5 ms·

> Market is collapsing. If you are not retired, then markets being down are a good thing, because everything is "on sale" / at 'discounted' prices. At least fo

> Market is collapsing. If you are not retired, then markets being down are a good thing, because everything is "on sale" / at 'discounted' prices. At least for the US† (S&P 500, NASDAQ, Russel 2000), the historical 1-, 3-, 5-, and 10-year returns after a 25% drop are quite good: * https://awealthofcommonsense.com/2022/10/getting-long-term-bullish/ https://awealthofcommonsense.com/2022/10/getting-long-term-b... If you've been foolish enough to cash out—which should really never been done by 'retail investors': * https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/ https://awealthofcommonsense.com/2014/02/worlds-worst-market... You should really start making regular contributions to get back in. You should always be fully invested: having cash on the side long-term is generally not a good investment. Even if you new ahead of time when the dips in the market would occur—which is impossible—it's still better to do regular contributions: * https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-cost-averaging/ https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co... If you try to be clever and skip the worst days in the market, you also tend miss the best days: * https://theirrelevantinvestor.com/2019/02/08/miss-the-worst-days-miss-the-best-days/ https://theirrelevantinvestor.com/2019/02/08/miss-the-worst-... At the end of the, there is only one piece of advice that average retail investors (saving for retirement) should follow: * https://ofdollarsanddata.com/just-keep-buying/ https://ofdollarsanddata.com/just-keep-buying/ As for myself: I have no idea if I'm down, or by how much, since I haven't logged into my brokerage/trading account since January when I topped it up for the new year; almost all of my investments are automated so I don't need to see/touch things. I have several decades until retirement, so why worry about what happens of the course of a single year? † I'm in Canada.

theknocker 4y ago
tmn 4y ago
Cash the side line has been a great allocation for this whole year. As the mantra goes, don’t fight the fed.
- throw0101c 4y ago
  The problem is getting out before things drop, and getting back in when the drop is "over": * https://awealthofcommonsense.com/2018/10/the-psychology-of-sitting-in-cash-part-deux/ https://awealthofcommonsense.com/2018/10/the-psychology-of-s... By sitting in cash you're also losing money through inflation: * https://ofdollarsanddata.com/the-cost-of-waiting/ https://ofdollarsanddata.com/the-cost-of-waiting/ At the end of the day you should always be invested, and if you're worried about market undulations then you should own some bonds. And besides reducing gyrations, bonds give another advantage: a source of 'dry powder'. If stocks get "too high" you rebalance by selling off some equities and buying bonds to 'lock in' the returns. When stocks drop you rebalance again by selling off bonds and 'buying low' in equities. Bonds/diversification can really help returns: * https://www.forbes.com/sites/investor/2010/12/17/the-lost-decade-was-a-golden-age-if-you-rebalanced/ https://www.forbes.com/sites/investor/2010/12/17/the-lost-de... At least in Canada you can get "all-in-one" ETFs that do this rebalancing automatically: * https://www.youngandthrifty.ca/picking-the-best-all-in-one-etfs-canada/ https://www.youngandthrifty.ca/picking-the-best-all-in-one-e...
  - dragontamer 4y ago
    > By sitting in cash you're also losing money through inflation: Also by sitting in Stocks, you not only lost 20% this year, but also 9% due to inflation for a total loss of ~30%+. Cash is cash. It gets the job done. I'm not saying go 100% cash btw, but it has its place in this time of uncertainty. You cannot buy the dip if you're 100% invested, you have to be holding cash. --------- I suggest holding 10% cash and rebalancing as needed. As the market goes up, you naturally sell stocks for more cash. As the market goes down, you naturally sell cash to buy more stock. This stabilizes the portfolio significantly.
    - quesera 4y ago
      > Also by sitting in Stocks, you not only lost 20% this year, but also 9% due to inflation for a total loss of ~30%+. But if you sold the stocks, you would have taken an immediate tax hit of ~20-35%, and you would have to time the bottom to get back in. So, it's not at all clear that getting out makes sense. Depends on the depth of the decline, and that is unknowable.
SnowHill9902 4y ago
No good if you are not liquid.
xupybd 4y ago
I started investing during this downturn. I'm investing for 30 years. Either this is the end of the world as we know it and my money is going to be worthless or it'll be fine over 30 years.
esalman 4y ago
Any advice for those who are retiring?
- voisin 4y ago
  Don’t. Wait for a few more years to see how inflation and interest rates and your portfolio goes. Retirement now is a massive gamble as major variables affecting your entire retirement plan are a complete lottery right now.
ky5 4y ago
blockwriter 4y ago
It’s only on sale for those that are liquid enough to buy. Presumably, being down 90% means stocks really aren’t on sale for the original poster.

theknocker 4y ago

tmn 4y ago

Cash the side line has been a great allocation for this whole year. As the mantra goes, don’t fight the fed.

throw0101c 4y ago
The problem is getting out before things drop, and getting back in when the drop is "over": * https://awealthofcommonsense.com/2018/10/the-psychology-of-sitting-in-cash-part-deux/ https://awealthofcommonsense.com/2018/10/the-psychology-of-s... By sitting in cash you're also losing money through inflation: * https://ofdollarsanddata.com/the-cost-of-waiting/ https://ofdollarsanddata.com/the-cost-of-waiting/ At the end of the day you should always be invested, and if you're worried about market undulations then you should own some bonds. And besides reducing gyrations, bonds give another advantage: a source of 'dry powder'. If stocks get "too high" you rebalance by selling off some equities and buying bonds to 'lock in' the returns. When stocks drop you rebalance again by selling off bonds and 'buying low' in equities. Bonds/diversification can really help returns: * https://www.forbes.com/sites/investor/2010/12/17/the-lost-decade-was-a-golden-age-if-you-rebalanced/ https://www.forbes.com/sites/investor/2010/12/17/the-lost-de... At least in Canada you can get "all-in-one" ETFs that do this rebalancing automatically: * https://www.youngandthrifty.ca/picking-the-best-all-in-one-etfs-canada/ https://www.youngandthrifty.ca/picking-the-best-all-in-one-e...
- dragontamer 4y ago
  > By sitting in cash you're also losing money through inflation: Also by sitting in Stocks, you not only lost 20% this year, but also 9% due to inflation for a total loss of ~30%+. Cash is cash. It gets the job done. I'm not saying go 100% cash btw, but it has its place in this time of uncertainty. You cannot buy the dip if you're 100% invested, you have to be holding cash. --------- I suggest holding 10% cash and rebalancing as needed. As the market goes up, you naturally sell stocks for more cash. As the market goes down, you naturally sell cash to buy more stock. This stabilizes the portfolio significantly.
  - quesera 4y ago
    > Also by sitting in Stocks, you not only lost 20% this year, but also 9% due to inflation for a total loss of ~30%+. But if you sold the stocks, you would have taken an immediate tax hit of ~20-35%, and you would have to time the bottom to get back in. So, it's not at all clear that getting out makes sense. Depends on the depth of the decline, and that is unknowable.

SnowHill9902 4y ago

No good if you are not liquid.

xupybd 4y ago

I started investing during this downturn. I'm investing for 30 years. Either this is the end of the world as we know it and my money is going to be worthless or it'll be fine over 30 years.

esalman 4y ago

Any advice for those who are retiring?

voisin 4y ago
Don’t. Wait for a few more years to see how inflation and interest rates and your portfolio goes. Retirement now is a massive gamble as major variables affecting your entire retirement plan are a complete lottery right now.

ky5 4y ago

blockwriter 4y ago

It’s only on sale for those that are liquid enough to buy. Presumably, being down 90% means stocks really aren’t on sale for the original poster.