My issue with stock market bubble fears

[Anonymous]

This may have been an emotional choice but we bought an annuity to buy us some time between when we want to retire and what we assume may be a market recovery.

[Anonymous]

Anonymous wrote:In nominal terms, it took about 25 years for the market to get back after the 1929 crash. But, if inflation adjusted and if you held and kept reinvesting all the dividends, it would have taken you about 10 years to get back to whole.

2008 was much less.

There's no doubt the current market is hyper-inflated. But how it plays out is anyone's guess.

The market isn't rational. The P/E ratios are nuts. AI is clearly in a blow off top.

But I have no idea how this is going to play out. Things aren't rational. But there is a lot of money out there, and it needs someplace to go.

The market can be irrational for a long time. I'd be nervous if I was 50. And I'd be paying attention if I was 25. Waiting for the crash for the opportunities.

As an aside, I think it's nuts that we are all depending on Wall Street douchebags to be able to live when we get old.

10 years is an eternity…and very few people during the Great Depression could just hold on.

Also, could you even buy an index like the Dow back in 1929? I guess mutual funds existed, but most investing back in the day was individual stocks and many went to zero.

[Anonymous]

Anonymous wrote:

Anonymous wrote:A lot of people don't have the time to ride out a stock market correction or crash, but they also need to stay invested in the market so their investments grow enough to cover a longer than expected retirement.

The problem is mostly for the retirees who are now living off their 401ks. Someone who has to withdraw funds for living expenses during a downturn is forced to sell assets at a low point. They've got to lock in the loss and they don't get to benefit from the eventual recovery.

I'm GenX, so I didn't care much in 2000, 2008, etc. because I had plenty of time before I needed that money. But now I'm getting closer to retiring and hoping that when we have a correction (or a crash), I'll still have time for the market to recover before I need to use that money.

Ageism in the job market is very real. If I lose my job in the next couple of years, I fully understand that I'll be getting a job at a much lower salary, if I get one at all. So that 401k money becomes even more important to me.

That's the problem. At least it is for me. I mean, just take a look at the average and median 401k amounts for people in their 50s and 60s, and you'll see why they fear a crash.

This.

Yes, and honestly? It's quite something that supposedly market-savvy people need to be told this.

Over the long run, the market is great. But the long run is much longer when you're 40 than it is when you're 64.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lot of people don't have the time to ride out a stock market correction or crash, but they also need to stay invested in the market so their investments grow enough to cover a longer than expected retirement.

The problem is mostly for the retirees who are now living off their 401ks. Someone who has to withdraw funds for living expenses during a downturn is forced to sell assets at a low point. They've got to lock in the loss and they don't get to benefit from the eventual recovery.

I'm GenX, so I didn't care much in 2000, 2008, etc. because I had plenty of time before I needed that money. But now I'm getting closer to retiring and hoping that when we have a correction (or a crash), I'll still have time for the market to recover before I need to use that money.

Ageism in the job market is very real. If I lose my job in the next couple of years, I fully understand that I'll be getting a job at a much lower salary, if I get one at all. So that 401k money becomes even more important to me.

That's the problem. At least it is for me. I mean, just take a look at the average and median 401k amounts for people in their 50s and 60s, and you'll see why they fear a crash.

This.

But if you’re Gen X don’t you still have time? And haven’t you been benefiting from the strong bull market in recent years?

I'm an old Gen X, born in 1966. I'm 59 and feel very strongly that I am running out of time.

[Anonymous]

Anonymous wrote:A lot of people don't have the time to ride out a stock market correction or crash, but they also need to stay invested in the market so their investments grow enough to cover a longer than expected retirement.

The problem is mostly for the retirees who are now living off their 401ks. Someone who has to withdraw funds for living expenses during a downturn is forced to sell assets at a low point. They've got to lock in the loss and they don't get to benefit from the eventual recovery.

I'm GenX, so I didn't care much in 2000, 2008, etc. because I had plenty of time before I needed that money. But now I'm getting closer to retiring and hoping that when we have a correction (or a crash), I'll still have time for the market to recover before I need to use that money.

Ageism in the job market is very real. If I lose my job in the next couple of years, I fully understand that I'll be getting a job at a much lower salary, if I get one at all. So that 401k money becomes even more important to me.

That's the problem. At least it is for me. I mean, just take a look at the average and median 401k amounts for people in their 50s and 60s, and you'll see why they fear a crash.

100 %

I knew someone who had just retired around the 2008 crash, and he had to go back to work, though he never found anything that paid what he used to get paid. Years later, he died of cancer.

I'm also gen x and want to retire next year. If the market tanks, I won't be able to retire. Not to mention the hit on my kids' college accounts just as the youngest is starting college.

The AI bubble is a big worry. The tech stocks are a large % of the Nasdaq, and if they fall, it will hurt.

https://finance.yahoo.com/news/absolutely-a-market-bubble-wall-street-sounds-the-alarm-on-ai-driven-boom-as-investors-go-all-in-200449201.html

[Anonymous]

Anonymous wrote:In nominal terms, it took about 25 years for the market to get back after the 1929 crash. But, if inflation adjusted and if you held and kept reinvesting all the dividends, it would have taken you about 10 years to get back to whole.

Yes, and if you weren't working in 1929, or were looking to retire soon, you wouldn't have been able to hold and reinvest. You would need to withdraw, or go back to work, or keep working much longer than you intended to. Those people have a much different retirement than they were hoping for.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here and I continued to be confused. The responses along the lines of “not everyone has time” are kinda bullshit, right? I mean, the whole idea is to buy and hold, usually to ensure your retirement. So you’re supposed to start early and hold, and if you do that you can ride the ups and downs without a problem. So what am I missing?

Yes, it's BS. These people likely have at least a 20 year time horizon after they retire. Their odds of failure increase in a big way if they give in to their fears. How much money you have doesn't matter.

Who are "these people"? In 20 years, I will be 79. Should I just plan to keep working full-time until then? FFS.

[Anonymous]

Anonymous wrote:
This thread is why I'm so glad that Social Security was never privatized. Remember when George W. pushed for that in 2005? I do. I think the 2008 crash put a stop to that kind of talk, hopefully for good. Social Security benefits might not be a lot, but they are a backstop for many people and for some people they are the whole deal.

+1000

[Anonymous]

Anonymous wrote:

Anonymous wrote:A lot of people don't have the time to ride out a stock market correction or crash, but they also need to stay invested in the market so their investments grow enough to cover a longer than expected retirement.

The problem is mostly for the retirees who are now living off their 401ks. Someone who has to withdraw funds for living expenses during a downturn is forced to sell assets at a low point. They've got to lock in the loss and they don't get to benefit from the eventual recovery.

I'm GenX, so I didn't care much in 2000, 2008, etc. because I had plenty of time before I needed that money. But now I'm getting closer to retiring and hoping that when we have a correction (or a crash), I'll still have time for the market to recover before I need to use that money.

Ageism in the job market is very real. If I lose my job in the next couple of years, I fully understand that I'll be getting a job at a much lower salary, if I get one at all. So that 401k money becomes even more important to me.

That's the problem. At least it is for me. I mean, just take a look at the average and median 401k amounts for people in their 50s and 60s, and you'll see why they fear a crash.

100 %

I knew someone who had just retired around the 2008 crash, and he had to go back to work, though he never found anything that paid what he used to get paid. Years later, he died of cancer.

I'm also gen x and want to retire next year. If the market tanks, I won't be able to retire. Not to mention the hit on my kids' college accounts just as the youngest is starting college.

The AI bubble is a big worry. The tech stocks are a large % of the Nasdaq, and if they fall, it will hurt.

https://finance.yahoo.com/news/absolutely-a-market-bubble-wall-street-sounds-the-alarm-on-ai-driven-boom-as-investors-go-all-in-200449201.html

Maybe I am missing something…so why don’t you reposition your portfolio so if the market tanks you won’t take a big hit? Literally do it now.

I think what you are saying is you still need market gains for like the next 5 years even if you aren’t working.

[Anonymous]

Anonymous wrote:This fear about running out of money when you are approaching retirement is just psychological. The withdrawal rate studies have already taken into account world wars, 70's inflation, 1929, etc. What you are seeing is basically people changing their risk tolerance as they get older, which is pretty common.

The withdrawal rate studies tell us ON AVERAGE what works best. Under that average are the experiences of real people, some of whom made out like bandits, others who took it in the teeth.

The idea that everything will be fine if we all just stay in the market, keep reinvesting, and follow the advice from the withdrawal rate studies on when/how much to withdraw is fantasy. Everything will be fine ON AVERAGE. For some people, things will very much not be fine.

[Anonymous]

We have been hedging the market by pulling out the gains based on a threshold amount in our retirement accounts into a money market acct with an interest rate of close to 4%. We started doing this at least a year before we wanted to retire. My spouse retired this past year, and I will retire next year. We have now about $400K in there. I'm hoping to have at least $800K in there by the time I retire next year. It took 3 months for my account alone to reach $170K in gains, so I think it's doable.

We also have about $300K sitting in a MMA.

Our Financial Advisor said that it usually takes about 18 months from the bottom of the market to recover. The amount we saved is more than enough to cover that time period.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lot of people don't have the time to ride out a stock market correction or crash, but they also need to stay invested in the market so their investments grow enough to cover a longer than expected retirement.

The problem is mostly for the retirees who are now living off their 401ks. Someone who has to withdraw funds for living expenses during a downturn is forced to sell assets at a low point. They've got to lock in the loss and they don't get to benefit from the eventual recovery.

I'm GenX, so I didn't care much in 2000, 2008, etc. because I had plenty of time before I needed that money. But now I'm getting closer to retiring and hoping that when we have a correction (or a crash), I'll still have time for the market to recover before I need to use that money.

Ageism in the job market is very real. If I lose my job in the next couple of years, I fully understand that I'll be getting a job at a much lower salary, if I get one at all. So that 401k money becomes even more important to me.

That's the problem. At least it is for me. I mean, just take a look at the average and median 401k amounts for people in their 50s and 60s, and you'll see why they fear a crash.

100 %

I knew someone who had just retired around the 2008 crash, and he had to go back to work, though he never found anything that paid what he used to get paid. Years later, he died of cancer.

I'm also gen x and want to retire next year. If the market tanks, I won't be able to retire. Not to mention the hit on my kids' college accounts just as the youngest is starting college.

The AI bubble is a big worry. The tech stocks are a large % of the Nasdaq, and if they fall, it will hurt.

https://finance.yahoo.com/news/absolutely-a-market-bubble-wall-street-sounds-the-alarm-on-ai-driven-boom-as-investors-go-all-in-200449201.html

Maybe I am missing something…so why don’t you reposition your portfolio so if the market tanks you won’t take a big hit? Literally do it now.

I think what you are saying is you still need market gains for like the next 5 years even if you aren’t working.

I have been. See post 10/15/2025 17:27.

[Anonymous]

Anonymous wrote:We have been hedging the market by pulling out the gains based on a threshold amount in our retirement accounts into a money market acct with an interest rate of close to 4%. We started doing this at least a year before we wanted to retire. My spouse retired this past year, and I will retire next year. We have now about $400K in there. I'm hoping to have at least $800K in there by the time I retire next year. It took 3 months for my account alone to reach $170K in gains, so I think it's doable.

We also have about $300K sitting in a MMA.

Our Financial Advisor said that it usually takes about 18 months from the bottom of the market to recover. The amount we saved is more than enough to cover that time period.

To add..

This only covers our living expenses. My kid's college account would tank which would hurt because they are going to college fall 2026.

[Anonymous]

Oh for god's sake none of this is "normal" or like "history" etc...

Trump & his sycophants have said "burn it to the ground"

That is exactly what they will do.

1. great depression coming
2. Disease will take a ton of humans
3. No medical care.
4. No help from Government for food shortages etc...

Thanks MAGA you did good!

[Anonymous]

Anonymous wrote:

Anonymous wrote:This fear about running out of money when you are approaching retirement is just psychological. The withdrawal rate studies have already taken into account world wars, 70's inflation, 1929, etc. What you are seeing is basically people changing their risk tolerance as they get older, which is pretty common.

The withdrawal rate studies tell us ON AVERAGE what works best. Under that average are the experiences of real people, some of whom made out like bandits, others who took it in the teeth.

The idea that everything will be fine if we all just stay in the market, keep reinvesting, and follow the advice from the withdrawal rate studies on when/how much to withdraw is fantasy. Everything will be fine ON AVERAGE. For some people, things will very much not be fine.

Those studies taken into account the worst periods of time in recent US history. Changing your allocation to something more conservative out of fear generally doesn't go well. But you have to look at the withdrawal chart to see your odds of success. This is all the past and the future is unknown obviously. If you're scared and you think that you won't be fine, my best advice is to not quit your day job.