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Just a friendly reminder for any newbie investors (8/5/2024)
During the GFC we didn't sell anything, didn't buy much either other than continue to contribute to our Roth IRA's. We were mainly in PRWCX. I did jump into PRHYX when the yield was approaching 20%!! I believe it was early 2009 when I sold PRHYX after ~40% gain.
Yes. ‘07-‘09 (especially ‘08) would have been a wonderful time to be dollar-averaging in to a retirement account. I hadn’t considered that. At a younger age I’d had paid it little heed. Stay the course.
For some of us the year and a half long market crash was an unwelcome retirement gift. I was already 10 years in. Those retirees who got caught with more risk on the table then their individual situation warranted got taken to the cleaners.
Y'all need to consider that many quote smart prognosticators we're thinking the market was going to get cut in half again from the low in 08, 09'. And Gartner and the ex Goldman sachs guy, I forget his name held an emergency weekend meeting in attempt to negate a complete collapse of our financial system.
I seem to recall that guy had a three page document that stated he would have complete control of all decisions..what an attempt to circumvate... luckily that didn't happen but oh so close
Ya in hindsight why say screw around with cost averaging in, should have just pushed all the chips in...
I do distinctly remember Grantham saying hold your nose and average DOWN with 10% of your money in chunks....he was correct...
“Ya in hindsight why say screw around with cost averaging in, should have just pushed all the chips in.. “
If you’re still working and contributing as much as you can to your retirement plan (IRA, 401-K) out of every paycheck (sometimes called dollar cost averaging) may I inquire where you would obtain all those “chips” to push around?
Does BB suggest younger investors during their accumulation phase try gaming the markets by moving back and forth between equities and cash?
There's a middle ground, though, @hank. You can change the volatility of your holdings; rather than outright selling everything and later buying everything back. Volatility is your friend on an upswing, but not on a downturn! Get quiet; rather than small. Then reverse the process. If you're reasonably gradual, you should be able to gain more on the bounce than you lost on the pullback. As always, the timing is the issue, but doable.
Re timing, all those guys that became famous for timing the GFC, did they ever repeat their timing prowess again in equity markets? A number of us in this forum time the market but any timing success I think is purely luck. I have not found timing to be a repeatable primary skill.
Paulson! yes @ BaluBalu, that is who I was referring to earlier.
And. @hank, no, nada, I sure wasn't advocating for all in all out etc...I was trying to point out that it is now easy to look back and say one should/could've(?) started averaging in..but at the time it wasn't easy at all...so with the knowledge of hindsight, it sure is easy to say now that should have went all in....
My drawdown was -3.7% (truth!) during the 08' flush (hey FD1000, how do you like that?)...as I got somewhat toasted during 2001 flush, I had good muscle memory recall....and also when I went to an open house at a new condo development in San Diego....I told the nice gal sales rep that the price points were kooky insane....she asked where I was from...and said that explains it..."you don't get it"...I said no ma'am, YOU don't get it...a year from now you will be on your knees begging me to pay 40% less than these prices...I was right....and now 15 years later, would say she was also...LOL! Then I also had a Washington Mutual open up by me with higher than market CD rates...the gal there was wanting me to sign a 5-year CD...I said, nah, I'm walking you guys are making home loans to folks who couldn't afford a storage shed...I don't want anything to do with ya'll and as a matter of fact I am going to short the piss out of your stock...made a nice bundle on that trade.
The more I read on this thread and think back 30 years+...the more I think a moderate-conservative multi-asset, balanced approach with some flexing around the edges is the way to go....sure would have more monies now and have had less stress, worries etc...
I was still working during the GFC and had a mantra of staying the course. It’s easy to say “woulda, shoulda” in retrospect. But the fear then, if you hadn’t experienced ‘87 or lost biggly in ‘00-‘01, holding on by your fingertips and chanting, “I think I can” was good enough for me.
Still, having experienced and not panicked (too much) has now provided the “muscle memory” as BB Fan noted, to put some chips in play when markets drop.
I also lived through 2000-2002 bear market and at that time I was single, 37-39 years old and was investing entirely with Janus...blast from the past!!
Janus Mercury, Janus Global Technology and at the time the vaunted Janus Worldwide with Helen Young-Hayes. I was 100% equities. I admit soon after 9/11 I just couldn't take it any longer with the market's long correction and sold out of my complete positions into a Janus MM fund for a month or so before reinvesting into the markets. I toned down the risk by going 75/25 equity/fixed income. I believe the equity fund was Janus Core Equity and the bond fund was Janus Flexible Income...again, names of those funds might be off just a bit.
As stated in my previous post, I didn't sell anything during the GFC with the difference being the experience I had living through 2000-2002 and the eventual rebound and also having a respected friend who encouraged me to stay the course during the GFC as he was doing.
Talking about 2000-2002 bear market and GFC, from Jan 2000 through December 2011, S&P 500 returned nearly 0. Which blend funds fared significantly better during that 12 year period?
I would think bond funds and even VWINX may have done better than moderate allocation funds like FBALX. But for apples to apples, I was looking for blend funds.
Comments
I did jump into PRHYX when the yield was approaching 20%!! I believe it was early 2009 when I sold PRHYX after ~40% gain.
For some of us the year and a half long market crash was an unwelcome retirement gift. I was already 10 years in. Those retirees who got caught with more risk on the table then their individual situation warranted got taken to the cleaners.
I seem to recall that guy had a three page document that stated he would have complete control of all decisions..what an attempt to circumvate... luckily that didn't happen but oh so close
Ya in hindsight why say screw around with cost averaging in, should have just pushed all the chips in...
I do distinctly remember Grantham saying hold your nose and average DOWN with 10% of your money in chunks....he was correct...
If you’re still working and contributing as much as you can to your retirement plan (IRA, 401-K) out of every paycheck (sometimes called dollar cost averaging) may I inquire where you would obtain all those “chips” to push around?
Does BB suggest younger investors during their accumulation phase try gaming the markets by moving back and forth between equities and cash?
BF, Hank Paulson.
And. @hank, no, nada, I sure wasn't advocating for all in all out etc...I was trying to point out that it is now easy to look back and say one should/could've(?) started averaging in..but at the time it wasn't easy at all...so with the knowledge of hindsight, it sure is easy to say now that should have went all in....
My drawdown was -3.7% (truth!) during the 08' flush (hey FD1000, how do you like that?)...as I got somewhat toasted during 2001 flush, I had good muscle memory recall....and also when I went to an open house at a new condo development in San Diego....I told the nice gal sales rep that the price points were kooky insane....she asked where I was from...and said that explains it..."you don't get it"...I said no ma'am, YOU don't get it...a year from now you will be on your knees begging me to pay 40% less than these prices...I was right....and now 15 years later, would say she was also...LOL! Then I also had a Washington Mutual open up by me with higher than market CD rates...the gal there was wanting me to sign a 5-year CD...I said, nah, I'm walking you guys are making home loans to folks who couldn't afford a storage shed...I don't want anything to do with ya'll and as a matter of fact I am going to short the piss out of your stock...made a nice bundle on that trade.
The more I read on this thread and think back 30 years+...the more I think a moderate-conservative multi-asset, balanced approach with some flexing around the edges is the way to go....sure would have more monies now and have had less stress, worries etc...
Still, having experienced and not panicked (too much) has now provided the “muscle memory” as BB Fan noted, to put some chips in play when markets drop.
David Giroux and other moderate allocation funds operate within a range of risk taking and I think that is a good approach for all mortals.
Let us count the equity traders who got timing right more than twice (not wishy washy prognostication).
Janus Mercury, Janus Global Technology and at the time the vaunted Janus Worldwide with Helen Young-Hayes. I was 100% equities. I admit soon after 9/11 I just couldn't take it any longer with the market's long correction and sold out of my complete positions into a Janus MM fund for a month or so before reinvesting into the markets. I toned down the risk by going 75/25 equity/fixed income. I believe the equity fund was Janus Core Equity and the bond fund was Janus Flexible Income...again, names of those funds might be off just a bit.
As stated in my previous post, I didn't sell anything during the GFC with the difference being the experience I had living through 2000-2002 and the eventual rebound and also having a respected friend who encouraged me to stay the course during the GFC as he was doing.
One view. SPY vs FBALX
View two, SPY vs VWINX. Same time frame 2000 through 2011.
BINGO !!!