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NSNP: Market "crash"

And for some historical perspective on this... Corrections mean down 10% from high.
“There have been 26 market corrections (not including today) since World War II with an average decline of 13.7%. Recoveries have taken four months on average.”

bear markets (-20%) typically last longer and take longer to recover (about 13mo)

www.cnbc.com

Here's how long stock market corrections last and how bad they can get

Here's what you need to know about how long and how severe the typical correction tends to be, according to CNBC and Goldman Sachs analysis.
www.cnbc.com www.cnbc.com
 
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I wish I had the knowledge to get into investing. I'm a AL state employee so, the state retirement plan is all I have. Plus, we live paycheck to paycheck so don't really have extra funds. Anytime I try and understand the markets and investing, it all just feels so over whelming.

Man, if we could get our credit card debt paid off one day, we'd have some extra cash. I preach to my kids that when they get older to never get a credit card because it will only get you in trouble. My wife and I are still trying to climb out of that hole.
 
CrimsonNagus said:
I wish I had the knowledge to get into investing. I'm a AL state employee so, the state retirement plan is all I have. Plus, we live paycheck to paycheck so don't really have extra funds. Anytime I try and understand the markets and investing, it all just feels so over whelming.

Man, if we could get our credit card debt paid off one day, we'd have some extra cash. I preach to my kids that when they get older to never get a credit card because it will only get you in trouble. My wife and I are still trying to climb out of that hole.
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My advice - when you get the extra income, invest in index funds. Keep it simple. Don't try individual stocks. Become an expert at the trade for which you are paid and let the financial experts help you manage your investments.

We can't be an expert an everything, and you want an expert managing this stuff.
 
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B1GTide said:
My advice - when you get the extra income, invest in index funds. Keep it simple. Don't try individual stocks. Become an expert at the trade for which you are paid and let the financial experts help you manage your investments.

We can't be an expert an everything, and you want an expert managing this stuff.
Click to expand...
we broke down and got a financial adviser a couple of years ago and it has really helped us get everything in order.

we've been debt-free aside from our mortgage for several years now and we are within a couple of years of having the mortgage paid. 🤞
 
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CrimsonNagus said:
I wish I had the knowledge to get into investing. I'm a AL state employee so, the state retirement plan is all I have. Plus, we live paycheck to paycheck so don't really have extra funds. Anytime I try and understand the markets and investing, it all just feels so over whelming.

Man, if we could get our credit card debt paid off one day, we'd have some extra cash. I preach to my kids that when they get older to never get a credit card because it will only get you in trouble. My wife and I are still trying to climb out of that hole.
Click to expand...

Been there! Keep it simple (as noted by B1GTide) and trim wherever possible as often as necessary.

Some tips:
  • Renegotiate any "I want it" things (i.e. cable/Directv, internet, etc etc etc plus natural gas rates, utilities, yardwork, etc.) that you pay for that you know could be lower. I've saved THOUSANDS over the last few years by making a few simple phone calls each year and resolving to cancel if they don't come down on price.
  • Unfortunately, credit cards are useful if you a) never use them or b) only use them like you would a check card (you pay via card, get the 1-2% cashback, and pay off immediately).
  • Create a side hustle and use any income produced to pay off the cards.
  • Once you get that handled, if you do have a side hustle you could actually create your own Solo 401k with generated income. (This is more of a "pro tip", but let it motivate you to start that side hustle using your God-given talents!)
For investing for retirement, start here : https://www.etf.com/docs/IfYouCan.pdf

...and then read everything below. Re-read until it starts to make sense and/or you can start to take action !
  1. https://news.tidefans.com/invest-for-retirement/
  2. https://www.bogleheads.org/wiki/Getting_started
  3. https://news.tidefans.com/investing-resources/
If you do go the financial adviser route, get an hourly-rate / fee-only one that doesn't take a % out of your investments. A financial planner may be more useful.

If I had enacted what I'm espousing here when I first started working 25 years ago, man...
 
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Down 11%+ for the week so far. The problem is that China is shut down so they’re not buying anything and manufacturing there is at a halt so will impact US companies who produce there.

China was already having problems so this has exacerbated it. Europe is jittery from Italy.

Good news is that my 403b/457 transfers deposited today. So bought 10% cheaper than if I had been paid last week :)

We may even be in for another 5-10% drop from here. Lots of folks having to sell to cover their bets. I'm long-term everything (ALL total market index / total bond mkt index / total int’l index) so I don't worry much about intermittent drops. I sleep well at night.
 
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BamaNation said:
Down 11%+ for the week so far. The problem is that China is shut down so they’re not buying anything and manufacturing there is at a halt so will impact US companies who produce there.

China was already having problems so this has exacerbated it. Europe is jittery from Italy.

Good news is that my 403b/457 transfers deposited today. So bought 10% cheaper than if I had been paid last week :)

We may even be in for another 5-10% drop from here. Lots of folks having to sell to cover their bets. I'm long-term everything (ALL total market index / total bond mkt index / total int’l index) so I don't worry much about intermittent drops. I sleep well at night.
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interestingly enough, I'm loading a lot of oranges to china starting this week. we haven't shipped oranges there since 2016
 
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BamaNation said:
Been there! Keep it simple (as noted by B1GTide) and trim wherever possible as often as necessary.

Some tips:
  • Renegotiate any "I want it" things (i.e. cable/Directv, internet, etc etc etc plus natural gas rates, utilities, yardwork, etc.) that you pay for that you know could be lower. I've saved THOUSANDS over the last few years by making a few simple phone calls each year and resolving to cancel if they don't come down on price.
  • Unfortunately, credit cards are useful if you a) never use them or b) only use them like you would a check card (you pay via card, get the 1-2% cashback, and pay off immediately).
  • Create a side hustle and use any income produced to pay off the cards.
  • Once you get that handled, if you do have a side hustle you could actually create your own Solo 401k with generated income. (This is more of a "pro tip", but let it motivate you to start that side hustle using your God-given talents!)
For investing for retirement, start here : https://www.etf.com/docs/IfYouCan.pdf

...and then read everything below. Re-read until it starts to make sense and/or you can start to take action !
  1. https://news.tidefans.com/invest-for-retirement/
  2. https://www.bogleheads.org/wiki/Getting_started
  3. https://news.tidefans.com/investing-resources/
If you do go the financial adviser route, get an hourly-rate / fee-only one that doesn't take a % out of your investments. A financial planner may be more useful.

If I had enacted what I'm espousing here when I first started working 25 years ago, man...
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After the recession and I nearly ended up homeless, I learned to do without extras. Before I buy something now I ask myself do I need this or do I just want it? I had done away with credit cards and if I did not have the cash to buy something, I didn't. I still wasn't saving properly. It took getting hit by a car to really wake me up. I decided to take that money and invest. I have a Roth, Mutual Funds, and other investments. I will have a 401k in October and my company will contribute 100% match. I really wish I had been smarter in my 20's. Retirement just never occurred to me. Who knew getting hit by a car would actually turn out to be a good thing?
 
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Looks like it may be another bad day. Futures for todays open are down about 1% and Stoxx 600 is down by 3%. Not sure whether to take RMD now or wait.
 
Bamaro said:
Looks like it may be another bad day. Futures for todays open are down about 1% and Stoxx 600 is down by 3%. Not sure whether to take RMD now or wait.
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These are the questions that get tough. In accumulation stage, the usual advice is keep investing regardless of what's happening in the market. In the decumulation / retirement phase, consideration has to be made about when to take the payout in a falling market b/c you're selling.

Here's some pretty good discussion of the issue & an article by Christine Benz that might help you and provide clarity:


You might also think about a Roth conversion if it works for your situation.
 
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BamaNation said:
These are the questions that get tough. In accumulation stage, the usual advice is keep investing regardless of what's happening in the market. In the decumulation / retirement phase, consideration has to be made about when to take the payout in a falling market b/c you're selling.

Here's some pretty good discussion of the issue & an article by Christine Benz that might help you and provide clarity:


You might also think about a Roth conversion if it works for your situation.
Click to expand...
Yeah, I disagree with that and can show where my disagreement has made me a lot of money in the last 2 recessions. Aside from 401k contributions, which come with a company match, I hold off on additional investments until the market settles.

In other words, I don't pull money out, but (aside from 401k), I hold my money on the sidelines until markets begin to recover. That can take anywhere from a few months to a few years. Then I move that money into the markets, buying low.

ETA - this is only an advantage if you truly set that money aside and don't touch it. If you might spend it, invest and let it ride. Better to suffer some losses than waste the money altogether.
 
B1GTide said:
Yeah, I disagree with that and can show where my disagreement has made me a lot of money in the last 2 recessions. Aside from 401k contributions, which come with a company match, I hold off on additional investments until the market settles.

In other words, I don't pull money out, but (aside from 401k), I hold my money on the sidelines until markets begin to recover. That can take anywhere from a few months to a few years. Then I move that money into the markets, buying low.

ETA - this is only an advantage if you truly set that money aside and don't touch it. If you might spend it, invest and let it ride. Better to suffer some losses than waste the money altogether.
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Yeah, for most people behavioral economics come into play. I.e. Most of us aren't able to be disciplined, follow a plan, not do stupid stuff, etc. ... and tend make very poor timing decisions (sell at lows / buy at highs)

On bogleheads, there are plenty of new posters who have been sitting on $100K - $1MM that they cashed out in 2008 at lows and put in the bank and have been waiting for another crash. Meanwhile, the market is up 200% and inflation has eaten away at their bank savings because they never could pull the trigger on getting back in.
 
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NationalTitles17 said:
This is going to turn into a bear market - bad for the short term, little effect on the long term. Maybe.
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Focusing on your maybe! If we go down the rabbit hole of potential outcomes to a global pandemic it can become very bleak from a worse case economic impact standpoint. Sort of obvious this fear is what is driving a market that has been running on excessive stimulus for a long while. The hedgies have been short this very overbought market and now watch the mutual funds head for the exits to cover redemption's. Difficult to say when it will be safe to get back in the water but hopefully that day is out there somewhere otherwise we will all feel some pain.
 
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