There was an interesting and somewhat odd article in the WSJ about investors who are close to retirement having sold out their equity exposure at varying points since the start of the Coronapocalypse. In recapping the story of a 62-year-old doctor in Connecticut, "he sold much of his stock holdings at a loss between January and early March."

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The assertion makes no sense. I'm sure he believes it but if he started selling in January, that was on the way up, he was at his highwater mark at that point. It's just odd reporting.

A little more interesting is this table;

I Tweeted that table with the comment that "people who sold within 5% of the all-time high (on the way up or down) because they think they have enough and don't want the volatility is one thing. People who sold down 25% or 30% or 35% is entirely different." I made the case early on that the market manifestations were not different, they never are (a point I've made a few hundred times). When these events occur, the market goes down a lot in a panic, stops going down for maybe no reason and then goes on to make a new high. The only variable is how long that all takes.

Yes the decline was fast and the snapback was both faster than usual and at this point is more than the typical partial retracement but it's the same arc. To the extent the chart is implying people panic sold after a large decline, that is unfortunate and unnecessary but it happens. One point I've made a few times, the first time was a long way into the recovery from the financial crisis, is that if you were desperate and bargaining with yourself back in mid-March that you'd get out if you could just get close to even then this is probably a good time to ring that bell, less than 10% from the high. You'd regret it a couple of years or so from now of course, I actually think it's a terrible idea but there are people who do have enough put away for what they need and cannot emotionally endure these events.

Anyone on the fence about whether they have enough, in fact, does not have enough yet. Or at least they don't have much of a margin of safety in the face of something unexpected and expensive. We can probably all figure out that we need $2500/mo or $4300/mo or whatever from our portfolio in retirement but we can't account for unexpected one-off expenses. I've suggested padding income needs by $1000/mo to cover one-offs like tires (just replaced mine last week), veterinary bills or home repairs. A very casual observation on my part is that some people are lucky in this regard and some people are unlucky, it's crucial to realize if you're one who has tended to be unlucky so you can plan accordingly.

The pandemic doesn't change the long term tendency for equities to move from the lower left to the upper right even if the pace ends up being slower than it used to be or less than we'd like. To sell out of equities forever is to push against that reality and deprive yourself of that tailwind. Disclaimer: proper asset allocation and maintaining discipline are still crucial to long term success.