Lost 23K on Monday

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tmcc
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Re: Lost 23K on Monday

Post by tmcc »

Can you give her a check for 23k? :D
tibbitts
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Re: Lost 23K on Monday

Post by tibbitts »

squirm wrote: Thu Mar 05, 2020 2:55 pm The only thing you can do is move over a little at a time. That way it averages out.
As mentioned many people can hedge by making complentary moves in other accounts.
the way
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Re: Lost 23K on Monday

Post by the way »

chevca wrote: Thu Mar 05, 2020 2:51 pm ...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.
But if the cash hit the IRA on Monday, why did OP even place the trades when they already knew the market was up 5%? I mean in my IRA I can place an order up to closing time to get the closing price of mutual funds, so I usually wait till the last 15mins to decide what to do (during a week like this). By 3:45 they would have known it was a huge up day and could've waited.

btw, what was her AA in the 401k? Unless it was 100% SP500, she probably didn't lose the full 5%.
tibbitts
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Re: Lost 23K on Monday

Post by tibbitts »

squirm wrote: Thu Mar 05, 2020 2:55 pm The only thing you can do is move over a little at a time. That way it averages out.
That is another very likely successful approach.
Broken Man 1999
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Re: Lost 23K on Monday

Post by Broken Man 1999 »

squirm wrote: Thu Mar 05, 2020 2:40 pm 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.
I am agent for DW's portfolio, and from the very first rollover from her 40Ks I always made sure her AA had the same AA as mine. Same funds, just different amounts. I do hold individual stocks, but I have never put any in her portfolio.

We enjoy the same rises, and suffer the same declines. Keeps both of us on the same page. We are pretty much in lockstep for everything. Doesn't mean declines are not painful, but both of us suffer the same, with no blame of each other.

But some serious discussions between OP and OP's wife need to be held. When a real bear market hits, they need to see themselves as a team. Avoids a lot of angst on both their parts. Financial matters can really stress marriages, and the reality is they will see major declines at some point. Best discuss it now, rather than later.

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

Post by squirm »

Broken Man 1999 wrote: Thu Mar 05, 2020 3:09 pm
squirm wrote: Thu Mar 05, 2020 2:40 pm 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.
I am agent for DW's portfolio, and from the very first rollover from her 40Ks I always made sure her AA had the same AA as mine. Same funds, just different amounts. I do hold individual stocks, but I have never put any in her portfolio.

We enjoy the same rises, and suffer the same declines. Keeps both of us on the same page. We are pretty much in lockstep for everything. Doesn't mean declines are not painful, but both of us suffer the same, with no blame of each other.

But some serious discussions between OP and OP's wife need to be held. When a real bear market hits, they need to see themselves as a team. Avoids a lot of angst on both their parts. Financial matters can really stress marriages, and the reality is they will see major declines at some point. Best discuss it now, rather than later.

Broken Man 1999
Thanks Broken Man, agree 100%.
squirm
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Re: Lost 23K on Monday

Post by squirm »

Just to expand on what Broken Man stated, my wife and I went through the bear makers before. You definitely need to both be on the same page especially when the capitulation phase hits investors.
rbaldini
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Re: Lost 23K on Monday

Post by rbaldini »

You must have a lot of money. Congratulations.

EDIT: I realize this might have come off as facetious. My point is that you lost a lot of money because you have a lot of money. That is a good thing. That's how I try to see it.
Last edited by rbaldini on Thu Mar 05, 2020 3:28 pm, edited 1 time in total.
Waiting_for_Godot
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Re: Lost 23K on Monday

Post by Waiting_for_Godot »

firebirdparts wrote: Thu Mar 05, 2020 2:41 pm
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.
The point stands, that if OP's wife is so fixated on daily retirement fund values, that they should reconsider their strategy, either by appreciating total market gains over long periods of time, or having a discussion about their AA given their retirement goals, or both.
Elysium
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Re: Lost 23K on Monday

Post by Elysium »

The thing most haven't hit upon so far is this. OP took the decision or influenced DW heavily to do this transfer.

After the intense selling he figured it'd be okay to be out of the market for the few days for the transfer to happen. It is also likely, the plan was once the money was transferred, it'll stay in cash and they'll figure out whether to lump sum back in or DCA in.

This is why his DW is mad at him. OP if this isn't true or partially true then I owe you an apology, but I don't see how there is not some truth there.

As for future, I would always insist on in-kind transfer, even between institutions it is possible, the funds go to a middle clearing house, and then get transferred over to your preferred institution. Major providers like Fidelity and Vanguard will do it if you insist. Most people don't try.

Whatever happened is okay, I wouldn't worry too much about 23K market gains "lost", it could very well have been a "gain" if market continued down on Monday. That's the way to look at it.
the way
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Re: Lost 23K on Monday

Post by the way »

Waiting_for_Godot wrote: Thu Mar 05, 2020 3:18 pm
firebirdparts wrote: Thu Mar 05, 2020 2:41 pm
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.
The point stands, that if OP's wife is so fixated on daily retirement fund values, that they should reconsider their strategy, either by appreciating total market gains over long periods of time, or having a discussion about their AA given their retirement goals, or both.
This and several other posts are completely missing the point of OP's wife. She now has and will forever have 95% of whatever she would have had if this hadn't happened - regardless of her AA, remaining time in the market, whether markets go up or down from here, or even her eventual tax bracket. It's always going to be 95%
rbaldini
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Re: Lost 23K on Monday

Post by rbaldini »

the way wrote: Thu Mar 05, 2020 3:40 pm This and several other posts are completely missing the point of OP's wife. She now has and will forever have 95% of whatever she would have had if this hadn't happened - regardless of her AA, remaining time in the market, whether markets go up or down from here, or even her eventual tax bracket. It's always going to be 95%
Sure. The bigger point: is there any reliable way to avoid these dips? No - not without holding out of the market entirely. It's the price of admission.
J295
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Re: Lost 23K on Monday

Post by J295 »

1. It’s only money, not a life-threatening medical diagnosis, car accident killing a family member, etc.

2. It’s 5% of what most Americans would consider a healthy retirement account. It’s not having lost your job because of a bad back and being unable to pay rent and purchase food for your children, while wondering why you ever married that guy that provides no court ordered support.

These aren’t imagined scenarios to make a point. This is how life works for many people.

It’s not clear to me why the transfer was being made in the middle of a very volatile and choppy market. However, whether by choice or forced by timing of the former employer, the result was clearly a risk that was being incurred and there should be no surprise at the outcome.

Accept , embrace, let go…
helloeveryone
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Re: Lost 23K on Monday

Post by helloeveryone »

market timer wrote: Thu Mar 05, 2020 11:22 am 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.
This thread is actually really helpful. I didn’t know how rollovers work since the only buying and selling we do is within the same account in the same institution (ie fidelity for 401k and vanguard for taxable mutual funds). I appreciate the posts about adjusting your holdings to accomodate pulling $ out of stock or bond to avoid this or at least to offset locking in the losses.
MathWizard
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Re: Lost 23K on Monday

Post by MathWizard »

Why did you roll it over? Has she retired?

I would focus on what she gained in rolling over.

Does she have lower fees? When does that make up the 4% loss?
Does she have more control?
Is she planning to do QCDs? If you, so needed to roll over to an IRA at some point,
since QCDs are not allowed from 401k's or 403b's.

She may be feeling that she made a bad decision.

She needed to make the rollover at some point. It was not a bad decision,
she just happened to be unlucky. It happens, and happily luck balances out in the end.

She could have been unlucky enough to be working for Enron with a retirement plan
invested in the company. This happened to a BIL's sister. She lost her job and her
retirement in one fell swoop. She lives mostly on SS, and some savings from the
next company she worked for.
jrbdmb
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Re: Lost 23K on Monday

Post by jrbdmb »

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!!!
I feel for you in the future when in retirement when you start to draw down your IRA. Every withdrawal will be an opportunity to "make a mistake." :?
rudeboy
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Re: Lost 23K on Monday

Post by rudeboy »

helloeveryone wrote: Thu Mar 05, 2020 5:14 pm
market timer wrote: Thu Mar 05, 2020 11:22 am 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.
This thread is actually really helpful. I didn’t know how rollovers work since the only buying and selling we do is within the same account in the same institution (ie fidelity for 401k and vanguard for taxable mutual funds). I appreciate the posts about adjusting your holdings to accomodate pulling $ out of stock or bond to avoid this or at least to offset locking in the losses.
Just so you know, the poster you quoted, market timer, found himself in significant debt by playing around with margin when the 2008 financial crisis unfolded. You should be aware of this if you are considering his incredibly bad advice to use margin. Please read: viewtopic.php?f=10&t=5934
thx1138
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Re: Lost 23K on Monday

Post by thx1138 »

rudeboy wrote: Thu Mar 05, 2020 5:39 pm
helloeveryone wrote: Thu Mar 05, 2020 5:14 pm
market timer wrote: Thu Mar 05, 2020 11:22 am 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.
This thread is actually really helpful. I didn’t know how rollovers work since the only buying and selling we do is within the same account in the same institution (ie fidelity for 401k and vanguard for taxable mutual funds). I appreciate the posts about adjusting your holdings to accomodate pulling $ out of stock or bond to avoid this or at least to offset locking in the losses.
Just so you know, the poster you quoted, market timer, found himself in significant debt by playing around with margin when the 2008 financial crisis unfolded. You should be aware of this if you are considering his incredibly bad advice to use margin. Please read: viewtopic.php?f=10&t=5934
His recommendation here is sound and wouldn’t result in them being in debt. What he was doing in the thread you linked was leveraging his entire portfolio. What he’s recommending here is leveraging a small part of the portfolio to match the performance as if the funds in transfer were invested in the market. The end result is not different than a unleveraged portfolio. Indeed there is care in the mechanics of doing it and as he also recommends derivatives may be a better method depending on the situation. But you are making something well beyond an apples to oranges comparison when you say his advice is incredibly bad.
rudeboy
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Re: Lost 23K on Monday

Post by rudeboy »

thx1138 wrote: Thu Mar 05, 2020 6:08 pm
rudeboy wrote: Thu Mar 05, 2020 5:39 pm
helloeveryone wrote: Thu Mar 05, 2020 5:14 pm
market timer wrote: Thu Mar 05, 2020 11:22 am 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.
This thread is actually really helpful. I didn’t know how rollovers work since the only buying and selling we do is within the same account in the same institution (ie fidelity for 401k and vanguard for taxable mutual funds). I appreciate the posts about adjusting your holdings to accomodate pulling $ out of stock or bond to avoid this or at least to offset locking in the losses.
Just so you know, the poster you quoted, market timer, found himself in significant debt by playing around with margin when the 2008 financial crisis unfolded. You should be aware of this if you are considering his incredibly bad advice to use margin. Please read: viewtopic.php?f=10&t=5934
His recommendation here is sound and wouldn’t result in them being in debt. What he was doing in the thread you linked was leveraging his entire portfolio. What he’s recommending here is leveraging a small part of the portfolio to match the performance as if the funds in transfer were invested in the market. The end result is not different than a unleveraged portfolio. Indeed there is care in the mechanics of doing it and as he also recommends derivatives may be a better method depending on the situation. But you are making something well beyond an apples to oranges comparison when you say his advice is incredibly bad.
Yeah, I dunno. I don't see any reason to recommend any leveraging at all, here. Especially from someone who quite infamously knows the downsides all too well.
inbox788
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Re: Lost 23K on Monday

Post by inbox788 »

tmcc wrote: Thu Mar 05, 2020 3:01 pm Can you give her a check for 23k? :D
+1!
the way wrote: Thu Mar 05, 2020 3:05 pm
chevca wrote: Thu Mar 05, 2020 2:51 pm ...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.
But if the cash hit the IRA on Monday, why did OP even place the trades when they already knew the market was up 5%? I mean in my IRA I can place an order up to closing time to get the closing price of mutual funds, so I usually wait till the last 15mins to decide what to do (during a week like this). By 3:45 they would have known it was a huge up day and could've waited.
NO! That would be adding market timing to an already risky transaction. If the market kept going up, either fast or inching up, you'd be losing even more money with even less rationale to get back in. All you can do is take what the market gives you and manage risk the best you can. Make your decisions in a rational and thought out manner and don't second guess yourself. A lot of folks get whipped sawed going back and forth and wind up doing considerably worse.

Actionable lessons:
1) Transfer in kind
2) Avoid doing these transfers when the market is volatile.
3) Transfer in tranches, so volatility hopefully averages out.

Cope with the regret and realize karma evens out. Someone else out there, probably many other folks, benefited from your loss (you can consider that a donation if you wish). Helps even out all the good karma you've had or can expect to have. Did you make greater than expected returns, is your home value growing, are you doing well in your jobs and health, etc.?

https://www.psychologytoday.com/us/blog ... ing-regret
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firebirdparts
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Re: Lost 23K on Monday

Post by firebirdparts »

rbaldini wrote: Thu Mar 05, 2020 3:57 pm
the way wrote: Thu Mar 05, 2020 3:40 pm This and several other posts are completely missing the point of OP's wife. She now has and will forever have 95% of whatever she would have had if this hadn't happened - regardless of her AA, remaining time in the market, whether markets go up or down from here, or even her eventual tax bracket. It's always going to be 95%
Sure. The bigger point: is there any reliable way to avoid these dips? No - not without holding out of the market entirely. It's the price of admission.
Try to keep up here. She's not complaining about a dip. If you all want to suggest solutions, you need to suggest that she use UPRO.
This time is the same
SlowMovingInvestor
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Re: Lost 23K on Monday

Post by SlowMovingInvestor »

For some 401k providers such as Fidelity, you can do a near in kind transfer from 401k to Rollover IRA. If the fund in your 401k isn't available in Fidelity's regular IRA accounts (say it's an institutional class funds), they will transfer the money to a similar fund without your being out of the market.

And you can always move the IRA later via ACATS if you want to be with another provider.
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celia
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Re: Lost 23K on Monday

Post by celia »

Not sure if this will help, but...

Last Friday, Feb. 28, was a volatile day in itself (the day when everything went to cash). If she was holding mainly mutual funds, they would have closed at a middling price compared to everything’s opening price and mid-day prices.

If she had lots of stocks, you might want to look up the high and low for each. Possibly she got the high price for a few. If she got the lowest price of the day,... well,...don’t bring it up.

Or, find something that could have happened that would have been worse (like if the markets had been shut down when things were at -10%).

PS. It is possible some of the holdings were in the middle of receiving distributions... which will take up to 2 more weeks to show up in her new account.
Last edited by celia on Thu Mar 05, 2020 9:11 pm, edited 1 time in total.
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Vulcan
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Re: Lost 23K on Monday

Post by Vulcan »

market timer wrote: Thu Mar 05, 2020 11:22 am 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.
The importance of this can not be understated. Though instead of messing with derivatives I would just do a series of partial transfers if there aren't enough bonds in outside accounts to buy stocks with for the entire transferred balance.

I am happy to have only paid about $500 to learn this lesson a while back.
If you torture the data long enough, it will confess to anything. ~Ronald Coase
m@ver1ck
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Re: Lost 23K on Monday

Post by m@ver1ck »

We all lost money. Markets fell and bottomed on Friday. Payroll was such that investments happened Monday evening.

I wonder if the fact that our 401K payroll contributions happen on the 1st and 16th has anything to do with markets....
YearTrader
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Re: Lost 23K on Monday

Post by YearTrader »

Let's think of it another way. Your goal is to save for retirement, not to beat or even match the market. Deviate a few precent from the index doesn't necessarily jeopardize the possibility to meet your goal. Sometimes people are too obsessed with their benchmark.
helloeveryone
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Re: Lost 23K on Monday

Post by helloeveryone »

rudeboy wrote: Thu Mar 05, 2020 5:39 pm
helloeveryone wrote: Thu Mar 05, 2020 5:14 pm
market timer wrote: Thu Mar 05, 2020 11:22 am 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.
This thread is actually really helpful. I didn’t know how rollovers work since the only buying and selling we do is within the same account in the same institution (ie fidelity for 401k and vanguard for taxable mutual funds). I appreciate the posts about adjusting your holdings to accomodate pulling $ out of stock or bond to avoid this or at least to offset locking in the losses.
Just so you know, the poster you quoted, market timer, found himself in significant debt by playing around with margin when the 2008 financial crisis unfolded. You should be aware of this if you are considering his incredibly bad advice to use margin. Please read: viewtopic.php?f=10&t=5934
Oh thanks! I def would not consider margins and derivatives. Anything beyond pick your AA and find a band that you’ll adjust at is beyond what I would be comfy with. The bits of info regarding what to do either when transitioning to retirement or changing jobs and rolling over are what I need to pick up.
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unclescrooge
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Re: Lost 23K on Monday

Post by unclescrooge »

Tigermoose wrote: Wed Mar 04, 2020 11:45 pm 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:
Your wife is not looking for answers. She is looking to vent, and for you to listen without offering a solution.

Tell her she is right, and she needs to cut back her spending too offset the losses.
:mrgreen:
TropikThunder
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Re: Lost 23K on Monday

Post by TropikThunder »

Tigermoose wrote: Wed Mar 04, 2020 11:24 pm We sold at the Friday end of day price and then reinvested into similar assets on Monday end of day.
I want to know how you did a rollover from a 401k to an IRA in one business day.
finite_difference
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Re: Lost 23K on Monday

Post by finite_difference »

tmcc wrote: Thu Mar 05, 2020 3:01 pm Can you give her a check for 23k? :D
+1.

Also, being unlucky enough to able to lose $23k like this also means you are really lucky to have a lot of money. I’d rather be lucky in the latter than be lucky at market timing a rollover one time.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
manatee2005
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Re: Lost 23K on Monday

Post by manatee2005 »

squirm wrote: Thu Mar 05, 2020 2:40 pm 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.
The best thing for people who are prone to capitulation is to enter their password wrong 3 times and get locked out of their account lol
manatee2005
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Re: Lost 23K on Monday

Post by manatee2005 »

unclescrooge wrote: Fri Mar 06, 2020 12:49 am
Tigermoose wrote: Wed Mar 04, 2020 11:45 pm 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:
Your wife is not looking for answers. She is looking to vent, and for you to listen without offering a solution.

Tell her she is right, and she needs to cut back her spending too offset the losses.
:mrgreen:
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manatee2005
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Re: Lost 23K on Monday

Post by manatee2005 »

m@ver1ck wrote: Thu Mar 05, 2020 9:51 pm We all lost money. Markets fell and bottomed on Friday. Payroll was such that investments happened Monday evening.

I wonder if the fact that our 401K payroll contributions happen on the 1st and 16th has anything to do with markets....
Maybe there’s a PhD Dissertation there
MoneyMarathon
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Re: Lost 23K on Monday

Post by MoneyMarathon »

Hyperchicken wrote: Wed Mar 04, 2020 11:33 pm 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.
This is the most accurate answer that I saw in this thread.

Market movements are not independent events. That +5% price increase could be the entire gains for the year 2020. Market participants will make decisions based on the prices including that day's price movement. If you remove one 5% day, the remaining sample of returns will have a lower average. We don't have infinite time to invest, and by averages, this loss is something between 6 months to a year of average market gains historically. When the market goes down, better valuations might attract investment. When you trade your way to having less shares, you're just eating a personal loss.

The mistake here was taking uncompensated risk and allowing that idiosyncratic "luck" factor to be introduced. The effect is the same as if someone picked one day out of the year to make a big bet on the direction of the markets. It was avoidable. It's worth taking steps to avoid it in the future. It was an expensive lesson.
EdNorton
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Re: Lost 23K on Monday

Post by EdNorton »

She's really going to be mad at you now, probably down another $50K after you reinvested. Your DW has to put up with such a stupid spouse.
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Sigz
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Re: Lost 23K on Monday

Post by Sigz »

Jeez oh weez. This is my first huge drop, fall, correction, whatever you want to call it.

Last week I was watching my accounts daily and seeing them drop. This week, I told myself I wouldn't look at them until next Summer.

But man - this sucks just seeing little tidbit news pop ups on my phone or online.. My damn (and not that huge) investment portfolio is probably looking horrible! I can't imagine what people during the great depression felt.
mroe800
Posts: 183
Joined: Mon Jan 27, 2020 12:37 am

Re: Lost 23K on Monday

Post by mroe800 »

Sigz wrote: Fri Mar 06, 2020 9:01 am Jeez oh weez. This is my first huge drop, fall, correction, whatever you want to call it.

Last week I was watching my accounts daily and seeing them drop. This week, I told myself I wouldn't look at them until next Summer.

But man - this sucks just seeing little tidbit news pop ups on my phone or online.. My damn (and not that huge) investment portfolio is probably looking horrible! I can't imagine what people during the great depression felt.
My nearly retired parents are losing Porsches in this market. Their reaction? “So what.”
Waiting_for_Godot
Posts: 125
Joined: Mon Oct 22, 2018 3:57 pm

Re: Lost 23K on Monday

Post by Waiting_for_Godot »

EdNorton wrote: Fri Mar 06, 2020 6:56 am She's really going to be mad at you now, probably down another $50K after you reinvested. Your DW has to put up with such a stupid spouse.
:sharebeer
For all of those so fixated on the semantics of the precise reason for the loss, I point to this as highly likely to be true. Given her fixation with the lost amount, she won't care that it was lost in transition while not in the market, vs 'staying the course' ... my prior post is valid as to remedying the issue.
rascott
Posts: 2957
Joined: Wed Apr 15, 2015 10:53 am

Re: Lost 23K on Monday

Post by rascott »

rudeboy wrote: Thu Mar 05, 2020 5:39 pm
helloeveryone wrote: Thu Mar 05, 2020 5:14 pm
market timer wrote: Thu Mar 05, 2020 11:22 am 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.
This thread is actually really helpful. I didn’t know how rollovers work since the only buying and selling we do is within the same account in the same institution (ie fidelity for 401k and vanguard for taxable mutual funds). I appreciate the posts about adjusting your holdings to accomodate pulling $ out of stock or bond to avoid this or at least to offset locking in the losses.
Just so you know, the poster you quoted, market timer, found himself in significant debt by playing around with margin when the 2008 financial crisis unfolded. You should be aware of this if you are considering his incredibly bad advice to use margin. Please read: viewtopic.php?f=10&t=5934


Good grief.... that's not what he said at all. He said to use margin (or other derivatives) to keep your equity exposure constant while you have a very large chunk of money in cash while it's being transferred.

It's actually very good advice and what I will do in the future if ever in this situation again.
rascott
Posts: 2957
Joined: Wed Apr 15, 2015 10:53 am

Re: Lost 23K on Monday

Post by rascott »

EdNorton wrote: Fri Mar 06, 2020 6:56 am She's really going to be mad at you now, probably down another $50K after you reinvested. Your DW has to put up with such a stupid spouse.
:sharebeer


You don't seem to understand what occurred here. It wasn't a paper loss due to market movements..... it was a real loss.... his wife owns less shares by 5%.
rascott
Posts: 2957
Joined: Wed Apr 15, 2015 10:53 am

Re: Lost 23K on Monday

Post by rascott »

finite_difference wrote: Fri Mar 06, 2020 1:33 am
tmcc wrote: Thu Mar 05, 2020 3:01 pm Can you give her a check for 23k? :D
+1.

Also, being unlucky enough to able to lose $23k like this also means you are really lucky to have a lot of money. I’d rather be lucky in the latter than be lucky at market timing a rollover one time.

Simple math shows that it was a roughly 500k account
rudeboy
Posts: 249
Joined: Thu Oct 05, 2017 9:21 pm

Re: Lost 23K on Monday

Post by rudeboy »

rascott wrote: Fri Mar 06, 2020 5:02 pm
rudeboy wrote: Thu Mar 05, 2020 5:39 pm
helloeveryone wrote: Thu Mar 05, 2020 5:14 pm
market timer wrote: Thu Mar 05, 2020 11:22 am 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.
This thread is actually really helpful. I didn’t know how rollovers work since the only buying and selling we do is within the same account in the same institution (ie fidelity for 401k and vanguard for taxable mutual funds). I appreciate the posts about adjusting your holdings to accomodate pulling $ out of stock or bond to avoid this or at least to offset locking in the losses.
Just so you know, the poster you quoted, market timer, found himself in significant debt by playing around with margin when the 2008 financial crisis unfolded. You should be aware of this if you are considering his incredibly bad advice to use margin. Please read: viewtopic.php?f=10&t=5934


Good grief.... that's not what he said at all. He said to use margin (or other derivatives) to keep your equity exposure constant while you have a very large chunk of money in cash while it's being transferred.

It's actually very good advice and what I will do in the future if ever in this situation again.
What happens if one were to use margin for a few days while a transfer is in progress, and during that few days the market tanks? That could be much costlier than simply missing out on some gains.
tibbitts
Posts: 23716
Joined: Tue Feb 27, 2007 5:50 pm

Re: Lost 23K on Monday

Post by tibbitts »

m@ver1ck wrote: Thu Mar 05, 2020 9:51 pm We all lost money. Markets fell and bottomed on Friday. Payroll was such that investments happened Monday evening.

I wonder if the fact that our 401K payroll contributions happen on the 1st and 16th has anything to do with markets....
Many people are paid on different schedules, and yes even some large employers USmail contributions to providers, which randomizes the investment dates.
rascott
Posts: 2957
Joined: Wed Apr 15, 2015 10:53 am

Re: Lost 23K on Monday

Post by rascott »

rudeboy wrote: Fri Mar 06, 2020 5:31 pm
rascott wrote: Fri Mar 06, 2020 5:02 pm
rudeboy wrote: Thu Mar 05, 2020 5:39 pm
helloeveryone wrote: Thu Mar 05, 2020 5:14 pm
market timer wrote: Thu Mar 05, 2020 11:22 am 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.
This thread is actually really helpful. I didn’t know how rollovers work since the only buying and selling we do is within the same account in the same institution (ie fidelity for 401k and vanguard for taxable mutual funds). I appreciate the posts about adjusting your holdings to accomodate pulling $ out of stock or bond to avoid this or at least to offset locking in the losses.
Just so you know, the poster you quoted, market timer, found himself in significant debt by playing around with margin when the 2008 financial crisis unfolded. You should be aware of this if you are considering his incredibly bad advice to use margin. Please read: viewtopic.php?f=10&t=5934


Good grief.... that's not what he said at all. He said to use margin (or other derivatives) to keep your equity exposure constant while you have a very large chunk of money in cash while it's being transferred.

It's actually very good advice and what I will do in the future if ever in this situation again.
What happens if one were to use margin for a few days while a transfer is in progress, and during that few days the market tanks? That could be much costlier than simply missing out on some gains.
Not at all..... if you set your equity exposure to match what you typically held in your account..... you would be in the identical position as where you would have been if you were leaving the account as it was..... minus a few bucks in interest.

Moving bonds to equity in other accounts as mentioned above is a better way to do it. But for those that are 100% equity... or don't have other choices, using derivatives is probably ideal. I'd probably use e- mini futures.
finite_difference
Posts: 3633
Joined: Thu Jul 09, 2015 7:00 pm

Re: Lost 23K on Monday

Post by finite_difference »

rascott wrote: Fri Mar 06, 2020 5:08 pm
finite_difference wrote: Fri Mar 06, 2020 1:33 am
tmcc wrote: Thu Mar 05, 2020 3:01 pm Can you give her a check for 23k? :D
+1.

Also, being unlucky enough to able to lose $23k like this also means you are really lucky to have a lot of money. I’d rather be lucky in the latter than be lucky at market timing a rollover one time.

Simple math shows that it was a roughly 500k account
Are you saying that’s not a lot of money for one person to have in their 401k account? Because I can do math too.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
tibbitts
Posts: 23716
Joined: Tue Feb 27, 2007 5:50 pm

Re: Lost 23K on Monday

Post by tibbitts »

rascott wrote: Fri Mar 06, 2020 5:51 pm
rudeboy wrote: Fri Mar 06, 2020 5:31 pm
rascott wrote: Fri Mar 06, 2020 5:02 pm
rudeboy wrote: Thu Mar 05, 2020 5:39 pm
helloeveryone wrote: Thu Mar 05, 2020 5:14 pm

This thread is actually really helpful. I didn’t know how rollovers work since the only buying and selling we do is within the same account in the same institution (ie fidelity for 401k and vanguard for taxable mutual funds). I appreciate the posts about adjusting your holdings to accomodate pulling $ out of stock or bond to avoid this or at least to offset locking in the losses.
Just so you know, the poster you quoted, market timer, found himself in significant debt by playing around with margin when the 2008 financial crisis unfolded. You should be aware of this if you are considering his incredibly bad advice to use margin. Please read: viewtopic.php?f=10&t=5934


Good grief.... that's not what he said at all. He said to use margin (or other derivatives) to keep your equity exposure constant while you have a very large chunk of money in cash while it's being transferred.

It's actually very good advice and what I will do in the future if ever in this situation again.
What happens if one were to use margin for a few days while a transfer is in progress, and during that few days the market tanks? That could be much costlier than simply missing out on some gains.
Not at all..... if you set your equity exposure to match what you typically held in your account..... you would be in the identical position as where you would have been if you were leaving the account as it was..... minus a few bucks in interest.

Moving bonds to equity in other accounts as mentioned above is a better way to do it. But for those that are 100% equity... or don't have other choices, using derivatives is probably ideal. I'd probably use e- mini futures.
This should probably be a topic in the Boglehead Wiki, because it's complicated enough and many of us probably have no experience with it. There are at least 3 approaches, with pros and cons:

1. split a move into multiple transfers
2. move funds in other accounts to maintain AA
3. use futures/derivatives/margin, etc. to hedge upward market movement.
dknightd
Posts: 3727
Joined: Wed Mar 07, 2018 10:57 am

Re: Lost 23K on Monday

Post by dknightd »

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!!!
Next time let her do the rollover
Retired 2019. So far, so good. I want to wake up every morning. But I want to die in my sleep. Just another conundrum. I think the solution might be afternoon naps ;)
rascott
Posts: 2957
Joined: Wed Apr 15, 2015 10:53 am

Re: Lost 23K on Monday

Post by rascott »

finite_difference wrote: Sat Mar 07, 2020 11:31 am
rascott wrote: Fri Mar 06, 2020 5:08 pm
finite_difference wrote: Fri Mar 06, 2020 1:33 am
tmcc wrote: Thu Mar 05, 2020 3:01 pm Can you give her a check for 23k? :D
+1.

Also, being unlucky enough to able to lose $23k like this also means you are really lucky to have a lot of money. I’d rather be lucky in the latter than be lucky at market timing a rollover one time.

Simple math shows that it was a roughly 500k account
Are you saying that’s not a lot of money for one person to have in their 401k account? Because I can do math too.

I don't consider it so much that a $23k loss is meaningless. Put another way.... she basically lost 4 years of max Roth IRA contributions. Or over 1 year of maxing 401k contributions. I'd be pretty upset too.
Marseille07
Posts: 16054
Joined: Fri Nov 06, 2020 12:41 pm

Re: Lost 23K on Monday

Post by Marseille07 »

I just lost some myself, a rollover took a while to complete and the market was going up.

It really sucks, I don't even understand why I couldn't roll it over directly when the from / to accounts are at the same institution. I was told that my from account blocked that and had to get distributed.

While I don't think there's any recourse, I am aware it could have gone either way. Such is life.
Last edited by Marseille07 on Wed Oct 20, 2021 12:22 am, edited 1 time in total.
Monsterflockster
Posts: 980
Joined: Wed Nov 20, 2019 11:03 pm

Re: Lost 23K on Monday

Post by Monsterflockster »

Since you bumped a 1.5 year old thread... I wonder if she’s still mad? 🤣
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