Merry Correction Day

bostonerimus

With major indexes in correction territory (greater than 10% down) it's time for all retirees to do their Guyton Klinger income adjustments, check on the cash reserve, or feel smug about having an annuity or DB pension....seriously this is where sequence of returns risk becomes a practical reality rather than some theoretical possibility.

232607

Or considering the time of the year they could just say sod it, I’m having an extra glass of sherry. :j

jamesd

Or have the extra glass of sherry and be glad that you followed Guyton's approach to reducing equity percentage to reduce sequence of returns risk.

I was about 44% cash, bonds and P2P lending before recent events. And since Guyton-Klinger draws on cash first (if no market gains) that means no need to sell equities. I'm imperfect but quite relaxed. I hope that others also paid attention to Guyton.

Linton

It’s blue skies and sunshine here in the Maldives. No need to worry about Guyton. Plenty in cash and Wealth Preservation funds as per objectives. Possibly a significant rebalance required in April, possibly not, who knows.

Happy Xmas.

bostonerimus

Linton and jamesd are well prepared, but this dive in market values could well stress many retirees and their drawdown plans. Now that boring things like annuities and DB pensions are just a memory it won't be long until the necessity for robust planning becomes apparent. I fear that many people won't have solid plans.

Linton

bostonerimus wrote: »

Linton and jamesd are well prepared, but this dive in market values could well stress many retirees and their drawdown plans. Now that boring things like annuities and DB pensions are just a memory it won't be long until the necessity for robust planning becomes apparent. I fear that many people won't have solid plans.

The FTSE world index with divs reinvested is now back to a level it first exceeded in March 2017 and subsequently dropped to in September 2017 and again in in March 2018. So possibly the recent fall is a bit of a shock to anyone retiring in the past year or so but it should not be a significant problem for the majority of people in drawdown..... as yet.

Sea_Shell

We've got 8 years worth of current expenditure in Cash products...so not too worried at the moment. Still investing via pension etc. but I don't feel as well off as I did 4 months ago!!

tacpot12

Yes, testing times for those of us who have to manage sequence of return risk. I have a plan, but the plan is untested, so we will have how things look end of next year after the plan has been running for a while.

Fingers crossed and best wishes to all investors.

MK62

bostonerimus wrote: »

With major indexes in correction territory (greater than 10% down)

Most have now entered bear market territory..:(...probably not the Christmas present we were all hoping for.


Still, what's bad for some could be a buying opportunity for others.......or not!!:eek:

Alexland

I browsed some of my accounts and decided not to update my spreadsheets today.

:xmassign::xmastree:

kidmugsy

From Zero Hedge:

"The Fed is the problem because they cut rates to Zero and held it there for 7 years. The Fed is the problem for helping orchestrate the bailouts. The Fed is the problem because they did multiple rounds of QE which did NOTHING for the middle class and the average Americans, instead it made the rich richer and created the largest wealth inequality. The Fed is the problem because they waited too long to begin raising rates, which helped create the largest asset bubbles the world had ever seen."

Once you have a market priced for perfection it's intrinsically unstable. Something will burst the bubble but nobody has any way of knowing in advance what it will be (nor when it will be). Moreover nobody has any way of knowing in retrospect what it was.

That won't stop chumps casting nasturtiums though, because their hotlines to God, or Karl Marx, will reveal exactly who the culprits are. We can all guess who will be blamed by Corbyn's circle, eh?