4 ms·

Ask HN: What to do when the stock market falls like this?

cercatrova 5y ago
Do nothing.
troydavis 5y ago
Nothing. 40%-50% drops (ie, far larger corrections than we’ve seen so far) are part of owning equities. They’re rare but they happen - and will happen again. And 30% drops aren’t even all that rare (https://money.com/stock-market-correction-chart/ https://money.com/stock-market-correction-chart/). The possibility - some might say near-certainty - of a 40-50% drop at some point is why few people have the stomach for a 100% equity portfolio.
moasda 5y ago
Buy more stocks if you have some money left for investments.
gregjor 5y ago
Buy Tether. It's on sale right now.
- Nextgrid 5y ago
  The risk is that it's going to turn into a closing down/clearance sale.
  - HarryHirsch 5y ago
    s/risk/hope. Bitcoin is a manipulable object of speculation - what purpose does such a thing even have?
HarryHirsch 5y ago
Buy real estate - the general public is too heavily invested in that unproductive sector of the economy. Concrete gold dropping in value is a political impossibility. (That fact also explains why the US is so screwed.)
- anovikov 5y ago
  It could be a good hedge... but not main investment. Real estate always loses against stocks even mid-term let alone long term. It is also a viable asset class only for billionaires because for everyone else, a particular house bought makes too high a fraction of their portfolio (it's like keeping all your money in only a few stocks, called stock picking, and is not advisable).
  - HarryHirsch 5y ago
    it's like keeping all your money in only a few stocks, called stock picking, and is not advisable That's the other cause of the general fuckedness - algorithmic investment. No one has skin in the game any longer, long-term investment is no longer a possibility.
stevespang 5y ago
raxxorraxor 5y ago
Buying more shares and hope we are already at the minimum. Otherwise I wouldn't do anything and wait.
incomingpain 5y ago
The first question you should have 'is the future here'? In 10 years do you predict your current country will be back to rockin it. Everything will be just fine? If yes then no reason to sell. Timing the market, selling now, hoping to buy at the bottom is never something that works. That huge profit margin in hindsight is such a lottery in practice. Though buying during the dip can be quite beneficial. If no to the above question, you expect your country to be a shitshow. What are you doing staying? Stock market isnt the question, why would you stay if you expect problems? Go find a better place to live. Your stocks aren't a primary concern.
deleted 5y ago
[deleted]
llampx 5y ago
Don’t wait for the storm to pass; dance in the rain.
- simonebrunozzi 5y ago
  Nice one you did here :)
dredmorbius 5y ago
Assess your investing strategy, goals, timeline, and position. Can you meet current cash obligations? Can you do so for the forseable future? You have little to worry about. If you cannot, then look to reduce expenses, increase income, take on debt, or liquidate securities as a last measure to do so. Investing is like navigating an oil tanker. Responses to inputs are slow, the planning horizon is distant, but mistakes can still be exceedingly catastrophic. Usually you don't want to make sudden movements. Occasionally your hand is forced. You goal first and foremost is to avoid those circumstances. Look at your asset distribution. Most people should not be 100% in on equities, though the number who are is ... surprisingly high. Many are stubbornly resistant to suggestions to change this distribution, even at points in their investment career where they really should be reducing risks. One of the classic problems in investing generally is that a sufficiently large market drop can take out otherwise solid investments, as those who'd either leveraged positions elsewhere or rely on balance sheets for other investments find that they are short on cash. If what you need is cash, then what you sell is everything, no matter how low the price. John Kenneth Galbraith's The Great Crash: 1929 covers this and numerous other elements of financial crises in clear and piercing detail. The book is a short and excellent read. Another element of investing is that the well-capitalised, reasonably-hedged invstor tends to have a greater capacity to weather volatile markets than smaller investors. This tends to result in a transfer of wealth from less to more wealthy, which can ultimately be problematic. And, especially if you're early in your career, though I'd argue this applies at all ages, look to pensions reform. The notion that individuals presuming market knowledge and absorbing both independent and long-term secular risk is the most sensible way to provide for old-age support is proving to be desperately false, and will be among the largest crises many developed countries face in the next 50 years, with many seeing serious strains now. Corporate pensions made sense in an era of lifetime employment. That world no longer exists. But a new set of institutions which takes on and manages that risk is necessary. This will be a major political battle, and many will suffer tremendously.
streetcat1 5y ago
Short the market - SQQQ.

Do nothing.

Nothing. 40%-50% drops (ie, far larger corrections than we’ve seen so far) are part of owning equities. They’re rare but they happen - and will happen again. And 30% drops aren’t even all that rare (https://money.com/stock-market-correction-chart/ https://money.com/stock-market-correction-chart/). The possibility - some might say near-certainty - of a 40-50% drop at some point is why few people have the stomach for a 100% equity portfolio.

moasda 5y ago

Buy more stocks if you have some money left for investments.

gregjor 5y ago

Buy Tether. It's on sale right now.

Nextgrid 5y ago
The risk is that it's going to turn into a closing down/clearance sale.
- HarryHirsch 5y ago
  s/risk/hope. Bitcoin is a manipulable object of speculation - what purpose does such a thing even have?

HarryHirsch 5y ago

Buy real estate - the general public is too heavily invested in that unproductive sector of the economy. Concrete gold dropping in value is a political impossibility. (That fact also explains why the US is so screwed.)

anovikov 5y ago
It could be a good hedge... but not main investment. Real estate always loses against stocks even mid-term let alone long term. It is also a viable asset class only for billionaires because for everyone else, a particular house bought makes too high a fraction of their portfolio (it's like keeping all your money in only a few stocks, called stock picking, and is not advisable).
- HarryHirsch 5y ago
  it's like keeping all your money in only a few stocks, called stock picking, and is not advisable That's the other cause of the general fuckedness - algorithmic investment. No one has skin in the game any longer, long-term investment is no longer a possibility.

stevespang 5y ago

raxxorraxor 5y ago

Buying more shares and hope we are already at the minimum. Otherwise I wouldn't do anything and wait.

incomingpain 5y ago

The first question you should have 'is the future here'? In 10 years do you predict your current country will be back to rockin it. Everything will be just fine? If yes then no reason to sell. Timing the market, selling now, hoping to buy at the bottom is never something that works. That huge profit margin in hindsight is such a lottery in practice. Though buying during the dip can be quite beneficial. If no to the above question, you expect your country to be a shitshow. What are you doing staying? Stock market isnt the question, why would you stay if you expect problems? Go find a better place to live. Your stocks aren't a primary concern.

deleted 5y ago

[deleted]

llampx 5y ago

Don’t wait for the storm to pass; dance in the rain.

simonebrunozzi 5y ago
Nice one you did here :)

dredmorbius 5y ago

Assess your investing strategy, goals, timeline, and position. Can you meet current cash obligations? Can you do so for the forseable future? You have little to worry about. If you cannot, then look to reduce expenses, increase income, take on debt, or liquidate securities as a last measure to do so. Investing is like navigating an oil tanker. Responses to inputs are slow, the planning horizon is distant, but mistakes can still be exceedingly catastrophic. Usually you don't want to make sudden movements. Occasionally your hand is forced. You goal first and foremost is to avoid those circumstances. Look at your asset distribution. Most people should not be 100% in on equities, though the number who are is ... surprisingly high. Many are stubbornly resistant to suggestions to change this distribution, even at points in their investment career where they really should be reducing risks. One of the classic problems in investing generally is that a sufficiently large market drop can take out otherwise solid investments, as those who'd either leveraged positions elsewhere or rely on balance sheets for other investments find that they are short on cash. If what you need is cash, then what you sell is everything, no matter how low the price. John Kenneth Galbraith's The Great Crash: 1929 covers this and numerous other elements of financial crises in clear and piercing detail. The book is a short and excellent read. Another element of investing is that the well-capitalised, reasonably-hedged invstor tends to have a greater capacity to weather volatile markets than smaller investors. This tends to result in a transfer of wealth from less to more wealthy, which can ultimately be problematic. And, especially if you're early in your career, though I'd argue this applies at all ages, look to pensions reform. The notion that individuals presuming market knowledge and absorbing both independent and long-term secular risk is the most sensible way to provide for old-age support is proving to be desperately false, and will be among the largest crises many developed countries face in the next 50 years, with many seeing serious strains now. Corporate pensions made sense in an era of lifetime employment. That world no longer exists. But a new set of institutions which takes on and manages that risk is necessary. This will be a major political battle, and many will suffer tremendously.

streetcat1 5y ago

Short the market - SQQQ.