Save Me! Sell or Dont Sell? Take some losses?

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Topic Author
TroutMD
Posts: 86
Joined: Tue Dec 25, 2012 10:58 am

Save Me! Sell or Dont Sell? Take some losses?

Post by TroutMD »

OK… I went all in BH style several years ago. I run about 35% Total bonds, 65% Total Stock, and 20% of that in Total International.

I peaked around 2.1m, currently down to 1.68m.

I keep not wanting to look but had to look today.

I am 39, dw is 38. Three kids ages 8, 6, and 3. They (did) have about 60K, 40K, and 30K in college funds. I haven't checked that and wont. That doesn't bother me so much.

I have plenty of cash for any rainy days as there is another side business I do that requires some cash. I am mostly cash right now in that which I don't consider bad.

House we just bought, but paid ~35% down.

Single physician income, so we do ok.



KEEP ME FROM SELLING!!!!

My most rational question, of my portfolio taxable piece, I have about 600K invested. Everything is still 'up' from purchase EXCEPT Total International (about 270K). It is down about 55K in taxable. Any reason to not at least sell that for the tax advantage losses to sit aside. I have some LTG coming from a business sell. I would probably sit on that 270K for now. I think this allows me to get some tax advantages, and perhaps 'calm' me a bit? I care less about my 401k/SEPs since I am 'young'. Thoughts????
lakpr
Posts: 7715
Joined: Fri Mar 18, 2011 9:59 am

Re: Save Me! Sell or Dont Sell? Take some losses?

Post by lakpr »

It would be foolish not to take advantage of tax loss harvesting when there is an opportunity to do so. Let the IRS cut you 35%+ break on your loss (offset against ordinary income at $3000/year) ... or at the very least 23.8% of your loss (offset against capital gains).

The only thing I see a bit off with your plan is your statement about "sell that for the tax advantage losses to sit aside". That's basically exiting the market at low. If you do believe in your overall portfolio (65:35), then you should buy a tax-loss-harvesting partner that you do not also have in your Trad-IRA / Roth-IRA accounts. Don't exit the market completely!!
rebellovw
Posts: 1123
Joined: Tue Aug 16, 2016 4:30 pm

Re: Save Me! Sell or Dont Sell? Take some losses?

Post by rebellovw »

Visit the calm thread and try be calm.

It is rough - You are doing slightly better than me - and you are a Dr!

I'm at around 55/45ish AA. House paid off - low cost of living state and about 1.5M - working from home.

Only thing that I have done was TLH - I now have 3K capital loss for next year's taxes to offset any capital gains.

I'm still contributing to 401K, wifes 401K and HSA - mostly Total Stock Market - but some bonds as well.

My plan for re balancing will be to buy stocks vs selling any bonds.

I also have a very high emergency fund of cash at Ally - in two 3% CDs and Cash.

Stay calm and best of luck.
Topic Author
TroutMD
Posts: 86
Joined: Tue Dec 25, 2012 10:58 am

Re: Save Me! Sell or Dont Sell? Take some losses?

Post by TroutMD »

lakpr wrote: Tue Mar 17, 2020 12:51 pm It would be foolish not to take advantage of tax loss harvesting when there is an opportunity to do so. Let the IRS cut you 35%+ break on your loss (offset against ordinary income at $3000/year) ... or at the very least 23.8% of your loss (offset against capital gains).

The only thing I see a bit off with your plan is your statement about "sell that for the tax advantage losses to sit aside". That's basically exiting the market at low. If you do believe in your overall portfolio (65:35), then you should buy a tax-loss-harvesting partner that you do not also have in your Trad-IRA / Roth-IRA accounts. Don't exit the market completely!!
Thanks. Yes, you are correct that the TLH piece sounds reasonable, sitting on that sell is a bit less reasonable, BUT if it calms me a bit, perhaps that's good? Guess I feel MORE worried about that international stock piece than my total stock piece.

Keep the comments coming.
lakpr
Posts: 7715
Joined: Fri Mar 18, 2011 9:59 am

Re: Save Me! Sell or Dont Sell? Take some losses?

Post by lakpr »

TroutMD wrote: Tue Mar 17, 2020 12:59 pm Thanks. Yes, you are correct that the TLH piece sounds reasonable, sitting on that sell is a bit less reasonable, BUT if it calms me a bit, perhaps that's good? Guess I feel MORE worried about that international stock piece than my total stock piece.

Keep the comments coming.
This comment, suggests perhaps that the 65:35 allocation is still too aggressive than your true risk tolerance. If you feel that with a 65:35 you will have trouble sleeping well at night (SWAN factor), switching to a more conservative allocation is not bad. No problems with me if you do decide to switch, but at the same time, make sure that you are going to be recognize that 60:40 or 55:45 or even 50:50 is your true risk tolerance, and rebalance around this new target asset allocation in the future. Resolve not to deviate more than 5% from this new target.

Or, if you feel queasy about the international stocks piece of your portfolio ONLY, exit international stocks completely and split your asset allocation to 65:35 with all the stocks invested only in domestic stocks. That's a reasonable portfolio allocation as well.

It's unfortunate that the realization of one's true risk tolerance becomes evident in a real bear market, when the portfolio has already suffered some losses. But better late than never ....
Stewpac14
Posts: 40
Joined: Mon Jan 22, 2018 3:28 pm

Re: Save Me! Sell or Dont Sell? Take some losses?

Post by Stewpac14 »

TroutMD,

Your kids are young and you're only 39. I feel like you have time on your side to let things recover and gain recent losses back.

I don't even know what else to add, it is that simple? Maybe I am missing something, but selling almost always seems like a bad answer especially when you are relatively young.
carminered2019
Posts: 909
Joined: Fri Jun 21, 2019 7:06 pm

Re: Save Me! Sell or Dont Sell? Take some losses?

Post by carminered2019 »

I am 50 yo, down over 600K+ with a bigger portfolio and still see down market as opportunity. I am about to sell my high end sport car back to the dealer so I can buy more equities.

DON'T do it, you will be way up 10 years from now and very highly likely your 1.68M be 3.36M+ in 10 years.
Last edited by carminered2019 on Tue Mar 17, 2020 1:32 pm, edited 1 time in total.
MittensMoney
Posts: 258
Joined: Mon Dec 07, 2015 10:59 pm

Re: Save Me! Sell or Dont Sell? Take some losses?

Post by MittensMoney »

If you sell now, you'll buy when "the dust settles"? When the dust settles, people will be less scared + economy will be more optimistic + people on financial networks will be telling others to buy -- the market will likely be higher at that point. Why sell your well-planned portfolio when things are low and then re-buy when the market is more expensive?
Shallowpockets
Posts: 1995
Joined: Fri Nov 20, 2015 10:26 am

Re: Save Me! Sell or Dont Sell? Take some losses?

Post by Shallowpockets »

OP, you missed the sell point.
Take a breath.
Is your money now at what point in time? As in you are back to 1.68 million and where is that in relation to the past? Are you back to 2018, 2017? Look at it that way. You were not worried then, were you? Didn't bail then, did you?

You missed getting out. You are down and it probably wont go down too much further
You are back to 2017. Big deal.
BlueMoonXD
Posts: 27
Joined: Sat Sep 14, 2019 11:50 pm

Re: Save Me! Sell or Dont Sell? Take some losses?

Post by BlueMoonXD »

TroutMD wrote: Tue Mar 17, 2020 12:59 pm Thanks. Yes, you are correct that the TLH piece sounds reasonable, sitting on that sell is a bit less reasonable, BUT if it calms me a bit, perhaps that's good? Guess I feel MORE worried about that international stock piece than my total stock piece.

Keep the comments coming.
If not being calm will prevent you from doing even more reckless action, then do it. And consider how to adjust your allocation going forward as clearly this was not right for you.

That said the better course of action would be to say in the market. You are young, with a very healthy amount of savings, no immediate need for the cash, and a fairly safe job. You are going to lose money in the long run in order to make yourself feel temporarily better about a meaningless number in your brokerage account.

You have to decide if that temporary feeling of comfort is worth the long term financial harm.
BW1985
Posts: 2075
Joined: Tue Mar 23, 2010 6:12 pm

Re: Save Me! Sell or Dont Sell? Take some losses?

Post by BW1985 »

You're under 40 yrs old with a 65/35 and a sizable portfolio. You have zero reasons to sell now. :sharebeer
Chase the good life my whole life long, look back on my life and my life gone...where did I go wrong?
Jebediah
Posts: 805
Joined: Tue Aug 28, 2012 9:19 pm
Location: Austin TX

Re: Save Me! Sell or Dont Sell? Take some losses?

Post by Jebediah »

If you feel certain the market will fall more, or if it just makes you feel better, why not treat yourself to a hedge, say 20K in UVXY or SPXS ?
achillesheel
Posts: 99
Joined: Thu Mar 12, 2020 2:19 pm

Re: Save Me! Sell or Dont Sell? Take some losses?

Post by achillesheel »

Dear OP,

This is my first bear market as an employed adult. I too have seen my account go down in value - on a few of the recent days, by more than my entire yearly salary. Some thoughts.

1. The "do something" urge will kill you. Don't do something, just stand there! Inactivity is a sign of intelligent investing, if you already have a well-chosen portfolio. You are seeking emotional release by selling. That suggests to me that you took a lot of pleasure in markets/your portfolio when they were rising - hence the pain you're in, now that they're falling. Find some way to release that stress (golf? friends? family? other hobbies?) that doesn't involve equities whatsoever. I dare you to take a 72 hr break from the markets - all news, accounts, etc.

2. I assuage my own urge to "do something" by TLH - and then buying a similar though not substantially identical index fund (i.e. VTI> SCHB).

3. You're a physician. Focus on all the good you can do for others in this time of crisis, in your day-to-day work. Many of us do not have a comparable opportunity!
MoneyMarathon
Posts: 992
Joined: Sun Sep 30, 2012 3:38 am

Re: Save Me! Sell or Dont Sell? Take some losses?

Post by MoneyMarathon »

TroutMD wrote: Tue Mar 17, 2020 12:46 pm I peaked around 2.1m, currently down to 1.68m.
You never had 2.1 million. Those were paper gains. :wink:

You could have 1.68 million if you need it right now.

You could also wait and hope it goes up. Why wouldn't you?
deltaneutral83
Posts: 1895
Joined: Tue Mar 07, 2017 4:25 pm

Re: Save Me! Sell or Dont Sell? Take some losses?

Post by deltaneutral83 »

OP, you are already 35% bonds, in your 30's, years away from retirement, and likely an income in the top 2% in an industry in need. You need more information about equities to settle your nerves as we are only down 30%. Read as much as you can.
Think
Posts: 22
Joined: Mon Feb 19, 2018 8:11 am

Re: Save Me! Sell or Dont Sell? Take some losses?

Post by Think »

Why overthink.

I worked in I-banking (including a decade at Greenwich Capital). Paradoxically, I went to a state school (BS + MBA at UConn) and when I was in my 20’s and 30’s I did, imho, everything wrong as an investor....borderline day trading, option psychoanalysis, private equity, etc, the whole gamut. All that -purported- intellectual flex added very little to my net worth. Just like when I go to a family physician and my skeptical side says this physician probably has little bearing on my life expectancy or general well being. Issues I identify as a concern and have tests done under guidance of a health care professional mitigate most problems I could ever see (linear regression be damned). My massive recommendation is to not overthink it - just continue to dollar cost average into the market at your AA and ween off the Bloomberg and CNBC apps.
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