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

[echappist]

Originally Posted by MattTuck

Condolences to the folks who bought the dip.

No, condolences for folks who need the money now (e.g. retirees)

[kppolich]

Originally Posted by echappist

No, condolences for folks who need the money now (e.g. retirees)

If you need money now and are leaning only on your investments to survive you shouldn't be even close to allocated towards high risk investments.

[Burnette]

Originally Posted by fa63

Been buying a little bit at a time since the second day of the current downfall. Will put in an order for a little more today. Not retiring anytime soon though, so time is on our side.

So true, whether it goes way high or really low people get short sighted and celebrate the gains or bemoan the losses when in reality it's the average over many years that matters.

This too shall pass, time is indeed on our side. From the time I first started I'm up and that's using simple index funds.

[jimcav]

Originally Posted by kppolich

If you need money now and are leaning only on your investments to survive you shouldn't be even close to allocated towards high risk investments.

my wife is closer to Roth withdrawal age than I, but still several years, but her "adviser" rarely changes things. last year was the 1st time in years he adjusted, and he went for similar but better performing mutual funds that would NOT be labeled low risk at all. I bet lots of folks who have accounts aren't managing them actively and the big brokerage/investment groups may not be doing the best choices.

[kppolich]

Originally Posted by jimcav

my wife is closer to Roth withdrawal age than I, but still several years, but her "adviser" rarely changes things. last year was the 1st time in years he adjusted, and he went for similar but better performing mutual funds that would NOT be labeled low risk at all. I bet lots of folks who have accounts aren't managing them actively and the big brokerage/investment groups may not be doing the best choices.

Interesting because Roth IRAs do not require withdrawals until after the death of the owner. I would be interested to hear from your advisor about the liquidation strategies you have. 9 times out of 10 you want to keep those ROTH distributions until last. Maybe small withdrawals over time to reduce your taxable income, but that is another conversation.

not a bad explanation about taking a little roth and a little taxable to reduce your taxable income in retirement. https://www.youtube.com/watch?v=fGzoZrybYLQ

[jimcav]

Originally Posted by Burnette

So true, whether it goes way high or really low people get short sighted and celebrate the gains or bemoan the losses when in reality it's the average over many years that matters.

This too shall pass, time is indeed on our side. From the time I first started I'm up and that's using simple index funds.

Wish I'd started saving sooner and of course wish I'd made some better stock pics, but mostly I've made ok choices. I tend to buy companies I like or do something I like (ie I bought Ford when they did NOT take the gov't bail out). Conversely i sold VW after the diesel news, as that disgusted me, but now that they are all in on EV, I may re-invest (perhaps more an idealistic move than sound financial investment by me).

There are definitely some higher risk opportunities if you have the stomach for it. I unfortunately don't have a lot on the sidelines to try anything, but the last downturn I bought Ford, DIA, QQQ--if i'd not loved road bikes so much I'd probably have more saved now...

Anyway, I think I see a short sell opportunity in VIR and MRNA which are up ridiculously on vaccine speculation, but that it is also risky since this will likely get worse b4 better. I took a gamble in my Roth today and sold Pappa Johns (which i bought post-n-word scandal) and will try to buy a cruise line stock that has been beaten down to 5 yr lows. I have 9 years before i can withdraw from the Roth, so hopefully they survive and recover by then

[jimcav]

Originally Posted by kppolich

Interesting because Roth IRAs do not require withdrawals until after the death of the owner. I would be interested to hear from your advisor about the liquidation strategies you have. 9 times out of 10 you want to keep those ROTH distributions until last. Maybe small withdrawals over time to reduce your taxable income, but that is another conversation.

not a bad explanation about taking a little roth and a little taxable to reduce your taxable income in retirement. https://www.youtube.com/watch?v=fGzoZrybYLQ

a Roth and a roll-over 401k IRA thing. She hasn't worked since our oldest was born, so 16 years. oddly (or maybe not) both her accounts have very similar funds, now that they are managed by the same guy. Lately they have done well, but I think that just reflected the crazy run up in the markets. I'll take a look at that video--thanks

[echappist]

Originally Posted by kppolich

If you need money now and are leaning only on your investments to survive you shouldn't be even close to allocated towards high risk investments.

i think you are mis-interpreting. People buying into the dips (to whom @MattTuck offers condolences) are not worried about buying at a 8-10% decline, only to see another 8-10% decline. Those people don't need the money in the short term and are willing to ride it out, with the hope that the market does recover.

When a the equity portion of a 30 equity / 70 bonds takes a 20% decline, sure, it's only 6% decrease in the overall value of the portfolio, but that's a baked-in loss, if one is actually withdrawing money from the account.

20% decline, in the grand scheme of things, is not out of the ordinary. S&P dipped more than 40% in each of dot-com era and housing crisis.

And before you say, well, then one should have even less exposure to equities in retirement, I would counter that most advisers recommends at least some exposure to equities, even in old age. Some upthread even recommend having higher exposures, because fixed income yields has been meager.

ETA: I guess one could make withdraw solely from the fixed income allocations, and thereby not taking actual losses. Who knows, maybe the overall asset allocations might even work out (e.g. still close to 30/70, vs the 32/68 breakdown in the 20% decline mentioned above). But that may or may not be prudent (I haven't delved into that part yet)

[MattTuck]

Originally Posted by echappist

No, condolences for folks who need the money now (e.g. retirees)

Yes, and no.

Of course it hurts when you're closer to withdrawals, but it is hard to feel bad for the generation retiring now. They've enjoyed huge run ups in valuations in the last 10 years. I was looking this morning and I think the AVERAGE annual return for VTI (Vanguard total market index) for the last 10 years was over 12%. This is way above historical averages.

The real villain is the Federal Reserve that drove the interest rates on savings so low that older folks were forced to buy stocks to get any kind of return. Paging Ahneida...

[echappist]

Originally Posted by MattTuck

Yes, and no.

Of course it hurts when you're closer to withdrawals, but it is hard to feel bad for the generation retiring now. They've enjoyed huge run ups in valuations in the last 10 years. I was looking this morning and I think the AVERAGE annual return for VTI (Vanguard total market index) for the last 10 years was over 12%. This is way above historical averages.

The real villain is the Federal Reserve that drove the interest rates on savings so low that older folks were forced to buy stocks to get any kind of return. Paging Ahneida...

that's certainly true...

also, not just retirees. There also 529 fund holders, though it has to be said that for 529 fund holders, the consequences of a 20% (or even 40%) decline isn't nearly as dire...

last thing is that from all this, I'm reminded of Poe's Masque of the Red Death, how much of the world simply just carried on as if everything were normal, all the while holding the notion that the danger is contained and cordoned off. Then all the sudden something changes, and pandemonium gets unleashed, and it just won't stop, similar to how there really hasn't been a break in the decline this week.

[weaponsgrade]

Originally Posted by MattTuck

Condolences to the folks who bought the dip.

I like reading this thread. I'm by no means any kind of financial expert. I leave my retirement nut up to the fine folks at Vanguard, but I give myself a bit of play money to buy individual stocks on dips. At the very least, it keeps me interested in following the news on Wall St. If I'm very lucky I can welcome an n+1 to the family.

[Tony T]

"Never try and catch a falling knife. Wait for it to hit the ground then pick it up.
... If you're trying to catch the knife, and you catch the wrong end, you get hurt."

[saab2000]

Originally Posted by Tony T

"Never try and catch a falling knife. Wait for it to hit the ground then pick it up.
... If you're trying to catch the knife, and you catch the wrong end, you get hurt."

A wise proverb indeed.

I’m doing nothing except keeping on keeping on.

When the virus panic subsides things will return to normal. Anyway, most folks thought a correction has been overdue. Now is no time to overreact.

[weaponsgrade]

Someone let me know when the knife hits the ground.

[fmradio516]

so the thing to do is just wait and NOT buy?