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Ask HN: How to deal with markets down turn? Feeling down

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Re: Ask HN: How to deal with markets down turn? Feeling down

#61

Post by bwb »

StopTheWorld wrote: post #39

In January 2021 the market seemed overheated so I mostly cashed out, and sold a lot of my 401K stock, putting it into safer assets. From May to September as tech indexes got cheaper I began buying them up in my rollover IRA. Two and a half weeks ago I started loading up on tech indexes with my spare liquid assets - I am down about 2.3% on that right now. I still have some spare liquid assets, but it's easily possible…

Timing the market is luck :)

If you want to be wealthy stay in it and wait 30, 40, or 50 years. It isn't a get rich quick scheme.

Re: Ask HN: How to deal with markets down turn? Feeling down

#62

Post by bluGill »

Fidelity did a survey of thier customers whose 401k did the best over the years. The most popular response (about 1/3) was 'I don't have a 401k at fidelity'. They had forgotten about it and left it alone to grow through good and bad. If you know how your investments are doing you know too much

Re: Ask HN: How to deal with markets down turn? Feeling down

#63

Post by cloudking »

Be aware that:

1) we're likely in a declining/sideways market for at least another year until inflation subsides, possibly longer

2) the Fed has most of the control over the inflation/deflation levers (on demand side)

3) markets will most likely recover over the long term, historically speaking

The Fed is purposefully reducing their asset holdings and increasing interest rates to slow down demand, which in theory should cool inflation. Once the economy cools enough, they will "flip the switch" back on to supporting markets by reducing interest rates, at which point #3 should begin. Educate yourself on the Fed and their impact on markets.

So if you sell at the lows, you're accepting the losses, can move on and invest again later. If you can afford to hold through this bear market, you may recover some of your losses on a longer timeframe. You can also position your portfolio with some downside protection (e.g long dated put options on indexes, selling covered calls on your stocks etc) to reduce the pain, you don't have to just watch your portfolio decline.

Re: Ask HN: How to deal with markets down turn? Feeling down

#64

Post by xvilka »

jeremyt wrote: post #23

Sorry that this happened. You're not alone feeling this way. 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 yo…

> I realized that I've desperately been trying to make money my whole life so that people will like me

Money themselves have zero value and certainly shouldn't be viewed from that perspective. Their only value as a tool to get things done or buy something. Nothing more.

Re: Ask HN: How to deal with markets down turn? Feeling down

#68

Post by spacemadness »

bluGill wrote: post #60
greymalik wrote: post #57

Earlier quoted context omitted.

Since the GP talks about stock options I’m guessing these are part of their total compensation and not a discretionary investment. I’m in a similar boat - stock is about 50% of my total compensation but its value has dropped by 90%. It’s hard to be blasé about losing almost half my income.

Unless you are aiming for the C suite you should NEVER have any company stock as that is putting too many eggs in one basket. If you have all your eggs in one basket you better watch that basket on a level that only C suite people have access to. (I'm not sure if they do,but at least they can unlike those below)

Many developers have a decent chunk of their total compensation in RSUs these days.

Re: Ask HN: How to deal with markets down turn? Feeling down

#69

Post by jmathai »

bluGill wrote: post #60
greymalik wrote: post #57

Earlier quoted context omitted.

Since the GP talks about stock options I’m guessing these are part of their total compensation and not a discretionary investment. I’m in a similar boat - stock is about 50% of my total compensation but its value has dropped by 90%. It’s hard to be blasé about losing almost half my income.

Unless you are aiming for the C suite you should NEVER have any company stock as that is putting too many eggs in one basket. If you have all your eggs in one basket you better watch that basket on a level that only C suite people have access to. (I'm not sure if they do,but at least they can unlike those below)

In this case, you don’t have much choice if company stock makes up a large portion of your income. You can sell immediately but the money you receive from that transaction is much less - it’s lowered income even if you immediately diversify.

Re: Ask HN: How to deal with markets down turn? Feeling down

#70

Post by thehappypm »

actionablefiber wrote: post #50
thehappypm wrote: post #37

Earlier quoted context omitted.

What was your motivation to invest in such a way that 95% loss was even possible?

Probably to make money? GP mentions margin calls, which suggests they're investing with leverage.

Sounds a lot like gambling.
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