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If you've followed the markets since 2/19/2020 right before this Covid-19 virus ramped up, what are you doing?

Not to get political please.

The FED lowered the rate for huge Corp to borrow money. So what do the markets do??? Today was the biggest drop in the markets since 1987.
Just today my retirement funds dropped $45,000. But in these last 4 weeks they dropped 38%. If I had 1 Million Dollars, the market wadded up $380,000 and tossed it.
So, IF I were to panic and draw all my Traditional IRA out, the IRS would hit me for another 37% or $229,400 in taxes. So $380K + $229.4K means I'd lost $609,400 of my $1,000,000. I can now spend the $390,600 on what ever I want. I just hide it under my mattress.

I have to ride the market out. Can only hope this bucking bronco does not ride into the ground, dead.
 

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At 67, I am holding pat. I have 20% in the market 20% real estate and 60% cash (20 yr. reserve). I am down to 2016 level. That being said, from 2010 - 2020 I made 6% per year average, this is including all the crashes including today. Hopefully it will be back up in 2-4 years.

The market for me is more for "play money" and like gambling, I don't invest what I cannot afford to lose. I don't plan on using until 10 yrs. down the road. It is all IRA money that I use to convert to a Roth IRA. As the value goes down, I get the benefit of converting more for less tax implications. In 4 years I will do the same for my wife.

I don't look for pie in the sky money, and my average portfolio with the cash is an honest 3%.

One quick and maybe dumb question. Where does the money go?
 

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I am staying in the market. Lost a lost of money, but it is only a number on a screen right now. If I withdraw it, the loss is permanent. I am almost 70.
 

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If you were going to get out the time would have been mid February. To late now.

If you are a long term investor the best thing to do is ride it out and wait for it to come back up on the other side. No safe havens to move it to anyway. Even Gold and Bitcoin are down. Only thing not down is cash.
I had my investments pretty well diversified so I will just hang in. I was a little heavy in stocks and planned to re-balance but didn't get it done before the drop. So I lost a little more than I should have. Oh well the market drop took care of re-balancing for me.
 

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Markets are, as said, just a number... until you sell. Then, and only then, is it a realized loss.
I'm mostly holding and looking forward to history repeating itself, as it always seems to do even with investing in the markets.
The numbers say I've lost (correction) $125,000 since the end of January in just one of my accounts. We have a few accounts but this one is the biggest account... still. If I just let it ride for a while then I'll loose nothing when the markets recover.

I'm set up right now with a State pension for me AND my wife as well as my military pension. Those currently satisfy all our expenses with a little left over so I don't have need to use any of our invested money. These are all defined benefit plans so won't change down from where they are now. The worst that may happen at this time is that they won't go up for COLA either. Haven't started SSA benefits yet (other than Medicare that starts real soon).

But a few weeks ago I did actually buy more shares of my 3 best performing mutual funds, just a little more. Those are down from then right now but I'll see the benefit when the markets recover. And they will recover. Every Bear Market or recession in history has lasted somewhere between 8 months to 22 months before they turn around and start climbing in a Bull Market. The last great recession was from end of 2007 to March 2009, about 1.5 years. And that was a longer one possibly due to being a bigger one. I have intention of waiting for conditions to plateau at the bottom, when the markets fluctuate wildly up and down about 4-5% but average stays the same. If it does that for a few weeks, or even a month or two then a turn around is coming providing no other catastrophe happens. I plan to invest even more as the climb starts out of the pit. Not wanting to get political (either) it does seem historically that when a certain party looks to take over the markets drop or under perform and when the other party looks to become dominant the markets climb faster or over perform. Just how it has happened. Listened to a webinar by one of the companies we have investments with today. They are looking for an end to the Bear Market sometime close to this fall. Maybe the bottom will hit sometime around Memorial Day. But they also stress a "wait and see" attitude.
 
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Discussion Starter #7
All those $1 and $5 under the mattress makes it lumpy anyway.
 

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Well, I'm about 18 months away from retirement. So for now, I'm going to stand pat on my investments even though in the last month I'm down $100k. Ya, it hurts and might go even lower, but if I sell or move out of my investments, not only do I lock the loss in, but if I convert to cash I may have to pay taxes on some of that conversion.
Now I'm lucky in a way. If I choose to, I could continue working longer to give the market more time to recover. I sure as hell don't want to do that, but it's an option.
Also lucky is that I have a modest, Defined Benefit Pension Plan. That coupled with our Canada Pension Plan and Old Age Security (similar to your US Social Security) will meet my minimum monthly needs but not much left over. My investments were my "mad money" for my retirement years, travel, new motorcycle, etc. But not absolutely necessary for retirement.
Also, if you figure your retirement nest-egg is going to last say 25 years, you really only need 1/25th of your savings for year one of your retirement. So even if the market is not fully recovered by the time I decide to hang up the 9-5, as long as it's moving towards recovery that's ok.
If in 18 - 24 months it's not moved upwards at all.... or is still losing, then I'm buying a fishing rod and that's how I'll have to get my food!!!! Look for me in the tent down by the river.
 

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I had my 401K in a safe harbor fund. Last Wed. when the market entered Bear territory being 20% lower, I thought there would be a dead cat bounce on Thursday from the wild swings in the market and I might make 2-3% and pull it out that evening. Well Thursday I lost 9% of my 401k. Largest one day loss in points ever for the Dow. Boy did I feel bad. Real bad timing. ?

But Friday it went up 8%. So I'm down 1.05% for the year. If I would have waited to Friday I would have done well. I almost went in today again after the 13% Dow drop but I think the market would stay flat or a little negative tomorrow. Futures are up right now but all I'm hearing is bad news.

If you have funds outside of the market wait. Housing is going to tumble next. Most families are living from paycheck to paycheck with a huge amount of debt. It's the American way.
 

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I invested a large amount of my cash reserves in refreshing beverages, kinda hard to move around the house right now, but they're easy to reach.
 

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I’m not a gambler and never learned anything about the world of stocks and shares so never entered into it.

Is there anything to stop it dropping twice as much as it has already?
 

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I’m not a gambler and never learned anything about the world of stocks and shares so never entered into it.

Is there anything to stop it dropping twice as much as it has already?
Think 1929 stock market crash combined with the 1918 pandemic.

 
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No, nothing to stop it from dropping more. But there are a LOT of factors that affect what the markets do that the experts look at. Any of those factors can change. Even the crash of 1929 ended in a few years and the markets resumed their upward climb for many years after that. The factors in place today indicate, for the USA at least, there is a stronger economy than in many past recessions even though not as strong as a few months ago. Financial experts don't yet call this a recession in this country... yet. One factor is GDP. That is expected to be near zero this quarter. If it goes below zero for 2 or more quarters that's what will mark it as a recession. I would expect GDP to be the same or maybe lower next quarter but it will depend on a lot of other factors what happens after that. I think I mentioned before... history shows the general trends of the market cycles and there is nothing that has happened yet to indicate anything different this time. Bear markets have always been much shorter lived than Bull markets.

My grandfather (mother's side) was an engineer, but was also very heavily into investing and knowing about investing. Even the local "expert" in a big name investment firm would sometimes come to HIM for advice. He tried to teach my dad but he just didn't pick it up as much as my grandfather was into it even though my dad was a math teacher (secondary major in college, teaching high school PE was his primary major). After my grandfather passed my dad did pick up with investing since part of that inheritance was invested. He even started up and lead a few independent investors clubs for the purpose of learning more himself. I started picking up bits and pieces from him. When my father passed 16 years ago he was just starting to close out those investment clubs. Since he was in charge of them he was responsible to manage the tax information for them and produce and send out the IRS forms (Federal forms 1099) to all the members. He died in early March without finishing that work so I had to learn fast and produce all the tax forms and send them out. I was envisioning the IRS authorities paying me a visit that year for incorrect reporting resulting in a massive audit. I guess I did OK after all or maybe the IRS just passed me by (yeah, right). So now I'm continuing that trend in the family. I credit investing as wisely as I know how with creating enough to retire without the need for added income and also have plenty to pass on to my kids. Some years I have made more investing than my income from work brought in. Making my money work for me rather than the other way around (me working for my money). I mostly keep to mutual funds simply because I don't want to be tied to watching the markets every minute. I also like a few bonds and high interest CDs (utilities and municipal as well as government bonds) just to offset times like this. The last many weeks my bonds have been doing really well. I did have a few stocks many years ago and sold those in favor of the funds. At least one fund is an index fund which actually performs slightly better than the index it is based on. I prefer to let the fund managers do their job of buying and selling stocks within the fund based on their expertise and access to information I don't have.
 

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Thanks for taking time to answer my question gents.

Presumably the danger is that once investment becomes worth significantly less than cash just left in the bank then people want to take it out but the bank can’t provide it and you have the ‘30s situation.
(not trying to spread fear, I just don’t understand how it works/worst case scenario)
 

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Discussion Starter #16
You have to remember, until you cash out your market shares, it is only a loss on paper, in most cases. The only way that it becomes a true loss is if one of the stocks your funds are spread around in goes to $0 in value. This has happened to some companies in the past.

I am 80% in Mutual Funds, 5% in Gov Bonds, 15% Annuity's. The Gov bonds are averaging 5% growth. The Annuity is locked at 3% growth, no more or no less so a stable place.

Now the Mutual Funds have from 2009 till Feb 2020 had growths between 15% and 70%. Back in 1987 my funds lost 80% in two days and was so fast no one could react. I lost almost $120K... A couple funds went to near 0 and never recovered and were washed out. But from later in1988 till 2008 they went back up in the 15% ranges +/- 10% fluctuation. So I had recovered that loss plus some gains. Again in 2008 the markets tummbled but we did have some time to move from Mutual Funds to the more stable Money Market funds. In that slump I lost around $65K but the Money Markets recovered maybe $25K of that in the 1.5 years I held them. In 2010 I had moved my money back into Mutual Funds and they have grown well till last month. Again Feb 20,2020 everything was moving upwards, by Feb 24th...... 38% losses so far. :(

Now if you are basing your retirement on Day Trading stocks..... I hope you're smarter that most pro's out there. Too much stress.
 
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I am 80% in Mutual Funds, 5% in Gov Bonds, 15% Annuity's...
Now I know how people feel when I go off on a technical excursion :)
(but I get the gist, it’s Schrödinger's cat but with money, It doesn’t matter what happens in the box, only what’s there when you open it).

I’ll stop cluttering the thread and let you guys crack on.
 

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This could be a bit hard to explain how the different types of funds work. It all matters on how conservative or aggressive you need to be. For most novices investors its best to let them do a Financial Needs Assessment (FNA) to see where you need to be. Then following their guidelines based on your FNA you pick some place to put your monies. If you need to be conservative then the Money Markets may be better. ;)

Back in 1982 I was offered a job teaching this stuff to some mid level fund managers in Germany . I knew more than them but I was still in the ARMY and did not want to get out.
 

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This drop is nothing like the 1929 stock market crash. The underlying market and financial system is in much better health than it was then. Also practices like margin buying that contributed to the 29 crash are no longer allowed. Banks are in good shape and in no danger of closing their doors like in 29.

This one is triggered by primarily two things. It started with the oil price war between Russia and Saudi Arabia and fears of the long term impacts of that. If it goes on for very long small oil producers could be driven to bankruptcy. That in turn cascades down to all the businesses that provide support to that industry and the people who work in it. Bigger producers should weather it OK. That drop was not huge but then it was exacerbated by fears of what the pandemic will do to the economy. In the short run it will at least put a big dent in cash flow and affect earnings for a couple of quarters. As long as the duration of the pandemic is relatively short the economy should recover in a relatively short time.

Could it get worse, sure. If it goes on longer many small businesses especially in the hospitality industry will be in danger of bankruptcy. Large businesses other than in specific areas like the cruse industry should be able to weather it for much longer as will the banking system. But just like in the oil industry when those small businesses go under there is a cascade effect that moves through the whole economy.

Best thing we can do for now is to take all measures we can to limit the spread of the virus.
 

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But LARGE Corp managers are still buying and selling Margins. That is why when the FED lowered the interest rate the market did not respond in the positive way. The money these managers owe in Margin debts are way over extended and they are just using the low rate to buy more....

I try to stay out of this level of the markets. It is way above my pay grade...
 
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