One of the benefits of a major stock market correction…

A lot of folks have been bemoaning the drop in the market, talking about the billions of $ that have been lost, and how the market seems to been in danger of a major correction. The doom-and-gloom people have been out in force. Still, most folks in the FIRE community have taken in all in with a “grain of salt” because of our long-term outlook and our financial knowledge. We all remember that it’s all paper losses, until you sell.

One of the major benefits of a market drop is the potential to buy things “on sale.” If we truly believe that the long-term trend of the market is up, then this sudden drop gives us the chance to purchase something we wanted. I know most folks in the US flock to sales like crazy (especially around Christmas), but seem to shy away from “sales” on stocks. Seems odd, doesn’t it.

This has an added benefit when you find yourself with some excess funds, for some reason. Mr. 39 Months company paid out their bonus for 2017, and since the company did well, I got a decent amount of money. With the timing the way it is, I can drop that into the market and buy some items on sale at the equivalent of a 4.1% discount (based on Jan 31 prices). Also, since I put 100% of it into my deferred account, I am able to put that money into the market without paying taxes on it (I did have to pay Social Security and Medicare taxes).

The result was a nice bump in the money that I can access when I retire early, as part of my draw down strategy.

Find any bargains out there?

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Mr. 39 Months

2 thoughts on “One of the benefits of a major stock market correction…”

    1. I agree.

      I agree. We were up 19% in 2017, so even if we only stay 0% for 2018, we are beating the expectation of what Bogle was saying earlier.

      What is fascinating is that, for those of us over 50, we have been through three major market meltdowns (1987, 2000 and 2008) and the bad market in the 70s. We know that the market does this periodically.

      There are a lot of people, even in the FI community, who haven’t known much before 2010, so they have only seen the market go up&up. They know about the market retreating at times, but haven’t actually experienced it. I actually think we need to have it draw back some, just so folks continue to respect the market, and not assume its just keeps rising.

      Mr. 39 Months

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