OT - Dow plunges 1,175 - worst point decline in history

[Tony T]

Originally Posted by robertbb

What goes up............

...........goes up

[Tony T]

'nother record (~29,350)

[Burnette]

Originally Posted by Tony T

'nother record (~29,350)

Yep, it's got legs. We know a dip has to occur at some point but if I can keep some gains from last year's rally and beat the average afterwards I'm calling it a win.

[Louis]

Originally Posted by Tony T

As you get older (nearing retirement) it should be easier, as you should be moving out of equities and into fixed income

I don't agree with this.

When my "investment horizon" was 10, 15, 20 years away all I had to do is dump the money into a mix of small cap, mid cap, large cap index and managed funds, with a bit of employer stock thrown in for good measure and not worry about it. I'd let my 401k go for years without even bothering to see how it was doing. Didn't matter, because I figured the market would always trend up in the long run, and I wasn't greedy so I didn't have to worry about maxing out my return.

Now that the horizon is a lot closer, what happens tomorrow can potentially affect my net wealth in a significant manner a few years from now, so I don't have the luxury of ignoring what's going on. I have been shifting large portions of my 401k into the more stable choices (luckily we have quite a few) but because I haven't decided exactly when I will retire, it's still an issue that I have to deal with.

[fa63]

It sounds like you are agreeing with it? You both seem to be suggesting a shift into more "stable" investments closer to retirement.

That said, historical data suggests that one might be able to achieve a higher safe withdrawal rate-SWR (i.e., never running out of money even in the worst case scenario) or perpetual withdrawal rate-PWR (i.e., withdrawing at such a rate that initial principle is sustained even under the worst case) by staying invested in stocks through retirement. Here is a tool that you can play around with:

https://portfoliocharts.com/portfolio/withdrawal-rates/

For 100% stocks (in a total stock market index fund), the SWR/PWR are 4.1%/3.6%. For 100% bonds (intermediate), the SWR/PWR are 3.4%/2.5%. For a 50/50 mix, it is 4.1%/3.5%.

For our retirement, we will be looking at a 60/40 mix (stocks/bonds).

Originally Posted by Louis

I don't agree with this.

When my "investment horizon" was 10, 15, 20 years away all I had to do is dump the money into a mix of small cap, mid cap, large cap index and managed funds, with a bit of employer stock thrown in for good measure and not worry about it. I'd let my 401k go for years without even bothering to see how it was doing. Didn't matter, because I figured the market would always trend up in the long run, and I wasn't greedy so I didn't have to worry about maxing out my return.

Now that the horizon is a lot closer, what happens tomorrow can potentially affect my net wealth in a significant manner a few years from now, so I don't have the luxury of ignoring what's going on. I have been shifting large portions of my 401k into the more stable choices (luckily we have quite a few) but because I haven't decided exactly when I will retire, it's still an issue that I have to deal with.

[MattTuck]

I wish I had stock in a face mask company... Yikes. This coronavirus outbreak is going to be bad.

[echappist]

Originally Posted by MattTuck

I wish I had stock in a face mask company... Yikes. This coronavirus outbreak is going to be bad.

well, 3M, Kimberly Clark, and P&G all make masks and/or medical garbs

apart from immediate health issues, a knock-on effect is a slowing global economy

[kppolich]

Originally Posted by MattTuck

I wish I had stock in a face mask company... Yikes. This coronavirus outbreak is going to be bad.

kind of like ebola was supposed to wipe us all out? I have no doubt that coronavius could be bad, but it's early and the reaction of restricting travel makes me feel a bit better.

In fact, ebola had quite a run compared to the handful of reported deaths so far with Coronavirus

Ebola Virus:
Total of 3416 cases (3297 confirmed & 119 probable), including 2237 deaths, 1136 survivors, and patients still under care.

[echappist]

Originally Posted by kppolich

kind of like ebola was supposed to wipe us all out? I have no doubt that coronavius could be bad, but it's early and the reaction of restricting travel makes me feel a bit better.

In fact, ebola had quite a run compared to the handful of reported deaths so far with Coronavirus

Ebola Virus:
Total of 3416 cases (3297 confirmed & 119 probable), including 2237 deaths, 1136 survivors, and patients still under care.

I'm not sure what numbers you are citing (perhaps the current outbreak in the DRC?), but the numbers from the 2014 outbreak alone (there was also a significant one in 1995) dwarf the ~3000 cases you mentioned, by almost a factor of eight. https://www.nytimes.com/interactive/...tbreak-qa.html

This coronavirus could end up being one of those virus that is not so lethal but is quite contagious

[MattTuck]

Originally Posted by echappist

well, 3M, Kimberly Clark, and P&G all make masks and/or medical garbs

apart from immediate health issues, a knock-on effect is a slowing global economy

Indeed. Hearing reports that China is shutting down many factories for 2 weeks.

Originally Posted by kppolich

kind of like ebola was supposed to wipe us all out?

In fact, ebola had quite a run compared to the handful of reported deaths so far with Coronavirus

Ebola Virus:
Total of 3416 cases (3297 confirmed & 119 probable), including 2237 deaths, 1136 survivors, and patients still under care.

In a globally connected world with lots of inter-country travel, diseases can spread faster than ever. I think your numbers are on the low side. The response to stop the outbreak was more than $3 billion. It is not like the disease just petered out on its own... there was an organized effort to control it. That effort is ongoing, in fact; and it it is not without risk. In November, an anti-Ebola activist was murdered in the lead up to vaccinations for the disease. It is a serious health threat with resources actively deployed to fight it.

That is like saying "the Y2K scare was overblown because nothing happened." Nothing happened because billions of dollars and human capital were spent mitigating and fixing the problem.

[Tony T]

DOW down 575 (close @ 603) - Jan `20 gains erased in one day.

[Jeff N.]

Originally Posted by Tony T

DOW down 575 - Jan `20 gains erased in one day.

Thank you coronavirus. I swear, it's always something that pops up outa nowhere.

[Ozz]

Originally Posted by Jeff N.

Thank you coronavirus. I swear, it's always something that pops up outa nowhere.

As long as it doesn't kill us all, you might consider this a buying oppty!

[MattTuck]

Originally Posted by Ozz

As long as it doesn't kill us all, you might consider this a buying oppty!

Yes, a buying opportunity for N95 masks, canned food, and bottled water.

If you loved the market when it was 500 points higher, then you should love it even more now.

[echappist]

Originally Posted by MattTuck

Yes, a buying opportunity for N95 masks, canned food, and bottled water.

If you loved the market when it was 500 points higher, then you should love it even more now.

I'm still not quite sure if N95 could filter virus. I mean, I think it should, but then I looked at the valve of one of mine, and it gave me pause. The diaphragm piece in the valve is not held in place, and moves quite a bit with airflow (e.g. breathing)...

I'm a bit more certain of the super duper mask I have though. But it's a real chore to breath through