Yes!!!!!It is a very therapeutic thread but I still feel jitters. Is it normal for S&P to lose 4+% in 24 hours without good reason? It is not like a pandemic or new war started. I know the unemployment rate went up 0.2% and some companies earned less than expected – but is it truly enough bad news to drop the market so much? Is the stock market usually so bumpy and reactive to minor things?
Here is what is crazy about 4%. If you subscribe to a 4% withdrawal in retirement, a 4% drop while holding 100% equities means your down 1 year of expenses. In fact, many of us have watched our portfolio fluctuate more than a year’s expenses over the course of a week more times than we can remember.
I know people say don’t look at your portfolio, but I think it’s best to get used to the volatility. If you can’t, that means you need “evaluate your jitters” and buy more bonds.
Let me pile on some more. It takes serious intestinal fortitude to rebalance out of bonds into equites during a market downturn. Not everyone has what it takes.
I'm grateful that my boring target date fund in my 401k is handling the rebalancing today. I have to admit, I wouldn't have done that on my own.
Statistics: Posted by intendi — Fri Aug 02, 2024 3:35 pm — Replies 714 — Views 670255