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> Market is collapsing. If you are not retired, then markets being down are a good thing, because everything is "on sale" / at 'discounted' prices. At least for the US† (S&P 500, NASDAQ, Russel 2000), the historical 1-, 3-, 5-, and 10-year returns after a 25% drop are quite good: * https://awealthofcommonsense.com/2022/10/getting-long-term-b... If you've been foolish enough to cash out—which should really never been…
Are you in Europe or the States? The two areas have vastly different economic outlooks. The outlook in the US can best be described as "uncertain". Valuations are down because the market doesn't like uncertainty, but it doesn't necessarily translate into a future recession -- many of the economic indicators in the US are very positive. OTOH, Europe is facing a hard winter unless an energy miracle appears. The market…
What are you referring to as being positive? .i.e. nonfarm payroll growth is not good at this point.
The most predictive indicator is the unemployment ratio, and it's very low right now.
Perhaps inflation is a better predictive indicator, but we really don't know since we haven't had any for ~40 years. As I said, it's the uncertainty depressing markets IMO, not necessarily the outlook.
I have lost about 95% of my liquid net worth this year, due to hubris, basically. The first half of 2022 for me was waking up every morning and feeling like puking a little as I get more under water, closer to that margin call, plunging through my stops.
After almost a year of this, I have found a perspective that is helpful for me and may be helpful for you.
It is my firm belief that you are meant to learn certain things in life, and your subconscious very carefully and meticulously arranges your life circumstances to learn these things. This is why you often find yourself shaking your head and saying "I got myself into this".
It may be different for you, but I have realized that the thing I needed to learn is that my net worth is not my self-worth. I realized that I've desperately been trying to make money my whole life so that people will like me and I can avoid the pain that I saw caused by poverty when I grew up.
I have been blessed to have money and realize that neither one of those things are true, and then I guess I have been blessed to be tested on what I learned the first time around by losing it.
I have also come to realize that I don't need all that much money to live a comfortable life.
These are the things that I learned. They may not be what you are intended to learn.
So, take it easy on yourself. What happened may have been completely out of your control, or it might have been something that you contributed to. Either way, it's done.
Take some time to feel shitty, because you will, but consider changing perspectives and start looking at what you can learn from this and maybe even what opportunities have opened up because of it.
If you bought options your base case should be that they expire worthless, except some very special cases. If you sold options your likely case should be extreme loss, exceeding the premium in double digit multiples. If you don't know this then you shouldn't have traded, and were misinformed. They're considered complex instruments for a reason, and the ease with which the masses trade them is something of a tragedy.…
In context, I’d assume OP’s options were employer-granted options being far more likely than they were speculating on public market options.
EDIT: From the down voters I would appreciate some substantiated reply as to why this isn't true. Don't get me wrong, if I had taken such a deal and was now under I'd be miserable as well, especially if I counted on that money and maybe bought something on credit expecting a windfall later. Such as getting a huge mortgage I thought I'd be able to pay off very fast soon. I took the opposite deal. I rejected offers that wanted to give me a lot of variable renumeration and a small base salary and was laughed out of the room.
If you can buy more, and you have confidence in the company, that’s what I would do.
This time will prepare you for the next one where you can buy at a discount to build wealth faster.
> Market is collapsing. If you are not retired, then markets being down are a good thing, because everything is "on sale" / at 'discounted' prices. At least for the US† (S&P 500, NASDAQ, Russel 2000), the historical 1-, 3-, 5-, and 10-year returns after a 25% drop are quite good: * https://awealthofcommonsense.com/2022/10/getting-long-term-b... If you've been foolish enough to cash out—which should really never been…
> Market is collapsing. If you are not retired, then markets being down are a good thing, because everything is "on sale" / at 'discounted' prices. At least for the US† (S&P 500, NASDAQ, Russel 2000), the historical 1-, 3-, 5-, and 10-year returns after a 25% drop are quite good: * https://awealthofcommonsense.com/2022/10/getting-long-term-b... If you've been foolish enough to cash out—which should really never been…
Cash the side line has been a great allocation for this whole year. As the mantra goes, don’t fight the fed.
* https://awealthofcommonsense.com/2018/10/the-psychology-of-s...
By sitting in cash you're also losing money through inflation:
* https://ofdollarsanddata.com/the-cost-of-waiting/
At the end of the day you should always be invested, and if you're worried about market undulations then you should own some bonds. And besides reducing gyrations, bonds give another advantage: a source of 'dry powder'.
If stocks get "too high" you rebalance by selling off some equities and buying bonds to 'lock in' the returns. When stocks drop you rebalance again by selling off bonds and 'buying low' in equities. Bonds/diversification can really help returns:
* https://www.forbes.com/sites/investor/2010/12/17/the-lost-de...
At least in Canada you can get "all-in-one" ETFs that do this rebalancing automatically:
* https://www.youngandthrifty.ca/picking-the-best-all-in-one-e...
Earlier quoted context omitted.
Cash the side line has been a great allocation for this whole year. As the mantra goes, don’t fight the fed.
The problem is getting out before things drop, and getting back in when the drop is "over": * https://awealthofcommonsense.com/2018/10/the-psychology-of-s... By sitting in cash you're also losing money through inflation: * https://ofdollarsanddata.com/the-cost-of-waiting/ At the end of the day you should always be invested, and if you're worried about market undulations then you should own some bonds. And besides red…
Also by sitting in Stocks, you not only lost 20% this year, but also 9% due to inflation for a total loss of ~30%+.
Cash is cash. It gets the job done. I'm not saying go 100% cash btw, but it has its place in this time of uncertainty. You cannot buy the dip if you're 100% invested, you have to be holding cash.
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I suggest holding 10% cash and rebalancing as needed. As the market goes up, you naturally sell stocks for more cash. As the market goes down, you naturally sell cash to buy more stock. This stabilizes the portfolio significantly.