Young investors, how do you feel about your 1st market crash?

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Stef
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Young investors, how do you feel about your 1st market crash?

Post by Stef » Fri Mar 20, 2020 4:00 am

Hello everyone

How do you feel about this correction? Do you feel bad/sick for basically losing all gains that you made in the last couple of years? Or are you even happy that you have the chance to buy stocks on sale far away from retirement age?

My personal experience: I'm 29 years old and I started investing end of November 2019 and did a lump sum of my life savings (took me about 2.5-3 years to save it) followed by my bonus investment on February 20th 2020. So I invested basically everything right at the top (average probably around 3200 in SP500). I lost about 30% of it by now. It sucks bigtime that I managed to have such bad luck and invest everything right before the crash without having the time to make some gains before. If I change the dates of my lump sum investments to end of November 2018 and February 2019, the story would be totally different and I'll probably look at -10% right now. On the flipside I learned that 100% stocks is the right AA for me. I sure kept track of the market on a daily basis (just out of interest) but still slept like a baby. I try to look at it in a positive way. Now I can buy stocks for a much lower price and don't have to worry about "when will the longest bull market in history finally end?" anymore. It doesn’t feel like it, but this crash might be the best thing that could have happened to me in my young investment career. I hope I'll look back in a couple of years and feel good about it.

Would be great to hear more stories from young investors.

Stef

fwellimort
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Re: Young investors, how do you feel about your 1st market crash?

Post by fwellimort » Fri Mar 20, 2020 4:42 am

Age 23.
Had six figures prior to this bear market in a 100% equities (working in tech and quite frugal + 'skipped out' a few years in elementary).

I think 100% equities are for me. I don't see anything about the strategy that worries me.
It could also be that because I'm constantly doing tax loss harvesting with the ETFs, the red % numbers look very low so while I have 'lost' quite a chunk of money, I just don't think like that instinctively.
And also cause I grew up with credit cards being the norm. Asset worth in brokerages just look like numbers in spread sheets. Not as 'money'.
I am annoyed this market crash had to happen now instead of 2 years ago but at same time, super thankful that I'm not graduating this year.

I am still putting money when I can but also staying realistic with an emergency fund even though I feel my job is as 'safe' as it can get this recession.

I came to understand I don't buy into the conventional idea of 'buy and hold'.
I understand the overall logic because stocks tend to go up over time so the more investors go out, the more potential the investor leaves part of the 'up'.
But in recessions, the overall trend of stocks are downwards.
I tried to find research papers about options during recessions/market timing during recessions/market timing during high volatility and it seems academia do not really have those research papers out there. In fact, there seems quite compelling evidence that active skilled traders before fees and taxes tend to outperform 'buy and hold' during economic downturns.

I plan to after a few years seriously consider trying out (and making) different algorithms which attempts to 'beat the market' [or at least create algorithms for specific periods such as periods during high volatility and large spreads]. And give a go with a small sum of real money (say $1,000) in a Roth IRA.
And also consider studying more in this field to learn how professionals used to evaluate stocks (outside Security Analysis).
I realize I might go through a few more instances in my life that I can 'see' and I want to prepare ahead of time for such. Whether that be in 10, 20 30 years or not. I want to hone up my skills in advance so I can fully capitalize that once in a lifetime event.

And I am starting to understand Graham's reasoning of 25 75 stock bond. Stocks when traded in unrealistic valuations regardless of fed's money injection are just more or less bitcoins (as the purpose of stocks lose meaning). As the stock market can stay irrational longer than one can wait, I am also coming to understand why Graham advocated to never leaving the stock market even in those time but rather to be more and more conservative as markets get more and more overpriced.

That said, for my serious money, I still believe in buy and hold. Simplicity behind it is great. And I understand the general competition in the stock market. It's just that the current recession made me realize markets can act irrational and can have noticeable spread issues due to liquidity during times of trouble (looking at the bond market especially). I am sure those who know how to evaluate bonds properly can take advantage of the spreads recently. An opportunity wide open but an opportunity no one can really capitalize upon as no one is educated in that area.
Opportunities come and go. The best I can do is prepare as much as possible so when these rare events come, I can take full advantage of such scenario.

Anyways, I am a full believer in buy and hold. I loved the two books, Common Sense Investing and Bogleheads Guide to Investing, and will probably stay passive most of (if not all) my working career.
Plus, stocks seem incredibly cheap compared to bonds right now at these low interest rate environment.

Most importantly though, I came to realization that one should always be flexible. 'Buy and hold' is just one of many strats. It's not the "only strat" and shouldn't be taken as some sort of mandate.
Oh, and if I am ever to hold bond funds, I will only be holding short/intermediate treasury/I/EE/TIPS equivalents. And I plan on leveraging returns during certain parts of periods.
Who knows if all this is a fool's errand as countless like minded people (including Nobel prize winners!) have tried to beat the market again and again and failed. But I want to 'test it out' myself first before conceding to 'buy and hold'.
Last edited by fwellimort on Fri Mar 20, 2020 4:59 am, edited 3 times in total.

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ReformedSpender
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Re: Young investors, how do you feel about your 1st market crash?

Post by ReformedSpender » Fri Mar 20, 2020 4:55 am

Make no mistake, Dec 2018 was also a crash. Only the magnitude, velocity and severity differ. So, this is not your “first”.

You are in the first innings of a 20 to 30 year accumulation phase. Hardly a dent. Keep your head up and stay the course.

:beer
Market history shows that when there's economic blue sky, future returns are low, and when the economy is on the skids, future returns are high. The best fishing is done in the most stormy waters.

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Re: Young investors, how do you feel about your 1st market crash?

Post by Cyclesafe » Fri Mar 20, 2020 5:16 am

If the purpose of this thread is to assuage a commitment to heavy equity investment, permit me offer the following:

If one has faith that some day the virus will be a memory, that technology will continue to create more and more value, and that the economy will rebound, then creating a spreadsheet helps. No Excel skills? Suddenly there is ample time to learn.

Model where we've been and where we will likely to be in the years of one's likely remaining life. With a deep decline now, cash-flow-permitting periodic contributions, with even very modest assumed returns, yield a bounty over a lifetime of compounding.

Focus on keeping healthy, keeping employed, avoiding divorce, and living below your means. Nothing has changed.
"Plans are useless; planning is indispensable.” (Dwight Eisenhower) | "Man plans, God laughs" (Yiddish proverb)

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Re: Young investors, how do you feel about your 1st market crash?

Post by ignition » Fri Mar 20, 2020 5:17 am

I am happy to buy stocks on sale and plan to keep on buying every month as I did before. I started investing in 2015 and am about break even now (100% stocks). About the same age as you.

I have about 60 years of investing in front of me if everything goes well so no this crash doesn't really bother me. I know I'm in this for the long haul and that crashes like this are common.

settlement12
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Re: Young investors, how do you feel about your 1st market crash?

Post by settlement12 » Fri Mar 20, 2020 5:23 am

Aged 29, started investing in 2015 after the mini crash in august. Bought in 100% equities. Sold out last year to avail of lower CGT after a move abroad but did not buy back in due to a concern about impending bear market. Now DCA'ing back in into 100% equities

FreddyC
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Re: Young investors, how do you feel about your 1st market crash?

Post by FreddyC » Fri Mar 20, 2020 6:00 am

38, barely out of school (and working in NYC) for 2008 with a small portfolio, so this is the first “economic episode” that really hits home and resembles that (I knew I was joining the military in 2009, so no job worries and small portfolio that became smaller).

As far as this crash and investing emotions, which are taking up a small, but detectable, amount of my emotional bandwidth, my main feeling is gratitude. Not for the buying opportunities.

Gratitude to this site and its members — wiki and forum — for giving me, over the last 9 years or so (mostly lurking) emotional and mental investment IQ so my wife and I can keep focused on our family, jobs, community, and investments, and have confidence in our investment plan.

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pennsylvania211
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Re: Young investors, how do you feel about your 1st market crash?

Post by pennsylvania211 » Fri Mar 20, 2020 6:17 am

Buying more
"In the long run, investing is not about markets at all. Investing is about enjoying the returns earned by businesses." - Jack Bogle

sjl333
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Re: Young investors, how do you feel about your 1st market crash?

Post by sjl333 » Fri Mar 20, 2020 6:33 am

Feel pretty bad for the older folks nearing retirement. Feel pretty bad for all the small businesses like restaurants. However I feel pretty good . Did not lose any sleep over this issue. I see this as a golden opportunity to capitalize. Currently planning on using all my cash flow (15k/month) and pump it into index funds and some of them into individual stocks (only a small percentage for individual stocks though).

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Re: Young investors, how do you feel about your 1st market crash?

Post by CMLAW1 » Fri Mar 20, 2020 6:36 am

31 years old with a 7 figure portfolio at the peak in January.

I feel great. Not worried at all. Sucks to “lose” big money but know eventually it will come back.

Really disappointed with the doom and gloom from most. We are bogleheads and should know better!

Stay the course, rebalance, buy more. Rinse, repeat.

🥱

Yawn

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Re: Young investors, how do you feel about your 1st market crash?

Post by MotoTrojan » Fri Mar 20, 2020 6:41 am

settlement12 wrote:
Fri Mar 20, 2020 5:23 am
Aged 29, started investing in 2015 after the mini crash in august. Bought in 100% equities. Sold out last year to avail of lower CGT after a move abroad but did not buy back in due to a concern about impending bear market. Now DCA'ing back in into 100% equities
You got lucky but now I fear for your future.

Imagine you had similar success back in 2000. The year is now 2011 and the financial media is talking non-stop about a bear/crash coming; you decide to stay in cash. When do you get back in? Ever?

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Stef
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Re: Young investors, how do you feel about your 1st market crash?

Post by Stef » Fri Mar 20, 2020 6:47 am

MotoTrojan wrote:
Fri Mar 20, 2020 6:41 am
You got lucky but now I fear for your future.

Imagine you had similar success back in 2000. The year is now 2011 and the financial media is talking non-stop about a bear/crash coming; you decide to stay in cash. When do you get back in? Ever?
I actually started a thread about my concers about the future crash end of October 2020: viewtopic.php?t=293747

Maybe waiting and getting the confirmation today would have changed my future decisions dramatically? And I guess not in a positive way.

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pennsylvania211
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Re: Young investors, how do you feel about your 1st market crash?

Post by pennsylvania211 » Fri Mar 20, 2020 6:55 am

MotoTrojan wrote:
Fri Mar 20, 2020 6:41 am
settlement12 wrote:
Fri Mar 20, 2020 5:23 am
Aged 29, started investing in 2015 after the mini crash in august. Bought in 100% equities. Sold out last year to avail of lower CGT after a move abroad but did not buy back in due to a concern about impending bear market. Now DCA'ing back in into 100% equities
You got lucky but now I fear for your future.

Imagine you had similar success back in 2000. The year is now 2011 and the financial media is talking non-stop about a bear/crash coming; you decide to stay in cash. When do you get back in? Ever?
I'm reminded of this from Jack Bogle:
The idea that a bell rings to signal when investors should get into or out of the stock market is simply not credible. After nearly fifty years in this business, I do not know of anybody who has done it successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently. Yet market timing appears to be increasingly embraced by mutual fund investors and the professional managers of fund portfolios alike.
"In the long run, investing is not about markets at all. Investing is about enjoying the returns earned by businesses." - Jack Bogle

dsmil
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Re: Young investors, how do you feel about your 1st market crash?

Post by dsmil » Fri Mar 20, 2020 6:56 am

I'm in my low 30's and really don't care about myself losing some retirement money. I don't think stock prices in 2050 are affected by a crash in 2020. If I had cash sitting on the sidelines, I would have been buying more in the last couple of weeks.

settlement12
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Re: Young investors, how do you feel about your 1st market crash?

Post by settlement12 » Fri Mar 20, 2020 6:57 am

MotoTrojan wrote:
Fri Mar 20, 2020 6:41 am
settlement12 wrote:
Fri Mar 20, 2020 5:23 am
Aged 29, started investing in 2015 after the mini crash in august. Bought in 100% equities. Sold out last year to avail of lower CGT after a move abroad but did not buy back in due to a concern about impending bear market. Now DCA'ing back in into 100% equities
You got lucky but now I fear for your future.

Imagine you had similar success back in 2000. The year is now 2011 and the financial media is talking non-stop about a bear/crash coming; you decide to stay in cash. When do you get back in? Ever?
Yeah I got lucky. I've already got back in 25% of my total cash on Monday. I'm planning on doing 3x more 25% DCAs, spread over the next few weeks. If it goes down further I'll just be glad that I won't be hit as hard as others, if it goes up well then well and good.

settlement12
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Re: Young investors, how do you feel about your 1st market crash?

Post by settlement12 » Fri Mar 20, 2020 6:59 am

pennsylvania211 wrote:
Fri Mar 20, 2020 6:55 am
MotoTrojan wrote:
Fri Mar 20, 2020 6:41 am
settlement12 wrote:
Fri Mar 20, 2020 5:23 am
Aged 29, started investing in 2015 after the mini crash in august. Bought in 100% equities. Sold out last year to avail of lower CGT after a move abroad but did not buy back in due to a concern about impending bear market. Now DCA'ing back in into 100% equities
You got lucky but now I fear for your future.

Imagine you had similar success back in 2000. The year is now 2011 and the financial media is talking non-stop about a bear/crash coming; you decide to stay in cash. When do you get back in? Ever?
I'm reminded of this from Jack Bogle:
The idea that a bell rings to signal when investors should get into or out of the stock market is simply not credible. After nearly fifty years in this business, I do not know of anybody who has done it successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently. Yet market timing appears to be increasingly embraced by mutual fund investors and the professional managers of fund portfolios alike.
Yeah I never actually planned to time the market. But when I moved to a new country it made sense to sell when the taxes were lower before I moved home. But then things kept going up and I didn't feel right about getting back in. It could have gone very badly

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pennsylvania211
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Re: Young investors, how do you feel about your 1st market crash?

Post by pennsylvania211 » Fri Mar 20, 2020 7:00 am

dsmil wrote:
Fri Mar 20, 2020 6:56 am
I'm in my low 30's and really don't care about myself losing some retirement money. I don't think stock prices in 2050 are affected by a crash in 2020. If I had cash sitting on the sidelines, I would have been buying more in the last couple of weeks.
Agree, the covid (and it's impact on the market) will be a faint foggy memory by 2050.
"In the long run, investing is not about markets at all. Investing is about enjoying the returns earned by businesses." - Jack Bogle

MotoTrojan
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Re: Young investors, how do you feel about your 1st market crash?

Post by MotoTrojan » Fri Mar 20, 2020 7:07 am

Stef wrote:
Fri Mar 20, 2020 6:47 am
MotoTrojan wrote:
Fri Mar 20, 2020 6:41 am
You got lucky but now I fear for your future.

Imagine you had similar success back in 2000. The year is now 2011 and the financial media is talking non-stop about a bear/crash coming; you decide to stay in cash. When do you get back in? Ever?
I actually started a thread about my concers about the future crash end of October 2020: viewtopic.php?t=293747

Maybe waiting and getting the confirmation today would have changed my future decisions dramatically? And I guess not in a positive way.
I think you could make that argument indeed. Even if the move doubled your current portfolio, it would then risk even more upside in the future on a much larger portfolio.

sd323232
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Re: Young investors, how do you feel about your 1st market crash?

Post by sd323232 » Fri Mar 20, 2020 7:08 am

Stef wrote:
Fri Mar 20, 2020 6:47 am
MotoTrojan wrote:
Fri Mar 20, 2020 6:41 am
You got lucky but now I fear for your future.

Imagine you had similar success back in 2000. The year is now 2011 and the financial media is talking non-stop about a bear/crash coming; you decide to stay in cash. When do you get back in? Ever?
I actually started a thread about my concers about the future crash end of October 2020: viewtopic.php?t=293747

Maybe waiting and getting the confirmation today would have changed my future decisions dramatically? And I guess not in a positive way.
Well, i dont think yield curve inversion is causing crash here, it is coronavirus panic. Im not sure how you can predict an event like coronavirus. Technically, anything can happen at any moment and send stocks up or down. Coronavirus may go away next week and stocks can rebound and hit new highs by summer, or it may never go away and we looking at dowj ones going to below 10k.

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Re: Young investors, how do you feel about your 1st market crash?

Post by MotoTrojan » Fri Mar 20, 2020 7:08 am

settlement12 wrote:
Fri Mar 20, 2020 6:57 am
MotoTrojan wrote:
Fri Mar 20, 2020 6:41 am
settlement12 wrote:
Fri Mar 20, 2020 5:23 am
Aged 29, started investing in 2015 after the mini crash in august. Bought in 100% equities. Sold out last year to avail of lower CGT after a move abroad but did not buy back in due to a concern about impending bear market. Now DCA'ing back in into 100% equities
You got lucky but now I fear for your future.

Imagine you had similar success back in 2000. The year is now 2011 and the financial media is talking non-stop about a bear/crash coming; you decide to stay in cash. When do you get back in? Ever?
Yeah I got lucky. I've already got back in 25% of my total cash on Monday. I'm planning on doing 3x more 25% DCAs, spread over the next few weeks. If it goes down further I'll just be glad that I won't be hit as hard as others, if it goes up well then well and good.
Just lump sum and stop the silly games; then in the future make it your mission to invest as much as you can, as soon as you can. Makes life easy as the only decision to make is "how much excess do I have beyond my emergency fund and necessary near-term spending?".

Doohop65
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Re: Young investors, how do you feel about your 1st market crash?

Post by Doohop65 » Fri Mar 20, 2020 7:16 am

Mid 30’s here and started the year in the 2 comma club but am not there any more. I would be lying if I didn’t say it tickled. That said, my brain knows it isn’t the worst thing.

My real issue is for my folks. They are people of very modest means. When things were humming along I had hope this bull would get them where they need to be. Now I am not so sure. I have mentally prepared myself I will have to step in some day but this may require a bigger shovel.

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Stef
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Re: Young investors, how do you feel about your 1st market crash?

Post by Stef » Fri Mar 20, 2020 7:17 am

MotoTrojan wrote:
Fri Mar 20, 2020 7:08 am
Just lump sum and stop the silly games; then in the future make it your mission to invest as much as you can, as soon as you can. Makes life easy as the only decision to make is "how much excess do I have beyond my emergency fund and necessary near-term spending?".
- Should I tilt to SCV or Nasdaq?
- Should I invest in exUS stocks?
- How much should I invest in exUS?
- Should I overweight EM in exUS?
- Should I invest in exUS bonds?
The list goes on :mrgreen:

But yeah I totally agree and I went that path. Lump sum invested my life savings and now investing as much and as soon as I can on a monthly basis.

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Re: Young investors, how do you feel about your 1st market crash?

Post by geerhardusvos » Fri Mar 20, 2020 7:33 am

Stef wrote:
Fri Mar 20, 2020 7:17 am
MotoTrojan wrote:
Fri Mar 20, 2020 7:08 am
Just lump sum and stop the silly games; then in the future make it your mission to invest as much as you can, as soon as you can. Makes life easy as the only decision to make is "how much excess do I have beyond my emergency fund and necessary near-term spending?".
- Should I tilt to SCV or Nasdaq?
- Should I invest in exUS stocks?
- How much should I invest in exUS?
- Should I overweight EM in exUS?
- Should I invest in exUS bonds?
The list goes on :mrgreen:

But yeah I totally agree and I went that path. Lump sum invested my life savings and now investing as much and as soon as I can on a monthly basis.
Income and savings rate matter way more than those questions. At early stages (and beyond for many), a 1-3 fund portfolio is wise and effective
VTSAX and chill

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Re: Young investors, how do you feel about your 1st market crash?

Post by BrownEyedGirl_27 » Fri Mar 20, 2020 7:37 am

pennsylvania211 wrote:
Fri Mar 20, 2020 6:17 am
Buying more
+1. If the government decides to give us money from the stimulus in the next few weeks it is going straight to taxable. :moneybag
"Your mind has a mind of its own. At the very moment when you are most convinced of your own rationality, you may be feeling rather than thinking your way toward a decision.” | Jason Zweig

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Re: Young investors, how do you feel about your 1st market crash?

Post by geerhardusvos » Fri Mar 20, 2020 7:38 am

29 yo with a (now$600k) 90/10 portfolio and staying the course. Thankful my employment seems rock solid, plowing more in the market each paycheck. Haven’t turned on the tv in a week. We will bounce back even if it takes a long while
VTSAX and chill

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Re: Young investors, how do you feel about your 1st market crash?

Post by BrownEyedGirl_27 » Fri Mar 20, 2020 7:45 am

Age 27. Well 2018 was technically my husband and mine first “crash” if you want to call it that. I got in late 2017 thinking this is great, glad I’m investing. Then 2018 came in and I was swimming upstream in losses. Portfolio was much smaller back then. Had a great run of ~30% gains in 2019. The last time I checked my net worth was 3 weeks ago—lost 10k or so. I’ve decided not to look at that number for a long time. I have a feeling we are not at the bottom yet but I plan to stay the course and keep buying total stock market (allocation is 100% equities). Sure it will take longer for our net worth to get to 100k but we are still saving until it hurts. Our advice is to ignore the market and keep buying.
"Your mind has a mind of its own. At the very moment when you are most convinced of your own rationality, you may be feeling rather than thinking your way toward a decision.” | Jason Zweig

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Re: Young investors, how do you feel about your 1st market crash?

Post by BrownEyedGirl_27 » Fri Mar 20, 2020 7:46 am

geerhardusvos wrote:
Fri Mar 20, 2020 7:38 am
29 yo with a (now$600k) 90/10 portfolio and staying the course. Thankful my employment seems rock solid, plowing more in the market each paycheck. Haven’t turned on the tv in a week. We will bounce back even if it takes a long while
That’s very impressive. Congratulations are in order!
"Your mind has a mind of its own. At the very moment when you are most convinced of your own rationality, you may be feeling rather than thinking your way toward a decision.” | Jason Zweig

BrownEyedGirl_27
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Re: Young investors, how do you feel about your 1st market crash?

Post by BrownEyedGirl_27 » Fri Mar 20, 2020 7:49 am

MotoTrojan wrote:
Fri Mar 20, 2020 7:08 am
settlement12 wrote:
Fri Mar 20, 2020 6:57 am
MotoTrojan wrote:
Fri Mar 20, 2020 6:41 am
settlement12 wrote:
Fri Mar 20, 2020 5:23 am
Aged 29, started investing in 2015 after the mini crash in august. Bought in 100% equities. Sold out last year to avail of lower CGT after a move abroad but did not buy back in due to a concern about impending bear market. Now DCA'ing back in into 100% equities
You got lucky but now I fear for your future.

Imagine you had similar success back in 2000. The year is now 2011 and the financial media is talking non-stop about a bear/crash coming; you decide to stay in cash. When do you get back in? Ever?
Yeah I got lucky. I've already got back in 25% of my total cash on Monday. I'm planning on doing 3x more 25% DCAs, spread over the next few weeks. If it goes down further I'll just be glad that I won't be hit as hard as others, if it goes up well then well and good.
Just lump sum and stop the silly games; then in the future make it your mission to invest as much as you can, as soon as you can. Makes life easy as the only decision to make is "how much excess do I have beyond my emergency fund and necessary near-term spending?".
+1 MotoTrojan. This is the question I ask about every two months.
"Your mind has a mind of its own. At the very moment when you are most convinced of your own rationality, you may be feeling rather than thinking your way toward a decision.” | Jason Zweig

Old_Dollar
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Re: Young investors, how do you feel about your 1st market crash?

Post by Old_Dollar » Fri Mar 20, 2020 7:56 am

This was a great test of my risk tolerance and even I am surprised how well I'm going. Everywhere I see the technology developed since the crash of 2008 being utilized to help people.

1. People working from home. Sure this was possible before, but now it is likely even easier thanks to Apple and Microsoft. Especially with development of Cloud services.
2. Amazons massive growth allowing for the delivering of items including food to people so they can stay home.
3. UberEats, DoorDash, etc delivering food to people so they can stay home.
4. Elon Musk talking about making ventilators.
5. Beer companies shifting operations to make hand sanitizer.
6. Netflix/Hulu so people don't get to cabin fever too quickly.


Back to the original question, I'm not concerned at all. The market is pricing in many events simultaneously. It's no wonder there's so much volatility.

1. COVID-19 including unprecedented stress on the healthcare system in nearly all countries on the planet.
2. An international response with disparate reactions across nations and local governments.
3. The Russia/Saudi Arabia oil stand off.
4. A Presidential election in the United States.

Edit: I'm buying more than usual.
Last edited by Old_Dollar on Fri Mar 20, 2020 7:57 am, edited 1 time in total.
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greenflamingo
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Re: Young investors, how do you feel about your 1st market crash?

Post by greenflamingo » Fri Mar 20, 2020 7:57 am

Mid-30s.

There are some happenstance timing things that could have worked better for me (I'm bunching donations this year, and the securities I planned to donate weren't quite to the 1 year mark to get maximum tax benefit--so those got TLH instead...). Beyond that, I've learned that I will not have a 100% equities AA in twenty years.

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Re: Young investors, how do you feel about your 1st market crash?

Post by greenback » Fri Mar 20, 2020 7:58 am

26 as of a few weeks ago. I was getting really excited to finally break the psychological barrier of crossing 6 digits before all of this happened. And now, well, it seems like a long way away. The silver lining is, getting to that 6 digit mark will be easier because i've proven to myself that this investment style really does work.

However i'm not as worried as I thought I would be. Yes, I saw my savings take a large hit. But for some reason I'm not worried about it. I think the Bogleheads have brainwashed me. Instead of panicking, I find myself wishing i can afford to buy more at this time understanding its likely only temporary.

I'm kind of glad this event occurred because it taught me 2 things.

1 - My current allocation (100% equity) is fine for me - with this amount of money.
2 - Do not think that the market will only go up forever. There will be bad times.
You shouldn’t retire until your money starts making more money than you made in your best year.

MotoTrojan
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Re: Young investors, how do you feel about your 1st market crash?

Post by MotoTrojan » Fri Mar 20, 2020 8:34 am

Stef wrote:
Fri Mar 20, 2020 7:17 am
MotoTrojan wrote:
Fri Mar 20, 2020 7:08 am
Just lump sum and stop the silly games; then in the future make it your mission to invest as much as you can, as soon as you can. Makes life easy as the only decision to make is "how much excess do I have beyond my emergency fund and necessary near-term spending?".
- Should I tilt to SCV or Nasdaq?
- Should I invest in exUS stocks?
- How much should I invest in exUS?
- Should I overweight EM in exUS?
- Should I invest in exUS bonds?
The list goes on :mrgreen:

But yeah I totally agree and I went that path. Lump sum invested my life savings and now investing as much and as soon as I can on a monthly basis.
That decision is made once ideally and then locked on, leaving only the previously mentioned question.

jayk238
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Re: Young investors, how do you feel about your 1st market crash?

Post by jayk238 » Fri Mar 20, 2020 8:38 am

33 years
invested about 45k taxable this past winter
My wife is contantly worrying despite my explanations for the long term
I am paying off about 120k in student loans - and thats what I plan to do w interest rates frozen
Otherwise, I've stopped checking stocks at this point- I know theres no point

Strangely, when I invested a large amount and the market was going up I struggled to look away even though My plans are 20 years down the road
Now, when it is tanked I am calm and just focused on other things- I didnt think that would happen so I think all those years reading about markets including Benjamin Graham's classic have helped me stay calm.

I have always and will continue to maximize my tax advantaged accounts. I currently put in the max- 19k and get matched about 15k a year

runner3081
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Re: Young investors, how do you feel about your 1st market crash?

Post by runner3081 » Fri Mar 20, 2020 8:40 am

39. Wish I had more money to put in the market at the moment.

Hoping to gear down in 11 years. Haven't changed a thing these past few weeks and won't be changing anything moving forward. Roughly 95% equities allocation wise.

CarpeDiem22
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Re: Young investors, how do you feel about your 1st market crash?

Post by CarpeDiem22 » Fri Mar 20, 2020 8:48 am

Age 33, I'm not at all bothered about the crash. But this is my first time selling bonds and buying stocks to rebalance. The concept of ''tax deferred'' doesn't exist in my geo and I'm torn between targeting tax efficiency or asset allocation, so I'm taking the middle path.

Anon9001
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Re: Young investors, how do you feel about your 1st market crash?

Post by Anon9001 » Fri Mar 20, 2020 8:50 am

21. I was lucky enough not to be 100% equities but rather 50%. The only thing positive on my portfolio today is my Gold Bonds and Long Term Indian Gilt Fund. Not by that much. Still hurts to see how much my money has fallen from peak. Don't think I will ever switch to 100% equities especially now.

HawkeyePierce
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Re: Young investors, how do you feel about your 1st market crash?

Post by HawkeyePierce » Fri Mar 20, 2020 9:42 am

Age 29. I started investing at 22 with my first Roth IRA. I'm at 80/20.

So far I am unphased by the financial aspects of the crisis. My portfolio has taken a hit but it's manageable and I have had no temptations to change my AA or pull out of the market. I don't have any "dry powder"—all my investable assets were already in the market.

vipertom1970
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Re: Young investors, how do you feel about your 1st market crash?

Post by vipertom1970 » Fri Mar 20, 2020 9:50 am

Anon9001 wrote:
Fri Mar 20, 2020 8:50 am
21. I was lucky enough not to be 100% equities but rather 50%. The only thing positive on my portfolio today is my Gold Bonds and Long Term Indian Gilt Fund. Not by that much. Still hurts to see how much my money has fallen from peak. Don't think I will ever switch to 100% equities especially now.
Wrong strategy young man. 50 here, 100% equities and still up 350% since 1995. This is an opportunity of a life time for accumulators with long time horizon.

Alain_Investing
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Re: Young investors, how do you feel about your 1st market crash?

Post by Alain_Investing » Fri Mar 20, 2020 9:51 am

I'm in a similar age group as the posters here - I think the lessons are timeless:

1. Money you cannot afford to lose: the rainy day/emergency fund cash is nonnegotiable. If unknown risks show up, this will help you survive another day. It makes a terrible pandemic less important from a financial standpoint and let's you focus on what matters. Money that you cannot afford to lose cannot/should not be risked/invested.

2. 0/100 stocks: While over the long run stocks return more than bonds, it is not a guarantee that stocks always outperform bonds. Hence, it makes sense to find the right balance of risk on/risk off to meet your goals. 100% stocks after a fully funded emergency fund it's okay but it is an active bet. Bonds have outperformed stocks and they have done so during the last 40 years (while the time horizon may be a cherry picked one - we will experience times when stocks do not outperform bonds).

3. Diversification saves your pants: I have been investing in small value, international and US stocks and US has dominated my overall returns; however, we don't know if the tables turn in the next decade. What I do know is that my current allocation allowed me to weather underperformance of portions of my portfolio and hopefully it continues to do so in the future.

4. We must risk to achieve satisfactory long term results. When uncertainty is at its highest, bearing risk is compensated more than when markets are calm. Investing is simple, but not easy. We have long-term horizons; therefore, our losses are aggravated by our peeking of our portfolios when we don't really need the funds. It would be like watching the first minute of the superbowl and the opposite team scores a touchdown. There's plenty of game left.

Anon9001
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Re: Young investors, how do you feel about your 1st market crash?

Post by Anon9001 » Fri Mar 20, 2020 9:58 am

vipertom1970 wrote:
Fri Mar 20, 2020 9:50 am
Anon9001 wrote:
Fri Mar 20, 2020 8:50 am
21. I was lucky enough not to be 100% equities but rather 50%. The only thing positive on my portfolio today is my Gold Bonds and Long Term Indian Gilt Fund. Not by that much. Still hurts to see how much my money has fallen from peak. Don't think I will ever switch to 100% equities especially now.
Wrong strategy young man. 50 here, 100% equities and still up 350% since 1995. This is an opportunity of a life time for accumulators with long time horizon.
Don't confuse past with present. The last time pandemic like this happened was 1918 I think and the World was much less interconnected at that point ie no airports for instance. If this continues to stay the stock market regardless of what country you live in will go down due to the effects it causes (social distancing,aversion of going outside). Some businesses might entirely go extinct because of this. I will keep my 50% equities and sleep well at night.

RomeoMustDie
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Re: Young investors, how do you feel about your 1st market crash?

Post by RomeoMustDie » Fri Mar 20, 2020 10:03 am

Wishing I had more money to spend into the stock market.

I'm 100% invested. Willing to liquidate bonds for an emergency expense, but not having to do so because of credit cards.

I would think differently if I were to lose my job, but everything has been secure so far in financial services IT.

vipertom1970
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Re: Young investors, how do you feel about your 1st market crash?

Post by vipertom1970 » Fri Mar 20, 2020 10:06 am

Anon9001 wrote:
Fri Mar 20, 2020 9:58 am
vipertom1970 wrote:
Fri Mar 20, 2020 9:50 am
Anon9001 wrote:
Fri Mar 20, 2020 8:50 am
21. I was lucky enough not to be 100% equities but rather 50%. The only thing positive on my portfolio today is my Gold Bonds and Long Term Indian Gilt Fund. Not by that much. Still hurts to see how much my money has fallen from peak. Don't think I will ever switch to 100% equities especially now.
Wrong strategy young man. 50 here, 100% equities and still up 350% since 1995. This is an opportunity of a life time for accumulators with long time horizon.
Don't confuse past with present. The last time pandemic like this happened was 1918 I think and the World was much less interconnected at that point ie no airports for instance. If this continues to stay the stock market regardless of what country you live in will go down due to the effects it causes (social distancing,aversion of going outside). Some businesses might entirely go extinct because of this. I will keep my 50% equities and sleep well at night.
Ok, good luck and let’s come back to visit this thread 10 years from now to see if this time is different.

pharmermummles
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Re: Young investors, how do you feel about your 1st market crash?

Post by pharmermummles » Fri Mar 20, 2020 10:08 am

I'm thrilled with what may be a beneficial sequence of returns instead of the awful one it was looking like for an accumulator. And I'm also thrilled people will maybe stop telling me I'm too inexperienced to know my own risk tolerance, and that 100% equities is just fine for me.

LiterallyIronic
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Re: Young investors, how do you feel about your 1st market crash?

Post by LiterallyIronic » Fri Mar 20, 2020 10:08 am

ReformedSpender wrote:
Fri Mar 20, 2020 4:55 am
Make no mistake, Dec 2018 was also a crash. Only the magnitude, velocity and severity differ. So, this is not your “first”.

You are in the first innings of a 20 to 30 year accumulation phase. Hardly a dent. Keep your head up and stay the course.

:beer
I'm 36 and consider this my first "crash." I graduated college in 2008 at age 25. Couldn't get a job, let alone invest, so that crash was all about just trying to keep making rent and getting groceries. Missed the run-up, finally investing my first dollar in 2012. Had about $7500 invested by 2013 when I decided to go back to school and get a different degree. I didn't reach $10k invested until 2014, when I was already in my 30s. Started working full-time during my senior year of college in 2016 and got my investments up to around $30k when I graduated college the second time at age 33. It was a long slog to finally getting $100k invested, which I finally reached a couple months ago (but I'm assuming I'm down into the $70k-range again currently, though I won't check until 4/1).

I don't have a 20 to 30 year accumulation phase. When you're in and out of college from 2001 to 2016, it really puts a dent in your time frame. Instead, I'm looking at a 17-year window between college graduation and retirement, three of which are now in the past.

How am I feeling? Mixed. I'm not happy that my assets are down. But I'm cautiously optimistic that this will allow me to get more assets in while the price in cheaper and hopefully I can experience a stock run-up with a decent portfolio for once in my life. Obviously I'm not selling anything.

sgrovercleveland
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Re: Young investors, how do you feel about your 1st market crash?

Post by sgrovercleveland » Fri Mar 20, 2020 10:09 am

Age 28. I started investing a small amount in my 401(k) in 2013, starting maxing my Roth IRA in 2014, and really kicked it into high gear by nearly maxing my 401(k) starting in 2016. 90/10 allocation. So far I am a lot less panicked than I expected. A lot of it is I keep a robust >6 months emergency fund in cash (3% rewards checking accounts). I recently changed jobs so my rollover IRA still had five figures in dry powder in money market funds when this crisis suddenly started, which I have been slowly trickling in with buys as large dips happen. That has made my mind focused on "buying at a discount" rather than fixated at "losing four years of capital gains."

I would say the only lessons learned from the crisis are to stick to my guns: 90/10 is the right balance for me at least until my mid 30s, keep my international allocation selective (I prefer developed markets) and smaller than Vanguard's recommendation (English common law matters!), stick to treasury bonds and take greater risk in stocks (slight small-value tilt) than adding in corporate bonds, and outside tax advantaged accounts keep the dry powder well-stocked for any circumstance with no intention of selling stocks in a collapsing market to keep the lights on. 8-)

youngcd12
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Re: Young investors, how do you feel about your 1st market crash?

Post by youngcd12 » Fri Mar 20, 2020 10:10 am

I'm 27 years old and started investing in late 2016. I am 100% stocks (besides emergency fund in high yield savings, which is not so high yield anymore) and while this is not enjoyable I also realize that it really doesn't matter in the long run. I am also really excited about the fact that at least in the short term, my automatic investments will be purchasing many more shares for the same amount of money. We'll see what happens from here but I'll be holding all my positions and continuing with my automatic investments biweekly.

CFK
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Re: Young investors, how do you feel about your 1st market crash?

Post by CFK » Fri Mar 20, 2020 10:55 am

I started investing in 2015; a few months later, the market dropped 10%, and I lost about $500. I was sick about the loss. I hadn't mentally prepared to lose money. $500 for me at the time was a lot of money and I had no "dry powder", so I couldn't capitalize on lower prices.

I did better in late 2018, even though I lost far more money than in the previous correction. I'd made peace with market fluctuations. And I was able to invest my year end bonus, so I could think of the drop like a buying opportunity.

This time around, we have lost about $100,000 in the past four weeks. I feel less sick about this than I did with the $500 loss a few years ago. But while I've made my peace with the market, I feel blindsided by the actual economy. My wife lost her job last week. And with a 1 year old and another baby on the way this summer, I have far more responsibility now than I did a few years ago. I'd mentally prepared for market fluctuations, but not the real world economic fallout of a recession.

Things I've learned about myself:

1. Market fluctuations don't bother me, so long as I have money that I can invest during the downturn. Although keeping some "dry powder" on hand may not lead to a better result than simply keeping a constant allocation, it helps me to think of these downturns as buying opportunities, not disasters.

2. My reaction to losses is more a function of how mentally prepared I am, not the amount of loss. As noted above, I was more upset by a $500 loss a few years ago than a $100,000 loss today.

3. For the long term allocation, losses beyond a certain point seem abstract. I don't feel differently about a 20% loss than a 40% loss, or losing $50,000 compared to $100,000. At some point, it's like trying to conceptualize the difference between a billion stars and a billion galaxies.

4. The real economy is pretty scary. Especially now that I have kids. My #1 priority is to make sure that nomatter what happens, they will be taken care of. That is more important than retiring early, making an extra percentage point of return, or anything else.

[/list]

I am considering whether any of these insights will lead me to change my IPS. One change I am certain to make is a larger emergency fund.

Sic Vis Pacem
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Re: Young investors, how do you feel about your 1st market crash?

Post by Sic Vis Pacem » Fri Mar 20, 2020 11:06 am

35. Joined the two comma club on January 16, and promptly surrendered my membership card. Not going to pretend this is not unsettling, but more sanguine than I expected with my 80/20 allocation. Rebalanced a little, new money going equities in tax protected accounts. Using additional funds to build up cash reserves a bit before resuming purchases in taxable.

We have a full-time nanny and she expects her fiance may lose his work at the end of the month. So we are trying to arrange our affairs to ensure we can keep her employed as long as DW and I have jobs, and perhaps raise her pay while they work through this.

Carguy85
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Re: Young investors, how do you feel about your 1st market crash?

Post by Carguy85 » Fri Mar 20, 2020 11:29 am

34.....new to investing in the market this past year...most of what I put in was near the peak....85/15 stocks/bonds, also a
large chunk in private equity, large chunk in cash In the bank in money market

Biggest lesson is avoiding lifestyle creep living below your means and pay cash for everything (with the exception of a 15year mortgage at no more than 25% take home) to minimize fixed costs. When I first got out of professional school I felt entitled to sign up for everything. I vividly remember adding everything up and barely having enough to pay for it if everything goes 100% as planned. Scary realization. I think back and smile. I would be totally screwed had I never wised up given I’m on unexpected furlough right now...still psychologically uneasy situation given my daily routine I’ve been used to for years has changed although we can way more than live off wife’s income alone. I had actually planned to do just that putting away all of what I earn....plan for the worst and hope for the best.
Last edited by Carguy85 on Fri Mar 20, 2020 11:37 am, edited 1 time in total.

Carguy85
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Re: Young investors, how do you feel about your 1st market crash?

Post by Carguy85 » Fri Mar 20, 2020 11:34 am

Also in January I was somewhat questioning if my move to immediately pay off our house (3 years into a 15 year mortgage) with a portion of proceeds of the sale of a business was the right move back in June. Dodged a bullet with that!!! I guess Dave Ramsey does know what he’s talking about with regard to personal finance after all.

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