How do you cope with all the negativism towards markets? [France]

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Havent
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Joined: Tue Aug 24, 2021 3:05 pm

How do you cope with all the negativism towards markets? [France]

Post by Havent »

Hello everyone,

I started investing recently (about a month ago if I am not mistaken), when the market was at record highs. Now I am facing one of the first stock market downturns since I have been invested. With this, my environment, which has never invested since it has always believed that the stock market was a lottery, is boasting about it.
Saying that I have made the worst mistake of my life, that I will lose most of my hard-earned savings and that I will not get them back for many years. I know I shouldn't listen to them, but it is still something that makes me worry more than I should in the markets, as my initial strategy was to try to stay disconnected from the fluctuations, but it seems inevitable.

For this reason, I wanted to ask you: how do you cope with all this negativity when times get tough and the market goes down? How do you stop thinking about the markets and not care that you are losing money?

I know it's a silly question and has no real answer. But I would love to get your opinion on how you deal with these periods and what your strategy is to not make it more important than it should be.

Thanks in advance!
livesoft
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Re: How do you cope with all the negativism towards markets?

Post by livesoft »

Practice makes permanent. I've had lots of practice. You can look forward to lots of practice yourself.
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senex
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Re: How do you cope with all the negativism towards markets?

Post by senex »

1. I don't watch the news. I only check my account statements occasionally (quarterly to annually, depending).

2. I re-read Charlie Munger's comment from the 2017 Daily Journal annual meeting, when a shareholder asked Charlie about a time his portfolio dropped 50%:
That’s a good lesson, that’s a good question. What happened is the value of my partnership, that I was running, went down by 50% in one year. Now the market went down 40% or something. It was a once in 30 year recession; monopoly newspapers were selling at 3-4x earnings. And at the bottom tick I was down from the peak 50%, or right about that.

And that has happened to me 3 times with my Berkshire stock. So I regard it as a part of manhood: that if you’re going to be in this game for the long haul, which is the way to do it, you better be able to handle a 50% decline without fussing too much about it. So my lesson to all of you is to conduct your life so that you can handle a 50% decline with aplomb and grace. Don’t try to avoid it. It will come. In fact, if it doesn’t come, I would say you aren’t being aggressive enough.
inverter
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Re: How do you cope with all the negativism towards markets?

Post by inverter »

I have a prediction for you, which I've thus far been 100% right about. Markets will go up and down. Which direction and when, I can't predict.

Tune out the rest of the noise!
runner3081
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Re: How do you cope with all the negativism towards markets?

Post by runner3081 »

Nothing to cope with if you ignore it.

Just keep doing the monthly investments and enjoy life.

Even if it goes down, what can I really do about it anyways (assuming I am happy with my allocation).
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Kenkat
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Re: How do you cope with all the negativism towards markets?

Post by Kenkat »

Try to remember - when you are young:

- if you are feeling great about the market, it’s a good time to buy stocks
- if you are feeling uneasy about the market, it’s an even better time to buy stocks
- if the thought of putting another hard earned dollar into the market makes you feel physically ill, it’s a fantastic time to buy stocks

The stock market is one of the few things where we as regular buyers still root for prices to go up.
yougotitdude
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Re: How do you cope with all the negativism towards markets?

Post by yougotitdude »

How wealthy are the people who are being negative?

This is a very small blip on the radar. If you're going to invest (and be fully/mostly in stocks) you need to be able to take way, way, way further drawdowns than this.
Carguy85
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Re: How do you cope with all the negativism towards markets?

Post by Carguy85 »

Just remember TINA (there is no alternative)...it’s really that simple. This certainly helped me not sweat it when we were negative in early 2020 more than what we paid for our first house... several acquaintances of course sold near the bottom... I hear annuity commercials on talk radio all the time and it makes me smile. One of the most recent commercials asks..how would you like to earn 9.75% and no risk of loss? Many many people can’t help but fall for this kind of fairy tale garbage.
Thesaints
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Re: How do you cope with all the negativism towards markets?

Post by Thesaints »

Havent wrote: Mon Oct 04, 2021 2:56 pm Hello everyone,

I started investing recently (about a month ago if I am not mistaken), when the market was at record highs. Now I am facing one of the first stock market downturns since I have been invested.
Well, if you really started one month ago this would be your first downturn (not "one of the first"), except that this is no downturn at all. What you have seen up to now is an absolutely normal oscillation.
With this, my environment, which has never invested since it has always believed that the stock market was a lottery, is boasting about it.
Saying that I have made the worst mistake of my life, that I will lose most of my hard-earned savings and that I will not get them back for many years. I know I shouldn't listen to them, but it is still something that makes me worry more than I should in the markets, as my initial strategy was to try to stay disconnected from the fluctuations, but it seems inevitable.
If you are worrying now, wait until you see 30% losses ! Maybe you should not be in stocks, or at least you should be reducing a lot your stock allocation.
260chrisb
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Re: How do you cope with all the negativism towards markets?

Post by 260chrisb »

Havent wrote: Mon Oct 04, 2021 2:56 pm Hello everyone,

I started investing recently (about a month ago if I am not mistaken), when the market was at record highs. Now I am facing one of the first stock market downturns since I have been invested. With this, my environment, which has never invested since it has always believed that the stock market was a lottery, is boasting about it.
Saying that I have made the worst mistake of my life, that I will lose most of my hard-earned savings and that I will not get them back for many years. I know I shouldn't listen to them, but it is still something that makes me worry more than I should in the markets, as my initial strategy was to try to stay disconnected from the fluctuations, but it seems inevitable.

For this reason, I wanted to ask you: how do you cope with all this negativity when times get tough and the market goes down? How do you stop thinking about the markets and not care that you are losing money?

I know it's a silly question and has no real answer. But I would love to get your opinion on how you deal with these periods and what your strategy is to not make it more important than it should be.

Thanks in advance!
Welcome to the forum. Wow, how old are you? By your "environment" do you mean your friends? What you're experiencing are normal market gyrations. None of us like to lose money but you've just begun my friend. Long term, the market is an excellent long term means of making money and growing wealth. Turn off the TV and all the daily screaming about a selloff or a downturn (or whatever the scary word of the day is) and stop listening to your environment (who I'm guessing are broke friends), and stop clicking on every article that rants about the next market crash, and find good long term investments that you understand with a risk level that you can live with. Understand your risk tolerance and risk capacity and take a disciplined long term approach. For me after years of investing I've come to the conclusion that Vanguard has a lot of really good funds that have done well for a lot of years. I sleep well at night not worrying about the daily or monthly gyrations and trust that they're probably going to do well for many years to come. Good luck!
Afty
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Re: How do you cope with all the negativism towards markets?

Post by Afty »

This is but a tiny dip, but the larger point is that it’s difficult to ignore the noise. I’ll admit to being very worried last March when the market collapsed because of the pandemic. I stopped reading or watching any financial news, I steered in-person conversations away from financial topics, and I even stopped reading Bogleheads for a while. Essentially sticking my head in the sand. It worked, I didn’t sell, and I’m way better off for having stayed the course.
H-Town
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Re: How do you cope with all the negativism towards markets?

Post by H-Town »

Havent wrote: Mon Oct 04, 2021 2:56 pm Hello everyone,

I started investing recently (about a month ago if I am not mistaken), when the market was at record highs. Now I am facing one of the first stock market downturns since I have been invested. With this, my environment, which has never invested since it has always believed that the stock market was a lottery, is boasting about it.
Saying that I have made the worst mistake of my life, that I will lose most of my hard-earned savings and that I will not get them back for many years. I know I shouldn't listen to them, but it is still something that makes me worry more than I should in the markets, as my initial strategy was to try to stay disconnected from the fluctuations, but it seems inevitable.

For this reason, I wanted to ask you: how do you cope with all this negativity when times get tough and the market goes down? How do you stop thinking about the markets and not care that you are losing money?

I know it's a silly question and has no real answer. But I would love to get your opinion on how you deal with these periods and what your strategy is to not make it more important than it should be.

Thanks in advance!
Give it time. It's not about a day, a month, or a year. It's the lifetime of investing.

Down market is actually money maker for you, because you're a new investor. Thinking of many years of buying stock funds at lower cost basis. So you kinda want to cheers for bad news....

In my portfolio at the moment, my contribution basis only makes up half of the portfolio. The other half is from market gain.
Time is the ultimate currency. My ultimate wealth is the full control of how I spend my time.
alex_686
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Re: How do you cope with all the negativism towards markets?

Post by alex_686 »

Havent wrote: Mon Oct 04, 2021 2:56 pm For this reason, I wanted to ask you: how do you cope with all this negativity when times get tough and the market goes down? How do you stop thinking about the markets and not care that you are losing money?
As the old saying goes: "Greed and Fear". The 2 dominate emotions when investing. And this saying is for professional investors. I have no idea how retail investors handle this. For context I work in the industry and have some great stories to tell.

It is and isn't a silly question. It is a common question that does not have a right answer. I will say that the Bogleheads method is broadly right. During times of calm and rationality write up your IPS. Then stick to it. Panic during chaos really works. There have always been negative emotions around. The few times where there were none were right before a crash.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
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Re: How do you cope with all the negativism towards markets?

Post by Grt2bOutdoors »

livesoft wrote: Mon Oct 04, 2021 2:59 pm Practice makes permanent. I've had lots of practice. You can look forward to lots of practice yourself.
^^That, and which is better? Lending your money that is not needed for at least 10 years, preferably more at a rate of 1.5% or less, or being a part-owner in 3,000 + companies and preferably more if you hold a globally diversified portfolio that adds an additional 12,000 companies into the mix. Do you want to lay odds on which option yields more over time? How about if I offered you the same option only at a discounted price? (Market declines are the equivalent of a store discount and who does not like a sale??)
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Mr.BB
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Re: How do you cope with all the negativism towards markets?

Post by Mr.BB »

They say the markets likes to climb a wall of worry.
If you have decades before you retire, you have to stop living in the moment (like a trader) and look long term (like an investor).
There are tons of charts out there that track big drops and bad events with the stock market, and guess what? The market always comes back. The best time to invest is when the market is down, not up.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."
Ed 2
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Re: How do you cope with all the negativism towards markets?

Post by Ed 2 »

This is not my first tango. I don’t cope. Talking heads on CNBC and other networks want you to do something and react. Just start watching Jack Bogle’s video on YouTube , turn off news network or start watching Netflix or something. Character’s like Cramer will tell you opposite story every day , sell sell sell , buy buy buy. Your head will spin if you will take him seriously. This charlatans making most money by selling fear or nonsense and books. So stop listening.
“ don’t do something , just stay there “. J. Bogle
Last edited by Ed 2 on Mon Oct 04, 2021 3:54 pm, edited 1 time in total.
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GerryL
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Re: How do you cope with all the negativism towards markets?

Post by GerryL »

Havent wrote: Mon Oct 04, 2021 2:56 pm Hello everyone,

I started investing recently (about a month ago if I am not mistaken), when the market was at record highs. Now I am facing one of the first stock market downturns since I have been invested. With this, my environment, which has never invested since it has always believed that the stock market was a lottery, is boasting about it.
Saying that I have made the worst mistake of my life, that I will lose most of my hard-earned savings and that I will not get them back for many years. I know I shouldn't listen to them, but it is still something that makes me worry more than I should in the markets, as my initial strategy was to try to stay disconnected from the fluctuations, but it seems inevitable.
You haven't said HOW you are invested. If you put all of your money into a single stock or a single sector, yeah, you could lose all or a lot. If you invested money that you expect to need in the short term, say a year or two, not a good plan. But if you are invested for the long term in a broadly diversified stock fund, you will be okay.
You need to accept the fact that the market goes up and it goes down, just not as predictably as the tides. And over time it has continued to rise. Understand that and then you can ignore the Cassandras who are trying to discourage you.

In 2009, the market was really tanking. Some people saw their stock portfolios go down by 40% or even more. And some sold and locked in their losses. I didn't know what to do, so I embraced my ignorance and just kept doing what I had been doing, investing automatically from every paycheck. And I stopped paying attention. Now I am gainfully unemployed (that is, retired) thanks to my healthy portfolio.

Do not despair. And stop paying so much attention to short-term moves in the markets.
mrpotatoheadsays
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Re: How do you cope with all the negativism towards markets?

Post by mrpotatoheadsays »

Be a student of history.

1. From 1970 to 2020, the worst drawdown of the S&P 500 was -51.0%.
2. From 2000 to 2009, the S&P 500's nominal annualized return was -0.9%.

You can therefore assume that you could lose half your money in an investment in U.S. Large Cap Blend and make no money for a decade. If you cannot handle this, you need to counter with a portion of your investment in 'safe" securities (short/intermediate Treasury bonds) and/or with a portion of your investment in non-U.S. Large Cap Blend (e.g. International Small Cap Value and U.S. REITs). Such diversity can reduce portfolio drawdown and increase the return.

On the flip-side, over the long-term (25-30 years), the inflation-adjusted annualized return for Large Cap Blend is 6.6%.

You need a plan. You need to stick to the plan. You won't care about negativity (or positivity) because you are diversified and in for the long-term.
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Re: How do you cope with all the negativism towards markets?

Post by arcticpineapplecorp. »

Havent wrote: Mon Oct 04, 2021 2:56 pm Hello everyone,

I started investing recently (about a month ago if I am not mistaken), when the market was at record highs. Now I am facing one of the first stock market downturns since I have been invested. With this, my environment, which has never invested since it has always believed that the stock market was a lottery, is boasting about it.
The stock market is not a lottery because there's a positive expected return whereas the lottery has a negative expected return (lotteries give you a negative 50% return which means you should expect to lose 50 cents for every dollar you gamble on the lottery. But the individual stocks within the market are a lottery even though the market as a whole is not. If you want to use the gambling analogy (I don't) you can think of individual stocks as different games (poker, blackjack, craps, roullette, etc) whereas the casino is known as "the house". You know the house always wins right? If they didn't, the casinos would go out of business. The odds are in their favor. Some may win at certain games some times, but most will lose the more they play. That's buying individual stocks. But if you own the total stock market, you get the guaranteed return of the market over time regardless of what happens to the individual companies. In fact, only about 4% of all companies tend to generate all the returns of the market (source: https://papers.ssrn.com/sol3/papers.cfm ... id=2900447). If you own the market, you get that return. If you miss owning those 4% of companies, you don't. Don't search for a needle in a haystack, own the entire haystack. Be the house.

people who call the stock market a lottery really don't understand how indexing or compounding interest works. They're myopic and only looking at what has happened recently, not the long arc which investing is. You don't get rich quick, you build wealth slowly and over time.

what do the naysayers suggest you do instead of invest in the stock market? Keep your money in cash? That's a guaranteed loss of purchasing power due to inflation. Real estate? That's a part time job and active management, unlike the passive management that is index funds. Not to mention generally in most areas real estate returns have been lower than on stocks over history (S.F., Seattle, NYC not withstanding)
Havent wrote: Mon Oct 04, 2021 2:56 pm Saying that I have made the worst mistake of my life, that I will lose most of my hard-earned savings and that I will not get them back for many years. I know I shouldn't listen to them, but it is still something that makes me worry more than I should in the markets, as my initial strategy was to try to stay disconnected from the fluctuations, but it seems inevitable.
how can you both lose money and also "get them back"? Is it a loss if you get your money back? No. Could you lose value in the short term? Yes. Are you likely to recover from those losses? Yes. Could that take years? Yes. Are you making money on new shares bought at lower prices? Definitely. Can you lose money and never get it back? Only if you own individual stocks which either go bust or don't recover or you own the market but sell after a downturn. If the market falls and never recovers, we all will have greater problems to contend with than "Dude what happened to my money?"
Havent wrote: Mon Oct 04, 2021 2:56 pm For this reason, I wanted to ask you: how do you cope with all this negativity when times get tough and the market goes down? How do you stop thinking about the markets and not care that you are losing money?
You realize that markets fall each and every year and you expect it, don't sweat it. That doesn't mean you don't make money. If you hold your investments through those losses and come out the other side, you do just fine.

last year was a good example of this in the short term. The market (US) gained 20% in 2020. But it also lost 32% between Feb 21-Mar 20. So in order to have made 20% on your money between Jan-Dec 2020, you had to be willing to lose 32% of your money over one month. That's risk and return right there compressed in the short term. If you put your money in the bank last year you wouldn't have seen a loss of money (doesn't mean you didn't. you did because of inflation). But because you took no risk in a bank acct, you got no reward (banks paid 0.5% in 2020, not 20% like US stocks). No risk, no reward. To get the return of the stock market, you really do have to take the risk.

Also, when stocks fall that means future expected returns are better. When stocks rise, future expected returns are lower.

Take a look at the following chart. Every year there were intrayear losses. The average is 14%. You have to expect you'll lose 14% on average every year you invest. But the market still went up relative to the beginning of the year 75% of the time over the past 41 years.

Image

You've got to tune out the noise.

Don't check your balances when markets are down.

Keep your head down and stay the course. Keep to your plan. If you don't have one, get one: https://www.bogleheads.org/wiki/Investm ... _statement

there's lots of reasons to sell, but look what happens if you tune out the noise:

Image

Image

Image

what happens over 1 year is meaningless (even 10 or 20 years) if you're invested for the rest of your life. Think about most people. They start investing in their 30s, retire in their 60s and hopefully live to their 90s (or later). That's 60 or more years you'll have some portion of your money in stocks (maybe more when younger 80% in stocks or more and maybe 30% in retirement). So you have to accept/deal with losses the rest of your life if you want the gains that comes from ownership.

Anyone who doesn't invest doesn't understand any of this. Even people who do invest don't always understand this. I recommend you read William Bernstein's The Four Pillars of Investing. It shows you the foundations that are necessary to be a good investor. One of the four is being a market historian. Most people do not know the history of the stock market, how long bear and bull markets have lasted on average and so on. So people are either flying blind, have no context and are merely reactionary based on what they saw/heard on cnbc and the like.

what do you think?
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bogledogle
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Re: How do you cope with all the negativism towards markets?

Post by bogledogle »

It gets easier to ignore the negativism when your portfolio is a few years old. It takes time.
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FrugalInvestor
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Re: How do you cope with all the negativism towards markets?

Post by FrugalInvestor »

See my avatar. "Ignore the Noise!" 'Nuff said.
Have a plan, stay the course and simplify. Then ignore the noise!
knowledge
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Re: How do you cope with all the negativism towards markets?

Post by knowledge »

viewtopic.php?f=10&t=80065

^ Read that thread. In the decade+ that thread has been running, the S&P has returned over 350%, with dividends reinvested. There have been almost 25k posts in that thread from people that were registered bogleheads members - a pre-selected population that generally do not believe that you can predict the markets. The general public...It's not surprising that you find yourself surrounded by people that are going to be pessimistic.

Seriously, go read that thread during the Coronavirus pandemic, the daily market watching, failed prognostications, and guttural pain, and realize even with this now 6%? dip - things will be alright.
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Re: How do you cope with all the negativism towards markets?

Post by SantaClaraSurfer »

Perspective.

1. Don't listen to the market news for the most part.

2. Stick to the long term plan and celebrate the victories along the way.

3. Honestly, following this path: increasing earnings, then increasing savings rate, then paying off debt, then reducing expense ratios, then slowly diversifying exposures as I learned more, and always simplifying in favor of maxing allocations into low cost index funds.

All of that ^^^^ adds up to a whole lot of perspective and benefits, and has paid dividends (figuratively and literally) along the way.

I moved 401(K) providers in mid-August via the "mail a check approach." It cost me a bit due to market volatility and time out of market, but I'll be ahead on fees in short order...and way ahead on fees for the future after that.

Since mid-August, I keep adding to my new 401(k) and for the last few weeks it's simply refusing to grow. At all. lol!

The end result is own more shares of everything, and, for now, they are all worth a bit less. They could easily decline more. Much more.

I will then purchase even more of the cheaper shares.

I'm hoping not to touch any of them until sometime around 2041. If I'm lucky, I won't touch some of these shares for much, much longer than that.

It's good to keep that perspective in mind when thinking about the frustrations of the moment:

I could never have earned the money in the first place
I could never have saved it
I could have continued to use some of my earnings to carry needless consumer debt
I could have continued to pay .8% ER fees versus .06%
I could have left my AA undiversified
I could have stayed in a former employer's 401(k) with high maintenance fees


All of those factors are way more important, and are items I have much more control over, than whether the market is up or down in a given quarter or year.
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Re: How do you cope with all the negativism towards markets?

Post by oldcomputerguy »

Havent, welcome to the forum. I suggest you read through nisiprius's excellent post A time to EVALUATE your jitters. It makes the point that, in the long term (which is how you should be looking at this), this past month's market movement will not even be a blip on the screen.
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Re: How do you cope with all the negativism towards markets? [France]

Post by LadyGeek »

Based on the OP's post in Re: Invest everything now or dollar cost average?, I retitled the thread to indicate a home country of France.

(This thread is in the Non-US Investing forum.)
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Re: How do you cope with all the negativism towards markets? [France]

Post by Dottie57 »

If your “environment” consists of friends or co-workers stop telling them about investing and what you are doing. It is not their business. Stick to your plan and don’t discuss.
longjohn
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Re: How do you cope with all the negativism towards markets? [France]

Post by longjohn »

Honestly, I don't listen to the noise - stopped reading financial news for a while until things have settled and stopped regarding the amount invested on my portfolios, I reallocated some more cash for investments and bought some of my favourite stocks and index.

Will just ride it out and forget about the red numbers and rather focus on the investments I want to make during this sale
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Re: How do you cope with all the negativism towards markets? [France]

Post by hudson »

Havent wrote: Mon Oct 04, 2021 2:56 pm For this reason, I wanted to ask you: how do you cope with all this negativity when times get tough and the market goes down? How do you stop thinking about the markets and not care that you are losing money?

I know it's a silly question and has no real answer. But I would love to get your opinion on how you deal with these periods and what your strategy is to not make it more important than it should be.

Thanks in advance!
Silly question? Not silly...good question.
Not care about losing money? I care big time. I don't want to lose a dime....but it's unavoidable
How do I deal with it? I took the sleep test in the 2008 downturn and became bond (fixed income) heavy.
Consider reading: viewtopic.php?p=5372762#p5372762
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celia
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Re: How do you cope with all the negativism towards markets?

Post by celia »

Kenkat wrote: Mon Oct 04, 2021 3:09 pm The stock market is one of the few things where we as regular buyers still root for prices to go up.
. . . Not me. I would like prices to go down on almost eveything I buy from milk and bread to airfare . . . and even stocks.

Now once you own something and want to sell it, THAT’S when you want it to have a higher price.
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Re: How do you cope with all the negativism towards markets? [France]

Post by oogZoo »

Havent wrote: Mon Oct 04, 2021 2:56 pm how do you cope with all this negativity when times get tough and the market goes down? How do you stop thinking about the markets and not care that you are losing money?
I am happy because I will get more ETF shares with the same amount of money in my next monthly savings cycle. Always nice to have a good discount on something that I need to purchase. Unfortunately the discount season always ends quickly.

I do not talk about my investments to other people except some close friends that invest also. And anonymously on internet forums. Especially I shall not mention it to clueless morons. Only bad things come out of it. Either they come up with idiotic comments or they start pestering me for investment recommendations or money at a later time. Better to keep my mouth shut about this topic.
jg12345
Posts: 158
Joined: Fri Dec 11, 2020 1:03 pm

Re: How do you cope with all the negativism towards markets? [France]

Post by jg12345 »

Many of the points made are very relevant, and I can add very little I think. a couple small things

1) others noted this. you call this a "downturn" when it is very hardly a downturn. it's probably like usual market fluctuations.

2) they may be right. the market has delivered approximately 0% between 2000-2009. it is not so likely but it may be that from 2021-2031 it will deliver 0% again (even less likely if the period is 2021-2041). so just to be clear that you are taking a risk, and hopefully you will be remunerated for that.

3) What oogzoo said may help you to think about "how to ignore": my reasoning is that this is a classic case in which people don't know what they don't know, so I am right to ignore them. it may be wasting time (or harmful) to discuss these with them - and it's not necessarily their fault. Indeed my personal approach is to listen, nod, and say nothing in most cases. Rarely my audience has the capacity to understand, and it may be even useful for them to understand, and therefore I present my (limited) knowledge about investing.

I have a much harder time with not reading news. I ignore them, but I still find myself far too often reading them.
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