How to get over paper loss?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
mentos
Posts: 22
Joined: Mon Feb 15, 2016 9:44 am

How to get over paper loss?

Post by mentos » Tue Oct 09, 2018 8:55 am

I've held onto $20k company stock from my ESPP and had a paper loss of about $6-7k. Bogleheads advised me to sell it all and buy an index fund and don't try to time the market. I really didn't want to take a loss, but decided to sell $10k company stock and put it all in SCHB last week. A week later, that $10k in SCHB is only worth $9k :( I feel like I can't win. It's very discouraging seeing my balance drop by $100-300 each passing day.

Admiral
Posts: 1460
Joined: Mon Oct 27, 2014 12:35 pm

Re: How to get over paper loss?

Post by Admiral » Tue Oct 09, 2018 9:04 am

mentos wrote:
Tue Oct 09, 2018 8:55 am
I've held onto $20k company stock from my ESPP and had a paper loss of about $6-7k. Bogleheads advised me to sell it all and buy an index fund and don't try to time the market. I really didn't want to take a loss, but decided to sell $10k company stock and put it all in SCHB last week. A week later, that $10k in SCHB is only worth $9k :( I feel like I can't win. It's very discouraging seeing my balance drop by $100-300 each passing day.
The market giveth, and the market taketh away. Many here see their paper balances drop by ten, fifty, or one hundred times that on a down day. Just stay the course. I suggest not checking your accounts on a daily basis. If you're in this for the long haul, then don't fret over day to day market fluctuations.

bloom2708
Posts: 5012
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: How to get over paper loss?

Post by bloom2708 » Tue Oct 09, 2018 9:05 am

It is hard. Stocks (individual or mutual funds or ETF funds) do not always go up.

You are not thinking "long term" enough. The balance today or tomorrow will fluctuate (sometimes a lot).

Check less often. Verify your mix of stocks/bonds is correct for your age, saving progress/goals and risk tolerance.

Many investors who started in the 2009-2010 range have only experienced a (generally) up market. The first real pullback (not saying this is one) will be an eye opener.

Make a plan, stick with it, stay the course, don't check when the market is going down, save more, find hobbies outside of investing.

:arrow:
"We are not here to please, but to provoke thoughtfulness." --Unknown Boglehead

livesoft
Posts: 62925
Joined: Thu Mar 01, 2007 8:00 pm

Re: How to get over paper loss?

Post by livesoft » Tue Oct 09, 2018 9:07 am

mentos wrote:
Tue Oct 09, 2018 8:55 am
,... but decided to sell $10k company stock and put it all in SCHB last week. A week later, that $10k in SCHB is only worth $9k
That is impossible. I can look up what SCHB did in the past week.

So you might wish to get some new reading glasses. <-- Not medical advice!

(But maybe the rest of your company stock went to $9K and that's what you meant.)
Wiki This signature message sponsored by sscritic: Learn to fish.

User avatar
mhc
Posts: 3807
Joined: Mon Apr 04, 2011 10:18 pm
Location: NoCo

Re: How to get over paper loss?

Post by mhc » Tue Oct 09, 2018 9:10 am

One way to help get over paper losses is to learn how to Tax Loss Harverst. This can help turn a paper loss into a real benefit.

Expected returns is directly related to risk. Risk means that sometimes things go down. That is the nature of the beast. The hope is that over the long haul there will be a net gain. The philosophy is to diversify into low cost funds and avoid behavioral errors.

User avatar
birdog
Posts: 169
Joined: Fri Apr 07, 2017 1:35 pm

Re: How to get over paper loss?

Post by birdog » Tue Oct 09, 2018 9:15 am

mhc wrote:
Tue Oct 09, 2018 9:10 am
One way to help get over paper losses is to learn how to Tax Loss Harvest. This can help turn a paper loss into a real benefit.
I agree. The option to tax loss harvest if my new purchase drops has helped me get over trying to time my purchases and just invest when I have money to invest.

mentos
Posts: 22
Joined: Mon Feb 15, 2016 9:44 am

Re: How to get over paper loss?

Post by mentos » Tue Oct 09, 2018 9:18 am

livesoft wrote:
Tue Oct 09, 2018 9:07 am
mentos wrote:
Tue Oct 09, 2018 8:55 am
,... but decided to sell $10k company stock and put it all in SCHB last week. A week later, that $10k in SCHB is only worth $9k
That is impossible. I can look up what SCHB did in the past week.

So you might wish to get some new reading glasses. <-- Not medical advice!

(But maybe the rest of your company stock went to $9K and that's what you meant.)
You are right, what I said was incorrect.

Last week I bought 153 shares of SCHB for $70.6999/share and right now it's at $69.315/share so the 10k only went down $211. However I own 804 shares, so I saw my total gain/loss fall from like +$4500 to $3000 in a week.

I will try to check less often.

Flyer24
Posts: 457
Joined: Sun Apr 08, 2018 4:21 pm

Re: How to get over paper loss?

Post by Flyer24 » Tue Oct 09, 2018 9:40 am

You need to quit watching your account. We all lose in market value at times. You need to look at the bright side. You are only in your 30’s. You should be focused on accumulating stock. Every drop in the market means that you just bought more shares for your money. Just focus on diversified investments with dollar cost average. I only look at my account about once a month just to update my shares in Quicken.

ChinchillaWhiplash
Posts: 570
Joined: Sat Jan 20, 2018 5:40 pm
Location: Colorado

Re: How to get over paper loss?

Post by ChinchillaWhiplash » Tue Oct 09, 2018 9:47 am

Just look at a long term chart (5-10 years) and see that there are constant dips all along its way up. Your paper loss is one of those dips. Given some time, it will go up.

Collinkp
Posts: 10
Joined: Wed Nov 22, 2017 10:08 pm
Location: Michigan

Re: How to get over paper loss?

Post by Collinkp » Tue Oct 09, 2018 9:48 am

I feel your pain. I have some losses pre-boglehead days of individual stocks in my Roth IRA. I just can't bring myself to sell them knowing how valuable Roth space is. I understand the opportunity cost of keeping them as opposed to buying vti or vxus but I keep hoping for them to go up. (This is not a good strategy). I know this doesn't solve your problem but just wanted you to know you're not the only one suffering from this dilemma. Hopefully others will have some experiences we can learn from.

pkcrafter
Posts: 13130
Joined: Sun Mar 04, 2007 12:19 pm
Location: CA
Contact:

Re: How to get over paper loss?

Post by pkcrafter » Tue Oct 09, 2018 10:56 am

Collinkp wrote:
Tue Oct 09, 2018 9:48 am
I feel your pain. I have some losses pre-boglehead days of individual stocks in my Roth IRA. I just can't bring myself to sell them knowing how valuable Roth space is. I understand the opportunity cost of keeping them as opposed to buying vti or vxus but I keep hoping for them to go up. (This is not a good strategy). I know this doesn't solve your problem but just wanted you to know you're not the only one suffering from this dilemma. Hopefully others will have some experiences we can learn from.
This is called anchoring:

Common behavioral pitfalls

https://www.bogleheads.org/wiki/Behavio ... #Anchoring
Anchoring

Basing decisions or estimates on events or values already known (the “anchor”), even though these facts may have no bearing on the actual event or value. Investors will tend to hang on to losing investments by waiting for the investment to break even at the price at which it was purchased. Thus, they anchor the value of their investment to the value it once had, and instead of selling it to realize the loss, they take on greater risk by holding it in the hopes it will go back up to its purchase price.
I just can't bring myself to sell them knowing how valuable Roth space is.
You're right, it doesn't make sense. Selling individual stock does not lose the valuable Roth space. You sell the stock in the Roth, then use that cash to make a purchase of total market, total international or both. No tax consequences either.

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.

inbox788
Posts: 5693
Joined: Thu Mar 15, 2012 5:24 pm

Re: How to get over paper loss?

Post by inbox788 » Tue Oct 09, 2018 11:07 am

mentos wrote:
Tue Oct 09, 2018 9:18 am
Last week I bought 153 shares of SCHB for $70.6999/share and right now it's at $69.315/share so the 10k only went down $211. However I own 804 shares, so I saw my total gain/loss fall from like +$4500 to $3000 in a week.

I will try to check less often.
Isn't +$3000 SCHB better than -$6-7k ESPP?

Check as often as you like, just look at SCHB 1 year, 3 year, 5 year, 10 year, etc. and keep looking at those. It's like watching paint dry and grass growing.

rich126
Posts: 186
Joined: Thu Mar 01, 2018 4:56 pm

Re: How to get over paper loss?

Post by rich126 » Tue Oct 09, 2018 11:16 am

Most everyone loses money on investments. Its like baseball, no team is going to win 162 games, nor no everyday player will hit 1.000.

Investments in stocks should be viewed as "is this the best investment for me going forward" and not "I can't sell because it will be a lost". The only other factors that should be included would be taxes. Too many people fixate on getting back to even and while they are waiting for that (and sometimes it never occurs), they are losing out on other, better investments that could have made them much more money.

Take the loss and move on, unless you think it will provide better returns than any other options you have.

Whocares1000
Posts: 12
Joined: Tue Sep 11, 2018 4:22 pm

Re: How to get over paper loss?

Post by Whocares1000 » Tue Oct 09, 2018 11:19 am

If you need the money within 5 years, I would not suggest putting it into a stock fund to begin with.

Beyond that, if you have a plan and it is reasonable, don't worry about the paper losses and instead find a hobby to do. I started investing in April of 2007 and rode the market all the way down and all the way up in the beginning. I am at a point now where there would be serious issues with the market to have a paper loss again in my 401k.

So my advice is to relax, follow the plan, and don't worry about it.

Dottie57
Posts: 4790
Joined: Thu May 19, 2016 5:43 pm

Re: How to get over paper loss?

Post by Dottie57 » Tue Oct 09, 2018 11:20 am

mentos wrote:
Tue Oct 09, 2018 8:55 am
I've held onto $20k company stock from my ESPP and had a paper loss of about $6-7k. Bogleheads advised me to sell it all and buy an index fund and don't try to time the market. I really didn't want to take a loss, but decided to sell $10k company stock and put it all in SCHB last week. A week later, that $10k in SCHB is only worth $9k :( I feel like I can't win. It's very discouraging seeing my balance drop by $100-300 each passing day.

Ignore. Stop looking. It is not a loss until you sell it. Investing since 1988, the market has had large bear markets and I am now retired. Stop reading financial news.

rgs92
Posts: 2273
Joined: Mon Mar 02, 2009 8:00 pm

Re: How to get over paper loss?

Post by rgs92 » Tue Oct 09, 2018 11:27 am

No pain no gain.

ChinchillaWhiplash
Posts: 570
Joined: Sat Jan 20, 2018 5:40 pm
Location: Colorado

Re: How to get over paper loss?

Post by ChinchillaWhiplash » Tue Oct 09, 2018 12:30 pm

Also remember that when your TSM fund is down the reinvested dividends will get you more shares too.

livesoft
Posts: 62925
Joined: Thu Mar 01, 2007 8:00 pm

Re: How to get over paper loss?

Post by livesoft » Tue Oct 09, 2018 1:03 pm

Rather than stop looking, I think one needs to look even more. After awhile, one will get used to losing money. I am serious about this.
Wiki This signature message sponsored by sscritic: Learn to fish.

tbone555
Posts: 32
Joined: Thu Apr 13, 2017 1:28 pm

Re: How to get over paper loss?

Post by tbone555 » Tue Oct 09, 2018 1:16 pm

livesoft wrote:
Tue Oct 09, 2018 1:03 pm
Rather than stop looking, I think one needs to look even more. After awhile, one will get used to losing money. I am serious about this.
I tend to agree with this. Playing mental games to 'hide' from the risk you are taking doesn't seem the right approach. Feeling the pain of paper losses is important. Then coming to grips with it and ignoring short term gyrations seems like a better approach.

crake
Posts: 238
Joined: Thu Mar 14, 2013 2:12 pm

Re: How to get over paper loss?

Post by crake » Tue Oct 09, 2018 1:19 pm

I am someone who can agonize over lost money. Every purchase in my life I try to optimize as efficiently as possible and if I find an area where I wasted 20 bucks it can drive me mad. On the same day I am beating myself up over forgetting to use a coupon before it expired I am may be down a couple of thousand dollars in my investment accounts and don't care.

This may seem like schizophrenic behavior but where I've been able to mentally draw a line is to not care about things I can't control. I have completely internalized that the best, most efficient course for investing is low cost index funds. I accept that with any alternative strategy I am likely to under perform. I don't control the ups and downs of the market. All I can do is save money, invest it immediately, and keep my costs low.

an_asker
Posts: 2204
Joined: Thu Jun 27, 2013 2:15 pm

Re: How to get over paper loss?

Post by an_asker » Tue Oct 09, 2018 1:41 pm

mentos wrote:
Tue Oct 09, 2018 8:55 am
I've held onto $20k company stock from my ESPP and had a paper loss of about $6-7k. Bogleheads advised me to sell it all and buy an index fund and don't try to time the market. I really didn't want to take a loss, but decided to sell $10k company stock and put it all in SCHB last week. A week later, that $10k in SCHB is only worth $9k :( I feel like I can't win. It's very discouraging seeing my balance drop by $100-300 each passing day.
How's your company's stock doing? [not that it can't happen] Don't tell me that it's been going up while SCHB dropped!

BTW, the principles of Bogleheads is not to get the most returns - it is to get the optimal returns. You could always get stuck with bad timing either way, as also could make it rich - much richer that comparable Boglehead in the market - with the one stock you picked. But that's not the point. Folks here try to stay on the average track not shoot for the stars.

an_asker
Posts: 2204
Joined: Thu Jun 27, 2013 2:15 pm

Re: How to get over paper loss?

Post by an_asker » Tue Oct 09, 2018 1:41 pm

crake wrote:
Tue Oct 09, 2018 1:19 pm
I am someone who can agonize over lost money. Every purchase in my life I try to optimize as efficiently as possible and if I find an area where I wasted 20 bucks it can drive me mad. On the same day I am beating myself up over forgetting to use a coupon before it expired I am may be down a couple of thousand dollars in my investment accounts and don't care.

This may seem like schizophrenic behavior but where I've been able to mentally draw a line is to not care about things I can't control. I have completely internalized that the best, most efficient course for investing is low cost index funds. I accept that with any alternative strategy I am likely to under perform. I don't control the ups and downs of the market. All I can do is save money, invest it immediately, and keep my costs low.
Same same here! The thing is my tolerance level is different for different items. :oops:

User avatar
sperry8
Posts: 1663
Joined: Sat Mar 29, 2008 9:25 pm
Location: Miami FL

Re: How to get over paper loss?

Post by sperry8 » Tue Oct 09, 2018 1:52 pm

I disagree with not checking. I think it is important to check. You need to learn what the market does. You will see it go down. You will see it stay flat. You will see it go up. What is important is this first hand learning experience. You say it right in the title - this is a paper loss. On paper only. It is meaningless. Do you need the money soon? If not - then the paper loss doesn't matter. But you are learning. You are practicing how to "stay the course" through a down period. You are learning how markets behave on a daily basis (erratically). You are and/or will become desensitized to these short-term gyrations which will serve you in your efforts to "stay the course" over the long term and especially as you continue to save money and put even more into the market. The reality is it is time in the market, not market timing that generates returns. And compounded (assuming one re-invests dividends and cap gains, if any) you will likely watch your monies grow faster than any other investment over the long-term.
Humbling BH contest results: 2017: #516 of 647 | 2016: #121 of 610 | 2015: #18 of 552 | 2014: #225 of 503 | 2013: #383 of 433 | 2012: #366 of 410 | 2011: #113 of 369 | 2010: #53 of 282

J295
Posts: 1744
Joined: Sun Jan 01, 2012 11:40 pm

Re: How to get over paper loss?

Post by J295 » Tue Oct 09, 2018 1:57 pm

It's not easy, but with some work it does get easier. And, if you are going to be in the market (which to some degree depending on personal circumstances is advisable), you should find a way to get used to it (otherwise fear and greed will lure you into poor decisions).

Two times come to mind .... September 2008 a drop of over 7% in one day (so $70k loss in one day on a $1 million equity stake; and in February 2018 a 4.6% drop on the dow). And, I'm leaving out Black Monday 1987 when we panicked and sold what small equity stake we then had. Live and learn (better than not learning from poor choices).

We have benefited significantly from an asset allocation that fits our needs and temperaments, and from an Investment Policy Statement that we follow (and only permits changes after a 3 month cooling off period). I recommend a good IPS (simple is fine; ours is 5 sentences) that includes your asset allocation.

User avatar
randomizer
Posts: 1540
Joined: Sun Jul 06, 2014 3:46 pm

Re: How to get over paper loss?

Post by randomizer » Tue Oct 09, 2018 2:03 pm

mentos wrote:
Tue Oct 09, 2018 8:55 am
It's very discouraging seeing my balance drop by $100-300 each passing day.
The solution to that is very simple: don't look!
87.5:12.5, EM tilt — HODL the course!

Admiral
Posts: 1460
Joined: Mon Oct 27, 2014 12:35 pm

Re: How to get over paper loss?

Post by Admiral » Tue Oct 09, 2018 2:09 pm

livesoft wrote:
Tue Oct 09, 2018 1:03 pm
Rather than stop looking, I think one needs to look even more. After awhile, one will get used to losing money. I am serious about this.
Meh. Like how often? Once a day? Three times? I see no reason to check obsessively. Once a week, twice a month, whatever, to make sure your automatic investments are correct etc seems like plenty. You'll still get plenty of time to acclimate to losing money at that rate. 8-)

PhilosophyAndrew
Posts: 456
Joined: Sat Aug 13, 2016 10:06 am

Re: How to get over paper loss?

Post by PhilosophyAndrew » Tue Oct 09, 2018 2:43 pm

mentos wrote:
Tue Oct 09, 2018 8:55 am
I've held onto $20k company stock from my ESPP and had a paper loss of about $6-7k. Bogleheads advised me to sell it all and buy an index fund and don't try to time the market. I really didn't want to take a loss, but decided to sell $10k company stock and put it all in SCHB last week. A week later, that $10k in SCHB is only worth $9k :( I feel like I can't win. It's very discouraging seeing my balance drop by $100-300 each passing day.
OP, did you follow others’ recommendations because you understood and agreed with their reasoning? If so, please honor your decision to accept that reasoning and stop checking your balances daily.

Reaffirming the reasoning that you acceptedwill help you to understand that daily fluctuations matter not at all; refraining from checking balances daily will improve your emotional health even more.

If you acted on recommendations that you did not understand, please go back and try to understand the more deeply. I’m sure folks here will be happy to help answer any specific questions you have about that reasoning.

Andy.

livesoft
Posts: 62925
Joined: Thu Mar 01, 2007 8:00 pm

Re: How to get over paper loss?

Post by livesoft » Tue Oct 09, 2018 2:50 pm

Admiral wrote:
Tue Oct 09, 2018 2:09 pm
livesoft wrote:
Tue Oct 09, 2018 1:03 pm
Rather than stop looking, I think one needs to look even more. After awhile, one will get used to losing money. I am serious about this.
Meh. Like how often?
That will depends on the person doing the looking until it doesn't bother them anymore.
Wiki This signature message sponsored by sscritic: Learn to fish.

H-Town
Posts: 1309
Joined: Sun Feb 26, 2017 2:08 pm

Re: How to get over paper loss?

Post by H-Town » Tue Oct 09, 2018 2:53 pm

mentos wrote:
Tue Oct 09, 2018 8:55 am
I've held onto $20k company stock from my ESPP and had a paper loss of about $6-7k. Bogleheads advised me to sell it all and buy an index fund and don't try to time the market. I really didn't want to take a loss, but decided to sell $10k company stock and put it all in SCHB last week. A week later, that $10k in SCHB is only worth $9k :( I feel like I can't win. It's very discouraging seeing my balance drop by $100-300 each passing day.
Investing and managing money is not for everybody. Delegate it to someone else who don't have any emotion attached to your portfolio. Focus on what you can do best.

stocknoob4111
Posts: 353
Joined: Sun Jan 07, 2018 12:52 pm

Re: How to get over paper loss?

Post by stocknoob4111 » Tue Oct 09, 2018 2:53 pm

mentos wrote:
Tue Oct 09, 2018 8:55 am
. It's very discouraging seeing my balance drop by $100-300 each passing day.
To give you some perspective my portfolio dropped over $8,000 in the last 4 days thanks to the bond rout and falling International/EM.. and no i'm not wealthy, that is a ton of money for me. However these are short term fluctuations and i've taught myself to tune it out.

livesoft
Posts: 62925
Joined: Thu Mar 01, 2007 8:00 pm

Re: How to get over paper loss?

Post by livesoft » Tue Oct 09, 2018 3:30 pm

stocknoob4111 wrote:
Tue Oct 09, 2018 2:53 pm
mentos wrote:
Tue Oct 09, 2018 8:55 am
. It's very discouraging seeing my balance drop by $100-300 each passing day.
To give you some perspective my portfolio dropped over $8,000 in the last 4 days thanks to the bond rout and falling International/EM.. and no i'm not wealthy, that is a ton of money for me. However these are short term fluctuations and i've taught myself to tune it out.
Right. You have to get this fixed because when your portfolio becomes larger as you near retirement, it might drop $10,000 to $30,000 to $100,000 in a single day or for several days in a row.
Wiki This signature message sponsored by sscritic: Learn to fish.

dandinsac
Posts: 110
Joined: Sat Jul 30, 2016 8:34 am

Re: How to get over paper loss?

Post by dandinsac » Tue Oct 09, 2018 3:45 pm

Buy 6-month treasuries. They pretty much go up in value (a little bit) or stay the same, every day. So, you’ll have a paper gain to offset the paper loss.

User avatar
munemaker
Posts: 3569
Joined: Sat Jan 18, 2014 6:14 pm

Re: How to get over paper loss?

Post by munemaker » Tue Oct 09, 2018 3:51 pm

I find a few brews often help.

:sharebeer :sharebeer

quantAndHold
Posts: 2045
Joined: Thu Sep 17, 2015 10:39 pm

Re: How to get over paper loss?

Post by quantAndHold » Tue Oct 09, 2018 4:20 pm

Why did you buy SCHB? Do the reasons you bought it still hold? Yes? Then stop worrying about it.

Some study a few years ago came to the conclusion that the less often people looked at their accounts, the more positive they were about their returns. I think it was the people who looked at their accounts once a year that thought they were doing well. Everyone else, not so much.

One thing that really helped me was to write a detailed IPS. Detailed enough that executing it was a mechanical exercise. No decisions to make that could be swayed by emotion. Yes, I look at my account on a regular basis in order to act in the instructions in my IPS, but I’m not at risk of shooting myself in the foot in a moment of emotion.

dknightd
Posts: 1032
Joined: Wed Mar 07, 2018 11:57 am

Re: How to get over paper loss?

Post by dknightd » Tue Oct 09, 2018 4:42 pm

I've been putting money into my investments every payday for many years.
Now the gains or losses of my existing investments can easily be bigger than what I am contributing.
As long as I am contributing I don't mind if my investments go down, it just means I'm buying "low".
It is kind of hard to see your latest contribution essentially disappear. Eventually you get used to it.
If you do not, adjust your AA so you feel comfortable.

I'm not sure how I'll feel when I retire and stop putting money in. I've been doing this long enough that I think I will be OK seeing paper losses. I better be because it is pretty sure that it will happen again.

stocknoob4111
Posts: 353
Joined: Sun Jan 07, 2018 12:52 pm

Re: How to get over paper loss?

Post by stocknoob4111 » Wed Oct 10, 2018 6:19 pm

-$12,000 today :shock: Under normal circumstances I may have had a heart attack but I understand the bigger picture so I am calm :sharebeer

User avatar
arcticpineapplecorp.
Posts: 3482
Joined: Tue Mar 06, 2012 9:22 pm

Re: How to get over paper loss?

Post by arcticpineapplecorp. » Wed Oct 10, 2018 6:30 pm

realize that losses happen more often than you might think:

Image

source: https://am.jpmorgan.com/blob-gim/138340 ... cale=en_US

Do you see how "Despite average intrayear drops of 13.8%, annual returns were positive 29 of 38 years"?

See how you have to "stay the course" to get the positive returns? That's what buy and hold/stay the course means. Patience wins the day. But you've got to stay in the market to get the generous return of the market.

The day to day moves as has been said are noise, nothing more.

"In the short run, the market is like a voting machine--tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine--assessing the substance of a company."

source: https://www.google.com/search?q=in+the+ ... fox-b-1-ab
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

User avatar
sperry8
Posts: 1663
Joined: Sat Mar 29, 2008 9:25 pm
Location: Miami FL

Re: How to get over paper loss?

Post by sperry8 » Thu Oct 11, 2018 7:52 am

arcticpineapplecorp. wrote:
Wed Oct 10, 2018 6:30 pm
realize that losses happen more often than you might think:

Image

source: https://am.jpmorgan.com/blob-gim/138340 ... cale=en_US

Do you see how "Despite average intrayear drops of 13.8%, annual returns were positive 29 of 38 years"?

See how you have to "stay the course" to get the positive returns? That's what buy and hold/stay the course means. Patience wins the day. But you've got to stay in the market to get the generous return of the market.

The day to day moves as has been said are noise, nothing more.

"In the short run, the market is like a voting machine--tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine--assessing the substance of a company."

source: https://www.google.com/search?q=in+the+ ... fox-b-1-ab
This is a great graph and so I took a look at their whole presentation. Wow. Chock full of great graphs. Thanks for sharing!
Humbling BH contest results: 2017: #516 of 647 | 2016: #121 of 610 | 2015: #18 of 552 | 2014: #225 of 503 | 2013: #383 of 433 | 2012: #366 of 410 | 2011: #113 of 369 | 2010: #53 of 282

ge1
Posts: 394
Joined: Sat Apr 28, 2012 8:15 pm

Re: How to get over paper loss?

Post by ge1 » Thu Oct 11, 2018 8:00 am

I think 2008 / 2009 cured me of any issues with paper losses... I remember we just got a lot of cash from selling a property in the summer of 2008 and I put most of in the market, nicely diversified (or so I thought). By March 2009 our portfolio dropped a cool 40% / > 400k or so...

stocknoob4111
Posts: 353
Joined: Sun Jan 07, 2018 12:52 pm

Re: How to get over paper loss?

Post by stocknoob4111 » Fri Oct 12, 2018 9:45 pm

ge1 wrote:
Thu Oct 11, 2018 8:00 am
By March 2009 our portfolio dropped a cool 40% / > 400k or so...
LOL! My portfolio was down $26,000 since Oct. 3 and it was just difficult to digest even though I know I am not touching this money at least for 20 years so it's irrelevant but it still rattles. I can't imagine going $400k down, yikes!

User avatar
tennisplyr
Posts: 1895
Joined: Tue Jan 28, 2014 1:53 pm
Location: Sarasota, FL

Re: How to get over paper loss?

Post by tennisplyr » Sat Oct 13, 2018 6:58 am

Just like life, it has it's ups and downs. This too shall pass.
Those who move forward with a happy spirit will find that things always work out.

BarbBrooklyn
Posts: 73
Joined: Fri Aug 24, 2018 9:33 am
Location: NYC

Re: How to get over paper loss?

Post by BarbBrooklyn » Sat Oct 13, 2018 7:44 am

livesoft wrote:
Tue Oct 09, 2018 1:03 pm
Rather than stop looking, I think one needs to look even more. After awhile, one will get used to losing money. I am serious about this.
+1
I've lived through 1987 and 2008. If you like watching roller coasters, watch every day so that you develop a tolerance for it. But only re-balance once or twice year if/when your AA gets out of whack. Stay the course.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."

FoolMeOnce
Posts: 351
Joined: Mon Apr 24, 2017 11:16 am

Re: How to get over paper loss?

Post by FoolMeOnce » Sat Oct 13, 2018 8:13 am

If you are shifting from one security you want to get rid of to another security you want to own, it is better to do so when both have dropped. You'll end up with more by paying fewer or no capital gains tax and possibly having losses to offset other gains or income. So don't sweat it.

Personally, I hadn't been paying too much attention to my portfolio, but with the recent drops I've been checking to see if I can get out of some individual securities and high-cost funds we have (former advisor...) and into the index funds we want. Would love to do so at a loss, if the index fund has also dropped correspondingly.

2015
Posts: 2170
Joined: Mon Feb 10, 2014 2:32 pm

Re: How to get over paper loss?

Post by 2015 » Sat Oct 13, 2018 11:21 am

Admiral wrote:
Tue Oct 09, 2018 9:04 am
mentos wrote:
Tue Oct 09, 2018 8:55 am
I've held onto $20k company stock from my ESPP and had a paper loss of about $6-7k. Bogleheads advised me to sell it all and buy an index fund and don't try to time the market. I really didn't want to take a loss, but decided to sell $10k company stock and put it all in SCHB last week. A week later, that $10k in SCHB is only worth $9k :( I feel like I can't win. It's very discouraging seeing my balance drop by $100-300 each passing day.
The market giveth, and the market taketh away. Many here see their paper balances drop by ten, fifty, or one hundred times that on a down day. Just stay the course. I suggest not checking your accounts on a daily basis. If you're in this for the long haul, then don't fret over day to day market fluctuations.
This. I was drooling at the thought of finally getting a TLH opportunity (no such luck!) so when I checked the VG accounts saw that around $20K had evaporated. No "loss" until I sell it. Since I have no intention of selling I pay no attention to it. I was much more disappointed that I couldn't TLH. Exact same thing happened back in February.

Post Reply