We pay no attention to stock market fluctuations. We expect them, are in it for the long haul, and have set up our portfolio to take us through them. We review annually and don’t make adjustments based on volatility. Also, someone else manages our money. We sleep better that way.
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The long bull run in equity markets globally in the recent past is due to:
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The end of the Cold War and its “peace dividend”
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Globalization with lower cost of production and transportation
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Productivity increases as a result of technological advances, particularly the internet
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Historically low interest rates and easy money policies by central banks globally
All of them are ending (except that productivity increases may still be possible with the adoption of artificial intelligence in many sectors).
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Yes, there were crazy times for ‘us young people’ to navigate. We sold our first home in Houston with a company move in 1980 - well before there was a period when nothing was moving without deep cuts there (like you experienced in 1987 most likely in a different part of the country). We did purchase a home with way high interest rates in mid 1980 after we were supposed to be locked in with a lower rate (4 % lower!) - and didn’t know we would be living there a shorter period than we did; house appreciated and company paid closing costs. Due to purchasing in a negative school district on our 3rd home in 1984, we stayed in that home until the decline in area forced us to sell to get out before we lost money (we were in the home 7 1/2 years, and made no loss or gain, sold by owner). We built and have stayed in our 4th purchased home since 1992 - and it has been gaining in value a lot most recently, due to supply/demand and the growing mid-sized city – and being in the best school district, prime house location, etc. We hope to be able to guide DDs when they are ready/able to purchase homes.
I do remember big losses in our 401k funds over 30 years ago when we didn’t understand how to control risk nor how to handle differently at the time - however we were young, saving, and just knew we had to know more to understand what we could do differently. DH’s company changed their overall fund management firm, so it was learning the investment choices and tracking them. They did one move during a big downturn - so we didn’t have good reporting during a really big downturn – in the transfer they moved the funds into ‘similar funds’ - so there was time to research and decide best funds to adjust and balance accordingly. We have watched the investment choices - and compared against benchmarks and also chosen with steady long term results.
Right now we are hanging in. Will have to analyze as we go along. It is all a bit of a new paradigm.
Me too. Exactly.
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I remember because I was lucky I bought a put on the SP500 Friday before the crash. But by the time I called in to close my put I just didn’t make as much money.
I haven’t take my SS yet, still waiting for 70, so if the market crash I will have something to eat, that’s my long term thinking.
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If that’s the case and the bull run in equities is also ending then what do you do about it? Find other investments? Save more because you expect lower returns? Try to spend less/earn more?
I’m retired already. There is nothing I can do about what is happening with the economy right now. Before I chose to retire, we made sure we could live on a minimal amount if needed.
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Same here. We could live just fine on SS if we had to.
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Waiting for SS has two big advantages: 1) survivor benefits, so the spouse can eat when you are gone; 2) inflation-adjusted benefits. (The latter is good as it keeps up, but bad (the economy) as that it has to keep up.)
edited to correct ‘spousal’ to ‘survivor’
When there’s a severe market dislocation, all asset classes, including those previously appeared to be uncorrelated, become highly correlated, so there’s really no place to hide in a long-only portfolio. There’re investment strategies that help mitigate such risks, but they all have costs (e.g. a reduction of the upside in a potential market rebound).
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My husband has already started his SS, I think in a couple, it’s best to have one delaying until 70. I will have max or close to max SS at 70, plus I checked that I can switch to survivors benefit if he’s not here, and he can switch to survivors benefit when I’m not here. I found that out by reading the book about retirement by Janet Bryant Quinn after I retired.
Also another point is as a female, I will most likely live longer, so I need to protect my retirement, having a bigger SS insures I will be able to eat in case of fraud, I have read cases of one spouse died and left millions to their surviving spouse and they were scammed. Who knows what state of mine I will be when I get older. Longevity is another reason. In the past 2-3 years, I’ve been to funeral of people died at 99(2 males), one female(98), my aunt(94), my aunts husband(94). None of these people were considered super healthy when they were younger, and none of them were wealthy either, more likely in the poor category, modern medicine is probably the reason for their longevity.
Not in this household. I can never collect on my husband’s SS…offset and windfall provisions…I’m not complaining…but just saying…spousal benefits are not available to everyone.
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Yet if I had a dollar for everyone who tells me that’s not the case…
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I have not thought much about spousal benefit, since my own SS is about same range as husband’s (though perhaps our financial advisors have some various future scenarios in mind). He is 7 years older and trying to hold out til age 70 fo SS…. so that may end up being a factor(?)
Per this article (which I only skimmed), for those eligible it can be a complex thing - Research: Social Security Retirement Benefit Claiming-Age Combinations Available to Married Couples
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correct. Generally, the highest income should wait to 70 for max SS benefit, including survivor benies.
“Not in this household. I can never collect on my husband’s SS…offset and windfall provisions…”
Good point, thumper, I admit I don’t understand WEP.
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Holy guac! 
Someone can write a PhD thesis about best strategies for SS benefit claiming! Lol.
(We make it easy for us: we both work and we both will claim our own benefits at 70 if we live that long and if SS is still around).
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I hope Congress will get rid of WEP, I think I’ve read somebody put out a proposal about that.
We plan to wait until 70 to claim - but if the market ends up really hurting our savings, I can claim earlier. We are fortunate to have that as an option, should it be necessary.
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There have been numerous proposals to repeal the offset and windfall provisions and none have passed.
I understand the basic principal. But…my SS would be about $600 a month based on MY earnings and SS contributions. My actual benefit is about $220 a month. And that’s that. It is what it is.
But we accounted for this in our retirement planning.
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