All Gains in 2018 Are Officially Gone As Of Wed. 11/22/18

we got way to far ahead of ourselves . there is always a reversion back to the mean at some point . the last 10 years were so exceptional they had to start averaging out.

funny though , my conservative income model portfolio is down 4% . my 100% equity growth model is down 2% ..

that is because the conservative income model which is only 25% equities never developed that cushion . the growth model had a cushion so even though it fell more it fell from much higher gain levels
 

It seems like my portfolio has always been two or three steps forward and one step back.

I watch the markets and get a little nervous like anyone else then I look at where I started compared to where I am.

Pick a sound strategy/allocation and stick with it, feed the pig and someday the pig will feed you!


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that is because 80% of the time your balance will always be somewhere between the last low and last high . ----always

this is why good portfolio construction provides the most direct root to those in between points . you have more conservative models which take a straighter path to those areas we spend 80% of the time without climbing the peaks , falling in to the valleys and ending up most of the time at the same in between point. --and no i don't mean using fixed income only .
 
that is a normal human reaction . we avoid looking . we know trees don't grow to the sky and things have to level out when they get to far ahead of themselves . yet we cringe when it does ha ha. we had a decade of way above average returns that need to eventually revert back to the mean .

a nicely designed balanced portfolio works just fine in retirement and always did .
 
I like the balance of my 401k currently, I don't have any qualms about that. I know that the market goes through highs and lows and corrections. But sitll, when I retire I want to go out on a high and not on a correction. :)
 
Uptosnuff said:
I like the balance of my 401k currently, I don't have any qualms about that. I know that the market goes through highs and lows and corrections. But sitll, when I retire I want to go out on a high and not on a correction. :)
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we all wanted to retire at a high , but for most we will not catch a high and if we do within a few years you may be in a dip anyway . it is just a fact of life depending on markets ,rates and inflation for your income
 
Uptosnuff said:
I like the balance of my 401k currently, I don't have any qualms about that. I know that the market goes through highs and lows and corrections. But sitll, when I retire I want to go out on a high and not on a correction. :)
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I'm not sure how much money you are talking about or how much you will rely on your 401K during retirement but I would try not to delay my retirement based on market fluctuations.

Start looking at different strategies to draw from your 401K during retirement. The old conventional wisdom of drawing 4% adjusted for inflation may not be a good choice if you retire early, the markets are in a slump, yields are low, etc... Look at your retirement income and see if you can enjoy your early years in retirement with a 1, 2 or 3% draw. Also, consider a draw based on a three year rolling average of your 401K balance to help smooth out the market highs and lows. Keep running the numbers until you find a strategy that will work for you and your situation.

Good luck!
 
actually if markets are in a slump 4% is no problem since it is based on the reduced balance .

more important would be taking a raise as things go back up . the rule of thumb is if you retire in a slump take your 4% inflation adjusted . when you recover to the point of being 50% higher then you started take a 10% raise plus any inflation adjusting .

repeat this every 3 years .

retiring in a slump can leave you drawing to little down the road when things recover so taking raises is an important part ..
 
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amateurs panic sell . then they blame markets . this is where many are penny wise and pound foolish . they have no skill or stomach for managing their own money . yet they won't pay the less than 1% a year that many great mangers charge to keep them from themselves .
 
Aunt Bea said:
I'm not sure how much money you are talking about or how much you will rely on your 401K during retirement but I would try not to delay my retirement based on market fluctuations.

Start looking at different strategies to draw from your 401K during retirement. The old conventional wisdom of drawing 4% adjusted for inflation may not be a good choice if you retire early, the markets are in a slump, yields are low, etc... Look at your retirement income and see if you can enjoy your early years in retirement with a 1, 2 or 3% draw. Also, consider a draw based on a three year rolling average of your 401K balance to help smooth out the market highs and lows. Keep running the numbers until you find a strategy that will work for you and your situation.

Good luck!
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Aunt Bea, thank you for the info. However, my retirement date has nothing to do with my 401k, or the markets. In the company I work for, it all depends on your years of service plus your age. I have 18 1/2 years of service and I'm 59. When my years of service = 20, I reach a "rule" where I can start drawing a pension when I'm 62. Also, my medical benefits will transfer over in retirement. So it all sort of "comes together for me" in about 2 1/2 years. It won't be a huge pension, but will make life easier and more secure and I count my blessings that I will get one.
 
I never used any type of strategy. I always believed in divesting in as many sectors of the market that I could and then moved some of the money in the weaker sectors of my portfolio to the sector that was gaining. Not all of it, just some of it. That's not a strategy, maybe just more of a plan that I used. I tried using the strategy "Dogs of the Dow" once. Let's just say that didn't work out too well.
 
With all the nonsense that is going on in Washington, and some of our major corporations, it's a wonder that we haven't seen a repeat of 2007/2008...Yet. I have a bad feeling that we are on the doorstep of a major decline in the markets, and I'm thinking seriously about moving everything into Money Markets/Municipal Bonds/Treasuries, etc., and preparing for many months of "riding it out".
 
that is rarely a good idea . over and over people lock in what they are down and getting back in again at lower prices rarely happens because markets always look like there is no bottom . then before anything changes , BOOM , they reverse on a dime with the biggest gains . it ends up just shooting you in the foot rather then preserve anything
 
mathjak107 said:
that is rarely a good idea . over and over people lock in what they are down and getting back in again at lower prices rarely happens because markets always look like there is no bottom . then before anything changes , BOOM , they reverse on a dime with the biggest gains . it ends up just shooting you in the foot rather then preserve anything
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Yeah, trying to "time" the markets is wishful thinking. I've ridden the ups and downs most of the time, over the past few decades, with minimal issues. I did get out of the markets for almost a year in 2007, and lost a minimum, and I have a gut feeling that we are headed for another such extended downturn. Today is another Miserable day on the markets, and by the end of this week, I may start to "chicken out" with at least part of our holdings.
 
fight the urge ..... our brains hate losing money more than making money and it will burn you every time . read jason zweigs book your money your brain . it is fascinating what the brain does to us .

hypothetically we know what is good investor behavior . but when the stress of real money is on the line different parts of our brain take over . the thought of being down is actually repulsive to our brain and causes different areas of the brain to come in to play then made the decisions when we had no stress .

this part of the brain causes us to make flawed choices and bailing out is one of them .
 
mathjak107 said:
fight the urge ....
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Today's market performance was quite possibly due more to "automation" than reality. It appears that many of the larger investment houses are using software that tracks short term vs. long term interest rates, and their programs predicted a "yield curve inversion", which usually signals a looming recession...and set in a series of automated selling. It almost seems that this is a case of Artificial Intelligence taking priority over common sense. The next few days should be interesting.
 
Jesse Livermore Quote 6:
“The market does not beat them. They beat themselves, because though they have brains they cannot sit tight.”

Jesse Livermore Quote 8:
“I can’t sleep” answered the nervous one.
“Why not?” asked the friend.
“I am carrying so much cotton that I can’t sleep thinking about. It is wearing me out. What can I do?”
“Sell down to the sleeping point”, answered the friend.

http://www.asxmarketwatch.com/2011/...rom-jesse-livermore-on-trading-and-investing/
 
Don M. said:
Today's market performance was quite possibly due more to "automation" than reality. It appears that many of the larger investment houses are using software that tracks short term vs. long term interest rates, and their programs predicted a "yield curve inversion", which usually signals a looming recession...and set in a series of automated selling. It almost seems that this is a case of Artificial Intelligence taking priority over common sense. The next few days should be interesting.
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most modern recessions were caused by high oil prices . the high oil prices forced the feds hand to raise rates to keep a lid on inflation . a by product was usually an inverted yield curve ...

well today oil is falling and the fed is not forced to keep raising short term rates . you had gdp fall from 5.40% the beginning of the year to 2.60 today .

in short this is not the typical inverted yield curve . there is nothing so far that has the building blocks in place for a recession but the traders don't differentiate.
 
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