tag:blogger.com,1999:blog-5621914599310831423.post8864671737244601187..comments2024-03-01T03:44:39.796-08:00Comments on The Retirement Café: What I Do When the Market TumblesDirk Cottonhttp://www.blogger.com/profile/05616143752082768155noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-5621914599310831423.post-69467379539322778152016-01-20T07:53:55.839-08:002016-01-20T07:53:55.839-08:00That's my idea of a Black Swan, not the occasi...That's my idea of a Black Swan, not the occasional severe market downturn. Bernstein talked about that, too, and suggested that expecting a success rate in retirement of more than about 80% is probably unrealistic.<br /><br />As I said above, losing your retirement savings or a big chunk of it, and with it your standard of living, is possible and it doesn't matter if that happens over decades because of sequence risk or in a year due to a spending crisis or over decades due to Japanese-like market returns. You need a plan (I suggest a floor) to deal with the possibility, no matter how unlikely.<br /><br />The scenario you suggest would impact far more than your portfolio and you should plan for that, too. I don't worry as much about market volatility as other sources of ruin because I can limit my exposure to the stock market. I can't limit my exposure to spending crises.<br /><br />One point I want to emphasize that has come up in several comments on this post. Retirement finance is much more than managing a portfolio of savings, yet researchers, retirees and many of my readers seem singularly focused on market risk.<br /><br />We need a broader perspective.<br /><br />Yet another excellent question, Barry. Thanks for the discussion!Dirk Cottonhttps://www.blogger.com/profile/05616143752082768155noreply@blogger.comtag:blogger.com,1999:blog-5621914599310831423.post-74655165420110072052016-01-20T05:39:43.622-08:002016-01-20T05:39:43.622-08:00Dirk - While I, too, find Bernstein's "ho...Dirk - While I, too, find Bernstein's "how much bear market can you stand" table illuminating and helpful, it implicitly and optimistically assumes a continuation of a reversion to the mean pattern that has characterized the US market for the past century ( i.e. that bulls always follow bears.). What it doesn't model and what worries me the most is a significant drop followed by Japanese-like flat market lasting decades. I'm thinking this would wreck permanent havoc not only on many retiree portfolios, but also on every private and public pension fund. Wondering what your thought is on this this.Barry Wassermanhttps://www.blogger.com/profile/07427324772238348828noreply@blogger.comtag:blogger.com,1999:blog-5621914599310831423.post-30439129054352293042016-01-19T12:12:59.758-08:002016-01-19T12:12:59.758-08:00I know, right?
They're cheaper than they were...I know, right?<br /><br />They're cheaper than they were two months ago. Whether that is "on sale" remains to be seen!Dirk Cottonhttps://www.blogger.com/profile/05616143752082768155noreply@blogger.comtag:blogger.com,1999:blog-5621914599310831423.post-14359423990558238302016-01-19T12:05:26.181-08:002016-01-19T12:05:26.181-08:00Equities are on sale? Why didn't anyone tell m...Equities are on sale? Why didn't anyone tell me?Paul D. Allenhttps://www.blogger.com/profile/11965561223342985464noreply@blogger.comtag:blogger.com,1999:blog-5621914599310831423.post-83914492982769922016-01-18T14:12:55.947-08:002016-01-18T14:12:55.947-08:00Sleep is underrated.Sleep is underrated.Dirk Cottonhttps://www.blogger.com/profile/05616143752082768155noreply@blogger.comtag:blogger.com,1999:blog-5621914599310831423.post-19439713489415237312016-01-17T14:31:39.423-08:002016-01-17T14:31:39.423-08:00Sound and timely advice Dirk. I haven't done a...Sound and timely advice Dirk. I haven't done anything yet, but I am getting close to my 5% buy threshold. I love being able to sleep at night in times like this. BradAnonymousnoreply@blogger.com