Thread: It’s your First recession (or not) and you’re staying the course

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jjunk
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Re: Thread: It’s your First recession (or not) and you’re staying the course

Post by jjunk » Tue Mar 24, 2020 4:18 pm

Not my first go round, but the first where I had enough money that the paper losses "hurt". The things I decided to do:
  • TLH in taxable from S&P to Total US Market when appropriate
  • Swapped my Total Bond fund at Fidelity for Intermediate Term Treasury fund
  • Started saving up cash in an actual emergency fund vs. relying on the contributions to my RIRA

ScroogeMcDuck
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Re: Thread: It’s your First recession (or not) and you’re staying the course

Post by ScroogeMcDuck » Tue Mar 24, 2020 4:24 pm

This is my first time investing through a crash - I'm in my mid-30s and started working/investing in 2010. Despite being down over $500k (ouch!) I haven't had a problem rebalancing to the 80/20 allocation required by my IPS every time I hit my rebalancing band. The factors have have helped me stay the course are:

- My IPS. My spouse and I put a lot of thought into our risk tolerance when writing it and we're comfortable sticking to it. I am grateful to the Bogleheads forum for educating me on the need to create and stick to a workable plan.
- No mortgage! As a result, our expenses are very low and we don't care if we lose our jobs. I'm happy to buy index funds today at the price they were when we paid off the mortgage three years ago.
- I believe that in the long term, people will be productive and the stock market will go up. For the short term, we have enough cash/bonds to live on if needed (5-8 years).
- At the moment, I'm more concerned about the potential health impact on the elderly members of my family. I'm not sleeping well at night, but it's not because of my portfolio.

KEotSK66
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Joined: Wed Mar 11, 2020 7:03 pm

Re: Thread: It’s your First recession (or not) and you’re staying the course

Post by KEotSK66 » Tue Mar 24, 2020 4:35 pm

the reason i can stay the course is my retirement portfolio (vwiax) is in place with 4 years to retirement, i think that portfolio has a good chance of meeting my retirement needs and goals

they say the battle plan doesn't survive the first shot, well mine's survived three: 2007-2009, the rate scare of a few years ago, and now this

Rus In Urbe
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Re: Thread: It’s your First recession (or not) and you’re staying the course

Post by Rus In Urbe » Tue Mar 24, 2020 5:04 pm

*
Retired. Long-time investor, been through Tech Crash, Great Recession, etc. All the downturns have made me a lot of money. I never expected to have as much as we do.

OP----You will do just fine because, based on your opening post, you understand what even so many on this board miss: Successful Investing is 50% knowledge and 50% Mental Discipline (which means governing Fear & Greed). It's frankly astounding to me to read some of the posts that are flying around here right now....Just astounding!

You asked about what we do personally to govern emotions and STC and keep on track? I'm a huge proponent of thinking about how many SHARES I own, rather than counting the Dollar $ amount. This gets a huge amount of push-back from some folks on this board who will claim, oh that's just a mind-game, bla bla. It actually is what I own.....X number of shares. I don't "own" the dollar value until I sell. That is actually how it works.

And thinking about how it actually works, and how many shares I own and can buy at any one moment keeps me buying low and selling high. Or holding through a downturn, for instance.

It sounds like you are on a great track to great success in building a financial future for yourself. Congratulations!

Count your shares and STC. :beer Rus.
I'd like to live as a poor man with lots of money. ~Pablo Picasso

Leesbro63
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Joined: Mon Nov 08, 2010 4:36 pm

Re: Thread: It’s your First recession (or not) and you’re staying the course

Post by Leesbro63 » Tue Mar 24, 2020 5:09 pm

OK, so here's a second stage thinking question: Let's say the Fed does what it's doing (printing money, I think, under different labels). And that Congress and the President do what they do...borrow big time. And sometime before summer they get things under control with a combination of respirators, medicine, social distancing and whatever else we can think of. And the economy comes back, more or less. What are the the longer term effects for us investors of the (economic...printing and borrowing) treatment? Inflation? Eventual default? Nothing at all? I get it that we don't REALLY know, but it just seems that the odds of what will happen going forward are different than before all this.

BrownEyedGirl_27
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Joined: Tue Dec 17, 2019 6:37 pm

Re: Thread: It’s your First recession (or not) and you’re staying the course

Post by BrownEyedGirl_27 » Tue Mar 24, 2020 5:16 pm

The way I look at it (as of the last time I read an article discussing the stock market downturn), we lost our 30% gain of 2019 and it's like we're back in Dec 2018. Trying to tune out the noise and focus on time in the market, not timing the market.
"Your mind has a mind of its own. At the very moment when you are most convinced of your own rationality, you may be feeling rather than thinking your way toward a decision.” | Jason Zweig

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Streptococcus
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Joined: Thu Jan 03, 2013 12:17 am

Re: Thread: It’s your First recession (or not) and you’re staying the course

Post by Streptococcus » Tue Mar 24, 2020 8:45 pm

Rus In Urbe wrote:
Tue Mar 24, 2020 5:04 pm
*
Retired. Long-time investor, been through Tech Crash, Great Recession, etc. All the downturns have made me a lot of money. I never expected to have as much as we do.

OP----You will do just fine because, based on your opening post, you understand what even so many on this board miss: Successful Investing is 50% knowledge and 50% Mental Discipline (which means governing Fear & Greed). It's frankly astounding to me to read some of the posts that are flying around here right now....Just astounding!

You asked about what we do personally to govern emotions and STC and keep on track? I'm a huge proponent of thinking about how many SHARES I own, rather than counting the Dollar $ amount. This gets a huge amount of push-back from some folks on this board who will claim, oh that's just a mind-game, bla bla. It actually is what I own.....X number of shares. I don't "own" the dollar value until I sell. That is actually how it works.

And thinking about how it actually works, and how many shares I own and can buy at any one moment keeps me buying low and selling high. Or holding through a downturn, for instance.

It sounds like you are on a great track to great success in building a financial future for yourself. Congratulations!

Count your shares and STC. :beer Rus.
Thanks Rus. :beer

HawkeyePierce
Posts: 1032
Joined: Tue Mar 05, 2019 10:29 pm
Location: Colorado

Re: Thread: It’s your First recession (or not) and you’re staying the course

Post by HawkeyePierce » Wed Mar 25, 2020 12:28 am

CobraKai wrote:
Tue Mar 24, 2020 1:08 pm
HawkeyePierce wrote:
Tue Mar 24, 2020 10:51 am
This is my first recession. I graduated college in 2012 so I've only known the bull market. The following are keeping me calm:

- A fully-funded emergency fund in the form of 8-10 months living expenses in a CD
- My high savings rate (>60%)
- My job appears to be secure as my employer is cash-rich and I can work from home
- Education. I've read all of Jack Bogle's and the Boglehead's "greatest hits" plus numerous books about past financial crises, which has given me the perspective to say "I've seen this movie before and I know how it ends"
- Debt free

I am in a remarkably lucky position.
Lucky or fortunate? Looks like you made some good decisions!
It's both. I've made good decisions but I've also been very lucky to end up in a career and industry with exceptionally high pay, which made those decisions easier.

DesertMan
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Re: Thread: It’s your First recession (or not) and you’re staying the course

Post by DesertMan » Wed Mar 25, 2020 9:17 am

Leesbro63 wrote:
Tue Mar 24, 2020 5:09 pm
OK, so here's a second stage thinking question: Let's say the Fed does what it's doing (printing money, I think, under different labels). And that Congress and the President do what they do...borrow big time. And sometime before summer they get things under control with a combination of respirators, medicine, social distancing and whatever else we can think of. And the economy comes back, more or less. What are the the longer term effects for us investors of the (economic...printing and borrowing) treatment? Inflation? Eventual default? Nothing at all? I get it that we don't REALLY know, but it just seems that the odds of what will happen going forward are different than before all this.
This might counsel towards holding an allocation that includes gold such as the Golden Butterfly, in order to diversify against the increased inflation risks. But others would say that stocks themselves provide enough protection against inflation and that gold is not desirable as an investment since it has no intrinsic value and does not provide an income stream. But others would say that it's just a shiny zero coupon bond. And on and on.

Bottom line... pick allocation. Then go away.

Leesbro63
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Joined: Mon Nov 08, 2010 4:36 pm

Re: Thread: It’s your First recession (or not) and you’re staying the course

Post by Leesbro63 » Wed Mar 25, 2020 9:23 am

DesertMan wrote:
Wed Mar 25, 2020 9:17 am
Leesbro63 wrote:
Tue Mar 24, 2020 5:09 pm
OK, so here's a second stage thinking question: Let's say the Fed does what it's doing (printing money, I think, under different labels). And that Congress and the President do what they do...borrow big time. And sometime before summer they get things under control with a combination of respirators, medicine, social distancing and whatever else we can think of. And the economy comes back, more or less. What are the the longer term effects for us investors of the (economic...printing and borrowing) treatment? Inflation? Eventual default? Nothing at all? I get it that we don't REALLY know, but it just seems that the odds of what will happen going forward are different than before all this.
This might counsel towards holding an allocation that includes gold such as the Golden Butterfly, in order to diversify against the increased inflation risks. But others would say that stocks themselves provide enough protection against inflation and that gold is not desirable as an investment since it has no intrinsic value and does not provide an income stream. But others would say that it's just a shiny zero coupon bond. And on and on.

Bottom line... pick allocation. Then go away.
You confirmed my thinking.

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WoodSpinner
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Re: Thread: It’s your First recession (or not) and you’re staying the course

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

jw2s wrote:
Tue Mar 24, 2020 2:00 pm
I think I'm staying the course. I have fiddled, but don't really know if it 'counts' as market timing or deviating from the course.

I was 80/20. I rebalanced when I was 5% off a few days ago to get back to 80/20.

Today, I changed my automatic paycheck contributions to 100% VIIIX. I replay 'be greedy when other's are fearful, and fearful when other's are greedy'. I have a 20yr retirement horizon. I plan to start buying bonds again as I travel down the road towards retirement. I have a pension. I haven't sold anything, just rebalanced and put future contributions into equities only.

I feel like I'm staying the course since I haven't pulled any money out of the market. Is my thinking correct in this? That so long as you don't pull your money out, you are staying the course?
Um.. VIIX?

https://investor.vanguard.com/mutual-fu ... view/VIIIX

At a $100,000,000 initial investment, why are you working?

WoodSpinner

igetthebag
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Re: Thread: It’s your First recession (or not) and you’re staying the course

Post by igetthebag » Wed Mar 25, 2020 10:06 am

My ability to stay calm is mostly due to 2 factors:

1. My job has been deemed "essential" for now (manufacturing/energy service)
2. I had 4 months of expenses in a checking account when all this started.

I was holding 80/20 stocks to bonds (66/33 domestic to int'l in equity).
I was aggressively rebalancing (1% bands) until the US market hit 30% down.
This week, I changed my AA to 85/15.
I have a windfall coming in in the next few weeks that is worth about 10-15% of my portfolio. If the market is even lower at that time, I will likely use that money to become more aggressive (90/10 to 95/5)

None of these moves are in my IPS. Actually, I threw my IPS away about 5 years ago, as I was convinced I have what it takes to do the right thing when the time comes. I know that this bear market could change my life for the better as long as I'm aggressive and the market actually recovers. I knew this time would come at some point, and I'm actually excited about it. I also know that my outlook might be completely different had my job been affected or I had just had an enormous unexpected expense in the previous months. Before someone asks, the changes to my asset allocation are probably not going to be permanent. Assuming we make it back to pre-drop levels, I will probably move back to 80/20 after letting momentum ride for a little while.

HawkeyePierce
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Location: Colorado

Re: Thread: It’s your First recession (or not) and you’re staying the course

Post by HawkeyePierce » Wed Mar 25, 2020 10:21 am

WoodSpinner wrote:
Wed Mar 25, 2020 9:49 am
jw2s wrote:
Tue Mar 24, 2020 2:00 pm
I think I'm staying the course. I have fiddled, but don't really know if it 'counts' as market timing or deviating from the course.

I was 80/20. I rebalanced when I was 5% off a few days ago to get back to 80/20.

Today, I changed my automatic paycheck contributions to 100% VIIIX. I replay 'be greedy when other's are fearful, and fearful when other's are greedy'. I have a 20yr retirement horizon. I plan to start buying bonds again as I travel down the road towards retirement. I have a pension. I haven't sold anything, just rebalanced and put future contributions into equities only.

I feel like I'm staying the course since I haven't pulled any money out of the market. Is my thinking correct in this? That so long as you don't pull your money out, you are staying the course?
Um.. VIIX?

https://investor.vanguard.com/mutual-fu ... view/VIIIX

At a $100,000,000 initial investment, why are you working?

WoodSpinner
If it’s in a 401k that’s not impossible. The minimum is applied against the combined balance in the fund of all 401k participants in that particular plan. Mine offers VINIX which is one step down from VIIX ($10 mil minimum I think).

Slowtraveler
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Re: Thread: It’s your First recession (or not) and you’re staying the course

Post by Slowtraveler » Wed Mar 25, 2020 11:01 am

2018 hit me pretty hard too, was harder than this one for me in some ways.

I went from 70-30 to 100-0 on this. Just keeping a few months cash in checking/saving accounts. Dumping everything else in. When the market recovers, I'll start saving up for a house instead of stocks but until then, buy stocks

pragmatist
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Re: Thread: It’s your First recession (or not) and you’re staying the course

Post by pragmatist » Wed Mar 25, 2020 11:11 am

31, most of my accumulated money in a Vanguard Roth IRA holding VT/VTWAX. I contribute a lump $6000 each January 2. I sent Vanguard a written request to permanently suspend redemption, so to sell/withdraw I would have to send a notarized letter first.

A little in TIAA workplace accounts that I contribute to every two weeks. I feel fine. No desire to do anything other than the status quo per my IPS. Being a state University employees helps.

jw2s
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Joined: Mon Nov 06, 2017 12:32 pm

Re: Thread: It’s your First recession (or not) and you’re staying the course

Post by jw2s » Wed Mar 25, 2020 2:08 pm

WoodSpinner wrote:
Wed Mar 25, 2020 9:49 am
jw2s wrote:
Tue Mar 24, 2020 2:00 pm
I think I'm staying the course. I have fiddled, but don't really know if it 'counts' as market timing or deviating from the course.

I was 80/20. I rebalanced when I was 5% off a few days ago to get back to 80/20.

Today, I changed my automatic paycheck contributions to 100% VIIIX. I replay 'be greedy when other's are fearful, and fearful when other's are greedy'. I have a 20yr retirement horizon. I plan to start buying bonds again as I travel down the road towards retirement. I have a pension. I haven't sold anything, just rebalanced and put future contributions into equities only.

I feel like I'm staying the course since I haven't pulled any money out of the market. Is my thinking correct in this? That so long as you don't pull your money out, you are staying the course?
Um.. VIIX?

https://investor.vanguard.com/mutual-fu ... view/VIIIX

At a $100,000,000 initial investment, why are you working?

WoodSpinner
If I had a fraction of a sliver of a hair of that amount of money I would not be working!

I double checked. Yes, VIIIX. 3-I's.

It is a fund available in my retirement plan(457). It's not an IRA for me, but qualifying for it as an IRA is...unimaginable. Why even have an IRA with that much money?

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