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My only advice, since there are much smarter people on here than I will ever be when it comes to investing, know your pucker factor BEFORE investing and set your allocation accordingly no matter your age, and never invest with anyone who makes money telling you what they want you to invest in, such as your bankers or insurance agents.
My only advice, since there are much smarter people on here than I will ever be when it comes to investing, know your pucker factor BEFORE investing and set your allocation accordingly no matter your age, and never invest with anyone who makes money telling you what they want you to invest in, such as your bankers or insurance agents.
no one ever knows their pucker factor not only BEFORE INVESTING , but until they actually get caught in a downturn .
no one ever knows there pucker factor not only BEFORE INVESTING , but until they actually get caught in a downturn .
True, but they can ask themselves to think about how they'd feel if the stock portion of their portfolio fell by 50%. On a $200,000 investment in a 60:40 portfolio, that would be a $60,000 loss. if merely thinking of seeing $200,000 shrink to $140,000 gives the OP the willies, than the OP can be reasonably sure that a 60:40 ratio is too risky for him, and that in an actual bear market like 2008 where that level of decline is real he'd bolt and sell. Better to cut the stock ratio back until the imaginary loss feels bearable.
you really can't even ask yourself. seasoned investors thought they were rock solid in 2008 in their plan to stay the course .
the human brain reacts very differently when it is hypothetical vs real money .
in fact the same parts of the brain do not even come in to play when it is hypothetical vs for real . it was like all the new guys coming in to NAM were all gun ho and leaving as seasoned veterans beaten to a pulp mentally.
you really have no idea what you will do until it is crunch time for the first time.
no one ever knows their pucker factor not only BEFORE INVESTING , but until they actually get caught in a downturn .
You are likely correct as usual but in markets like today, a new investor has to have seen what recently happened and may continue to happen and therefore know approx what percentage they might we willing gamble with, hopefully for the short term, but they need to figure it out or maybe not put that part of their money into the market.
I had worked hard for my money, no one gave even a penny to me, so I knew I did not wish to lose much of it and I have faith that a lot of people have to be at least as knowledgeable as I am, based on what has been going on with markets this year alone and especially if they have been reading here what some of you sage investors post.
I think we have way too many people in today's society who are not used to losing at all, we saw that in the last election from some on the losing side and continue to see it in daily posts, IMO people like those maybe should never get into the market, as life is full of ups and downs and people need to learn to roll with the punches.
the human brain reacts very differently when it is hypothetical vs real money.
Which is why it's safe to assume that if a given hypothetical loss is already freaking a person out, an ACTUAL loss of that magnitude is going to cause them to bolt out of the market as fast as they can set up a sell order. It's not foolproof by any means, but I do think putting actual numbers on the potential level of loss instead of just percentages can help a novice investor get a more accurate feel for what's actually at stake. ("I could lose THAT MUCH?!!!") And that may help them avoid taking on more risk than they can handle.
(This makes me think of our old frenemy joetucker - did we need to see him actually dip his toe into the market to know his pucker factor was close to zero? Just the way he talked about potential losses made that abundantly clear!)
Which is why it's safe to assume that if a given hypothetical loss is already freaking a person out, an ACTUAL loss of that magnitude is going to cause them to bolt out of the market as fast as they can set up a sell order. It's not foolproof by any means, but I do think putting actual numbers on the potential level of loss instead of just percentages can help a novice investor get a more accurate feel for what's actually at stake. ("I could lose THAT MUCH?!!!") And that may help them avoid taking on more risk than they can handle.
(This makes me think of our old frenemy joetucker - did we need to see him actually dip his toe into the market to know his pucker factor was close to zero? Just the way he talked about potential losses made that abundantly clear!)
he did not really know his pucker factor , he was just anti investing . what a character he was , he just believed his own bull a bit to much .
i did do him a favor and walked his resume in to the company i worked for but he did not get hired .
well he was complaining how their was a lack of jobs and the unemployment numbers lie.
i sent jot a laundry list of positions available in the company i worked for in various states .
i told him i can not vouch for him in any way but i will walk the resume in .
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