally painful. I'm convinced that my end goal needs to be EF money in non-retirement accounts, but I'm going to have to, at least initially, use that tax advantaged space so as to not lose it.

I know that my current outlook and ability to be a cold calculating investor, would be VASTLY improved with a large, liquid, FDIC insured EF fund sitting in my war chest. My job hasn't been impacted, yet, and has no obvious direct or first order indirect exposure to this crisis, but I'm sure business will somehow be impacted (even a chance it is positively impacted) but it's no doctor level job security and the next crisis will undoubtedly be different.

This has been my main takeaway lesson, thus far.
I learned that big lump sums into your Roth at the start of the year is not always the best. I got caught up with the "maxed out my Roth" on Jan 2nd crowd. I think moving forward I will put in the 6k max but into the MM fund and buy $500 monthly Total Stock Market Index. Of course up until Feb 20 it looked like a pretty good plan.
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FelixTheCat
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Re: What have you learned from this situation that you will take action on?

Post by FelixTheCat »

I can eat an entire bag of Costco broccoli. Healthier eating is not that bad. :D
Felix is a wonderful, wonderful cat.
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dziuniek
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Re: What have you learned from this situation that you will take action on?

Post by dziuniek »

deanmoriarty wrote: Tue Mar 24, 2020 12:51 pm That I need to rethink my fixed income allocation. I am 70/30, and my fixed income was in 50% BND and 50% munis. Moving forward it will likely become 50% cash (HYSA, CDs, I-bonds), 25% BND, 25% munis. Maybe even more cash than 50%.

I'll gladly suffer the cost of inflation but I do want the nominal value of my fixed income portion to not ever go down, it's just too brutal when equities are dropping like crazy and I have to sell bonds at a 10% loss to rebalance...

I clearly underestimated their risk.
This.

There's been crazy intra-day and at close in price moves of BND (total bond market etf). After the dust settles... I am removing anything from my portfolios (where I can) that has anything to do with corporate bonds.

Although it'll probably be a good time to buy some HYG. Haha. :)
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FelixTheCat
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Re: What have you learned from this situation that you will take action on?

Post by FelixTheCat »

anon3838 wrote: Tue Mar 24, 2020 9:09 am The thread you are referring to is pure gold on this forum, and IMO, every investor should read it in its entirety.

I read the thread in late 2019, and it was a game-changer for me. In January 2020 I went from 100% equities to 70/30; 30% bonds is equivalent to ~7 year's living expenses for me, and I'm still in the accumulating phase.
Can you link the thread?
Felix is a wonderful, wonderful cat.
Sic Vis Pacem
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Re: What have you learned from this situation that you will take action on?

Post by Sic Vis Pacem »

I'm mid lesson. I'll let you know when I complete it.
Shael_AT
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Re: What have you learned from this situation that you will take action on?

Post by Shael_AT »

1. The same people who ridiculed me for having an 18 month emergency fund seem to be the ones who are asking for money 1 week after being out of work. I've learned that 18-24 months is reasonable for me, and helps me sleep at night.

2. Some of the wealthiest people I know are really panicked, and it's made me reflect on my own finances.

3. Love your family. Money means nothing if you have no meaningful relationships and stories with people

4. Employment is not a guarantee. I understand why people who went through dot com and great recession as adults w/ liabilities and obligations decided this last decade to find and stay in stable, boring, sometimes miserable but guarantee'd level jobs.

5. I miss shopping for the sake of being in the mall. I had no idea how much a part of my life window shopping and consumerism was. No, I'm not going to have a anti-consumerist, minimalist "revelation", in fact I'm absolutely going to hardcore splurge when this is all over. Take a month or two off from investing and saving. Go to Maui. Something. Anything.

6. I loved worked from home until I HAD to do it. Now, I loathe it and miss going into the office.
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WoodSpinner
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Re: What have you learned from this situation that you will take action on?

Post by WoodSpinner »

FelixTheCat wrote: Tue Mar 24, 2020 1:25 pm
anon3838 wrote: Tue Mar 24, 2020 9:09 am The thread you are referring to is pure gold on this forum, and IMO, every investor should read it in its entirety.

I read the thread in late 2019, and it was a game-changer for me. In January 2020 I went from 100% equities to 70/30; 30% bonds is equivalent to ~7 year's living expenses for me, and I'm still in the accumulating phase.
Can you link the thread?
Here you go ...
viewtopic.php?t=25126
Chip
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Re: What have you learned from this situation that you will take action on?

Post by Chip »

I've learned that I have to carefully review the spreadsheet I use to determine if rebalancing is necessary. Especially after I've made a bunch of trades and done multiple updates on it. I managed to count one particular bond position twice. Had I not caught it I would have rebalanced when it wasn't called for.

This isn't a particularly big deal, but is something I'll remember.
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FelixTheCat
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Re: What have you learned from this situation that you will take action on?

Post by FelixTheCat »

WoodSpinner wrote: Tue Mar 24, 2020 2:10 pm Here you go ...
viewtopic.php?t=25126
Nice thread. I am going to modify my IPS a little.
Felix is a wonderful, wonderful cat.
sylph
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Re: What have you learned from this situation that you will take action on?

Post by sylph »

I am at 100% stocks AA. I do have an EF. I feel fine. I sleep like a baby. This is my first experience with market crash.
Conclusion: My AA is right for me. I have ability to "Stay the Course"
confusedinvestor
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Re: What have you learned from this situation that you will take action on?

Post by confusedinvestor »

+1

I made a rebalance mistake on Monday where I sold 80K US to buy 80K International in my 401K which now brought my US:INT from 70:30 to 60:40 and today I fixed the mistake with a reverse trade.

Well, it costed by 1.5% short term redemption fees on Int Fund ~ 1200$ +

Lesson learnt:

1. Double check on Rebalance trades / excel SS

2. Stick to Yearly Rebalance Timepoint.



Chip wrote: Tue Mar 24, 2020 2:32 pm I've learned that I have to carefully review the spreadsheet I use to determine if rebalancing is necessary. Especially after I've made a bunch of trades and done multiple updates on it. I managed to count one particular bond position twice. Had I not caught it I would have rebalanced when it wasn't called for.

This isn't a particularly big deal, but is something I'll remember.
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corp_sharecropper
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Re: What have you learned from this situation that you will take action on?

Post by corp_sharecropper »

macheta wrote: Mon Mar 23, 2020 9:08 pm I've made some difficult decisions over the last six months. Basically, I spent a lot on building my emergency fund.

My friend told me to get out of the stock market in February and I did not listen to him. I keep hearing something in the background telling me to stay the course. Sort of like the "Hold" scene in Braveheart when William Wallace was holding the line.
You're my brother from another mother! THIS is EXACTLY what I was thinking of last night and is a perfect illustration of my feelings. First I was mooning the opposing army (I'm not scared, bring it!), then they started charging (meh, they're so far away, ok), then I could feel the cavalry pounding the ground as it got closer and finally I'm standing there, knees knocking together (nevermind what bodily functions I may have lost control of in my animal skin pants) and all I'm thinking is "hold, hold, HOLD, HOOOOOLLLLD!!!".

I've now made it to the point where I'm confident I'm in it for the entire cycle or whatever it ends up being, no way I'm jumping ship at this point. But, as I said in the OP, I don't particularly like this feeling and I know the single most effective antidote to this feeling would be a larger EF, for me.
Olemiss540
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Re: What have you learned from this situation that you will take action on?

Post by Olemiss540 »

I have learned that even bogleheads are prone to the hysteria inducing buy high and sell low mentality.

IPS, while universally endorsed, is a fickle piece of paper in the end.

That anxiety is inevitable regardless of financial position.

People are losing jobs and looking for food. Spend some time donating time or money to those with serious life struggles and you will spend less time concerned with paper losses or the size of you cash fund.

I have not sold or bought anything different than I sold or bought 10 years ago. When I decided on my asset allocation, I gave my self total absolution from any second guessing or back testing of results and am perfectly happy with the stock purchases I made a month ago. Dwell on the things that make you happy and try to focus on the blessings instead of the curses in your life.

Health first and foremost.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.
tealeaves
Posts: 218
Joined: Sun Apr 29, 2018 1:21 pm

Re: What have you learned from this situation that you will take action on?

Post by tealeaves »

I learned that at the end of the day spending a lot of time thinking about factors and tilting is kind of silly.
avidlearner
Posts: 64
Joined: Tue Mar 19, 2019 7:51 am

Re: What have you learned from this situation that you will take action on?

Post by avidlearner »

That I need to rebalance at 5% band and not 2% because had I rebalanced at 5% I would have got more stocks for the same money I sold in bonds :).

Also, focus on health and family first.
Last edited by avidlearner on Tue Mar 24, 2020 9:00 pm, edited 1 time in total.
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timboktoo
Posts: 833
Joined: Sun Mar 31, 2013 3:42 pm

Re: What have you learned from this situation that you will take action on?

Post by timboktoo »

I think my takeaway is about how fragile human life is. I would never have imagined something like this. It seems like the stuff of movies.

- Tim
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tooluser
Posts: 713
Joined: Sat Oct 01, 2011 7:04 pm

Re: What have you learned from this situation that you will take action on?

Post by tooluser »

That I will probably want a bigger cash allocation in retirement than I was planning on. I was already thinking this through via the The Retirement Manifesto website (bucketing advocate). There is surely comfort in knowing you'll be okay for a few years.

Also that my 70/30 stocks/bonds allocation goal feels pretty good for retirement.
CUBuffs
Posts: 117
Joined: Wed Feb 18, 2009 2:28 pm

Re: What have you learned from this situation that you will take action on?

Post by CUBuffs »

For those investors fortunate enough to have a Thrift Savings Plan, don't use the L Income Fund for your retirement withdrawals. The TSP is an excellent vehicle for the accumulation phase, but the withdrawal options are severely limited. You can't specify which funds from which to withdraw. For example, if you have 50% in the G Fund (essentially a bond fund with a guaranteed return) and 50% in the C fund (S&P 500 fund), you cannot specify that withdrawals come from the G Fund during declining markets. The TSP withdrawals are made proportionately, e.g. 50% G Fund and 50% C Fund. This is very detrimental during declining markets. Even the L Income Fund (about 20% equities) is down today, 3/24/2020, about 6%.

In my opinion, it would be better to move your equity allocation to an IRA and keep your TSP portion totally in the G Fund. That would provide flexibility to determine which funds you would use for your withdrawals.

Stay safe and healthy, friends.

Mike
Jim Beaux
Posts: 109
Joined: Sun Jul 23, 2017 4:29 pm

Re: What have you learned from this situation that you will take action on?

Post by Jim Beaux »

I feel that considering all thats happened, hopefully we are going to come through in fair shape. We have enough food, cash, & our 50/50 portfolio hasnt kept me up at night. We didnt hoard though we did have to buy groceries every day last week.

Im sticking with my plan and expect things to recover in due time.

When you feel your car getting loose hold the steering wheel straight.
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crystalbank
Posts: 332
Joined: Wed Nov 01, 2017 12:21 am

Re: What have you learned from this situation that you will take action on?

Post by crystalbank »

I learned the following lessons during this crash. I'm still sticking to my AA and didn't capitulate (yet) but there are some hard lessons for me during this crash.

1. Never skimp on your Emergency Fund (EF) and don't use your EF as dry powder and invest it during a dip.
2. Don't put your EF in Munis. While Munis didn't drop like equities, still not a reliable place for an EF.
3. Worry more about your job/income stream rather than market performance and TLH strategies.
4. Ditch tilts, factors and other backtested biases and simplify your portfolio. Complex portfolio strategies seem great during a bull run but when market drops it's far too overwhelming to keep track of all of it and stick to it.

Unrelated to market, this whole saga made me realize how fragile our modern society is and the downsides of efficiency and optimization. I can still buy groceries and supplies reliably (thank goodness) but I won't take it for granted. It's good to have decentralized (inefficient) systems in place.

Going forward, my Emergency Fund will mostly be in I-Bonds, with some portion of it in cash (dollar bills) and some gold.
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Atomic
Posts: 110
Joined: Sat Mar 13, 2010 12:14 am
Location: Minnesota

Re: What have you learned from this situation that you will take action on?

Post by Atomic »

Its good to be young with time on your side. Health is wealth. Curiosity, a sober assessments of risk, and disciplined plan implementation might save the life of someone near you.
rene
Posts: 268
Joined: Wed Mar 19, 2008 9:33 pm

Re: What have you learned from this situation that you will take action on?

Post by rene »

- increase emergency fund
- pay off mortgage sooner rather than later
valuables
Posts: 37
Joined: Fri Feb 07, 2020 7:55 pm

Re: What have you learned from this situation that you will take action on?

Post by valuables »

Lessons learned:

1. Have the right asset allocation. I have 20% in fixed income, and the losses while big have been tolerable.

2. Really spend more time thinking about the right kind of fixed income. Now I'm considering moving to long term treasuries due to their properties in a downturn. I don't like Bond ETFs anymore.

3. Emergency funds are important, I had 9 months expenses available. Now, I will likely try to double that. I would have felt way more vulnerable had I not had 1/2 of a down payment saved for a house that I can use as a backup emergency fund.

4. While I understand why others don't want to tilt, I do. Whatever your strategy is, stick to it for the long term and don't be swayed by the devout from the 'other side.'

5. Don't be dogmatic. A little market timing is okay. No, it shouldn't be a core strategy, but if you have a little side cash, or a small amount of extra fixed income, it makes sense to sell that and buy equities when they are undervalued. I would not recommend market timing a full portfolio like some of the insane posters did here (or maybe they were trolls?).

6. Rebalancing can be fun and gives you something to do in a crisis.

7. Don't overreact to downswings early on in plunge, wait for the blood on the street to arrive. DCA into dips, don't make drastic moves but make lots of small bets.
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