What to do after losing $117k in stock market?

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whiteprius
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Re: What to do after losing $117k in stock market?

Post by whiteprius »

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Last edited by whiteprius on Thu Dec 14, 2017 12:56 pm, edited 1 time in total.
BogleMelon
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Re: What to do after losing $117k in stock market?

Post by BogleMelon »

Fountain84 wrote: Tue Dec 12, 2017 6:48 am Path 1: ... This will alleviate a lot of stress in my life but I will feel more depressed because I know I won't be able to win back some of my losses. Investing does bring me joy and excitement. Life will be boring.
Take this path and yes you will win. That 4.8% you are paying annually is a compounded loss. Getting rid of that = making money = winning!
As others said, find another thing in life to make it less boring. Gambling is not a solution. Gambling isn't fun. It wasn't fun to lose $117K, was it?
Fountain84 wrote: Tue Dec 12, 2017 6:48 am Path 2: Continue to payoff student loans but invest modest amount ($600/month). This will bring me more happiness because I get to stay in the market and not feel like i'm missing out.
I suggest that you read this book: https://www.amazon.com/Smart-People-Mon ... 0684859386
I recall that a chapter of it is talking about FOMO or the fear of missing out.
Fountain84 wrote: Tue Dec 12, 2017 6:48 am don't want to feel like i'm missing out in 2018 if the tax cut plan passes and stocks continue to rise
Guess what, this is already priced in. All the market knows by now this information, thus, it is priced in already in today's stock prices.

OP: Investing is for long term. Long term plans requires patience. It was proven that such patience is paying back. Excitement and news flashes are good for only entertaining. But if you are going to keep doing what you were doing before, don't expect a different result.
"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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Hawaiishrimp
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Re: What to do after losing $117k in stock market?

Post by Hawaiishrimp »

Simple plan:

1. Payoff ALL student loans asap
2. Save and invest heavy into 3-Funds portfolios (indexes)

Life is that simple.
I save and invest my money, so money can make money for me, so I don't have to make money eventually.
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ruralavalon
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Re: What to do after losing $117k in stock market?

Post by ruralavalon »

Fountain84 wrote: Tue Dec 12, 2017 7:50 pm There are not enough words to express my gratitude for all the wonderful and informative responses I have received. I do have some gambling and risk-taking tendencies which caused me dearly. I will try my best to never repeat this mistake. I'm relatively young and have over 30 years left in my career. Once again, i'm a faily new investor but not a novice. I fully understand the advantage of index investing as advocated by Jack Bogle. Deep down I know that index investing is the best strategy long-term. Lack of patience and greed is what made me invest in risky biotech and oil stocks.
It is possible. You can change your behavior. Keep your investing simple.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
AntsOnTheMarch
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Re: What to do after losing $117k in stock market?

Post by AntsOnTheMarch »

I assume you’re young? You have something more important than money: youth and marketable skills. You’ll make that $117k up in no time and forget about itin the long run. You need to concentrate on:

- Human capital. Don’t end underemployed or unemployed at 50.
- Pay down debt while putting enough into 401k to max employer contribution. Never leave free money on the table!
- Invest all funds outside emergency in target fund.
- You may have a gambling prombelm. Get that attended to.
ZWorkLess
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Re: What to do after losing $117k in stock market?

Post by ZWorkLess »

I'm sorry for your losses, but at least you are young and have good earning power, so you have the opportunity to take your losses as a life lesson and do *much better* from this day forward. As long as you cash in your chips, go home, and never go back to the casino, you'll be fine.

What you're describing in your financial behavior is gambling, not investing. Some investments are riskier than others, but clearly what you've done and what you propose to continue to do all sounds like gambling. (I.e., get in while you expect the market to dramatically gain due to possible/probably tax changes -- note, all the super smart financial guys out there investing billions have *already priced in* the likelihood of tax changes . . . This is a key principle that guides my investing . . . I am *not smarter than the market* -- and neither are you!) . . . Especially the emotional component and your urgency around it. Your words ooze "danger, danger, Will Rogers!" in big glowing red letters.

I'd recommend doing some soul searching and probably therapy about addiction and gambling. My dad was a gambling addict and an alcoholic. Neither made him a bad person or stupid. He was one of the smartest people I've known, and his heart was gold. He would have cut off his arm to save me a finger. His gambling paid off handsomely just often enough to reinforce his compulsion. I always felt like the trips to the casinos when he won big were so much WORSE for him than the (many other) trips when he lost modestly, because the occasional big win kept him coming back for more and losing more and just throwing away his time and money. If he'd put that energy and time into his (lucrative) day job, he'd have been much better off. As it was, he earned a very high income throughout his working life, had some big lucky breaks with stocks, too (being on the ground floor of IPOs from businesses he was deeply involved in), but if he'd just put 10% (or more!) of his regular income into a Total Stock Market or similar fund all along, he'd have died a rich man instead of died with nothing left to his name. (And, he'd have died a lot later and had some great golden years with his grandkids to live pretty well off his Social Security that he died too young to ever claim . . . if his alcohol addiction hadn't so weakened his body.)

Anyhow, having closely witnessed the damage that addiction -- both financial/gambling and substance/alcohol -- does to a person, I'm very attuned to the dangers of it, and I am vigilant to not fall into those traps myself. Taking big risks is sometimes necessary, and I've taken many of my own (student loans, business acquisition debt, business ownership, etc.), but they are well considered and taken when *necessary* to reach an important goal.

The kinds of gambling you are doing with stocks is simply reckless and self-destructive. Learn from this, and regroup, and *pay off those student loans*. Make your "game" about seeing how fast you can pay down your debts. In your shoes (and in my own shoes, FWIW), I'd only invest in low cost broad market index funds -- invest and forget -- and for now, only do so up to your company match if you have a company match available, while paying off those student loans. When the student loans are paid off, I'd ramp up your saving/investing in the same low cost broad market index funds, but I would *never* gamble in the market, ever again.

Gambling can be a fun "game" for many people -- they can go to the casino or the stock market with a bit of money and play around like it's Monopoly. Others of us are prone to addiction and destructive behaviors, and we can't "play" at all without risking serious danger. My dad as well as several other close family members have been gambling addicts, so, I just don't gamble, period. (Addiction is partially genetic . . . so why risk it? And, besides, it really doesn't seem so fun anymore once you have witnessed the damage it can cause.) In your case, clearly you've already proven to yourself that you are prone to compulsive and destructive gambling with stocks. The smart move now would be to become a "tea totaler" in your financial life -- zero gambling. Leave the "It's OK to gamble with your 'fun money' -- i.e., a very small portion of your money -- to those who can do it safely and have fun with it. You can't. Period. Ever. Just trust me. (I don't know for sure if I could do it myself either, which is why I made the choice a long time ago not to test those waters. I don't go to casinos, I didn't even allow my kids to play poker for fun, even though my dad had taught me to count cards (black jack) when I was so young that I don't remember I time when I didn't know how to count cards . . . Nope, gambling is not a game if you're playing Russian roulette, and when you've got addiction in your veins, that's what gambling is.

Cash out your remaining stock investments as reasonably as you can tax-wise. If they're in tax-advantaged accounts, you can just sell and reinvest in Total Stock Market or a Target Date Retirement Fund. If they're in taxable accounts, just sell them all, track the losses for taxes, and use any remaining proceeds to take a big first bite on those student loans.

Pay off those student loans as fast as you can. It'll feel great.
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randomizer
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Re: What to do after losing $117k in stock market?

Post by randomizer »

goblue100 wrote: Tue Dec 12, 2017 7:36 am
Fountain84 wrote: Tue Dec 12, 2017 6:48 am Investing does bring me joy and excitement. Life will be boring.
I submit the line above should be changed to "Gambling does bring me joy and excitement. Life will be boring without it."

Proper investing should be boring. The best use of your money is to pay down your student loan debt. If you have a 401k available, put in enough to get the match from the company into either some version of the three fund portfolio or a target retirement date fund. You will start to increase your net worth, which is what you should be doing.
Yep, it mostly is pretty much boring.
87.5:12.5, EM tilt — HODL the course!
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Ditchwitch
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Re: What to do after losing $117k in stock market?

Post by Ditchwitch »

ZWorkLess wrote: Wed Dec 13, 2017 12:19 pm I'm sorry for your losses, but at least you are young and have good earning power, so you have the opportunity to take your losses as a life lesson and do *much better* from this day forward. As long as you cash in your chips, go home, and never go back to the casino, you'll be fine.

What you're describing in your financial behavior is gambling, not investing. Some investments are riskier than others, but clearly what you've done and what you propose to continue to do all sounds like gambling. (I.e., get in while you expect the market to dramatically gain due to possible/probably tax changes -- note, all the super smart financial guys out there investing billions have *already priced in* the likelihood of tax changes . . . This is a key principle that guides my investing . . . I am *not smarter than the market* -- and neither are you!) . . . Especially the emotional component and your urgency around it. Your words ooze "danger, danger, Will Rogers!" in big glowing red letters.

I'd recommend doing some soul searching and probably therapy about addiction and gambling. My dad was a gambling addict and an alcoholic. Neither made him a bad person or stupid. He was one of the smartest people I've known, and his heart was gold. He would have cut off his arm to save me a finger. His gambling paid off handsomely just often enough to reinforce his compulsion. I always felt like the trips to the casinos when he won big were so much WORSE for him than the (many other) trips when he lost modestly, because the occasional big win kept him coming back for more and losing more and just throwing away his time and money. If he'd put that energy and time into his (lucrative) day job, he'd have been much better off. As it was, he earned a very high income throughout his working life, had some big lucky breaks with stocks, too (being on the ground floor of IPOs from businesses he was deeply involved in), but if he'd just put 10% (or more!) of his regular income into a Total Stock Market or similar fund all along, he'd have died a rich man instead of died with nothing left to his name. (And, he'd have died a lot later and had some great golden years with his grandkids to live pretty well off his Social Security that he died too young to ever claim . . . if his alcohol addiction hadn't so weakened his body.)

Anyhow, having closely witnessed the damage that addiction -- both financial/gambling and substance/alcohol -- does to a person, I'm very attuned to the dangers of it, and I am vigilant to not fall into those traps myself. Taking big risks is sometimes necessary, and I've taken many of my own (student loans, business acquisition debt, business ownership, etc.), but they are well considered and taken when *necessary* to reach an important goal.

The kinds of gambling you are doing with stocks is simply reckless and self-destructive. Learn from this, and regroup, and *pay off those student loans*. Make your "game" about seeing how fast you can pay down your debts. In your shoes (and in my own shoes, FWIW), I'd only invest in low cost broad market index funds -- invest and forget -- and for now, only do so up to your company match if you have a company match available, while paying off those student loans. When the student loans are paid off, I'd ramp up your saving/investing in the same low cost broad market index funds, but I would *never* gamble in the market, ever again.

Gambling can be a fun "game" for many people -- they can go to the casino or the stock market with a bit of money and play around like it's Monopoly. Others of us are prone to addiction and destructive behaviors, and we can't "play" at all without risking serious danger. My dad as well as several other close family members have been gambling addicts, so, I just don't gamble, period. (Addiction is partially genetic . . . so why risk it? And, besides, it really doesn't seem so fun anymore once you have witnessed the damage it can cause.) In your case, clearly you've already proven to yourself that you are prone to compulsive and destructive gambling with stocks. The smart move now would be to become a "tea totaler" in your financial life -- zero gambling. Leave the "It's OK to gamble with your 'fun money' -- i.e., a very small portion of your money -- to those who can do it safely and have fun with it. You can't. Period. Ever. Just trust me. (I don't know for sure if I could do it myself either, which is why I made the choice a long time ago not to test those waters. I don't go to casinos, I didn't even allow my kids to play poker for fun, even though my dad had taught me to count cards (black jack) when I was so young that I don't remember I time when I didn't know how to count cards . . . Nope, gambling is not a game if you're playing Russian roulette, and when you've got addiction in your veins, that's what gambling is.

Cash out your remaining stock investments as reasonably as you can tax-wise. If they're in tax-advantaged accounts, you can just sell and reinvest in Total Stock Market or a Target Date Retirement Fund. If they're in taxable accounts, just sell them all, track the losses for taxes, and use any remaining proceeds to take a big first bite on those student loans.

Pay off those student loans as fast as you can. It'll feel great.
Gambling addiction and related compulsive behaviors are "genetic" or at the very least "socially reinforced" behaviours. This happens when you are young and as an adult it becomes almost impossible to escape. So they key is to turn off the lights on addictive behaviors and say good bye to them. It's pretty much the same as alcohol, drugs, XXX (you know what I mean). - Doing more different things in moderation and less things compulsively - that should be your motto. Move on and find more meaningful things to enhance your life's experience. When you are young all the doors are open to you...and like others said you have skills and a steady high income stream going for you that sets you worlds apart from other less fortunate folks.
“Anyone who has never made a mistake has never tried anything new.” | ― Albert Einstein
Nowizard
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Re: What to do after losing $117k in stock market?

Post by Nowizard »

One of my best lessons learned about investing came from a large loss. You are fortunate you learned it (You have, haven't you?) while young. Welcome to the forum. Sky diving might be a better way to fight boredom in the future, paying for it with steady increases in your portfolio from sustainable investing. Best of luck to you.

Tim
Maverick3320
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Re: What to do after losing $117k in stock market?

Post by Maverick3320 »

I'll go against the grain here and recommend that you keep trading...but reduce your active trading amount by 98%. Even those of us that have no issues staying the course occasionally play around with 2% or less of our portfolios; just from reading your posts, you don't sound like the cold turkey type (no offense).

Obviously, this small active trading amount is what will be left over after you contribute enough to get any type of matching funds and then using the rest to pay off those student loans.
Dandy
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Re: What to do after losing $117k in stock market?

Post by Dandy »

Getting your kicks from investing is a gambling high and will usually lead to a financial issues like you have experienced. Find another "hobby" to engage your interest and excitement. Investing for most should be rather dull i.e. a few passive/low cost funds that fit your risk tolerance and an occasional re balance adjustment.

Pay off your student loans, do some Boglehead investment reading and move on.
Afty
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Re: What to do after losing $117k in stock market?

Post by Afty »

whiteprius wrote: Wed Dec 13, 2017 8:24 am
Ditchwitch wrote: Wed Dec 13, 2017 7:57 am people have sold their houses to buy crypto currencies....
That's horrifying, unless they got in a year ago.
A guy on a different forum I read wanted to cash out his 401k to buy crypto currency. We told him that was idiotic, but he didn't seem convinced. I wouldn't be surprised if he did it anyway.

This was a week ago, by the way.
whiteprius
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Re: What to do after losing $117k in stock market?

Post by whiteprius »

There go our great securities regulators, letting people take out their 401(k) to invest in Bitcoin with zero warning.
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StevieG72
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Re: What to do after losing $117k in stock market?

Post by StevieG72 »

You like winning, we all do.

It is no fun to play if you lose.

Take it as a lesson and streamline your portfolio so that you are betting with the house.

Do not try to recoup what is lost by continuing the same or similiar investments.
Fools think their own way is right, but the wise listen to others.
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M_to_the_G
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Re: What to do after losing $117k in stock market?

Post by M_to_the_G »

goblue100 wrote: Tue Dec 12, 2017 7:36 am
Fountain84 wrote: Tue Dec 12, 2017 6:48 am Investing does bring me joy and excitement. Life will be boring.
I submit the line above should be changed to "Gambling does bring me joy and excitement. Life will be boring without it."
+1. This. I suggest straight-up gambling in a casino. It's more fun, will give you the same "joy and excitement"... plus they give you free drinks in casinos, to boot. Plus you can just call a spade a spade and actually say you are gambling and not sugar-coat it by saying you are "investing."

All joking aside, your problem is the fact that you find stock-picking to be "joy and excitement." But there's a cure for that. And here it is: download the free pamphlet "If You Can" by Bill Bernstein here. Read it in its entirety and read every book in the included reading list in the order specified. You will be cured.
msj16
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Re: What to do after losing $117k in stock market?

Post by msj16 »

OP,

Being truthful with oneself is very important to beat addictions. Despite the best of intentions, we all succumb to our impulses and have to help prevent this from happening (e.g., not buying the cookies in the store in the first place so it does not tempt one). To reduce the tendency to gamble stocks I suggest:

1) Establish an account with Vanguard or Fidelity where money is automatically taken from your bank account monthly to invest in a stock mutual funds. Resist the urge to check the balance. It is the set it and forget it approach which will allow you to grow substantial riches over time.

2) Only purchase individual stocks with what remains (no more than 5% of your available cash). If you find yourself selling off mutual funds to purchase more stocks, then you know you have a real problem and have to try to stop playing the game completely.

3) Paying down loans (student loan/mortgage) will keep money safe since you are not able to access it.

Best,
msj16
mentos
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Re: What to do after losing $117k in stock market?

Post by mentos »

My wife and I paid off student loans, bought a house (240k left on mortgage @3% APR), maxed retirement accounts and opened a taxable account this year. The retirement accounts are all target date funds or three-fund portfolios. However, for the taxable account we started to buy individual stocks. It's about 13k individual stocks and 13k S&P fund. This thread has inspired me to dump the individual stocks (although I still have the urge to hold AMZN, the only individual stock that I have a net gain) and put it in the S&P just like the rest of our portfolio. The talk about the correction around the corner scares me.

What is the best way to transfer from individual stocks to S&P index, sell it all at once and buy 13k worth of S&P or DCA like 1k/month over the next year?

Also I own about 27k of company stock thru ESPP... I maxed it out for 2 years (this was before I found out about Bogleheads, 3-fund portfolio, etc) but the stock plummeted. Even with the discount, I would have a net loss of about 6k. Should I dump it all now and throw it all in S&P index too?
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ruralavalon
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Re: What to do after losing $117k in stock market?

Post by ruralavalon »

mentos wrote: Fri Dec 15, 2017 7:47 am My wife and I paid off student loans, bought a house (240k left on mortgage @3% APR), maxed retirement accounts and opened a taxable account this year. The retirement accounts are all target date funds or three-fund portfolios. However, for the taxable account we started to buy individual stocks. It's about 13k individual stocks and 13k S&P fund. This thread has inspired me to dump the individual stocks (although I still have the urge to hold AMZN, the only individual stock that I have a net gain) and put it in the S&P just like the rest of our portfolio. The talk about the correction around the corner scares me.

What is the best way to transfer from individual stocks to S&P index, sell it all at once and buy 13k worth of S&P or DCA like 1k/month over the next year?
All at once, just get it over with.

mentos wrote: Fri Dec 15, 2017 7:47 amAlso I own about 27k of company stock thru ESPP... I maxed it out for 2 years (this was before I found out about Bogleheads, 3-fund portfolio, etc) but the stock plummeted. Even with the discount, I would have a net loss of about 6k. Should I dump it all now and throw it all in S&P index too?
Yes.

. . . . .

I suggest that you read one or two books on general investing. Wiki article, "Books: recommendations and reviews". When I first stated managing my own investments, I found this tutorial very helpful in learning investing terminology/jargon and some of the investing basics. Morningstar, "Investing Classroom". Also take a look at the Boglehead’s wiki, the "getting started" link I give below.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
focusedonwhatmatters
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Re: What to do after losing $117k in stock market?

Post by focusedonwhatmatters »

Fountain84,

Taking a big loss is hard emotionally. I think many of us at some time in our life have made what turned out to be a bad investment, learned from it, and have made better decisions going forward. Now we are all here. You are young, have great earning potential, and seem willing to learn. Try to put the loss behind you, and rather than trying to make it all back quickly, be patient and invest wisely in the future.

fowm
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Fountain84
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Re: What to do after losing $117k in stock market?

Post by Fountain84 »

After reading all the responses and doing some self-reflecting this past week. I have decided today is the day I become a financially responsible adult and make major chances to my life. This is a complete 180 for me but I feel very happy and relieved. I withdrew all money from Fidelity account and parked it in savings account.

Here is my plan moving forward:
1. It hurts like crazy but i'm going to accept the loss and give up on trying to win back some of that money. It is gone and already reported to IRS as capital loss. Nothing left to wonder or think about anymore.
2. Allocate 55% of my earnings toward student loans and payoff completely by 2020.
3. After paying off student loans, attack my mortgage and payoff in 1-2 more years.
4. I am currently contributing 3% towards 401k to get company match. But will increase to maximum $17k after student loans are paid off.
5. I do have a gambling problem. I can't even consider some of the suggestion about allocating small amount (%5) as play money to trade stocks. I know myself too well, that small play money will end up being another $100k down the toilet. I give up completely on picking individual stocks. It is not worth the stress. Life will fly right by me and I don't want to have regrets when I'm older about wasting so much time in my youth researching and monitoring stocks instead of enjoying life with my family.
6. Take a break for 4 years to payoff student loans and mortgage, then allocate 30% of my paycheck to automatic investing in 3 funds from Vanguard:
a. Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) or Vanguard 500 Index Fund Investor Shares (VFINX)
b. Vanguard Total World Stock Index Fund Investor Shares(VTWSX) or Vanguard Total International Stock Index Fund Investor Shares (VGTSX)
c. Vanguard High Dividend Yield Index Fund (VHDYX)

It's a beautiful day here in Florida and I'm going to enjoy my weekend outside with nature. No more being stuck on my computer researching about which stocks to buy on Monday. Those days are over. I am done with the old me. Take care everyone.
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ruralavalon
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Re: What to do after losing $117k in stock market?

Post by ruralavalon »

4) For future reference, starting 2018 the maximum employee contribution is $18.5k per year.

5) I am glad to see you will completely stay away from gambling and stick with investing.

Have a nice weekend :) .
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Doom&Gloom
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Re: What to do after losing $117k in stock market?

Post by Doom&Gloom »

Fountain84 wrote: Sat Dec 16, 2017 9:51 am After reading all the responses and doing some self-reflecting this past week. I have decided today is the day I become a financially responsible adult and make major chances to my life. This is a complete 180 for me but I feel very happy and relieved. I withdrew all money from Fidelity account and parked it in savings account.

Here is my plan moving forward:
1. It hurts like crazy but i'm going to accept the loss and give up on trying to win back some of that money. It is gone and already reported to IRS as capital loss. Nothing left to wonder or think about anymore.
2. Allocate 55% of my earnings toward student loans and payoff completely by 2020.
3. After paying off student loans, attack my mortgage and payoff in 1-2 more years.
4. I am currently contributing 3% towards 401k to get company match. But will increase to maximum $17k after student loans are paid off.
5. I do have a gambling problem. I can't even consider some of the suggestion about allocating small amount (%5) as play money to trade stocks. I know myself too well, that small play money will end up being another $100k down the toilet. I give up completely on picking individual stocks. It is not worth the stress. Life will fly right by me and I don't want to have regrets when I'm older about wasting so much time in my youth researching and monitoring stocks instead of enjoying life with my family.
6. Take a break for 4 years to payoff student loans and mortgage, then allocate 30% of my paycheck to automatic investing in 3 funds from Vanguard:
a. Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) or Vanguard 500 Index Fund Investor Shares (VFINX)
b. Vanguard Total World Stock Index Fund Investor Shares(VTWSX) or Vanguard Total International Stock Index Fund Investor Shares (VGTSX)
c. Vanguard High Dividend Yield Index Fund (VHDYX)

It's a beautiful day here in Florida and I'm going to enjoy my weekend outside with nature. No more being stuck on my computer researching about which stocks to buy on Monday. Those days are over. I am done with the old me. Take care everyone.
Looks like a reasonable plan. Well done.
#5 Shows terrific insight IMO. To help yourself with that, make an effort to adjust the way you think about investing (note my bolding in #1).
Good luck!
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oldzey
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Re: What to do after losing $117k in stock market?

Post by oldzey »

Welcome to the forum, Fountain84!

My desire to speculate (by purchasing individual stocks) was extinguished by reading what investment experts had to say about it.

Here are a couple resources on this forum that might help convince you that low-cost, broad market index funds are a better choice for investing:

What the experts say about investing

Taylor Larimore's Investment Gems

Best,
oldzey
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman
Strayshot
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Re: What to do after losing $117k in stock market?

Post by Strayshot »

Fountain84 wrote: Sat Dec 16, 2017 9:51 am 5. I do have a gambling problem. I can't even consider some of the suggestion about allocating small amount (%5) as play money to trade stocks. I know myself too well, that small play money will end up being another $100k down the toilet. I give up completely on picking individual stocks. It is not worth the stress. Life will fly right by me and I don't want to have regrets when I'm older about wasting so much time in my youth researching and monitoring stocks instead of enjoying life with my family.
This is very wise. Let me post a story about where this kind of behavior can take you over a lifetime if it persists, as it doesn't stop in youth.

A family friend passed away this year and his spouse (for whom I have POA now) is totally illiterate in all things financial and unwilling to learn. As I've gone through and re-engineered her financial situation to do what we can and prepare her fiscally for what life remains, we found insane fiscal misbehavior/gambling over the last decade from her husband. Forex, derivatives/options, individual stocks, etc he was day trading it all and with money they really needed for ongoing retirement and healthcare. When we cleaned out his "office" we went through piles of paper notebooks all with numbers, ticker symbols, etc scribbled throughout. Think the financial version of a fusion of the movies "Pi" and "The Number 23" scribbled in paper notebooks. Nobody knew this was going on, least of all his spouse. Almost six-figure losses in the last year alone. They have no living offspring, so his wife is the only one left. They had a good life together, but his legacy to her after many decades of marriage is a catastrophe of estate and financial mess and the very real potential that she may outlive the remaining resources.
RRAAYY3
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Re: What to do after losing $117k in stock market?

Post by RRAAYY3 »

embrace the boredom that is index investing

Buy Admiral shares of total us / total int’l - own every company worth owning

Sometimes at parties I hear people talk about “buying stock” like it makes them cool ... I just laugh. Most recently I heard someone mention “it’s time for me to buy more Tesla” - I said yeah I already own that, and the rest of the automotive industry

Those 2 funds give you shares of around 10,000 companies ... plenty of horses to bet on long term
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Re: What to do after losing $117k in stock market?

Post by MotoTrojan »

Maverick3320 wrote: Wed Dec 13, 2017 2:22 pm I'll go against the grain here and recommend that you keep trading...but reduce your active trading amount by 98%. Even those of us that have no issues staying the course occasionally play around with 2% or less of our portfolios; just from reading your posts, you don't sound like the cold turkey type (no offense).

Obviously, this small active trading amount is what will be left over after you contribute enough to get any type of matching funds and then using the rest to pay off those student loans.
I’d recommend it be 2% or similar of contributions. Otherwise it’s easy to lose it all, start a new 2%, and repeat until you’ve put a big dent in your portfolio.

Make the deposit into a totally separate brokerage and do it automatically. Have fun!
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Taylor Larimore
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Re: What to do after losing $117k in stock market?

Post by Taylor Larimore »

It's a beautiful day here in Florida and I'm going to enjoy my weekend outside with nature. No more being stuck on my computer researching about which stocks to buy on Monday. Those days are over. I am done with the old me. [/quote
Fountain84:

You are on your way to investment success.

Congratulations and best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: What to do after losing $117k in stock market?

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Doom&Gloom
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Re: What to do after losing $117k in stock market?

Post by Doom&Gloom »

MotoTrojan wrote: Sat Dec 16, 2017 12:48 pm
Maverick3320 wrote: Wed Dec 13, 2017 2:22 pm I'll go against the grain here and recommend that you keep trading...but reduce your active trading amount by 98%. Even those of us that have no issues staying the course occasionally play around with 2% or less of our portfolios; just from reading your posts, you don't sound like the cold turkey type (no offense).

Obviously, this small active trading amount is what will be left over after you contribute enough to get any type of matching funds and then using the rest to pay off those student loans.
I’d recommend it be 2% or similar of contributions. Otherwise it’s easy to lose it all, start a new 2%, and repeat until you’ve put a big dent in your portfolio.

Make the deposit into a totally separate brokerage and do it automatically. Have fun!
Really? Did you read #5 in OP's plan a few posts above? This is like encouraging an alcoholic to have just one drink.
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nedsaid
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Re: What to do after losing $117k in stock market?

Post by nedsaid »

Fountain84 wrote: Tue Dec 12, 2017 6:48 am Yes, I feel like the biggest idiot especially in this bull market. I only started investing 3 years ago and got involved in high risk stocks (oil and biotech). Made some really bad picks and took a massive lost. I try to ignore thinking about how much I've lost because I feel ashamed and embarrassed. I still owe $153k in student loans and have a $110k mortgage. I love reading and following the stock market. It is a hobby of mine and brings me lots of joy but it is also stressful and depressing because I seem to always pick the worst stocks to invest. I am lucky to have a stable $120k/year job. I am considering which path to take moving forward. Any opinion will be greatly appreciated. Thank you in advance.

Nedsaid: This is a good lesson about diversification. Investors need broad diversification across industry sectors. Your picks were concentrated in two sectors: energy and biotech. We all know what has happened in energy. Biotech can be a pretty volatile sector.

Another lesson is that good investing is boring. Going for excitement with your investments is a recipe for disaster. Stocks are inanimate and could care less about you, your needs, your emotional state. Markets just do what markets do.

The thing is, I have had my disasters too. I saw Lucent, Nortel, and later AIG crash and burn. Lucent still hurts to this day. Fortunately, I had my winners too and I was broadly diversified. But with individual stocks comes individual stock risk and the lesson that bad things can happen to even good stocks. I also have posted about my "Four Horsemen of Underperformance."


Path 1: Get out of the market completely. Focus entirely on paying off my student loans (4.8% interest) and only consider investing after paying off my student loans. This will alleviate a lot of stress in my life but I will feel more depressed because I know I won't be able to win back some of my losses. Investing does bring me joy and excitement. Life will be boring.

Nedsaid: Unfortunately, as I mentioned above, investments are inanimate. They don't care and they can't care. Markets are just a poor place to get validation, self-worth, and emotional support. Bad things happen and can happen at the worst possible time.


Path 2: Continue to payoff student loans but invest modest amount ($600/month). This will bring me more happiness because I get to stay in the market and not feel like i'm missing out. I don't want to feel like i'm missing out in 2018 if the tax cut plan passes and stocks continue to rise. But this plan will make me feel guilty because this is an additional $600 monthly payment I could put towards my student loans and bring apprehension because I will constantly worry about losing more money (especially with my track record of horrible picks).

Nedsaid: Your biggest issue is that you might be a gambler at heart and not an investor. Investing is not about hitting the big score. It is being a business owner, participating in our free market economy, and reaping the rewards of business. It would help to think more like a businessman, but I fear you have the gambler's instinct. You need to do some self-examination and know yourself. Not much more to say. Best wishes.
A fool and his money are good for business.
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nedsaid
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Re: What to do after losing $117k in stock market?

Post by nedsaid »

The other thing I will say is that I have experienced losses too. Back in 2008-2009, my losses in the stock market were about two years of take home pay. It smarted but at least I held on and didn't sell. I just kept investing and the markets rebounded. My portfolio rebounded with the markets. It really helps to have a long term perspective.

Losses sting, and they hurt. You are not alone. It is also a lesson in tennis balls and chicken eggs. Quality stocks will bounce back after bad markets, speculative stocks often just spatter and leave a mess. Think of how many red, hot high tech and internet companies from the late 1990's that don't exist today. This is yet another lesson, invest in quality. Quality stocks are like tennis balls, they bounce back up. Risky, speculative stocks are like chicken eggs and often just spatter. Larry Swedroe calls these speculative companies lottery stocks.
A fool and his money are good for business.
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nedsaid
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Re: What to do after losing $117k in stock market?

Post by nedsaid »

One more point on all of this. A couple family members and I get excited about the Ethanol craze. I bought a three alternative energy stocks and also speculated in an oil in Israel stock. It was a total of 4 stocks, two were outright scams, one was actually a solid company, and one had good ideas but went bankrupt. Fortunately, it was about 2% to 3% of my portfolio. I took small bets and the damage was limited. But I felt stupid afterward but it was tuition in the school of hard knocks. I took a fling and lost. I ventured a little and lost a little.

It is easy to get caught up in magical thinking and the rush of excitement. Turned out the whole ethanol thing was held up by subsidies and tax breaks. Less there than what met the eye. It was fun but alas reality returned. Don't venture out in the land of the NASDAQ OTC Bulletin Board. Truly the wild west out there. Stay away!
A fool and his money are good for business.
RAchip
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Re: What to do after losing $117k in stock market?

Post by RAchip »

Was it a realized loss or a paper loss?

My view is that just because the market price of some stocks in your portfolio went down, thats no reason to quit. It depends what stocks you own.

I bought a lot of BP in the low-mid 40's. When it fell to the upper $20's I "lost" (on paper) several hundred thousand. But I didnt sell. It continued to pay me a large dividend. And Now the price is back up to around $40.

If you invest in good companies, I would just hold on and be a patient investor, particularly if they are solid dividend payers. Good companies make mistakes and fall on hard times. If you believe in the company, that's when to buy not sell.
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Re: What to do after losing $117k in stock market?

Post by ruralavalon »

MotoTrojan wrote: Sat Dec 16, 2017 12:48 pm
Maverick3320 wrote: Wed Dec 13, 2017 2:22 pm I'll go against the grain here and recommend that you keep trading...but reduce your active trading amount by 98%. Even those of us that have no issues staying the course occasionally play around with 2% or less of our portfolios; just from reading your posts, you don't sound like the cold turkey type (no offense).

Obviously, this small active trading amount is what will be left over after you contribute enough to get any type of matching funds and then using the rest to pay off those student loans.
I’d recommend it be 2% or similar of contributions. Otherwise it’s easy to lose it all, start a new 2%, and repeat until you’ve put a big dent in your portfolio.

Make the deposit into a totally separate brokerage and do it automatically. Have fun!
This is very bad idea in my opinion.

Stick to your plan of investing simply, without even a little gambling on individual stocks.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Re: What to do after losing $117k in stock market?

Post by MotoTrojan »

Doom&Gloom wrote: Sat Dec 16, 2017 2:08 pm
MotoTrojan wrote: Sat Dec 16, 2017 12:48 pm
Maverick3320 wrote: Wed Dec 13, 2017 2:22 pm I'll go against the grain here and recommend that you keep trading...but reduce your active trading amount by 98%. Even those of us that have no issues staying the course occasionally play around with 2% or less of our portfolios; just from reading your posts, you don't sound like the cold turkey type (no offense).

Obviously, this small active trading amount is what will be left over after you contribute enough to get any type of matching funds and then using the rest to pay off those student loans.
I’d recommend it be 2% or similar of contributions. Otherwise it’s easy to lose it all, start a new 2%, and repeat until you’ve put a big dent in your portfolio.

Make the deposit into a totally separate brokerage and do it automatically. Have fun!
Really? Did you read #5 in OP's plan a few posts above? This is like encouraging an alcoholic to have just one drink.
I personally did not recommend the original plan and would advice against it so sorry for my phrasing. Simply stating that if the OP used Maverick’s recommendation that they should set it up in a manner that truly isolated <2% of the portfolio/investable-earnings. As stated by Maverick and many others who allocate a small % to riskier investments, it’s usually a percentage of portfolio rather than contributions, which allows it to drain the portfolio if repeatedly lost.
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Fountain84
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Re: What to do after losing $117k in stock market?

Post by Fountain84 »

https://www.youtube.com/watch?v=1lyu1KKwC74

The song Bittersweet Symphony by The Verve sums up exactly my new outlook on life:" Cause it's a bittersweet symphony this life
Trying to make ends meet, you're a slave to the money then you die....
Well I never pray,
But tonight I'm on my knees, yeah.
I need to hear some sounds that recognize the pain in me, yeah.
I let the melody shine, let it cleanse my mind, I feel free now."
DavidRoseMountain
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Re: What to do after losing $117k in stock market?

Post by DavidRoseMountain »

You might try finding the excitement you seek by going and playing some sports, running, weightlifting. Keep the investing boring.
prettybogle
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Re: What to do after losing $117k in stock market?

Post by prettybogle »

OP, remember, most of us have lost money in some way or another. For example, one of our friends who also lives in florida lost 100kish in options trading. He is pretty good in technical analysis and all that stuff but that knowledge did not translate into wealth. Best course of action is forget that you need to ‘recover 117000’; open an account with a ‘boring’ brokerage like Vanguard and not exciting ones like tastytrade, ib interactive, td ameritrade etc. whenever you get the urge to gamble, just transfer the money that you feel like gambling to vanguard and buy index.
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Texas Radio
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Re: What to do after losing $117k in stock market?

Post by Texas Radio »

Congratulations. Your loss has given you wisdom.

I'd pick Option 2. Pay down your debt while simultaneously adding shares to your simple 3 Fund Portfolio. Tax advantaged accounts get top priority. Find your excitement elsewhere.
A portfolio is like a bar of soap. The more you handle it the smaller it gets.
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GreatOdinsRaven
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Re: What to do after losing $117k in stock market?

Post by GreatOdinsRaven »

beardsworth wrote: Tue Dec 12, 2017 7:39 am Fountain,

It looks like you just joined the forum this morning, so welcome.

Said with respect . . .

I believe your quests for "excitement" and not wanting to feel "left out" of the possibility of easy money are among the main reasons why you have made some bad, i.e., impulsive, choices.

I suggest you read the links under "Getting Started," here:

https://www.bogleheads.org/wiki/Main_Page
Pay off your highest interest rate debt first.

If you can, invest in your 401k if you get a company match (up to the match limit).

If you can investing your IRA, do it. If not keep plowing away at high interest debt.

Meanwhile, read Bill Bernstein's, if you can. https://www.etf.com/docs/IfYouCan.pdf . Take it to heart.

Then, make investing boring, automatic, and simple. Get rich slowly. Automate monthly or biweekly mutual fund contributions. Start simple with a three fund portfolio, target date fund or target risk fund (Life Strategy). Read. Read. Read. Do nothing. Read some more. And, in a couple of years come back and see if you care to refine your investment strategy.

Good luck

GOR
"The greatest enemies of the equity investor are expenses and emotions." -John C. Bogle, Little Book of Common Sense Investing. | | "Winter is coming." Lord Eddard Stark.
ZWorkLess
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Re: What to do after losing $117k in stock market?

Post by ZWorkLess »

Fountain84 wrote: Sat Dec 16, 2017 9:51 am After reading all the responses and doing some self-reflecting this past week. I have decided today is the day I become a financially responsible adult and make major chances to my life. This is a complete 180 for me but I feel very happy and relieved. I withdrew all money from Fidelity account and parked it in savings account.

Here is my plan moving forward:
1. It hurts like crazy but i'm going to accept the loss and give up on trying to win back some of that money. It is gone and already reported to IRS as capital loss. Nothing left to wonder or think about anymore.
2. Allocate 55% of my earnings toward student loans and payoff completely by 2020.
3. After paying off student loans, attack my mortgage and payoff in 1-2 more years.
4. I am currently contributing 3% towards 401k to get company match. But will increase to maximum $17k after student loans are paid off.
5. I do have a gambling problem. I can't even consider some of the suggestion about allocating small amount (%5) as play money to trade stocks. I know myself too well, that small play money will end up being another $100k down the toilet. I give up completely on picking individual stocks. It is not worth the stress. Life will fly right by me and I don't want to have regrets when I'm older about wasting so much time in my youth researching and monitoring stocks instead of enjoying life with my family.
6. Take a break for 4 years to payoff student loans and mortgage, then allocate 30% of my paycheck to automatic investing in 3 funds from Vanguard:
a. Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) or Vanguard 500 Index Fund Investor Shares (VFINX)
b. Vanguard Total World Stock Index Fund Investor Shares(VTWSX) or Vanguard Total International Stock Index Fund Investor Shares (VGTSX)
c. Vanguard High Dividend Yield Index Fund (VHDYX)

It's a beautiful day here in Florida and I'm going to enjoy my weekend outside with nature. No more being stuck on my computer researching about which stocks to buy on Monday. Those days are over. I am done with the old me. Take care everyone.
Brilliant plan!! Well done!!
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Fountain84
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Re: What to do after losing $117k in stock market?

Post by Fountain84 »

Thank You. This is the first weekend in 4 years that I did not research/read about stocks. I feel a little empty because stocks was such a big part of my life. But I do feel much more relaxed because not worrying and constantly thinking about what to buy at the market open on Monday.
TG2
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Re: What to do after losing $117k in stock market?

Post by TG2 »

Fountain84 wrote: Sun Dec 17, 2017 11:17 am Thank You. This is the first weekend in 4 years that I did not research/read about stocks. I feel a little empty because stocks was such a big part of my life. But I do feel much more relaxed because not worrying and constantly thinking about what to buy at the market open on Monday.
Good for you. And no, you didn't lose $117,000 in the market. You paid tuition at Financial College. Granted, you paid more than a lot of people have, but all that means is that you should remember the lessons better. By far the best thing to do is take what you learned and move forward. Don't go back later and argue that they should reimburse you that tuition. The money is spent, and you got the education. Good enough.
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Taylor Larimore
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Re: What to do after losing $117k in stock market?

Post by Taylor Larimore »

TG2:

Well said!

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
larryslocum1982
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Re: What to do after losing $117k in stock market?

Post by larryslocum1982 »

As others have said, think of it as tution.

You are young. Stay optimistic. Invest systematically. You will be fine.
jcf
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Re: What to do after losing $117k in stock market?

Post by jcf »

Good advice already about doing BH way of investing from now on (3 funds portfolio).
For the addiction part, I would suggest 'virtual trading' in the market using virtual money. TOS on TDAmeritrade or others allow it. Feels real, but no real money involved and you can see if your strategies were worth it.
Fallible
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Re: What to do after losing $117k in stock market?

Post by Fallible »

Fountain84 wrote: Sun Dec 17, 2017 11:17 am Thank You. This is the first weekend in 4 years that I did not research/read about stocks. I feel a little empty because stocks was such a big part of my life. But I do feel much more relaxed because not worrying and constantly thinking about what to buy at the market open on Monday.
This is an important start, along with seeking investment advice here.

And now the hard part begins - achieving the discipline and emotional control to stay on your new course. Possibly a next step is to find other interests to fill in the initial emptiness you're feeling. Whatever, Bogleheads stand ready to help any time. Self-discipline is something we all have to work on.

:thumbsup
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
Acealthebes
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Re: What to do after losing $117k in stock market?

Post by Acealthebes »

have some humility dude.

Do you really think you are going to outsmart all those ivy league graduates who pick stocks full time with the help of advanced computers and every other support system behind them?

Just buy an index fund.

Start with the boglehead wiki.

Go bungee jumping if you want excitement.
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Shackleton
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Re: What to do after losing $117k in stock market?

Post by Shackleton »

Acealthebes wrote: Sun Dec 17, 2017 5:06 pm have some humility dude.

Do you really think you are going to outsmart all those ivy league graduates who pick stocks full time with the help of advanced computers and every other support system behind them?

Just buy an index fund.

Start with the boglehead wiki.

Go bungee jumping if you want excitement.
Did you not read his follow-up posts? I think he has shown a lot of humility and is now heading down a much better path.

Fountain84 - you're gonna be fine. Go get a healthful hobby to fill your extra time. :)
“Superhuman effort isn't worth a damn unless it achieves results.” ~Ernest Shackleton
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Fountain84
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Re: What to do after losing $117k in stock market?

Post by Fountain84 »

Ironically, I am an extremely frugal person. I'm OCD with my budget. I haven't bought new clothes or shoes in 2 years. I feel guilty about buying ribeye steaks. I rather buy generic soda than coca-cola. I haven't taken a vacation in 4 years. This is why looking back now, it was shocking to see how greed had distorted my view of money. I would feel guilty about spending money on food or clothes, yet throw away thousands in the stock market (sometimes losing over $10k in a single day). For a gambling/stock trading addict, the only way we can snap out of this is to regain a realistic view of money. I know I have mostly myself to blame for the past mistake but I feel that casinos and brokerage companies know all the gimmicks and tricks to distort our view of money. Once you start to de-personalize your hard earned money, you are setting yourself up for trouble. I vow to value every single hard-earned dollar and see the true worth of my money. Having money locked up in brokerage account and magnifying it through margin does not allow me to physically and realistically see it's true worth.
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