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

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

Post by Nicolas » Wed Apr 08, 2020 11:19 am

I’ve learned to quit obsessing about my portfolio and that includes looking at it too much, it leads to emotional actions which are always bad. I was watching it too much during the bull market. There are other things in life.

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

Post by FoolStreet » Wed Apr 08, 2020 11:41 am

watchnerd wrote:
Wed Apr 08, 2020 8:59 am
palanzo wrote:
Wed Mar 25, 2020 12:29 am
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
You absolutely cannot :oops:

Try it, you'll be surprised.

Just make sure you use proper pecorino romano.

We have a wheel.
Do you mix the pasta on top of the wheel, like a plate?

nascar090210
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Re: What have you learned from this situation that you will take action on?

Post by nascar090210 » Wed Apr 08, 2020 11:54 am

Cash was already 40% of our portfolio. So, staying the course.

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

Post by Mr.BB » Wed Apr 08, 2020 12:20 pm

Same thing I learned in the 2008 crash.
1) This is the real test of your asset allocation tolerance.
2) You really won't understand any aspect of this downturn until at least 3 years from now.
3) If you can stay employed throughout this and continue to fund (to some level) your retirement accts you will come out way ahead.
4) This is a great reminder to learn what it will be like to be retired and have a market downturn, and what type of AA you should have when you want to retire.
5) Emergency fund accounts, though they can be a bit of a drag on your wealth building is a valuable thing to have. I think the 3-6 month minimum should be increased to 8 to 12 months.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

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

Post by Nestegg_User » Wed Apr 08, 2020 12:49 pm

Mr.BB wrote:
Wed Apr 08, 2020 12:20 pm
Same thing I learned in the 2008 crash.
1) This is the real test of your asset allocation tolerance.
2) You really won't understand any aspect of this downturn until at least 3 years from now.
3) If you can stay employed throughout this and continue to fund (to some level) your retirement accts you will come out way ahead.
4) This is a great reminder to learn what it will be like to be retired and have a market downturn, and what type of AA you should have when you want to retire.
5) Emergency fund accounts, though they can be a bit of a drag on your wealth building is a valuable thing to have. I think the 3-6 month minimum should be increased to 8 to 12 months.


Mr BB
This is why those of us who are retired make sure that our IPS acknowledges the risks of downturn and sequence of returns and sets a proper allocation as a result. For us, that meant an allocation to equities of 45% or lower (we were at 42% prior to crisis, but had a lower limit of 35% as that is the lowest limit that allowed for some inflation protection), but we also had set up a rolling ladder of CD's to insure cash flow. The nature of ones fixed income holdings is also very important which is why we used CD's, treasuries, money market funds, and (since I had access) the unique G fund. (as noted by others, in retirement your entire portfolio is your emergency fund. Prior to retirement, I'd already started the CD ladder and had at least two years of funds for cash flow as emergency funds.)
Your IPS may also need to consider that a "safe" withdrawal level is lower than 4% (we use 3.5% as max) especially in the current situation of lower bond yields in addition to the recession conditions (which could easily be another failure point of the "4% rule", especially if we follow up with "stagflation" like the 70's).

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

Post by Mr.BB » Wed Apr 08, 2020 1:10 pm

Nestegg_User wrote:
Wed Apr 08, 2020 12:49 pm
Mr.BB wrote:
Wed Apr 08, 2020 12:20 pm
Same thing I learned in the 2008 crash.
1) This is the real test of your asset allocation tolerance.
2) You really won't understand any aspect of this downturn until at least 3 years from now.
3) If you can stay employed throughout this and continue to fund (to some level) your retirement accts you will come out way ahead.
4) This is a great reminder to learn what it will be like to be retired and have a market downturn, and what type of AA you should have when you want to retire.
5) Emergency fund accounts, though they can be a bit of a drag on your wealth building is a valuable thing to have. I think the 3-6 month minimum should be increased to 8 to 12 months.


Mr BB
This is why those of us who are retired make sure that our IPS acknowledges the risks of downturn and sequence of returns and sets a proper allocation as a result. For us, that meant an allocation to equities of 45% or lower (we were at 42% prior to crisis, but had a lower limit of 35% as that is the lowest limit that allowed for some inflation protection), but we also had set up a rolling ladder of CD's to insure cash flow. The nature of ones fixed income holdings is also very important which is why we used CD's, treasuries, money market funds, and (since I had access) the unique G fund. (as noted by others, in retirement your entire portfolio is your emergency fund. Prior to retirement, I'd already started the CD ladder and had at least two years of funds for cash flow as emergency funds.)
Your IPS may also need to consider that a "safe" withdrawal level is lower than 4% (we use 3.5% as max) especially in the current situation of lower bond yields in addition to the recession conditions (which could easily be another failure point of the "4% rule", especially if we follow up with "stagflation" like the 70's).
+1
When I look ahead I am hoping to plan on a 3% withdrawal rate. Of course there are so many variables, what the next 5-10 years will look like.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

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

Post by Oregano » Fri Apr 10, 2020 11:01 pm

In October/November 2008, I told myself that once risky assets recovered, I was going to implement the Permanent Portfolio for a portion of my portfolio. And sometime in early 2010 or so I did. But I looked around and saw that a lot of risky assets were still attractive and I was young, so I sold the PP holdings and rode the bull market a while longer. Started moving my portfolio more conservative in 2016, but didn't implement any PP. Starting last year, based on my expectations that certain personal financial circumstances would play out, I finally planned to start moving part of my portfolio to a PP strategy. But those circumstances keep getting delayed, so I kept deferring the PP plan. This time, after risky assets recover, I will without question move some of money into PP.

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

Post by confusedinvestor » Fri Apr 10, 2020 11:42 pm

Mr.BB wrote:
Wed Apr 08, 2020 12:20 pm
Same thing I learned in the 2008 crash.
1) This is the real test of your asset allocation tolerance.
2) You really won't understand any aspect of this downturn until at least 3 years from now.
3) If you can stay employed throughout this and continue to fund (to some level) your retirement accts you will come out way ahead.
4) This is a great reminder to learn what it will be like to be retired and have a market downturn, and what type of AA you should have when you want to retire.
5) Emergency fund accounts, though they can be a bit of a drag on your wealth building is a valuable thing to have. I think the 3-6 month minimum should be increased to 8 to 12 months.

+100.

Pure Wisdom.

But, can you please help elaborate #2 ?

Mr.BB
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Joined: Sun May 08, 2016 10:10 am

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

Post by Mr.BB » Sat Apr 11, 2020 2:07 pm

#2...think of it this way.
If I told you to stand in front of a painting of a busy park scene (people, various activities, animals, weather, etc.. you can only see so much; basically it is living in the moment. As you step further away from the painting, all the little nuances that could not see will start showing up. Living through situations like a pandemic is no difference. 3 years from now you will get a clearer picture of what the stock market did (and why), the effects of the various government stimulus packages and laws; as well as how effective they really were. The decision you made at this moment and how they affected your future.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

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