[60 year old - anxiety over market downturn]

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JoeRetire
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Re: 60 year old professional anxiety

Post by JoeRetire »

chassis wrote: Thu Sep 22, 2022 8:23 am2020-2022 inflation runup took 2.5 years, if the peak is behind us. Probably late 2024 until normal-ish inflation is back.
What inflation in 2020?
Oh, noooooo! I'm so sorry, it's the moops! The correct answer is 'the moops'.
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9-5 Suited
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Re: [60 year old - anxiety over market downturn]

Post by 9-5 Suited »

doc2547 wrote: Thu Sep 22, 2022 7:40 am I have been a Boglehead for years and rarely post anything. I know the philosophy of being a member, however does anybody else out there feel like I do about our large losses this year and worry about our retirements being curtailed.I have stayed the course for my entire investing 35 years , but this market stings. Any thoughts or words of inspiration out there.

[Topic title edited for clarity by moderator oldcomputerguy]
I think a big part of the challenge is that a lot of one's success as an investor - at least over short time periods - can feel very much outside your control. Even if you are the "perfect" investor however you define it (healthy amount of stocks, diversified, low-cost, bonds to meet your risk tolerance, rebalance dutifully, etc.), you still can do NOTHING to prevent yourself from losing massive amounts of wealth you used to have. The only thing you have to cling to is the knowledge that this has happened many times, is totally expected, and will happen many more times in the future. But in the moment that's not always a fully comforting message.

But, the only thing worse would be to take some ill-advised action that you end up regretting. One must believe in the system to some degree - not really much other choice. For those in working years, they can certainly opt to work longer but that's a cost in its own right.

It's not always easy not matter what some people say.
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JoeRetire
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Re: 60 year old professional anxiety

Post by JoeRetire »

afan wrote: Thu Sep 22, 2022 11:57 am
JoeRetire wrote: Thu Sep 22, 2022 8:12 am
afan wrote: Thu Sep 22, 2022 8:08 am Not that I am doing anything in response, but this time there is a fear of stagflation.
What leads you to be worried about that?
Not so much my personal fear, rather commentary about rising interest rates and falling GDP. From there to stagflation is just a matter of degree.
You missed the high unemployment component of stagflation.
Oh, noooooo! I'm so sorry, it's the moops! The correct answer is 'the moops'.
JS-Elcano
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Re: 60 year old professional anxiety

Post by JS-Elcano »

KlangFool wrote: Thu Sep 22, 2022 9:10 am
homebuyer6426 wrote: Thu Sep 22, 2022 9:05 am
staustin wrote: Thu Sep 22, 2022 8:51 am After suffering through 2008, and thanks to the work of the good Dr. Bernstein, we have an asset allocation that allows for restful sleep.

The era of zero interest rates and qe ending has and will continue to impact asset prices.
How did your asset allocation help you this year when bonds are way down too?
homebuyer6426,

VTI is down 18% YTD. My 60/40 portfolio is down 12%.

Bond helps by not being down 18%.

KlangFool
As of market close today, VTI is -22.5% and BND is -14.2% , making it a -19.2% downturn for a 60/40 portfolio unless the 40% is in somewhat more complicated investments than just a total bond fund. So, if you were only down around 12% that's quite a feat unless you are including lots of new contributions.
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CyclingDuo
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Re: 60 year old professional anxiety

Post by CyclingDuo »

Leesbro63 wrote: Thu Sep 22, 2022 9:52 amI think the bottom line underlying fear is that whatever is causing the current situation is different and will cause something worse and for longer. That's always the concern, I know, but we never know that it isn't that until after. And sometimes it IS that. 1929 and 1966 WAS that.
We’ve had this discussion a few times before. :beer

If it IS that this time around, have you prepared or made plans?

How did your grandparents (or other relatives) make it through those times?

CyclingDuo
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KlangFool
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Re: 60 year old professional anxiety

Post by KlangFool »

JS-Elcano wrote: Thu Sep 22, 2022 4:36 pm
KlangFool wrote: Thu Sep 22, 2022 9:10 am
homebuyer6426 wrote: Thu Sep 22, 2022 9:05 am
staustin wrote: Thu Sep 22, 2022 8:51 am After suffering through 2008, and thanks to the work of the good Dr. Bernstein, we have an asset allocation that allows for restful sleep.

The era of zero interest rates and qe ending has and will continue to impact asset prices.
How did your asset allocation help you this year when bonds are way down too?
homebuyer6426,

VTI is down 18% YTD. My 60/40 portfolio is down 12%.

Bond helps by not being down 18%.

KlangFool
As of market close today, VTI is -22.5% and BND is -14.2% , making it a -19.2% downturn for a 60/40 portfolio unless the 40% is in somewhat more complicated investments than just a total bond fund. So, if you were only down around 12% that's quite a feat unless you are including lots of new contributions.
JS-Elcano,

1) Includes some new contribution.

2) My 60/40 portfolio is more complicated that a simple 60/40. You can see the details at my signature.

KlangFool
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Marseille07
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Re: [60 year old - anxiety over market downturn]

Post by Marseille07 »

9-5 Suited wrote: Thu Sep 22, 2022 11:59 am I think a big part of the challenge is that a lot of one's success as an investor - at least over short time periods - can feel very much outside your control. Even if you are the "perfect" investor however you define it (healthy amount of stocks, diversified, low-cost, bonds to meet your risk tolerance, rebalance dutifully, etc.), you still can do NOTHING to prevent yourself from losing massive amounts of wealth you used to have. The only thing you have to cling to is the knowledge that this has happened many times, is totally expected, and will happen many more times in the future. But in the moment that's not always a fully comforting message.

But, the only thing worse would be to take some ill-advised action that you end up regretting. One must believe in the system to some degree - not really much other choice. For those in working years, they can certainly opt to work longer but that's a cost in its own right.

It's not always easy not matter what some people say.
Isn't it passive investing in a nutshell though? If one just holds cash, they don't have that problem.

But once you passively invest (stocks or bonds), you're at the mercy of the markets...up and down.
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tfunk
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Re: 60 year old professional anxiety

Post by tfunk »

Leesbro63 wrote: Thu Sep 22, 2022 8:17 am
JS-Elcano wrote: Thu Sep 22, 2022 8:14 am
jebmke wrote: Thu Sep 22, 2022 7:55 am This is actually a pretty routine downturn as they go; much less dramatic than the last couple of major ones.

The 08-09 down tick was a major financial system crisis. I retired in December, 2007; not the best timing from that perspective but I managed fine keeping to my plan. 2020 was a pandemic. Both of these were pretty dramatic.

The current one seems to be a more natural cycle that should work itself out and allow a lot of assets to re-price and clear out a lot of dead wood.
I am not sure about pretty routine if we end the year with the 20% downturn that we currently have in SP500, not to mention the concurrent 13% downturn in Total Bond funds that someone @60 may have shifted to in recent years. There have only been 3 years with >20% annual losses in the SP500 the past 85 years (2008, 2002, 1937). So, it is understandable to me that some people are feeling anxious because it reminds them of major crises rather than routine, especially @60.
I think this misses the 1973-1975 period. I don't know the actual years or numbers, but I am almost certain that over a few consecutive years the losses were way greater than 20%. So while TECHNICALLY that period didn't have any single year without a 20% loss, IN REALITY they did.
Per Investech - 1973 Bear Market total S&P loss 48%. Duration 21 months.
Leesbro63
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Re: 60 year old professional anxiety

Post by Leesbro63 »

tfunk wrote: Thu Sep 22, 2022 7:45 pm
Leesbro63 wrote: Thu Sep 22, 2022 8:17 am
JS-Elcano wrote: Thu Sep 22, 2022 8:14 am
jebmke wrote: Thu Sep 22, 2022 7:55 am This is actually a pretty routine downturn as they go; much less dramatic than the last couple of major ones.

The 08-09 down tick was a major financial system crisis. I retired in December, 2007; not the best timing from that perspective but I managed fine keeping to my plan. 2020 was a pandemic. Both of these were pretty dramatic.

The current one seems to be a more natural cycle that should work itself out and allow a lot of assets to re-price and clear out a lot of dead wood.
I am not sure about pretty routine if we end the year with the 20% downturn that we currently have in SP500, not to mention the concurrent 13% downturn in Total Bond funds that someone @60 may have shifted to in recent years. There have only been 3 years with >20% annual losses in the SP500 the past 85 years (2008, 2002, 1937). So, it is understandable to me that some people are feeling anxious because it reminds them of major crises rather than routine, especially @60.
I think this misses the 1973-1975 period. I don't know the actual years or numbers, but I am almost certain that over a few consecutive years the losses were way greater than 20%. So while TECHNICALLY that period didn't have any single year without a 20% loss, IN REALITY they did.
Per Investech - 1973 Bear Market total S&P loss 48%. Duration 21 months.
Thanks for that confirmation. Yeah, I knew it was brutal.
Logan Roy
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Re: [60 year old - anxiety over market downturn]

Post by Logan Roy »

Probably the thing I've learnt to be most certain of in investing is that no one's any good at forecasting inflation.

There's little doubt that staying the course is the right thing to do. The whole concept of trying to time this – when we could get so many false starts, with easing, with inflation seeming to cool, and with these core components being effectively unforecastable – would be a recipe for disaster.

It is my view (and probably Harry Browne's, Ray Dalio's and David Swensen's, to name a few) that 60:40 has always been too vulnerable to inflation. All Weather and Endowment portfolios tend to have 20-35% in Real Assets, for situations exactly like these – that we may be out of within a year, or may still be dealing with in 2032 and beyond. TIPS, gold and commodities are pretty standard things to put in a 'Real Assets'.
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Re: 60 year old professional anxiety

Post by JS-Elcano »

tfunk wrote: Thu Sep 22, 2022 7:45 pm
Leesbro63 wrote: Thu Sep 22, 2022 8:17 am
JS-Elcano wrote: Thu Sep 22, 2022 8:14 am
jebmke wrote: Thu Sep 22, 2022 7:55 am This is actually a pretty routine downturn as they go; much less dramatic than the last couple of major ones.

The 08-09 down tick was a major financial system crisis. I retired in December, 2007; not the best timing from that perspective but I managed fine keeping to my plan. 2020 was a pandemic. Both of these were pretty dramatic.

The current one seems to be a more natural cycle that should work itself out and allow a lot of assets to re-price and clear out a lot of dead wood.
I am not sure about pretty routine if we end the year with the 20% downturn that we currently have in SP500, not to mention the concurrent 13% downturn in Total Bond funds that someone @60 may have shifted to in recent years. There have only been 3 years with >20% annual losses in the SP500 the past 85 years (2008, 2002, 1937). So, it is understandable to me that some people are feeling anxious because it reminds them of major crises rather than routine, especially @60.
I think this misses the 1973-1975 period. I don't know the actual years or numbers, but I am almost certain that over a few consecutive years the losses were way greater than 20%. So while TECHNICALLY that period didn't have any single year without a 20% loss, IN REALITY they did.
Per Investech - 1973 Bear Market total S&P loss 48%. Duration 21 months.
I corrected my post. I accidentally wrote down the wrong 3 years (1937 instead of 1974), but it's still just 3 years in the last 85 years. Besides those 3 years, the period from 1939-1941 was the only time in those 85 years when smaller negative annual returns in consecutive years added up to >20%. So, yes, ending this year (potentially) with >20% is not as common or routine as some make it out to be.
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Re: [60 year old - anxiety over market downturn]

Post by placeholder »

Over 50% of my fixed income in my 60/40 allocation is in stable value and while its ~2% return isn't keeping up with inflation it did help in reducing losses so far this year and that's in line with the concept I had when I split the fixed income between that and bond index.
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Re: [60 year old - anxiety over market downturn]

Post by Random Musings »

My anxiety over the current market is minimal as I have an asset allocation that lets me sleep at night which includes mostly GIF, T-Bills/MM, ST TIPs and I-Bonds for my bond portion. When treasuries were paying basically nothing, I greatly reduced my nominal bond position. Until the Fed starts saying they are going to put the brakes on raising rates, my risk appetite for nominals is minimal right now.

With Target Funds having losses of 16-21% YTD because the bond
funds used are providing minimal ballast, I can see why more investors would have some level of anxiety.

As increased rates have greatly affected affordability in housing, I expect to see real estate pricing take a pretty substantial hit.

There is always something to worry about, but this too, shall pass.

RM
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Logan Roy
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Re: [60 year old - anxiety over market downturn]

Post by Logan Roy »

I'm quite relaxed about my asset allocation, but very concerned that we may be in for a multi-decade period of negative real returns from stocks and bonds – which isn't all that uncommon. From 1982 onwards has been a goldilocks zone for market returns. I worry that none of have realistic expectations about returns through long periods of tightening and inflation, and that we may have gone far too far with money printing in recent years.

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Re: 60 year old professional anxiety

Post by Charles Joseph »

homebuyer6426 wrote: Thu Sep 22, 2022 9:05 am
staustin wrote: Thu Sep 22, 2022 8:51 am After suffering through 2008, and thanks to the work of the good Dr. Bernstein, we have an asset allocation that allows for restful sleep.

The era of zero interest rates and qe ending has and will continue to impact asset prices.
How did your asset allocation help you this year when bonds are way down too?
My portfolio isn't down nearly as much as the total stock market.
Mazel Tov!
homebuyer6426
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Re: [60 year old - anxiety over market downturn]

Post by homebuyer6426 »

Charles Joseph wrote: Fri Sep 23, 2022 1:49 am
homebuyer6426 wrote: Thu Sep 22, 2022 9:05 am
staustin wrote: Thu Sep 22, 2022 8:51 am After suffering through 2008, and thanks to the work of the good Dr. Bernstein, we have an asset allocation that allows for restful sleep.

The era of zero interest rates and qe ending has and will continue to impact asset prices.
How did your asset allocation help you this year when bonds are way down too?
My portfolio isn't down nearly as much as the total stock market.
Fair enough. But I honestly don't see a big psychological difference between a -12% drop and a -18% drop. Especially when inflation is making those numbers -20% vs -26% real.
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Re: [60 year old - anxiety over market downturn]

Post by jebmke »

looking at returns since a random arbitrary date like December 31 is a waste of mental energy.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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Re: [60 year old - anxiety over market downturn]

Post by 9-5 Suited »

Marseille07 wrote: Thu Sep 22, 2022 6:16 pm
9-5 Suited wrote: Thu Sep 22, 2022 11:59 am I think a big part of the challenge is that a lot of one's success as an investor - at least over short time periods - can feel very much outside your control. Even if you are the "perfect" investor however you define it (healthy amount of stocks, diversified, low-cost, bonds to meet your risk tolerance, rebalance dutifully, etc.), you still can do NOTHING to prevent yourself from losing massive amounts of wealth you used to have. The only thing you have to cling to is the knowledge that this has happened many times, is totally expected, and will happen many more times in the future. But in the moment that's not always a fully comforting message.

But, the only thing worse would be to take some ill-advised action that you end up regretting. One must believe in the system to some degree - not really much other choice. For those in working years, they can certainly opt to work longer but that's a cost in its own right.

It's not always easy not matter what some people say.
Isn't it passive investing in a nutshell though? If one just holds cash, they don't have that problem.

But once you passively invest (stocks or bonds), you're at the mercy of the markets...up and down.
Yep, exactly. It's the deal you sign up for. But it doesn't mean it's always easy, especially for people who are used to having a large degree of personal control over the success or failure of outcomes in their lives. Surrendering to the long-term productive nature of capital markets is a wonderful idea and sometimes a little nerve-wracking especially when near or in retirement. I think a smart asset allocation usually means a little bit of discomfort, but not a lot.
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Re: 60 year old professional anxiety

Post by wistlo »

dbr wrote: Thu Sep 22, 2022 8:54 am
doc2547 wrote: Thu Sep 22, 2022 7:40 am ... Any thoughts or words of inspiration out there.
... If you lay a 36 month average over the last few years what you find is that both the big run ups prior to the last year or so and the big losses recently are both wiped out and nothing has happened. My 36 month running average has me with more money today than in my whole life and that after 15 years of taking withdrawals.
....
Schwab starts up with a screen-wide graph showing the past 24 months. That graphic provides some perspective. It's ugly over toward the right (recent) end, but over 2-3 years, close to neutral. I look at the endpoints of the line and take some comfort in that. I also remember family members bailing out after the 1987 crash and later regretting it.

I did move a big chunk out of the bond family of funds into a mix of cash (short term treasuries) and VTI index as I was disappointed when they dropped an unexpected 15-20% when interest rates woke up from zero. I did not expect that drop. But guest what: they're stabilized now, and I wonder whether I should had left them alone.

At 62 I'm starting to think shorter term, with retirement anywhere from a possible layoff notice next week up to 67-70-ish. My employer's whim, personal circumstances, and net worth will all factor into that timing.
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Re: [60 year old - anxiety over market downturn]

Post by Marseille07 »

9-5 Suited wrote: Fri Sep 23, 2022 9:59 am Yep, exactly. It's the deal you sign up for. But it doesn't mean it's always easy, especially for people who are used to having a large degree of personal control over the success or failure of outcomes in their lives. Surrendering to the long-term productive nature of capital markets is a wonderful idea and sometimes a little nerve-wracking especially when near or in retirement. I think a smart asset allocation usually means a little bit of discomfort, but not a lot.
Near retirement is okay because you just work longer. It's not ideal obviously but no one promised you can retire (early) in the first place.

In retirement...not much you could do tbh. I certainly recommend having plenty of cash (2~3 years expenses) to ride out the downturns.
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RadAudit
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Re: [60 year old - anxiety over market downturn]

Post by RadAudit »

I have been a Boglehead for years and rarely post anything. I know the philosophy of being a member, however does anybody else out there feel like I do about our large losses this year and worry about our retirements being curtailed. I have stayed the course for my entire investing 35 years , but this market stings. Any thoughts or words of inspiration out there.
I'm fresh out of words of inspiration. However, I can commiserate with your feelings on the subject.

I'm down roughly about 17% for the portfolio since the beginning of the year. While that may sound manageable, in this market - depending on your AA - when you're near / or in retirement and translate % to $ - it stings. When you think of what may come, it stings more.

Now, I think DW and I can make it to the end with room to spare; but, I may have to rearrange my plans for donations to charities, helping the grandkids with college educational expenses, amount and timing of distribution of the estate to the kids, etc. Modifications to those things sting too.

Wishing you the best in the days to come.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
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Re: [60 year old - anxiety over market downturn]

Post by dbr »

Between the time I retired and when my portfolio balance bottomed out in Mar 2009 my assets were down 26%. That is an event that can happen.

On the other hand in the five years before I retired my portfolio balance went up 30%. That is also an event that can happen.

As it turns out due to the good luck of stocks rising from 2010 to 2020 my assets are now 25% higher than when I retired. That is also an event that can happen.

If you look in this model and trace portfolio balances over a period of time you can see the ups and downs that can occur. Sometimes the end result is kind of dismal and sometimes the end result is fabulously good. That is the nature of investing. This can be avoided by converting assets to income by buying an SPIA or setting up a long ladder of bonds. It is not at all clear one is better off by doing those things though, and the cost of SPIAs and ladders varies a lot over time when you make the purchase.

Model: https://engaging-data.com/visualizing-4-rule/
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Re: [60 year old - anxiety over market downturn]

Post by March2009 »

Wife and I retired in January at age 53. Not worried at all. Our AA is correct per our investment plan and risk profile. We will rebalance in January and carry on.

If you need help getting over your anxiety, you can analyze past periods for reassurance your retirement portfolio will be able to weather future storms. For my specific case, 1966 would have been the worst year for us to retire (horrible period for 60/40 and inflation during the first 15 years). If that repeats now, we can survive it. Could 2022 be the new worst-case start of retirement that will cause us pain? That is possible since we don't know the future, but we stand by our decision; the process was sound. Remember the cost of zero risk is extremely high.
In bear markets, stocks return to their rightful owners. - J.P. Morgan
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Re: [60 year old - anxiety over market downturn]

Post by linberl »

I am 72 and retired. I'm staying the course and freaking out less because of this website. Yeah, when my assets dropped beyond a certain mental point yesterday I had a momentary freakout, lol. I'm 25% stock/75% bonds and bonds are dropping, boo. I just try to tell myself everything is paper money. beyond what I initially invested - that's my hard line. If it goes down beyond that I most definitely WILL freak out, lol. I made sure when I retired that I could manage solely on my Social Security if need be with some serious budgeting. If things continue to go south, I will stop taking my dividends and reinvest instead to capture low prices, and hunker down on my reduced budget. Won't be fun but it is doable until things improve. I credit this forum for keeping me sane right now and for helping me figure out my fallback plan and how/when I retired. My heirs may not inherit as much as they'd like, but I'll be okay unless it's the apocalypse, in which case we're all screwed anyway.
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Re: 60 year old professional anxiety

Post by arcticpineapplecorp. »

CyclingDuo wrote: Thu Sep 22, 2022 9:50 am Image
interesting chart, but the only thing I'm wondering is how they came up with a 50% decline from 2000-2002 because I'm seeing worse drawdown (for total market) in that period was -37.10%:

https://www.portfoliovisualizer.com/bac ... ion1_1=100

and S&P500 had a loss of -38.9%

https://www.portfoliovisualizer.com/bac ... ion1_1=100

nasdaq lost more than that, but not "the market" as per vtsax. so where'd they get that 50% decline for the market from 2000-2002?
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Re: [60 year old - anxiety over market downturn]

Post by vineviz »

Hebell wrote: Thu Sep 22, 2022 11:43 am I guess I'm still perplexed why more people did not just simply move to individual bonds, or defined maturity ETFs at that time. If only to avoid psychological distress!
People who understand that owning bond funds represent the same risk as owning individual bonds don't necessarily suffer from that psychological distress, so many of them prefer the simplicity of using a fund.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
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Re: [60 year old - anxiety over market downturn]

Post by Hebell »

vineviz wrote: Fri Sep 23, 2022 12:37 pm
Hebell wrote: Thu Sep 22, 2022 11:43 am I guess I'm still perplexed why more people did not just simply move to individual bonds, or defined maturity ETFs at that time. If only to avoid psychological distress!
People who understand that owning bond funds represent the same risk as owning individual bonds don't necessarily suffer from that psychological distress, so many of them prefer the simplicity of using a fund.
Yes, as I noted, the issue is a psychological one. But frankly I prefer not to have all of the volatile pricing changes imported into my Quicken file, as bond fund prices fluctuate. It adds a perceived volatility to my portfolio, which one cannot mechanically back out of Quicken reports. This of course presumes I hold all individual bonds to maturity.
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Re: [60 year old - anxiety over market downturn]

Post by vineviz »

Hebell wrote: Fri Sep 23, 2022 1:07 pm
vineviz wrote: Fri Sep 23, 2022 12:37 pm
Hebell wrote: Thu Sep 22, 2022 11:43 am I guess I'm still perplexed why more people did not just simply move to individual bonds, or defined maturity ETFs at that time. If only to avoid psychological distress!
People who understand that owning bond funds represent the same risk as owning individual bonds don't necessarily suffer from that psychological distress, so many of them prefer the simplicity of using a fund.
Yes, as I noted, the issue is a psychological one. But frankly I prefer not to have all of the volatile pricing changes imported into my Quicken file, as bond fund prices fluctuate. It adds a perceived volatility to my portfolio, which one cannot mechanically back out of Quicken reports. This of course presumes I hold all individual bonds to maturity.
Doesn't Quicken update the bond prices daily as well?
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Re: [60 year old - anxiety over market downturn]

Post by jebmke »

dbr wrote: Fri Sep 23, 2022 11:42 am Between the time I retired and when my portfolio balance bottomed out in Mar 2009 my assets were down 26%. That is an event that can happen.
You piqued my curiosity. I retired in December, 2007. Our roughly portfolio declined by ~29% to March 2009. My last TLH/re-balance for US equity was on March 16, 2009. I still have those assets.

I also note that the S&P 500 is about where it was in mid-June of this year.
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Re: [60 year old - anxiety over market downturn]

Post by LilyFleur »

9-5 Suited wrote: Thu Sep 22, 2022 11:59 am
doc2547 wrote: Thu Sep 22, 2022 7:40 am I have been a Boglehead for years and rarely post anything. I know the philosophy of being a member, however does anybody else out there feel like I do about our large losses this year and worry about our retirements being curtailed.I have stayed the course for my entire investing 35 years , but this market stings. Any thoughts or words of inspiration out there.

[Topic title edited for clarity by moderator oldcomputerguy]
I think a big part of the challenge is that a lot of one's success as an investor - at least over short time periods - can feel very much outside your control. Even if you are the "perfect" investor however you define it (healthy amount of stocks, diversified, low-cost, bonds to meet your risk tolerance, rebalance dutifully, etc.), you still can do NOTHING to prevent yourself from losing massive amounts of wealth you used to have. The only thing you have to cling to is the knowledge that this has happened many times, is totally expected, and will happen many more times in the future. But in the moment that's not always a fully comforting message.

But, the only thing worse would be to take some ill-advised action that you end up regretting. One must believe in the system to some degree - not really much other choice. For those in working years, they can certainly opt to work longer but that's a cost in its own right.

It's not always easy not matter what some people say.
I agree, it is not always easy.

I am retired, and my first 401k withdrawal this year was spent largely helping one of my young adult children with a very expensive medical condition. So, when I really think about it, my financial and family worries can feel a bit overwhelming.

During 2020, I did move half of my fixed income allocation into the stable value fund in my 401k (from the total bond market index fund), as did others on this forum. That has given me the ability to make withdrawals for a few years from an asset that, while not keeping up with inflation, is not bleeding as red as the other assets.

My perspective on retirement is shifting. I used to focus on the total dollar amount of my savings. Now, I realize it will be a roller coaster, and I have a few years of withdrawals in my stable value fund. Beyond that, I don't know. I've started my social security to help with cash flow this year (I don't have a long life expectancy) and in two and a half years at age 65, my medical expenses will drop, which will help.

Life is a roller coaster, and having a hobby helps. I'm painting today; there's a deadline for a local exhibit that I'm thinking about.
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Devil's Advocate
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Re: [60 year old - anxiety over market downturn]

Post by Devil's Advocate »

Unless you're in retirement or right near it shouldn't matter what you are down. I think I'll go to work and make some money.

DA
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Re: [60 year old - anxiety over market downturn]

Post by BogleFan510 »

Devil's Advocate wrote: Fri Sep 23, 2022 1:36 pm Unless you're in retirement or right near it shouldn't matter what you are down. I think I'll go to work and make some money.

DA
Yes, but as a 58 yr old early retiree, with no plans to work, it does feel bad. Portfolio down about 2M, largely due to a few big tech winners dropping and broader mkt. 8.5M vs 6.5M moving forward seems material, though likely we were over saved and it wont impact us.
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Re: [60 year old - anxiety over market downturn]

Post by Orthodoc1. »

I think you are normal. If you keep up with current events, there is and there was a lot to worry about, at least in the short run. Sometimes a little adjustment in asset allocation can ease the anxiety as long as you don't do anything drastic. I am approximately your age. For me it was adding a little value tilt and shortening up duration of bond funds about a year ago
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Re: [60 year old - anxiety over market downturn]

Post by JakeyLee »

Op,
I feel like the poster child for anxiety and fear when it comes to my investments/portfolio. I find that stepping back and looking at the bigger historical picture has always helped bring me back to reality .

As I type this, I notice the S&P, while down approximately 20%, is still priced where it was in mid December of 2020. And I had anxiety then, as the market seemed overpriced. In the last 30 plus years, I’ve never been content when the market is selling off, and I’ve never been content when it’s making huge returns (my constant fear of what’s around the corner).. so I tend become paralyzed and unable to make changes. Sticking to my IPS and game plan is the only thing that’s allowed me to stay afloat. It’s the only thing that keeps me from making behavioral based decisions. Which in my case are all known as costly mistakes.

So maybe the market sells off another 50%… maybe we begin another big bull run, who knows? But I sleep well knowing my plan is in place.

I often remind myself of how I felt in 1995 (‘94?) when the S&P crossed 500. I thought we were doomed. There was no more room for growth.. then a a few years later it was at 1000. *gasp*. And don’t even get me started on the 2000’s. I’m not sure what my point is(?) markets go up, and markets go down. This time might be different. Or maybe it’s the same recycled plot to so many movies we’ve seen before. I have a feeling I know how it’s going to end. And if it doesn’t, there’s no tinkering or changes on my part will save the day.
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Re: [60 year old - anxiety over market downturn]

Post by Devil's Advocate »

BogleFan510 wrote: Fri Sep 23, 2022 1:40 pm
Devil's Advocate wrote: Fri Sep 23, 2022 1:36 pm Unless you're in retirement or right near it shouldn't matter what you are down. I think I'll go to work and make some money.

DA
Yes, but as a 58 yr old early retiree, with no plans to work, it does feel bad. Portfolio down about 2M, largely due to a few big tech winners dropping and broader mkt. 8.5M vs 6.5M moving forward seems material, though likely we were over saved and it wont impact us.
Sounds like you are going to-do fine. That's a first world problem for sure! Congratulations on your nest egg. That's impressive.

DA
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Re: [60 year old - anxiety over market downturn]

Post by tesuzuki2002 »

A lot of GREAT inputs here. I love the perspective from Bogleheads. I am thankful to still be well in the middle of accumulation years.

I've had thoughts on retiring early and doing some much more fun things in my life... but it seems I can never get ahead of the markets and there is always a new curve ball coming at us. It seems to hit me every time.

At some point closer to retirement I see a definite need to shift allocations and be a lot more stable value assets and even a couple of years of cash.. But for now I stay the course and keep investing... watching my portfolio go down.

The large sticker shock for me as time goes on and I have a larger and larger portfolio... It means I can no longer out invest a market dip.

Here is to hoping for all of you soon to be retirees that this down cycle allows you to reallocate and invest at a discount before the next good bull run!!!
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Re: [60 year old - anxiety over market downturn]

Post by Random Walker »

Devil's Advocate wrote: Fri Sep 23, 2022 1:56 pm
BogleFan510 wrote: Fri Sep 23, 2022 1:40 pm
Devil's Advocate wrote: Fri Sep 23, 2022 1:36 pm Unless you're in retirement or right near it shouldn't matter what you are down. I think I'll go to work and make some money.

DA
Yes, but as a 58 yr old early retiree, with no plans to work, it does feel bad. Portfolio down about 2M, largely due to a few big tech winners dropping and broader mkt. 8.5M vs 6.5M moving forward seems material, though likely we were over saved and it wont impact us.
Sounds like you are going to-do fine. That's a first world problem for sure! Congratulations on your nest egg. That's impressive.

DA
In deciding on AA important to think both in terms of potential % losses and absolute $ losses. Pain of loss twice as much as happiness derived from equal sized gain, and that ratio increases a lot with net worth.

Dave
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Re: [60 year old - anxiety over market downturn]

Post by Leesbro63 »

vineviz wrote: Fri Sep 23, 2022 12:37 pm
Hebell wrote: Thu Sep 22, 2022 11:43 am I guess I'm still perplexed why more people did not just simply move to individual bonds, or defined maturity ETFs at that time. If only to avoid psychological distress!
People who understand that owning bond funds represent the same risk as owning individual bonds don't necessarily suffer from that psychological distress, so many of them prefer the simplicity of using a fund.
+1. This is absolutely correct. And owning individual bonds is a part time job.
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Re: [60 year old - anxiety over market downturn]

Post by Lawrence of Suburbia »

I'll admit ... the last few days, I've become a bit more than concerned. Clickbait of "the 1970s all over again!!" variety is hitting the financial news networks and websites. Thankfully, the "gurus" and commentariat are usually wrong. Mostly. I hope.

What hidden strength has saved me from going to all-cash, I hear you asking ...?

Laziness. Sloth. Can't-be-botheredness. (Plus the certain knowledge that my going to cash would almost certainly mark the bottom of this bear market).

I am the laziest person on the planet. Maybe the entire Solar System (hey, prove me wrong).

I specialize in doing #$@!-all, really; an active day for me is just getting out of bed. A busy day might find me watering the plants on my verandah. An exhausting day might see me going out to a nice café and having a cappuccino, sat there watching all the other humans pass by and doing all sorts of ... stuff (shudder).


"Don't just do something; stand there!"
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Last edited by Lawrence of Suburbia on Fri Sep 23, 2022 2:40 pm, edited 5 times in total.
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Re: [60 year old - anxiety over market downturn]

Post by Youngblood »

Random Walker wrote: Fri Sep 23, 2022 2:22 pm
Devil's Advocate wrote: Fri Sep 23, 2022 1:56 pm
BogleFan510 wrote: Fri Sep 23, 2022 1:40 pm
Devil's Advocate wrote: Fri Sep 23, 2022 1:36 pm Unless you're in retirement or right near it shouldn't matter what you are down. I think I'll go to work and make some money.

DA
Yes, but as a 58 yr old early retiree, with no plans to work, it does feel bad. Portfolio down about 2M, largely due to a few big tech winners dropping and broader mkt. 8.5M vs 6.5M moving forward seems material, though likely we were over saved and it wont impact us.
Sounds like you are going to-do fine. That's a first world problem for sure! Congratulations on your nest egg. That's impressive.

DA
In deciding on AA important to think both in terms of potential % losses and absolute $ losses. Pain of loss twice as much as happiness derived from equal sized gain, and that ratio increases a lot with net worth.

Dave
Definitely true for me.
"I made my money by selling too soon." | Bernard M. Baruch
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Re: 60 year old professional anxiety

Post by CyclingDuo »

arcticpineapplecorp. wrote: Fri Sep 23, 2022 12:28 pm
CyclingDuo wrote: Thu Sep 22, 2022 9:50 am Image
interesting chart, but the only thing I'm wondering is how they came up with a 50% decline from 2000-2002 because I'm seeing worse drawdown (for total market) in that period was -37.10%:
I usually follow the bear/bull/corrections site at Yardeni Research (however it is being updated today, so the chart is not showing as I type this). It should be updated by this evening.
https://www.yardeni.com/pub/sp500corrbeartables.pdf

Regardless, most measure the 2000-02 bear market for the S&P 500 from peak to trough at -49.x%. The graphic above simply rounds the percentages to full numbers for the 5 bear markets it was highlighting.

Ben Carlson also has a nice table of bear markets since 1960 1950 (edit) with the peak to troughs, etc... you can view...

https://awealthofcommonsense.com/2022/0 ... kets-last/
The worst-case scenario is the 1973-1974, 2000-2002 and 2007-2009 crashes which all took more than four years to recover.

Image

We shall see where we end up 2, 4, and 6 years from now, but I would imagine the current bear market and recovery will fit right in with the table from Carlson's website in terms of duration, peak to trough drop, and the number of days/years to breakeven when all is said and done.

We are standing here doing nothing. Sitting, actually at the moment...

CyclingDuo
Last edited by CyclingDuo on Fri Sep 23, 2022 3:58 pm, edited 1 time in total.
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Re: 60 year old professional anxiety

Post by arcticpineapplecorp. »

CyclingDuo wrote: Fri Sep 23, 2022 2:31 pm
arcticpineapplecorp. wrote: Fri Sep 23, 2022 12:28 pm
CyclingDuo wrote: Thu Sep 22, 2022 9:50 am Image
interesting chart, but the only thing I'm wondering is how they came up with a 50% decline from 2000-2002 because I'm seeing worse drawdown (for total market) in that period was -37.10%:
I usually follow the bear/bull/corrections site at Yardeni Research (however it is being updated today, so the chart is not showing as I type this). It should be updated by this evening.
https://www.yardeni.com/pub/sp500corrbeartables.pdf

Regardless, most measure the 2000-02 bear market for the S&P 500 from peak to trough at -49.x%. The graphic above simply rounds the percentages to full numbers for the 5 bear markets it was highlighting.

Ben Carlson also has a nice table of bear markets since 1960 with the peak to troughs, etc... you can view...

https://awealthofcommonsense.com/2022/0 ... kets-last/
The worst-case scenario is the 1973-1974, 2000-2002 and 2007-2009 crashes which all took more than four years to recover.

Image

We shall see where we end up 2, 4, and 6 years from now, but I would imagine the current bear market and recovery will fit right in with the table from Carlson's website in terms of duration, peak to trough drop, and the number of days/years to breakeven when all is said and done.

We are standing here doing nothing. Sitting, actually at the moment...

CyclingDuo
thanks. PV only does monthly or yearly, not daily so i see it's not as granular as we need.
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Re: [60 year old - anxiety over market downturn]

Post by strummer6969 »

The S&P is already down, what like 25% YTD? These are the times when people usually make irrational decisions. My parents are late 60s (although not retired and are working part-time). I haven't heard them worry about it, so I assume they're staying the course.

We've got the best institutions in the world. We'll come roaring back eventually!
Last edited by strummer6969 on Fri Sep 23, 2022 2:54 pm, edited 1 time in total.
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Re: [60 year old - anxiety over market downturn]

Post by Ocean77 »

I think stocks are reasonably priced here. They are also up by 10% or so since the beginning of 2020. This is a bit less than the historic average of market returns, but we did have a pandemic in the meantime. There also was a strange year in between (2021) were prices of most assets were disconnected from reality. This is now past us, and from here, I think we can optimistically look to the future. There will of course be bear markets and crashes, but nobody can know ahead of time when they will occur.
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Re: 60 year old professional anxiety

Post by miket29 »

Offshore wrote: Thu Sep 22, 2022 8:13 am I am 62, partially retired and feel exactly as you do! I have stayed the course rather easily through past market turmoil when there was a full paycheck coming in. Now? Not so much. As others have identified, it's the bond market that has gotten to me in this cycle. I don't see those losses coming back, even with higher monthly dividends.

What I have done is move 25% of my fixed income into short term T-bills that I buy at auction. It has stemmed the losses and I am darn close to locking in more losses by cashing out of VBTLX and buying individual bonds. Haven't done that yet because I really want to "Stay the course" as much as I can.

Can anyone give me a reason other than locking in losses to NOT move from mutual funds to individual bonds considering the Federal Reserve has told us there will be more rate hikes in the last quarter of 2022?
I'm in a similar boat, retired about a year ago. As I neared retirement I moved to a 70% bond allocation to reduce my exposure to market moves. I was swayed in part by the Ferri article https://www.forbes.com/sites/rickferri/ ... r-retirees although he has since said on this board that was just a starting point for thought and many would want more equity exposure.

I thought I was sitting pretty, the bond money in short and intermediate bond funds and just wanted it preserve the real purchasing power I had saved. Then inflation took away 10% of my purchasing value in one year alone and the funds dropped in value to add insult to injury. A few months ago I decided to move into TIPS. My thinking was that I have enough to retire if I can keep my purchasing power, TIPS more or less let me do that. Back when I did it the TIPS were still negative but I figured locking in a modest loss was better than watching 5-10% or more evaporate. And if you buy now the return even a year out is positive. See https://www.wsj.com/market-data/bonds/t ... _tips_full
Last edited by miket29 on Fri Sep 23, 2022 3:08 pm, edited 1 time in total.
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Re: [60 year old - anxiety over market downturn]

Post by jebmke »

strummer6969 wrote: Fri Sep 23, 2022 2:52 pm The S&P is already down, what like 25% YTD? These are the times when people usually make irrational decisions. My parents are late 60s (although not retired and are working part-time). I haven't heard them worry about it, so I assume they're staying the course.

We've got the best institutions in the world. We'll come roaring back eventually!
We are about where we were in June. So if you didn’t hear from them then or now they are probably staying on course.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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Re: [60 year old - anxiety over market downturn]

Post by Grt2bOutdoors »

Earnings are about to get a whole lot worse for many companies. When is the question? The answer is likely in 6 months or so as the impact of higher borrowing costs trickles through the economy. We are already seeing a slowdown in automotive and housing. The market is forward looking. At today's prices, the market is still richly priced and money is no longer "free". Speculation costs alot of money especially when it involves the use of leverage in a rising rate environment. Look for stock buybacks to slow down, if they haven't already.

It is painful, no doubt, especially in the short term. If you are age 60, what is your asset allocation?
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CloseEnough
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Re: [60 year old - anxiety over market downturn]

Post by CloseEnough »

Anxiety = Excess Wealth - market downturn / personality type (are you a worrier).

Lots of good advice here, I try to follow it. Unfortunately if you are heavy in the denominator (as I am) it can be difficult.

Good luck, hopefully you all can keep things in perspective and weather the market and personal challenges.
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Re: [60 year old - anxiety over market downturn]

Post by strummer6969 »

jebmke wrote: Fri Sep 23, 2022 3:06 pm
strummer6969 wrote: Fri Sep 23, 2022 2:52 pm The S&P is already down, what like 25% YTD? These are the times when people usually make irrational decisions. My parents are late 60s (although not retired and are working part-time). I haven't heard them worry about it, so I assume they're staying the course.

We've got the best institutions in the world. We'll come roaring back eventually!
We are about where we were in June. So if you didn’t hear from them then or now they are probably staying on course.
I had to call them to make sure they didn't hadn't made any rash decisions. It looks like my mom turned off her 401K contributions in June (at the bottom of course). Their portfolio has taken a big hit but their full social security should cover their monthly expenses when they retire in a year. I told them to retire a few years ago to spend more time with the grandkids. I'm so glad they didn't listen to me.
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Re: [60 year old - anxiety over market downturn]

Post by bikeeagle1 »

I know that most folks on this forum don’t believe in market timing, which is fine if you can stand to ride out deep drawdowns, even in retirement during the withdrawal stage of your investing life. As for me, based on my purely mathematical system with no forecasting involved, I’ve been all cash since the third week of February. I will be happy to post here when the system calls for a return to stocks. I emphasize with the OP, since I am 62 and retired.
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