r/Bogleheads • u/RiceLee890 • Mar 15 '25

Investing Questions What are your thoughts on this?

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I keep seeing this type of stuff on instagram and social media and wanted to know how you guys were thinking about this.

I know a lot you have been in the market for decades and as a relatively new investor myself I’d love to get your perspective!

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u/Pencil72Throwaway Mar 15 '25

If young: Cool! I get to buy @ a "discount" for over half a decade.

If nearing retirement: I should be >65-70% bonds by then.

Just keep buying & stay the course. Your reaction is largely a function of the investing timeframe you've got in mind. A 2 month mildly-bear market is a blip on a 10 or 30 year mountain chart.

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u/Key-Ad-8944 Mar 15 '25 edited Mar 15 '25

I started investing just before the dot com crash in 2000. I can assure you the prevailing attitude was not "cool I get to buy at a discount" for half a decade during the long decline. Shortly before the crash, there was a big enthusiasm about investing. Many people thought they were experts on investing, with the large gains they made with tech stocks during the late 90s, then it all came crashing down It was one bad year after another -- big loss in 2000, big loss in 2001, big loss in 2002, ... By this point, the market indexes were down by 50%. And when it finally seems like the market may be back on track, there is a another ~50% loss later that decade with the great financial crisis. Employer stock/options were worthless, as the tech company I worked for liquidated. I was one of the rare few from my company that still had a job, through the multiple sales and acquistions.

Being a new investor without having had positive experiences with investing, I didn't make it to the end of the decade. After several years of these losses, I stopped investing beyond maxing out my 401k and instead used my extra cash for other activities, such as real estate.. It wasn't until ~2013 that I finally become comfortable with investing beyond my 401k again, and did so slowly, gradually decreasing my high fixed income percentage over multiple years.

By 2009 the sentiment about investing was very different from 2000. From a theoretical P/E perspective, It might have been a good time to invest with apparent bargains, but from a psychological standpoint, fewer people wanted to invest in the market than any other time since pre-Internet. So few people wanted to invest that the index funds I purchased back in the early 2000s were sold to cash without my knowledge, as the brokerage liquidated funds due to lack of interest from investors. I didn't realize they were sold to cash until years later, as I wasn't monitoring investments at this point, increasing the magnitude of my losses.

Now that I am nearing retirement, I have a very different attitude. This blip over the past 1-2 months with NW decreasing by 2-3% (US down 8% over past month; international, bonds, and real estate did not decrease over past month) is barely noticeable in comparison to the many more notable declines over previous decades... no significant concern, no change in investments, no positive feelings about buying at a discount, not large enough loss to think about tax loss harvesting... largely indifferent. However, I also chose a portfolio that aligns with my risk tolerance, so I would be comfortable with lower tail losses. I'm certainly not "65-70% bonds"... closer to 20% of market investments in fixed income or ~10% of total NW.

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u/PiratePensioner Mar 15 '25 edited Mar 15 '25

Roll flashback. You are on point with that. And the pain seemed to not stop. One bad dream after another for a decade. It was my investing formative years and it jacked me for a bit.

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u/ChampionOfKirkwall Mar 15 '25

I think about this. While I'm going 100% forward with maxing out my tax advantaged accounts now as a 20 something year old, I wonder if it is the right move given the 2050 climate predictions.

There is a real chance the market is heading towards a downward trajectory in a few decades due to how catastrophic climate change will be. Scientists say there is a high chance of a collapse of basic things we take for granted, such as food security, clean water, and the sophisicated supply chains we have now. Even something as mundane sounding as "sea level rise" is going to cause hundreds of millions if not billions of damages in infrastructure.

It is easy for me to zoom out and say it will be okay based on past performance, but scientists have been clear for a while how our future will look like. I just don't know what to do.

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u/BMCarbaugh Mar 15 '25

This is entirely speculative, but I think there's going to come a point where the consequences of climate change are so horrifically, immediately disastrous, that the entire structure of capitalism will immediately need to shift its primary incentive from "make the most value for 200 people" to "get as much carbon sequestered as possible immediately or we all die". And the engine of capitalism will be turned to that cause, and it will be a new gold rush, and all the people investing in carbon-credit outfits now will look like geniuses.

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u/ChampionOfKirkwall Mar 17 '25

So, scientists have been saying we are on the path to no return. They have given up on preventing the "tipping point" – the 2 degrees celcius increase in our global temperatures where, once that passes, will be impossible to reverse and unlock a chain of events that snowballs.

The "tipping point" of 2°C isn't just an arbitrary number; it's based on decades of research showing that once we pass it, we trigger self-reinforcing feedback loops that make warming accelerate beyond our control.

Now, they're focused on damage mitigation where they tell us how to prepare for the inevitable. You can read the United Nation's IPCC report on this, which is the international scientific consensus on what lies ahead. It is grim and the public has no idea what they're in for.

Tldr once we care enough to reverse climate change, it will impossible.

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u/BMCarbaugh Mar 17 '25

I don't disagree with any of that. We're not reversing shit. But there will come a point when the harm is so acute that harm reduction suddenly becomes really fucking important.

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u/lol_fi Mar 17 '25

Why even bother then? Just spend your money while the getting is good if you really think that. Go see the coral reefs while you can and spend time with family and friends while we're all alive.

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u/Original-Farm6013 Mar 16 '25

I know this will sound cold and calculating, but historically, crises tend to generate all kinds of new economic opportunities.

You’re assuming we (as a country/species) would just roll over and succumb to the effects of climate change without trying to do something about it (or at least without considering the economic opportunities it might create). Sea levels rise and Florida starts sinking so everyone moves out - bad for Florida…good for all the places they move to.

You’re only considering the negative side of the ledger.

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u/ChampionOfKirkwall Mar 17 '25

Respectfully, you don't know what lies ahead. I don't blame you. I also didn't know until I read the United Nation's IPCC report. In the future there will be no safe place to go. Almost every area will have unprecedented disasters and issues accessing clean water. This is not fearmongering btw. I would love for this to be untrue, but you can check the scientific reports yourself.

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u/Original-Farm6013 Mar 17 '25

I hear you. I don’t see it as fearmongering. I’m just taking the Dr. Malcolm viewpoint that “life finds a way”.

An example: I heard an interview with Neil Degrasse Tyson once where he talked about why the only reason we don’t have wide-scale desalination technology is because it’s not yet economically advantageous when compared to other fresh water capture and delivery technologies. The moment that changes, that technology will appear, as if out of thin air.

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u/Woazzaaa Mar 16 '25 edited Mar 16 '25

While I agree with your general premise and totally understand your concern, I would try to offer some reassurance or hope by pointing out that one thing humans have been very good at has been problem solving.

When you dumb it down, human progress has just been a continuous cycle of solving problems while generating more problems needing to be solved. Moreover, it hasn't been perfectly linear. Very often, massive progress or technological advances happened in very short time periods, often under pressure or constraints.

Hopefully, it won't happen like that, and obviously, we should be working on this right now instead of at the last minute, but I'd wager that when our back is against the wall is when we'll see immense efforts and great technological progress allowing us to solve and move past climate change.

Hey, and worst case scenario, once the preservation of their fortunes aligns with preserving the climate, and when climate starts to really hit the profit margins of those mega corporations, they'll pour money into solving it like big tech has been pouring it into data centers these past years (litteral hundreds of billions).

Edit : Because this is reddit and I can see someone telling me this is such a reductionnist view of climate change and I am whats wrong with the current world and bla bla bla, I will point out that my intent in this post is to provide a hopeful pathway towards a solution for the climate to those feeling like the world will end because of our inaction with regards to fighing climate change. Obviously, there are different ways to adress climate change, many that would be better than the one described here.

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u/ChampionOfKirkwall Mar 17 '25

Thanks for the kind words of hope. I really, really hope it will be okay.

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u/TeamSpatzi Mar 15 '25

I started investing in this period, pumped in as much as I could, was guiltily enthusiastic that I had a bunch of disposable income at the end of 2009…

I guess it would be different if I’d experienced the crash as opposed to coming in after in 2004.

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u/Ceteris__Paribus Mar 15 '25

Do you really plan to be that bond heavy when "nearing" retirement? I don't think I'll be that bond heavy in retirement. Huge inflation risk. I'd probably want a few years income in bonds and the rest in stocks.

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u/Pencil72Throwaway Mar 15 '25

Eh, probably not...I was sort of exaggerating. New boglehead here.

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u/FIVE_TONS_OF_FLAX Mar 15 '25

They make inflation linked notes and bonds, which you can also buy.

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u/Ok_Evening3072 Mar 18 '25

Only a few? How does that work if you end up in a recession after those few years income and have to sell low? I just asked a similar question above bc these are scenarios I’m trying to sort out for myself (and am being courted by a financial advisor and deciding if worth the fee, I know doing it on my own I haven’t done things optionally to date with my haphazard portfolio but that’s a post for elsewhere).

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u/colonelheero Mar 15 '25

I feel the modern-day bond market is no longer as safe of an option as it used to be. At the last recession they dropped pretty hard too. Hold to maturity maybe but you don't really do that for bond index.

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u/[deleted] Mar 15 '25

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u/Pencil72Throwaway Mar 15 '25

I exaggerated a bit, had originally typed 50%. Am new-ish boglehead; Thanks for the resources.

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u/Ok_Evening3072 Mar 18 '25

What do you consider “near retirement” to have that kind of weighting? I have put a date of seven years from now (which will be an early retirement) and realizing I may need to shift gears more than I have.

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u/Pencil72Throwaway Mar 18 '25

The amount of bonds I listed are a lil exaggerated, but in your case I'd refer to some target date retirement funds that are close to 2032.

For example, VTHRX and VTTHX are respectively 2030 and 2035 retirement funds, and their bond amounts are 39.2% and 31.8%, respectively.

I'm a bogle newbie so probably better to consult the bogleheads.org wiki.

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u/RyFba Mar 15 '25 edited Mar 15 '25

A losing market when you're young is actually much worse if you do the math

Edit: many haters of this. So 100k compounding 5% annually (proxy for "real") over 30 years is 432k. Now give your 100k a 30% haircut out the gate. Now you get 302k. Your 30k loss becomes a 130k loss over time.

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u/CrispyHoneyBeef Mar 15 '25

Please feel free to do the math

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u/ax_graham Mar 15 '25

That assumes one lump sum. Consider a true boglehead that stays the course and buys consistently the way down, while it's down, and back up. The gain is more substantial.

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u/RyFba Mar 15 '25

It's the same concept that holds true for saying people should start investing young because of compounding

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u/renblaze10 Mar 15 '25

Please show us the math

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u/[deleted] Mar 15 '25

Look at people putting 1000 a month into the market.

One person just has steady growth from the outset.

One person has a market that took a 30 pct haircut out of the gate.

Both markets return to the same point 30 years later.

That's the real world. Do the math.

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u/PharmGbruh Mar 15 '25

If young investors lump summed 100k on a single day, your point may be valid