What is the chance of a purchase decreasing in value at some point?
What is the chance of a purchase decreasing in value at some point?
I feel slightly dissapointed when I purchase shares of an index mutual fund, and then it decreases in value the next day, or the next week, or at some other point. It would be better if I had waited, but of course I had no way of knowing.
What is the chance of making a purchase on a date where the fund never decreases below the initial purchase value? I am guessing that a large percentage of purchase dates are not at such an optimal point in time, and that knowing this fact would be in some way reassuring when the value decreases.
Has anyone seen this figure calculated?
What is the chance of making a purchase on a date where the fund never decreases below the initial purchase value? I am guessing that a large percentage of purchase dates are not at such an optimal point in time, and that knowing this fact would be in some way reassuring when the value decreases.
Has anyone seen this figure calculated?
Re: What is the chance of a purchase decreasing in value at some point?
I would guess that it is at least 33% or so. I say this because LS investing is better than DCA only about twothirds of the time.
Re: What is the chance of a purchase decreasing in value at some point?
You are twisting yourself up for no reason in order to get reassurance. Prices go up and they go down. If you can't just be happy with losing some money sometimes then you need to either learn more about investing or reconsider your strategy. Probably both.
Re: What is the chance of a purchase decreasing in value at some point?
If you only want to see upward movement in your purchase's value you need to restrict yourself to CD's at FDIC insured banks. Investment implies "risk". Risk means that you could "lose" something.
The closest helping hand is at the end of your own arm.
Re: What is the chance of a purchase decreasing in value at some point?
IMHO  you're crying over spilled milk. Once you rip off the bandaid a few times and move large sums of money into the market (your personal belief of what "large sum" is)... you kind of forget what you bought said stocks for and how much it moves in the next 3, 5, 10, 20, and 30 days. Imagine if you moved $10 million dollars into S&P500 or TSM 2 weeks ago... you'd have lost probably hundreds of thousands of dollars (off the top of my head without math)... but 1015 years from now... our collective BH hope is that such noise would be no big deal and you're better off from having invested said monies.
Re: What is the chance of a purchase decreasing in value at some point?
Don’t sell ... the “loss” is irrelevant  until you click the button and make it a reality. Markets go down? Cool, buy more for cheaper and lower your cost basis. Markets go up? Cool your money made money.
Don’t invest what you’ll need in the next 5 years, CDs / high yield savings instead
oh, and stop checking
Don’t invest what you’ll need in the next 5 years, CDs / high yield savings instead
oh, and stop checking
Re: What is the chance of a purchase decreasing in value at some point?
Is there any stock that has maintained a consistently upward trajectory — or at least consistently not downward one — throughout its trading history?
My guess is no. So every stock that has ever been sold has had someone who bought it and then had its price decline.
My guess is no. So every stock that has ever been sold has had someone who bought it and then had its price decline.

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Re: What is the chance of a purchase decreasing in value at some point?
On a whim, I decided to check SPY back to its inception in 1999. That encompasses the dotcom bust and the 2008 crisis. Note that I can't find data on SPY's Adjusted Close (now that Yahoo's historical data API is gone), so I can't take dividends into account.
Without taking dividends into acccount, you would end up with at least 1 down day 96% of the time
A very rough estimate of dividends (2.5% annually, compounded daily) gives me at least 1 down day 95% of the time.
But this is not really useful or actionable in any way
Without taking dividends into acccount, you would end up with at least 1 down day 96% of the time
A very rough estimate of dividends (2.5% annually, compounded daily) gives me at least 1 down day 95% of the time.
But this is not really useful or actionable in any way
Re: What is the chance of a purchase decreasing in value at some point?
It gets worse. If you buy ETFs, you can watch the value decline on the *same* day.
Maybe adjust your time frame and stop checking your investments so often?
Maybe adjust your time frame and stop checking your investments so often?
Re: What is the chance of a purchase decreasing in value at some point?
Using Yahoo's adjusted closing price for VFINX, 628 of the last 9641 prices, 6.5%, have not yet seen a lower price.
Ron
Ron
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Re: What is the chance of a purchase decreasing in value at some point?
I only try and buy on down days. You're doing it wrong.fctu wrote: ↑Sun Mar 25, 2018 2:20 pmI feel slightly dissapointed when I purchase shares of an index mutual fund, and then it decreases in value the next day, or the next week, or at some other point. It would be better if I had waited, but of course I had no way of knowing.
What is the chance of making a purchase on a date where the fund never decreases below the initial purchase value? I am guessing that a large percentage of purchase dates are not at such an optimal point in time, and that knowing this fact would be in some way reassuring when the value decreases.
Has anyone seen this figure calculated?