A time to EVALUATE your jitters

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Mattzees
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Re: A time to EVALUATE your jitters

Post by Mattzees »

If you're jittery, Ben Felix just put out a good video about the current situation.

https://www.youtube.com/watch?v=9PYsVkPtcXk
Ardarsh
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Re: A time to EVALUATE your jitters

Post by Ardarsh »

StormShadow wrote: Sun Mar 01, 2020 6:47 pm Hah! I was about to start a thread talking about exactly this. People need to relax.

All this news about COVID-19... its being overblown. I'm a physician, and I'm telling you, its being overblown. If you live in the USA, odds are that you are way way WAY more likely to die from influenza than you are from COVID-19. So far this year, we have had a grand total of one person die from COVID-19. We literally have 30,000 to 60,000 people die from influenza EVERY SINGLE year. Get your flu vaccine. Practice good hygiene.

In the meantime...

Don't try to time the market. That's a losers game.

Stick to your asset allocation. Which, btw, may need revision since I am convinced that most people vastly over-estimate their risk tolerance. Its the only way you can objectively "buy low, sell high".
I'm in healthcare. Does the media provide sensational reports? Yes. Is it overblown? Not quite conclusive yet. If NYC starts instituting wartime protocols on patients coming into their hospitals, then that means everywhere else might see the same. These new epicenters in the US need to get it under control for everyone to be at ease. Young people are having critical illnesses too, not just gomers.

But otherwise I agree, that people should stick to their asset allocation based on their age and risk tolerance. I'm near 40 and I've been 80/20 with stocks and bonds. I decided in December that this nonsense evaluation of companies having share values way higher than their earnings was not going to last, not because of a virus. So I switched into more bonds than stocks in my 401K where there are no fees between the different available funds. I guess I was lucky with only a 8-10% drop. I decided Tuesday to switch back to my old allocation. Maybe I gain something from it in the long run. However, my Vanguard accounts suffered a large drop which I accept. I'm not leaving the game anytime soon and maybe when I'm 50, I'll get into more conservative funds since I plan to retire by 55 hopefully.

It's different for us since we have higher income jobs. And I personally am not a big spender and prefer to go for vacations versus big homes and Bentley lifestyle. Well, I'll be saving some more money now too since I can't go anywhere until the Fall at the earliest.

DON'T LEAVE THE MARKET unless you really need the cash right now. If you need the money in 5-10 years, the portfolios will bounce back and you'll be fine.
LMK5
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Re: A time to EVALUATE your jitters

Post by LMK5 »

I've always played by the Bogle rule, "Your age in bonds," but have you noticed that over the past few years just about all the "advice" was "modernized" to put a higher allocation into equities? Do you think people will now adhere to the original Bogle axiom?
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StormShadow
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Re: A time to EVALUATE your jitters

Post by StormShadow »

Ardarsh wrote: Thu Mar 26, 2020 7:24 pm
StormShadow wrote: Sun Mar 01, 2020 6:47 pm Hah! I was about to start a thread talking about exactly this. People need to relax.

All this news about COVID-19... its being overblown.
I'm in healthcare. Does the media provide sensational reports? Yes. Is it overblown? Not quite conclusive yet. If NYC starts instituting wartime protocols on patients coming into their hospitals, then that means everywhere else might see the same. These new epicenters in the US need to get it under control for everyone to be at ease. Young people are having critical illnesses too, not just gomers.
...
DON'T LEAVE THE MARKET unless you really need the cash right now. If you need the money in 5-10 years, the portfolios will bounce back and you'll be fine.
Heheh... time has a way of telling...

Hindsight being 20/20, yeah, I was TOTALLY wrong about COVID19 being overblown. It turned out to be much more serious than I believed.

Still doesn’t change my investing recs. I’m still buying on the way down and I’m still very optimistic for the future.

Stay safe everybody.
Joe_R95
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Re: A time to EVALUATE your jitters

Post by Joe_R95 »

mickeyd wrote: Tue Jan 12, 2016 1:16 pm I recall reading and responding to Nisi's post of over 4 years ago. The post is timeless and as accurate today as then and will be accurate 4+ years from now.

If you have not done so, it's a keeper. :moneybag
You jinxed us man...

I really enjoy the old threads that pop up on this board when everyone is freaking out. I joined in 2015 and up until this crisis all I saw on this board was "stay the course" and "write an IPS and follow it to the letter". Turns out a lot of people only believe that when the market is going up. I'm sure this time is different. Last time was different too. Time before that even more different. Next time will be a whole new level of different that will surprise everybody.

One of my favorite quotes from this board
"The best part of diversification is watching the individual components of your portfolio fall at different rates during a crisis."

I don't remember who wrote it, but I now fully understand it. Thanks for all the wisdom shared here guys.
Muffin Master
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Re: A time to EVALUATE your jitters

Post by Muffin Master »

ARRRRRRRRRRRRR ! I'm just fine thank you! <serious facial twitch>

No problems here.

:o
Kohaku
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Re: A time to EVALUATE your jitters

Post by Kohaku »

Thank you for this thread. It has given me a lot to think about and the OP is particularly therapeutic.

AA= 90/10, late 20s investor for about 5 years. I cashed out and adjusted to 20/80 the day before the drop in Feburary, breaking my own hold-forever policy that I'd come up with after doing recommended Bogleheads reading. I have friends and family in east Asia who were living through the outbreak and giving me daily news while the US markets didn't really seem to care yet, so I figured it was time to get out after years of market highs. It wasn't exactly a panic "sell low" moment, but I recognize it's still not good because I attempted to market time (a loser's game, I should know better) and just got lucky in this case.

I've begun to DCA back into my previous allocation. Still, this quarter has been my first adult experience with bigger-than-average volatility and I believe I have lessons to learn, if not purely about risk tolerance then about discipline in general. I feel a little ashamed, to be honest.
minimalistmarc
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Re: A time to EVALUATE your jitters

Post by minimalistmarc »

Kohaku wrote: Sat Apr 18, 2020 3:59 am Thank you for this thread. It has given me a lot to think about and the OP is particularly therapeutic.

AA= 90/10, late 20s investor for about 5 years. I cashed out and adjusted to 20/80 the day before the drop in Feburary, breaking my own hold-forever policy that I'd come up with after doing recommended Bogleheads reading. I have friends and family in east Asia who were living through the outbreak and giving me daily news while the US markets didn't really seem to care yet, so I figured it was time to get out after years of market highs. It wasn't exactly a panic "sell low" moment, but I recognize it's still not good because I attempted to market time (a loser's game, I should know better) and just got lucky in this case.

I've begun to DCA back into my previous allocation. Still, this quarter has been my first adult experience with bigger-than-average volatility and I believe I have lessons to learn, if not purely about risk tolerance then about discipline in general. I feel a little ashamed, to be honest.
Don’t feel ashamed. Be grateful you’ve had a market timing win and it is great that you have learned lessons. Onwards and upwards!
LMK5
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Re: A time to EVALUATE your jitters

Post by LMK5 »

Kohaku wrote: Sat Apr 18, 2020 3:59 am Thank you for this thread. It has given me a lot to think about and the OP is particularly therapeutic.

AA= 90/10, late 20s investor for about 5 years. I cashed out and adjusted to 20/80 the day before the drop in Feburary, breaking my own hold-forever policy that I'd come up with after doing recommended Bogleheads reading. I have friends and family in east Asia who were living through the outbreak and giving me daily news while the US markets didn't really seem to care yet, so I figured it was time to get out after years of market highs. It wasn't exactly a panic "sell low" moment, but I recognize it's still not good because I attempted to market time (a loser's game, I should know better) and just got lucky in this case.

I've begun to DCA back into my previous allocation. Still, this quarter has been my first adult experience with bigger-than-average volatility and I believe I have lessons to learn, if not purely about risk tolerance then about discipline in general. I feel a little ashamed, to be honest.
Being young and a 90/10 investor, you may have inadvertently learned that a 90/10 AA may not be your "sleeping point." I also learned over time that I was happier with a more conservative AA. I'm 50/50 at 58 years old.
Stephen_Crane
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Re: A time to EVALUATE your jitters

Post by Stephen_Crane »

LMK5 wrote: Sat Apr 18, 2020 10:51 am
Kohaku wrote: Sat Apr 18, 2020 3:59 am Thank you for this thread. It has given me a lot to think about and the OP is particularly therapeutic.

AA= 90/10, late 20s investor for about 5 years. I cashed out and adjusted to 20/80 the day before the drop in Feburary, breaking my own hold-forever policy that I'd come up with after doing recommended Bogleheads reading. I have friends and family in east Asia who were living through the outbreak and giving me daily news while the US markets didn't really seem to care yet, so I figured it was time to get out after years of market highs. It wasn't exactly a panic "sell low" moment, but I recognize it's still not good because I attempted to market time (a loser's game, I should know better) and just got lucky in this case.

I've begun to DCA back into my previous allocation. Still, this quarter has been my first adult experience with bigger-than-average volatility and I believe I have lessons to learn, if not purely about risk tolerance then about discipline in general. I feel a little ashamed, to be honest.
Being young and a 90/10 investor, you may have inadvertently learned that a 90/10 AA may not be your "sleeping point." I also learned over time that I was happier with a more conservative AA. I'm 50/50 at 58 years old.
How often do you reallocate?
sent from my user friendly home computer.
LMK5
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Re: A time to EVALUATE your jitters

Post by LMK5 »

Stephen_Crane wrote: Sun Apr 26, 2020 9:57 am
LMK5 wrote: Sat Apr 18, 2020 10:51 am
Kohaku wrote: Sat Apr 18, 2020 3:59 am Thank you for this thread. It has given me a lot to think about and the OP is particularly therapeutic.

AA= 90/10, late 20s investor for about 5 years. I cashed out and adjusted to 20/80 the day before the drop in Feburary, breaking my own hold-forever policy that I'd come up with after doing recommended Bogleheads reading. I have friends and family in east Asia who were living through the outbreak and giving me daily news while the US markets didn't really seem to care yet, so I figured it was time to get out after years of market highs. It wasn't exactly a panic "sell low" moment, but I recognize it's still not good because I attempted to market time (a loser's game, I should know better) and just got lucky in this case.

I've begun to DCA back into my previous allocation. Still, this quarter has been my first adult experience with bigger-than-average volatility and I believe I have lessons to learn, if not purely about risk tolerance then about discipline in general. I feel a little ashamed, to be honest.
Being young and a 90/10 investor, you may have inadvertently learned that a 90/10 AA may not be your "sleeping point." I also learned over time that I was happier with a more conservative AA. I'm 50/50 at 58 years old.
How often do you reallocate?
Once per year on my birthday.
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Noobvestor
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Re: A time to EVALUATE your jitters

Post by Noobvestor »

Kohaku wrote: Sat Apr 18, 2020 3:59 am Thank you for this thread. It has given me a lot to think about and the OP is particularly therapeutic. AA= 90/10, late 20s investor for about 5 years. I cashed out and adjusted to 20/80 the day before the drop in Feburary, breaking my own hold-forever policy that I'd come up with after doing recommended Bogleheads reading. I have friends and family in east Asia who were living through the outbreak and giving me daily news while the US markets didn't really seem to care yet, so I figured it was time to get out after years of market highs. It wasn't exactly a panic "sell low" moment, but I recognize it's still not good because I attempted to market time (a loser's game, I should know better) and just got lucky.

Well, good, I thought, it sounded like you learned a lesson, except ...
Kohaku wrote: Sat Apr 18, 2020 3:59 amI've begun to DCA back into my previous allocation. Still, this quarter has been my first adult experience with bigger-than-average volatility and I believe I have lessons to learn, if not purely about risk tolerance then about discipline in general. I feel a little ashamed, to be honest.
I hate to break it to you, but you're compounding market timing with more market timing. If your asset allocation was suitable, you would have realized your mistake and reverted to it. Instead, you're slowly easing back in, to what effect? If the same thing happens again, and you jump out, and then DCA back in, and there's a quick recovery (see: 2018/19), you'll lose out. DCA'ing back in after market-timing out just adds a a new problem to the old problem. Better idea: rethink your allocation and risk tolerance. Chances are at your age this market-timed exit and DCA-timed reentry won't matter - the bigger challenge and better question is how it will impact your investing approaches going forward. Every day you're not in your target allocation is a day you're actively deciding to hold more cash than your allocation calls for - you're prolonging the issue. You're also training yourself to think the solution to a market-timing mistake is to draw out the timing, and ease your way back in. Sorry, it isn't.

In short: I don't think there's anything here to be ashamed about, but if you really view this as a learning opportunity, then take it as a chance to decide a forward-looking asset allocation you won't sell out of or ever feel the need to DCA back into again in your life. Right now, you're taking a behavioral mistake and making it worse, not better - time to game out a way to stay the course, now and in the future. /2 cents
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe
LMK5
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Re: A time to EVALUATE your jitters

Post by LMK5 »

Noobvestor wrote: Mon Apr 27, 2020 2:49 am
Kohaku wrote: Sat Apr 18, 2020 3:59 am Thank you for this thread. It has given me a lot to think about and the OP is particularly therapeutic. AA= 90/10, late 20s investor for about 5 years. I cashed out and adjusted to 20/80 the day before the drop in Feburary, breaking my own hold-forever policy that I'd come up with after doing recommended Bogleheads reading. I have friends and family in east Asia who were living through the outbreak and giving me daily news while the US markets didn't really seem to care yet, so I figured it was time to get out after years of market highs. It wasn't exactly a panic "sell low" moment, but I recognize it's still not good because I attempted to market time (a loser's game, I should know better) and just got lucky.

Well, good, I thought, it sounded like you learned a lesson, except ...
Kohaku wrote: Sat Apr 18, 2020 3:59 amI've begun to DCA back into my previous allocation. Still, this quarter has been my first adult experience with bigger-than-average volatility and I believe I have lessons to learn, if not purely about risk tolerance then about discipline in general. I feel a little ashamed, to be honest.
I hate to break it to you, but you're compounding market timing with more market timing. If your asset allocation was suitable, you would have realized your mistake and reverted to it. Instead, you're slowly easing back in, to what effect? If the same thing happens again, and you jump out, and then DCA back in, and there's a quick recovery (see: 2018/19), you'll lose out. DCA'ing back in after market-timing out just adds a a new problem to the old problem. Better idea: rethink your allocation and risk tolerance. Chances are at your age this market-timed exit and DCA-timed reentry won't matter - the bigger challenge and better question is how it will impact your investing approaches going forward. Every day you're not in your target allocation is a day you're actively deciding to hold more cash than your allocation calls for - you're prolonging the issue. You're also training yourself to think the solution to a market-timing mistake is to draw out the timing, and ease your way back in. Sorry, it isn't.

In short: I don't think there's anything here to be ashamed about, but if you really view this as a learning opportunity, then take it as a chance to decide a forward-looking asset allocation you won't sell out of or ever feel the need to DCA back into again in your life. Right now, you're taking a behavioral mistake and making it worse, not better - time to game out a way to stay the course, now and in the future. /2 cents
Well stated. I have found that most investors overestimate their tolerance for risk. A lot of this comes from the media. During bull markets, you'll see a gradual creep upwards of the suggested allocation to equities by the financial press. I'm guessing most of these writers are on the younger side and haven't gone through enough downside pain to inject real wisdom into their advice.
Kohaku
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Re: A time to EVALUATE your jitters

Post by Kohaku »

Noobvestor wrote: Mon Apr 27, 2020 2:49 am I hate to break it to you, but you're compounding market timing with more market timing. If your asset allocation was suitable, you would have realized your mistake and reverted to it. Instead, you're slowly easing back in, to what effect? If the same thing happens again, and you jump out, and then DCA back in, and there's a quick recovery (see: 2018/19), you'll lose out. DCA'ing back in after market-timing out just adds a a new problem to the old problem. Better idea: rethink your allocation and risk tolerance. Chances are at your age this market-timed exit and DCA-timed reentry won't matter - the bigger challenge and better question is how it will impact your investing approaches going forward. Every day you're not in your target allocation is a day you're actively deciding to hold more cash than your allocation calls for - you're prolonging the issue. You're also training yourself to think the solution to a market-timing mistake is to draw out the timing, and ease your way back in. Sorry, it isn't.

In short: I don't think there's anything here to be ashamed about, but if you really view this as a learning opportunity, then take it as a chance to decide a forward-looking asset allocation you won't sell out of or ever feel the need to DCA back into again in your life. Right now, you're taking a behavioral mistake and making it worse, not better - time to game out a way to stay the course, now and in the future. /2 cents
Thank you for the feedback! yes, I agree it is a good time to reevaluate my risk tolerance and find a more practicable AA I am comfortable in the longer term, as LMK5 mentioned.
LMK5
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Re: A time to EVALUATE your jitters

Post by LMK5 »

Kohaku wrote: Fri May 01, 2020 2:15 pm
Noobvestor wrote: Mon Apr 27, 2020 2:49 am I hate to break it to you, but you're compounding market timing with more market timing. If your asset allocation was suitable, you would have realized your mistake and reverted to it. Instead, you're slowly easing back in, to what effect? If the same thing happens again, and you jump out, and then DCA back in, and there's a quick recovery (see: 2018/19), you'll lose out. DCA'ing back in after market-timing out just adds a a new problem to the old problem. Better idea: rethink your allocation and risk tolerance. Chances are at your age this market-timed exit and DCA-timed reentry won't matter - the bigger challenge and better question is how it will impact your investing approaches going forward. Every day you're not in your target allocation is a day you're actively deciding to hold more cash than your allocation calls for - you're prolonging the issue. You're also training yourself to think the solution to a market-timing mistake is to draw out the timing, and ease your way back in. Sorry, it isn't.

In short: I don't think there's anything here to be ashamed about, but if you really view this as a learning opportunity, then take it as a chance to decide a forward-looking asset allocation you won't sell out of or ever feel the need to DCA back into again in your life. Right now, you're taking a behavioral mistake and making it worse, not better - time to game out a way to stay the course, now and in the future. /2 cents
Thank you for the feedback! yes, I agree it is a good time to reevaluate my risk tolerance and find a more practicable AA I am comfortable in the longer term, as LMK5 mentioned.
I remember when I started investing, back in 1985 or so. My first mutual fund was Pacific Horizon Aggressive Growth. I used to come home after work, call the hotline, and get the latest price. Every day. It was exciting watching my investment grow. It seemed so easy. Then October 1987 came around and we all got an education. What I realized over time was that the stodgy growth and income funds were doing just as well, with less gastric pain, as the "aggressive" funds were. They were just not very exciting. Much later, I realized that the best investment wasn't the one that had the best returns, it was the one that you stuck with. That made your returns durable. In 1991 I discovered Vanguard Wellington, and that is an example of a fund that someone can stick with for a lifetime and not lose much sleep over. Not glamorous, but durable. I still have it.
Last edited by LMK5 on Fri May 01, 2020 5:03 pm, edited 1 time in total.
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Re: A time to EVALUATE your jitters

Post by LadyGeek »

New member nanameg has a question which I've moved into a stand-alone thread. See: [Cashed out in panic, how to get back in?]
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Re: A time to EVALUATE your jitters

Post by William Million »

This is truly one of the Bogleheads' best posts, and one that I've frequently come back to.

Looking at retirement this year, the market decline is annoying. However, thanks to OP and others urging me to know my risk tolerance, I went into this downturn at 50/50. For now, I'll starting withdrawing my 4% from the fixed income side while waiting for equities to come back. I can wait.

However, if we see a DJIA well below 20k, I'll be tempted to move some $ from fixed income to equities.
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Re: A time to EVALUATE your jitters

Post by Colleen »

We lost over $600,000 in the spring crash. And made it all back before summer. Wild times.
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Re: A time to EVALUATE your jitters

Post by striker79 »

You may lose it all again soon. Nothing is made or lost in fact, until you sell.
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Re: A time to EVALUATE your jitters

Post by CycloRista »

striker79 wrote: Thu Jun 11, 2020 2:17 pm You may lose it all again soon. Nothing is made or lost in fact, until you sell.
Truth.

I'll add: nothing is gained or lost until you "need it" (in retirement or in an emergency).
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Re: A time to EVALUATE your jitters

Post by Robot Monster »

striker79 wrote: Thu Jun 11, 2020 2:17 pm You may lose it all again soon. Nothing is made or lost in fact, until you sell.
Exactly. Stocks are not cash, but they look like cash because their dollar amount is displayed same as a money market fund. I'm just happy Vanguard doesn't display the current value of my house, otherwise perhaps I'd be in the psychological trap viewing the house's changes in value as making/losing money. Or perhaps because the house is a physical thing I'd realize it's in fact not cash. Stocks are rather ethereal compared to a house.
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Re: A time to EVALUATE your jitters

Post by flaccidsteele »

Kohaku wrote: Sat Apr 18, 2020 3:59 am Thank you for this thread. It has given me a lot to think about and the OP is particularly therapeutic.

AA= 90/10, late 20s investor for about 5 years. I cashed out and adjusted to 20/80 the day before the drop in Feburary, breaking my own hold-forever policy that I'd come up with after doing recommended Bogleheads reading. I have friends and family in east Asia who were living through the outbreak and giving me daily news while the US markets didn't really seem to care yet, so I figured it was time to get out after years of market highs. It wasn't exactly a panic "sell low" moment, but I recognize it's still not good because I attempted to market time (a loser's game, I should know better) and just got lucky in this case.

I've begun to DCA back into my previous allocation. Still, this quarter has been my first adult experience with bigger-than-average volatility and I believe I have lessons to learn, if not purely about risk tolerance then about discipline in general. I feel a little ashamed, to be honest.
How much of the 50% rebound did you catch?

How much capital gains did you crystallize and is taxable?

Was it really a market timing “win”?

Investors who simply bought more in March had a market timing win imo
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
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Re: A time to EVALUATE your jitters

Post by LadyGeek »

New member Destiple has a question which I've moved into a new thread. See: [Where can I invest my cash?]
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Re: A time to EVALUATE your jitters

Post by Freckle's friend »

Joe_R95 wrote: Sat Mar 28, 2020 7:33 am Turns out a lot of people only believe that when the market is going up. I'm sure this time is different. Last time was different too. Time before that even more different. Next time will be a whole new level of different that will surprise everybody.
Isn't this the truth! For as long as the Market is where people go to outperform their bank account and sustain themselves in the face of inflation, then it will... outperform the bank account and sustain itself in the face of inflation eventually. As hard as it is to watch a portfolio value fall 50% or more timing in and out is only possible in hindsight. (I bought into Japan in the early 90's when I thought its 30% drop from its high was an indication and was so 'wrong' when it came to timing.) When the market is up 10% it seems like it can't go up further, until it does. When it drops 20% it seems like the fundamentals must be pushing it down and so better get out, missing the return to higher values. Stay the course doesn't make the past feel better (that is an entirely different psychological thing seems to me), instead is it assures you that you will obtain the returns that outperform the bank account and sustain itself in the face of inflation... with much much better likelihood than anything else you do (market timers miss the market average over 75% of the time?). Asset allocations seem to help clarify what that long term benefit is (assuming that 1926 to the present is a pretty good estimate as to what will happen over the next 30 years). And it clarifies how low your allocation can actually go. More stocks, more benefit but very deep losses, etc. So, perhaps the only other decent piece of advice is from Bernstein. Get out if you have already 'won'. I.E. if that bank account returns you enough to live the life you want, give the assets you wish to give at your end, despite inflation, then why worry about a possibly bigger loss at just the time you don't want it to?

And I read what I write, believe in it based on all I have read from Malkiel, Larimore, Bogle, etc. and this market still makes me nervous... For as I get close to retirement, to see the wealth I have take two big steps back and need 2-3 years to catch back up means I will have to postpone till 2027. And I would really rather not. But I cannot get out, I need 4% 'real' return and keep adding to the pot and then can retire in 2022 or 3. So if I hedge against a crappy market NOW by pulling out I will... have to retire in 2027 if I can at all.

I think that is why risk tolerance and 'objectives' fit nicely together into the AA and investment plan. Timing just can't.
Last edited by Freckle's friend on Sun Aug 23, 2020 4:58 pm, edited 1 time in total.
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Re: A time to EVALUATE your jitters

Post by Freckle's friend »

Kohaku wrote: Sat Apr 18, 2020 3:59 am AA= 90/10, late 20s investor for about 5 years. I cashed out and adjusted to 20/80 the day before the drop in Feburary, breaking my own hold-forever policy that I'd come up with after doing recommended Bogleheads reading. I have friends and family in east Asia who were living through the outbreak and giving me daily news while the US markets didn't really seem to care yet, so I figured it was time to get out after years of market highs. It wasn't exactly a panic "sell low" moment, but I recognize it's still not good because I attempted to market time (a loser's game, I should know better) and just got lucky in this case.
A colleague and I are both physicians. We wondered if the news of COVID in February was just being ignored because it couldn't be understood. SARS also leaped from China and there was no pandemic. Ebola was terrifying, no pandemic. Despite this we considered: are there world events that predictably drive investor behavior? In late March I would have said so. By late June I have to say 'no'.
nzahir
Posts: 113
Joined: Mon Jul 27, 2020 11:44 pm

Re: A time to EVALUATE your jitters

Post by nzahir »

striker79 wrote: Thu Jun 11, 2020 2:17 pm You may lose it all again soon. Nothing is made or lost in fact, until you sell.
This x100

People in general don't know much history

DJIA high of around 6k in 1929 was still at 6k in 1991. It recovered in 1961 and went up a bit more, but if you never sold, then you were screwed. Imagine if you held (like you were told) for 60+ years...no gains, a huge loss of buying power
jarjarM
Posts: 286
Joined: Mon Jul 16, 2018 1:21 pm

Re: A time to EVALUATE your jitters

Post by jarjarM »

nzahir wrote: Mon Aug 24, 2020 8:37 pm
striker79 wrote: Thu Jun 11, 2020 2:17 pm You may lose it all again soon. Nothing is made or lost in fact, until you sell.
This x100

People in general don't know much history

DJIA high of around 6k in 1929 was still at 6k in 1991. It recovered in 1961 and went up a bit more, but if you never sold, then you were screwed. Imagine if you held (like you were told) for 60+ years...no gains, a huge loss of buying power
May want to double check that, DOW was at 600+ in 1929, not 6000.
MarkRoulo
Posts: 269
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Re: A time to EVALUATE your jitters

Post by MarkRoulo »

jarjarM wrote: Mon Aug 24, 2020 8:46 pm
nzahir wrote: Mon Aug 24, 2020 8:37 pm
striker79 wrote: Thu Jun 11, 2020 2:17 pm You may lose it all again soon. Nothing is made or lost in fact, until you sell.
This x100

People in general don't know much history

DJIA high of around 6k in 1929 was still at 6k in 1991. It recovered in 1961 and went up a bit more, but if you never sold, then you were screwed. Imagine if you held (like you were told) for 60+ years...no gains, a huge loss of buying power
May want to double check that, DOW was at 600+ in 1929, not 6000.
The pre-crash peak in 1929 was 381 and a bit. Even less than 600.

Though the claim may be intended to be in inflation adjusted terms (with dividends not included).
jarjarM
Posts: 286
Joined: Mon Jul 16, 2018 1:21 pm

Re: A time to EVALUATE your jitters

Post by jarjarM »

MarkRoulo wrote: Mon Aug 24, 2020 9:30 pm
jarjarM wrote: Mon Aug 24, 2020 8:46 pm
nzahir wrote: Mon Aug 24, 2020 8:37 pm
striker79 wrote: Thu Jun 11, 2020 2:17 pm You may lose it all again soon. Nothing is made or lost in fact, until you sell.
This x100

People in general don't know much history

DJIA high of around 6k in 1929 was still at 6k in 1991. It recovered in 1961 and went up a bit more, but if you never sold, then you were screwed. Imagine if you held (like you were told) for 60+ years...no gains, a huge loss of buying power
May want to double check that, DOW was at 600+ in 1929, not 6000.
The pre-crash peak in 1929 was 381 and a bit. Even less than 600.

Though the claim may be intended to be in inflation adjusted terms (with dividends not included).
Ah, you’re right, shame on me for trying to read log scale on Wikipedia. If the original claim is based inflation adjusted price of DOW but ignore the effect of dividend, then that’s only half of the story. Using only price index instead of total return is not really the appropriate metric here.
nzahir
Posts: 113
Joined: Mon Jul 27, 2020 11:44 pm

Re: A time to EVALUATE your jitters

Post by nzahir »

MarkRoulo wrote: Mon Aug 24, 2020 9:30 pm
jarjarM wrote: Mon Aug 24, 2020 8:46 pm
nzahir wrote: Mon Aug 24, 2020 8:37 pm
striker79 wrote: Thu Jun 11, 2020 2:17 pm You may lose it all again soon. Nothing is made or lost in fact, until you sell.
This x100

People in general don't know much history

DJIA high of around 6k in 1929 was still at 6k in 1991. It recovered in 1961 and went up a bit more, but if you never sold, then you were screwed. Imagine if you held (like you were told) for 60+ years...no gains, a huge loss of buying power
May want to double check that, DOW was at 600+ in 1929, not 6000.
The pre-crash peak in 1929 was 381 and a bit. Even less than 600.

Though the claim may be intended to be in inflation adjusted terms (with dividends not included).
Inflation adjusted, my bad

Hoping macrotrends has the data right
Grt2bOutdoors
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Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: A time to EVALUATE your jitters

Post by Grt2bOutdoors »

nzahir wrote: Mon Aug 24, 2020 8:37 pm
striker79 wrote: Thu Jun 11, 2020 2:17 pm You may lose it all again soon. Nothing is made or lost in fact, until you sell.
This x100

People in general don't know much history

DJIA high of around 6k in 1929 was still at 6k in 1991. It recovered in 1961 and went up a bit more, but if you never sold, then you were screwed. Imagine if you held (like you were told) for 60+ years...no gains, a huge loss of buying power
Wrong. And the price level does not account for dividends reinvested. Dividend reinvestment is a big component of the compounding effect. The yields back then were over 5 percent for the common stock.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Nowizard
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Joined: Tue Oct 23, 2007 5:33 pm

Re: A time to EVALUATE your jitters

Post by Nowizard »

Simply put, we will not always be correct, and we cannot control the result. However, we do each have the responsibility to carefully assess choices within our own circumstances, make our decisions and be able to answer the question "Can I accept the consequences of my decisions" affirmatively. That applies in all areas of life, and it is the best we can do.

Tim
pupMama3
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Joined: Thu Nov 12, 2020 5:52 pm

Re: A time to EVALUATE your jitters

Post by pupMama3 »

Timeless post - and spot on. Ty for digging it back up!
Blue456
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Joined: Tue Jun 04, 2019 5:46 am

Re: A time to EVALUATE your jitters

Post by Blue456 »

Kohaku wrote: Sat Apr 18, 2020 3:59 am Thank you for this thread. It has given me a lot to think about and the OP is particularly therapeutic.

AA= 90/10, late 20s investor for about 5 years. I cashed out and adjusted to 20/80 the day before the drop in Feburary, breaking my own hold-forever policy that I'd come up with after doing recommended Bogleheads reading. I have friends and family in east Asia who were living through the outbreak and giving me daily news while the US markets didn't really seem to care yet, so I figured it was time to get out after years of market highs. It wasn't exactly a panic "sell low" moment, but I recognize it's still not good because I attempted to market time (a loser's game, I should know better) and just got lucky in this case.

I've begun to DCA back into my previous allocation. Still, this quarter has been my first adult experience with bigger-than-average volatility and I believe I have lessons to learn, if not purely about risk tolerance then about discipline in general. I feel a little ashamed, to be honest.
William Bernstein recommends 50/50 allocation for young investors until they loose their virginity. His logic is that you may loose much more market timing and getting out at the wrong time than investing more conservatively.
Harper
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Re: A time to EVALUATE your jitters

Post by Harper »

Thank you! This is the perfect post, at the perfect time as we all around the world are having our risk tolerances playing tug of war in so many different areas of our lives. Happy Thanksgiving 2020.
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