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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

#191

Post by yellowapple »

Another way of framing it: you can now buy a bunch of stocks at a 90% discount :)

Of what little I have in my Fidelity account, literally everything's in the red (except, weirdly enough, the single AMC share I own). Doesn't bother me too much; just means I can get more bang for my buck right now. At some point that'll flip around (with inflation the way it is, there's certainly some investments that'll depreciate slower than the dollar over the next decade or so), so even if we ain't at the bottom of the market yet, I feel like now is the time to be squirreling away bits of pocket change here and there.

The sun is setting, and the night will be long and dark, but at some point the sun will rise, and now's the time to prepare for it.

...that, or it'll prematurely supernova, at which point stock prices would probably be among the least of our concerns.

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

#192

Post by thevagrant »

ekelsen wrote: post #115
cloudking wrote: post #63

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 sho…

"markets will most likely recover over the long term, historically speaking" tell that to the Nikkei index. At this point you'll have been waiting 40 years for the recovery. https://www.macrotrends.net/2593/nikkei-225-index-historical...

It's down to strategy. If you bought once, all in 1990 and did nothing and waited, then maybe that's a problem.

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

#193

Post by sokoloff »

tharkun__ wrote: post #24
sokoloff wrote: post #16

Earlier quoted context omitted.

In context, I’d assume OP’s options were employer-granted options being far more likely than they were speculating on public market options.

In which case - and sorry for not having any consoling words here for the OP here - I can unfortunately not really have much empathy here. An overwhelming majority of people especially here on HN laugh at you if you discount variable aspects of renumeration. Employer issued options or RSUs are down 90%? So what! You accepted a variable renumeration scheme. You knew ahead of time. You are no longer making 200k base +…

Without additional info, telling a stranger that they had “200k in options/RSUs that you expected to actually yield you 500k in value for doing nothing? Well that's the deal you took.” is likely to gather some downvotes for tone, lack of empathy, and a bit of strawmanning.

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

#194

Post by dragontamer »

quesera wrote: post #75
dragontamer wrote: post #29

Earlier quoted context omitted.

> By sitting in cash you're also losing money through inflation: 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. --------- I suggest holding 10% cash and re…

> Also by sitting in Stocks, you not only lost 20% this year, but also 9% due to inflation for a total loss of ~30%+. But if you sold the stocks, you would have taken an immediate tax hit of ~20-35%, and you would have to time the bottom to get back in. So, it's not at all clear that getting out makes sense. Depends on the depth of the decline, and that is unknowable.

Surely you have some cost-basis lot where selling just 10% of your portfolio results in a capital loss (ie: a tax _break_) if you were going to switch into Cash today.

> you would have to time the bottom to get back in.

Nah, you just rebalance at 10%.

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

#195

Post by pseudoramble »

greymalik wrote: post #57
gtirloni wrote: post #48

Earlier quoted context omitted.

Same advice. Unless you're a day trader, just pick strong assets and look at them once in a while. You'll get sick if you keep reacting to the fluctuations every day.

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.

Yeah, exactly why I mentioned it. I don't have that setup, so it's different for me. Don't want to be dismissive of that point!

How does it work though? Do you sell stock to use as income? Do you hold onto it and get by on salary? I'm not really familiar with how people use these kinds of setups in total comp.

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

#196

Post by blockwriter »

throw0101c wrote: post #19

> 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…

It’s only on sale for those that are liquid enough to buy. Presumably, being down 90% means stocks really aren’t on sale for the original poster.

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

#197

Post by svnt »

tharkun__ wrote: post #59
svnt wrote: post #46

Earlier quoted context omitted.

I’d hazard a guess that you’re being downvoted because of your lack of empathy, which is the point of the post, but also because of your gotcha position around variable comp. If you work for a startup and reject variable comp, you are wasting your time. Go get a safer, easier, better-salaried position. If you aren’t working for a startup, you’re in no position to comment on the validity of the approach people take th…

We don't know about the OP. He didn't say what his situation was. For the hypothetical situation of my parent my stance stays even if voted into oblivion. And I knew it would likely happen given the overall sentiment on HN. Like with variable renumeration itself knew what I was getting into. FWIW I have a variable mortgage and I knew what might happen and is now happening and that is why I didn't buy at the top of wh…

I’m not saying your position is wrong or irrational. You chose not to participate in an upside which can be a lottery ticket. It’s a fairly rational position. You asked why you were being downvoted so I tried to explain the reason, which it seems like you were already mostly aware of.

And even if the funeral is as you describe, my point is that people don’t usually want to be told at a funeral why the deceased was wrong. It’s for emotional support. Like this post.

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

#198

Post by UncleMeat »

opportune wrote: post #177
pzs wrote: post #111

Earlier quoted context omitted.

That sounds great in theory, but you can't implement it in practice. It's often easy in hindsight to identify where are those suboptimal 5%-away-from-perfect-timing points where you should have done a rebalancing, but we have no idea how close we are to the next peak/trough.

It was very easy to identify as it happened, when inflation hit 8% while rates were at 0% and unemployment was at like 4%.

You also have to get back in at the right time. A lot of people called that the market would drop in March 2020. But how many realized that by August, long before vaccines were in sight, that the market wouldn't go below the pre-covid peak again? Somebody who sells in March and then buys in October loses a lot.

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

#199

Post by UncleMeat »

ekelsen wrote: post #115
cloudking wrote: post #63

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 sho…

"markets will most likely recover over the long term, historically speaking" tell that to the Nikkei index. At this point you'll have been waiting 40 years for the recovery. https://www.macrotrends.net/2593/nikkei-225-index-historical...

This is something of "the exception that proves the rule." Literally everybody brings up this specific index as the example. And further, it saw a ridiculous growth prior to its collapse. A regular investor still made out like a bandit. The only people who got crushed were hypothetical investors who put all of their money in right at the top.
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