As 2008 unfolded, I lightened up on stocks from an aggressive position maybe 80% to about 50% before the Lehmann Moment. I didn't have much cash, but had bonds. In March 2009 I decide to take my bonds and redeploy into stock in ten monthly steps. I remember that talk with my wife, almost a decade later.barrett wrote: ↑Sun Nov 18, 2018 7:31 amocho, what did you actually do in March of 2009? Have you really learned a lot since then? Not only about markets, but about yourself and your willingness to take on risk? Not trying to be a smart ass... just asking. With only 10% cash in your portfolio you wouldn't be positioned to ramp up to 70% stocks. It's really easy in retrospect to see that March of 2009 was a great time to load up on equities, but at the time I didn't hear too many people saying with any confidence that the bottom was in.
I think the best outcomes during that crash was for people who entered 2008 with a lazy portfolio with a high cash position who also had the discipline to keep rebalancing into stocks. The second best position was probably for investors who didn't lose their jobs and who also actually kept purchasing stocks. But even that strategy was only effective for a relatively short time as the bounce back was quick.
I just can't predict this stuff. It might be March of 2001 for gold right now. I just have no clue.
In retrospect, I was lucky. The S&P500 might've gone from 666 to 333. I didn't have a process other than "buy when others are fearful". That process (lack thereof) has failed me since in different sectors; energy, gold.
I have learned a lot. The value of cash as an asset (it's a call option on anything), I had no gold in 2008-2008, and I'm using simple but robust technical indicators, and I've found researchers that I like (Kathy Jones for bonds; Ned Davis, Lance Roberts, I find value in the bearishness of Hussman, he's the Roman slave whispering in my ear "this too shall pass").
In 2000, I was fully exposed to the bear market. I was unaware of it mostly; I don't remember feeling any angst during that period. I had much less money back then, and still 26 years from retirement. Now I'm 7.5 years out.
I wish I knew in 2000 what I know now. My net worth would be 50% greater. I'm passing the learnings on to my daughter. She's graduating with a BSEE and going to work in EE in June. I think that's how families get wealthy. I loved my Dad, but didn't learn Jack from him about money. Learned much more from Mom. She practised Couch Potato portfolio investing.