The difference two weeks can make

Two weeks ago, I blogged about my Early Retirement plans starting to crystallize, and how, unless things would go dramatically bad, I should be able to pull the “9 to 5” plug by the end of the year.

Well, although there’s no guarantee the worst is behind us at this point, I can say I’m already feeling the heat here. The first 2 weeks of January have basically put me 1 year behind my goals, and it’s going to be tough to recover from that.

As it stands right now, 2016 is now off the table for my Early Retirement date. As someone who’s still in the accumulation phase, it’s not such a terrible thing, as it means I’m going to get stocks on sale for the next few months. What kinda sucks however is that most of my investments so far had been done in 2015, the year where I started to really move stuff around in a portfolio that makes sense in the long run. I invested most of my wealth in 2015, and my portfolio has tanked. My investments in emerging markets for example are down 25%. Not from “their all time high”, but since inception! My other index funds are showing similar trends, and the only stock “in the green” is my company’s stock that I have owned for several years now.

In other words, I’ve invested at the worst possible time and would be in the red globally (understand: having less money than the total I’ve invested since inception of my brokerage account), if it wasn’t for my old company’s stock (that I’m trying to get rid of progressively to convert it into index funds). I’ll be able to recover partially from that but I guess I’m in the category of people that gets hurt the most by the downtrend: I’m really close to Financial independence, meaning I have lots of skin in the game, and I’m at a stage where my additional investments don’t make a big difference. The only people who are possibly in a worst situation (with similar portfolios) are people who retired in 2014 or 2015. Some of them, who did not have a comfortable enough egg nest, must be freaking out right now. I surely wouldn’t like to have my first Early retirement year in a similar situation.

I could have mitigated the issue by investing my money progressively throughout 2015, rather than in large chunks. Although one can’t time the market, investing is several lumps sums ensures you get to buy stocks at the “average” price throughout the year, rather than going “all in” at a specific time.

I’m down more than 10% from my 2015 highs. The impact is bigger to me already than the August 2015 market correction, and even if the market went up 7% from here I’d still be one year behind on my goals, as they stood at the end of 2015.

It’s not the end of the world, and I’m not freaking out. I’m just a bit disappointed that I might have to work “one more year” after all. At least. 🙁

Are you feeling the heat of the 2016 downtrend? Does this impact your retirement goals at all?

  1. Mike H.
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