Retirement accounts

[RocketDawg]

The Dow is down about 21% since its high point. I just checked my retirment accounts and they're "only" down about 14% from the high point, so my investment manager must be doing something right.

My present balance is actually a little (maybe 2 or 3%) higher than it was at the end of 2019.

 

[TBone.sixpack]

-13.68 here. Guess it could always be worse but it still sucks.

 

[Captain Ron]

Deleted

 

[RocketDawg]

I was afraid to look fearing that it'd be down 40% or whatever it was a couple weeks ago. But even then it was only down 20% or so. Of course, it doesn't rise quite as rapidly as the overall market either.

Yep, sucks but wasn't as bad as I thought.

 

[Willow Grove Dawg]

I am down almost 16% from the highs which I can live with since I was up 22-23% in 2019 and 15-16% on 2018. I am probably working for at least 12-13 more years anyway.

 

[Shmuley]

I'm down around 14% measured from January 1.

 

[o_Spectre]

Unless you are fully in stocks it wouldn't be down as much as the stock market...

 

[Jeffreauxdawg]

I am down almost 16% from the highs which I can live with since I was up 22-23% in 2019 and 15-16% on 2018. I am probably working for at least 12-13 more years anyway.

I am testing the Hell out of my passive investment strategy. I have an old pension buyout I rolled over to a friend who is running his firms optimal strategy for me. I have my current retirement in a Vanguard S&P 500 Index fund. He admits that my strategy will win more often than not in a bull market, but he says will make up for it in a bear... Not looking good for him.


2019 Return on active fund 22.83% after fees. Not bad.
2019 Return on passive index fund 29.47% after fees. Much better.
As of 4-7-2020 yesterday.
2020 Return on active fund -15.67% after fees.
2020 Return on passive index fund -18.45% after fees.

If the trend holds, it proves the boggleheads right... But I must admit, it takes brass balls to not touch that passive fund. It's just so tempting to try and time the market, but very few pull it off over the long run

 

[Tomas Smid]

Over the long term of fifty or so years a passive index fund linked to the S and P five hundred will out perform most managed funds

 

[philduckworth]

I am testing the Hell out of my passive investment strategy. I have an old pension buyout I rolled over to a friend who is running his firms optimal strategy for me. I have my current retirement in a Vanguard S&P 500 Index fund. He admits that my strategy will win more often than not in a bull market, but he says will make up for it in a bear... Not looking good for him.


2019 Return on active fund 22.83% after fees. Not bad.
2019 Return on passive index fund 29.47% after fees. Much better.
As of 4-7-2020 yesterday.
2020 Return on active fund -15.67% after fees.
2020 Return on passive index fund -18.45% after fees.

If the trend holds, it proves the boggleheads right... But I must admit, it takes brass balls to not touch that passive fund. It's just so tempting to try and time the market, but very few pull it off over the long run

A passive fund linked to the S&P 500 is not going to be as diversified as an activity strategy at an investment firm. Number 1, the S&P 500 is all US companies, Number 2 the S&P is market cap weighted meaning the larger companies are going to make up a bigger chunk of your investments. And of course the S&P is 100% stocks.

A diversified strategy at most firms is going to include international stocks, bonds, and you won't be over-weighted in just a few companies. This should lead to better risk adjusted returns over time. But the S&P has been nearly impossible to beat the last 10 years.

 

[johnson86-1]

Unless you are fully in stocks it wouldn't be down as much as the stock market...

100% stocks here other than real estate and the bright side is there's not much tracking error I can see in my returns.** Also, most of our tenants have stopped paying rent, so that has been good diversification as far as ways to lose money. Much more satisfying watching money not come in as opposed to numbers on a screen going down.**

 

[dawgoneyall]

My World Com hasn't gone down any.

Down 15.87% from the high.

 

[dawgphd]

My present balance is actually a little (maybe 2 or 3%) higher than it was at the end of 2019.

Great point I had overlooked. I am up a tad 3-31-19/3-31-20

Makes it a bit easier to stomach.

 

[Cap'n Geech]

My portfolio is helped by my exposure to bitcoin: a non-correlated asset with an asymmetric return profile. Any investment advisor that is not recommending a nonzero allocation to bitcoin is failing their fiduciary duty.

YTD:
bitcoin +1.89%
S&P 500 -14.9%

1Y:
bitcoin +38.69%
S&P 500 -4.94%

2Y:
bitcoin +4.45%
S&P 500 +5.59%

5Y:
bitcoin +3,006.55%
S&P 500 +30.82%

 

[philduckworth]

My portfolio is helped by my exposure to bitcoin: a non-correlated asset with an asymmetric return profile. Any investment advisor that is not recommending a nonzero allocation to bitcoin is failing their fiduciary duty.

YTD:
bitcoin +1.89%
S&P 500 -14.9%

1Y:
bitcoin +38.69%
S&P 500 -4.94%

2Y:
bitcoin +4.45%
S&P 500 +5.59%

5Y:
bitcoin +3,006.55%
S&P 500 +30.82%

The big firms can't recommend or buy bitcoin for their clients.

 

[paindonthurt_]

I haven’t looked at my retirement account Or investment account summary/statement once since this happened.

I am only 38 but haven’t looked.

 

[Jeffreauxdawg]

A passive fund linked to the S&P 500 is not going to be as diversified as an activity strategy at an investment firm. Number 1, the S&P 500 is all US companies, Number 2 the S&P is market cap weighted meaning the larger companies are going to make up a bigger chunk of your investments. And of course the S&P is 100% stocks.

A diversified strategy at most firms is going to include international stocks, bonds, and you won't be over-weighted in just a few companies. This should lead to better risk adjusted returns over time. But the S&P has been nearly impossible to beat the last 10 years.

My retirement is far enough away, I have no interest in bonds. I also feel like I get plenty of international exposure with the S&P 500, just less political risk. I take a holistic approach when looking at diversification. I feel I am diversified, but it will not apply to many people and any broker is trained to frown upon it.

1-My ability to work is my bond (income) it's good for 20 years or so and hedged by insurance.

2-I keep 6 months of cash reserves on hand.

3-I have plenty of real estate exposure with my personal home and my career.

4-I want safe long term growth for my retirement. There is as much risk in treasury bills going to zero as there is in the 500 largest companies in the US going to 0. Either way, it's walking dead out there. So the risk is based on market timing. When I get within 5-7 years of retirement, this 200% equity allocation will change. Or if fed interest rates get back to 4-5% and decent returns are available on bonds (which can't happen anytime soon because of our federal debt burden.)

5-I "actively" trade in taxable accounts. I try to buy value equities and hold them for at least a year. I trade in stocks that I know. I also sometimes trade commodity ETFs as my background is in commodities. I buy puts against stock positions when appropriate. I have never taken an uncovered short position and I am not sure if I ever will.


I would not recommend my strategy for anyone else. I have a unique position and a unique background. I care about absolute returns only.. not risk adjusted returns.. for now. My series 7 friends think I am crazy. My friend that works for a hedge fund thinks I am boring and should use leverage.

 

[TrueMaroonGrind]

I'm down around 18%. I have a very aggressive mix at the moment.

 

[WhiteShepherd07]

Ehh currently most bond funds have been hit pretty hard as well. Unless you’re in treasuries then there’s been nowhere to hide during this.

Although, bonds are actually presenting a pretty attractive opportunity for those conservative investors now if you know where to look.

 

[coach66]

Well, still all cash and down 20%, I’m very

Surprised by this rally. I have been kicking myself pretty hard but at 60 yo I’m not as aggressive as I once was. If my real estate/timber can hold its own then we’re down about 9% overall.

 

[patdog]

How are you down 20% if your all cash? I tried to time the market, and right now, I'm behind on that, although I still think we're going to see another significant downturn in the next few months. People are underestimating the damage to our economy and how slow it will come back, as well as the effect of an immediate 10% increase in the national debt just from the stimulus package plus whatever the reduced tax revenues will be the next couple of years. I'm a little younger than you (not much), and if I'm wrong and I miss out on some gains, I'll be OK.

 

[karlchilders.sixpack]

How are we down 20 per cent

because we sold some stuff on the way down. No recovery from that.

Maybe not 20 down, but close.

 

[philduckworth]

Never understood why people try to time. You have to be almost perfect twice. When to get out and when to get back in.

 

[TaleofTwoDogs]

Just ran my numbers and I am down -13.8% mesured from 2/5/2020. Adjusted for our contibutions the portfolio is equivalent to late 2017. Of course, I bought LGND in 2019 and it has been slaughtered even before the virus.

 

[Seinfeld]

#2 on your list may be the most important one that many people have historically overlooked, and many will continue to do so. I know it’s hard to stash that much cash away when neighbors have new cars, kids want a pool, and mama wants a spectacular vacation.

That said, in times like these, cash is king and it can literally be the difference between a family making it through ok or finding themselves in financial disaster that can last a lifetime.

When my kids get old enough to get out on their own, there are things my wife and I will do to support them. However, they WILL be immediately funding an emergency fund or else all bets are off. It’s that critical

 

[turkish]

Never understood why people try to time. You have to be almost perfect twice. When to get out and when to get back in.

You are right. I learned my lesson this time. I try to look at it like this : I paid a fee to avoid a catstrophe that doesn’t look like it will happen. In hindsight, I regret having done so, but it made me sleep easier at the time.

 

[horshack.sixpack]

If anyone says bitcoin, I have to post this regardless of how many times I've done so before:

 

[johnson86-1]

Never understood why people try to time. You have to be almost perfect twice. When to get out and when to get back in.

I get it because it's a natural impulse. If you see a big drop and feel the need to get out, it most likely means your portfolio mix was inappropriate, although it could be just being emotional. But if you're 58 and realize that your 90% stock portfolio was much too aggressive, what do you do? If you're healthy, I think you stay put and commit to working longer if that's what it takes. But what if you're 64? No good answer at that point. If you can afford it, reducing your stock allocation might be the right thing to do. You're protecting yourself against catastrophic losses by locking in a painful loss. If you really need the rebound to be ok in retirement, I guess you ride it out. .

 

[horshack.sixpack]

there's very little interest in bonds these days

 

[Shamoan]

down 13.5 % for me.

 

[Shamoan]

what have you told your tenants? ive got a signed lease with a tenant that is moving in mid May and he is a service industry worker....im kinda nervous.

 

[philduckworth]

there's very little interest in bonds these days

literally.

 

[philduckworth]

I get it because it's a natural impulse. If you see a big drop and feel the need to get out, it most likely means your portfolio mix was inappropriate, although it could be just being emotional. But if you're 58 and realize that your 90% stock portfolio was much too aggressive, what do you do? If you're healthy, I think you stay put and commit to working longer if that's what it takes. But what if you're 64? No good answer at that point. If you can afford it, reducing your stock allocation might be the right thing to do. You're protecting yourself against catastrophic losses by locking in a painful loss. If you really need the rebound to be ok in retirement, I guess you ride it out. .

never put any money in stocks that you might need to touch in 3 years. Most bear markets last about 3 years. So if you suffer a big drop in stocks, you should never have to "sell low".

 

[fishwater99]

Down 17.3%, was closer to 30% at one point.

 

[johnson86-1]

#2 on your list may be the most important one that many people have historically overlooked, and many will continue to do so. I know it’s hard to stash that much cash away when neighbors have new cars, kids want a pool, and mama wants a spectacular vacation.

That said, in times like these, cash is king and it can literally be the difference between a family making it through ok or finding themselves in financial disaster that can last a lifetime.

When my kids get old enough to get out on their own, there are things my wife and I will do to support them. However, they WILL be immediately funding an emergency fund or else all bets are off. It’s that critical

I think 6 months in cash is probably suboptimal for a lot (most?) people. We have cash sort of on accident right now, but generally don't carry cash for the reasons laid out here: https://earlyretirementnow.com/2016/05/05/emergency-fund/

I would add to that if you're a typical employee, you probably have access to a 401k and Roth Ira each year, so that's up to $25,500 you can put in tax deferred savings each year. I certainly wouldn't forego maxing that out in order to have cash handy. Contributions to a Roth IRA can be withdrawn tax free, so that can acts as an emergency fund in a pinch, even if it can be painful to take it out of stocks in a downturn. You will have some risk early on, but if you get started early enough, you should be able to manage that risk until you have decent money saved up in a roth. The biggest issue is not running up commitments (house note primarily but lifestyle in general) that makes a downturn unduly risky to you. Probably most importantly, if you have a two earner household, you cannot afford to live up to your income the way a single earner household might, because even though it's less risky in the sense that you will likely have at least one income coming in, you actually double your risk of having a job loss, and being able to meet 50% of your obligations is only slightly less catastrophic than being able to meet 0% of them.

 

[johnson86-1]

what have you told your tenants? ive got a signed lease with a tenant that is moving in mid May and he is a service industry worker....im kinda nervous.

I am letting our property manager handle it; he does a good job dealing with the quality of tenants we get and identifying who to work with b/c they are trying and worth working with and who to be ruthless with b/c they are just looking to screw anybody that will give them a chance. And we have what I would consider pretty nice properties for rentals; nothing I would be unwilling to live in, and therefore for the most part have good tenants that don't just have the attitude that a judgment against them is not big deal. But based on past history, I would guess around 10-20% of our tenants will see that we can't evict them, and they will just stop paying no matter their income situation b/c when they get evicted, they will just go to another rental and just let us chase them for the months they didn't pay. That's just based on the number of tenants we have that end up skipping out in the middle of the night and/or purposefully damaging property. We could avoid some of that with more stringent screening, but our current approach has been a good cost/benefit tradeoff up until now.

 

[Cap'n Geech]

Haha yeah I saw that a previous time someone posted it on here. But I really am curious: What is y'all's exposure to the top performing asset of the last ten years? 0%? Or >0%?

 

[Cap'n Geech]

The big firms haven't figured out how to make money off of it yet!

 

[Jeffreauxdawg]

I think 6 months in cash is probably suboptimal for a lot (most?) people. We have cash sort of on accident right now, but generally don't carry cash for the reasons laid out here: https://earlyretirementnow.com/2016/05/05/emergency-fund/

I would add to that if you're a typical employee, you probably have access to a 401k and Roth Ira each year, so that's up to $25,500 you can put in tax deferred savings each year. I certainly wouldn't forego maxing that out in order to have cash handy. Contributions to a Roth IRA can be withdrawn tax free, so that can acts as an emergency fund in a pinch, even if it can be painful to take it out of stocks in a downturn. You will have some risk early on, but if you get started early enough, you should be able to manage that risk until you have decent money saved up in a roth. The biggest issue is not running up commitments (house note primarily but lifestyle in general) that makes a downturn unduly risky to you. Probably most importantly, if you have a two earner household, you cannot afford to live up to your income the way a single earner household might, because even though it's less risky in the sense that you will likely have at least one income coming in, you actually double your risk of having a job loss, and being able to meet 50% of your obligations is only slightly less catastrophic than being able to meet 0% of them.

1-Not everyone is eligible for a Roth.
2- Cash on hand, doesn't mean it's sitting in a checking account. I keep an emergency fund in my checking account, but most of my cash is in my settlement fund in my brokerage account so I can move quick on great opportunities.
3- I took half of that cash last week and bought a super safe stock that was completely undervalued. It's up 31% and I am going to take my win now. If you are all tied up in equities and in different vehicles, you cannot move like that.

ETA. In case you think I am full of BS. Here are my email confirmations. A little bit of cash on hand just let me make 8k in a week.

 

[johnson86-1]

1-Not everyone is eligible for a Roth.

If you don't have any earned income, then a lot of financial advice is irrelevant to you.

2- Cash on hand, doesn't mean it's sitting in a checking account. I keep an emergency fund in my checking account, but most of my cash is in my settlement fund in my brokerage account so I can move quick on great opportunities.
3- I took half of that cash last week and bought a super safe stock that was completely undervalued. It's up 31% and I am going to take my win now. If you are all tied up in equities and in different vehicles, you cannot move like that.

ETA. In case you think I am full of BS. Here are my email confirmations. A little bit of cash on hand just let me make 8k in a week.

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View attachment 15832

It's not about whether it's in a checking account or an investment account. It's about whether it's in an asset that is earning returns or not. If you think that you can market time or stock pick, then keeping dry powder makes sense. The vast majority of people cannot market time or stock pick and outperform the S&P.