Schwab's Advice For Retirees Unprepared For Market Downturns

[bobcat]

you can disagree all you want but you are still wrong . that is all your money accessible to you at any point in time and your value at any point in time IF YOU HAVE REASON TO WANT TO KNOW .

dont confuse not caring with the fact you may be down for one or two decades , its happened

do you understand how retirement incomes are calculated ?

networth statements?

asset based loans .

THE FACT IT TOOK 20 years for markets to come back in the 1960’s and ten years in 2000.

there is zero difference between you being Down 40% with a million dollar portfolio and gaming 600k left vs someone buying exactly what you own today with 600k .

there is no difference

your portfolios are worth the same thing

You are confusing actual money with market valuation and possible gains over time. If I buy a table for $50 and I sell it for $50, I have not lost money. That is just plain common sense, and that's how things work in this universe, and you can disagree all you want, but it is just fact.

 

[Aunt Bea]

It doesn’t matter if it’s a table or a share of stock, it’s only worth what someone will pay for it.

I agree that sometimes it’s wise to hang on in hopes the market recovers rather than lock in a loss.

 

[mathjak107]

You are confusing actual money with market valuation and possible gains over time. If I buy a table for $50 and I sell it for $50, I have not lost money. That is just plain common sense, and that's how things work in this universe, and you can disagree all you want, but it is just fact.

good luck believing your own bologna and your post makes zero sense.

so by your logic a 100k in 1987 in the fidelity insight growth model is now worth 6.3 million .

so if one falls in value down to everything but a 100k they lost no money .

that is pretty flawed logic and pretty funny

the reality is that money. is all your money at any point in time . it’s like money in the bank that gets interest .

the only difference is its value varies if you keep it in play either in the same investment or another one .

that balance is all yours and a reduction is down in balance until the value changes again is very real .

that drop in value has nothing to do with a capital loss for tax purposes .

in fact a capital loss for taxes is irrelevant in my ira . if my portfolio in my ira falls 10% my balance is down 10% from what i had

 

[HoneyNut]

I considered buying gold three different times and decided not to each time.

I was considering it a couple months ago but decided not to, and now I'm regretting it. I'm afraid so many incompetent people are controlling things that our currency is going to suffer.

I guess I could still buy some, but its price is high, but maybe the future is bleak enough to make it worth buying still.

I'm starting to worry about my bonds, previously I only looked at the ratings and stayed above the Bs, but now I'm very worried that policy and regulations are going to become full of risk. One position I have that I accidentally got too much of is described as "diversified global derivatives exchange operator and CCP". Somehow that doesn't sound like a safe thing to be right now (whatever it is!).

 

[mathjak107]

It doesn’t matter if it’s a table or a share of stock, it’s only worth what someone will pay for it.

I agree that sometimes it’s wise to hang on in hopes the market recovers rather than lock in a loss.

many times it makes sense to sell and ride a better opportunity back up

so whether one hangs on to the old one or picks a better choice really is irrelevant as far current balance.

its only a question of what you choose to ride back

 

[bobcat]

good luck believing your own bologna and your post makes zero sense.

so by your logic a 100k in 1987 in the fidelity insight growth model is now worth 6.3 million .

so if one loses everything but a 100k they lost no money .

that is pretty flawed logic and pretty funny

the reality is that money. is all your money at any point in time . it’s like money in the bank .

tge only difference is its value varies if you keep it in play either in the same investment or another one .

that balance is all yours and a reduction is down in balance until the value changes again is very real .

that drop in value has nothing to do with a capital loss for tax purposes .

in fact a capital loss for taxes is irrelevant in my ira . if my portfolio in my falls 10% my balance is down 10% from what i had

I'm sorry this is over your head, but I will try to put it as simply as I can. As I said earlier, I haven't lost the money until I sell the asset. If I choose to hang onto it until it reaches a point beating inflation and giving me the return I desire, my profit or loss is still in limbo. You CANNOT, determine profit or loss until you subtract from the sell price. Until it is determined, there is no profit or loss.

 

[mathjak107]

I'm sorry this is over your head, but I will try to put it as simply as I can. As I said earlier, I haven't lost the money until I sell the asset. If I choose to hang onto it until it reaches a point beating inflation and giving me the return I desire, my profit or loss is still in limbo. You CANNOT, determine profit or loss until you subtract from the sell price. Until it is determined, there is no profit or loss.

if that’s what you think then just keep believing it .

no one will convince you otherwise

the rest of us understand how things should be viewed and why we need to look at balances to judge gains or losses over time.

the working capital and your balance you are free to take does not mysteriously change when you sell an investment and buy another .

but believe what you want

 

[bobcat]

if that’s what you think then just keep believing it .

no one will convince you otherwise

the rest of us understand how things should be viewed and why we need to look at balances to judge gains or losses over time.

the working capital and your balance you are free to take does not mysteriously change when you sell an investment and buy another .

but believe what you want

Sorry, but I don't buy snake oil. Peddle it to someone else.

 

[mathjak107]

everyone else understands the difference between a loss in value of what your portfolio was and now is

when markets fall 20% no one cares what they may have paid two or three decades earlier .

they had x in value and now its y in value and they are down . down has nothing to do with whether its a capital loss or not.

every year our safe withdrawal rate is based on portfolio value .

if the portfolio lost value our income takes a hit .

that’s reality , that’s how things work

 

[Brookswood]

I completely disagree. If you don't sell the stock, it is only perceived value, not actual money (dollars).

If you used the stock as collateral for a loan, and it falls in price, you will quickly find out what the bank thinks is its real value. Or if an unexpected emergency arises and you have to sell when it’s low. The proof of the pudding is in the eating. Not watching it sit on a shelf while waiting to taste it later.

But, to each his own. I simply did not want any newbies to the stock market to think that they aren’t losing money when they are.

 

[Brookswood]

You CANNOT, determine profit or loss until you subtract from the sell price. Until it is determined, there is no profit or loss.

If it is a publicly traded stock with a good market, it is bought and sold every day. Nobody cares who owns the stock that is sold. “Oh wait, George Jetson sold those 100 common stock shares of IBM, and his shares are more valuable than Fred Flinstone’s common stock shares. “ <—- Nope, that doesn’t happen

 

[mathjak107]

If you used the stock as collateral for a loan, and it falls in price, you will quickly find out what the bank thinks is its real value. Or if an unexpected emergency arises and you have to sell when it’s low. The proof of the pudding is in the eating. Not watching it sit on a shelf while waiting to taste it later.

But, to each his own. I simply did not want any newbies to the stock market to think that they aren’t losing money when they are.

exactly the case

in fact cost basis is irrelevant in an ira or 401k

after decades no one even knows there cost basis anymore with all the money going in over time and investments being swapped

we all judge by current value , well most of us do , and whether that value is up or down from what we had . many benchmark off our closing values yearly .

others do a net worth sheet yearly or at whatever point they choose .

but after a while cost basis plays no more role except for tax purposes in a taxable account becsuse you are so far ahead

all we care about is current value and there are many good reasons for knowing that value

even in a taxable account whether realized or unrealized isn’t important except at tax time .

balance is key like when setting a retirement draw based on total balance or taking an asset based loan or even using margin.

each year our retirement draw is set by a percentage of our balance . so that value effects our income

but you are correct , new investors should not listen to myths like it only matters if you sell. because that is false and poor investing logic

only taxes matter if you sell .

one can always sell one stock or fund and ride an equally capable one back up with no effect at all on performance

 

[mathjak107]

tyler creator of the portfolio charts website and creator of the popular golden butterfly portfolio , did a deep dive in to the worst of times .

he looked at dozens of popular portfolios .

of course no portfolio will hold up when risk is off like in 2022 and rates were soaring but once things settle down 5 portfolios have stood up the best to the different combinations of the worst of times

interesting how many use gold or commodities


the permanent portfolio

25% Domestic Stocks
25% Long Term Bonds
25% Cash
25% Gold


the larry portfolio

Asset Allocation

15% Small Cap Value
7.5% Int’l Small Cap Value
7.5% Emerging Markets¹
70% Intermediate Bonds


the weird portfolio

Asset Allocation

20% Small Cap Value
20% International Small Cap Blend
20% Long Term Bonds
20% REITs¹
20% Gold

the 7 twelve

Asset Allocation

12.5% Large Cap Blend¹
12.5% Small Cap Blend¹
8.3% International Stocks
8.3% Emerging Markets
17% Intermediate Bonds²
8.3% International Bonds
8.3% Cash
16.6% Commodities³
8.3% REIT


the global market portfolio

Asset Allocation

45% Developed World Stocks⁴
5% Emerging Market Stocks¹
44% Developed World Intermediate Bonds²
4% REITs
2% Gold³




How to Succeed in the Worst Stock Markets – Portfolio Charts

 

[bobcat]

If you used the stock as collateral for a loan, and it falls in price, you will quickly find out what the bank thinks is its real value. Or if an unexpected emergency arises and you have to sell when it’s low. The proof of the pudding is in the eating. Not watching it sit on a shelf while waiting to taste it later.

But, to each his own. I simply did not want any newbies to the stock market to think that they aren’t losing money when they are.

No one said anything about using stocks as collateral for a loan or perceived value. What I said was you cannot determine profit or loss from stocks and equities until they are sold. If they are not sold, then it is still an unknown. Perceived value or what someone will pay for it at any point in time is another matter.

If you believe differently, as you said, to each his own.

 

[mathjak107]

No one said anything about using stocks as collateral for a loan or perceived value. What I said was you cannot determine profit or loss from stocks and equities until they are sold. If they are not sold, then it is still an unknown. Perceived value or what someone will pay for it at any point in time is another matter.

If you believe differently, as you said, to each his own.

What part of we all track balances being higher or lower over time don’t you get

We all know our 401k and Ira balance and if it falls 15% we are down -period

That is howLong term investing is measured, Total return each year is the benchmark

That has nothing to do with cost basis

Few can even tell a long term cost basis on a 401k or ira after swapping funds over time

Our guide is portfolio balances not a fund we hold at the moment

Even if you know your cost basis , sell or not that’s your gain or drop at any point in time in relation to where you were

You are just as down in value when markets fall selling or not regardless of cost basis which may be money from a decade ago that has been in all different investments over the years

 

[bobcat]

What part of we all track balances being higher or lower over time don’t you get

We all know our 401k and Ira balance and if it falls 15% we are down -period

That is howLong term investing is measured, Total return each year is the benchmark

That has nothing to do with cost basis

Few can even tell a long term cost basis on a 401k or ira after swapping funds over time

Our guide is portfolio balances not a fund we hold at the moment

Even if you know your cost basis , sell or not that’s your gain or loss at any point in time

Believe whatever you want. I really don't care.

 

[mathjak107]

Believe whatever you want. I really don't care.

as long as others understand , it doesn’t matter what you think .

as you see pretty much all here understand exactly why if you are down from where you were , you are just as down balance wise sell or not

 

[bobcat]

as long as others understand , it doesn’t matter what you think .

as you see pretty much all here understand exactly why if you are down from where you were , you are just as down balance wise sell or not

Well, I posed the question to the AI Copilot, and here is the result:

If I buy a stock, and it fluctuates in price, have I lost any money if I haven't sold it yet
Copilot answer:
Until you sell the stock, any changes in its price—whether up or down—are considered "unrealized gains" or "unrealized losses." These represent how much the value of your investment has fluctuated, but they're not actual financial losses or gains until you sell the asset. Essentially, it's all theoretical at this stage.
It's like owning a painting that becomes more or less valuable over time. Until you decide to sell it, you're not gaining or losing any money—you're just holding onto an asset with a fluctuating market value.

I posed the same question to Chat GPT:
Chat GPT answer:
Nope, you haven't actually lost any money until you sell it. That fluctuation is just what's called an unrealized loss (or gain) — it's on paper only. The value of your investment has gone down (or up), but it’s not locked in until you sell.
Think of it like this: your house might lose value in a market dip, but unless you're selling it, you haven't really "lost" anything — you still own the same house. Same idea with stocks.
You only realize a loss (or profit) when you sell the stock at a lower (or higher) price than you bought it for.

As I said, you can believe whatever you choose, and so can any others on this site. As for me, I stand by what I said.

 

[mathjak107]

Well, I posed the question to the AI Copilot, and here is the result:

If I buy a stock, and it fluctuates in price, have I lost any money if I haven't sold it yet
Copilot answer:
Until you sell the stock, any changes in its price—whether up or down—are considered "unrealized gains" or "unrealized losses." These represent how much the value of your investment has fluctuated, but they're not actual financial losses or gains until you sell the asset. Essentially, it's all theoretical at this stage.
It's like owning a painting that becomes more or less valuable over time. Until you decide to sell it, you're not gaining or losing any money—you're just holding onto an asset with a fluctuating market value.

I posed the same question to Chat GPT:
Chat GPT answer:
Nope, you haven't actually lost any money until you sell it. That fluctuation is just what's called an unrealized loss (or gain) — it's on paper only. The value of your investment has gone down (or up), but it’s not locked in until you sell.
Think of it like this: your house might lose value in a market dip, but unless you're selling it, you haven't really "lost" anything — you still own the same house. Same idea with stocks.
You only realize a loss (or profit) when you sell the stock at a lower (or higher) price than you bought it for.

As I said, you can believe whatever you choose, and so can any others on this site. As for me, I stand by what I said.

you are losing sight of the word loss .

there is a loss based on cost basis .

but what most of us go by is a loss based on portfolio value.

one can have a 1 million dollar portfolio

but if markets fall and are now down 40% you are 400k poorer than you were regardless of whether you were up or down based on cost basis .

that is what most here watch and you are just as down 400k whether you sell or not .

if i was going to draw 4% of that million , which is 40k , well now my income is 4% of 600k or just 24k .

so down in value matters ..that has nothing to do with cost basis

like i said few know their actual cost basis in their retirement money .

it represents decades of contributions, employer contributions and investment changes .

but everyone knows their balance and whether it is higher or lower than it was.

i can certainly say that after A decade of being retired and drawing 6 figures a year out , our portfolio is higher than the day we retired .

i also can say that we are still 50k off our all time high of 3 weeks ago and that is what matters.

whats our cost basis ? no way of ever knowing after 30 years .

only thing we know is that specific investment we are holding at the moment

 

[Muskrat]

I count my assets based upon current value if I sold….not what I paid. My biggest assets are real estate…and the value has dropped in the area where they lie. Real estate is like stock as it can be used as collateral. And that is bases upon current value. Period.

 

[bobcat]

you are losing sight of the word loss .

there is a loss based on cost basis .

bup what most of us go by is a loss based on portfolio value.

one can have a 1 million dollar portfolio

but if markets fall and are now down 40% you are 400k poorer than you were regardless of whether you were up or down based on cost basis .

that is what most here watch and you are just as down 400k whether you sell or not .

if i was going to draw 4% of that million , which is 40k , well now my income is 4% of 600k or just 24k .

so down in value matters ..that has nothing to do with cost basis

like i said few know their actual cost basis in their retirement money .

it represents decades of contributions, emplover contributions and investment changes .

but everyone know their balance and whether it is higher or lower than it was

Sigh ....I give up.
I'm sure you have a multitude of followers who are anxiously awaiting the next galactic insight from your financial genius.
Don't keep them waiting. No doubt their future is at stake.

 

[mathjak107]

I count my assets based upon current value if I sold….not what I paid. My biggest assets are real estate…and the value has dropped in the area where they lie. Real estate is like stock as it can be used as collateral. And that is bases upon current value. Period.

exactly as we all do it the same way .

well except those that want to look at things in their own manner and then try to tell us that when markets fall we aren’t down because we didn’t sell .

we are just as down in balance regardless .

all we do is hope that what we own or if we sold , the new investment bounces back.



what it cost , like you said is irrelevant. all that matters is its value today , markets have no memory you may have paid more then it’s worth or at one time it was worth more .

that is its value now - period, and it’s all you have to plan around , until it’s not. things may never come back to where they were in our lifetime. so that value is ours like it or not and any drop has us that much poorer

just follow it :

if you owned an s&p fund and paid 50k for your investment and it goes to 100k and you sell it and buy a total market fund and markets fall 40% your total market fund is worth 60k regardless what you paid

if you kept the same s&p fund and if fell 40% you have the same 60k left either way .

your 100k is now just 60k in both cases so selling or not isnt a factor .

you are no different than anyone else with 60k invested going forward in either case and that’s all you have working for you.

so it always counts , we just hope it goes back but as long as we ride equally capable assets back selling or not is no factor

 

[OldOld]

THE FACT IT TOOK 20 years for markets to come back in the 1960’s and ten years in 2000.

there is zero difference between you being Down 40% with a million dollar portfolio and gaming 600k left vs someone buying exactly what you own today with 600k .

there is no difference

your portfolios are worth the same thing

well said.

 

[mathjak107]

well said.

there are all kinds of myths and old wives tales out there that are really nothing more than mentally soothing lies .

the old it’s only a loss if you sell is complete bull ,the. buy low sell high mantra has lost more money for investors when they think they know where low is and try to catch a falling knife .

it is actually buy high and sell higher that makes the most money as the trend is your friend and unlike a down marjet where next stop is lower , an up market is usually higher

will rogers was filled with great sayings but most are false or impractical.

will used to say buy land , they are not making anymore of it .

boy was he wrong .

we have an enormous development , battery park city sitting on landfill where the water once was .

but i think most people understand with some exceptions, that when values of what we have fall , we are down regardless, that has nothing to do with a capital loss based on cost basis .

most have no idea of cost basis on a retirement account , since it’s decades of contributions and investment exchanges or changes .

in my example, any time you had a 100k working for you and now you gave only 60k working for you , you are down whether You want to recognize that fact or not .

the fact one day it may bounce back is irrelevant, it’s still only 60k when you had a 100k for the taking

 

[OldOld]

it is actually buy high and sell higher that makes the most money as the trend is your friend and unlike a down marjet where next stop is lower , an up market is usually higher

So let's buy gold, it's at all time high now.