Jump to content
Sign in to follow this  
sschullo

Ten years ago Tomorrow, 09/15 2008, where were you?

Recommended Posts

My late spouse and I were enjoying the grandest canyon in the world, the Grand Canyon, on that horrific day when Lehman Brothers collapsed. 

From investmentnews.com: While Lehman's Sept. 15, 2008, bankruptcy still stands as the largest in U.S. history, it's worth noting that of the 10 largest U.S. bankruptcies, six occurred in 2008 and 2009. Did I read Six! Wow!  

My boring portfolio did what it was set up to do with a 30/70 stock bond split. Minus 11.8% in 2009 and soared up to 13.9% in 2009. That's how the stock market works, after crashes it always goes up, but we just don't know when. 

I learned my lesson when I lost 70% during the tech bubble and crash. Never again will I be so risky (and dumb) with 100% stocks and most in tech stocks.  

DSC_0844.JPG

DSC_0830.JPG

Share this post


Link to post
Share on other sites
3 hours ago, sschullo said:

Never again will I be so risky (and dumb) with 100% stocks and most in tech stocks.  

Things have been going well for too long. Don't get me wrong its a good thing and we all have benefited in one way or another (Investments, steady employment etc).  But, I worry about new investors who may have never lived through a downturn before and who have started to accumulate a decent nest egg the last ten years. How will they react when the next downturn happens? I think we may be closer to a downturn than many might think. Vanguard thinks it will be sometime in 2020. No one really knows . It took me two downturns to realize 100% stocks was too risky. I hope others won't be so stubborn.

Share this post


Link to post
Share on other sites
12 hours ago, tony said:

Things have been going well for too long. Don't get me wrong its a good thing and we all have benefited in one way or another (Investments, steady employment etc).  But, I worry about new investors who may have never lived through a downturn before and who have started to accumulate a decent nest egg the last ten years. How will they react when the next downturn happens? I think we may be closer to a downturn than many might think. Vanguard thinks it will be sometime in 2020. No one really knows . It took me two downturns to realize 100% stocks was too risky. I hope others won't be so stubborn.

I think you are fine with 100% stock allocation and you survived two of the biggest stock market crashes in history. Obviously, your tolerance for risk is much higher and broader than mine because I think you said that you and your wife can live off your pensions just fine. Heck, you could still be in 100% stocks as long as they are diversified as I know you have. Why have any bonds because your investments are for other reasons than you and your wife's retirement. The allocation to bonds are for people who need the money. I don't think you do. 

I have known from day one after the tech bubble collapse that I will need the support of my investments in retirement and took precautions before 2008. That crash REALLY affected me. After a few years of shock, I have learned great strategies that are so commonplace now (diversification, passive strategy FOREVER, very low costs and the now famous stock-bond allocation split).

BTW, very few people predicted 2008. As it turned out for me, paying extremely low costs and getting these returns below since I retired produced some great annual incomes. Heck, last year I grossed over $200,000 for the first time in my life, and this is from a 30/70 stock bond split (pension, investments, SS and my VA compensation). But most were from my investments that grew 9.0% last year. I am very proud of that achievement! 

2007 5.20%
2008 -11.9
2009 13.90%
2010 10.60%
2011 2.50%
2012 10.00%
2013 6.90%
2014 6.00%
2015 0.005%
2016 5.90%
2017

9.00%

 

I am sure when we were in our 40s and 50s older people worried about us and that we never experienced downturns. People will always make mistakes, and you and I are about the only people, (and a few others here and on Bogleheads) who admit to making mistakes. OMG! Financial mistakes! I never had an issue with making mistakes and learning from them. Money is not important to my ego and identity, but the process is important! All I did over the years is live belong my means, always putting away something and learning about investing as I went along. Getting abused by the annuity monopoly helped with my initial motivation to straighten myself out and pay attention to my money and never let somebody else manage it. 

So I would not worry about young people.  Never let somebody else manage your money (But you can hire somebody to learn from them and then do it yourself), pay low costs, have a well-diversified plan, in other words, set up a very BORING portfolio and stay the course. None of this is original, I learned the emotional part from experience and ALL of my investment strategies from others.  

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

×