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7% drop in one week. Government shutdown, again. In hindsight the worst thing to do in 2008 was panic and sell. Just wait 10 years, and you will be good. I panicked then and moved my 401(k) to one-third cash as an insurance policy against catastrophic failure. Helped me sleep at night.
this is why stocks are a long term investment . all these returns we get all include them over the long haul and all magically end within about 2% of each other in average return .
think about what went through our heads in 1987 when markets fell 26% in one afternoon .
irrelevant... all that means is while the stock is falling every payment has another 7% taken off the share price deepening the decline of the stock . it is no different than taking the same 7% draw out of a portfolio by selling some shares . that dividend is the company selling a piece of your share price and handing it to you .
a dividend is not like interest . if it was it would be like giving you the interest , but subtracting it off your balance . all interest going forward would be on that lowered balance . interest is on top of principal with no offset in value . dividends are a pocket swap of existing value .
your total return is what counts . that is all your investment is worth .
Last edited by mathjak107; 12-22-2018 at 02:38 AM..
How much making America great again can we stand? Trump likes to take the bows for the stock market when it’s successful let’s see how this con man blames someone else for it’s drop! I’ve never seen such a baby as president. He said he would take the blame for the shut down too. I know he is going to blame the Democrats for something. He has the mind of a child.
7% drop in one week. Government shutdown, again. In hindsight the worst thing to do in 2008 was panic and sell. Just wait 10 years, and you will be good. I panicked then and moved my 401(k) to one-third cash as an insurance policy against catastrophic failure. Helped me sleep at night.
You have to be your own judge. I try to balance risk versus max return. Historically, I pulled out a large chunk out of the market right before the 2016 election because everyone said a trump election would destroy the market and I thought he was going to win even though I thought his policies would benefit the economy and market....so I listened to others and it cost me a bit. I ended up getting back in the second day after the election and rode the Trump Bump.
I also got spooked with the impending Blue Wave and pulled a chunk out in September 2018 so I have avoided a good portion of the drop.
All of the above to say, follow good principles of safety and risk management and make your own calls. Also, historically, every time I've listened to "experts", I've done worse than when I've made my own calls.
people have to keep things in perspective too . it is like more aggressive models fell from balances that were so much higher that even in the worst drop would they still likely would be a head of the more conservative models .
with the 17-22% drop from the highs the markets had depending on index , the difference ytd between the fidelity insight 100% equity growth model and the 21% equity conservative income model , is the 100% equity model is down just 4.40% more .
but that is down to a balance , that the conservative model would still have not seen in the best year .
You have to be your own judge. I try to balance risk versus max return. Historically, I pulled out a large chunk out of the market right before the 2016 election because everyone said a trump election would destroy the market and I thought he was going to win even though I thought his policies would benefit the economy and market....so I listened to others and it cost me a bit. I ended up getting back in the second day after the election and rode the Trump Bump.
I also got spooked with the impending Blue Wave and pulled a chunk out in September 2018 so I have avoided a good portion of the drop.
All of the above to say, follow good principles of safety and risk management and make your own calls. Also, historically, every time I've listened to "experts", I've done worse than when I've made my own calls.
You're my hero. Seriously. I am so weary of the people who say, "JUST HOLD ON! The market will come back!"
Yeah, I'm 60 years old. Will it take 10 years?
Meanwhile, the "professionals' advice" has been a mess. Just a hot mess. I listened to them in the beginning and had some significant losses. Now I follow my heart, and am doing much better.
I sold out a few weeks ago and am so grateful that I did. I'm hanging on to a few things just for sport, but until the market calms down, I'm staying in CDs.
Helps me sleep at night.
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