Should I stop watching my investments? Negative ROI feels bad.
Should I stop watching my investments? Negative ROI feels bad.
Hi all, I only started investing 4 months ago as I am a recent graduate with my first job.
Here is my cash flows.
As you can see I have now officially reached negative ROI on my investment.
It feels pretty bad. I knew that the market can fluctuate, but I feel really stupid putting in more and more money as the market slowly goes down. I thought it would be clever to make this, but I think I should just stop watching mint/excel from now on.
Any advice?
Here is my cash flows.
As you can see I have now officially reached negative ROI on my investment.
It feels pretty bad. I knew that the market can fluctuate, but I feel really stupid putting in more and more money as the market slowly goes down. I thought it would be clever to make this, but I think I should just stop watching mint/excel from now on.
Any advice?
- njboater74
- Posts: 633
- Joined: Mon Apr 25, 2016 8:21 pm
Re: Should I stop watching my investments? Negative ROI feels bad.
The simple answer would be to just stop watching your investments for a while. You don't want to do anything that would cause you to deviate from the course you've started.
After your first job and only 4 months, you have an impressive 21k saved up. This is an amazing start, and your future self will thank you.
After your first job and only 4 months, you have an impressive 21k saved up. This is an amazing start, and your future self will thank you.
When the mob and the press and the whole world tell you to move, your job is to plant yourself like a tree beside the river of truth and tell the whole world - 'No, YOU move'--Captain America, Boglehead
Re: Should I stop watching my investments? Negative ROI feels bad.
Just a few days ago you posted in Larry Swedroe's "Myopic Loss Aversion" thread. Did you read the article? Because that entire thread was about this.
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Re: Should I stop watching my investments? Negative ROI feels bad.
ok i'm going to make some general replies based on the very general info you provided.
i assume you're fairly young (recent graduate) with a long earning career ahead of you. this means you are in the "accumulation stage" of investing. what happens today, next year, the next decade, should really be of no concern. in fact, i'll go with this wild thought:
if you are in the accumulation stage, you want the market to be going down.
so don't worry about .08% - use it as a small, incredibly minor and not impactful to your long term at all, but use it for your "gut check". can you handle seeing that be -10%? -20%? more? if it were down -30% would you sell? or would you buy more? *hint the answer is buy more*
don't fret. have a plan, stay the course, understand where you are right now and that this money which you have invested should be viewed as essentially gone on a very long vacation and it will get back to you in about 25-35 years.
i assume you're fairly young (recent graduate) with a long earning career ahead of you. this means you are in the "accumulation stage" of investing. what happens today, next year, the next decade, should really be of no concern. in fact, i'll go with this wild thought:
if you are in the accumulation stage, you want the market to be going down.
so don't worry about .08% - use it as a small, incredibly minor and not impactful to your long term at all, but use it for your "gut check". can you handle seeing that be -10%? -20%? more? if it were down -30% would you sell? or would you buy more? *hint the answer is buy more*
don't fret. have a plan, stay the course, understand where you are right now and that this money which you have invested should be viewed as essentially gone on a very long vacation and it will get back to you in about 25-35 years.
yes you can do this!
Re: Should I stop watching my investments? Negative ROI feels bad.
you have to read this to understand what real losses mean
https://smile.amazon.com/Great-Depressi ... redirect=1
Please read some histories.
It is the duty of an investor to bear some losses now and then to get long term returns. That is why it is called risk premium.
https://smile.amazon.com/Great-Depressi ... redirect=1
Please read some histories.
It is the duty of an investor to bear some losses now and then to get long term returns. That is why it is called risk premium.
- Phineas J. Whoopee
- Posts: 9675
- Joined: Sun Dec 18, 2011 5:18 pm
Re: Should I stop watching my investments? Negative ROI feels bad.
Post deleted.
Last edited by Phineas J. Whoopee on Tue Oct 18, 2016 7:01 pm, edited 1 time in total.
Re: Should I stop watching my investments? Negative ROI feels bad.
Stay the course.
Some time in the future your ROI might be worse. At the very least, you will find yourself looking at your total and seeing that it is much lower than it was six months previous.
Back in 2008 when everything dropped big-time, my wife came to me and asked if we were doing the right thing since she had been reading about all the losses in the stock market. (We have a neighbor who panicked and sold a lot of stock at that time.) I assured her that our monthly contributions to our IRA would be a great investment when the market went back up, which was the case.
Will this work out for the future? Probably, but I can't guarantee it. But, what are your options? Good on you for starting so early. Pick an asset allocation that you are comfortable with using low-ER index funds and go with it.
Some time in the future your ROI might be worse. At the very least, you will find yourself looking at your total and seeing that it is much lower than it was six months previous.
Back in 2008 when everything dropped big-time, my wife came to me and asked if we were doing the right thing since she had been reading about all the losses in the stock market. (We have a neighbor who panicked and sold a lot of stock at that time.) I assured her that our monthly contributions to our IRA would be a great investment when the market went back up, which was the case.
Will this work out for the future? Probably, but I can't guarantee it. But, what are your options? Good on you for starting so early. Pick an asset allocation that you are comfortable with using low-ER index funds and go with it.
Re: Should I stop watching my investments? Negative ROI feels bad.
Congrats on such an early start! I wish I'd started when I was in my first job.
Here’s Jack Bogle speaking directly to you at the 1:10 mark
https://personal.vanguard.com/us/insigh ... /3659-Exc2
Here’s Jack Bogle speaking directly to you at the 1:10 mark
https://personal.vanguard.com/us/insigh ... /3659-Exc2
Re: Should I stop watching my investments? Negative ROI feels bad.
I love seeing negative ROI. I have decades of accumulation ahead of me, and the cheaper the stocks are right now, the cheaper I can buy them and the better my expected return over all.
Looks to me like you are putting money in at a good clip. Each time you are dripping in your $625, realize that you are adding 3% to your investment portfolio. If the market continues to fall, each of those 3% additions is buying you more and more.
When the market goes up, I get excited and check my investments and how well they are doing. When the market goes down, I get excited and cannot wait to put more money into the market. I know it is just a mental game, but it works great for me.
Looks to me like you are putting money in at a good clip. Each time you are dripping in your $625, realize that you are adding 3% to your investment portfolio. If the market continues to fall, each of those 3% additions is buying you more and more.
When the market goes up, I get excited and check my investments and how well they are doing. When the market goes down, I get excited and cannot wait to put more money into the market. I know it is just a mental game, but it works great for me.
Re: Should I stop watching my investments? Negative ROI feels bad.
You should look every single day, because that way you'll get accustomed to the fluctuations, and you'll no longer be bothered by it.
Re: Should I stop watching my investments? Negative ROI feels bad.
I don't think that's what the actual research on the subject has found.*3!4!/5! wrote:You should look every single day, because that way you'll get accustomed to the fluctuations, and you'll no longer be bothered by it.
From one recent study:
Regardless of loss aversion, infrequent evaluation positively affects investment level changes.
Re: Should I stop watching my investments? Negative ROI feels bad.
Well they need to go back and do their research properly.AlohaJoe wrote:I don't think that's what the actual research on the subject has found.*3!4!/5! wrote:You should look every single day, because that way you'll get accustomed to the fluctuations, and you'll no longer be bothered by it.
From one recent study:Regardless of loss aversion, infrequent evaluation positively affects investment level changes.
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Re: Should I stop watching my investments? Negative ROI feels bad.
To paraphrase Benjamin Graham, "investors should buy stocks like they buy groceries, not like they buy perfume." In other words, when the price of stocks falls investors should eagerly purchase more and when the price of stocks rises investors should purchase less. Ironically, it appears you are already following this advice unknowingly by implementing a weekly purchase plan through your 401k. Stay the course and try in think of 5 or 10 year increments, rather than quarterly.
"In a world of uncertainty, one should focus more on the consequences than the probabilities." - Benjamin Graham
- ruralavalon
- Posts: 26297
- Joined: Sat Feb 02, 2008 9:29 am
- Location: Illinois
Re: Should I stop watching my investments? Negative ROI feels bad.
Four months is nothing. You are doing fine.
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link: Bogleheads® investment philosophy
Re: Should I stop watching my investments? Negative ROI feels bad.
I used to look every day and it drove me nuts. Now I listen to the radio on the way home and if the S&P is up, I'll take a look, if not, I won't peek. So now I only see days when the market is up
Bogleheads Wiki: https://www.bogleheads.org/wiki/Main_Page
Re: Should I stop watching my investments? Negative ROI feels bad.
If you are young, and can maintain your job to keep investing, a crash would be great! You can get so many stocks for cheap. It does not matter at all what your stocks are worth now. It's all about accumulation of shares at this point. In 50 years it will matter how much those shares are worth, right now you need to focus on getting as many shares as you can, and the best way to do that is on sale. In the words of Jim Cramer, BUY BUY BUY!
Re: Should I stop watching my investments? Negative ROI feels bad.
Ride the roller coaster. Both Terrifying and exhilarating. Don't look down at the ground look at your target.
Create that steady drum beat of investment. Invest on a schedule as you have been doing. Listen and you will thank us later in life.
Create that steady drum beat of investment. Invest on a schedule as you have been doing. Listen and you will thank us later in life.
Re: Should I stop watching my investments? Negative ROI feels bad.
When prices are down you are buying on sale!
If seeing a lower balance is upsetting, stop looking.
Would you prefer the steady balance of a bank savings account?
Seriously, look at your AA and be sure your stock allocation is a number you can sleep well at night with. These drops are noise. How will you handle a big drop? Tip: come and read here and do not pull any money out. When the markets have a big drop, keep putting money in, rebalance if you get out of your desired AA by more than 5%.
lafder
If seeing a lower balance is upsetting, stop looking.
Would you prefer the steady balance of a bank savings account?
Seriously, look at your AA and be sure your stock allocation is a number you can sleep well at night with. These drops are noise. How will you handle a big drop? Tip: come and read here and do not pull any money out. When the markets have a big drop, keep putting money in, rebalance if you get out of your desired AA by more than 5%.
lafder
Re: Should I stop watching my investments? Negative ROI feels bad.
This!*3!4!/5! wrote:You should look every single day, because that way you'll get accustomed to the fluctuations, and you'll no longer be bothered by it.
- nisiprius
- Advisory Board
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Re: Should I stop watching my investments? Negative ROI feels bad.
I think I disagree. If you watch every day you become accustomed to fluctuations of like 1% and 2% and you start to get the idea that fluctuations stay within a fairly small range, and then a 20% correction like 2011 feels even worse.
My personal opinion, my two cents, is:
My personal opinion, my two cents, is:
- Try to stop watching. (It's very easy to say "don't watch" but I don't think most people can really do that nowadays, what with it being to easy to log on). You probably can't insulate yourself from news reports of "the Dow plunged"--or seeing "U.S. Stocks in Freefall" suddenly rise to the top again in Bogleheads, but somewhere along the line figure out the "conversion factor"--i.e. if your portfolio is 50% stocks, then if the news says "the Dow dropped 2%" then your portfolio dropped about 1%--and try not to use a news report as a specific reason to check your own portfolio that very day.
- Try very hard to watch the total value of your entire portfolio, and, if possible, include any bank accounts or other savings that you plan to hold for a long time. Not your checking account, but yes, any five-year CDs. Look at the whole, try to ignore the parts.
- Yes, negative ROI feels bad. It feels bad to everyone, though probably not equally bad to everyone. Some of people that say it doesn't bother them are bluffing. Some of the people that say they love crashes because they can load up on cheap stocks are posturing. Not all, but do allow for it.
- Only you can judge your feelings. Know thyself. Trust thyself. Nothing that's happened in the last four months has been bad at all. It's almost certain you'll see much worse sometime in next year years or so. If it is a problem, do not put yourself in a position where you might be pushed to the breaking point. Dial back your risk, reduce your stock allocation, up your bonds and your plain-old-bank savings, and, once again, try to set up something so that you are watching the grand total, not the individual pieces.[/quote]In 1940, Fred Schwed wrote:[quote]Like all of life's rich emotional experiences, the full flavor of losing important money cannot be conveyed by literature. Art cannot convey to an inexperienced girl what it is truly like to be a wife and mother. There are certain things that cannot be explained to a virgin either by words or pictures. Nor can any description that I might offer here even approximate what it feels like to lose a real chunk of money that you used to own.
Last edited by nisiprius on Tue Oct 18, 2016 8:56 am, edited 2 times in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Re: Should I stop watching my investments? Negative ROI feels bad.
Then a person can bring up some charts of long term history of different investments and look to see the whole range of short and long term, small and large fluctuation, crashes, bear markets, bull markets, secular trends etc. Having done that the fluctuations in a short four month period will shrink to utter insignificance.nisiprius wrote:I think I disagree. If you watch every day you become accustomed to fluctuations of like 1% and 2% and you start to get the idea that fluctuations stay within a fairly small range, and then a 20% correction like 2011 feels even worse.
Re: Should I stop watching my investments? Negative ROI feels bad.
You're doing great. Serious and steady accumulation is the path to wealth. There will be set-backs so you need to get your head around 10-20% losses because it's not uncommon.
I suppose the uneven dollar purchases in your taxable account means you're using ETFs. You mention feeling stupid as you buy more and more and the market goes down. One thing that helped us is to use mutual funds and set up automatic exchanges to happen every month/quarter. Investing becomes hands-off. Decision making and regret are minimized.
I suppose the uneven dollar purchases in your taxable account means you're using ETFs. You mention feeling stupid as you buy more and more and the market goes down. One thing that helped us is to use mutual funds and set up automatic exchanges to happen every month/quarter. Investing becomes hands-off. Decision making and regret are minimized.
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Re: Should I stop watching my investments? Negative ROI feels bad.
I think learning what it feels like to invest, the ability to recognize the distressing feeling, acknowledge it and still do the prudent and important work of following your investment plan is one the most important lessons in investing - more important then asset allocation and a close second to living below your means. Investing is simple but hard.
Re: Should I stop watching my investments? Negative ROI feels bad.
aboose, here is what you wrote in your first post,
No. 1 Don't watch your portfolio.
No. 2 Understand volatility and how it's always provides a bumpy ride.
No. 3 Reevaluate your asset allocation. If you discover you can't stand the heat, turn down the burner a bit. It's far better to be comfortable than brave. For what it's worth, I don't recommend anyone by over 80% equity.
Volatility
https://blbarnitz4.wordpress.com/2016/0 ... #more-3679
By the way, I hope you not planning to use these retirement funds in 10-20 years.
Paul
Now, you have become aware that it isn't as easy as it seems to watch your portfolio stall out, but this is nothing compared to what you will experience later on. I think Nisiprius was attempting to convey this message.I was wondering if you could give me advice on a lazy, set it and forget it portfolio for both my job 401k and the vanguard IRA I will open. I am not conservative about risk at all and don't plan on using these funds for 10-20+ years.
No. 1 Don't watch your portfolio.
No. 2 Understand volatility and how it's always provides a bumpy ride.
No. 3 Reevaluate your asset allocation. If you discover you can't stand the heat, turn down the burner a bit. It's far better to be comfortable than brave. For what it's worth, I don't recommend anyone by over 80% equity.
Volatility
https://blbarnitz4.wordpress.com/2016/0 ... #more-3679
By the way, I hope you not planning to use these retirement funds in 10-20 years.
Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
Re: Should I stop watching my investments? Negative ROI feels bad.
Take a look at the end of today's trading, I bet your ROI will be above 0.
In all, get used to the fluctuation, you haven't lost anything yet b/c you haven't sold; and you're looking at not even -0.1%. let alone -1%, -5%, -20% that most investors have seen at some point in time.
Really focus on the fact that you saved 21k in a short time.
Welcome to investing.
In all, get used to the fluctuation, you haven't lost anything yet b/c you haven't sold; and you're looking at not even -0.1%. let alone -1%, -5%, -20% that most investors have seen at some point in time.
Really focus on the fact that you saved 21k in a short time.
Welcome to investing.
Last edited by mortfree on Tue Oct 18, 2016 10:59 am, edited 1 time in total.
Mid-40’s
Re: Should I stop watching my investments? Negative ROI feels bad.
Consider this a really cheap lesson on your personal risk tolerance. If losing $17 feels bad, imagine how losing $1k, $10k, $100k might feel and choose your AA accordingly.
FIRE'd. Mid-40s.
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Re: Should I stop watching my investments? Negative ROI feels bad.
You're doing great, and look at what you've accumulated by having a plan! But, if seeing the neg is a problem, you probably should cut down on looking or just wait for the up days (if your money is mostly in stock funds). Keep it up! And remember, you haven't lost anything, until you sell!
Re: Should I stop watching my investments? Negative ROI feels bad.
Don't lose sight of the big picture... You have saved/invested $21K since June!! That is outstanding!! Continue that sort of savings rate and you will do just fine.
I'd say it's fairly normal to check balances daily when you first start. I did. Then I stopped watching account balances so closely, but watched the S&P 500 ticker closely. Now I don't watch that closely or even daily, but give it a look once or twice a week. I would guess, OP, you and others will progress similarly. So no, you shouldn't watch so closely. But, you probably will for a while yet. That's okay.
I'd say it's fairly normal to check balances daily when you first start. I did. Then I stopped watching account balances so closely, but watched the S&P 500 ticker closely. Now I don't watch that closely or even daily, but give it a look once or twice a week. I would guess, OP, you and others will progress similarly. So no, you shouldn't watch so closely. But, you probably will for a while yet. That's okay.
- LAlearning
- Posts: 1365
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Re: Should I stop watching my investments? Negative ROI feels bad.
Why are you using a tIRA vs a Roth?
I know nothing!
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Re: Should I stop watching my investments? Negative ROI feels bad.
I think this is great advice. I think it's actually easy to stop watching. I have automated investments for the most part, and only log onto my IRA if I'm trying to add extra money, and almost never to my 401k. I don't keep a line item spreadsheet like the OP, so I usually forget how much was in there the last time. I know roughly/vaguely, but not specifically. I don't look at returns that often, maybe a couple times a year. I do update a spreadsheet maybe once a month, but that's because I use it to determine my asset allocation and potentially fiddle with what extra money in my IRA would do to my allocation, so determine how I should spread out new contributions. Marketplace Radio podcast is the only thing I listen to that gives me raw numbers of what's up or down, and I'm usually a day or two behind so by the time I hear the market is down it's usually back up again.nisiprius wrote:My personal opinion, my two cents, is:
- Try to stop watching. (It's very easy to say "don't watch" but I don't think most people can really do that nowadays, what with it being to easy to log on). You probably can't insulate yourself from news reports of "the Dow plunged"--or seeing "U.S. Stocks in Freefall" suddenly rise to the top again in Bogleheads, but somewhere along the line figure out the "conversion factor"--i.e. if your portfolio is 50% stocks, then if the news says "the Dow dropped 2%" then your portfolio dropped about 1%--and try not to use a news report as a specific reason to check your own portfolio that very day.
- Try very hard to watch the total value of your entire portfolio, and, if possible, include any bank accounts or other savings that you plan to hold for a long time. Not your checking account, but yes, any five-year CDs. Look at the whole, try to ignore the parts.
- Yes, negative ROI feels bad. It feels bad to everyone, though probably not equally bad to everyone. Some of people that say it doesn't bother them are bluffing. Some of the people that say they love crashes because they can load up on cheap stocks are posturing. Not all, but do allow for it.
I focus way more on dollar amounts in my savings accounts, my budget, and total debt. I use a spreadsheet for my budget (rather than an online tool) and I check and update that several times a week. How much I'm saving/spending is something I can control. I care very little for what the stock market is doing on accounts I won't be withdrawing for decades. So I think it's easy to ignore balances/performance of investment. If someone wants to spend the energy, they should focus on how they can save more etc.
Where the tides of fortune take us, no man can know.
Re: Should I stop watching my investments? Negative ROI feels bad.
My guess, with the OP's savings rate, is there is a high income involved, they are above the Roth limit, and don't know of the backdoor Roth route. Just my guess though.LAlearning wrote:Why are you using a tIRA vs a Roth?
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Re: Should I stop watching my investments? Negative ROI feels bad.
It is not stupid to (put) money as the market goes down. Actually it is a smart thing to do!
Don't think of it as a bank account. Your investment account doesn't have any real cash in it. It is full of stocks. As the stocks go cheaper (on sale), it is a smart thing to keep buying. There is no reason not to buy something on sale, if you are going to buy it anyways!
Don't think of it as a bank account. Your investment account doesn't have any real cash in it. It is full of stocks. As the stocks go cheaper (on sale), it is a smart thing to keep buying. There is no reason not to buy something on sale, if you are going to buy it anyways!
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather
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Re: Should I stop watching my investments? Negative ROI feels bad.
The ROI that matters is when you sell or when you cash out dividends (during retirement)
The ROI as of today, doesn't mean anything to you.
The ROI as of today, doesn't mean anything to you.
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather
Re: Should I stop watching my investments? Negative ROI feels bad.
Just allow yourself to look at your investments when the S&P 500 is above a certain number. Say, 2,150
Re: Should I stop watching my investments? Negative ROI feels bad.
I will point out that you have lost $17.
I remember my first investment with Vanguard; similar circumstances as you, having just graduated from college. I invested $3000 in a Vanguard fund and it promptly dropped $150 within a week. I felt much the same as you do now, but I told myself, no, you said you were in it for the long run, so be in it for the long run. If it helps you not to look, then that's what you should do. I personally still look at my portfolio every day but take no action. I actually find it interesting to see how little the day to day fluctuations mean in the long run.
The key at your age is to save as much as possible. Returns mean little when you are just starting out. Your $17 loss is easily wiped out by your next contribution. As your balance grows, that is no longer the case, but for now, just save as much as possible and you will likely be in a good place in the long run.
I remember my first investment with Vanguard; similar circumstances as you, having just graduated from college. I invested $3000 in a Vanguard fund and it promptly dropped $150 within a week. I felt much the same as you do now, but I told myself, no, you said you were in it for the long run, so be in it for the long run. If it helps you not to look, then that's what you should do. I personally still look at my portfolio every day but take no action. I actually find it interesting to see how little the day to day fluctuations mean in the long run.
The key at your age is to save as much as possible. Returns mean little when you are just starting out. Your $17 loss is easily wiped out by your next contribution. As your balance grows, that is no longer the case, but for now, just save as much as possible and you will likely be in a good place in the long run.
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Re: Should I stop watching my investments? Negative ROI feels bad.
Googling up these charts is now so easy to do it's hard to believe the OP hasn't already looked at plenty of them. He/she went to college, invests at a good rate, and tracks it in a spreadsheet. Per a previous post he/she works in corporate finance at a F500 company.dbr wrote:Then a person can bring up some charts of long term history of different investments and look to see the whole range of short and long term, small and large fluctuation, crashes, bear markets, bull markets, secular trends etc. Having done that the fluctuations in a short four month period will shrink to utter insignificance.nisiprius wrote:I think I disagree. If you watch every day you become accustomed to fluctuations of like 1% and 2% and you start to get the idea that fluctuations stay within a fairly small range, and then a 20% correction like 2011 feels even worse.
Is there more to the story behind your question aboose?
JW
Retired at Last
Re: Should I stop watching my investments? Negative ROI feels bad.
OP,
You are right, it feels bad, but it is perfectly normal behavior for the stock market, and normal feelings for stock investors. That is one of the specific reasons that stock investing pays more in the long run than bank CDs, you have to tolerate those fluctuations to get the better returns. With your time frame, look back at 20 year values to see the gains, but also notice the continuous fluctuations from there to now. One of the reasons that I am now comfortable but not wealthy is in the 1980s I was spending less than 10% of my $400 weekly paycheck on index fund shares that are now worth 16-18 times their purchase prices.
I too had your feelings. I stopped looking when I could have a good day at work, but feel down at home after I saw the news. By looking less often, my contributions were more than the market fluctuations so I only saw gains until the big crashes occurred.
Consider this analogy. When measured in fractions of a second, your respiration stops between inhaling and exhaling, but the big picture is, that stopping doesn't matter, it is normal for the flow of air in your lungs to change directions. The stock market values fluctuate daily, monthly, annually, and every decade is different from the last one. So far, every 20 year period has had gains, but here we have learned that just means we are waiting on that record to be broken. The good news has been mentioned by others, you are currently buying at prices that will amaze you in 30 years.
A small problem here is these forum are the home of very patient investors. We are the epitome of buy and hold index fund purchasers. Jack Bogle said "Stay the course." Warren Buffet said "The best holding period for stocks is forever" and Boglerheads agree with them. Yes, try to avoid checking your portfolio.
The news media need to get your attention in order to profit from advertising revenue. The leading headline will say "STOCKS ARE DOWN!" then the story is that they are down by a few tenths of one percent. There are going to be some changes made when they put me in charge.
You are right, it feels bad, but it is perfectly normal behavior for the stock market, and normal feelings for stock investors. That is one of the specific reasons that stock investing pays more in the long run than bank CDs, you have to tolerate those fluctuations to get the better returns. With your time frame, look back at 20 year values to see the gains, but also notice the continuous fluctuations from there to now. One of the reasons that I am now comfortable but not wealthy is in the 1980s I was spending less than 10% of my $400 weekly paycheck on index fund shares that are now worth 16-18 times their purchase prices.
I too had your feelings. I stopped looking when I could have a good day at work, but feel down at home after I saw the news. By looking less often, my contributions were more than the market fluctuations so I only saw gains until the big crashes occurred.
Consider this analogy. When measured in fractions of a second, your respiration stops between inhaling and exhaling, but the big picture is, that stopping doesn't matter, it is normal for the flow of air in your lungs to change directions. The stock market values fluctuate daily, monthly, annually, and every decade is different from the last one. So far, every 20 year period has had gains, but here we have learned that just means we are waiting on that record to be broken. The good news has been mentioned by others, you are currently buying at prices that will amaze you in 30 years.
A small problem here is these forum are the home of very patient investors. We are the epitome of buy and hold index fund purchasers. Jack Bogle said "Stay the course." Warren Buffet said "The best holding period for stocks is forever" and Boglerheads agree with them. Yes, try to avoid checking your portfolio.
The news media need to get your attention in order to profit from advertising revenue. The leading headline will say "STOCKS ARE DOWN!" then the story is that they are down by a few tenths of one percent. There are going to be some changes made when they put me in charge.
- InvestorNewb
- Posts: 1663
- Joined: Mon Sep 03, 2012 11:27 am
Re: Should I stop watching my investments? Negative ROI feels bad.
My Portfolio: VTI [US], VXUS [Int'l], VNQ [REIT], VCN [Canada] (largest to smallest)
Re: Should I stop watching my investments? Negative ROI feels bad.
Hi everyone,
Sorry, I was at work, so I wasn't able to reply. I didn't expect to see so many responses. I'm very thankful for all the wise advice Bogleheads forum has given me both from a technical standpoint and from an emotional standpoint right now.
I think the toughest part for me was that I knew the market could go down and didn't mind that part as I know this is in the long run. But lately, every single economics and news article is talking about how real return is going down, how the global economy is slowing down. How we're due for a drop or how the market is overvalued. Especially with the rate hike coming. Even Bogleheads are talking about how they're pulling out of the market, etc. It's just constantly blaring and I didn't expect that aspect. Everyone's talking about how long run returns won't be the same as what they were. How 4% isn't a safe withdrawal anymore, more like 2%. It just makes me feel like all my planning isn't going to pay off, especially while my peers spend all of their money on seemingly nice toys and single bedroom apartments.
I'm really grateful that this forum gave me the advice I needed to save as much as I have.
I think I will just set and forget and stop looking at the balances.
Thanks everyone.
Sorry, I was at work, so I wasn't able to reply. I didn't expect to see so many responses. I'm very thankful for all the wise advice Bogleheads forum has given me both from a technical standpoint and from an emotional standpoint right now.
I think the toughest part for me was that I knew the market could go down and didn't mind that part as I know this is in the long run. But lately, every single economics and news article is talking about how real return is going down, how the global economy is slowing down. How we're due for a drop or how the market is overvalued. Especially with the rate hike coming. Even Bogleheads are talking about how they're pulling out of the market, etc. It's just constantly blaring and I didn't expect that aspect. Everyone's talking about how long run returns won't be the same as what they were. How 4% isn't a safe withdrawal anymore, more like 2%. It just makes me feel like all my planning isn't going to pay off, especially while my peers spend all of their money on seemingly nice toys and single bedroom apartments.
I'm really grateful that this forum gave me the advice I needed to save as much as I have.
Frankly this is exactly the issue I am having. A heightened sense of self importance making me think that somehow I'm causing this in some weird way.InvestorNewb wrote:I felt the same way in 2013:
Feel like I somehow cursed the market
... been riding high since then.
I think I will just set and forget and stop looking at the balances.
Thanks everyone.
It seemed like the best thing to do to save taxes. Would a roth be better for some reason? And no I am not super high income, I could still open a roth. I make about 70k annually, but this year I am on track to make about 42k due to only working for 7 months.LAlearning wrote:Why are you using a tIRA vs a Roth?
Re: Should I stop watching my investments? Negative ROI feels bad.
aboose wrote:Hi all, I only started investing 4 months ago as I am a recent graduate with my first job.
Here is my cash flows.
As you can see I have now officially reached negative ROI on my investment.
It feels pretty bad. I knew that the market can fluctuate, but I feel really stupid putting in more and more money as the market slowly goes down. I thought it would be clever to make this, but I think I should just stop watching mint/excel from now on.
Any advice?
The lower it goes the more to throw in. .. THAT .... buys more shares which should make you happy. I sat on my hands through the 1998-9 crash and the 2007-8 debacle buying more shares every payday. Sure, it feels more grate than great but it's a market and it goes up and it goes down, that's what markets do. This is nothing.... daily or monthly noise and truly NOTHING. Look at a chart of the Dow or S&P from beginning.. late 1800's to now. You figure 150 years of history is going to go away just because you got it? Keep investing and don't bother looking if it bothers you.
Re: Should I stop watching my investments? Negative ROI feels bad.
Wait, what?! OP are you pulling our leg?JW-Retired wrote:Googling up these charts is now so easy to do it's hard to believe the OP hasn't already looked at plenty of them. He/she went to college, invests at a good rate, and tracks it in a spreadsheet. Per a previous post he/she works in corporate finance at a F500 company.
Is there more to the story behind your question aboose?
- Dale_G
- Posts: 3466
- Joined: Tue Feb 20, 2007 4:43 pm
- Location: Central Florida - on the grown up side of 85
Re: Should I stop watching my investments? Negative ROI feels bad.
aboose, you are very early in your investing career. The bad news and good news as you continue to save and invest over the next decades is that you will see losses of hundreds of thousands of dollars or, if you do really well, perhaps a million or so. The bad news is that it doesn't feel very good. The good news is that the big losses are because you have (had!) a big nest egg as a result of saving and investing well.
I admit I was not happy to see a 23% of the value of my equities in evaporate in a single day on October 19, 1987. The bear market equity loss of 57% (from peak to trough) during the "great recession" wasn't much fun either. But it is the nature of the market. Over time, perhaps decades, you should learn to accept the inevitable losses. If there is no risk involved, the equity market will return little more than a bank CD.
I pay no attention to projections of low returns over the next decade. If the returns are low I will accept them without recrimination. @79 years old, I am interested in more than the next decade. You should be too.
Dale
I admit I was not happy to see a 23% of the value of my equities in evaporate in a single day on October 19, 1987. The bear market equity loss of 57% (from peak to trough) during the "great recession" wasn't much fun either. But it is the nature of the market. Over time, perhaps decades, you should learn to accept the inevitable losses. If there is no risk involved, the equity market will return little more than a bank CD.
I pay no attention to projections of low returns over the next decade. If the returns are low I will accept them without recrimination. @79 years old, I am interested in more than the next decade. You should be too.
Dale
Volatility is my friend
Re: Should I stop watching my investments? Negative ROI feels bad.
I'm not pulling anyone's leg. See my post above. I guess I just got jitters. People saying that returns will never be the same. All my assumptions are based on past performance, but I'm beginning in a time period where everyone, including Jack Bogle himself, is saying that long term returns are going down. That combined with seeing my portfolio go negative made me feel strange... it's one thing to have volatility, but I really need to steel my resolve and trust the market.*3!4!/5! wrote:Wait, what?! OP are you pulling our leg?JW-Retired wrote:Googling up these charts is now so easy to do it's hard to believe the OP hasn't already looked at plenty of them. He/she went to college, invests at a good rate, and tracks it in a spreadsheet. Per a previous post he/she works in corporate finance at a F500 company.
Is there more to the story behind your question aboose?
Re: Should I stop watching my investments? Negative ROI feels bad.
Are you and I reading the same forum? For every post by someone whose courage is failing, there are 20 saying stay the course.aboose wrote:Even Bogleheads are talking about how they're pulling out of the market, etc.
You have many years of investing ahead of you. A drop today or next week or next month will be a nearly invisible blip on the graph over your investing lifetime.
Re: Should I stop watching my investments? Negative ROI feels bad.
If you read his articles, you will see that he also predicted lower returns before because he didn't expect the speculative return to be so high especially during the 90's. What he tries to predict and he admits that he and anyone else can be wrong is the total return which includes fundamental and speculative return. Fundamental returns are pretty much set in stone if looked at the average for the past 100 years; speculative returns are anyone's guess. As long as businesses are profitable in the long term the stock market will grow. Don't be surprised if you lose 50% of your money in the next 5 years. Current P/E ratio is around 26 compared to the average P/E of 15 over the last 100 years. This means that the market is 73% more expensive right now than average.aboose wrote:I'm not pulling anyone's leg. See my post above. I guess I just got jitters. People saying that returns will never be the same. All my assumptions are based on past performance, but I'm beginning in a time period where everyone, including Jack Bogle himself, is saying that long term returns are going down. That combined with seeing my portfolio go negative made me feel strange... it's one thing to have volatility, but I really need to steel my resolve and trust the market.*3!4!/5! wrote:Wait, what?! OP are you pulling our leg?JW-Retired wrote:Googling up these charts is now so easy to do it's hard to believe the OP hasn't already looked at plenty of them. He/she went to college, invests at a good rate, and tracks it in a spreadsheet. Per a previous post he/she works in corporate finance at a F500 company.
Is there more to the story behind your question aboose?
This doesn't mean that you should stop investing at these prices because the price can keep going up and up for years and if you dont invest you will lose out on all that money. Personally in my current situation, I feel that I would do better by paying down my debt by good ol' fashioned work and wait for the market to drop to start investing. Nobody can predict when that will happen but I can assure you that it will.
Take at look at the chart below.
https://hurricanecapital.files.wordpres ... ogle_4.png
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- Posts: 12
- Joined: Sun Oct 09, 2016 1:16 pm
Re: Should I stop watching my investments? Negative ROI feels bad.
aboose,
What great advice you have here! If all these wise ones haven't convinced you, read up on "dollar cost averaging." Then read one of the classic Boglehead books (there are book lists on the wiki). You are doing the right thing, you are on the right path, and you are going to be rich. Your colleagues aren't going to get much of a return from their toys and apartments, are they?
Don't get caught up in buying individual stocks or the empty promises of managed funds, crazy insurance products, and the like. Stay the course; you'll be so glad you did!
Anne
What great advice you have here! If all these wise ones haven't convinced you, read up on "dollar cost averaging." Then read one of the classic Boglehead books (there are book lists on the wiki). You are doing the right thing, you are on the right path, and you are going to be rich. Your colleagues aren't going to get much of a return from their toys and apartments, are they?
Don't get caught up in buying individual stocks or the empty promises of managed funds, crazy insurance products, and the like. Stay the course; you'll be so glad you did!
Anne
Re: Should I stop watching my investments? Negative ROI feels bad.
Look once a year ,
If you want to.
Ignore the noise.
Keep Investing.
If you want to.
Ignore the noise.
Keep Investing.
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
- blaugranamd
- Posts: 724
- Joined: Wed Apr 11, 2012 1:57 pm
- Location: D-lux apt in the sky
Re: Should I stop watching my investments? Negative ROI feels bad.
Stop watching!!! I'm relatively new to Bogleheads and view it like this: you never lose the number of shares you hold and the value of those shares is irrelevant of you don't need to sell them. It would be like getting your home appraised daily, if you aren't planning to move for 20 years, who cares what your home value is now? You're looking at your portfolio as if something you own is disappearing when really the value of what you own is changing. You actually own MORE shares than you did 4 months ago so you are in a better position to capitalize on the virtually guaranteed long term trend of market growth that will happen before you actually PLAN to sell shares.
-- Don't mistake more funds for more diversity: Total Int'l + Total Market = 7k to 10k stocks -- |
-- Market return does NOT = average nor 50th percentile, rather 80-90th percentile long term ---
Re: Should I stop watching my investments? Negative ROI feels bad.
A very good analogy.It would be like getting your home appraised daily, if you aren't planning to move for 20 years, who cares what your home value is now?
Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.