2020: Lessons learned

[tennisplyr]

Financially, what did you learn from 2020?

[jeffreys]

- Don't book flights so far in advance
- More educated on financial planning particularly for early retirement simply by virtue of having more time due to all those flights not taken!

[theplayer11]

continue to buy in big on huge dips

[jaqenhghar]

(1) cash is king during market swings

(2) don't introduce emotion into something I've learned how to automate

[BionicBillWalsh]

Don't always listen to the advice given on this board...otherwise you may pull the trigger on selling a large amount of Tesla stock way too early due to single stock risk.

[BolderBoy]

Financially, what did you learn from 2020?

That rebalancing works as intended!

[Sandtrap]

Don't book flights too far in advance.
Persistence pays off for full refunds for cancelled flights.

Stick to IPS in market swings. And, if in doubt of rebalancing bands or anything else, do nothing.

Ignore the noise, all of the colors and flavors of the month noise about everything.

Foundational "boglehead investment basics and strategies" work.

What others think and opine and pundit and profess and digress and digest . . . is irrelevant to one's personal financial and other strategy in life.

The "bogleheads.org" forum is an incredibly effective personal finance education and "support" group.

j

[Tingting1013]

Wait for holiday incentives before buying a new car. Could have saved me $5k this year

[Godot]

The "bogleheads.org" forum is an incredibly effective personal finance education and "support" group.

j

+1!

[tennisplyr]

The stock market is very resilient and it's virtually impossible to determine was truly drives it.

[gator15]

Don’t procrastinate completing a backdoor Roth. Having prepared meals delivered to our house daily isn’t that much more expense than buying groceries and prepping the meals myself when you consider time spent prepping the meal. I’m just as effective working from the house if not more than working in an office. Not commuting much this year has saved me a lot of money on gas and maintenance considering my commute was nearly a 150 mile round trip everyday.

[Kenkat]

I saw a recent comment about 2020, paraphrased I think from something pre-2020, but it was:

We are not all in the same boat; we are in the same storm. Some have yachts, some have rowboats, while others are drowning.

I realized that I was fortunate that my particular job was largely unaffected; I can work at home for the same pay and benefits as before. That was just sheer luck / good fortune.

I also learned that those with capital in the form of savings and investments were in a far better position than those without. That’s probably always true, but it became critical this year.

Financially, I have done fine in 2020, with cash (due to decreased expenses) and investments at all time highs. Health-wise, no one in my immediate family has caught Covid-19 and while extended family and friends did, none were affected enough to need hospitalization.

So 2020 for me has been 50% luck and 50% being ready in advance for and during the storm.

[AerialWombat]

VTI ain’t half bad.

[abc132]

I Bond & EE Bond for the win!

Funny enough, I found some pamphlets on them from 1994 while trying to find my Roth contributions over the years.

[minesweep]

That staying the course works. Actually I didn't just learn that fact this year. I've been doing just that since October 19 of 1987 when the Dow plunged 22.6% in one day.

[Woodshark]

I learned that somehow, against all logic, the market can actually quickly shrug off a worldwide pandemic.
I'm still baffled but happy.

[johnegonpdx]

I can live a much simpler life and still be very, very happy.
In the process, I can save and invest more than I originally thought I could.

[Tingting1013]

The stock market is very resilient and it's virtually impossible to determine was truly drives it.

The Fed

[aktx97]

When in doubt, consider checking in on Bogleheads.org before doing any transactions.

[femgineer]

Financially, what did you learn from 2020?

That rebalancing works as intended!

+1

[pasadena]

* I really do need a more substantial income replacement emergency fund so I can sleep at night during worldwide economic crisis and periods of uncertainty. Because I really, really don't want to spend money from my investments and postpone my goals.

* My retirement Asset Allocation is at the right level for me, at least when the market tanks badly for a short period of time. Hence, my non-retirement asset allocation was too conservative (also because my non-retirement goals have shifted).

* Rebalancing is a beautiful thing, and tax loss harvesting is not as bad as I thought it was

* When in doubt, your IPS is your friend. If your IPS doesn't tell you to do something, listen.

* FOMO is a thing, and I'm not immune to it. Confirmation bias is also very strong in some circles.

* This forum is the weapon I need to fight against said FOMO.

* I probably should have bought my fun-money stocks in my Roth IRA instead of brokerage

[Tingting1013]

* I probably should have bought my fun-money stocks in my Roth IRA instead of brokerage

I think the standard advice is the opposite, to take advantage of TLH if your fun money turns into sad money

[h82goslw]

I learned what a "K shaped recovery" meant

I also learned that I am very comfortable with my AA in the midst of a market crash like what we saw in March....due to what I've learned on this website. And I owe 99% of my financial success to this website. Thank you Mr. Bogle, Mr. Larrimore and the rest of the folks who post endlessly on Bogleheads.

[pasadena]

* I probably should have bought my fun-money stocks in my Roth IRA instead of brokerage

I think the standard advice is the opposite, to take advantage of TLH if your fun money turns into sad money

I know! But when fun money turns into happy money , it hurts lol. Hindsight!

[000]

Fixed income isn't a good store of value.

[JBTX]

The the world and the future are unpredictable.

That things we would never think could happen, can happen.

[Afty]

Don’t panic. Stay the course.

[GerryL]

Don't fall for the offer by cruise companies to save a few dollars by paying with an "echeck" instead of applying charges to a card.

Before making the payment, I read the T&Cs to confirm that if they cancelled the trip they would refund what I paid. They did indeed cancel, but they insist the trip has been "postponed" and have said their lawyers told them they only have to offer me a cruise credit. The only communication is daily marketing emails and weekly circulars and catalogs -- with no offers of anything similar to the trip that was cancelled.

[alec]

Money isn’t as important as physical and mental health.

[JoeRetire]

Financially, what did you learn from 2020?

Nothing I didn't already know.

[JoeRetire]

Having prepared meals delivered to our house daily isn’t that much more expense than buying groceries and prepping the meals myself when you consider time spent prepping the meal.

How so? Are you giving up paid hours to prep your meals?

[GuySmiley]

2020 reinforced that nobody knows nuthin', maintain balance, and keep expenses low. On a narrower basis, I learned about I-bonds via income tax overpayment, the SWAN benefits of having a healthy emergency fund (which I learned by it's absence!), and the realization that our savings rate is likely to decrease once the teenager starts driving in a few years, then another after that, then another after that...

[KlangFool]

Financially, what did you learn from 2020?

That rebalancing works as intended!

+1

+2

KlangFool

[UpperNwGuy]

— Don't buy airfare too far in advance.
— Resist the temptation to "do something" with your portfolio when the market is volatile. Stay the course instead.
— Bonds are not as bad as many on this forum would have you believe.
— The market will often rebalance for you.

[montanagirl]

RMD comes first;

THEN Roth conversions.

[wootwoot]

TLH can have demonstrable value despite all of the threads that downplay TLH's impact.

[willthrill81]

Major stock market declines do not occur in a vacuum. They are typically caused by really bad news on one or more fronts. As such, investors' willingness to take on risk can decline precipitously at the same time that stocks are tumbling.

[pasadena]

As such, investors' willingness to take on risk can decline precipitously at the same time that stocks are tumbling.

And then it skyrockets to unreasonable levels when stocks go back up.

[UpperNwGuy]

Having prepared meals delivered to our house daily isn’t that much more expense than buying groceries and prepping the meals myself when you consider time spent prepping the meal.

To reach this conclusion you have to value your personal time at the same hourly rate as your professional time. I don't think that's valid.

[Tingting1013]

Having prepared meals delivered to our house daily isn’t that much more expense than buying groceries and prepping the meals myself when you consider time spent prepping the meal.

To reach this conclusion you have to value your personal time at the same hourly rate as your professional time. I don't think that's valid.

A rational person would value their personal time higher than their working time.

[UpperNwGuy]

Having prepared meals delivered to our house daily isn’t that much more expense than buying groceries and prepping the meals myself when you consider time spent prepping the meal.

To reach this conclusion you have to value your personal time at the same hourly rate as your professional time. I don't think that's valid.

A rational person would value their personal time higher than their working time.

A rational person would value being able to control their food prep to ensure healthy eating.

[Xyz214]

continue to buy in big on huge dips

where did the money come from?

[willthrill81]

As such, investors' willingness to take on risk can decline precipitously at the same time that stocks are tumbling.

And then it skyrockets to unreasonable levels when stocks go back up.

Indeed.

Investors need to estimate as best they can how much stock they want to own when it seems like the world is crashing in on itself. That estimate may be very different than more conventional means of estimating risk tolerance (e.g. 'adjust your risk tolerance assuming that stocks could fall by 50% at any point).

[willthrill81]

continue to buy in big on huge dips

And what if the 'huge dip' turns into an ugly bear market that lasts for years?

[flaccidsteele]

continue to buy in big on huge dips

+1 this

Buying more in the spring yielded fantastic results as per usual

[260chrisb]

[Political comment removed by moderator oldcomputerguy] I've also learned to think differently as I near retirement. I took action on this late in 2019 based on what I had learned from 2018. I also learned that thinking and acting long term continues to be the very best approach and sticking to your plan is the right thing to do utilizing the best investments and information available. Being part of this community helps. Last year I enjoyed my best year financially! This year will be my second best. For the life of me I would not have ever believed this possible back in February and March. Obviously there is more to learn.

[willthrill81]

continue to buy in big on huge dips

+1 this

Buying more in the spring yielded fantastic results as per usual

How well did that work in the year 2000?

[flaccidsteele]

continue to buy in big on huge dips

+1 this

Buying more in the spring yielded fantastic results as per usual

How well did that work in the year 2000?

I picked up the bulk of my shares of Berkshire Hathaway B when it fell from 2700 to 1400 during the tech wreck

I still own them to this day

For me it was the beginning of a fantastic series of buying more during downturns

[Fallible]

_Just how far apart the stock market and the economy can get.
_How we still aren't certain whether what appears to be a market bubble really is a bubble or when it might burst.
_How uncertainty is the most important lesson of any year, requiring finding and staying the right course. Thank you, Jack Bogle.

[GenawithanE]

- Don't book flights so far in advance

+1
Really, +14000. Hoping we can go to Australia next year.

And we learned that travel insurance doesn’t cover pandemics.