Retiring Into a Down Market--Part III (or Armageddon)
Two weeks ago our investment guy came over with a bottle of wine to go over our portfolio with us. He always brings a bottle of wine, even when the market is up. We just drank it a little faster this time.
After I told him that I am not panicking, he told me that a significant portion of his clients have had him sell everything; they have decided to stay out of the market for awhile. They concede that it may be the absolute wrong thing to do, but they just can't stomach it anymore.
Three days ago, I met a friend for lunch and she asked me if I'm selling everything. She told me that another friend of ours did, and put it all into cash. I told her no, I'm not selling anything.
It may look to the outside world like I am one cool-headed investor. But the truth is, I simply have no choice.
If I sold everything right now and put it all into cash, I would have a ZERO percent chance of making enough on that money to get me through 50 years of retirement. It simply could not generate enough income to keep up with inflation and my living expenses for that length of time.
The worst-case scenario of the market never ever recovering would also mean that I could not meet my retirement needs either. But at this point, the only hope I have, is to hope that the market will indeed recover at some point. And since that possibility has odds of greater than ZERO percent, I have to go with that approach.
The other alternative, of course, is to sell everything and wait for the exact bottom and buy it all back up again at bargain-basement prices. But I also know with 100% certainty that I'm not smart enough to know what day that is, so I'm not even going to try.