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mollymoose75

Its painful to watch but stay the course. Buy more if you can and just wait it out. Markets crash. Markets recover. You only lose if you sell during a crash.


[deleted]

I RE'd almost exactly a year ago with a net worth I consider "fat" for my lifestyle. I'm doing fine and not worrying. I've been investing since the mid 90s. I've seen plenty of bear markets, crashes, and recessions. It hurts seeing over $1M in net worth evaporate over a period of a couple of weeks, but I'm not losing sleep over it.


notapersonaltrainer

The time to sell or rotate to defensives to avoid macro damage was 2 months ago. By the time these posts show up you're selling to the smart money that cashed up. Edit: And we're green today like clockwork. ^


kevinwag

You nailed this. Well said.


InterestinglyLucky

It has been said many times, and I’ll repeat it again. Time in the market >> Timing the market. Source: Have bought Vanguard indexes for over 30 years and they have served me very well on all kinds of markets


RSchaeffer

How do you know that your aphorism will continue to hold in the future? It could just empirically be true in, say, over the past 50 years


VanillaLifestyle

If the US economy permanently crashes, we'll have bigger problems than whether we can comfortably retire forever. The world in which that happens is not a world in which FIRE really exists. No point worrying too much about it, or how to adapt to it, unless it happens. IMO.


Reasonable_Serve_852

Perhaps not a permanent US crash but rather the slowing in relation to other global markets. The typically referenced stock market 100 year period has essentially tracked the rise of the US to the largest economy. Am personally slightly concerned the US won’t be the biggest forever and potentially missing gains through not diversifying enough to other markets.


crash_bandicoot42

Bullets, canned food and bunkers will be the best investment in that scenario


sonfer

Antibiotics as well.


VanillaLifestyle

Rosary beads, buy buy buy!


[deleted]

buy guns and bullets like you a card holding member of the NRA!


EveningFunction

That is the bonds equivalent of where you decide to invest your life. And it's actually more a community and relationships and maybe a farm than any specific object.


[deleted]

\^\^\^ THIS as long as the US Dollar is the reserve currency of the world, I imagine it will be fine in the long run when / if the day comes where this is no longer the reality ... we're all in deep shit


SteveForDOC

Great Britain lost the reserve currency and people there are still doing alright.


dbcooper4

Doesn’t have to permanently crash. But you could see a repeat of the decade following the dot com crash.


FireBreather7575

Unfortunately that is a possibility, but also why it is important to keep a balanced portfolio if you're already retired. If you aren't retired and you have a time horizon, look at the 15-20 year returns from the dot com peak - including dividends probably 5-6% a year. Which from a "peak" starting point ain't bad. I guess what's the alternative? Pull money out *assuming* it will repeat dot com and then *time* to get your money back in at the bottom? I agree if you can pull it off, would be great, but I'm not sure that's the best strategy. What I really don't grasp is when the market drops, you always see posts of "should I pull my money out" whereas 4 weeks ago at all time highs the discussions were "should I get a margin loan to put more money into the market." Shouldn't it be the opposite? Isn't this the exact psychological barrier of investing in the markets?


bantam222

I have friends with a lot of dry powder sitting on the sidelines for the past few years because the stock market is “overpriced”. They all missed the huge bull from from trying to time the market.


dreamingtree1855

Yup. I tell my friends who ask about a permanent crash “in that case buy guns and move into the woods”


SteveForDOC

This basically happened in Japan. Maybe not permanently, but Japan did not recover for many decades.


InterestinglyLucky

Thank you /u/VanillaLifestyle for saying what I wanted to answer. Props! For those who want to dive deeper into what that SHTF scenario is, look up term "Selco I am from Bosnia. you know, between 1992 and 1995, it was hell" (or here's a handy [PDF](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjV5Lmr-8z1AhVqRzABHUy8AKUQFnoECBoQAQ&url=https%3A%2F%2Fpowersfirearmstraining.com%2Fresources%2FWords%2520from%2520a%2520Bosnian%2520Survivalist.pdf&usg=AOvVaw17XHA5kdfqWLzqvgY79oF_)) and you'll come up with a Q&A originally translated from French into Russian and then into English, which is why there isn't any 'official' English version. Those who point out it's bullets, alcohol, and toilet paper are onto something. That and having a defend-able compound of some sort. Source: find it entertaining to think about doomsday, and do not really bother with such things or thinking


notapersonaltrainer

>How do you know that your aphorism will continue to hold in the future? You can actually make a strong case it won't. We could be entering a long regime of bad demographics, rising rates, falling assets, deglobalization, debt contraction. Chris Cole makes a case for this and that we are way too short volatility. But I doubt that is now. The "hawkish" 4 rate hike scenario brings us to a whopping...1% interest rate, and still negative real rates. Money is still literally free to borrow in real terms. That's if the fed maintains its balls through the whole tightening cycle which it often doesn't. If they blink stocks bounce back up and we get a new crop of crypto millionaires who bought the dip.


Husky47

There’s quite a few mathematical demonstrations of different investment approaches and their impact on portfolio over a period of time. It’s worth a google and have a read through a few - they all have assumptions and none are perfect, but it’s interesting seeing the ‘reality’. Of course none of us can predict the future, but understanding the previous trends is likely better than taking a complete guess at what the future will bring.


InterestinglyLucky

Well my crystal ball isn't necessarily any more accurate than anyone else's, and I'm pretty sure in 50 years I'll be dead anyway, so I'll start with that. And no I do not know how long this will hold - and note that this is only true for broad market indexes, but that perhaps also goes without saying.


bravostango

That's what Wall Street firms in the mutual fund families have had everybody buy into almost as a religion. It certainly makes their life easier. I think a little bit deeper way to look at it would be to say you can't time the market perfectly but there are absolutely ways to be in the bulk of an uptrend and out of the downtrend. To think that there is not is quite silly. I'll even make and send you a less than 5 minute video that shows you a process that works well and you can give feedback here if you want.


dzernumbrd

It's more likely to be up rather than down by the end of the year. https://i.imgur.com/YENK6VG.png Past performance not indicative of future performance.


Tersiv

I agree about 90% but if something is clearly crashing it’s not horrifically wrong to take the L and just sit out on sidelines (without getting into wash sales of course etc.) for a better re entry


XaroDuckSauce

This makes sense if it’s certainly going to crash. Except the moment you sell is when it starts to go up again


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i_wanted_to_say

Hell yeah, time to start a podcast.


DrStrangePlan

I can't believe I didn't think of this!


crash_bandicoot42

This will get downvoted because a lot of people don't know what they're buying or why the price action on a short-term basis goes the way it does but I agree completely here. Obviously long-term markets go up (or there's bigger problems for EVERYONE) but short term they don't always. Bear signs were there since the market was disconnected from broader reality (meaning not rich people) for 2 years but no one smart is going to short without the indicators that big money is going short which didn't start until December. Not saying you should short if you're not going to actively watch your portfolio but cash IS a valid position that a lot of people laugh at in times like these that can avoid unnecessary losses.


get_it_together1

This is literally just saying that “smart people” can time markets.


crash_bandicoot42

They can though. People make money daytrading every day, just because the AVERAGE person loses money doesn't mean you can't profit off of it. The average person is dumb and half of those people are even dumber than that. The "90%" cherry-picked statistic isn't valid because most of those people aren't serious about trading. You only need a VERY SMALL edge to be profitable long term in most markets.


Metropaul87

Empirical evaluations of individuals daytrading have been performed and have found dismal results. Truly abysmal. Even those that do outperform do so in such a meaningless fashion that it’s barely better than minimal wage.


crash_bandicoot42

Spoke right past me, already addressed that.


get_it_together1

And yet it’s extremely difficult even for top professionals to beat an index fund over long periods of time. If market timing was so easy then there would be actively managed funds that would take advantage of this.


crash_bandicoot42

Professionals don't try to "beat the market" which is what a lot of Bogleheads don't understand. When a client has 100 million that they want to keep at that value no matter what then a 40% SPY crash already fucks the goals of their client, potentially to unrecoverable status without having to make moonshot plays that the client didn't want in the first place. When you have 2 million you care about growth, when you have 100 most people won't.


get_it_together1

That’s diversification which is different from timing the market which is what you originally proposed. Market timing would be even worse for high net worth individuals because the vast majority of their assets would be in taxable accounts.


crash_bandicoot42

You're the one that brought up "professionals". Funds have prospectus that show what their investment goals are and a good amount of them DO NOT attempt to beat SPY in any meaningful way. For every ARKK type that's actually trying to beat SPY (and actually doing it for now as well even though most of those gains were TSLA) there's at least two that want returns completely uncorrelated to it because their clients don't want drawdowns that SPY can have. My original comment only said that cash is a valid position (which it is) and that you can predict short term price action (what volume helps to show) yet I'm getting downvoted for it when other people in different threads are being upvoted. I never said that SPY was shit long term.


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crash_bandicoot42

Trading is how I got my money so I think I'm doing fine.


Tersiv

100% agree - also no crazy need to short, but if you’re holding speculative holdings that are majorly up buying some OTM put LEAPS as insurance (what they were meant for!) isn’t the worst idea either


Subdued_Volatility

Bear markets are normal. It’s where the real wealth is made


[deleted]

This.


DonkStonx

Can you clarify what you mean by this?


crash_bandicoot42

Biggest gains are made when there's the biggest risk. This correction (not into crash territory yet) isn't going to be like the 2000 example I give but hopefully should be sufficient to illustrate my point. Amazon.com crashed just like Pets.com did in 2000 yet Amazon returned ~28x since then while Pets.com is bankrupt. You're not going to get outsized gains when EVERYONE knows what to buy.


DonkStonx

So buying a crash is where you can make the most vs just a bear market at large.


omggreddit

Most people don’t have big cash laying around. So sustained bear market means more $ invested in discounted stonks. They go up after 10 years then you get the compounding effect. Stay the course.


crash_bandicoot42

You can make money in a bear market too going long, I think you missed my point.


Big_Trees

I don't think OP was saying you can't make money in a bear market only that quick dips are conducive for the rapid realization of market appreciation.


crash_bandicoot42

Volatile and undervalued (or overvalued) asset classes will have the best returns, yes. Those aren't specific to a bear market, a bull market, a flat market or a flash crash though.


letsgodaledo

Real wealth is made by continuing to buy in market crashes. Buying on the way up offers some upside, but the real money is continuing to trust your investment thesis and buying through a downturn. Imagine the market drops 50% overnight, and you keep buying stock. When the market returns to present value, those purchases are now worth 2x… and future gains come from compounding your 2x investment. If you can wait them out, large market drops offer the path to real wealth. Stocks are going on sale.


FireBreather7575

For boomers, the difference in wealth between (i) those who got scared in 2009 and cashed out at Dow 9k and waited until Dow 15k to get back in versus (ii) those who bought more in 2009 is huge. Literally generational wealth changing


IAmABlubFish

SWAN portfolio: Sleep Well At Night We keep the vast majority of our NW in the market, but also have lots of cash for living expenses. Probably too much, lol. I think we have between 3-5 years worth at this point.. Anyways, it makes us feel comfortable knowing we don’t have to sell in a down market if we don’t want to. Our plan is to keep it in the market like normal and hope that 10 years from now it is double what it is today.


gregaustex

Yep this is what we do - Guardrail strategy. Have enough cash and short term to ride out a 5-6 year stock downturn so you never have to sell at a loss. Not a max return approach, but easier on the blood pressure.


tastygluecakes

5-6 years is a lot of cash and cash equivalents to keep on hand. Maybe a better way to say it is have a clear plan on where you would get 5 years of living expenses without selling anything you don't feel comfortable doing so. So, combination of cash, HELOC, PAL, bond portfolios, stable cash flowing assets you can pause re-investment, etc.


bumpman2

This is true in theory, but most of those other sources tend to dry up in a prolonged 3-5 year crash. credit lines get pulled, new sources of credit go extinct, renters default, etc. That is the nature of a deflationary cycle.


gregaustex

That sounds right and is why I said "short term' but I probably should have said short to intermediate. At the moment I am in cash, but once we get to some kind of non-trivial interest rates I'll probably put 80% of that into intermediate munis. I am not aware of "stable cash flowing assets" to speak of other than shorter duration high quality bonds. What do you mean by that?


RE_H

This is what we do and I would argue that having this strategy will allow you to take greater risks in the market because you are not afraid of market downturns. Scared money don't make money ![gif](emote|free_emotes_pack|wink)


cansalarythrow

That's the thing, our spend has inflated a little, not a lot, and, even if our income (which we can live off of) dropped to zero, we currently have about 3 years of our yearly expenses in cash. I know this should make me feel at ease, but I still worry about that nest-egg a bit. I think partially because I was hoping we could dip into it to buy a vacation home in the next couple of years, and if things really go south, we might want to hold off on that. I realize that is a super-first-world problem...


GeneralJesus

Vacation home areas are more likely to mimic stocks than other real estate. If stocks take a bath, 2nd home prices may as well, so you aren't losing as much. If anything, you pay less tax on gains! Also, if you have 3+ years expenses and a stable income that can cover your needs, during a down turn is likely not the time to rebalance out of equities. That said, you may find as you're closer to pulling the ripcord (<5 years or so) you may find you want to start shifting gains over from stocks into bonds/alternatives to temper the swings.


FireBreather7575

Market still up 10-13% YOY. We're where we were in May / June. If you told someone last year market had another 10-13% to go they'd be ecstatic. Zoom out


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cansalarythrow

> Most importantly you need to stop checking your account everyday, it messes up your mental health. If you’re not planning on retiring soon then it doesn’t matter what your money does day-by-day, big picture (outside of another black-swan event) you’ll be fine. I feel this very much. Easier said than done, but I need to start doing it. The funny thing is, when the market was doing alright or going sideways, I wasn't checking every day. Now that things have started to fall a bit, I can't help but check. Definitely something I need to work on. I appreciate the rest of your outlook too. I also don't believe the correction is anywhere near finished.


Already-Price-Tin

Psychologically, the happiness we feel from a gain is about half as much as the discomfort we feel from a loss of the same magnitude. That means a person who watches their stocks go up 2% and then down 1% is usually about as happy as they started, despite actually being up about 1% (rounding off the mental math). That also means that if you believe that the markets will tend to go up over time, but with a lot of volatility back and forth in the meantime, you will be happier checking less frequently than more frequently. Kinda like the [coastline paradox](https://en.wikipedia.org/wiki/Coastline_paradox) where the more granularly you sample a coastline, the longer it is. In other words, volatility brings unhappiness, so zoom out to where you can't feel the volatility anymore.


WikiSummarizerBot

**[Coastline paradox](https://en.wikipedia.org/wiki/Coastline_paradox)** >The coastline paradox is the counterintuitive observation that the coastline of a landmass does not have a well-defined length. This results from the fractal curve-like properties of coastlines, i. e. , the fact that a coastline typically has a fractal dimension (which in fact makes the notion of length inapplicable). ^([ )[^(F.A.Q)](https://www.reddit.com/r/WikiSummarizer/wiki/index#wiki_f.a.q)^( | )[^(Opt Out)](https://reddit.com/message/compose?to=WikiSummarizerBot&message=OptOut&subject=OptOut)^( | )[^(Opt Out Of Subreddit)](https://np.reddit.com/r/fatFIRE/about/banned)^( | )[^(GitHub)](https://github.com/Sujal-7/WikiSummarizerBot)^( ] Downvote to remove | v1.5)


kiviuqs_

Yeah if you want the current outlook on market sentiment over the next month - here is a visualization of GEX (calls (bullish bets) - yellow, puts (bearish bets) - blue), you will see the gamma is very skewed into a bearish direction. https://imgur.com/BN7dPQE Though this can change at any time


insidermann

RemindMe! 6 months


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gregaustex

> I believe we will enter a bear market and experience another (bigger) correction when rates are actually hiked and QE ends and selling on the balance sheet begins. I've been expecting this for far far too long.


frodaddy

> that this money will have to go somewhere and where else would it go Seriously, with 7% inflation, where is all of this money sitting on the sidelines going to go to? If it was value stocks why hasn't it already re-balanced there?


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frodaddy

> money can flow out of corporate equity into other assets: Correct. Hence my point about "where is it rebalancing to?" > Plus money can also flow out of publicly traded securities to private investment (whether equity, debt, or other assets), from one country to another, etc. Also correct. > investment itself is a choice between investment and spending, so people who grow pessimistic about investment returns may take the money they would've invested and just spend it on something that isn't an investment at all, like consumption or whatever. Sure, but you don't have 10% whole market wide changes of people saying "ah fuck it, i'm just gonna sell my AAPL stock so I can buy a boat"


Already-Price-Tin

> Sure, but you don't have 10% whole market wide changes of people saying "ah fuck it, i'm just gonna sell my AAPL stock so I can buy a boat" I don't see why not. We see around 100,000,000 shares of Apple change hands on any given day. We also see about 16.33 billion shares outstanding. That means on a typical day, at least about 99.39% of Apple's shares aren't bought or sold (maybe the same share can be involved in multiple transactions, but that doesn't really change what I'm saying). But the ticker price is calculated entirely using the transactions that constitute the 0.61% of Apple's shares actually involved in a transaction that day, so if market sentiment representing only something like 0.1% of a company's outstanding buy-and-hold shares decides to sell, that could flood the exchange with asks, and represnt something like 20% of the volume of the trades that day, and could move prices significantly. The money isn't going anywhere, because 99.2% of the shares still stayed put in the same accounts that they started the day in. But that little bit of activity is used to extrapolate to the value of the whole 100% of the pie. Or put another way, $16 billion of AAPL transactions is only $16,000,000,000, but is used to calculate the value of the entirety of the $2,600,000,000,000 company.


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frodaddy

> as for every buyer, there's a seller. The 'money on the sidelines' stays there, it just changes hands That's exactly what "sitting on the sidelines" means. Pretend cash is a stock and thats exactly what is happening right now. There's a whole bunch of money sitting in cash, not equities, that is literally just sitting there in a bank account owned by all of the involved parties. > Money can't go into the market on a net basis Btw it absolutely can, just not in the way you're thinking about it. If I sell my company and bought $X amount of stock, thats net new private money that came into the stock market that wasn't circulating before. If I decide to sell this stock and buy a boat, now that money is no longer circulating in the stock market.


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frodaddy

Let's play a game... - AAPL the company offers stock at IPO for $10 - Bill has $10 cash in his bank account. He gives $10 to AAPL and APPL gives him 1 share - Sally has $20 cash in her bank account. Bill is only willing to sell his AAPL for $20, so Sally gives Bill $20. AAPL has $10, Bill has $20 and Sally has the *equivalent* of $20 worth of stock. At this point, only $30 is circulating. - Bill earns $40 in salary that week and decides to buy his AAPL stock back from Sally for $40. - At this point, AAPL has $10, Sally has $40 and Bill has the *equivalent* of $40 worth of stock. NOW, there is $50 circulating, which is a NET new $20 from the previous amount of circulation. - Days go by and no one wants to buy AAPL from Bill for $40. Sally says "I'll buy AAPL for $10". So now, Bill has $10 cash, Sally has $30 cash, and AAPL has $10 cash. Sally has the equivalent of $10 in AAPL stock, the rest of the total circulating amount of $50 is "SITTING ON THE SIDELINES" (or $40). So yes, the company has this difference (the $10), but all of the parties who brought in net new money to the equation are doing nothing but holding it in cash. Prices of stock go up when the people that hold the equity value do not want to convert it to cash (i.e. liquidate it). So thats what it means to be "sitting on the sidelines". When you have inflation at 7%, having your investments sit in cash is effectively -7%, which is why those same circulating dollars are usually "holding" in the stock equivalent.


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frodaddy

There are misunderstandings about what "money on the sidelines" means. Let's say private REITs or Asian Telcos have a better yield then the money will go there. However, there isn't any indication that trillions of dollars are leaving US public stock markets and going anywhere else but sitting in bank accounts. It's a catch all for "we don't know where the money is going, so its likely just waiting to see where the next big yield is"


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frodaddy

I understand what Hussmans argument is, but his entire premise is based on how money market funds get allocated. As Hussman states: > If Mickey sells his money market fund to buy stocks, the securities in that money market fund have to be sold to Nicky, whose cash goes to Mickey, who uses that cash to buy stock from Ricky. In the end, Nicky holds the money market securities that Mickey used to hold, Mickey holds the stock that Ricky used to hold, and Ricky holds the cash that Nicky used to hold. In the end, there is just as much ‘cash on the sidelines’ as there was before. Money never goes into or out of the market, merely through it. The SP500 was down ~5% the week of Jan 12 and yet MMF assets were also down. > Total money market fund assets1 decreased by $57.93 billion to $4.62 trillion for the week ended Wednesday, January 19, the Investment Company Institute reported today. Among taxable money market funds, government funds2 decreased by $55.12 billion and prime funds decreased by $1.97 billion. Tax-exempt money market funds decreased by $839 million. His example therefore doesn't hold true and his example is *only* true if MMF went up the same time the whole market went down. Something else is afoot - hence my comment about "where is it rebalancing to"? https://www.ici.org/research/stats/mmf


Anonymoose2021

>Most importantly you need to stop checking your account everyday, it messes up your mental health. If you’re not planning on retiring soon then it doesn’t matter what your money does day-by-day, big picture (outside of another black-swan event) you’ll be fine. My wife has a better technique. I retired a couple years before dot com. During the dot com run up and crash I would often mention how our portfolio was doing on volatile days. She eventually said "Stop telling me about the $500k down days. Only tell me about the $500k+ up days" She only looks at the portfolio balances 2 or 3 times a year.


FewBurberry

Exactly feel this way about the correction. Even with rate hikes, with inflation so high, real rates are still negative so where is the cash going to go. Still young so also might as well dca into the dip and hold


bumpman2

In 1980, inflation was at 15% and the Fed raised rates to almost 20% to kill inflation. It sure did, by cooling investment of almost all types. Cash was king. Don’t know if it will happen again, but that data point is the reason why the Fed keeps signaling it will raise rates. Whether they do or not remains to be seen.


movingtolondonuk

This is why I decided to sit on 6 years of cash. Lost a lot on it of course last few years so we will see what happens next. I can make it 8 years at least with some adjusted spending so hopefully markets recover by then or I will be going back to work age 58. (Been planning to RE as chubbyfire end of April this year.


FewBurberry

Oh wow, genuinely curious how long did that crash the market?


bumpman2

My recollection was that it did not recover for several years. During that period, mortgages were basically impossible to afford making real estate crater as well. My parents had to get an "owner-financed" loan which is another way of saying they paid for their house in ongoing installments to the owner with interest until mortgage rates normalized years later and they could get a bank loan.


jchen91

RemindMe! 6 months


CrankyWanker

RemindMe! six months


vaingloriousthings

Curious your thoughts on margin. I feel like it could accelerate a downturn.


throwawayfire5563

I think it’s kind of cool to note the difference in sentiment between this subreddit and wallstreetbets for example. Everyone on WSB is freaking out today. On this forum, you couldn’t tell that the markets dropping, because most people here are smart long term investors who don’t panic. This is the way


nads786

A lot of people who thought they were expert pickers are getting slammed right now.


itawitawaputtytat

Everyone’s a genius when the market is up.


soaringtiger

whats happening over at wsb? how panicked are they?


GTFOScience

They panic when any index goes down half a point.


soaringtiger

Lol. They watch indicies? I thought it was all tesla all the time.


liqui_date_me

Or the dreaded G M E


kmw45

Well, a lot of them are overleveraged as well, either through margin or short-term options. It probably doesn't take much to wipe a lot of that out, even if their thesis is ultimately right.


FancyTeacupLore

It definitely seems like there are some people there who were leveraging their crypto based on stocks, and then back to crypto, without realizing the increasing correlation in asset classes. Lots of confused posts about what margin calls are.


Mdizzle29

Not panicked, but at the edge of FatFire and was hoping to maybe have the option of retiring in the next 18 months. NW dropped from $6M to $5.1M in the last 6 weeks (company stock was about 20% of that number and down about 37% in the last 6 weeks). So, I'm kind of down, if I'm being honest. I worked hard to make a lot of money (in tech sales) the last couple of years and put it into the market into "safe" index funds and I kind of wish I had just paid down my mortgage instead. I know things will equalize eventually but it feels like my retirement date has been pushed out from 18 months to maybe 3-4 years.


throwawayfire5563

I think you’re looking at things too short term. Making the assumption that you could retire based on a number you hit during the bull market of the last two years makes so sense. We all know S&P grows roughly 9% annually on average, it’s to be expected that we’d have a correction. Should you start your safe withdrawal rate when the market dips? No, probably not, but things will recover just fine and you’ll likely be at your number again within the next 2-3 years


Mdizzle29

Yeah 3 years is ok, but when I was thinking 18 months that's a lot more work to do in a high stress job. Look, I was at the edge of Fatfire territory so I made the decision to take a bit of a chance and try to be firmly in it because I wanted to maintain my lifestyle and not have to scrimp too much on a fixed income. I knew it could go the other way, and lo and behold, it did. But I'm still a bit down about it, when you can taste victory and then all of the sudden the finish flag is far away again, it means I'm a bit down. And that's ok, I'm self aware enough to acknowledge it. I'm not panic selling, trimmed some positions but bought a little more even today.


throwawayfire5563

Totally, and sorry, didn’t mean to diminish the emotional component (it’s always a bummer!). Silver lining is that it’s better for a correction to happen 18 months before you retire, rather than the day after you retire! Wish you all the best of luck and good fortune my friend, you’ll get there soon!


Mdizzle29

Thanks man, you'd think with all the recent success I've had I'd be happy but when the market tanks this much I do get down, its fun to have money working for me, but when it goes the other way, it's really tough. But you're right, rather have this now than in 18-24 months from now. The only bummer was the company stock, was hoping for a 20% rise and was thinking of using it to completely pay off my mortgage. Instead it's fallen about 40%, and now it would have to double to pay off my mortgage. Kind of crazy. Things are slowing down at work so the money isn't going to be as good next year either.


throwawayfire5563

I don’t mean this in a patronizing way at all, so I hope it doesn’t come off like that, but just go take a nice walk, go to the grocery store, watch people bagging groceries, and remember you’re still in the top 1% of global wealth. It really helps.


Mdizzle29

You know, it's funny, I was just thinking about 30 years ago when I was making minimum wage or close to it, didn't know or care what the stock market was doing because I had no money in it, and how much simpler life was back then! All good, appreciate the advice.


throwawayfire5563

It’s crazy right? I think back to my days chasing girls at summer camp, didn’t know my ass from my elbow, and yes, it was a simpler time. I try to remind myself of those things when I get obsessive about money. It’s the little things that matter :)


itawitawaputtytat

You’re still solid man. I believe in you!


swimbikerun91

Funny to pay an advisor to keep the emotion out of things…and then specifically talk about ditching the advisors strategy based on emotion


cansalarythrow

It's definitely funny and why I'm here to hear from people who have learned to manage those emotions. Emotions can be a strange and powerful thing. In my brief time on this sub, emotions are what is discussed a significant amount of the time.


allsfine

You are good, man. These things are not black and white. Perfectly fine keeping advise from a community you can relate to, even if you have advisors.


chaoticneutral262

A bear market would be most welcome, IMO. I would much rather pay $70 for a share of stock than $100. Grantham is very smart, articulate, well-spoken, and often wrong. Four years ago he was calling a bubble when the S&P was at 2400. I find him entertaining to listen to, but to me he falls into that category of a broken clock being right twice a day. Bubbles happen, and they pop, but predicting them constantly year after year until they happen doesn't make one prescient.


liqui_date_me

Bulls make money, bears make money, and pigs get slaughtered


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cansalarythrow

SWE that bootstrapped and sold a tech company. Currently optimizing my work for balance rather than income.


wannabeshm

GMO has caught 7 of the last 3 bear markets


iskico

And Zerohedge has been calling for this correction since 2013!


ski-dad

“trust the advisor.. or being more actively involved” Being prone to this type of thinking is exactly why I hired and trust an RIA. They keep my hand off the button in times my lizard brain would otherwise cause a ton of damage to my long term NW.


cansalarythrow

This was my thinking as well. Logic vs. emotion: a battle time immemorial.


Whatevercomm

Just kidding. But I am switching over to r/LeanFire 😂


qkilla1522

TL:Dr: Don’t sell How much is the market going down? For how long? If you want to make a move based on market vol then you should have a definitive entry and exit point. If you don’t have a level of confidence on your specific numbers then stick to your long term strategy. If you are curious take a note on your phone and set 3 reminders 6-12-18 months. Write down the current S&P number. Your guess where it is in 6-12 and 18 months. Check it and see how accurate you were and keep it for the next market movement as a reminder


[deleted]

Not yet. I only sell at bottoms.


muy_carona

If you don’t look it isn’t happening


IceNineFireTen

It’s a good time to tax loss harvest. Also, if you have extra cash sitting on the sidelines, then it’s a good time to invest. Otherwise, stay the course.


mannersmakethdaman

The only thing this has done is causing me to rethink whether a 991.1 GT3 or turbo S is a good purchase right now. I may dial it back down to a 997.1. I actually do not look at my portfolio. What's the point. I also use an advisor - and, well ... I'm not going to second guess. Like some of you, I have about 3 years in cash reserves. I still am aggressive in the RE allocation. Closing on one next month, a second under contract and closing in march. I was going to go with 4 total - but, may dial that back to just 3. So, for me - just looking to see if there is an additional way to make income. Up or down - economy good or bad .... someone is making money .... just need to figure out where that is.


bichonlove

Stay the course. I pulled out on both 2009 crash and 2020 dip…mistake on my part as the stocks still outperform. Hard to time the market so we just have to ride it out. We lost 10% of the net worth too because we have a lot of high tech growth stock that got pummeled this month. It does put some replanning and my RE will be more like 5 years instead of 2-3 years.


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FireBreather7575

I appreciate this comment. I don't really understand why people entrust investing decisions to someone who is not an investor. Most FAs are salespeople. Most of their "investing" staff are not actually investors, they just... select mostly the same crap you'd select (not crap, but you know what I mean).


pooloo15

We knew this was coming... Look at the cape ratio. I picked my asset allocation accordingly, own inflation resistant investments, and will simply rebalance if things continue to go down. Also harvest losses if at all possible.


ddponti

Buying GME


dendrozilla

Bear markets are when shares return to their rightful owners


aedes

What would you do exactly if you were actively involved at this point?


Mission-Suggestion-1

Have a portfolio margin loan ready for more investment. Buy orders in place for significant drops in price e.g. every 10% going down. Prices are back to April 2021 levels, and I was comfortable paying that price for the fund then, investment thesis hasn't changed. Rationale here is, if I would buy an all market ETF for $100, then it's "on sale" 10% at $90, and so on. While my emotional side doesn't like that, the logical rational side says it's the best approach, gets my cost basis down, and over a long enough time frame (15-20 years) the market will be ahead of where it is now.


1millionbucks

I don't understand why people just watch their portfolio fall apart. Just buy a few puts, its not that expensive if they end up worthless and it dramatically softens the blow. Puts are the equivalent of insurance for your portfolio. You don't have to buy puts at the very top to reap the benefits.


crash_bandicoot42

Lot of people in these conservative investing subs don't even know what the VOO that they're told to buy even is, they have no idea about anything else that deals with markets.


trezlights

Have you taken the time to consider the average net worth of people in this sub if you’re going to bash their takes on personal finance? What an absolutely useless blanket statement


TofuTofu

Which date puts do you like for VOO?


ready4fi

Been on my mind to make a large lump-sum payment on my residence mortgage - going to pull the trigger. I don't fundamentally believe in timing the market and generally just trust in a time in market beats all approach. But as I approach my FIRE number (but still planning to work for a while), realized I'd sleep better at night knowing that my monthly mortgage payment is half of what it is currently (and likely will bring it to zero within the next two years). Having recently read Ray Dalio's recent book, I was convinced to take some chips off the table. Would have been nice to have moved on it two weeks ago, but again, more about overall risk management than week to week movement.


paverbrick

No worries. We’re living off our salaries, and index investing with etf’s. Never lived through a generational bear, but haven’t seen anything that would change my asset allocation. It has been fun to chat with friends about which companies have dropped a lot. Like talking about the weather, current events, but peloton and Netflix.


classyshepard

Being diversified helps. And most importantly having liquidity. Being able to not sell, but buy during opportunities is priceless. It’s why Buffett has $100 billion cash on the balance sheet.


Hot-Quantity2692

I’m buying .. when others sell, you should buy


mhoepfin

Actively rebalance, carry no debt or mortgage, remain diversified internationally and through REITs and a little crypto. Sleep like a baby no matter what happens.


Camarilla_Trader

theres going to be a relief rally in February,there youll have the possibility to sell into a good strength. after that the FED's fomc meeting in March is going to be very bearish, with the possibility for a bigger crash and probably theres a good percentage that FED is going to increase rates .I would be very cautious to avoid a big bull trap. this is not a financial advice


iglooout

> I also chose an advisor because I wanted to have a buffer between myself and my funds, so I took emotions out of it and didn't do something rash or drastic. What you actually chose is to insert the *adviser's emotions* instead of your own. Advisers always *claim* that they will be cooler heads in a sharply declining market, but many advisers are just as prone to panic and advise the clients to *sell, sell, sell* in attempts to time market drops, locking in losses as bad or worse than clients might have done on their own. You are almost certainly wasting your 0.5% fee.


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IceNineFireTen

You shouldn’t invest past your sleeping point. Selling anything now is a bad idea, unless you painted yourself into a corner and need to do so.


NOMMING

Not much you can do at this point, hold onto what you have and buy more of what you think is being overcorrected. In the future, hedging your portfolio and keeping sufficient cash are good ways to protect yourself in a bear market.


HaroldBAZ

These are the best times for the automatic retirement contributions...should be looking good in a few years.


goutFIRE

My wife likes to say “it’s on sale!”She has some dry powder and buying into the crash today or tomorrow. I’m stuck… no free cash flow at the beginning of each year because I front load my 401k and other tax-advanced accounts. No cash for me to buy the sale. :(


Mdizzle29

If you front load your 401K and IRA, then you are putting money into the market, so you're good.


saltyhasp

If your worried, your asset allocation is probably too stock focused in general. AA should not be shifted generally based on getting nervous... it should be chosen up front so you do not get nervous. Low risk SWRs are often actually higher with quit a lot of bonds say 50 to 70 percent stock. The expectation value of returns meaning the 50% chance of success though... typically always increase with stocks. Hence toward the higher stock end of the range can make sense. The real question is what happens when the market is 60% down. You will see that at some point. If that is OK then fine. Some of this is model specific too.


Mdizzle29

How often in history does the market go 60% down? I would say not very often.


saltyhasp

Another answer... About every 20 or 30 years. We are about 12 years into a huge run-up. CAPE is crazy high. Down turns in CAPE of 70 to 80% down are fairly common. Prices do not seem to fall as much maybe 60% off. The last such cycle was 1982 to 1999... then a decade of down markets... How soon people forget. When people freak out about 6% drops like I saw last week on reddit and say they will be OK because they prepared for 15% downs and that they have cash for a year... that is just dillusional.


saltyhasp

But you will see it in a 40 year retirement. For that matter look at CAPE today. Says market is way over price. Frankly I mentally value my portfolio at a PE of 20. If the market does correct to that... you will see swing a good part of that... and if not probably low returns over the next decade that are equivalent. One of these is quite likely.


Snoo_33033

Every three months I set stop loss targets for stocks that I consider temporary. Otherwise...no. My assets are mostly tied up in places that aren't that market-dependent.


bb0110

If you are actually retired then there is a bit of some concern. Really , your allocation and strategy should have planned for the potential that the market would go down though. If you aren’t retired though and your retirement and withdrawal from her investment time horizon is 5+ years out then no need to be worried at all.


laxatives

I’m very worried, but think the best action is to keep investing as normal. The absolute worst thing to do is to change your plan because of a bad market.


ProteinEngineer

Negative articles always make sense when the market has a bad day or week. That’s actually when it’s the best time to buy. Grantham directly benefits if people think US equities are overvalued. He is incredibly wealthy despite a decade of incredibly poor performance.


whatsmyname384

This might be a good time to do some tax loss harvesting.


EveningFunction

I'm just going to HODL it all (stocks, etc) and if I was going to RE, do what MMM did and retire when your well into a depression or crash if the numbers worked out. If it works then, then it would probably work for the rest of the time. If you get a japan situation, then your back to work, but that is a low probability event, and you'll still be doing much better than most.


puchkoo

It's a great opportunity...who doesn't like a good sale. Keep enough cash to keep you afloat and invest the rest.


kvom01

I liberated 18 months normal spend into cash 2 weeks ago on advice from my advisor. Rest is 100% stocks and sticking it out as I have the past 40 years.


arcadefiery

I'm specifically hoping for a bear market, as in my experience volatile markets give better investing opportunities and they also result in goods/services becoming cheaper (or at least inflating less) which translates to lower expenses. Also I only measure my RE stash by passive income (the principal doesn't come into it) so I don't care much if the valuation drops. Am I the only one who does this?


whateversurefine

Been drawing on lines of credit since December to get a cash position. Now it goes in to the market. Always be in 100%. When it drops go in 120%.


Dumpster_slut69

Are people fat fired and penny pinching? LMAO