So.... is this really "it"? Is this what we needed to mentally prepare for?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
FackKnope
Posts: 2
Joined: Mon Mar 16, 2020 1:00 pm

Re: So.... is this really "it"? Is this what we needed to mentally prepare for?

Post by FackKnope » Wed Mar 25, 2020 7:08 am

"Don't just do something; stand there." - someone wiser than me

This is the first major crash I've experienced while being heavily invested.

The question isn't "is indexing the right strategy?"

The question is "do I think capitalism is broken?" If so, go buy guns and ammo and hole up in a cave.
"The name of the game is not to get rich, but rather to avoid dying poor." - William Bernstein, "The Investor's Manifesto"
Data tells us a long term, buy and hold, index strategy is the best chance you have of not dying poor. I'm going with that instead of shivering in the woods.

CnC
Posts: 946
Joined: Thu May 11, 2017 12:41 pm

Re: So.... is this really "it"? Is this what we needed to mentally prepare for?

Post by CnC » Wed Mar 25, 2020 9:01 am

TheBogleWay wrote:
Fri Mar 13, 2020 10:31 pm
CoastalWinds wrote:
Fri Mar 13, 2020 10:29 pm
TheBogleWay wrote:
Fri Mar 13, 2020 10:26 pm
CoastalWinds wrote:
Fri Mar 13, 2020 10:06 pm
Stay humble. This isn’t even close to being done with.
So you're a market timer? You know stocks will continue to go down?
Not a market timer. Just saying we are not out of the woods, not even close.
...that's market timing. This thread is talking about the stock market, not peoples health.

So if you're sure that we're not near the bottom, have you sold your stocks? When do you think you'll buy back in? Just curious.
This is a combative and somewhat naive post.

You are bragging about being ok losing ±300k while still having a job and +1m in the bank...

It's hard to not be ok when you have a high paying job and more assets than 95% of Americans and 99.9% of the world. This is not the big test for you. The big test for you is that you become unemployed AND unemployable.

If you are like myself and still employed and able to continue to invest in this downturn it isn't a real test. Sure it's a big drop, and sure it may shake the faith of some. But for those of us who are not actually struggling, it can't be a real test without real struggle.


I do think we are not near the bottom, and I am certain the pain from this hasn't even started. Yes I timed this and took out my AA down to 50/50 and I am DCA back to 80/20 as this thing drops. I have any thread about it.

Valuethinker
Posts: 39557
Joined: Fri May 11, 2007 11:07 am

Re: So.... is this really "it"? Is this what we needed to mentally prepare for?

Post by Valuethinker » Wed Mar 25, 2020 9:21 am

TheBogleWay wrote:
Fri Mar 13, 2020 10:01 pm
I hope this doesn't come across as insensitive to people who are impacted more than I am, maybe those who just retired, etc. I do very much feel for them and wish the best for those in other scenarios.


However... all of my investing life and life at Bogleheads, everyone tells you to mentally prepare yourself. They say it's the hardest part of investing, to control the fears and jitters when the inevitable corrections/recessions happen.


Here we are, I've lost maybe 20% of my net worth in ~45 days. I've lost upwards of $300,000 on paper.


Yet, I almost couldn't care less. I have zero fear about this. I had thoughts about trying to save a few dollars but no fear. I showed it to my wife and screen captured it because it's interesting, and crazy to see how much these numbers go up and down, and a little chuckle and move on with our day. I have enough to pay bills, I'm likely to remain employed and I'm in this for the long gain. Even if this compounding work issue means another 20/30/40% drop, I suspect I'll feel the same.


Is this really it? Does this mean I pass the jitters test? Because if so, I'll be one happy guy. I haven't personally lived (as a significant investor) through a recession so I couldn't be 100% sure until actually lived through it how I'd react. I'm actually encouraged, game plan is in effect.


Is anyone else out there proud of themselves and how they're handling this drop?
1. if you are close to retirement the losses are quite important

2. if your job is under threat then the losses could be important

3. if your health or that of your loved ones is under threat, 1 & 2 are pretty irrelevant.

Glad that 20% fall does not make you feel too awful. Kudos to you for holding something other than 100% equities.

Valuethinker
Posts: 39557
Joined: Fri May 11, 2007 11:07 am

Re: So.... is this really "it"? Is this what we needed to mentally prepare for?

Post by Valuethinker » Wed Mar 25, 2020 9:24 am

CnC wrote:
Wed Mar 25, 2020 9:01 am



I do think we are not near the bottom, and I am certain the pain from this hasn't even started. Yes I timed this and took out my AA down to 50/50 and I am DCA back to 80/20 as this thing drops. I have any thread about it.
My sense is we will bottom at or near the point the US infection rate peaks - when we start to see meaningful falls in number of new cases each week.

That's quite a long way away, in the sense that the countries for which this has happened have imposed drastic controls on personal freedom and movement to do it.

The US is not organised that way, and at the moment (some) policy inclines in ways which could dramatically accelerate infection rates (and thus death rates with a roughly 4 week lag). As and if hospitals hit capacity, the death rate will start to soar - as it has in Italy, for example.

coachd50
Posts: 274
Joined: Sun Oct 22, 2017 10:12 am

Re: So.... is this really "it"? Is this what we needed to mentally prepare for?

Post by coachd50 » Wed Mar 25, 2020 9:28 am

FackKnope wrote:
Wed Mar 25, 2020 7:08 am


Data tells us a long term, buy and hold, index strategy is the best chance you have of not dying poor. I'm going with that instead of shivering in the woods.
I think the above point is what is missed in the millions of "market timing" and other investment strategy threads and posts.

It is simply a different thought process. It is not trading. It is not trying to make a buck here and there. It is simply "what is the best thing I can do with my my cash accumulated by living beneath my means" It really is fairly simple. Of course, that would mean not much to discuss LOL.

CT-Scott
Posts: 413
Joined: Sun Feb 22, 2015 3:01 pm

Re: So.... is this really "it"? Is this what we needed to mentally prepare for?

Post by CT-Scott » Wed Mar 25, 2020 9:41 am

TheBogleWay wrote:
Fri Mar 13, 2020 10:01 pm
Yet, I almost couldn't care less. I have zero fear about this. I had thoughts about trying to save a few dollars but no fear. I showed it to my wife and screen captured it because it's interesting, and crazy to see how much these numbers go up and down, and a little chuckle and move on with our day.
OP hasn't signed in since 3/14. I wonder if his wife stopped "chuckling."

coachd50
Posts: 274
Joined: Sun Oct 22, 2017 10:12 am

Re: So.... is this really "it"? Is this what we needed to mentally prepare for?

Post by coachd50 » Wed Mar 25, 2020 9:49 am

CT-Scott wrote:
Wed Mar 25, 2020 9:41 am
TheBogleWay wrote:
Fri Mar 13, 2020 10:01 pm
Yet, I almost couldn't care less. I have zero fear about this. I had thoughts about trying to save a few dollars but no fear. I showed it to my wife and screen captured it because it's interesting, and crazy to see how much these numbers go up and down, and a little chuckle and move on with our day.
OP hasn't signed in since 3/14. I wonder if his wife stopped "chuckling."
I would say that not logging in is consistent with his behavior here. Have a plan, work the plan, live your life and not worry about your portfolio.

TigerNest
Posts: 343
Joined: Mon May 10, 2010 12:58 pm

Re: So.... is this really "it"? Is this what we needed to mentally prepare for?

Post by TigerNest » Wed Mar 25, 2020 9:53 am

VTI peaked on Feb. 19, just 5 weeks ago. The decline has hit with remarkable speed. We're back to early 2017 levels.

This downturn feels different right now because it feels like there's a simple explanation for the decline -- the virus and the quarantine -- and there's something of an end in sight: quarantine until it gets down to manageable levels, increase hospital capacity through more ventilators and PPE as much as we can, increase funding into drugs and vaccine research with the hopes that something comes up in the next 12 months, and let the infection rate slow as more of the population recovers and has some form of immunity.

But we are still in very early days of this financial crisis, and I don't think we've seen the wider repercussions to the global economy. Over the next two months, the number of infected people with serious complications will skyrocket, our hospitals will be overwhelmed, and many people will die. It's hard to imagine the stock market improves or even remains stable during that time.

In the meantime, many businesses will stop paying rent. This will cause landlords, many of whom are heavily in debt, to default on their debt. Residential mortgage defaults will increase. Businesses will default on their bonds. This will cascade throughout the economy. Large companies will start to go bankrupt, especially in the oil & gas sector, and may stay in bankruptcy for some time due to the lack of clarity of when and how the business can be viable. Small businesses will shutter at a rate that I think is unprecedented (many already have). And consumer spending, usually the primary driver of the US economy, will take a massive double hit from a spike in unemployment possibly higher than we've ever experienced in this country and the world, as well as the changing behaviors of quarantined consumers.

I remember the feeling in early 2008, when Bear Sterns collapsed, and people started talking about the mortgage crisis and hoping it would be contained. Lehman Brothers didn't collapse until 7 months later, and the stock market didn't reach the bottom until 6 months after that. I also remember the feeling of utter panic in the marketplace in March 2009, where people were talking about the possibility that the economic model that had fueled our growth over the past century had come to an end.

It did not, as we know, and we recovered, but I won't forget that loss of faith in the system that became so widespread in the depths of the last recession. Let's hope it does not get to that point. When you ask 'is this it', for your portfolio, that's what I remember.

Pablov
Posts: 5
Joined: Mon Feb 04, 2019 11:14 am

Re: So.... is this really "it"? Is this what we needed to mentally prepare for?

Post by Pablov » Wed Mar 25, 2020 10:59 am

Rupert Dacat wrote:
Sat Mar 14, 2020 5:44 am
mancich wrote:
Sat Mar 14, 2020 5:21 am
watchnerd wrote:
Sat Mar 14, 2020 12:11 am
random_walker_77 wrote:
Sat Mar 14, 2020 12:00 am
OP, approx how old are you? I'd hate to spoil your happiness, but I don't think this is anywhere near as scary as either 2008 or 2001. 2008 scared me the most, though I was still able to pinch my nose and rebalance a couple of times. You'll know it's bad when you (and everyone else) is/are scared to rebalance back into stocks.

Let me paint a scenario that would better convey the sense of despair that needs to happen. Please don't accuse me of fear-mongering -- I don't actually think ......

Ahem, perhaps that last bit about war was a bit over the top, but the point is, right now we've simply reset ourselves back to where we were before an amazingly large runup in the stock market. The last couple years were really good. Oh well. The fear and terror that something *truly bad* is about to happen -- well, we're not there yet, and I sure hope we won't get there. For now, I think it's too early to pat yourself on the back and declare victory.

Dang, dude.

The only thing you left out was "and your parents die, too."

I need to go watch a romantic comedy after that.
That's it. I'm going to 100% cash :D
Why not a good slug of TIPS?
I'm going to 100% toilet paper!! :oops:

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