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Nw 2022

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  • #16
    Originally posted by Hatton View Post
    I do not calculate my net worth when the market is dropping like this. I only look for tax harvests.
    Have not updated the monthly balances since January 2022. I do check the available cash in one account. That is it. Purely to transfer cash from one account to another as needed. That will probably occur around 5/22/22. If any more cash is needed, I will simply sell a specific bond etf. No more, no less. Purely cash management. I will adjust bond holdings next January 2023, possibly in December 2022 to see if there are any losses I wish to offset in rebalancing in January.
    I don't even rebalance on the market fluctuations.
    Full disclosure: I hope my AA works. I admit, these threads make me more curious. I try to resist since it just makes me realize that I cannot outsmart Mr. Market.

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    • #17
      Originally posted by The White Coat Investor View Post

      If you're a good saver, you have to get pretty far into your investing career before net worth should be going down much, even with a market downturn.
      In point of fact, paradoxically the better you have been as a saver, the more likely your NW is to decrease because your contributions are a small number relatively speaking.

      Consider a "good saver" who has saved 30% of income for 20 years. They might have 20x income in their portfolio at that point, which means even saving 30% per year that is only 1.5% of portfolio. As little as a 2% portfolio decline is greater than the 1.5% contribution.

      The higher your savings rate the faster your portfolio grows and in fact the earlier portfolio swings are greater than contributions.

      Even someone with "just" $1,000,000 and a healthy savings rate of $100,000 per year is going to see NW decline with a total portfolio decrease of 10%, which is not at all rare.

      ​​​​​​So far this year my guesstimated portfolio decline is approximately ten times our savings year to date .

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      • #18
        FAANG:
        https://etfdb.com/themes/faang-etfs/...der=asc&page=1

        QQQ is down 22% YTD

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        • #19
          Originally posted by altadoc View Post

          That's an interesting way to frame it - thank you! With a ton of new contributions, the market drop matters a lot less.

          Similar to this idea on inflation. If you spend all your income, inflation hurts more. But if you are a prodigious saver, inflation impacts your finances much less.
          The best solution to most financial problems is work longer and save more. Amazing what it takes care of.
          Helping those who wear the white coat get a fair shake on Wall Street since 2011

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          • #20
            Originally posted by Hatton View Post
            I do not calculate my net worth when the market is dropping like this. I only look for tax harvests.
            Yes. What is the point. It is "down", so what. If you can TLH great. If not, ignore and keep buying.

            20 years from now I will be 70. if it is lower than now I will worry then.

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            • #21
              The problem right now is that inflation is at 9% while our investments are down 15%. When I calculate my net worth, I like to look forward and project how much I will have in the future to see if it is "enough". If inflation remains high and market returns remain low (stagflation), the amount that you have to save in order to retire early or at a routine age becomes difficult to achieve. I know that no one expects inflation to remain at 8-9%, but no one expected inflation to even be at 8-9% last year.

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              • #22
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                how about after yesterday’s drop in the market? even if you are invested in index funds, the 1000 point drop in DJI has to hurt everyone. If you have lots to gain you also have lots to loose?

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                • #23
                  Originally posted by Tangler View Post

                  Yes. What is the point. It is "down", so what. If you can TLH great. If not, ignore and keep buying.

                  20 years from now I will be 70. if it is lower than now I will worry then.
                  You will worry before then. So many new "famous experts" are being minted, you are already digging holes to "learn new things".
                  Remember: Don't just do something, stand there.

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                  • #24
                    Originally posted by STATscans View Post
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                    how about after yesterday’s drop in the market? even if you are invested in index funds, the 1000 point drop in DJI has to hurt everyone. If you have lots to gain you also have lots to loose?
                    if you're not close to retirement (10+ years away) I don't see how a 1000 point drop in the DJI hurts you. You are investing for the long run so we're all buying stuff that is on sale. My wife got paid yesterday so her 401k contribution happened at the end of the day. My payday is tomorrow. DJI down again today. Honestly I am thrilled. Things are around 20% on sale. How come people only get excited about a sale when it's to buy a material good?

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                    • #25
                      NW definitely down, but the rents I collect which cover all my basic living expenses increased about 10% this month. Even with this increase many of my long term tenants are still below market so have some downside protection there. Unlike stocks and bonds, values of my RE holdings have increased since the start of the year. So overall down in the single digits with increased cash flow. No complaints.

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                      • #26
                        Originally posted by The White Coat Investor View Post
                        Certainly my stocks, bonds, and real estate have gone down in value the last four months. But even if I just look at my retirement assets, I'm up about 7% since the first of the year. How can that be? New contributions. And that's not including the value of the business and home.

                        If you're a good saver, you have to get pretty far into your investing career before net worth should be going down much, even with a market downturn.
                        I’m still a bit confused by this. Say with a portfolio of 5M, and 75/25 allocation, you would still be down 750k with a 20% market downturn and 375k with a 10% downturn. You’re going to need a very high income to make that up with new contributions within 4 months YTD.

                        Shouldn’t matter how good a saver once your portfolio reaches a certain size. You can earn 1M a year and save 60% and still have “only” contributed 200k four months into the new year.



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                        • #27
                          Originally posted by STATscans View Post

                          wow at that NW, I’d be 75% retired!!
                          I would be 100% retired.

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                          • #28
                            I recently calculated our NW and was suprised to find that it's up 7% YTD. We have a relatively low NW (~1.5m) so contributions helped. Having some real estate appreciation and oil stocks also helped.

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                            • #29
                              Why does it matter what NW is during the middle of the year? End of year NW will be interesting though if this meltdown keeps up...

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                              • #30
                                Originally posted by JBME View Post

                                if you're not close to retirement (10+ years away) I don't see how a 1000 point drop in the DJI hurts you. You are investing for the long run so we're all buying stuff that is on sale. My wife got paid yesterday so her 401k contribution happened at the end of the day. My payday is tomorrow. DJI down again today. Honestly I am thrilled. Things are around 20% on sale. How come people only get excited about a sale when it's to buy a material good?


                                the problem with this statement is that you you are stating that stocks were priced accordingly to their actual value when they were at their highs earlier in the year, thus you think their stock price decrease makes them "on sale" when in fact they were and have been way overpriced to begin with making their new lower price closer to the their real valuation

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