Please! Make it stop! (Stock market crash)

J

JOhnH

Touchdown! Greaser!
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I'm not broke yet, but if this slide doesn't stop, I may have to stop flying. Maybe even sell the airplane, or at least move it out of the hangar to a tie-down spot.

Last December, a friend of mine finally made the decision to retire as of Mar 31. It was a tough decision but he calculated that he should have enough of a nest egg to retire at 66. He has now lost a huge percentage of that nest egg and doesn't have the option to keep working since he has already hired and trained his replacement.
 
If you're referring to your investments, and you're not living on proceeds from them, chill. This could be a pretty sizeable "correction", but it won't last forever. Paper losses right now are nothing but accounting reports. If you have any discretionary cash, instead of worrying so much, do some bargain shopping.
 
For cryng out loud, Close the stock market for a cooling off period!!! They are closing everything else, they closed it during 9/11!!
 
snglecoil said:
Maybe this will bring some sanity back to the used airplane market. I mean 80k for a ‘68 Skyhawk with an original VFR panel and 2300 SMOH...yeah that seems reasonable :loco:
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Yeah, those are the kinds of prices I've seen for 172s, too. It's bizarre. You can buy a better equipped/maintained 182 for less than the price of a 172.
 
write-stuff said:
If you're referring to your investments, and you're not living on proceeds from them, chill. This could be a pretty sizeable "correction", but it won't last forever. Paper losses right now are nothing but accounting reports. If you have any discretionary cash, instead of worrying so much, do some bargain shopping.
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That advice is probably good, but it is much easier for someone with a stable income to live with. It is tougher for retired or retiring people. I asked my financial advisor about using some spare cash to buy stocks that have seen big (temporary) reductions. He said I have enough equity exposure and pointed out that even if I used $40k cash and saw a 25% profit, that would only amount to $10k before taxes. That would be nice, but not life changing and not guaranteed and would probably not offset the comfort of having that $40k cash for an emergency, or everyday living expenses.

Also, I recently read a theory that when this scare is over, there will be a lot of pent-up demand and the recovery should be almost as robust as the downturn. I just hope that happens in months, not years.
 
JOhnH said:
That advice is probably good, but it is much easier for someone with a stable income to live with. It is tougher for retired or retiring people. I asked my financial advisor about using some spare cash to buy stocks that have seen big (temporary) reductions. He said I have enough equity exposure and pointed out that even if I used $40k cash and saw a 25% profit, that would only amount to $10k before taxes. That would be nice, but not life changing and not guaranteed and would probably not offset the comfort of having that $40k cash for an emergency, or everyday living expenses.

Also, I recently read a theory that when this scare is over, there will be a lot of pent-up demand and the recovery should be almost as robust as the downturn. I just hope that happens in months, not years.
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But as long as you don't need to sell low in order to cover your expenses, you should be OK. That's why they tell you to keep a cash reserve. Look how many times stocks have crashed, then recovered. I'm saying this as someone who I think is about the same age and has been retired for almost 3 years.
 
I'm 62 and retired, when my 401K suffered an 8% drop at the end of February, I moved all of my accounts into cash equivalent positions. I wasn't going to watch them fall further.

Since then, those accounts have lost another 15%.
 
write-stuff said:
Yeah, those are the kinds of prices I've seen for 172s, too. It's bizarre. You can buy a better equipped/maintained 182 for less than the price of a 172.
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Oh, wow. You are right. I was looking in the other direction...for less capable models, but there are some very well equipped 182s out there that look like relative steals compared to the trainer market.
 
snglecoil said:
Oh, wow. You are right. I was looking in the other direction...for less capable models, but there are some very well equipped 182s out there that look like relative steals compared to the trainer market.
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You can get an equally equipped Warrior or Archer for half what you'd have to pay for 172 these days.
 
I’m decades away from retirement, but it’s still tough to watch the changes in my account and not make rash decisions. The human brain is a funny thing.
 
write-stuff said:
You can get an equally equipped Warrior or Archer for half what you'd have to pay for 172 these days.
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Good luck! :thumbsup: I had several students just spend over a year looking for a modestly equipped Warrior/Archer/Dakota that was less than $100k. If you found one, you better show up cash in hand within 24/48 hours, because they were gone!
 
I was, and still am, planning to retire "real soon now". Until last week we had pretty much been at our target number. That's all changed. So I can keep working for a while, and that was all part of the plan, or if my company closes down and I get laid off then I guess that's the beginning of my retirement. The 401s and IRAs will come back, some day.
 
midwestpa24 said:
Good luck! :thumbsup: I had several students just spend over a year looking for a modestly equipped Warrior/Archer/Dakota that was less than $100k. If you found one, you better show up cash in hand within 24/48 hours, because they were gone!
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Could be. I was looking at some about a month ago and found a number of them. But maybe it was just my lucky day.
 
Don't believe it is time to abandon all hope... that being said, it probably depends on each persons situation, there isn't a one-size-fits-all answer. Since so much of stock pricing is emotional and based on uncertainty (and there is lots of uncertainty) waiting this out is IMHO, the best option at the moment. If one is retired and their income is derived from fixed payout instruments (social security, pensions, fixed-rate securities), they are more likely to weather this out, particularly if they have a decent cash cushion. If they are dependent on using the investments principal as income, that is a very different situation and I can understand bailing to cash.

So long as the electricity stays on and the trucks keep rolling to the supermarkets, suspect most of us will be fine. For those living paycheck to paycheck, that will be more difficult.
 
write-stuff said:
If you're referring to your investments, and you're not living on proceeds from them, chill. This could be a pretty sizeable "correction", but it won't last forever. Paper losses right now are nothing but accounting reports. If you have any discretionary cash, instead of worrying so much, do some bargain shopping.
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I watched people in '87, and '08, who panicked and sold into the market losses. I asked them why they needed to sell and take the loss. Both times they said they felt the markets had changed forever, and they'd never again trust stocks and bonds. Maybe this time is different. If it is, we'll all be more worried about what's in our pantry and in our safes, then what's in our brokerage accounts.

I started keeping a bit of cash in case the ATMs go down in a blaze of cyber warfare. I'm thinking now, I'll keep 10 or 20 gallons of Zero-E gasoline as well. But, I'm not really planning on doing anything other than working my plan as far as retirement investments go.
 
write-stuff said:
Could be. I was looking at some about a month ago and found a number of them. But maybe it was just my lucky day.
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There were also a few that have been on the market for a long, long time, because they are basket cases once you look into them. Some even had shiny new paint jobs and/or interiors and looked good from 100 feet away.
 
Gary said:
So long as the electricity stays on and the trucks keep rolling to the supermarkets, suspect most of us will be fine. For those living paycheck to paycheck, that will be more difficult.
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I agree, Gary. We should probably look to the dot.com burst and the mortgage-meltdown episodes as models. It could be really bad after the biological issue is over. But it will recover at some point. History has shown that it might take a couple of years to reverse the negative inertia, but it will turn back around.
 
The markets are motivated by 2 things. Fear and greed.

This is true now, it was true in the depression, it was true in 2008.

The markets have recovered every time.

Most financial advisors will tell you the same story.

"I had a client pull out when the market started tanking. Moved all his assets to cash. When it (the market) started going up again, he reinvested. He missed a great deal of wealth building while he was in cash... He would have done much better staying in."

They all tell the same story, because like most clichés it is true, at least on average.

My flying account IS in cash... But I invested that money and made a guaranteed 15% because it was an ESOP.

My other account is invested in one stock. I'm making about 1-2% every day. Compounded. I day trade the stock.

I have to pay attention to it daily, but even in a volatile market, in a volatile sector, it's still working for me

You may not have the ability to do that in your portfolio. But you should be able to move it, penalty free, into an account you can monitor and change the diversity in. And since you (like me) are retired, you have the time to do that.

Good night and good luck.

fly to the scene of the incident, or be recovered at the scene of the tragedy
 
Let it crash. I was on side lines and waiting on more bargains.
 
write-stuff said:
I agree, Gary. We should probably look to the dot.com burst and the mortgage-meltdown episodes as models. It could be really bad after the biological issue is over. But it will recover at some point. History has shown that it might take a couple of years to reverse the negative inertia, but it will turn back around.
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Agreed. Once this initial hysteria is over, and people realize that they can still get milk & eggs, much of this hoarding behavior will subside. Downturns tend to be sudden and drastic, recoveries take years.
 
write-stuff said:
I agree, Gary. We should probably look to the dot.com burst and the mortgage-meltdown episodes as models. It could be really bad after the biological issue is over. But it will recover at some point. History has shown that it might take a couple of years to reverse the negative inertia, but it will turn back around.
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I’m surprised that the gold price is tanking, too. Usually rises as the market dives.
 
murphey said:
I’m surprised that the gold price is tanking, too. Usually rises as the market dives.
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People selling gold for cash, or to cover stock losses... Silver is down too .. most commodities, down.

fly to the scene of the incident, or be recovered at the scene of the tragedy
 
murphey said:
I’m surprised that the gold price is tanking, too.
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It's not,, we are in at 35 dollar for a lot of the gold we hold.
gold is a long term investment you can't think of it any other way.
 
Clip4 said:
Let it crash. I was on side lines and waiting on more bargains.
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Exactly. I teach an Adult-Ed investing class and I tell students who are in the accumulation phase to rejoice when there are market declines. Everything is on sale.

For those who are paying a significant portion of their living expenses from their portfolios it is a little more complex. As long as they have a good asset allocation between equities and fixed income, they just need to draw from the fixed income side until equities recover. Which they always have.
 
Tom-D said:
It's not,, we are in at 35 dollar for a lot of the gold we hold.
gold is a long term investment you can't think of it any other way.
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Tom, what'd you do buy it the moment it became legal... That $price was decades ago.

Here's the thing... How do you break down gold to barter for TP or potatoes... Or anything...

Junk silver is a good idea with barter-able denominations....

A silver dollar worth ~$12-15 (+-) a dime worth $1/10th if that, etc

fly to the scene of the incident, or be recovered at the scene of the tragedy
 
CharlieD3 said:
Tom, what'd you do buy it the moment it became legal... That $price was decades ago.
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much of the gold we hold was inherited, some was bought as raw gold, (button gold)
we sold some as dental material.
there are other ways to trade gold.
 
I can tell you, that when the s*** truly hits the fan, cash, gold, etc. is worthless. If you can eat it or drink it, it doesn't matter. In the immediate aftermath of Katrina, cash was worthless, but you could buy a car with beer. Hopefully any times like that are short lived though.
 
midwestpa24 said:
I can tell you, that when the s*** truly hits the fan, cash, gold, etc. is worthless. If you can eat it or drink it, it doesn't matter. In the immediate aftermath of Katrina, cash was worthless, but you could buy a car with beer. Hopefully any times like that are short lived though.
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But, long term, you have to have something that is universally trade-able. In the immediate, yeah food, gas, beer... But long term... Precious metals in small, recognizable units makes more sense...

That and KNOWLEDGE.

Knowing how to fix, build, grow, butcher, etc. Will be extremely valuable.

fly to the scene of the incident, or be recovered at the scene of the tragedy
 
kayoh190 said:
I’m decades away from retirement, but it’s still tough to watch the changes in my account and not make rash decisions. The human brain is a funny thing.
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You're looking at it wrong. You are still adding money, so you need to see it as getting more (much more) for your dollar today. It matters where the market will be when you retire compared to when you started and not so much where it is now compared to last month.
 
I'm really not concerned about this. Why:

1) I'm a few decades away from retirement, things will bounce back and putting money in while it's lower is the best thing I can do for retirement
2) I always keep a level of cash reserves - which is just good practice to do
3) If things truly go to hell (which I am not at all expecting to happen), suddenly my bulldozer and tractors sound like good things to have :)
 
CharlieD3 said:
But, long term, you have to have something that is universally trade-able. In the immediate, yeah food, gas, beer... But long term... Precious metals in small, recognizable units makes more sense...

That and KNOWLEDGE.

Knowing how to fix, build, grow, butcher, etc. Will be extremely valuable.

fly to the scene of the incident, or be recovered at the scene of the tragedy
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Lucifer's Hammer, by Niven and Pournelle

A comet hits earth. Because there were several weeks to prepare, one of the characters took all the medical books, first aid books, Boy Scout Handbook, civil engineering books, reference books, and any other information source he could get his hands on and sealed it up and put it in a safe space. As soon as the atmospheric disruption subsided enough, he was able to recover those books.

Communities were formed and perimeters/borders were enforced. If you could contribute something to the community you were let in, otherwise you had to stay out in the roving bands of...whatever. Anyone who could build, grow, maintain, or repair food, things, or other people were in high demand.

It's been said the Dark Ages are when you don't just forget how to do something, it's when you forget that you ever knew how to do it in the first place. I think we are a long way from entering a new Dark Age.
 
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Three decades ago there was a crash on a Friday the 13th. One of our people had millions in the stock market, and people were talking about how much money he lost. He said that he'd not lost a thing, only the idiots selling were losers. He bought more stock, at a low. He did very, very well.
Patience is a virtue.
 
Matthew said:
Lucifer's Hammer, by Niven and Pournelle

A comet hits earth. Because there were several weeks to prepare, one of the characters took all the medical books, first aid books, Boy Scout Handbook, civil engineering books, reference books, and any other information source he could get his hands on and sealed it up and put it in a safe space. As soon as the atmospheric disruption subsided enough, he was able to recover those books.
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<--- rummaging through my desk for an empty USB drive...
 
asicer said:
You're looking at it wrong. You are still adding money, so you need to see it as getting more (much more) for your dollar today. It matters where the market will be when you retire compared to when you started and not so much where it is now compared to last month.
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Oh I’m well aware - that was the point of my post. I find it funny that my understanding of the situation doesn’t make it feel any better when I see my account balance, and there’s still that little voice back there saying “Run! Rebalance!”
 
asicer said:
You're looking at it wrong. You are still adding money, so you need to see it as getting more (much more) for your dollar today. It matters where the market will be when you retire compared to when you started and not so much where it is now compared to last month.
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except if you are we’re ready to retire, you aren’t. And probably not going to be able to for the next 7 years.
 
kayoh190 said:
Oh I’m well aware - that was the point of my post. I find it funny that my understanding of the situation doesn’t make it feel any better when I see my account balance, and there’s still that little voice back there saying “Run! Rebalance!”
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I guess my brain is just wired different.
 
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