Lost $53K in the market downturn

[msomnipotent]

The last numbers I have to compare are from 9/13/18, and it looks like we lost a little over 10% but we are still up for the year (so far). I have been slowly moving money and future contributions into less risky investments for the past year just because my husband is in his 50's and my daughter only has 4 years until college. I feel that the market as a whole has a lot more room to go down yet although I am buying individual stocks. I'm also increasing our 401k contributions this year.

If you are not in stocks for the long haul, you probably shouldn't be buying stocks. I lost 40% of my retirement fund after 9/11, and I don't even know how much I lost after the tech bubble. I didn't sell anything and I'm way ahead of where I was after those events even though I didn't contribute anything to my 403b for about 2 years prior to 9/11.

[Captain Save]

When I moved all my money to cash in my 401k .. I was at break even for the year.. by the time everything went trhough .. I was down 8% ...

Moral of the story is Emotions goes both ways. .. when things are going well ... you don't think about protecting yourself if you have a specific need. The face of the matter is the minute I made the decision to use my 401k money .. I should have moved it to cash. It might have been more procrastination than FOMO .. but it's easy to procrastinate when the market is doing well

[~bs]

The last numbers I have to compare are from 9/13/18, and it looks like we lost a little over 10% but we are still up for the year (so far). I have been slowly moving money and future contributions into less risky investments for the past year just because my husband is in his 50's and my daughter only has 4 years until college. I feel that the market as a whole has a lot more room to go down yet although I am buying individual stocks. I'm also increasing our 401k contributions this year.

If you are not in stocks for the long haul, you probably shouldn't be buying stocks. I lost 40% of my retirement fund after 9/11, and I don't even know how much I lost after the tech bubble. I didn't sell anything and I'm way ahead of where I was after those events even though I didn't contribute anything to my 403b for about 2 years prior to 9/11.

You lost a lot of money post 9/11 and tech bubble, but if you were relatively young (and I'm guessing you were), it really didnt affect you, because the subsequent economic boom more than made up for those losses if you stayed in teh market. If your investing horizon is shorter, need to be more conservative.

pretty much every financial news article says time and again not to be too aggressive if you're nearing retirement age, but people dont listen.. I know people that lost their pants in the 2008 recession and were forced to keep working instead of retiring. If they had their assets allocated correctly, the peak value wouldn't have been as high, but they wouldn't have lost 50% of their nest egg either. The age old rule of thumb would have helped. If anything, I think it's a bit too conservative for younger people in their 20s and 30s, and not conservative enough for people in the 50s - 60s.



"The old rule of thumb used to be that you should subtract your age from 100 - and that's the percentage of your portfolio that you should keep in stocks. For example, if you're 30, you should keep 70% of your portfolio in stocks. If you're 70, you shouldkeep 30% of your portfolio in stocks."

[Like2Plan]

DH and I are also down. A lot! All of our new contributions this year were 40% international index and 60% bond index--both pretty lackluster all year long. The bonds are finally up a minuscule amount. Of course, everything else went down, down, down!

The most aggravating thing is the Roth conversion I did. I locked in the taxable amount when I did the conversion, but the Roth is worth several thousand less now. No more re-characterizations when that happens. Oh well.

The other factor is DH has decided to retire next year, so I'm going to have to look at the effect of sequence of returns risk a little more carefully. Our overall portfolio is currently about 55% stocks & 45% bonds. Some folks convert the next 3 years of expenses to bonds separate from the overall allocations. I have thought about doing that--perhaps that would result in less worry? (Except, maybe I would worry about losing out when the market goes up? ) Decisions, decisions.

[~bs]

^ Well he hasn't retired yet, so could always look at reevaluating and working another year. If youre retirement age, your assets should be mostly allocated away from stocks anyways. Perhaps run some numbers where the stock portion of your account goes down by 40%, is that something you can weather without difficulty? if the answer is no, then perhaps better to work and keep plowing savings into your "safe" asset portion

[TexasHusker]

If you're going to stay in the market in the next few months, it might not hurt to work another couple of years!

[Like2Plan]

^ Well he hasn't retired yet, so could always look at reevaluating and working another year. If youre retirement age, your assets should be mostly allocated away from stocks anyways. Perhaps run some numbers where the stock portion of your account goes down by 40%, is that something you can weather without difficulty? if the answer is no, then perhaps better to work and keep plowing savings into your "safe" asset portion

Yes, we are currently about 55% stocks & 45% bonds. (Well, maybe we have a higher percentage of bonds after today, ) We will be okay, but I just have to think about the best way to accomplish our goal.

[greenskeeper]

"The old rule of thumb used to be that you should subtract your age from 100 - and that's the percentage of your portfolio that you should keep in stocks. For example, if you're 30, you should keep 70% of your portfolio in stocks. If you're 70, you shouldkeep 30% of your portfolio in stocks."

I'm 39. 100-39= 61%

not quite....I'm 100% in on stocks. Have been since age 18 with my first 401k deposit & match. I'll start dialing things back once I hit 55+

[disneysteve]

I'm 39. 100-39= 61%

not quite....I'm 100% in on stocks. Have been since age 18 with my first 401k deposit & match. I'll start dialing things back once I hit 55+

I think that rule of thumb, which was often modified later to be 110-age, is too conservative when you're young. However, it reinforces the point that stocks always need to be a part of your portfolio, even after retirement. If you cash out when you retire at 62 or 65 and go all cash, you run a much higher risk of outliving your money than if you keep 30 or 40% in stocks. An all cash portfolio that has to last 30 years or more is pretty risky.

[~bs]

yup, i mentioned that in my earlier post. it's simplistic and conservative on the young and aggressive on the older side, which is why i guess disney mentioned it was modified to 110

[disneysteve]

pretty much every financial news article says time and again not to be too aggressive if you're nearing retirement age, but people dont listen.

No surprise there. People don't listen, largely because they aren't even paying attention and generally have no clue what they're doing. They don't understand where their money is and what risks are involved.

I'm old enough to remember Enron. When that company imploded, many employees lost their entire nest egg. Why? Because they had it 100% (or close to it) in company stock. Nobody anywhere has ever suggested that that's a good idea. 5% sure. 10% maybe. But much more than that in any one stock, especially that of your employer, and you're playing with fire. But those folks had all of their own contributions going into company stock and the matching funds were paid in company stock so they were all in big time and got decimated.

[LivingAlmostLarge]

9/3 was what appeared to be the peak for us. We are down $111k in our retirement accounts. Down $77k in our taxable. That is about $188k down. Considering we maxed out the retirement to the tune of $18.5k and $11k Roth IRAs plus company match for the year. From the beginning of the year we are down $38k in retirement plus another $38k in contributions.Then in taxable we are down $35k and then paid off a ton of debt for the rest. We are 39 and 41. The plan was to "retire" in 9 years or really 16 when DK2 is done with college. We're riding this out. I'm not changing a thing. We are going to muscle through.

I will say I still have over 6 figures in cash, I'm hoping to either snag a SFH home on deal for us where we live in the next 1-2 years or buy a couple of investment properties. That's why we are currently so heavily in cash right now along with our investments. If nothing pans out I plan on putting it into the market in the next 1-2 years at about 80/20 mix. I don't plan on changing it more conservative until 10 years from now. Then heading to a more 65/35 mix with 2-3 years to go and going 70/30 with 5 years to go.

I don't want to look at our RSU. Um I'm pretty sure we're screwed on RSU for DH, but considering his salary is still solid I can't complain. We usually bank the entire RSU and don't use it to live on. Just means less savings.

[scfr]

My question is - how are the rest of you able to handle the crash ? Do you not feel any fear at all over all this uncertainty ?

Scallywag - For me, the key has been to have an asset allocation that is truly aligned with risk tolerance (always - whether the market is up or down or way up or way down), current financial situation, and goals.

I want to ask about a comment you made in your original post on this thread. You said that your spouse is "beyond pissed" about your decision to sell. That concerns me. Did you not discuss with your spouse before selling? Are the two of you not on the same page about investments? Or is the child that you mention only yours (not your spouse's), finances are completely separate, and it's all on you to provide for the child's future? If planning investments and providing for the child's future is a joint effort between the 2 of you, then maybe it is better for you to park your finances on the sidelines until the two of you have time to sit down and make a plan as a couple. Good luck.

[Like2Plan]

I don't know if this will be of any interest to anyone, but I found an interesting analysis here: https://www.bogleheads.org/forum/vie...80572#p4280572

Of course, as they always say-- past performance is not an indicator of what will happen in the future. And, we don't know where we are on this roller coaster--are we at the lowest valley or are we still plummeting down? Yikes! Well, Hang on to your hats and glasses cuz this here is a wild ride!

[Petunia 100]

I know what I did may seem stooooopid to many savvy investors but I just couldn't take the anxiety anymore. I am younger thsn you so maybe it won't matter in the long run but I just had to bail for now.

When people sell everything out of anxiety or fear, it is a sure sign that they had too much (percentage-wise) in stocks to suit their own risk tolerance. I suggest you use the time between now and March 2019 to think about an asset allocation you can stick with. Best of luck to you.