Losing Your Savings

The worst point to retire is before a stock market crash.

Ok, things are different for me. I’m young enough to start working again if I want, and my wife still has a job that pays well.

I’m not looking for sympathy, just insight into the mind of someone managing their money in capitalist America.

When I decided to retire, most of our net worth was in the company I worked for, Twilio (TWLO). I was employee #113 at SendGrid, which Twilio then purchased.

I started selling stock in March of 2019 to cover some tax implications of exercising my options. We sold about 10% of our shares that year at an average price of $113.64. Three years later and TWLO is now $103.

We were not selling TWLO because we thought it would go down in three years. Instead, we needed to pay taxes on the shares that we hoped would be worth more in the long term.

In 2020 TWLO dropped below $70, and all my thoughts of early retirement were gone. But in a few months, the pandemic blew the stock up.

We decided to sell 50% of our holdings at what we thought was an insanely high price of $178.16.

The stock continued to rise. It hit an all-time high at $457.30, but the most we sold it for was $356.14. We sold 80% of our shares at an average price of $241.49. We could have almost doubled our money if we correctly timed the top.

The market was in a bubble. Valuations were extraordinarily high and went even higher. We kept most of our money in cash as bonds had no real return. I saw an opportunity to buy stocks like Shopify at a “reasonable price” in December 2021. I was very wrong. I didn’t even think about selling the last of our shares of Twilio when it fluttered around $400.

I was afraid of taking capital gains hits. 70% of $400 is more than 100% of $100.

I waited for the stock to drop to $94 to sell the remainder of my shares. Then, I rebought 1000 shares and bought other companies’ stocks that had fallen. But unfortunately, my other investments had sunk so much that I would still be in the red if I were to realize all my losses.

Wake me up in 2025.

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