What would be affected in your life? Would you panic? Could you withstand such a decline in the markets?
What would be affected in your life? Would you panic? Could you withstand such a decline in the markets?
I'm well armed as is my local group. We have planned for such a contingency.
I wouldn't be happy about it but would dump our available cash and forthcoming bonuses into SPY. As long as we kept our jobs and what not it wouldn't really impact our day to day at this point.
No problems. I keep a quarter million bucks liquid to live off of so I don't need to tap those other accounts for years if I don't want to.
I would become VERY cash poor
In isolation a 60% drop in invested wealth would have virtually no impact on my lifestyle, but 60% drops in the market don't generally happen in isolation.
Sally Vixxxxxxxxens wrote:
What would be affected in your life? Would you panic? Could you withstand such a decline in the markets?
That will give me a great opportunity to move my money from bonds to stocks.
I don't plan to retire anytime soon. So being able to buy on the cheap would be great. ;)
It would not affect me at all.
I'm military so will have at least one pension when I get out. My plan once I hit 20 is to get out and get a DA Civilian job, earning a second pension (well its a combined pension/SS/401k) while collecting the first.
This is the way.
The biggest decision point will be how long I stay in the Army, and that depends on what rank I am at 20 and if the Army dangles the carrot as they are keen to do. I am a Sergeant First Class. Assuming I make Master Sergeant in the next 9 years I will have to hold that rank for 3 years in order to retire with the pension at that rank.
Alan
I have 35k set aside for a monumental dip like that. Have $250k invested.
Monkeys Skyping wrote:
In isolation a 60% drop in invested wealth would have virtually no impact on my lifestyle, but 60% drops in the market don't generally happen in isolation.
Yea, this is correct.
There will be other very bad things happening if there’s 60% drop in the market.
With that kind of drop, something very bad is happening where job loss is likely. Id like to say I wouldn’t touch my investment or live normally, but when it feels like end of the world, humans including myself could do irational(it’ll feel rational in present time) things that could be very detrimental.
I have a long term strategy to weather bad times, but every drop is different, so who knows. It’s hard to say until we’re there.
Flagpole would be relegated to a home one-lane bowling alley.
Sally Vixxxxxxxxens wrote:
What would be affected in your life? Would you panic? Could you withstand such a decline in the markets?
Would not instantly impact our life. Have cash set aside for next 3 years needs so have time for it to return. And this scenario has never never happened.
The DJIA declined 89% from 1929 to 1932.
Sally Vixxxxxxxxens wrote:
What would be affected in your life? Would you panic? Could you withstand such a decline in the markets?
The real trouble will come when the US govt cannot back its bonds.
high school xc coach wrote:
I would become VERY cash poor
How so? Dividends currently held aren't impacted by a stock price. You should only be impacted if you panicked and sold.
If the market dropped 60% that would be fine and I'd just push 300k cash into the best values.
DanM wrote:
The DJIA declined 89% from 1929 to 1932.
FED back then did not know how to respond to a market crash.
We had the biggest one day drop in 1987, and that did not lead to a recession. As Samuelson once said, stock market crash predicted eight of the last five recessions.
I make sure my therapy girlfriend/unofficial wife was by my side and the furry cat as well. I'd dispose of any bleach and rope like material and then I'd head on a bee line to the liquor store and buy an inappropriate amount.
They have circuitbreakers in place to stop trading before it can reach those depths.
Depending on what prompted the dip, I'd buy more of the stocks I like.
Sally Vixxxxxxxxens wrote:
What would be affected in your life? Would you panic? Could you withstand such a decline in the markets?
I would be thrilled. I'm just saving for vacation through investing. And a big decline like that would mean I could buy stocks at a large discount.
60% would be nuts though.
If you need your money anytime soon it shouldn't be in the stock market. So very few people should be that effected. If it dropped that well I'd throw a good chunk of cash into the market and make a big profit over the next year or two.
Now if you said how would my life be effected if the market fell 60% tomorrow and didn't recover for 5 years? Well I guess I wouldn't buy a bigger house in 5 years.
Money that's in the stock market should be thought of as your extra money that you don't need right now. If you're retired you should periodically take chunks out of the market and in something safer so that you don't have to sell at temporarily low prices.