Tuesday, October 7, 2008

Trying Hard NOT to Hyperventilate

I knew better than to look, but it's kinda like being ordered NOT to think of a pink elephant--once someone brings it up, you just can't help yourself. Pink elephants are ALL you can think about.


I looked.

There were my retirement funds: the ones that were at $174,518 last October; the ones where I've been contributing an additional $1000+ every single month since then;

And there I found my retirement funds as of yesterday: $129,626.


I just keep telling myself to stick with the program; I'm getting a bargain on purchases of my mutual funds; I've got nearly ten years until I want to retire; It will get better. It will get better.

It had dang well better get better!


Fabulously Broke said...

keep telling yourself that...

I'm pumping more money into the market myself. It's a bargain!

Shevy said...

{{{Grace}}} That's shocking.

Just keep breathing and trust that you'll have enough time to turn it around again. They say a decade is long enough, but I know it's not fun.

Living Almost Large said...

It will get better.

But remember we had a discussion about mitigating returns like this by stabilizing a portfolio with Bonds/Cash Equivalents.

I hate to point out but a year ago you told me 100% stocks was the way you wanted to play, though I pointed you to a site where 80% stocks/20% bonds has close to the same returns to 100% stocks. And the risk was a LOT lower.

I don't think now is the time to move into bonds with these losses, but perhaps it's time to redirect your funds into a more balanced portfolio.

Perhaps considering moving into an 80/20 or 75/25 mix.

Momthing1 said...

I feel your pain, Grace.

I am not doing anything foolish, like moving to cash. I am, however, considering if I want to move from 70/30 to 65/35. Since the market has made this move for me, it doesn't really require much effort on my part.

(I'd throw in a "lol" right there, but I actually don't feel much like laughing.)

Looking back, I made a lot of money by continuing to dollar cost average through 2001 and 2002. I believe that one day I will say that about 2008.

Grace. said...

LAL--I'm not ready to concede just yet. Ask me again in five years. My friends in bond funds aren't doing much better than I am these days. We all seem to be swirling the drain together, and angst is at an all-time high. But angst-ridden or not, I don't see moving to cash or bonds as the solution.

Louise said...

I'm not looking either, I figure I'm in it for another 15 years so I'll be OK, anyway last time I looked I'd lost 15% so I can only imagine what's it's lost over the last 2 weeks.
But if I get any spare cash next month I might jump in and buy some blue chip shares myself.

Living Almost Large said...

I will. I think even in 5 years you'll have underperformed a balanced 80/20 portfolio. I did not SAY compare to a 100% bond portfolio or even a 50/50% portfolio.

But we could go head to head. I am hold about 20% cash/bonds by just chance. And I might go as high as 90% stocks. But I put bonds as a stabilizer into my portfolio and I'm 29.

So I think fair 5 years comparison would be 100% stocks like you versus someone 15-25% in cash/bonds.

You need to compare what I suggested for someone like you with 10 years to retirement. I'd have played a 20-25% position in bonds personally. You'd have gone down but not as much.

Momthing1 said...


I think you are overlooking an important point: the "correct" asset allocation is going to vary from person to person.

Grace did not sell during the recent downturn. IMO, that speaks volumes about her risk tolerance and her commitment to "stay the course".

Carol said...

My brother (the same one I've talked about before) just told me that his 401k went from 210,000 to 120,000....he sounded shell-shocked.

I've been pretty conservative (compared to what the investment people think anyhow) and had about 50% in a stable value fund and about 50% in a fund that's tied to the S&P. I've lost about $5000 (went from $41,000 to $36,000. So I moved all the rest of it except about 10% into that stable value fund--I'd rather not make much additional money than flush it all down the toilet...

I know financially speaking, that's not a sound strategy, but I am the one who is going to have to live with my decisions and I don't have much money in there in the first place, let alone losing 50% or more of it!

I really feel for people who are closer to retirement than me, it's got to be financially devastating and emotionally draining, too. The numbers that people are losing are just unbelievable. But you're still doing better (retirement wise) than probably 75% of people your age...

Living Almost Large said...

We did not sell anything either. I would say my DH is one of the most aggressive investor's you'll meet. We have individual stocks in our IRAs. We still kept a chunk in bonds/cash. Not fear but rather calculated risk.

We decided we want the greatest return with the least amount of risk. Why would you want the most risk and minimal returns?



I've placed the fundadvice before. And it explains why you need bonds.