My issue with stock market bubble fears

[Anonymous]

Anonymous wrote:

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.

Very comforting advice to people who are 65 years old.

But anyway, it seems like you do understand the issue, you're just not worried about it because you are too young to be affected by it.

[Anonymous]

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?

People cannot control their emotions. Repeat that 100x. They call VOO going from $600 to $400 'losing money' even before they sell any. Instead of buying more, they remember what the balance used to be. Their whole attention is on the 'lost money'.
I am poor people. I don't need to sell, because I'm prepared. It doesn't take me a lot of money to survive the few years the market is down. I can always get 2 minimum wage jobs. I have never been out of job as a low income earner. This is for the person who thinks poor people sell because they are poor. They sell, because they didn't prepare and/or can't handle downturn.
Ofcourse there are people who need money because of unforeseen emergency or health reasons, but most people empty the accounts because they CANNOT handle seeing their account value go down. This is not me. I am waiting for the dip, because I went trough it in 2022. My account value went from $400k to $150k. I had just got into market for growth stocks in 2020. I took it like a champ. There was no reason to sell at $150k. I think my cost basis was ca $100k.
I had no money to buy in 2009 unfortunately, but I see how the money is made in the down market. Rich have cash to deploy, but as a poor person, the minimum I can do for myself, is keep my emotions in check.
I'm fine with down market or correction. It cannot go up in straight line, and it's up to us to be able to manage out money and emotions and not sell low.
So, what keeps you all preparing for it today?
Even the people who don't invest talk about losing money in the market. Think about it. That's just crazy. They don't talk about how to not lose money even though it can be done. Again, down markets is where the money is made, not lost.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

Very comforting advice to people who are 65 years old.

But anyway, it seems like you do understand the issue, you're just not worried about it because you are too young to be affected by it.

I mean it's reality and has nothing to do with not caring. You need to have a plan and be unemotional as possible. But we are all human and every investor has made some type of mistake by trying to time the market or unsuccessfully trying to beat the market in one way or another. They key is to only make small mistakes and stick to the plan even when it hurts.

[Anonymous]

It is a problem for those who need the money to live on in the near future.

They could have to sell stocks for less money than they cost (or less money than the person expected to have when they planned to retire).

[Anonymous]

Anonymous wrote:Market rise and fall. If you are in the market for the long-term, even a big crash isn’t gonna kill you. That’s what I don’t understand. Everyone talks about the market crashing, but if it’s crashing from being so high, and you’ve been in it for a long time then you’re still always gonna come out ahead. So what’s the problem?

because there are a lot of idiots in the market and a lot of day traders who don't know what they are doing...that and computerized trading means wild swings.

[Anonymous]

Does anyone feel like we are in a time like the beginning of a collapse?
I’m not a finance person at all, but it feels strange… why are gold, stocks, real estate, everything way way up right now?
Do I sell the gold jewelry (family stuff with legacy attached) now?
My IBonds?
Are we frogs in slowly boiling water?
Buy land in Canada?

[Anonymous]

What return are your ibonds getting now? You might be surprised if you bought high. If you can redeem without penalty look at what regular bills and notes are yielding.

[Anonymous]

Invest it and forget it. Works every time.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

Very comforting advice to people who are 65 years old.

But anyway, it seems like you do understand the issue, you're just not worried about it because you are too young to be affected by it.

When you are 65 you get SS/Medicare and can qualify for all sorts of discounts, including senior housing if you are broke. Even if you aren't broke, there are many discounts for elderly. In VA limited income seniors can get discounted RE tax even if they live in a luxury home and own a car.

[Anonymous]

Anonymous wrote:Invest it and forget it. Works every time.

I think this conversation is about people being afraid to retire into a crash and not having any time to save themselves, since you are aged out of workplace. Many people "age out" of their industry a lot sooner than 65, the risk is real.

[Anonymous]

Anonymous wrote: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!

That's a long way to say "we are all gonna die! "

[Anonymous]

Anonymous wrote:

Anonymous wrote:Invest it and forget it. Works every time.

I think this conversation is about people being afraid to retire into a crash and not having any time to save themselves, since you are aged out of workplace. Many people "age out" of their industry a lot sooner than 65, the risk is real.

If your plan is to make a bunch of money between 55-60 to fund your retirement, then your plan sucks because you dropped the ball a long time to ago.

And if you are concerned about retiring "into a crash," then you need to either lower your withdrawal rate or have a decent percentage of bonds to minimize the sequence of returns risk.