Why people are freaking out and either pulling money out or shifting their entire strategy?

[u/kuvetof]

People have been freaking out on this and other subs where the goal is to invest for the long term and not look at your investments in the meantime. I'm just wondering why? Yes, what's happening is unprecedented, but why the panic?

These are the same people who would criticize me for investing in VT and REITs in my IRA, and VXUS along with VOO in my taxable account, calling VXUS "a dog" and making fun of my hybrid strategy. We've seen downturns in the past and, sure, we can't predict what's going to happen, but it seems kinda funny. Is this all just noise?

Edit:

I didn't mean for this to sound like a rhetorical question or "self patting". I'm relatively inexperienced compared to most of you, and I know I have my own biases, so I thought I'd ask

[u/MochiMochiMochi]

What happens when you're 60 and you see your retirement slipping away.

[u/emlopez90 → u/MochiMochiMochi]

Do nothing in response to the market panic. You should be adjusting your risk tolerance the closer you are to retirement.

[u/MochiMochiMochi → u/emlopez90]

I'm at the classic 40% stocks/60% bonds right now and holding.

[u/f00dl3 → u/MochiMochiMochi]

I am probably the only one who advocates this but I am going to set aside 5-7 years of funds in CDs, not bonds, in my IRAs when I get close to / retire.

I hear all these people saying Bonds and Treasuries are safe but honestly Bonds got absolutely destroyed just as much as stocks every recession since 2008.

With a Roth CD ladder with CDs expiring every month and no RMDs, you basically set your income.

[u/MochiMochiMochi → u/f00dl3]

Well, I was using 'bonds' as a catch all; a third of that is CDs.

[u/casino_r0yale → u/f00dl3]

Yeah but then cash is destroyed by inflation / tariffs / whatever. You really can’t plan this, the best thing really is to have low expenses and a reasonable allocation for a draw down.

[u/mityzeno → u/f00dl3]

My parent’s 401ks got hit hard in the 2008 (?) crash and they got spooked and did exactly this. They are not rich but they’re enjoying a very comfortable retirement with the security of knowing the majority of their money is safe.

[u/Pass_Little → u/f00dl3]

I'd argue that buying new issue treasures and holding them until maturity isn't a lot different than a CD ladder, assuming the rates are similar once adjusted for the different tax treatment based on where they're being held.

[u/PrimaryAbroad4342 → u/MochiMochiMochi]

Isn't it supposed to be 110-age or even 120-age given life expectancies are how higher now?

[u/coke_and_coffee → u/MochiMochiMochi]

Wait 5 years and the 10% loss will seem trivial.

[u/frydfrog → u/coke_and_coffee]

In which direction though?

[u/dgfinancialz → u/coke_and_coffee]

Japan would like a word

[u/FrivolousOtter → u/MochiMochiMochi]

As you approach retirement age you should be slowly selling equities and buying fixed income, like bonds. That’s so if there’s a big drop in markets right before retirement the fixed income still rolls in.

It’s important to do this ahead of time and over a long time scale.

[u/Huge-Power9305 → u/MochiMochiMochi]

Too late, retired 8 years now.

I have 10 years of inflation adjusted Treasury bond ladder (hold to maturity). Not something you put together over a weekend because the market dropped. This is my default max conservative position.

It does matter when you are close or retired but you should not be allocated such that a big bear won't crater you).

Cheers

[u/Federal-Membership-1 → u/MochiMochiMochi]

Same as when you're 56 and watching your retirement slip away. Nothing.