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How does this fine tune your perspective? Often small drops are followed by more small drops, if it falls by the same amount once per week for 16 weeks should

How does this fine tune your perspective? Often small drops are followed by more small drops, if it falls by the same amount once per week for 16 weeks should we still not be concerned? Fine tuned for what?

koakuma-chan 1y ago
What if it failed for 16 weeks? Would you sell? I think it's better to just ignore this.
- techblueberry 1y ago
  There are other impacts from the stock market falling outside of the size of your bag. Would I sell? No, would I call my family members to make sure they don't need help, or see if they’re concerned about losing their job? Yes,
andsoitis 1y ago
> , if it falls by the same amount once per week for 16 weeks should we still not be concerned? Correct, you should not be concerned. Time in market is more important than timing the market. Remember that when the market falls, you have not lost money, not unless you sell. You may even judge it to be a good buying opportunity since you might assess the new lower price to be more reasonable. Over time, a diversified portfolio will expand in value due to compounding, unless you are not a believer that the future will be better than the past. Take a look again at the charts - they spell it out clearly.
- SeanAnderson 1y ago
  "Remember that when the market falls, you have not lost money, not unless you sell." This is such a bad take, lol. It's a thing meme traders say to cope. You absolutely have lost money. You haven't realized the losses, but you are definitely poorer and should re-evaluate your risk tolerances based on your current worth. You can take loans out using your stock portfolio as collateral. In attempting to do so, as you speak to a bank, they aren't judging you based on your initial capital investment. They're looking at the current valuation of your portfolio - unrealized gains/losses taken into consideration. That makes your current worth very real and tangible without needing to actually realize the gains/losses. If taxes didn't occur when you realized gains/losses then people would stop saying this phrase. It's just something said to try and prevent anxiousness from increasing your tax burden. Fundamentally, you lose/gain money whenever the things you own change value.
  - AaronAPU 1y ago
    This reasoning only makes sense if you weren’t already investing under the assumption of minor and major swings occurring.
  - andsoitis 1y ago
    > You absolutely have lost money. My point is the if you sell, you realize the loss. If you stay put, it will very likely be recovered AND have grown in time. Do you disagree?
    - darkfloo 1y ago
      Yes , this is fundamentally an incomplete view , Japan index peaked in 1989 before peaking in again this year, if you bought at the peak it would have taken you 35 years to recover your money. Past performance is not indicative of future performance
    - SeanAnderson 1y ago
      I agree that, over a long enough timespan, human innovation is the key driving factor of the overall growth of the stock market and that maximizing exposure to this is the most reliable way to increase wealth. There's absolutely no guarantees other than that. Yesterday's dip could be the start of the United States' "lost decade." The market could mirror the performance of the Nikkei 225's last 35 years where everyone is underwater for over a generation. The recent overperformance of the US tech market is an exceptional scenario. People should not be encouraged to believe that if they buy into an exceptional scenario, and continue to blindly hold as their investments go underwater, that it's a sure thing that they will have more money at the time they are forced to exercise for life events. Especially in a time where many investors aren't picking broad, overarching index stocks.
      - deleted 1y ago
        [deleted]
      - andsoitis 1y ago
        The problem is you cannot know the future, so you need to make a bet. What do you bet?
- Esophagus4 1y ago
  > Time in market is better than timing the market There’s a fun simulation to illustrate this - for those who think they know better, I encourage you to try it: https://personalfinanceclub.com/time-the-market-game/ https://personalfinanceclub.com/time-the-market-game/
mikeocool 1y ago
Zoom out further
- techblueberry 1y ago
  When I zoom out all the way, I see lots of times when people lost their life or retirement savings at an age it was inconvenient to do so. Like I literally don’t get what the original person was trying to say. Yes, if you’re perpetually holding for the long term nothing really matters.
  - andsoitis 1y ago
    > I see lots of times when people lost their life or retirement savings at an age it was inconvenient to do so. It is very true that it can be very very difficult for someone to absorb a drop in the market when they need that cash, like the case you mentioned. I also assume that there are many people who have been bitten by this. However, I have never seen data to suggest that statistically it is worse to be in the market because most people are likely to be hit by a huge drop that wipes out all their retirement savings and so they become destitute. I’m sure there are cases like that, but it is extreme and I would bet a minority of cases. Most people follow the advice of gradually shifting your portfolio to debt and away from equities as you age, to reduce this risk.

koakuma-chan 1y ago

What if it failed for 16 weeks? Would you sell? I think it's better to just ignore this.

techblueberry 1y ago
There are other impacts from the stock market falling outside of the size of your bag. Would I sell? No, would I call my family members to make sure they don't need help, or see if they’re concerned about losing their job? Yes,

andsoitis 1y ago

> , if it falls by the same amount once per week for 16 weeks should we still not be concerned? Correct, you should not be concerned. Time in market is more important than timing the market. Remember that when the market falls, you have not lost money, not unless you sell. You may even judge it to be a good buying opportunity since you might assess the new lower price to be more reasonable. Over time, a diversified portfolio will expand in value due to compounding, unless you are not a believer that the future will be better than the past. Take a look again at the charts - they spell it out clearly.

SeanAnderson 1y ago
"Remember that when the market falls, you have not lost money, not unless you sell." This is such a bad take, lol. It's a thing meme traders say to cope. You absolutely have lost money. You haven't realized the losses, but you are definitely poorer and should re-evaluate your risk tolerances based on your current worth. You can take loans out using your stock portfolio as collateral. In attempting to do so, as you speak to a bank, they aren't judging you based on your initial capital investment. They're looking at the current valuation of your portfolio - unrealized gains/losses taken into consideration. That makes your current worth very real and tangible without needing to actually realize the gains/losses. If taxes didn't occur when you realized gains/losses then people would stop saying this phrase. It's just something said to try and prevent anxiousness from increasing your tax burden. Fundamentally, you lose/gain money whenever the things you own change value.
- AaronAPU 1y ago
  This reasoning only makes sense if you weren’t already investing under the assumption of minor and major swings occurring.
- andsoitis 1y ago
  > You absolutely have lost money. My point is the if you sell, you realize the loss. If you stay put, it will very likely be recovered AND have grown in time. Do you disagree?
  - darkfloo 1y ago
    Yes , this is fundamentally an incomplete view , Japan index peaked in 1989 before peaking in again this year, if you bought at the peak it would have taken you 35 years to recover your money. Past performance is not indicative of future performance
  - SeanAnderson 1y ago
    I agree that, over a long enough timespan, human innovation is the key driving factor of the overall growth of the stock market and that maximizing exposure to this is the most reliable way to increase wealth. There's absolutely no guarantees other than that. Yesterday's dip could be the start of the United States' "lost decade." The market could mirror the performance of the Nikkei 225's last 35 years where everyone is underwater for over a generation. The recent overperformance of the US tech market is an exceptional scenario. People should not be encouraged to believe that if they buy into an exceptional scenario, and continue to blindly hold as their investments go underwater, that it's a sure thing that they will have more money at the time they are forced to exercise for life events. Especially in a time where many investors aren't picking broad, overarching index stocks.
    - deleted 1y ago
      [deleted]
    - andsoitis 1y ago
      The problem is you cannot know the future, so you need to make a bet. What do you bet?
Esophagus4 1y ago
> Time in market is better than timing the market There’s a fun simulation to illustrate this - for those who think they know better, I encourage you to try it: https://personalfinanceclub.com/time-the-market-game/ https://personalfinanceclub.com/time-the-market-game/

mikeocool 1y ago

Zoom out further

techblueberry 1y ago
When I zoom out all the way, I see lots of times when people lost their life or retirement savings at an age it was inconvenient to do so. Like I literally don’t get what the original person was trying to say. Yes, if you’re perpetually holding for the long term nothing really matters.
- andsoitis 1y ago
  > I see lots of times when people lost their life or retirement savings at an age it was inconvenient to do so. It is very true that it can be very very difficult for someone to absorb a drop in the market when they need that cash, like the case you mentioned. I also assume that there are many people who have been bitten by this. However, I have never seen data to suggest that statistically it is worse to be in the market because most people are likely to be hit by a huge drop that wipes out all their retirement savings and so they become destitute. I’m sure there are cases like that, but it is extreme and I would bet a minority of cases. Most people follow the advice of gradually shifting your portfolio to debt and away from equities as you age, to reduce this risk.