Lost $7000 today in ONE DAY!
Re: Lost $7000 today in ONE DAY!
You want to talk about bad days?? How about 9/29/2008 - I think my holdings dropped around 10% in a single day. Don't remember for sure but it was probably 80/20 allocation. However, about 2 weeks later (10/13/08), holdings were up 11% for the day. Those were crazy times that I hope we don't see again.
Re: Lost $7000 today in ONE DAY!
LOL. I started buying stocks in 1978. The S&P was in the 90's.
Day to day fluctuations are tiny compared to the long game.
Day to day fluctuations are tiny compared to the long game.
Re: Lost $7000 today in ONE DAY!
I was around but didn't have any money Thanks!deltaneutral83 wrote: ↑Thu Aug 17, 2017 9:08 pm OP, I'm going to guess you weren't around in the fall of 2008. The 1.5% move today would be small potatos next to the daily 5-6% declines in the S&P. It seems like yesterday. Your $7k to the downside today would have frequently experienced $25k losses then.
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Re: Lost $7000 today in ONE DAY!
He said he had a spreadsheet of his Investments. There are functions you can import into Excel that can automatically update the value of your holdings. So it's easy to go back at a later date and review things.
AJ is a pretty smart cookie from what I've seen...
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Re: Lost $7000 today in ONE DAY!
If a 1.5% drop after the large run up we have had in the past several years worries you, you probably have a higher equity allocation than you should. Everyone should evaluate their own risk tolerance and invest accordingly. People usually think their tolerance is higher that it actually is during market run-ups.
Once in a while you get shown the light, in the strangest of places if you look at it right.
Re: Lost $7000 today in ONE DAY!
Yes, theoretically I understand that I must stick to the plan and stay in the market no matter what, and then over a period of 20-25 years it should be around 7% a year average.Rob5TCP wrote: ↑Thu Aug 17, 2017 9:16 pmAlex GR wrote: ↑Thu Aug 17, 2017 8:39 pm Hi everyone,
I lost $7000 today in one day. My portfolio is below.
Ironically, I've just returned from a store where I was arguing with a cashier over 0.50 cents! Got home and saw that the portfolio went down by $7k...
Should I change the allocation if this kind of downswing bothers me?
The portfolio is 72/28 with 55% U.S. Stock, 28% U.S. Bond and 17% International Stock.
VOO Vanguard 500 Index Fund 32%
VOE Vanguard Mid-Cap Value ETF 5%
VBR Vanguard Small-Cap Value ETF 13%
POGRX PRIMECAP Odyssey Growth Fund 5%
BIV Vanguard Intermediate-Term Bond ETF 19%
PONDX PIMCO Income Fund Class D 9%
VXUS Vanguard Total International Stock ETF International 12%
VWO Vanguard FTSE Emerging Markets ETF International 2%
SFVLX Seafarer Overseas Value Fund International 3%
As mentioned above, if a $7k loss is causing lost sleep; what will happen when the day comes and you have $50,000 or $100,000 loss (or even more).
You need to find what level you are comfortable to withstand the next inevitable bear market. Adjust your risk levels so you can ride out the next bear market (when it comes - which it inevitability will)
But you mention a drop of $100k in a day or over a few days. The problem with this is when I think about what I have to do to earn $100k in my place of work, it makes me go crazy. I mean you have no idea how much stress and what I personally have to go through to save $100k.
Re: Lost $7000 today in ONE DAY!
+1
The Best,
The Truth In A Nutshell
Tiny and Meaningless.
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
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Re: Lost $7000 today in ONE DAY!
I agree that the stock market run up over past nine months makes it unlikely that very many holding lots will show a loss right now after yesterday's 1.5% decline.SpringMan wrote: ↑Fri Aug 18, 2017 7:34 am Tax loss harvesting is not an option unless your cost basis is higher than your current value in a given position held in a taxable account. A 2% drop in one day does not necessarily erase all previous profits. Most financial advisers would likely advise investors to ignore geopolitical events IMO.
Nonetheless, the point remains: taxable account investors in particular need to aware of current market conditions for best results...
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Re: Lost $7000 today in ONE DAY!
Yeah, but I was right. The thing was on sale for $2.49 and he rang up $2.99.stemikger wrote: ↑Fri Aug 18, 2017 12:18 am That's just karma giving you a spanking for arguing with (most likely a minimum wage worker) over 50 cents.
In all seriousness, don't look at these day to day fluctuations, especially when the market is down. If you do feel you need to change your AA because your risk tolerance has changed, not is not the time, if anything when the market is going down, buying more equities is the best thing you can do. As Warren Buffett says, when the price of hamburgers goes down, the Buffett household is cheering. Warren loves his hamburgers.
Sorry, I couldn't resist
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Re: Lost $7000 today in ONE DAY!
It's not clear to me that you have the right temperament presently to have significant funds in the stock market.Alex GR wrote: ↑Fri Aug 18, 2017 10:35 am
...But you mention a drop of $100k in a day or over a few days. The problem with this is when I think about what I have to do to earn $100k in my place of work, it makes me go crazy. I mean you have no idea how much stress and what I personally have to go through to save $100k.
Can you explain why you have money in stocks and how long you've been investing?
What did you do during the 2008-09 timeframe?
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Re: Lost $7000 today in ONE DAY!
It's just paper worth. If you have cash on the side, any big drop is a buying opportunity.
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Re: Lost $7000 today in ONE DAY!
Buying on the dips, yes...WhiteMaxima wrote: ↑Fri Aug 18, 2017 11:11 am It's just paper worth. If you have cash on the side, any big drop is a buying opportunity.
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Re: Lost $7000 today in ONE DAY!
Risk and rewards go hand-in-hand. You can't expect a gain without bearing the risk of losing money. This is fundamental of investing.Alex GR wrote: ↑Fri Aug 18, 2017 10:35 am But you mention a drop of $100k in a day or over a few days. The problem with this is when I think about what I have to do to earn $100k in my place of work, it makes me go crazy. I mean you have no idea how much stress and what I personally have to go through to save $100k.
If you could save $100k, why can't you do it again and then some? I don't undermine your stress at work by any means. Everyone has to deal with it in certain degree. A wise man once said, life might knock you down and kick you around while you're down, but it can't win if you never give up.
Take emotions out of the situation and maybe you'll find it easier to cope with the market downturn.
Time is the ultimate currency.
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Re: Lost $7000 today in ONE DAY!
I won't buy on 1.5% dip. I'd buy on -10% correction.The Wizard wrote: ↑Fri Aug 18, 2017 11:21 amBuying on the dips, yes...WhiteMaxima wrote: ↑Fri Aug 18, 2017 11:11 am It's just paper worth. If you have cash on the side, any big drop is a buying opportunity.
Re: Lost $7000 today in ONE DAY!
It's paper worth if you don't need the money before the market rebounds. If you do, you'll have to sell, locking in a loss.WhiteMaxima wrote: ↑Fri Aug 18, 2017 11:11 am It's just paper worth. If you have cash on the side, any big drop is a buying opportunity.
Another factor in the OP's case may be failing to properly judge his tolerance for risk when setting the allocation. In a market drop, this can lead to anxiety, leading to sleepless nights, leading to a market bailout at a loss.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: Lost $7000 today in ONE DAY!
Well, we might have an idea of how stressful it is. But, if seeing your portfolio go down $7k hurts you much more than seeing it go up, which it has, during the rest of the year, perhaps you should dial it back a bit. Not precipitously, but after consideration of your risk tolerance.Alex GR wrote:I mean you have no idea how much stress and what I personally have to go through to save $100k.
Welcome to the forum. You're much younger than I am, but I find it useful to remind myself that every decline means that my kids get to invest at lower prices. We are still accumulating ourselves, but I find it comforting to think of it in terms of my kids.
I get the FI part but not the RE part of FIRE.
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Re: Lost $7000 today in ONE DAY!
Yes and no. The stocks in my retirement account aren't really liquid. I can't sell them for cash I can use without taking a significant penalty. They are essentially illiquid for the next 25 years.Tamalak wrote: ↑Fri Aug 18, 2017 8:45 am Man, I understand the whole 'it's only paper losses' thing, and I see the value in thinking that way if you're trying to soothe your anxiety about buy and hold. But it's just factually wrong, for something SO liquid as a stock. You really are making/losing THOUSANDS of dollars most days. Practically every day I gain or lose more than I make at my job. It's not something the human psyche is equipped to easily handle.. but it's the truth.
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Re: Lost $7000 today in ONE DAY!
This is an excellent post. Although I do have a minor quibble with the last paragraph even though I agree with it. The essence of the post is that the first step is to change your thoughts about how you look at investing. That leads to a change in feeling which can lead to a change in behavior.MJW wrote: ↑Thu Aug 17, 2017 11:52 pmOkay. I'm not going to be overly dramatic about piling on here. Looks like that has already been taken care of several times over.
Let's try something, though. Feel however you feel about it. If it bothers you to see this type of drop, just accept that you're bothered by it and then do nothing. Next time it happens, take the same approach. And then the next time. Get used to being bothered by it but also recognize that it doesn't mean you need to do anything.
Try it for a while. If after some time you still feel like you just can't help yourself, then go with a less volatile portfolio and accept that you will probably have to save more from now on. Feeling lousy when seeing these drops may be the price you have to pay for achieving your financial goals later. Only you can decide whether it is worth it.
Or you can stop feeling lousy, but changing how you feel is much harder than changing what you do.
Thoughts --> [Feelings] --> Behavior
The primary message is that changing your thoughts will help get you to your desired behavior/goal. And you will almost certainly feel less distraught along the way.
Re: Lost $7000 today in ONE DAY!
Perhaps my bigger point is that too much emphasis is being placed on how the OP feels about the situation right now rather than his ability to choose how he will act. In this case I think the OP may be better served by demonstrating to himself that his feelings do not necessarily need to dictate his actions. Telling him to "not feel bad" about seeing his account drop is probably akin at this point in time to telling him to not blink or grow his fingernails. However, over time, if he can consistently prove to himself that taking a course of action that is different from the emotional knee-jerk, as counter-intuitive as it may feel, could yield a better result then maybe his thinking on it will change. And yes, the hope is that over time he begins to feel differently, because his thinking is now shaped by seeing a different result of his actions. But even if that doesn't happen he might at least become accustomed to refraining from impulsive behavior in spite of his discomfort.Doom&Gloom wrote: ↑Fri Aug 18, 2017 12:00 pm This is an excellent post. Although I do have a minor quibble with the last paragraph even though I agree with it. The essence of the post is that the first step is to change your thoughts about how you look at investing. That leads to a change in feeling which can lead to a change in behavior.
Thoughts --> [Feelings] --> Behavior
The primary message is that changing your thoughts will help get you to your desired behavior/goal. And you will almost certainly feel less distraught along the way.
I agree with the other poster that said the OP is being given too hard of a time. I don't enjoy seeing my account balances drop either, despite all of the glib proclamations about "buying opportunities." I'd rather just see my numbers go up all the time, but that isn't how it works. I had not looked at my accounts for a while, but after seeing this thread I had a morbid curiosity and took a peak. If I hadn't been paying attention I wouldn't have even known that my balances represented a drop.
Last edited by MJW on Fri Aug 18, 2017 1:11 pm, edited 3 times in total.
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Re: Lost $7000 today in ONE DAY!
Are you cashing everything out today? If not - then why do you think you lost $7000?
Re: Lost $7000 today in ONE DAY!
Yes, definitely would have been beneficial for people to have cash on the side for yesterday's 'buying opportunity' - because the gains they missed out on by not having it invested over the last month (and more) were just paper gains anyway...WhiteMaxima wrote: ↑Fri Aug 18, 2017 11:11 am It's just paper worth. If you have cash on the side, any big drop is a buying opportunity.
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Re: Lost $7000 today in ONE DAY!
Just because stocks are held in a retirement account does not mean they are not liquid. That access to the funds in general is restricted does not make the specific investment more or less liquid. Only restrictions on the specific investment would affect liquidity. But, even if they were not liquid, that doesn't mean the loss/gain would not be real unless the investment is sold. It just means it would be harder to figure the gain or loss exactly without selling.alfaspider wrote: ↑Fri Aug 18, 2017 11:48 am
Yes and no. The stocks in my retirement account aren't really liquid. I can't sell them for cash I can use without taking a significant penalty. They are essentially illiquid for the next 25 years.
Quod vitae sectabor iter?
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Re: Lost $7000 today in ONE DAY!
I think we are saying (or trying to say) the same thing. It is a process. Not much will change the OP's thoughts, beliefs, feelings, or actions over the course of this thread. At this point he needs a road map for his future, not a detailed action plan for the next few days.MJW wrote: ↑Fri Aug 18, 2017 1:05 pmPerhaps my bigger point is that too much emphasis is being placed on how the OP feels about the situation right now rather than his ability to choose how he will act. In this case I think the OP may be better served by demonstrating to himself that his feelings do not necessarily need to dictate his actions. Telling him to "not feel bad" about seeing his account drop is probably akin at this point in time to telling him to not blink or grow his fingernails. However, over time, if he can consistently prove to himself that taking a course of action that is different from the emotional knee-jerk, as counter-intuitive as it may feel, could yield a better result then maybe his thinking on it will change. And yes, the hope is that over time he begins to feel differently, because his thinking is now shaped by seeing a different result of his actions. But even if that doesn't happen he might at least become accustomed to refraining from impulsive behavior in spite of his discomfort.Doom&Gloom wrote: ↑Fri Aug 18, 2017 12:00 pm This is an excellent post. Although I do have a minor quibble with the last paragraph even though I agree with it. The essence of the post is that the first step is to change your thoughts about how you look at investing. That leads to a change in feeling which can lead to a change in behavior.
Thoughts --> [Feelings] --> Behavior
The primary message is that changing your thoughts will help get you to your desired behavior/goal. And you will almost certainly feel less distraught along the way.
I agree with the other poster that said the OP is being given too hard of a time. I don't enjoy seeing my account balances drop either, despite all of the glib proclamations about "buying opportunities." I'd rather just see my numbers go up all the time, but that isn't how it works. I had not looked at my accounts for a while, but after seeing this thread I had a morbid curiosity and took a peak. If I hadn't been paying attention I wouldn't have even known that my balances represented a drop.
Re: Lost $7000 today in ONE DAY!
Unbelievable that a thread like this would warrant 3 pages. Really?
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Re: Lost $7000 today in ONE DAY!
Well, absent the posts that primarily say, "Look how much larger my portfolio is than yours", and absent posts centered on whether or not losses are real even if you don't sell (they are), it would be less than a page.
Quod vitae sectabor iter?
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Re: Lost $7000 today in ONE DAY!
OP is a new poster. Forum members are generally a helpful bunch and the best you can do is complain about folks wanting to allay the fears he/she may have?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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Re: Lost $7000 today in ONE DAY!
Sure, but why fret about the value of an investment you won't sell for 25 years? I understand they are technically liquid, but if you are committed to a BH portfolio and can't get cash out without penalty, there's very little difference between the funds and closely held stock, other than the fact you can get an instant and accurate quote of the value.saltycaper wrote: ↑Fri Aug 18, 2017 1:18 pmJust because stocks are held in a retirement account does not mean they are not liquid. That access to the funds in general is restricted does not make the specific investment more or less liquid. Only restrictions on the specific investment would affect liquidity. But, even if they were not liquid, that doesn't mean the loss/gain would not be real unless the investment is sold. It just means it would be harder to figure the gain or loss exactly without selling.alfaspider wrote: ↑Fri Aug 18, 2017 11:48 am
Yes and no. The stocks in my retirement account aren't really liquid. I can't sell them for cash I can use without taking a significant penalty. They are essentially illiquid for the next 25 years.
Re: Lost $7000 today in ONE DAY!
Another thing to consider: There have been a few other days this year where it's dropped about this much or more. One of them was last Thursday. Because of the overall upward trend, none of them were even decent TLH opportunities (for me at least). Look at a graph of the total stock market so far this year, and you'll see this drop for the noise that it is. This doesn't mean the overall upward trend will necessarily continue, but it shows what a non-event yesterday was in the scheme of things.
That said, I'm in the camp that believes the losses are real, not just "paper losses". You may not have lost any shares, but those shares did lose value in a very liquid market. An important distinction is that the losses are "real", but not "realized" unless you sell. Same with gains.
That said, I'm in the camp that believes the losses are real, not just "paper losses". You may not have lost any shares, but those shares did lose value in a very liquid market. An important distinction is that the losses are "real", but not "realized" unless you sell. Same with gains.
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Re: Lost $7000 today in ONE DAY!
stocks down yesturday and today. Does that mean time to buy more?
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Re: Lost $7000 today in ONE DAY!
I don't think people should fret about it, but they should acknowledge gains or losses are happening at all times, whether they pay attention or not, and even if they don't sell. The big difference between a stock mutual fund and closely held stock is you can sell the fund at any time with ease (say, to buy a bond fund instead), while that might not be possible with closely held stock.alfaspider wrote: ↑Fri Aug 18, 2017 2:05 pm
Sure, but why fret about the value of an investment you won't sell for 25 years? I understand they are technically liquid, but if you are committed to a BH portfolio and can't get cash out without penalty, there's very little difference between the funds and closely held stock, other than the fact you can get an instant and accurate quote of the value.
Quod vitae sectabor iter?
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Re: Lost $7000 today in ONE DAY!
Nothing new about stock market going up and then down. Think about your long-term goals. It is OK to complain when you temporarily loose some money, but then be careful to tell people about all the money you are making when it goes up again. I once had a daughter-in-law who thought she could spend more as the market went up.
Re: Lost $7000 today in ONE DAY!
There are a host of individuals who have been investing for the past 7-8 years that have never experienced a true bear market.
For them stocks only go up, up and up. It will be an eye opener even if we talk about it over and over. 95/5 is conservative.
Don't just do something, stand there.
Re: Lost $7000 today in ONE DAY!
On my phone, so there be typos...Alex GR wrote: ↑Fri Aug 18, 2017 10:35 amYes, theoretically I understand that I must stick to the plan and stay in the market no matter what, and then over a period of 20-25 years it should be around 7% a year average.Rob5TCP wrote: ↑Thu Aug 17, 2017 9:16 pmAlex GR wrote: ↑Thu Aug 17, 2017 8:39 pm Hi everyone,
I lost $7000 today in one day. My portfolio is below.
Ironically, I've just returned from a store where I was arguing with a cashier over 0.50 cents! Got home and saw that the portfolio went down by $7k...
Should I change the allocation if this kind of downswing bothers me?
The portfolio is 72/28 with 55% U.S. Stock, 28% U.S. Bond and 17% International Stock.
VOO Vanguard 500 Index Fund 32%
VOE Vanguard Mid-Cap Value ETF 5%
VBR Vanguard Small-Cap Value ETF 13%
POGRX PRIMECAP Odyssey Growth Fund 5%
BIV Vanguard Intermediate-Term Bond ETF 19%
PONDX PIMCO Income Fund Class D 9%
VXUS Vanguard Total International Stock ETF International 12%
VWO Vanguard FTSE Emerging Markets ETF International 2%
SFVLX Seafarer Overseas Value Fund International 3%
As mentioned above, if a $7k loss is causing lost sleep; what will happen when the day comes and you have $50,000 or $100,000 loss (or even more).
You need to find what level you are comfortable to withstand the next inevitable bear market. Adjust your risk levels so you can ride out the next bear market (when it comes - which it inevitability will)
But you mention a drop of $100k in a day or over a few days. The problem with this is when I think about what I have to do to earn $100k in my place of work, it makes me go crazy. I mean you have no idea how much stress and what I personally have to go through to save $100k.
I do understand in theory what stress it takes to make 100k. But keep investing. Trust that There are many more days that you will earn that much or more. And the reward?
You will never need to stress over making the 100k ever again because your invested money will do it for you! That's called "retirement"
Good luck!
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Re: Lost $7000 today in ONE DAY!
I have paid more attention than many on here because I have been moving my accounts from a financial advisor and setting up my allocation at vanguard. It is the first time I have ever really watched or cared much about the market. It has been a good exercise because my conclusions have been more strongly supported that my savings rate and getting my assets into the market are more important than what the market does today or next week or next year. I was frustrated when my account transfer took longer than expected because i got stuck selling during a 1% drop last Thursday and my prior account lost a chunk before I could sell. But, I was excited that I bought vanguard funds at a 1% discount and they jumped back to where they were earlier in the week. I thought about DCAing the money back in, but stuck with my plan and bought all in the same day. Then, yesterday I took another hit with the 1.5% drop. I wasn't really irritated as much as excited that I might have an opportunity to get more money in if it keeps going down. I think my new theory is similar to a long term ambition I have had to pay $1,000,000 in taxes in a year. I hate paying taxes, but if I'm paying that much, I had a great year. At this phase in my career I'll put in many multiples of what I have invested, so burn baby burn. Maybe my new goal will be to lose $1,000,000 in a day. If that happens, my account will be primed to get huge!!
Re: Lost $7000 today in ONE DAY!
Does your investment approach include rebalancing? Do you put new money towards the lower performance asset class? Do you recognize that your need for risk may change based on overperformance/underperformance relative to expectations? Do you do any forecasting of when you may be able to retire, how much you need to save today to hit your targets, etc?alfaspider wrote: ↑Fri Aug 18, 2017 2:05 pm
Sure, but why fret about the value of an investment you won't sell for 25 years?
While you shouldn't fret, all those and more are very real reasons to remain aware of the current value of your investment - in fact, the current value is far more important to track then the cost basis (that is only relevant for tax purposes).
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Re: Lost $7000 today in ONE DAY!
We are pure luck without a true bear market last 8 years. We know that QE and low interest that fueled this asset bubble.bloom2708 wrote: ↑Fri Aug 18, 2017 2:17 pmThere are a host of individuals who have been investing for the past 7-8 years that have never experienced a true bear market.
For them stocks only go up, up and up. It will be an eye opener even if we talk about it over and over. 95/5 is conservative.
Don't just do something, stand there.
Re: Lost $7000 today in ONE DAY!
Alex, I concur with Fallible. You should consider some risk reduction if you are really nervous about a 1.5% loss--at least until you can roll with the punches. Also, your portfolio is probably a bit too busy, and that's not helpful either.
Here's a link to an article on understanding volatility...
https://finpage.blog/author/pkcrafter/
I posted this on pg 1, but maybe you didn't see it. I also asked how long you've had this allocation. Where did you get the idea for the funds you are holding?
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.
Re: Lost $7000 today in ONE DAY!
LOL!! Good one!Alex GR wrote: ↑Fri Aug 18, 2017 10:38 amYeah, but I was right. The thing was on sale for $2.49 and he rang up $2.99.stemikger wrote: ↑Fri Aug 18, 2017 12:18 am That's just karma giving you a spanking for arguing with (most likely a minimum wage worker) over 50 cents.
In all seriousness, don't look at these day to day fluctuations, especially when the market is down. If you do feel you need to change your AA because your risk tolerance has changed, not is not the time, if anything when the market is going down, buying more equities is the best thing you can do. As Warren Buffett says, when the price of hamburgers goes down, the Buffett household is cheering. Warren loves his hamburgers.
Sorry, I couldn't resist
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!
Re: Lost $7000 today in ONE DAY!
Point taken. Apologies to OP as I overlooked the new member status. OTOH, there is a massive amount of redundancy in the responses. If OP's fears aren't "allayed" after 3 pages of this thread, they may never be.Grt2bOutdoors wrote: ↑Fri Aug 18, 2017 1:54 pmOP is a new poster. Forum members are generally a helpful bunch and the best you can do is complain about folks wanting to allay the fears he/she may have?
Re: Lost $7000 today in ONE DAY!
It might. We'll let you know tomorrow! LOLindexonlyplease wrote: ↑Fri Aug 18, 2017 2:10 pm stocks down yesturday and today. Does that mean time to buy more?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
Re: Lost $7000 today in ONE DAY!
A couple of ways to look at it, if you are under 40, it would probably better for you long time for the market to crash and get that out of the way so your future contributions are buying more shares. Instead of looking at it through your portfolio, look at it as SALE!!! on your future purchase. If your timeline is 30+ years the value of the market today has zero affect of what it will be 30 years out.Alex GR wrote: ↑Fri Aug 18, 2017 10:35 amYes, theoretically I understand that I must stick to the plan and stay in the market no matter what, and then over a period of 20-25 years it should be around 7% a year average.Rob5TCP wrote: ↑Thu Aug 17, 2017 9:16 pmAlex GR wrote: ↑Thu Aug 17, 2017 8:39 pm Hi everyone,
I lost $7000 today in one day. My portfolio is below.
Ironically, I've just returned from a store where I was arguing with a cashier over 0.50 cents! Got home and saw that the portfolio went down by $7k...
Should I change the allocation if this kind of downswing bothers me?
The portfolio is 72/28 with 55% U.S. Stock, 28% U.S. Bond and 17% International Stock.
VOO Vanguard 500 Index Fund 32%
VOE Vanguard Mid-Cap Value ETF 5%
VBR Vanguard Small-Cap Value ETF 13%
POGRX PRIMECAP Odyssey Growth Fund 5%
BIV Vanguard Intermediate-Term Bond ETF 19%
PONDX PIMCO Income Fund Class D 9%
VXUS Vanguard Total International Stock ETF International 12%
VWO Vanguard FTSE Emerging Markets ETF International 2%
SFVLX Seafarer Overseas Value Fund International 3%
As mentioned above, if a $7k loss is causing lost sleep; what will happen when the day comes and you have $50,000 or $100,000 loss (or even more).
You need to find what level you are comfortable to withstand the next inevitable bear market. Adjust your risk levels so you can ride out the next bear market (when it comes - which it inevitability will)
But you mention a drop of $100k in a day or over a few days. The problem with this is when I think about what I have to do to earn $100k in my place of work, it makes me go crazy. I mean you have no idea how much stress and what I personally have to go through to save $100k.
If you are over 50 like me very large downturns are a concern because they may not recover until decades later. But a 1-2% move is background noise.
Again it comes back to:
Do you want to participate in the market and have a good chance at growing your money long term vs letting it decrease slowly due to inflation?
Do you think you personally have the ability to time the market when decades of evidence shows even professionals can't?
If your answers are yes, then no, just roll with it. If the answers are different then you should rethink your investment strategy.
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Re: Lost $7000 today in ONE DAY!
A lot of pounding on, and a lot of ignoring the market.
I like a different approach:
Imagine the day that you're going to retire, decades down the line. Where do you think the market will be then compared to now. Higher? Lower? About the same? If you think it's going to be higher, buy or at least do nothing. If you don't think it will be higher, move your funds out of stocks and put it in bonds (lower risk/volatility) or Certificates of Deposit (essentially no risk/volatility).
Another approach I use:
Keep track of your investments on a graph. Not how much you add (you can do that, but it's not for this exercise), just the total. Add a point on the graph every month. Now when you look at the graph you see the peaks and falls over time and realize that the general trend is up. It gives you a perspective based on your real world investments that what happened this week is small potatoes compared to the last year/decade.
I like a different approach:
Imagine the day that you're going to retire, decades down the line. Where do you think the market will be then compared to now. Higher? Lower? About the same? If you think it's going to be higher, buy or at least do nothing. If you don't think it will be higher, move your funds out of stocks and put it in bonds (lower risk/volatility) or Certificates of Deposit (essentially no risk/volatility).
Another approach I use:
Keep track of your investments on a graph. Not how much you add (you can do that, but it's not for this exercise), just the total. Add a point on the graph every month. Now when you look at the graph you see the peaks and falls over time and realize that the general trend is up. It gives you a perspective based on your real world investments that what happened this week is small potatoes compared to the last year/decade.
Re: Lost $7000 today in ONE DAY!
Yes, for some reason there was a bull run on this thread, and the result was driving up replies.
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.
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Re: Lost $7000 today in ONE DAY!
Hi Alex GR -Alex GR wrote: ↑Thu Aug 17, 2017 8:39 pm Hi everyone,
I lost $7000 today in one day. My portfolio is below.
Ironically, I've just returned from a store where I was arguing with a cashier over 0.50 cents! Got home and saw that the portfolio went down by $7k...
Should I change the allocation if this kind of downswing bothers me?
The portfolio is 72/28 with 55% U.S. Stock, 28% U.S. Bond and 17% International Stock.
VOO Vanguard 500 Index Fund 32%
VOE Vanguard Mid-Cap Value ETF 5%
VBR Vanguard Small-Cap Value ETF 13%
POGRX PRIMECAP Odyssey Growth Fund 5%
BIV Vanguard Intermediate-Term Bond ETF 19%
PONDX PIMCO Income Fund Class D 9%
VXUS Vanguard Total International Stock ETF International 12%
VWO Vanguard FTSE Emerging Markets ETF International 2%
SFVLX Seafarer Overseas Value Fund International 3%
The most important decision an investor can make is asset allocation. That is the allocation between stocks, bonds, and perhaps cash. Asset Allocation is very personal and is based on each investors goals, timeframe, and tolerance for risk.
If you are upset about your investing portfolio declining $7,000 (technically you did not "lose" anything), then perhaps it is a good time to revisit your asset allocation.
Best.
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Lost $7000 today in ONE DAY!
Hi Alex GR -Alex GR wrote: ↑Thu Aug 17, 2017 8:39 pm Hi everyone,
I lost $7000 today in one day. My portfolio is below.
Ironically, I've just returned from a store where I was arguing with a cashier over 0.50 cents! Got home and saw that the portfolio went down by $7k...
Should I change the allocation if this kind of downswing bothers me?
The portfolio is 72/28 with 55% U.S. Stock, 28% U.S. Bond and 17% International Stock.
VOO Vanguard 500 Index Fund 32%
VOE Vanguard Mid-Cap Value ETF 5%
VBR Vanguard Small-Cap Value ETF 13%
POGRX PRIMECAP Odyssey Growth Fund 5%
BIV Vanguard Intermediate-Term Bond ETF 19%
PONDX PIMCO Income Fund Class D 9%
VXUS Vanguard Total International Stock ETF International 12%
VWO Vanguard FTSE Emerging Markets ETF International 2%
SFVLX Seafarer Overseas Value Fund International 3%
One addition item to note is the overall quantity of funds in your investment portfolio. There may be overlap and possibly advantages to consolidating such as cost and simplicity.
Jack Bogle has often noted that "simplicity is the master key to financial success"!
Best.
John C. Bogle: “Simplicity is the master key to financial success."
Re: Lost $7000 today in ONE DAY!
+1 therapists charge a lot of money for advice like this, and it's kind of what I went though in the beginning before being ok with the idea it's the long term plan that matters.MJW wrote: ↑Thu Aug 17, 2017 11:52 pmOkay. I'm not going to be overly dramatic about piling on here. Looks like that has already been taken care of several times over.
Let's try something, though. Feel however you feel about it. If it bothers you to see this type of drop, just accept that you're bothered by it and then do nothing. Next time it happens, take the same approach. And then the next time. Get used to being bothered by it but also recognize that it doesn't mean you need to do anything.
Try it for a while. If after some time you still feel like you just can't help yourself, then go with a less volatile portfolio and accept that you will probably have to save more from now on. Feeling lousy when seeing these drops may be the price you have to pay for achieving your financial goals later. Only you can decide whether it is worth it.
Or you can stop feeling lousy, but changing how you feel is much harder than changing what you do.
Re: Lost $7000 today in ONE DAY!
I also lost $7,000 yesterday. I giggled a bit at my good fortune, because today is payday, and therefore 401k contribution day.
You should have had a much bigger loss than this last year right after Brexit. I know I lost $22k that day. But my portfolio today is larger than the day before that drop....by about $135k.
You should have had a much bigger loss than this last year right after Brexit. I know I lost $22k that day. But my portfolio today is larger than the day before that drop....by about $135k.
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Re: Lost $7000 today in ONE DAY!
As Warren Buffett noted during the financial crisis "things are on sale".
John C. Bogle: “Simplicity is the master key to financial success."
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