I just made my first start and invested a few thousand GBP into a vanguard index (Global Balanced Fund) 2 weeks ago. I have lost -4.61% / £466.58 already
Don't get me wrong, not making this as a statement or looking for sympathy.
I knew the risks were there, and I had planned to keep this vested for at least 5 years, so hopefully it will recoup the losses.
But yeah, may not have been the smartest decision.
Yeah seriously, don't look at the numbers for a few years. I'm not knowledgeable at all about investing, which is why my savings are in Vanguard index funds to begin with. I have two that are up nearly 70% over the last 10 years or so. If you buy and hold these things you're investing in the long term functioning and health of the economy, which has proven over the last few centuries to be a decent bet. If civilizational collapse messes with your returns the state of your index funds will be the least of your worries.
The biggest mistake new investors make is sell when they see a red negative number. As long as you don't do that you will almost certainly recoup your losses.
"Markets can remain irrational longer than you can remain solvent." --Keynes (maybe)
I think it's fair to make the observation that the fundamentals are all out of whack and that investor confidence doesn't seem to correlate with the greater economic picture without being required to gamble your life savings on it.
I actually don't think it's fair to "make the observation".
There are multiple issues at play here:
Who is paying this person and what do they have to gain from people panicking and selling shares?
How is this an observation given the title? It's a proclamation. I can write the exact same article and say that the current climate is here to say.
Putting your investments where your mouth is shows that you don't have a specific agenda and that you're being honest and truthful in your writing. I don't advise people to do things I wouldn't do, why should we give market "journalists" a pass?
If you literally write an article proclaiming "The Stock Market is on the Edge of a Historic Crash" then there's no honest reason why if you wrote that and believe it that you would have any problem whatsoever in showing the audience how you adjusted your trading strategy. Anything besides that to me is horseshoe, which is why I never read or pay attention to these articles.
Or, maybe not. Nobody knows!
Investors have seemingly been pricing in the current consensus of a recovery in late 2021 or early 2022. There is a lot of money on the sidelines willing to buy dips. We might go sideways for a while unless there is a sudden shock.
Sure, if enough people start believing the stock market is on the edge of a crash, their actions can cause it to crash. For the stock market is a social construct: The decisions of buyers and sellers at every instant construct the market. Widespread fear can cause a crash.
> Consider what my Crash Confidence Index[a] is telling us. That measurement of sentiment about the safety of the stock market is based on this question: “What do you think is the probability of a catastrophic stock market crash in the U.S., like that of Oct. 28, 1929, or Oct. 19, 1987, in the next six months, including the case that a crash occurred in the other countries and spreads to the U. S.?”
The index is a rolling six-month average of the percentage of monthly respondents who think that the probability of such a major crash is less than 10 percent. In August, the percentage of individual investors with that level of confidence in the market hit a record low, 13 percent. The most recent reading in September, 15 percent, was still extremely low.
This author has posted articles about the stock market being on the brink several times per month since he started contributing. Maybe one day he will be right.
So, you’re telling me there’s a chance? Dumb and Dumber, got to love it
But in all seriousness, there was so much printed money thrown into stabilizing things by the Fed that a fear that the economy isn’t ready to pick itself up without that money being injected isn’t unwarranted... I just don’t know what you do about that concern...
Readit News
- the author followed his own advice and invested half of his life savings into an S&P 500 put option with maturity in March 2021
or
- the author did not put his money where his mouth and wimped out
Don't get me wrong, not making this as a statement or looking for sympathy.
I knew the risks were there, and I had planned to keep this vested for at least 5 years, so hopefully it will recoup the losses.
But yeah, may not have been the smartest decision.
If you hold on, history shows that these things grow at an average of 8% annually, even accounting for depressions.
https://www.linkedin.com/in/dan-runkevicius/
I don't see relevant investing experience.
"Markets can remain irrational longer than you can remain solvent." --Keynes (maybe)
I think it's fair to make the observation that the fundamentals are all out of whack and that investor confidence doesn't seem to correlate with the greater economic picture without being required to gamble your life savings on it.
There are multiple issues at play here:
Who is paying this person and what do they have to gain from people panicking and selling shares?
How is this an observation given the title? It's a proclamation. I can write the exact same article and say that the current climate is here to say.
Putting your investments where your mouth is shows that you don't have a specific agenda and that you're being honest and truthful in your writing. I don't advise people to do things I wouldn't do, why should we give market "journalists" a pass?
If you literally write an article proclaiming "The Stock Market is on the Edge of a Historic Crash" then there's no honest reason why if you wrote that and believe it that you would have any problem whatsoever in showing the audience how you adjusted your trading strategy. Anything besides that to me is horseshoe, which is why I never read or pay attention to these articles.
Deleted Comment
I know I'm going to get downvoted for saying this, but this really is not the kind of sensationalist info that I expect to see here.
Hardly historic, and not worth any attention or consideration.
Move on.
Coincidentally, Nobel prize winner Robert Shiller wrote a piece about this just last week: "People Fear a Market Crash More Than They Have in Years" (https://www.nytimes.com/2020/10/23/business/people-fear-a-ma...). Quoting Shiller:
> Consider what my Crash Confidence Index[a] is telling us. That measurement of sentiment about the safety of the stock market is based on this question: “What do you think is the probability of a catastrophic stock market crash in the U.S., like that of Oct. 28, 1929, or Oct. 19, 1987, in the next six months, including the case that a crash occurred in the other countries and spreads to the U. S.?”
The index is a rolling six-month average of the percentage of monthly respondents who think that the probability of such a major crash is less than 10 percent. In August, the percentage of individual investors with that level of confidence in the market hit a record low, 13 percent. The most recent reading in September, 15 percent, was still extremely low.
[a] https://som.yale.edu/faculty-research-centers/centers-initia...
But in all seriousness, there was so much printed money thrown into stabilizing things by the Fed that a fear that the economy isn’t ready to pick itself up without that money being injected isn’t unwarranted... I just don’t know what you do about that concern...