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  • The White Coat Investor
    replied
    Don't assume the market dipped because of Omicron. That may be what financial columnists are saying, but they really don't know and often don't realize that correlation is not causation.

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  • Zaphod
    replied
    Originally posted by Special Delivery View Post
    As the markets dipped a little with news of the Omicron variant recently, I realized I didn't much care. My spouse and I have been minimally investing in retirement accounts over the past few years (now in the low six figures), and have only recently set about maxing our retirement accounts starting 2022. Since we're roughly 20 years away from retirement, and are comfortable with the risk at this time, our portfolio is essentially 45% S&P 500, 45% TSM, and 10% REIT. I realize the psychological impact of these swings might be different with seven figure retirement accounts, just as it is with a 4 or 5 figure retirement account, or if we were closer to retirement goals... but realizing I wasn't impressed and barely amused by swings bigger than a biweekly paycheck was a surprise to me.

    Should I be feeling... more? Or is this "peace" natural, seeing as we are hands-off index investors who don't react to things and have a written plan?
    No, for one thing the market is barely down, another is up a ton this year.

    Markets go up markets go down, if your time horizon is long, it matters not, if not, your AA should be setup to where it doesnt.

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  • Panscan
    replied
    Originally posted by jfoxcpacfp View Post
    On average, markets correct ~14% annually and we’ll see a bear of 20%+ q5 yrs or so. Learn to expect this, gets easier over time.

    Would be interesting to have the ability to go back over the last few years on this forum and compile a thread of all of the “market is overvalued/due for a correction/in a bubble” etc posts for all to see. I know there have been plenty.
    This time its real I swear!

    half kidding

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  • jfoxcpacfp
    replied

    On average, markets correct ~14% annually and we’ll see a bear of 20%+ q5 yrs or so. Learn to expect this, gets easier over time.

    Would be interesting to have the ability to go back over the last few years on this forum and compile a thread of all of the “market is overvalued/due for a correction/in a bubble” etc posts for all to see. I know there have been plenty.

    Leave a comment:


  • Tim
    replied
    Originally posted by Special Delivery View Post
    That was a function of income. 2019 was our first year with a household income >100k. I'm pretty happy with our start.
    Don't take it as a criticism. Rule of thumb is 20% of gross per year, not just retirement accounts. It's just math.

    Leave a comment:


  • Special Delivery
    replied
    Originally posted by Random1 View Post
    As far as your first comment, about minimally investing in retirement, you may want to rethink that one.
    That was a function of income. 2019 was our first year with a household income >100k. I'm pretty happy with our start.

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  • Tim
    replied
    Originally posted by VagabondMD View Post
    I would not overestimate your risk tolerance based on the events and market swings of the last few years.
    Last 10 years.

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  • Kamban
    replied
    Originally posted by Random1 View Post
    Psychologically , it is a lot different seeing your accounts go down by one or two thousand , vs two or three hundred thousand on a "dip" or bad news. The closer you come to retirement , the more you appreciate this.
    This depends on how much you have, your underlying personality trait, how many times you have seen the market crash and burn and rise up again and whether you have sufficient cash on hand to go through the downturns ( 2-3 years).

    Since all my market investment is in stocks and not bonds, I have seen 100-300K drops at times but it does not frazzle me. I have witnessed major stock market crashes starting with the Black Monday of 87 when I was just having a few stocks in the market to crashes in 2000 and 2008 and the various stagnations. Sometimes I wish for these events to put some money down.

    But I can see how a newcomer can really get rattled by a 1000 point Dow drop ( which is really nothing but a blip).

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  • auggie1983
    replied
    Just because the bull market has been great or we have had above average returns doesn’t mean we are due for a big correction. We could start chugging along at ‘average’ market returns moving forward and would still regress to the mean

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  • JBME
    replied
    When your account drops by a ton instead of freaking out pivot your mindset to think that equities/stocks are now on sale! When prices drop on consumer goods people think this way and go out and buy more if anything. You should have the same mindset with equities/stocks.

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  • VagabondMD
    replied
    I would not overestimate your risk tolerance based on the events and market swings of the last few years.

    Leave a comment:


  • CordMcNally
    replied
    It's different when it's more money and it's different when you're closer to retirement and you'll be needing that money soon. Find an investing style that suits you, sock away the money, and don't worry about swings that will be just a blip on the screen when looking at the big picture.

    Leave a comment:


  • Dusn
    replied
    The market has had an incredibly good year.

    I think the S&P500 is up about a 24% return over the past 12 months? My entire salary has been dwarfed by my market returns this year. This is multiple times the expected return and given how long and large this bull market has been, we should be expecting a large and/or long correction at some point.

    It’s not hard to feel fine when the market has had an incredibly good year.

    Leave a comment:


  • Nysoz
    replied
    It is different seeing your account change by 4 to 5 to 6 figures on a daily basis, but ultimately if you see it enough (and your account is big enough) you do get used to that as well.

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  • Random1
    replied
    Psychologically , it is a lot different seeing your accounts go down by one or two thousand , vs two or three hundred thousand on a "dip" or bad news. The closer you come to retirement , the more you appreciate this. This is the best time , to figure out how to turn off the financial emotions and avoid knee jerk selling and buying.

    As far as your first comment, about minimally investing in retirement, you may want to rethink that one.

    Leave a comment:

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