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Started By
Message
Sage advice for younger investors?
Posted on 3/31/20 at 10:01 am
Posted on 3/31/20 at 10:01 am
By that I mean people who have started their careers and investing in the last 5-10 years.
I've been DCAing into diversified index funds via Vanguard and have seen virtually 3-4 years of gains wiped out in a matter of a couple of weeks. Long-term this has shaken my confidence in American businesses and it honestly feels like I'd have been better served stuffing all that money in a mattress.
I've been DCAing into diversified index funds via Vanguard and have seen virtually 3-4 years of gains wiped out in a matter of a couple of weeks. Long-term this has shaken my confidence in American businesses and it honestly feels like I'd have been better served stuffing all that money in a mattress.
7
Posted on 3/31/20 at 10:11 am to Boring
Here’s what Charlie Munger said in 2009 about how worried he may be watching his stocks fall by 50%.
quote:
“This is the third time that Warren and I have seen our holdings of Berkshire go down, top tick to bottom tick, by 50%. I think it’s in the nature of long-term shareholding, of the normal vicissitudes in worldly outcomes and markets that the long-term holder has his quoted value of his stock go down by say 50%.
In fact you could argue that if you are not willing to react with equanimity to a market price decline of 50% 2-3 times a century, you are not fit to be a common shareholder and you deserve the mediocre result that you are going to get, compared to the people who do have the temperament who can be more philosophical about these market fluctuations.”
Posted on 3/31/20 at 10:14 am to Boring
“Time in the market” is more important than “timing the market.”
Over a working life of 30 to 50 years, there will be market ups and downs of 30-50% during a given year.
Stay the course for now, but recognize that trees do not grow to the sky. Also understand that IF the underlying business that a stock you own is still relevant, you are getting a bargain. It may take awhile, but buying low is what you want.
I’m 55, I still have a lot of equity investments. There is time for things to come back.
My mom, OTOH, needs cash now. I had 10 years worth of expenses in cash for her as of 1 January 2020. I have added some equities to her accounts the last two weeks without putting all of her money at risk.
Over a working life of 30 to 50 years, there will be market ups and downs of 30-50% during a given year.
Stay the course for now, but recognize that trees do not grow to the sky. Also understand that IF the underlying business that a stock you own is still relevant, you are getting a bargain. It may take awhile, but buying low is what you want.
I’m 55, I still have a lot of equity investments. There is time for things to come back.
My mom, OTOH, needs cash now. I had 10 years worth of expenses in cash for her as of 1 January 2020. I have added some equities to her accounts the last two weeks without putting all of her money at risk.
Posted on 3/31/20 at 10:46 am to Boring
quote:
Be fearful when others are greedy and greedy when others are fearful
-Warren Buffett
This post was edited on 3/31/20 at 11:57 am
Posted on 3/31/20 at 10:49 am to gpburdell
Don't be stupid, buy more on another dip.
Me
Me
Posted on 3/31/20 at 10:53 am to Boring
Buy into the market as soon and often as you can.
Posted on 3/31/20 at 10:57 am to Boring
I had just started working a real job out of college in 2000 and watched my precollege and first year of real money get wiped out in 2000-2001. Then again in 2008 saw it take a hit, and now again in 2020.
Only advice I can give is stay the course it worked for me the two other dips I’m gonna ride this one out as well...
Only advice I can give is stay the course it worked for me the two other dips I’m gonna ride this one out as well...
Posted on 3/31/20 at 10:57 am to Boring
quote:
Long-term this has shaken my confidence in American businesses and it honestly feels like I'd have been better served stuffing all that money in a mattress.
Between dividends and growth in 3-4 years your investments are absolutely worth more then simply putting them in a mattress. Yes, there is risk there without a doubt.
Posted on 3/31/20 at 11:08 am to gpburdell
One of the greatest market quotes ever.
I'll add to it that it's a good idea to always keep some cash available so that you can be greedy when others are fearful. Cash is also a position.
I'll add to it that it's a good idea to always keep some cash available so that you can be greedy when others are fearful. Cash is also a position.
Posted on 3/31/20 at 11:40 am to Boring
I've been at this a lot longer than 5-10 years. The challenge is if a 401k or other is your only means of investing and you don't have readily available excess cash how much does a downturn help you if you don't have funds to invest? If it is something you are really concerned about then you could shift to more of a balanced portfolio when markets get extremely high which would give you the capacity to buy additional equity when there is a significant down turn. If you have less than 100k in a 401k your contributions make much more of an impact than the market return. What's not fun is having multiple 7's, your holdings go down 7 figures in a down turn and although it is relatively small percentage paper loss it is still a bit unnerving. That's the bad side of assets that can be priced by the second compared to real estate, etc. I granted rent relief to a commercial tenant last week, times are very challenging for some. If you are employed you are still in the game and should keep contributing to your investments.
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