Lost 23K on Monday

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Topic Author
Tigermoose
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Joined: Sat Jul 21, 2012 5:02 pm

Lost 23K on Monday

Post by Tigermoose »

While rolling over my wife's employer 401k to a traditional rollover IRA, we were in a cash position on Monday when the S&P went up about 5%. We sold at the Friday end of day price and then reinvested into similar assets on Monday end of day. My wife thinks that that we really lost about $23K + future interest on that 23K and is sick to her stomach over it. I pointed out that the market went up over 4% today for our entire portfolio and thus we made well over 30K, and that over time that one day lost opportunity is not a huge deal. She feels that it was a huge mistake and is not able to be at peace. She keeps ranting about things that we could have bought or services received for that amount. The money was in a retirement account. I realize that Mr. Market has given us tremendous gains over the years, and to focus on that one day loss is not healthy. Can you give her any advice, or am I being a Pollyanna?

Thank you Bogleheads!!!
Institutions matter
beehivehave
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Re: Lost 23K on Monday

Post by beehivehave »

Tigermoose wrote: Wed Mar 04, 2020 11:24 pm While rolling over my wife's employer 401k to a traditional rollover IRA, we were in a cash position on Monday when the S&P went up about 5%. We sold at the Friday end of day price and then reinvested into similar assets on Monday end of day. My wife thinks that that we really lost about $23K + future interest on that 23K and is sick to her stomach over it. I pointed out that the market went up over 4% today for our entire portfolio and thus we made well over 30K, and that over time that one day lost opportunity is not a huge deal. She feels that it was a huge mistake and is not able to be at peace. She keeps ranting about things that we could have bought or services received for that amount. The money was in a retirement account. I realize that Mr. Market has given us tremendous gains over the years, and to focus on that one day loss is not healthy. Can you give her any advice, or am I being a Pollyanna?

Thank you Bogleheads!!!
You are not being a pollyanna at all. If you look at your daily gains and losses, you will drive yourself absolutely nuts.
lexor
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Re: Lost 23K on Monday

Post by lexor »

Tigermoose wrote: Wed Mar 04, 2020 11:24 pm While rolling over my wife's employer 401k to a traditional rollover IRA, we were in a cash position on Monday when the S&P went up about 5%. We sold at the Friday end of day price and then reinvested into similar assets on Monday end of day. My wife thinks that that we really lost about $23K + future interest on that 23K and is sick to her stomach over it. I pointed out that the market went up over 4% today for our entire portfolio and thus we made well over 30K, and that over time that one day lost opportunity is not a huge deal. She feels that it was a huge mistake and is not able to be at peace. I realize that Mr. Market has given us tremendous gains over the years, and to focus on that one day loss is not healthy. Can you give her any advice, or am I being a Pollyanna?

Thank you Bogleheads!!!
Everyone makes some mistakes at some point. If you want to move money it's not always an option to stay exposed to the market. Your wife isn't technically wrong but a better thing to focus on would be income and savings rate since it's just not healthy to dwell.

I bought 100k of NTSX yesterday and then it underperformed VTI by 1% today for example (also due to money transfering messing with what I actually wanted to do).

That said many brokers will roll over 401ks in kind in house. Then you can transfer in kind to another institution if desired.
“The miracle of compounding returns is overwhelmed by the tyranny of compounding costs.” -Mr. John C. Bogle
Hyperchicken
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Re: Lost 23K on Monday

Post by Hyperchicken »

She is right, you've lost $23K and all the future gains/losses on that amount. Sure you'll save more in the future, and will have more gains and losses in the future, but all these will be on top of and in addition to that $23K loss. In that sense the loss is permanent and irreversible. That's just the way it is, there is nothing you've done wrong, and nothing you could have done differently apart from pure luck of executing the rollover on a day when the market happened to go down.

Naturally you're right as well when you say focusing on that loss is not healthy. There isn't really much to advise here. It will suck for a while and then it'll be alright.
Willmunny
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Re: Lost 23K on Monday

Post by Willmunny »

I don't think this will have a material impact on your life.

Going forward, if you are moving funds and temporarily in cash due to that move, and you can do so without tax consequences in a qualified retirement account, you can temporarily shift some bonds to stocks to account for the amount that is temporarily in cash and out of the market. Then when you get back in after the move, you can re-balance to your desired allocation.
Topic Author
Tigermoose
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Re: Lost 23K on Monday

Post by Tigermoose »

I approach this with a kind of gallows humor, because of the fact that we never market time and are buy and hold investors, and the one time we do anything the market has a record gain for one day and we lose that amount. My laughing at the ridiculous bad luck is not received well by my wife as this is her retirement fund that she worked hard to build up when she was a young single mom :oops:
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H-Town
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Re: Lost 23K on Monday

Post by H-Town »

Tigermoose wrote: Wed Mar 04, 2020 11:24 pm While rolling over my wife's employer 401k to a traditional rollover IRA, we were in a cash position on Monday when the S&P went up about 5%. We sold at the Friday end of day price and then reinvested into similar assets on Monday end of day. My wife thinks that that we really lost about $23K + future interest on that 23K and is sick to her stomach over it. I pointed out that the market went up over 4% today for our entire portfolio and thus we made well over 30K, and that over time that one day lost opportunity is not a huge deal. She feels that it was a huge mistake and is not able to be at peace. She keeps ranting about things that we could have bought or services received for that amount. The money was in a retirement account. I realize that Mr. Market has given us tremendous gains over the years, and to focus on that one day loss is not healthy. Can you give her any advice, or am I being a Pollyanna?

Thank you Bogleheads!!!
You know the drill. You just listen (or pretend to listen), agree (or pretend to go with it), and only give your opinion when she directly asks for it. This works every time in almost every situation.
Time is the ultimate currency.
WildBill
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Re: Lost 23K on Monday

Post by WildBill »

[

You know the drill. You just listen (or pretend to listen), agree (or pretend to go with it), and only give your opinion when she directly asks for it. This works every time in almost every situation.
[/quote]

Howdy

Sage advice from a long married individual, or a very fast learner.

Happy matrimonial harmony

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid
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retireIn2020
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Re: Lost 23K on Monday

Post by retireIn2020 »

Was this your decision? Buy some roses and promise to pay her back! :happy

Stocks were tumbling the entire week, speculation predicted positive news over the weekend. Never ever sell in a down market.
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DiploInvestor
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Re: Lost 23K on Monday

Post by DiploInvestor »

I did something similar and also missed about $25k or so in gains in one of my positions that day. Nothing compares to the over $200,000 my portfolio dropped at some point over the past couple weeks. In the bigger picture, not worth your or your wife's time worrying about.
"History doesn’t repeat itself, but it often rhymes." -- Mark Twain // "If you have a garden and a library, you have everything you need." — Cicero
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Third Son
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Re: Lost 23K on Monday

Post by Third Son »

Tigermoose wrote: Wed Mar 04, 2020 11:24 pm While rolling over my wife's employer 401k to a traditional rollover IRA, we were in a cash position on Monday when the S&P went up about 5%. We sold at the Friday end of day price and then reinvested into similar assets on Monday end of day. My wife thinks that that we really lost about $23K + future interest on that 23K and is sick to her stomach over it. I pointed out that the market went up over 4% today for our entire portfolio and thus we made well over 30K, and that over time that one day lost opportunity is not a huge deal. She feels that it was a huge mistake and is not able to be at peace. She keeps ranting about things that we could have bought or services received for that amount. The money was in a retirement account. I realize that Mr. Market has given us tremendous gains over the years, and to focus on that one day loss is not healthy. Can you give her any advice, or am I being a Pollyanna?

Thank you Bogleheads!!!
Not sure how old you are but if you are in your 30s or 40s I wouldn't be worried. By the time you reach retirement you will have forgotten all about it among your millions.
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Sandtrap
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Re: Lost 23K on Monday

Post by Sandtrap »

Lessons:
1
DW will remind you of this forever when you least expect it.
2
Do things like this together, share the blame.
3
Blame cannot be shared. (see #1)
4
Compose a practical and simple IPS Statement (Investment Policy Statement) together, stick to it.
5
Realize that no matter how hard you try, strategize, and implement a financial strategy, . . "things happen".
So, actionably, it is unavoidable to error, but not unavoidable to minimize errors.
6
The market goes up and also goes down on any given day, week, month, years. Like ocean undercurrents, and smaller wind chop on top. So. . . don't look at it, just enjoy the journey.
7
See #1.

j :happy
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firebirdparts
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Re: Lost 23K on Monday

Post by firebirdparts »

I know how you feel. These millionaire problems.

There's always a way to be unhappy. Sometimes you have to look really hard for it, but there's always a way.
This time is the same
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hagridshut
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Re: Lost 23K on Monday

Post by hagridshut »

Tigermoose wrote: Wed Mar 04, 2020 11:24 pmMy wife thinks that that we really lost about $23K + future interest on that 23K and is sick to her stomach over it. I pointed out that the market went up over 4% today for our entire portfolio and thus we made well over 30K, and that over time that one day lost opportunity is not a huge deal. She feels that it was a huge mistake and is not able to be at peace. She keeps ranting about things that we could have bought or services received for that amount. The money was in a retirement account.

Can you give her any advice, or am I being a Pollyanna?
There is nothing to do except to wait out this Coronavirus situation. When people are angry and emotional, advice and reasoning are rarely effective.
Taking a break as of 2 Mar. 2021; First Principles: (1) Diversify (2) Low Cost (3) Stay the Course | 3-Fund Index Portfolio
InvestingGeek
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Re: Lost 23K on Monday

Post by InvestingGeek »

Acknowledge and validate her emotions saying she's absolutely right and well-justified to feel mad and sad about losing such a huge amount - who wouldn't be. You can even add yourself to the list, and mention how 23k could have bought a car and so many things. She wants to grieve for the 23k lost so join her in the grief for a bit. This will put both of you on the same side of the problem, in her view. In my experience, once the emotions are validated, then the mind is free to focus on the logical aspect of it. You might need to revalidate the emotions multiple times if you've denied her this far if you just repeatedly explained to her that in the long run it doesn't matter (which is logically correct but emotions come before logic here).

In my non-expert experience: For men, helping someone feel better is about minimizing the problem, pointing out how it's not such a big deal. To women, this seems to come across as saying that what they're feeling is not justified and that their feelings are incorrect. In all my arguments with my wife, I focus on taking care of (acknowledge, validate) her emotions first and the rest ends up not being a problem.
Last edited by InvestingGeek on Thu Mar 05, 2020 9:50 am, edited 4 times in total.
core4portfolio
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Re: Lost 23K on Monday

Post by core4portfolio »

When I did rollover, I lost 1% however after I rollover i lost 10% in recent downturn.
In 401k rollover, my provider have an option for OVERNIGHT DELIVERY of cheque which i dont know until I asked about delay in receiving.
This is charged at 40 bucks additionally apart from account closure fee of 50 bucks in my case
if you chose that mostly the transfer will be within a day.
Allocation : 80/20 (90% TSM, 10% on ARKK,XBI,XLK/individual stocks and 20% TBM) | | Need to learn fishing sooner
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goingup
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Re: Lost 23K on Monday

Post by goingup »

The timing was unfortunate, but everyone who is in the market right now is gaining and losing big dollars everyday. Big swings.

Try looking at the YTD numbers or the 1 year returns. I think you'll see overall that there have been very good returns, especially over the 1,3,5 year periods. Try to focus on that.

Now that the retirement money is invested, hopefully at an appropriate AA, you both should look away as the euphoria and carnage in this market continue unabated.
Broken Man 1999
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Re: Lost 23K on Monday

Post by Broken Man 1999 »

If she keeps it up, I would be inclined to stop managing her account, and say, "have at it, knock yourself out managing your IRA!."

No way I would take such abuse on something that doesn't matter squat in the grand scheme of things.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
mattsmith321
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Re: Lost 23K on Monday

Post by mattsmith321 »

Sandtrap wrote: Thu Mar 05, 2020 8:54 am Lessons:
1. DW will remind you of this forever when you least expect it.
2. Do things like this together, share the blame.
3. Blame cannot be shared. (see #1)
4. Compose a practical and simple IPS Statement (Investment Policy Statement) together, stick to it.
5. Realize that no matter how hard you try, strategize, and implement a financial strategy, . . "things happen". So, actionably, it is unavoidable to error, but not unavoidable to minimize errors.
6. The market goes up and also goes down on any given day, week, month, years. Like ocean undercurrents, and smaller wind chop on top. So. . . don't look at it, just enjoy the journey.
7. See #1.

j :happy
I like this approach. If you are doing #2 & #4, and your IPS that you both agree on is making a move like this, then you have to just do your best to minimize the impact. But you can't really do that so you just have to recognize that it could go either way. I've been doing a whole lot of movement over the past year to consolidate my various accounts, as well as my mom's accounts. As such, I have had to acknowledge the fact that there will be multi-day periods where my money is out of the market while it is in transition. I could try to time it but we know how that goes. I typically just ignore the market for those particular assets while they are moving because otherwise I won't ever move them and then I'll be annoyed all the time that they are scattered all over. So I just initiate the move and deal with whatever temporary losses or gains I hit and enjoy the peace of mind that I am executing on my IPS.

But I'm a relative newbie to all of this so don't take my word for much. Also, the above doesn't do anything to address how your wife feels. I agree with other posts that you should try to validate her concerns.
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Stinky
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Re: Lost 23K on Monday

Post by Stinky »

H-Town wrote: Wed Mar 04, 2020 11:53 pm
You know the drill. You just listen (or pretend to listen), agree (or pretend to go with it), and only give your opinion when she directly asks for it. This works every time in almost every situation.
Excellent advice. Over time, this, too, shall pass.

You’ve done nothing wrong, and there’s nothing you can do about it. You and DW can analyze and reanalyze until you’re both blue in the face, but you can’t change anything.

As your portfolio grows, there will be times when you “make” (or “lose”) more than this in a short period of time. Hopefully your “winners” will be larger than your “losers”.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
deltaneutral83
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Re: Lost 23K on Monday

Post by deltaneutral83 »

Maybe don't slide the check over to her at the next restaurant.

I would handle all administrative things (Rollovers, investment elections, etc etc) during calmer times. It seems like OP initiated the liquidation after a week of tumbling trying to time the market expecting it to keep going down, which it probably will. I don't think OP is out of the woods because if the market starts to go below S&P close on 2/28, it will only get more heated. There was one poster who started a rollover where it typically takes 2-3 days to cut the check and then another 2-3 days to mail and clear at the new institution and wound up selling on 2/28 as well. The problem is that the market goes up like an escalator and down like an elevator.
Last edited by deltaneutral83 on Thu Mar 05, 2020 9:58 am, edited 4 times in total.
MotoTrojan
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Re: Lost 23K on Monday

Post by MotoTrojan »

Nothing you can do about the past, but in the future there are options. If you held bonds in other parts of your tax-advantaged account you could consider the cash/check taken out of a transferred account as part of your bond/fixed-income/cash allocation and move those other bonds to equities until the transfer is complete. This way you are not out of the equity market for more than a few minutes, and any moves in the bond market (relative to the cash) will be quite minor.
OldBallCoach
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Re: Lost 23K on Monday

Post by OldBallCoach »

I was down over a million one day last week and then made it up the other...if you are in this for the long run it will not matter...you need to look past this and in the words of the famous profit Mr Tony Soprano " forget about it" ...or the first rule of race car driving...whats behind me is not important.
JLJL
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Re: Lost 23K on Monday

Post by JLJL »

Tigermoose wrote: Wed Mar 04, 2020 11:24 pm While rolling over my wife's employer 401k to a traditional rollover IRA, we were in a cash position on Monday when the S&P went up about 5%. We sold at the Friday end of day price and then reinvested into similar assets on Monday end of day. My wife thinks that that we really lost about $23K + future interest on that 23K and is sick to her stomach over it. I pointed out that the market went up over 4% today for our entire portfolio and thus we made well over 30K, and that over time that one day lost opportunity is not a huge deal. She feels that it was a huge mistake and is not able to be at peace. She keeps ranting about things that we could have bought or services received for that amount. The money was in a retirement account. I realize that Mr. Market has given us tremendous gains over the years, and to focus on that one day loss is not healthy. Can you give her any advice, or am I being a Pollyanna?

Thank you Bogleheads!!!
How much money have you lost in the last 2 weeks being mostly "in" the market with this money? Isn't it like, way more? You could get her to stop thinking about the missed 1 day opportunity by getting her really regretting the 10-day blood bath. Like smashing your thumb with a hammer to take your mind off a headache.
TheDDC
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Re: Lost 23K on Monday

Post by TheDDC »

Tigermoose wrote: Wed Mar 04, 2020 11:24 pm While rolling over my wife's employer 401k to a traditional rollover IRA, we were in a cash position on Monday when the S&P went up about 5%. We sold at the Friday end of day price and then reinvested into similar assets on Monday end of day. My wife thinks that that we really lost about $23K + future interest on that 23K and is sick to her stomach over it. I pointed out that the market went up over 4% today for our entire portfolio and thus we made well over 30K, and that over time that one day lost opportunity is not a huge deal. She feels that it was a huge mistake and is not able to be at peace. She keeps ranting about things that we could have bought or services received for that amount. The money was in a retirement account. I realize that Mr. Market has given us tremendous gains over the years, and to focus on that one day loss is not healthy. Can you give her any advice, or am I being a Pollyanna?

Thank you Bogleheads!!!
Was this an ACATS transaction? A VA held in a 401(k)? Were you actually forced to sell before the transfer went through? You say "similar" assets, but did you buy into the same funds after the transfer? Something is not adding up here in the decision making process.

The only time I have ever been forced to sell assets when doing a transfer was when I was transferring proprietary funds held in a crappy VA to a Vanguard IRA brokerage. I have done other transfers in kind in which "shares and dollars" were moved from one brokerage company to another and reflected exactly the same, but that was electronic (ACATS).

I wouldn't get that bent out of shape. I suspect the $23k would have been lost and gained again a several times over by the time this wild ride is finished.

-TheDDC
Rules to wealth building: 75-80% VTSAX piled high and deep, 20-25% VTIAX, 0% given away to banks.
deltaneutral83
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Re: Lost 23K on Monday

Post by deltaneutral83 »

OldBallCoach wrote: Thu Mar 05, 2020 9:58 am I was down over a million one day last week and then made it up the other...if you are in this for the long run it will not matter...you need to look past this and in the words of the famous profit Mr Tony Soprano " forget about it" ...or the first rule of race car driving...whats behind me is not important.
Just my opinion, but this is apples to oranges. A 5% swing is a lot different with the numbers you have provided vs someone much closer to $0. This is why a 5% raise in income around median income is a much bigger deal than a 5% increase for someone at the top of the tax tables.
Ferdinand2014
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Re: Lost 23K on Monday

Post by Ferdinand2014 »

Tigermoose wrote: Wed Mar 04, 2020 11:24 pm While rolling over my wife's employer 401k to a traditional rollover IRA, we were in a cash position on Monday when the S&P went up about 5%. We sold at the Friday end of day price and then reinvested into similar assets on Monday end of day. My wife thinks that that we really lost about $23K + future interest on that 23K and is sick to her stomach over it. I pointed out that the market went up over 4% today for our entire portfolio and thus we made well over 30K, and that over time that one day lost opportunity is not a huge deal. She feels that it was a huge mistake and is not able to be at peace. She keeps ranting about things that we could have bought or services received for that amount. The money was in a retirement account. I realize that Mr. Market has given us tremendous gains over the years, and to focus on that one day loss is not healthy. Can you give her any advice, or am I being a Pollyanna?

Thank you Bogleheads!!!
Sounds like she shouldn't have any of her retirement in stocks.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
aristotelian
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Re: Lost 23K on Monday

Post by aristotelian »

It was not a mistake, it was just poor timing. It could have just as easily gone the other way. While the money was out of market, it was guaranteed so you at least got compensated for the lower return. Nothing you can do about it now but move on.

Were you only out of market for the one day? If you were out of market only a couple days either way, the market may have evened things out for you.

In the future, you can try to mitigate the impact of being out of market by increasing stock allocations in other accounts or doing a series of partial rollovers.
rascott
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Re: Lost 23K on Monday

Post by rascott »

TheDDC wrote: Thu Mar 05, 2020 10:02 am
Tigermoose wrote: Wed Mar 04, 2020 11:24 pm While rolling over my wife's employer 401k to a traditional rollover IRA, we were in a cash position on Monday when the S&P went up about 5%. We sold at the Friday end of day price and then reinvested into similar assets on Monday end of day. My wife thinks that that we really lost about $23K + future interest on that 23K and is sick to her stomach over it. I pointed out that the market went up over 4% today for our entire portfolio and thus we made well over 30K, and that over time that one day lost opportunity is not a huge deal. She feels that it was a huge mistake and is not able to be at peace. She keeps ranting about things that we could have bought or services received for that amount. The money was in a retirement account. I realize that Mr. Market has given us tremendous gains over the years, and to focus on that one day loss is not healthy. Can you give her any advice, or am I being a Pollyanna?

Thank you Bogleheads!!!
Was this an ACATS transaction? A VA held in a 401(k)? Were you actually forced to sell before the transfer went through? You say "similar" assets, but did you buy into the same funds after the transfer? Something is not adding up here in the decision making process.

The only time I have ever been forced to sell assets when doing a transfer was when I was transferring proprietary funds held in a crappy VA to a Vanguard IRA brokerage. I have done other transfers in kind in which "shares and dollars" were moved from one brokerage company to another and reflected exactly the same, but that was electronic (ACATS).

I wouldn't get that bent out of shape. I suspect the $23k would have been lost and gained again a several times over by the time this wild ride is finished.

-TheDDC


It's fairly common when doing a 401k to IRA rollover for the 401k custodian to sell the positions and send a check to the IRA broker. I had one last year where it took upwards of 3 weeks before I was back in the market. Fortunately market dropped in my case.
tibbitts
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Re: Lost 23K on Monday

Post by tibbitts »

Tigermoose wrote: Wed Mar 04, 2020 11:24 pm While rolling over my wife's employer 401k to a traditional rollover IRA, we were in a cash position on Monday when the S&P went up about 5%. We sold at the Friday end of day price and then reinvested into similar assets on Monday end of day. My wife thinks that that we really lost about $23K + future interest on that 23K and is sick to her stomach over it. I pointed out that the market went up over 4% today for our entire portfolio and thus we made well over 30K, and that over time that one day lost opportunity is not a huge deal. She feels that it was a huge mistake and is not able to be at peace. She keeps ranting about things that we could have bought or services received for that amount. The money was in a retirement account. I realize that Mr. Market has given us tremendous gains over the years, and to focus on that one day loss is not healthy. Can you give her any advice, or am I being a Pollyanna?

Thank you Bogleheads!!!
She should be sick and I don't understand why you didn't take measures to avoid this. Unless markets drop over the rest of your lifetime, the damage will only compound, so you actually lost much more than $23k. Did you not have $23k to hedge this? Maybe not in her accounts but elsewhere? She might have been upset with her losing $23k and you gaining $23k, but that's really a separate problem. Or just do many smaller transactions.

I also don't understand all these Bogleheads - where we debate the merits of buying used shoes - making this sound trivial.

The only way to recover is to make a market timing bet - or many bets. There is no other way.
TheDDC
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Re: Lost 23K on Monday

Post by TheDDC »

tibbitts wrote: Thu Mar 05, 2020 10:17 am
Tigermoose wrote: Wed Mar 04, 2020 11:24 pm While rolling over my wife's employer 401k to a traditional rollover IRA, we were in a cash position on Monday when the S&P went up about 5%. We sold at the Friday end of day price and then reinvested into similar assets on Monday end of day. My wife thinks that that we really lost about $23K + future interest on that 23K and is sick to her stomach over it. I pointed out that the market went up over 4% today for our entire portfolio and thus we made well over 30K, and that over time that one day lost opportunity is not a huge deal. She feels that it was a huge mistake and is not able to be at peace. She keeps ranting about things that we could have bought or services received for that amount. The money was in a retirement account. I realize that Mr. Market has given us tremendous gains over the years, and to focus on that one day loss is not healthy. Can you give her any advice, or am I being a Pollyanna?

Thank you Bogleheads!!!
She should be sick and I don't understand why you didn't take measures to avoid this. Unless markets drop over the rest of your lifetime, the damage will only compound, so you actually lost much more than $23k. Did you not have $23k to hedge this? Maybe not in her accounts but elsewhere? She might have been upset with her losing $23k and you gaining $23k, but that's really a separate problem. Or just do many smaller transactions.

I also don't understand all these Bogleheads - where we debate the merits of buying used shoes - making this sound trivial.

The only way to recover is to make a market timing bet - or many bets. There is no other way.
So throwing good money after bad just making bets is what you're advocating? Market timing is market timing. They would have a better shot hustling it in the pool hall. I would look at this as a $23k education. That's one year's tuition at BHU.

-TheDDC
Rules to wealth building: 75-80% VTSAX piled high and deep, 20-25% VTIAX, 0% given away to banks.
OldBallCoach
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Re: Lost 23K on Monday

Post by OldBallCoach »

deltaneutral83 wrote: Thu Mar 05, 2020 10:06 am
OldBallCoach wrote: Thu Mar 05, 2020 9:58 am I was down over a million one day last week and then made it up the other...if you are in this for the long run it will not matter...you need to look past this and in the words of the famous profit Mr Tony Soprano " forget about it" ...or the first rule of race car driving...whats behind me is not important.
Just my opinion, but this is apples to oranges. A 5% swing is a lot different with the numbers you have provided vs someone much closer to $0. This is why a 5% raise in income around median income is a much bigger deal than a 5% increase for someone at the top of the tax tables.
I dont disagree with you about it but my point is that if she is gonna drill him over it now what good is to come of it...sure they can both learn how to avoid this going forward with some planning but crying over spilt milk is gonna going to help anyone. 27K is not a small amount of money but that money could just as easy gone down that day as up if you are trying to time this crazy market. Just my opinion.
MotoTrojan
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Re: Lost 23K on Monday

Post by MotoTrojan »

Those of you trying to rationalize this by saying she lost way more over the past weeks, or you lost over a million are missing the point IMHO. She lost exposure, not dollars, and that is much worse.

There is still nothing to do about it now so OP/DW need to just move on and learn.
EdNorton
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Re: Lost 23K on Monday

Post by EdNorton »

I read a post the other day, if you put another $23k in, you'll be back to even. Good advice from marketinvestor.
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market timer
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Re: Lost 23K on Monday

Post by market timer »

There is a good lesson here for others. When making large transfers that temporarily change your asset allocation, it is worth investigating other ways to maintain your asset allocation. This might mean shifting from bonds to stocks in other accounts, or even using margin or derivatives to maintain the equity allocation while the transfer is in process.
Caduceus
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Re: Lost 23K on Monday

Post by Caduceus »

I think it's healthier to accept the truth as it is rather than find ways to fudge things over. If you were not able to do an in-kind transfer and had to cash out and then buy back in at 5% higher, that 5% is a genuine loss, and you really did lose $23k over it. You have to think about it in terms of shares rather than the dollar amount; because the stock market went up during the period of your transfer, you got less shares than you previously owned.

So all you can do is help your partner to accept that sometimes crap happens. Over an investment lifetime, you'll get unlucky sometimes (like this time), and lucky at other times. It may balance out (or it may not), but it is what it is.

Markets are not usually so volatile, so this was really bad luck. You could have happened to cash out on one of those +4% up days and got back in on one of those -5% down days.
yohac
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Re: Lost 23K on Monday

Post by yohac »

Tigermoose wrote: Wed Mar 04, 2020 11:24 pm She feels that it was a huge mistake and is not able to be at peace. She keeps ranting about things that we could have bought or services received for that amount.
Unless she feels you should have predicted those market swings, it was just bad luck, not a "huge mistake". These things happen on transfers. There's nothing you can do now, except wait for those feelings to pass, which they will.

BTW, my DW never "rants". She expresses well-founded concerns. :wink:
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goingup
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Re: Lost 23K on Monday

Post by goingup »

I don't know about mitigation efforts. It sounds good but sometimes there is so little visibility into rolling over a 401K that you just have to "go with god" and hope it happens quickly and correctly.

My SO rolled over a $623K balance (which was in a balanced fund) last year. Talked with a Vanguard rep to specify which fund it would go into. Talked to the 401K administrator who said they would cut a check and mail it to our home. One week later $630K landed in the Vanguard fund, with no check ever having been mailed to us.

Sometimes the timing is fortuitous and sometimes it isn't. I wouldn't know how to hedge that outcome.
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JonnyDVM
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Re: Lost 23K on Monday

Post by JonnyDVM »

It could be way worse. Daily big fluctuations are happening and it's impossible to know which way the coin is going to fall on any given day. Why beat yourself up over it? Obsessing over things you have no control over is a waste of energy. Let it go.
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MotoTrojan
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Re: Lost 23K on Monday

Post by MotoTrojan »

goingup wrote: Thu Mar 05, 2020 2:07 pm I don't know about mitigation efforts. It sounds good but sometimes there is so little visibility into rolling over a 401K that you just have to "go with god" and hope it happens quickly and correctly.

My SO rolled over a $623K balance (which was in a balanced fund) last year. Talked with a Vanguard rep to specify which fund it would go into. Talked to the 401K administrator who said they would cut a check and mail it to our home. One week later $630K landed in the Vanguard fund, with no check ever having been mailed to us.

Sometimes the timing is fortuitous and sometimes it isn't. I wouldn't know how to hedge that outcome.
If you have available space (it isn't the majority of your equity holdings) then the mitigations are quite easy, just make the change before even transferring (move the 401k to cash, move bonds to equities elsewhere or even buy equities on margin in taxable or with free cash). Then the timing of the transfer don't matter. Once it is rolled in, you unwind it on your terms.
squirm
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Re: Lost 23K on Monday

Post by squirm »

If you can't take a lose get out of the market. It's insane to think stock markets should only go up.

Honestly, this downturn is nothing. Bears will continue to make money as the bulls complain.
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Re: Lost 23K on Monday

Post by aristotelian »

Caduceus wrote: Thu Mar 05, 2020 11:36 am I think it's healthier to accept the truth as it is rather than find ways to fudge things over. If you were not able to do an in-kind transfer and had to cash out and then buy back in at 5% higher, that 5% is a genuine loss, and you really did lose $23k over it. You have to think about it in terms of shares rather than the dollar amount; because the stock market went up during the period of your transfer, you got less shares than you previously owned.

So all you can do is help your partner to accept that sometimes crap happens. Over an investment lifetime, you'll get unlucky sometimes (like this time), and lucky at other times. It may balance out (or it may not), but it is what it is.

Markets are not usually so volatile, so this was really bad luck. You could have happened to cash out on one of those +4% up days and got back in on one of those -5% down days.
He did not lose $23K. He cashed out when the market was down and received a check for the market value at the time. He then failed to make $23K in gains that would have occurred (but only could be known in hindsight). He made a choice that having the money out of market for a few days was a risk worth taking in order to roll over the funds to his desired account. During the time he was out of market his cash value was guaranteed against the risk of the market going down during a volatile time. His investment never lost value value to the market price on Friday.

By the way, this was his wife's account so presumably she signed all the paperwork and was equal partner to every transaction.
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goingup
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Re: Lost 23K on Monday

Post by goingup »

MotoTrojan wrote: Thu Mar 05, 2020 2:13 pm
goingup wrote: Thu Mar 05, 2020 2:07 pm I don't know about mitigation efforts. It sounds good but sometimes there is so little visibility into rolling over a 401K that you just have to "go with god" and hope it happens quickly and correctly.

My SO rolled over a $623K balance (which was in a balanced fund) last year. Talked with a Vanguard rep to specify which fund it would go into. Talked to the 401K administrator who said they would cut a check and mail it to our home. One week later $630K landed in the Vanguard fund, with no check ever having been mailed to us.

Sometimes the timing is fortuitous and sometimes it isn't. I wouldn't know how to hedge that outcome.
If you have available space (it isn't the majority of your equity holdings) then the mitigations are quite easy, just make the change before even transferring (move the 401k to cash, move bonds to equities elsewhere or even buy equities on margin in taxable or with free cash). Then the timing of the transfer don't matter. Once it is rolled in, you unwind it on your terms.
Thanks for that. You make a good point.
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Re: Lost 23K on Monday

Post by tibbitts »

TheDDC wrote: Thu Mar 05, 2020 10:27 am
tibbitts wrote: Thu Mar 05, 2020 10:17 am
Tigermoose wrote: Wed Mar 04, 2020 11:24 pm While rolling over my wife's employer 401k to a traditional rollover IRA, we were in a cash position on Monday when the S&P went up about 5%. We sold at the Friday end of day price and then reinvested into similar assets on Monday end of day. My wife thinks that that we really lost about $23K + future interest on that 23K and is sick to her stomach over it. I pointed out that the market went up over 4% today for our entire portfolio and thus we made well over 30K, and that over time that one day lost opportunity is not a huge deal. She feels that it was a huge mistake and is not able to be at peace. She keeps ranting about things that we could have bought or services received for that amount. The money was in a retirement account. I realize that Mr. Market has given us tremendous gains over the years, and to focus on that one day loss is not healthy. Can you give her any advice, or am I being a Pollyanna?

Thank you Bogleheads!!!
She should be sick and I don't understand why you didn't take measures to avoid this. Unless markets drop over the rest of your lifetime, the damage will only compound, so you actually lost much more than $23k. Did you not have $23k to hedge this? Maybe not in her accounts but elsewhere? She might have been upset with her losing $23k and you gaining $23k, but that's really a separate problem. Or just do many smaller transactions.

I also don't understand all these Bogleheads - where we debate the merits of buying used shoes - making this sound trivial.

The only way to recover is to make a market timing bet - or many bets. There is no other way.
So throwing good money after bad just making bets is what you're advocating? Market timing is market timing. They would have a better shot hustling it in the pool hall. I would look at this as a $23k education. That's one year's tuition at BHU.

-TheDDC
Not advocating, but the only way to recover from making a bad bet is to make another bet and hope for a better outcome. If you want to feel better there really is no other way.
tibbitts
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Re: Lost 23K on Monday

Post by tibbitts »

squirm wrote: Thu Mar 05, 2020 2:17 pm If you can't take a lose get out of the market. It's insane to think stock markets should only go up.

Honestly, this downturn is nothing. Bears will continue to make money as the bulls complain.
You're missing the point. This was an entirely avoidable loss. If I receive an inheritance and lump sum in one day and the market drops 10% the next, that's just luck, not a mistake: I am intentionally changing my allocation and have to accept that risk. The OP should not have felt bad if that's what he did. But if I move money around with the goal of about the same allocation when done, and could have hedged market volatility but didn't, that's completely different. I would feel terrible about that.
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Re: Lost 23K on Monday

Post by tibbitts »

goingup wrote: Thu Mar 05, 2020 2:24 pm
MotoTrojan wrote: Thu Mar 05, 2020 2:13 pm
goingup wrote: Thu Mar 05, 2020 2:07 pm I don't know about mitigation efforts. It sounds good but sometimes there is so little visibility into rolling over a 401K that you just have to "go with god" and hope it happens quickly and correctly.

My SO rolled over a $623K balance (which was in a balanced fund) last year. Talked with a Vanguard rep to specify which fund it would go into. Talked to the 401K administrator who said they would cut a check and mail it to our home. One week later $630K landed in the Vanguard fund, with no check ever having been mailed to us.

Sometimes the timing is fortuitous and sometimes it isn't. I wouldn't know how to hedge that outcome.
If you have available space (it isn't the majority of your equity holdings) then the mitigations are quite easy, just make the change before even transferring (move the 401k to cash, move bonds to equities elsewhere or even buy equities on margin in taxable or with free cash). Then the timing of the transfer don't matter. Once it is rolled in, you unwind it on your terms.
Thanks for that. You make a good point.
Absolutely correct. You may not come out 100% unharmed, but you will come close.
squirm
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Re: Lost 23K on Monday

Post by squirm »

Honestly, if she's sick to her stomach you two need to have a serious talk about your allocation. If this goes into a full blown bear market she's going to have worse days then this.
My wife and I never talk about the market because we just don't care. This thing can sink like a rock and we won't care. Some people try to feel better by buying at lower prices but then feel even worse after prices crash through those prices. That's a real bear market which ends in total capitulation.
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firebirdparts
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Re: Lost 23K on Monday

Post by firebirdparts »

squirm wrote: Thu Mar 05, 2020 2:17 pm If you can't take a lose get out of the market. It's insane to think stock markets should only go up.

Honestly, this downturn is nothing. Bears will continue to make money as the bulls complain.
She didn't even take a loss. She's mad about what happened to some cash. Some of y'all need to try to keep up here.
This time is the same
chevca
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Re: Lost 23K on Monday

Post by chevca »

Tell her to look today. Most of it would be gone anyway.

As mentioned, nothing was "lost". You were sitting on cash while making a move. The only it would be a mistake was if you knew beforehand that was going to be an up day and made the move avoiding it. Of course, there's no way to know that beforehand.
squirm
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Re: Lost 23K on Monday

Post by squirm »

The only thing you can do is move over a little at a time. That way it averages out.
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