Dow futures already down close to 5%
- Thread starter o_dawgnabit
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It appears this will destroy people’s retirement After all. It’s sad, I am 52 but my wife is 57 so she is closer to it. I did move mine into 85 % cash about 10 days ago(after already losing 20 percent of it). There are more restrictions on hers and it’s not as easy to move. It’s going to hurt us. Listening to people telling us to ‘leave it in, it will come back’. This looks like doomsday for it all. I guess if we have our house when this is over with, will be considered fortunate.
This really is one of the most unbelievable things I’ve seen in my lifetime. A slide was to be expected, but it’s gotten to the point where if a senator so much as sneezes too loudly, there’s going to be a panicked selloff. I’m having the hardest time wrapping my head around all of it because in my mind, the only way one for sure loses an absolute crapload of money is to dump now
Sure, there are going to be those close to retirement where it made perfect sense to take a 10-15% loss a week ago rather than risk losing 35% later, but what about the rest of these folks? It’s as if the entire damn market is acting like their lives will be ruined if the market dips another 5%. It’s just so strange for a simple mind like mine to comprehend
Above all, one thing that is painfully alarming to me is how many individuals, families, and businesses are clearly one missed paycheck away from disaster. Is that the crux of what’s driving this? A missed paycheck means not being able to pay the electricity bill, so people are taking 40% losses in the market simply so they’ll have the cash they need to make ends meet? This whole pandemic situation is frightful to be sure, but I’m not sure that the exposed fragile nature of our entire economy isn’t even more frightening
Sure, there are going to be those close to retirement where it made perfect sense to take a 10-15% loss a week ago rather than risk losing 35% later, but what about the rest of these folks? It’s as if the entire damn market is acting like their lives will be ruined if the market dips another 5%. It’s just so strange for a simple mind like mine to comprehend
Above all, one thing that is painfully alarming to me is how many individuals, families, and businesses are clearly one missed paycheck away from disaster. Is that the crux of what’s driving this? A missed paycheck means not being able to pay the electricity bill, so people are taking 40% losses in the market simply so they’ll have the cash they need to make ends meet? This whole pandemic situation is frightful to be sure, but I’m not sure that the exposed fragile nature of our entire economy isn’t even more frightening
Ha, I'll see your simple-mindedness and raise you one. I think a lot of this is just indicative of the fact that we've printed way too much money in the last two decades. Money as we all knew it a few decades ago now has the feel of monopoly money.
Depends on what part of his advice you are talking about. THe people that have gotten rid of and/or avoided debt are probably extremely glad they did. The people that believed him when he said they could expect 10% returns on their stocks are doubly 17ed now.
That said, I'm a fan and think he does more good than harm and now is a good example of why. A lot of people out there right now who have made above average incomes who not only don't have much cash savings to fall back on but also have car notes, boat notes, etc. to keep up with.
I think you are seeing a lot of selling due to liquidity needs. If you're in retirement, this was disastrous. If you're at least five years away and still have your job, I think this is ok. Still going to hurt, and no doubt this is a real negative shock from a reduction in future earnings and not just an irrational selloff, but there has probably been an oversell and five years of pumping money back in while stocks are recovering should help mitigate some of that. And hopefully anybody that close had a decent position in bonds, so they hopefully they are rebalancing into this, so they are going to sell bonds and buy stocks when they are high and low respectively. Might delay retirement by a year or two, but maybe not even that.
People closer to their expected retirement date than that can just go ahead and reset their expectations (unless they already had a huge cushion or huge cash position).
How soon are you looking to retire? Unless it's within the next few years, then you should definitely listen to the people who are telling you to leave it in...this isn't doomsday. I'm not one to recommend financial advisers, but in this case I think you may benefit from one. You are probably going to leave a lot of money on the table if you are doing this with 10ish years left until you retire.
I wonder if a substantial reason for this drop is how easy it is to trade now. I don’t know what it was like 15+ years ago, but now it’s easy to move huge money quickly. So you get a lot more regular Joes like me trading and they will freak out faster.
If you're young, stay the course and keep investing.
If you're older approaching retirement or in retirement have at least 1-2yrs cash on hand if you believe in the markets and stick with your allocations.
If you're very risk adverse and approaching retirement or in retirement have at least 1-2 years cash on hand, but lighten up on your risk tolerance towards the lower end of your risk asset allocations.
That way you don't have to stress about what market futures are doing every morning or volatility in the actual market knowing you have ample liquidity for the next two years.
The markets will come back...at some point.
If you're older approaching retirement or in retirement have at least 1-2yrs cash on hand if you believe in the markets and stick with your allocations.
If you're very risk adverse and approaching retirement or in retirement have at least 1-2 years cash on hand, but lighten up on your risk tolerance towards the lower end of your risk asset allocations.
That way you don't have to stress about what market futures are doing every morning or volatility in the actual market knowing you have ample liquidity for the next two years.
The markets will come back...at some point.
No he is.
His strategy: 25% Int'l stocks, 25% Growth, 25% Aggressive Growth and 25% Growth and Income would have killed any portfolio and likely worse than the S&P500 has done since the sell off.
Dave Ramsey's investing strategies are awful if you're looking for risk adjusted returns not to mention he actually endorses paying commissions.
His strategy: 25% Int'l stocks, 25% Growth, 25% Aggressive Growth and 25% Growth and Income would have killed any portfolio and likely worse than the S&P500 has done since the sell off.
Dave Ramsey's investing strategies are awful if you're looking for risk adjusted returns not to mention he actually endorses paying commissions.
He works for folks who have zero financial discipline and he's helped a lot of people because a lot of people have no discipline. For those ppl, he's a miracle worker.
Does Dave Ramsey not give any advice on allocations between stocks and bonds? Have listened to him a decent amount in the past and read a couple of his books, but can't remember if he even talks about it. Does he actually advocate 100% stock allocation? Or is the 25/25/25/25 split just for the stock portion of a portfolio?
Does he actually advocate against bonds b/c it's a debt transaction?
Gotcha. I was thinking growth and income was a mix of growth stocks and dividend paying stocks.
Speaking of ol Dave Ramsey...I had 1000 shares of stock at $75 a share(GWW) and I kept listening to Dave and he said don’t own single stocks put it in a Mutual Fund.... so I did and within 2 years the GWW stock shot up to $370 per share.... (even with the downturn it is still $220 a share today) but my mutual fund that I moved it to is hovering around $75K right now....
I prefer the approach on individual stocks of liking the product and seeing how and if others could like the product. You have to be careful that you do it in the order of liking the product then investing in the company. That's the order it happened for Warren Buffett and Coca Cola. I did the same thing with Amazon a decade ago.
In the case of Grainger, I imagine that you are probably in charge of inventory management for a company that goes through a good quantity of a wide variety of industrial supplies, and liked the service you were getting from Grainger and could see how others could or do like it too.
I'm not a fan of Dave Ramsey's approach overall. I think he has some good points, but takes it way to conservative on other areas. I probably did the most Dave Ramsey thing I could do when I read his books: I checked them out from the local library.
In the case of Grainger, I imagine that you are probably in charge of inventory management for a company that goes through a good quantity of a wide variety of industrial supplies, and liked the service you were getting from Grainger and could see how others could or do like it too.
I'm not a fan of Dave Ramsey's approach overall. I think he has some good points, but takes it way to conservative on other areas. I probably did the most Dave Ramsey thing I could do when I read his books: I checked them out from the local library.
I didn’t mean to start a Ramsey debate. I was mostly referring to the earlier post highlighting how uncommon family emergency funds appear to be. Investment wise, yeah, he stoopid.
This.
This is so concerning to me as well.
We watch friends, coworkers, etc continue to climb the ladder of nice things and then look at each other wondering what the 17 are they doing that we arent.
The only conclusion we can draw is their reserves arent full.
I hope that isnt the case and all of them actually have wealthy uncles.
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