Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

What We've Learned from 150 Years of Stock Market Crashes

morningstar.com

Post reply on HN
Print view View original

71–80 of 97 posts

Re: What We've Learned from 150 Years of Stock Market Crashes

#71

Post by velcrovan »

nh23423fefe wrote: post #67
velcrovan wrote: post #46

Earlier quoted context omitted.

Call me crazy, but since the DOGE hatchet-wielding started, I've redeemed all my US bonds. I just don't have confidence that the people needed to keep TreasuryDirect running will still have their jobs if/when I need to redeem them in the future.

Are you going to post in the future when your panic is shown to be irrational?

Sure. Of course, if anyone had described what DOGE is doing 1 year ago, they would have been similarly dismissed. I wouldn't say what I am doing is "panicking" or "irrational", I would just say I'm hedging against turbulence that may well prove temporary but which might come at a bad time for me personally.

Re: What We've Learned from 150 Years of Stock Market Crashes

#74

Post by UncleMeat »

317070 wrote: post #28
ram_rar wrote: post #24

While dollar cost averaging and index investing are solid strategies, this article overlooks an important consideration: the Realistic Rate of Return (RoR) needed for retirement planning. Yes, US markets historically recover (lately that notion seems to be challenged more often than not), but timing matters significantly. What happens if someone's retirement coincides with a market crash? Younger investors have time…

Meet Bob. Bob is the world’s worst market timer. https://awealthofcommonsense.com/2014/02/worlds-worst-market...

The bob scenario is educational, but isn't relevant here. The reason why bob is still fine is that the crashes all happen during the accumulation phase. What you don't want is a crash right as you retire, causing you to rapidly liquidate a much larger portion of your savings than expected.

Re: What We've Learned from 150 Years of Stock Market Crashes

#75

Post by fransje26 »

Analemma_ wrote: post #11
throw0101c wrote: post #8

Earlier quoted context omitted.

> Not in Japan it didn't. Only if you were 100% JP equities without any diversification: if you had some (20%?) bonds (and rebalanced), or had an international equities (and rebalanced), you were probably fine. * https://www.bogleheads.org/blog/2017/02/06/a-short-study-of-... * https://www.gocurrycracker.com/lessons-from-japans-lost-deca... > Using Portfolio Charts withdrawal rates calculator, which uses data going b…

Real interest rates in Japan were zero or negative for pretty much all of that same 35-year period, so bonds wouldn't have helped you either. And "you were up if you bought international equities" kind of proves my point: if Japan is the harbinger for the rest of the world, there will be no more "always up" markets to flee to.

> if Japan is the harbinger for the rest of the world, there will be no more "always up" markets to flee to.

There is a Dutch saying that says:

  Trees do not grow to heaven
The nonsense will have to stop one day.

Re: What We've Learned from 150 Years of Stock Market Crashes

#77

Post by nine_zeros »

velcrovan wrote: post #46
nine_zeros wrote: post #38

Earlier quoted context omitted.

> Age-appropriate risk management becomes increasingly important as your investment horizon shortens. As you appear closer to retirement, make sure you invest in Bonds or other fixed income. It won't beat inflation but it will prevent you from draw-downs exactly when the market is down.

Call me crazy, but since the DOGE hatchet-wielding started, I've redeemed all my US bonds. I just don't have confidence that the people needed to keep TreasuryDirect running will still have their jobs if/when I need to redeem them in the future.

> Call me crazy, but since the DOGE hatchet-wielding started, I've redeemed all my US bonds.

Not crazy given the incompetence in American political leadership.

BUT, if US treasuries default, your savings accounts, agency, municipal, state, international bonds, stocks - all will fail immediately.

Your literal checking account is backed by treasuries under the hood by the bank. Widespread bank runs will be likely. And even if you are at the front of the line in a run, you will not be able to withdraw $100k in actual dollar bills because banks don't have them in vaults like the old days.

Re: What We've Learned from 150 Years of Stock Market Crashes

#78

Post by xnx »

ram_rar wrote: post #24

While dollar cost averaging and index investing are solid strategies, this article overlooks an important consideration: the Realistic Rate of Return (RoR) needed for retirement planning. Yes, US markets historically recover (lately that notion seems to be challenged more often than not), but timing matters significantly. What happens if someone's retirement coincides with a market crash? Younger investors have time…

> While dollar cost averaging and index investing are solid strategies

Dollar cost averaging is a psychological strategy, not a financial one.

"The costly myth of dollar-cost averaging": https://web.archive.org/web/20050910142530/http://moneycentr...

"Debunking the Myth of Dollar Cost Averaging": https://news.ycombinator.com/item?id=36271061

Re: What We've Learned from 150 Years of Stock Market Crashes

#79

Post by bryanlarsen »

317070 wrote: post #28
ram_rar wrote: post #24

While dollar cost averaging and index investing are solid strategies, this article overlooks an important consideration: the Realistic Rate of Return (RoR) needed for retirement planning. Yes, US markets historically recover (lately that notion seems to be challenged more often than not), but timing matters significantly. What happens if someone's retirement coincides with a market crash? Younger investors have time…

Meet Bob. Bob is the world’s worst market timer. https://awealthofcommonsense.com/2014/02/worlds-worst-market...

Bob also picked the best stock market to invest in. He would have done a lot worse investing in any other stock market. It's not surprising he did well, he picked the winner.

What are the chances the US is going to have the best stock market over the next 50 years? It's possible, but doesn't seem likely.

Re: What We've Learned from 150 Years of Stock Market Crashes

#80

Post by didntknowyou »

throw0101c wrote: post #5

A popular post that is often given to folks who are freaking out about drops in their portfolio: * https://awealthofcommonsense.com/2014/02/worlds-worst-market... And for those who want to sit on the sidelines, that's usually not a good idea: * https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co... The main folks that do have to worry about their portfolio are those who are about to retire, and those that ha…

you can't really compare regular drops to the current drops triggered directly by trump. the current situation is unique.
Post reply on HN