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> , 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 i

> , 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?
      - SeanAnderson 1y ago
        You bet that it becomes increasingly likely to regress to the mean as prices diverge and step in/out as you factor those odds into your bet. The solution isn't binary. You don't have to be fully exposed/unexposed to the market all the time.
        andsoitis 1y ago
- username332211 1y ago
  > 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. They say long ago somewhere far away an astrologer managed to cause a panic by predicting a devastating volcano. People didn't just flee, they sold their homes for nothing, because they were convinced their homes would be under 3 feet of lava soon. And that brings us to the key question - is your home worth less, just because everyone on the same streat is selling their houses for pennies? Isn't the opinion of the USGS slightly more important than the opinions of the real estate market?
  - SeanAnderson 1y ago
    Are your tulips worth less if you bought them in 1636 or were they fairly priced and we're just still waiting on the market to come back to rationality? It's easy to say that the homes were undervalued in that situation with hindsight. If disaster had actually struck then those prices seem fair. Clearly some people sold their houses just before Pompeii and made out like bandits. Yes, you can apply a rationale mindset to things and use statistics-based inferences to try and calculate what the "real" value of something is rather than what the current, "market-based" value is and, more often than not, that's likely to serve you better, but black swan events still occur plentifully over a human's lifespan and those events are incredibly difficult to factor in when you need to optimize your wealth for practical usability over a couple of decades.
    - andsoitis 1y ago
      > Are your tulips worth less if you bought them in 1636 or were they fairly priced and we're just still waiting on the market to come back to rationality? When you’re broadly invested in the market (diversified portfolio), you’re basically saying to yourself that you are optimistic that the future will be better than today. There will be more prosperity, more peace, more human flourishing. If you believe those things, then it is rational to be invested. If, on the other hand, you believe the future is doomed, then I supposed it could make sense to withdraw all your money in a defensive move and, I dunno, do something else with it. I know which path I choose.
- theptip 1y ago
  It’s a useful intuition pump for value investment (check out Benjamin Graham), it pre-dates meme trading. Due to loss aversion humans are irrational about negative price movements, so you need some cognitive strategy to counteract. Here’s one example: if you have a 401k, CD, bond, or investment fund your investment is illiquid for some lockup period. Therefore you don’t have to mark-to-market every day. As a matter of accounting facts, you are not forced to book the loss in this scenario.
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/

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?
    - SeanAnderson 1y ago
      You bet that it becomes increasingly likely to regress to the mean as prices diverge and step in/out as you factor those odds into your bet. The solution isn't binary. You don't have to be fully exposed/unexposed to the market all the time.
      - andsoitis 1y ago
username332211 1y ago
> 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. They say long ago somewhere far away an astrologer managed to cause a panic by predicting a devastating volcano. People didn't just flee, they sold their homes for nothing, because they were convinced their homes would be under 3 feet of lava soon. And that brings us to the key question - is your home worth less, just because everyone on the same streat is selling their houses for pennies? Isn't the opinion of the USGS slightly more important than the opinions of the real estate market?
- SeanAnderson 1y ago
  Are your tulips worth less if you bought them in 1636 or were they fairly priced and we're just still waiting on the market to come back to rationality? It's easy to say that the homes were undervalued in that situation with hindsight. If disaster had actually struck then those prices seem fair. Clearly some people sold their houses just before Pompeii and made out like bandits. Yes, you can apply a rationale mindset to things and use statistics-based inferences to try and calculate what the "real" value of something is rather than what the current, "market-based" value is and, more often than not, that's likely to serve you better, but black swan events still occur plentifully over a human's lifespan and those events are incredibly difficult to factor in when you need to optimize your wealth for practical usability over a couple of decades.
  - andsoitis 1y ago
    > Are your tulips worth less if you bought them in 1636 or were they fairly priced and we're just still waiting on the market to come back to rationality? When you’re broadly invested in the market (diversified portfolio), you’re basically saying to yourself that you are optimistic that the future will be better than today. There will be more prosperity, more peace, more human flourishing. If you believe those things, then it is rational to be invested. If, on the other hand, you believe the future is doomed, then I supposed it could make sense to withdraw all your money in a defensive move and, I dunno, do something else with it. I know which path I choose.
theptip 1y ago
It’s a useful intuition pump for value investment (check out Benjamin Graham), it pre-dates meme trading. Due to loss aversion humans are irrational about negative price movements, so you need some cognitive strategy to counteract. Here’s one example: if you have a 401k, CD, bond, or investment fund your investment is illiquid for some lockup period. Therefore you don’t have to mark-to-market every day. As a matter of accounting facts, you are not forced to book the loss in this scenario.

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/