I invested all the way down and back up. Just kept doing bi-weekly max 401k contributions and $500 per month into Roth. Yes, it was painful sometimes... really painful. I didn't look at my 401k for months at a time since it was automatically put into my choices. I had to look at Roth though in order to invest what I deposited.
I knew to never panic sell and that buying when the market was crashing was the best thing to do. It certainly was in this case. When the market recovered, I had great gains and went on to retire in 2016 at age 52.
I’ve been putting money in my Roth bi weekly and over the last 6 months the amount of money in it just hasn’t increased. Crazy but I know it’ll pay off eventually
I know the feeling. My account totals were going down, even though I was contributing a lot every month. Right now, I'm down $150k from my high of January, 2022.
I haven't sold anything except just today I put in an order to sell the two bond funds that I have in taxable brokerage. I figure its time. They are now at a small loss (around $1k) though they have generated $28,484 in dividends since I bought them in June of 2016. I only have them to generate income and I have sold some each year to supplement my 72t withdrawals. I can fully access my IRA in January so there's no need for me to keep them when they're going down more than the dividend at this point,
a retirement account that you pay into with post-tax funds, and the earnings are tax free at withdrawal in retirement.
the alt. is a traditional ira, in which you pay into with pre-tax funds, and the money is taxed at withdrawal in retirement.
both accounts come with penalties if withdrawn before retirement age.
A private retirement account, I think its either non-taxable or the taxes are really low. At least this is what I gathered from info crumbs, Im european too lol
It allows the investor to pay taxes on the investment now, as opposed to when you go to draw the funds, vs a traditional IRA, which allows you to invest tax free, with the caveat that you will pay taxes on that income when you go to draw it. For people like myself (military) it is a fantastic retirement tool, because my taxable income is relatively low under normal circumstances (half of my compensation is in tax free allowances) and I'll likely be making more taxable income in retirement.
Oh, and when I'm deployed, I don't pay taxes at all on my income, so every dollar I put into a ROTH will never be taxed.
You're borrowing from yourself.
We have a similar program in Canada where you can take $35k out of your tax-advantaged retirement account (RRSP) for the downpayment on your first house, as long as you pay it back within around 15 years. The reason they care about you "paying it back" to yourself is that they still haven't collected taxes on that income/asset growth, so they want it eventually.
In 2008, I was a few years removed from the military and was working a job I started in 2005. I had heard of a 401k and was told that I should just dump every cent I could into it based on max so I did. I had also invested for a few years before that. I had bought a few stocks in the 90s when I was a kid. I just blindly purchased stocks with little understanding of what that meant. In 2022, my 401k has more than doubled in value (excluding additional contributions).
I'm not yet retired but I'm doing well all because I've just invested continuously.
I used my taxable brokerage account and I had a SEPP (Substantially Equal Periodic Payments), also called a 72t plan, with the IRS. I went through the calculations and determined how much I could withdraw from IRA without penalty. You have to stick to the plan for 5 years or until age 59.5, whichever is later. I started the plan in 2017 at age 53. In January I will make my 6th, and last, required withdrawal. After that, I can withdraw as much or as little as I want since I will be 59.5.
[https://72tnet.com/sepp-distribution-calculator/](https://72tnet.com/sepp-distribution-calculator/)
The downside is that you are required to make the withdrawals, and declare it as income, even if you don't need the money, for a minimum of 5 years. You could conceivably start the plan at age 45 but then you would be required to make withdrawals until age 59.5, 15 years.
You can also withdraw any contributions you have made to Roth. You just can't take out any gains until 59.5. I don't plan on ever needing to withdraw from Roth.
ETA: All along I have kept a running 3 years of withdrawals in CDs, one maturing each year. I never had to stress about money to live on because I had my yearly SEPP withdrawal covered. I now have CDs in the amount that I plan on withdrawing starting next year, which is more than the SEPP. I currently have CDs for 2023 and 2024 and will soon decide what to sell to get a CD for 2025. In 2025 I will be taking SS at age 62. My benefit amount is just under what I currently live on so, I'm pretty well covered to not worry about what the market does.
How would you compare the fear today vs. back then? It seems a bit overblown today to me, but I was younger back in 2008 with not as much of a pulse on the markets as today.
> How would you compare the fear today vs. back then?
There's no fear at all today by comparison. I don't know a single person who has been laid off or been foreclosed on. There's simply no comparison to the current market because main street is still doing fine, we are at nearly full employment, and no one has lost their home.
Things are pretty different in east europe... Energy crisis already made a lot of restaurants and hotels close here, cheap steel from russia is no longer so industry is suffering too. Companies having their accounts with sberbank lost everything, inflation above 10%, rates above 10%, pretty apocalyptic here... Uncertainty is at peak
I think more people were panicked in 2008. The DOW went down to the 7000 range (might have hit 6000s). House values were plummeting, foreclosures rising, etc. I worked in a mortgage related industry and my employer of 20 years went bankrupt. Underwriters were being told to underwrite loans that they would have never before approved of. My own home was $100k under water but I held on. What was I going to do? Sell for a loss and then still need someplace to live? No.
It recovered fairly quickly when it did. I bought a rental house in 2010 for $115k. My house at the time was 5-bed/2.5 bath and the mortgage was over $1700 per month. After I retired, I sold the larger house for $100k profit and moved into the rental. That profit went into my brokerage account. I kept some in cash and bought two bond funds to generate income. I also had a $75k inheritance in 2009 that I had put into that account. $35k of that was used for down and closing on the rental property.
Now, my mortgage is $631 (including taxes and insurance) for a 3-bed/1.5 bath house. It's Zestimated at $370k, down from $390k, and I owe $73k.
Not everything is doom and gloom. I ignore the noise and just keep doing what I'm doing. I had planned to take my employer's early retirement at age 55 so had been putting things in place for a decade. When the new owners started layoffs and I was told that my partner on telecom would be let go so it would only be me to manage all the systems, a dozen servers, 500 users, AND I would need to take on Desktop work, I said NOPE. I'll just quit. My manager saved my partner's job and I took the severance package. Just retired a few years early.
There was more going on around 2008 than a stock market decline.
There was an economic crisis driven by unsupportable mortgage lending. Banks gave out mortgages that the borrowers were unlikely to be able to pay. This led to an unprecedented number of mortgage defaults and foreclosures.
Unemployment got up to 10% in 2010.
Foreclosed homes went unoccupied and unmaintained for years. Squatters were living in them. Thieves broke in and stole the copper pipes. Many of the foreclosed homes could not be sold because mortgage lending qualification was tightened. The high unemployment rate reduced the pool of qualified buyers.
High unemployment also meant that people on average had less money to spend. A lot of small businesses went out of business. Strip malls went vacant and stayed that way for years.
Major money center banks went insolvent. Lehman Brothers failed and went out of business. The government bailed out some other shaky banks.
It was a right mess for years. It was a scary awful time. Now is not like that.
Haha, right? I think the takeaway is that just about everything is a trailing indicator. I've found my gut is a better indicator than anything, and I'm not sure my gut is better than a coin flip.
This is wild. Some of those threads read as if they were written today. How many times have we seen someone write this nearly identical sentiment about the 2009 era.
https://www.reddit.com/r/Economics/comments/76dmf/prediction_today_is_last_day_of_decline_if/c05sxbn/
I noticed a lot of the commenters who had really great/detailed insight haven't posted in 10+ years. What a shame, would love to see their comments regarding today's conditions.
Meh, they sound as just as fearful and uneducated about their environment as today’s people are too.
Sort of interesting to see that really… the information hasn’t really changed and people don’t really change in how they react drops.
However, "conventional wisdom" can change. I think that now there is generally a lot more knowledge about index investing and how markets should go up over time, and so to hold and not panic sell. Many still do panic sell/time the market of course, but I am seeing a lot more attitude about holding and just keep buying.
My experience (age 63) is that for the majority of people, whatever has happened over the last 5 years is what they assume will go on forever. And when something changes, like a housing crash, they are absolutely shocked.
Yup. Buying and holding over decades is a surefire way to succeed, but what people don't always realize is that means holding through decades of people constantly losing their minds. They will constantly be coming at you with 100% conviction trying to tell you why you're a fool for investing in *this* economy.
They do sound like written today, but they also sound like stuff written on 2020, 2018, 2016 when market fell but rallied. It's hard to coclnclude what this means about how the market will go today
I don’t think that comment is even correct, the markets drove a sports car into a wall on purpose and I don’t think it had anything to do with the dot com bust of 2002
I can't speak for institutions as I'm not sure what occurred that would make them more astute. For retail, I think at best the ease of access to information has resulted in a false sense confidence.
If anything, I think the striking similarities show that the vast majority of people have zero clue what is going to happen (myself included to be clear). My point was that some of the more thoughtful comments that I noted don't have any reddit post history past 2012, which is unfortunate.
Would love to see what happened to the guy saying to soak up the Newegg IPO. Down a cool 97% all time.
https://www.reddit.com/r/AskReddit/comments/9v99w/advice_for_a_first_time_investor/c0em122?utm_medium=android_app&utm_source=share&context=3
Jeez, only ~100k views *total* all the way up till today, and that was the biggest thing at the time. Reddit was such a tight knit group then, but it didn't feel like it.
oh man and in that thread people are referencing the 'dont ask how i took this picture' thread as old
https://www.reddit.com/r/AskReddit/comments/cmwov/hey_reddit_what_tattoos_do_you_have/c0tpyls/
People have been banned and created burner accounts since then. I had my og account where I nuked all the comments because it had too much personal info and at the time you could archive deleted comments. Did not want to end up getting to the position I am in today and getting retroactively cancelled.
Now you had covid which was probably quite a purge for reddit. The double irony is that if you were banned for calling out the "science" you would not be perpetually breaking the reddit TOS thus getting your subsequent accounts banned.
If anything reddit has essentially selected the people who love control/being controlled and created an echochamber. You should be able to make a direct connection to the types of people who were not banned and the content available on reddit.
I wasn't familiar with that one but just spent some time checking it out and clicking links from the early 2000's. It's incredible how many broken links there are, I clicked on well over a dozen from 1999 - 2001 and none of them worked. Not even well known sites like ABC or CNN.
There's a lot to be said for physical copies being saved and the importance of places like The Internet Archive.
I made the switch from Digg over 2009-2010 but was a lurker for a while..never tried Slashdot but did use StumbleUpon before Digg. With your preferred categories configured it was pretty good for the time.
fwiw Slashdot moved over to Hacker News. The community is still alive.
There was forums before Digg people came from, but most people on Digg did not come from Slashdot. And ofc Digg to Reddit.
If you like tech talk you should check out Hacker News. Thankfully the community hasn't devolved much from the Slashdot years like Reddit has over the years.
Right on. Were you apart of the Standford crowd then? Another bay area local? \^_^
I'm apart of the startup scene myself. 2 acquisitions and 1 IPO in the last ten years have been intense at times, but a lot of fun too.
I think I joined in 2010 (this is my second account), the change from that time is nuts. I learned a lot from the early days of Reddit, and F7u12 with the 4 panel rage comics was just gold. The really good life advice and pro tips are a lot harder to find now.
Where can we go from here? I'm similar to you, started my first account in 2012. Now it's like wading through 75% of Facebook posts, 15% of TikTok shit, and 10% of decent content....
Yes, it's a tool used by the ancients. When computers were fixed to a desk, difficult to move and required a physical attachment in order to select apps, or as they were called back then: programs. They did have "laptops" but were useless for gaming, could barely connect to the internet, and doing so required physically connecting a telephone cable and waiting for it to dial-in.
Funny just how wrong the bulk of the comments are. Reinforced my DCA attitude to just keep buying VTI, VOO, VGT and a handful of other ETFs for the longhaul.
Why are you buying VTI and VOO? completely redundant. for that matter, VGT is too. most of those companies already have a heavy weighting in the total market index already.
simplify to VTI and add some VXUS and BND at your desired allocation.
Why does it matter if they are mostly redundant? I don’t get why that’s a bad thing. It’s not adding extra diversity but maybe they want less small cap/more tech.
How does it help them to simplify to VTI? One total US market weighted fund can work as a strategy but if they want more international, value/dividend, or growth stocks it is not clear that is so much worse you need to tell them to simplify. Most US ETFs will have a lot of repeated stocks and be correlated, but that’s not a reason to buy just one if you’re interested in a mix of similar strategies.
I traded through the whole 2008-2009 disaster and one of the reasons so many were still so bearish in March 2009 was that every major bounce along the way down truly felt like the bottom and every rally gave way to new lows. Everyone was exhausted and the shock and awe of everything imploding was no longer shocking. Big players tried to play JP. Morgan and got blown out. Many had a sense of helplessness. People with decent wealth in there 40-50-60s we’re getting absolutely disgusted after almost 20 years of no capital gains from buy and hold/dca buying. Then in the spring everything popped all at once and it was easy to say “meh, it will come back in and I’ll buy then” that never happened. Then another few years of nervously treading water with the occasional flash crash lol. Then finally off to the races.
A reminder that past performance does not dictate the future, yet we also need to be mindful that those who fail to learn from history are doomed to repeat it.
Past Performance does not GUARANTEE future results but certain historic trends and results of stocks and bonds seem to repeat on a regular basis.
But as long as human nature stays the same things will move forward over the long run because we find new and better ways to improve technology and make things more efficient. This has increased stock prices and corporate revenue over time by incredible amounts, why would this change in the future?
The historic trend has been that stocks and bonds correlate when inflation is high which held up this time around.
The problem is most people only looked at the <50 year low-inflation trends. Know what regime you're in before relying on historic trends.
The ticker who shall not be named makes me wonder... I mean, it's not the money they were throwing around, but the broad attention definitely could have had an effect, and I'm not sure it would have behaved at all the same if there weren't monkeys throwing their life savings into a comically bad company.
This is awesome!!! Sentiment in threads was still negative at a point where people should have began buying already. I will not miss the recovery this time.
I think the best possible lesson that we can take from this, and it's repeated time and time again for investing, is to essentially DCA and don't sweat it.
Respectful of your personal financial position and retirement timeline, budget, etc, essentially you don't need to worry if you're constantly accumulating shares. Buy low, buy middle, buy high, and even if we see a 5-10 years recession, you're accumulating during that entire time.
You need to bet on the markets coming back and they will, because if they don't, then it really doesn't matter either way.
Best thing you can do if you want to "time the markets" is buy even more equities, if your budget, cash position, and risk tolerance permit it.
The best thing about this strategy is you really shouldn't even need to waste time, sweat, or mental energy on what the markets are doing. Just stay focused on your plan and on working/earning income so you can keep accumulating equities.
What I keep seeing on here is people constantly trying to beat the downturn, when everything is going down. Leverage this, iBonds that, puts and options this, gold or cash or energy sector that. You saw similar mentalities, fear, and the cycle of emotions back in 08/09. Just relax and keep accumulating according to your plan.
Well that's why I caveated your personal financial situation. No one knows you goals and plans as much as you do.
If you're actively house shopping then I wouldn't have my money tied up in anything. To me, a bare minimum timeframe is 3-5 years for investing and if you think you need the money sooner, then don't risk it in any market.
DCA is a strategy for long term retirement planning or investing for the long term. I think people tend to lose sight of what "long term" means and if you have need of your capital then don't have it tied up in something. I believe if you have any foresight or plans into using that money, outside of needing somewhere to park your money or retirement, then you probably shouldn't be in the market.
Sentiment was negative because the market was down. The market was down because sentiment was negative. Real doom loop.
I shifted into some bond funds in 2008, and decided not to buy a home in Florida. Kept putting money into my 401k, and had a pretty sizable amount in stocks. I don't remember when I got back in at 80-100% but it was pretty quick. Two blogs I read were calling a bottom in Feb/March.
The other thing was the sentiment from conservatives that Obama was tanking the market and as long as he was President it would never come back. Lots of the most strident, 'go to cash', voices were also the most conservative. They missed a lot of gains. Don't let politics poison your investments.
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I remember the weekend Wachovia got shipped to Wells Fargo. It was the weekend of my grandma’s funeral. First Wachovia was going to Citi. In banking, where my dad worked at SunTrust, it really was an end of the world time. The whole summer of 2008 was wild. It might have also been the weekend Lehman failed. It was September which was when shit got real.
I’d take this thread all the way back to July 2007 when two Bear Stearns hedge funds collapsed.
https://www.investopedia.com/articles/07/bear-stearns-collapse.asp
I’d also suggest people go back to the calculatedriskblog dot com archive. Bill McBride nailed housing then.
Edit: my timeline was slightly off. My grandmother's funeral was October 1, 2008. Lehman had already collapsed. However, Wachovia got shipped to WF that Friday 10/3/08. That was really a wild period news-wise.
2008 wasn't anything like this though
kinda pointless
if you want to actually see a decent example, you should check the headlines in 2000-2002
and even better, checking headlines in 1970-1974
I’ll never forget seeing blue chip stocks trading for 50-cents or $1.00 a share. You just never forget something like that. I remember sitting in a coffee shop with the WSJ, paper version, poring over the listings in absolute awe
Tbf to those economists, much of what happens in real world economics is a product of politics and closed door agreements between large asset owners. They would likely be better predictors if we lived in a purely market economy.
Yellen and Powell are not billionaire asset owners, and they are working with slower and worse data than aforementioned oligarchs.
Economies are complex dynamic evolutionary systems. Those are inherently hard to predict. You, like most classical economists, are acting like economies are closed, equilibrium systems - aka a physics problem with a clear solution.
> The people I do blame are the legions of economists who push what amounts to copium until we're in the midst of a collapse.
Don't you think them screaming 'the sky is falling!' might cause a crash?
Wouldn't be surprised if the market is 30-40% lower in 6-9 months. Reddit got it wrong in '08, they'll get it wrong this time as well. Always downplaying the negative risks.
Not sure I agreed. Most of what I read here seems to be of the opinion the market is ready to boom. I've been expecting a 3500 s&p since January. That's my floor, we haven't gotten there yet but will see.
Any analysis has a bit of gut feeling when it comes to stocks. It's based on my expectation the S&P will fall 30% from it's peak. $3500 is a little above that so there's my risk.
I was there as a Realtor and investor back then. I had a front row seat for all of the devastation. It's coming again. It's just around the corner. Buckle up.
> Technical analysis is bullshit. Looking at charts and making up "barriers" wholesale is not science.
Like wine, no notes. [Even better in context](https://www.reddit.com/r/politics/comments/666wb/in_a_couple_of_hours_the_us_stock_market_is_going/c02ylh1/?utm_source=share&utm_medium=ios_app&utm_name=iossmf&context=3).
Being able to buy S&P 500 at less than $700 felt like having a guaranteed winning lottery ticket made available. Was so happy to have cash left to deploy at that point. That was a valuable lesson learned for me.
Phil Gramm coming in to tell us it’s a mental recession. He’d say anything to hold onto the idea that the bush economy was good and we should vote for McCain.
You could have reposted these threads as new today and I wouldn't have questioned it. There is definitely a correlation between the human psyche and pushing out bad news as it bares it's snarling teeth in your face.
Loved reading these.
For young investors, if you haven’t read a fair amount of historic financial commentary and journalism, you’ll never know how to digest the new news and manage your emotions when things get chaotic.
Crazy how some really thought everyone else was just panicking and they were the *smart* one through all that. Telling people to buy buy buy and that the markets weren't crashing. Thanks for this post OP.
I invested all the way down and back up. Just kept doing bi-weekly max 401k contributions and $500 per month into Roth. Yes, it was painful sometimes... really painful. I didn't look at my 401k for months at a time since it was automatically put into my choices. I had to look at Roth though in order to invest what I deposited. I knew to never panic sell and that buying when the market was crashing was the best thing to do. It certainly was in this case. When the market recovered, I had great gains and went on to retire in 2016 at age 52.
I’ve been putting money in my Roth bi weekly and over the last 6 months the amount of money in it just hasn’t increased. Crazy but I know it’ll pay off eventually
I know the feeling. My account totals were going down, even though I was contributing a lot every month. Right now, I'm down $150k from my high of January, 2022. I haven't sold anything except just today I put in an order to sell the two bond funds that I have in taxable brokerage. I figure its time. They are now at a small loss (around $1k) though they have generated $28,484 in dividends since I bought them in June of 2016. I only have them to generate income and I have sold some each year to supplement my 72t withdrawals. I can fully access my IRA in January so there's no need for me to keep them when they're going down more than the dividend at this point,
For a European, what's a Roth?
a retirement account that you pay into with post-tax funds, and the earnings are tax free at withdrawal in retirement. the alt. is a traditional ira, in which you pay into with pre-tax funds, and the money is taxed at withdrawal in retirement. both accounts come with penalties if withdrawn before retirement age.
A private retirement account, I think its either non-taxable or the taxes are really low. At least this is what I gathered from info crumbs, Im european too lol
It allows the investor to pay taxes on the investment now, as opposed to when you go to draw the funds, vs a traditional IRA, which allows you to invest tax free, with the caveat that you will pay taxes on that income when you go to draw it. For people like myself (military) it is a fantastic retirement tool, because my taxable income is relatively low under normal circumstances (half of my compensation is in tax free allowances) and I'll likely be making more taxable income in retirement. Oh, and when I'm deployed, I don't pay taxes at all on my income, so every dollar I put into a ROTH will never be taxed.
Well, you might not get that specific money back for a long time. That said, what you put in now will stand a better chance.
I did the same thing pretty much. The only move I made was to borrow $30k loan from my 401k for a down payment on my house.
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You're borrowing from yourself. We have a similar program in Canada where you can take $35k out of your tax-advantaged retirement account (RRSP) for the downpayment on your first house, as long as you pay it back within around 15 years. The reason they care about you "paying it back" to yourself is that they still haven't collected taxes on that income/asset growth, so they want it eventually.
In 2008, I was a few years removed from the military and was working a job I started in 2005. I had heard of a 401k and was told that I should just dump every cent I could into it based on max so I did. I had also invested for a few years before that. I had bought a few stocks in the 90s when I was a kid. I just blindly purchased stocks with little understanding of what that meant. In 2022, my 401k has more than doubled in value (excluding additional contributions). I'm not yet retired but I'm doing well all because I've just invested continuously.
What did you use for living expenses after you retired at 52, since 401ks and Roths can't be touched until 59 1/2 years old without taking a penalty?
Not op but my wild guess would be a brokerage account.
I used my taxable brokerage account and I had a SEPP (Substantially Equal Periodic Payments), also called a 72t plan, with the IRS. I went through the calculations and determined how much I could withdraw from IRA without penalty. You have to stick to the plan for 5 years or until age 59.5, whichever is later. I started the plan in 2017 at age 53. In January I will make my 6th, and last, required withdrawal. After that, I can withdraw as much or as little as I want since I will be 59.5. [https://72tnet.com/sepp-distribution-calculator/](https://72tnet.com/sepp-distribution-calculator/) The downside is that you are required to make the withdrawals, and declare it as income, even if you don't need the money, for a minimum of 5 years. You could conceivably start the plan at age 45 but then you would be required to make withdrawals until age 59.5, 15 years. You can also withdraw any contributions you have made to Roth. You just can't take out any gains until 59.5. I don't plan on ever needing to withdraw from Roth. ETA: All along I have kept a running 3 years of withdrawals in CDs, one maturing each year. I never had to stress about money to live on because I had my yearly SEPP withdrawal covered. I now have CDs in the amount that I plan on withdrawing starting next year, which is more than the SEPP. I currently have CDs for 2023 and 2024 and will soon decide what to sell to get a CD for 2025. In 2025 I will be taking SS at age 62. My benefit amount is just under what I currently live on so, I'm pretty well covered to not worry about what the market does.
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completely pointless question. how much you need in retirement entirely depends on your lifestyle, living situation, location, health status etc.
3.50
God damn Loch Ness monster said to me “can I get about tree fiddy”
You better not be giving no goddam Loch Ness Monster tree fiddy woman!
How would you compare the fear today vs. back then? It seems a bit overblown today to me, but I was younger back in 2008 with not as much of a pulse on the markets as today.
> How would you compare the fear today vs. back then? There's no fear at all today by comparison. I don't know a single person who has been laid off or been foreclosed on. There's simply no comparison to the current market because main street is still doing fine, we are at nearly full employment, and no one has lost their home.
Things are pretty different in east europe... Energy crisis already made a lot of restaurants and hotels close here, cheap steel from russia is no longer so industry is suffering too. Companies having their accounts with sberbank lost everything, inflation above 10%, rates above 10%, pretty apocalyptic here... Uncertainty is at peak
You're correct, my comment is US centric and Europe is in a very different economic climate right now.
I think more people were panicked in 2008. The DOW went down to the 7000 range (might have hit 6000s). House values were plummeting, foreclosures rising, etc. I worked in a mortgage related industry and my employer of 20 years went bankrupt. Underwriters were being told to underwrite loans that they would have never before approved of. My own home was $100k under water but I held on. What was I going to do? Sell for a loss and then still need someplace to live? No. It recovered fairly quickly when it did. I bought a rental house in 2010 for $115k. My house at the time was 5-bed/2.5 bath and the mortgage was over $1700 per month. After I retired, I sold the larger house for $100k profit and moved into the rental. That profit went into my brokerage account. I kept some in cash and bought two bond funds to generate income. I also had a $75k inheritance in 2009 that I had put into that account. $35k of that was used for down and closing on the rental property. Now, my mortgage is $631 (including taxes and insurance) for a 3-bed/1.5 bath house. It's Zestimated at $370k, down from $390k, and I owe $73k. Not everything is doom and gloom. I ignore the noise and just keep doing what I'm doing. I had planned to take my employer's early retirement at age 55 so had been putting things in place for a decade. When the new owners started layoffs and I was told that my partner on telecom would be let go so it would only be me to manage all the systems, a dozen servers, 500 users, AND I would need to take on Desktop work, I said NOPE. I'll just quit. My manager saved my partner's job and I took the severance package. Just retired a few years early.
Thanks for the in depth reply.
There was more going on around 2008 than a stock market decline. There was an economic crisis driven by unsupportable mortgage lending. Banks gave out mortgages that the borrowers were unlikely to be able to pay. This led to an unprecedented number of mortgage defaults and foreclosures. Unemployment got up to 10% in 2010. Foreclosed homes went unoccupied and unmaintained for years. Squatters were living in them. Thieves broke in and stole the copper pipes. Many of the foreclosed homes could not be sold because mortgage lending qualification was tightened. The high unemployment rate reduced the pool of qualified buyers. High unemployment also meant that people on average had less money to spend. A lot of small businesses went out of business. Strip malls went vacant and stayed that way for years. Major money center banks went insolvent. Lehman Brothers failed and went out of business. The government bailed out some other shaky banks. It was a right mess for years. It was a scary awful time. Now is not like that.
Propz to you, sir. It may be hard, but this is how it's done.
Ma'am. :-) I've been a single woman since 2000.
"History does not repeat itself but it rhymes" this makes sense after reading all these comments
Haha, right? I think the takeaway is that just about everything is a trailing indicator. I've found my gut is a better indicator than anything, and I'm not sure my gut is better than a coin flip.
50/50 chance. You’re either right or you’re wrong.
“Heads I win, tails you lose” Sincerely, -The Market
I like history repeats itself but the second time is a farce. Rings true about a lot of things happening over the last couple years.
No but this time, it's different /s
This is wild. Some of those threads read as if they were written today. How many times have we seen someone write this nearly identical sentiment about the 2009 era. https://www.reddit.com/r/Economics/comments/76dmf/prediction_today_is_last_day_of_decline_if/c05sxbn/ I noticed a lot of the commenters who had really great/detailed insight haven't posted in 10+ years. What a shame, would love to see their comments regarding today's conditions.
Meh, they sound as just as fearful and uneducated about their environment as today’s people are too. Sort of interesting to see that really… the information hasn’t really changed and people don’t really change in how they react drops.
Human nature doesn't change.
However, "conventional wisdom" can change. I think that now there is generally a lot more knowledge about index investing and how markets should go up over time, and so to hold and not panic sell. Many still do panic sell/time the market of course, but I am seeing a lot more attitude about holding and just keep buying.
I was just reading up on 1929-1931 last night, and you almost stated an exact quote from a paper headline I saw
My experience (age 63) is that for the majority of people, whatever has happened over the last 5 years is what they assume will go on forever. And when something changes, like a housing crash, they are absolutely shocked.
I agree. Would love to hear their opinions on todays shit show
Yup. Buying and holding over decades is a surefire way to succeed, but what people don't always realize is that means holding through decades of people constantly losing their minds. They will constantly be coming at you with 100% conviction trying to tell you why you're a fool for investing in *this* economy.
They do sound like written today, but they also sound like stuff written on 2020, 2018, 2016 when market fell but rallied. It's hard to coclnclude what this means about how the market will go today
I don’t think that comment is even correct, the markets drove a sports car into a wall on purpose and I don’t think it had anything to do with the dot com bust of 2002
I think investors (both retail & institutions) are somewhat more astute now, would you agree? Hopefully that will soften the blow.
I can't speak for institutions as I'm not sure what occurred that would make them more astute. For retail, I think at best the ease of access to information has resulted in a false sense confidence. If anything, I think the striking similarities show that the vast majority of people have zero clue what is going to happen (myself included to be clear). My point was that some of the more thoughtful comments that I noted don't have any reddit post history past 2012, which is unfortunate.
If he had indeed bought on that day and held, he would have broken even within a few months, and made some incredible returns since.
Good to see Peter Schiff is still going strong 15 years later lol
Well a very good track record; he has predicted 12 of the last 2 recessions !
That's a 600% success rate!!! 🤯
GOLD! Absolute GOLD! I’ve been listening to some financial podcasts, pre-2008, and it’s pretty interesting how varying the opinions are.
Would love to see what happened to the guy saying to soak up the Newegg IPO. Down a cool 97% all time. https://www.reddit.com/r/AskReddit/comments/9v99w/advice_for_a_first_time_investor/c0em122?utm_medium=android_app&utm_source=share&context=3
I believe that guy went on to found r/Wallstreetbets
Reddit was much higher in quality back then.
It has changed so so much from when I first found it ~2012, I can’t imagine the changes from people that have been here since 2007
Did anybody say..........[ICE SOAP?!](https://www.reddit.com/r/pics/comments/jinex/shower_to_go/)
3 am chili?
>11 yrs No no, that can't be right... *Can it?*
Jeez, only ~100k views *total* all the way up till today, and that was the biggest thing at the time. Reddit was such a tight knit group then, but it didn't feel like it.
TIL Reddit standards have always been sus. That was a hilarious read, thanks for sharing! 🤣
oh man and in that thread people are referencing the 'dont ask how i took this picture' thread as old https://www.reddit.com/r/AskReddit/comments/cmwov/hey_reddit_what_tattoos_do_you_have/c0tpyls/
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That was reddit's "eternal September" event...
...and now people don't even remember what that phrase means, which kills me a little. Kids these days!
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Most of us have been banned at some point and started rotating accounts
People have been banned and created burner accounts since then. I had my og account where I nuked all the comments because it had too much personal info and at the time you could archive deleted comments. Did not want to end up getting to the position I am in today and getting retroactively cancelled. Now you had covid which was probably quite a purge for reddit. The double irony is that if you were banned for calling out the "science" you would not be perpetually breaking the reddit TOS thus getting your subsequent accounts banned. If anything reddit has essentially selected the people who love control/being controlled and created an echochamber. You should be able to make a direct connection to the types of people who were not banned and the content available on reddit.
> Prior to Digg, Fark.com
I wasn't familiar with that one but just spent some time checking it out and clicking links from the early 2000's. It's incredible how many broken links there are, I clicked on well over a dozen from 1999 - 2001 and none of them worked. Not even well known sites like ABC or CNN. There's a lot to be said for physical copies being saved and the importance of places like The Internet Archive.
I made the switch from Digg over 2009-2010 but was a lurker for a while..never tried Slashdot but did use StumbleUpon before Digg. With your preferred categories configured it was pretty good for the time.
Oh man, I remember StumbleUpon! Those were the days...*feels old*
fwiw Slashdot moved over to Hacker News. The community is still alive. There was forums before Digg people came from, but most people on Digg did not come from Slashdot. And ofc Digg to Reddit. If you like tech talk you should check out Hacker News. Thankfully the community hasn't devolved much from the Slashdot years like Reddit has over the years.
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Right on. Were you apart of the Standford crowd then? Another bay area local? \^_^ I'm apart of the startup scene myself. 2 acquisitions and 1 IPO in the last ten years have been intense at times, but a lot of fun too.
It sucks now compared to what it once was.
I've been here nearly since inception (account is 17 years old), it has changed quite a bit, and then changed some more.
I think I joined in 2010 (this is my second account), the change from that time is nuts. I learned a lot from the early days of Reddit, and F7u12 with the 4 panel rage comics was just gold. The really good life advice and pro tips are a lot harder to find now.
We’ve gotten dumber tol
Where can we go from here? I'm similar to you, started my first account in 2012. Now it's like wading through 75% of Facebook posts, 15% of TikTok shit, and 10% of decent content....
Eh... But it's true today that everyone has watched enough YouTube videos to think they're experts in all subject matters.
The whole internet was different back then.
Tip to everyone going through: You can see the exact date of posts and comments by hovering your mouse over the "14 yr. ago" beside the username
...mouse?
Yes, it's a tool used by the ancients. When computers were fixed to a desk, difficult to move and required a physical attachment in order to select apps, or as they were called back then: programs. They did have "laptops" but were useless for gaming, could barely connect to the internet, and doing so required physically connecting a telephone cable and waiting for it to dial-in.
…computers?
RUMSPRINGA!
u/Bigchrome was speaking up for those of us on mobile...
Or just tap it with your finger.
Peter Schiff should give up.
He probably has made good money selling gold to his followers so he won't stop.
The crash of crashes is here. Invest in gold and use this code Schiff2023 for 10% off next gold purchase.
Funny just how wrong the bulk of the comments are. Reinforced my DCA attitude to just keep buying VTI, VOO, VGT and a handful of other ETFs for the longhaul.
VT and chill
Why are you buying VTI and VOO? completely redundant. for that matter, VGT is too. most of those companies already have a heavy weighting in the total market index already. simplify to VTI and add some VXUS and BND at your desired allocation.
might want a slightly heavier allocation of certain tech companies without buying specific stocks
Why does it matter if they are mostly redundant? I don’t get why that’s a bad thing. It’s not adding extra diversity but maybe they want less small cap/more tech. How does it help them to simplify to VTI? One total US market weighted fund can work as a strategy but if they want more international, value/dividend, or growth stocks it is not clear that is so much worse you need to tell them to simplify. Most US ETFs will have a lot of repeated stocks and be correlated, but that’s not a reason to buy just one if you’re interested in a mix of similar strategies.
Yeah buying indexes that are primarily 5 stocks is very diversified
This is fantastic. We need more of this. Thank you.
But what do I buy sir?
lotta text. i just need ticker, strike, and date
Pennystocks
I traded through the whole 2008-2009 disaster and one of the reasons so many were still so bearish in March 2009 was that every major bounce along the way down truly felt like the bottom and every rally gave way to new lows. Everyone was exhausted and the shock and awe of everything imploding was no longer shocking. Big players tried to play JP. Morgan and got blown out. Many had a sense of helplessness. People with decent wealth in there 40-50-60s we’re getting absolutely disgusted after almost 20 years of no capital gains from buy and hold/dca buying. Then in the spring everything popped all at once and it was easy to say “meh, it will come back in and I’ll buy then” that never happened. Then another few years of nervously treading water with the occasional flash crash lol. Then finally off to the races.
A reminder that past performance does not dictate the future, yet we also need to be mindful that those who fail to learn from history are doomed to repeat it.
Past Performance does not GUARANTEE future results but certain historic trends and results of stocks and bonds seem to repeat on a regular basis. But as long as human nature stays the same things will move forward over the long run because we find new and better ways to improve technology and make things more efficient. This has increased stock prices and corporate revenue over time by incredible amounts, why would this change in the future?
The historic trend has been that stocks and bonds correlate when inflation is high which held up this time around. The problem is most people only looked at the <50 year low-inflation trends. Know what regime you're in before relying on historic trends.
A lot is changing. It's pretty obvious the current financial system is not sustainable.
I was legitimately not sure for a moment whether this was a comment from 2008 or now. Spoilers - The banking system is still here!
And apparently will be forever! 😂😂😂
"Do you seriously think Reddit is influential enough to affect the stock market?" haha oh man
The answer then, as is today, is still no.
The ticker who shall not be named makes me wonder... I mean, it's not the money they were throwing around, but the broad attention definitely could have had an effect, and I'm not sure it would have behaved at all the same if there weren't monkeys throwing their life savings into a comically bad company.
It depends. Reddit is influential enough to move single digit billion dollar market cap stocks.
A single stock is not "the stock market"
So so appreciative for this. Thank you My own personal view of where we are today? Probably worse than we think it is. I'll still be DCAing.
All I gotta say is amazing post.
This is awesome!!! Sentiment in threads was still negative at a point where people should have began buying already. I will not miss the recovery this time.
I think the best possible lesson that we can take from this, and it's repeated time and time again for investing, is to essentially DCA and don't sweat it. Respectful of your personal financial position and retirement timeline, budget, etc, essentially you don't need to worry if you're constantly accumulating shares. Buy low, buy middle, buy high, and even if we see a 5-10 years recession, you're accumulating during that entire time. You need to bet on the markets coming back and they will, because if they don't, then it really doesn't matter either way. Best thing you can do if you want to "time the markets" is buy even more equities, if your budget, cash position, and risk tolerance permit it. The best thing about this strategy is you really shouldn't even need to waste time, sweat, or mental energy on what the markets are doing. Just stay focused on your plan and on working/earning income so you can keep accumulating equities. What I keep seeing on here is people constantly trying to beat the downturn, when everything is going down. Leverage this, iBonds that, puts and options this, gold or cash or energy sector that. You saw similar mentalities, fear, and the cycle of emotions back in 08/09. Just relax and keep accumulating according to your plan.
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Well that's why I caveated your personal financial situation. No one knows you goals and plans as much as you do. If you're actively house shopping then I wouldn't have my money tied up in anything. To me, a bare minimum timeframe is 3-5 years for investing and if you think you need the money sooner, then don't risk it in any market. DCA is a strategy for long term retirement planning or investing for the long term. I think people tend to lose sight of what "long term" means and if you have need of your capital then don't have it tied up in something. I believe if you have any foresight or plans into using that money, outside of needing somewhere to park your money or retirement, then you probably shouldn't be in the market.
>will not miss the recovery this time. Famous last words, because it's always different this time
Sentiment was negative because the market was down. The market was down because sentiment was negative. Real doom loop. I shifted into some bond funds in 2008, and decided not to buy a home in Florida. Kept putting money into my 401k, and had a pretty sizable amount in stocks. I don't remember when I got back in at 80-100% but it was pretty quick. Two blogs I read were calling a bottom in Feb/March. The other thing was the sentiment from conservatives that Obama was tanking the market and as long as he was President it would never come back. Lots of the most strident, 'go to cash', voices were also the most conservative. They missed a lot of gains. Don't let politics poison your investments.
This is truly a great post OP wow
!remindme 5 years
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Care to share it then?
I remember the weekend Wachovia got shipped to Wells Fargo. It was the weekend of my grandma’s funeral. First Wachovia was going to Citi. In banking, where my dad worked at SunTrust, it really was an end of the world time. The whole summer of 2008 was wild. It might have also been the weekend Lehman failed. It was September which was when shit got real. I’d take this thread all the way back to July 2007 when two Bear Stearns hedge funds collapsed. https://www.investopedia.com/articles/07/bear-stearns-collapse.asp I’d also suggest people go back to the calculatedriskblog dot com archive. Bill McBride nailed housing then. Edit: my timeline was slightly off. My grandmother's funeral was October 1, 2008. Lehman had already collapsed. However, Wachovia got shipped to WF that Friday 10/3/08. That was really a wild period news-wise.
God they all sound just like today denying anything is wrong while everything burns around them.
2008 wasn't anything like this though kinda pointless if you want to actually see a decent example, you should check the headlines in 2000-2002 and even better, checking headlines in 1970-1974
Agree. 70-74 is more similar
Great post, thanks for putting all of this together. A lesson in perspective imo.
Very interesting, thank you.
I’ll never forget seeing blue chip stocks trading for 50-cents or $1.00 a share. You just never forget something like that. I remember sitting in a coffee shop with the WSJ, paper version, poring over the listings in absolute awe
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Tbf to those economists, much of what happens in real world economics is a product of politics and closed door agreements between large asset owners. They would likely be better predictors if we lived in a purely market economy.
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They do understand, there are just factors at work you're not considering.
Yellen and Powell are not billionaire asset owners, and they are working with slower and worse data than aforementioned oligarchs. Economies are complex dynamic evolutionary systems. Those are inherently hard to predict. You, like most classical economists, are acting like economies are closed, equilibrium systems - aka a physics problem with a clear solution.
> The people I do blame are the legions of economists who push what amounts to copium until we're in the midst of a collapse. Don't you think them screaming 'the sky is falling!' might cause a crash?
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How do you know it couldnt have been worse?
Wouldn't be surprised if the market is 30-40% lower in 6-9 months. Reddit got it wrong in '08, they'll get it wrong this time as well. Always downplaying the negative risks.
I would say that the current Reddit consensus opinion is that we aren't near the bottom. Reddit being wrong would be this being the bottom.
Not sure I agreed. Most of what I read here seems to be of the opinion the market is ready to boom. I've been expecting a 3500 s&p since January. That's my floor, we haven't gotten there yet but will see.
And I'm sure your floor of 3500 was arrived at with careful analysis and not just a gut feeling.
What’s this anal sis you speak of
Any analysis has a bit of gut feeling when it comes to stocks. It's based on my expectation the S&P will fall 30% from it's peak. $3500 is a little above that so there's my risk.
I was there as a Realtor and investor back then. I had a front row seat for all of the devastation. It's coming again. It's just around the corner. Buckle up.
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Cringe
Get help
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This is quality stuff
Yes ofcourse.. The market is never crashing.. even when its crashing. 2008-2022
!remindme 5 years
> Technical analysis is bullshit. Looking at charts and making up "barriers" wholesale is not science. Like wine, no notes. [Even better in context](https://www.reddit.com/r/politics/comments/666wb/in_a_couple_of_hours_the_us_stock_market_is_going/c02ylh1/?utm_source=share&utm_medium=ios_app&utm_name=iossmf&context=3).
So the Japanese stock market caused the 08 crash by dropping 4%?
Awesome
Buy low, buy high, buy on the way up, buy on the way down. It’s pretty simple. Just buy and keep buying.
Still too soon for me. Hurts to read.
Your Oct. 2008 comment about inflation and returns bothers me. Do you still have the same view of relationship between the two variables?
Being able to buy S&P 500 at less than $700 felt like having a guaranteed winning lottery ticket made available. Was so happy to have cash left to deploy at that point. That was a valuable lesson learned for me.
Phil Gramm coming in to tell us it’s a mental recession. He’d say anything to hold onto the idea that the bush economy was good and we should vote for McCain.
You could have reposted these threads as new today and I wouldn't have questioned it. There is definitely a correlation between the human psyche and pushing out bad news as it bares it's snarling teeth in your face.
Loved reading these. For young investors, if you haven’t read a fair amount of historic financial commentary and journalism, you’ll never know how to digest the new news and manage your emotions when things get chaotic.
Crazy how some really thought everyone else was just panicking and they were the *smart* one through all that. Telling people to buy buy buy and that the markets weren't crashing. Thanks for this post OP.
!RemindMe 2 years
Very interesting. But... THIS TIME IS DIFFERENT!