I moved 40% of my money into bonds at the bottom like a dunce and now Im regretting it. Luckily I kept the majority in stocks but I'll remember this lesson for the rest of my life. I got caught up in the news and the doom when I should have known no one had any extra information they were operting on.
I'm going to buy back in and keep it there this time, while also going on a diet of news around markets. The news is not reflective of any special information and I was better off living my day to day and sticking to the plan.
Sorry you got caught in the bumps, why did you feel the need to sell? You need to think on that because otherwise, buying back in now is a recipe for disaster if you don't know what caused this. Especially if you are a long way off from fire.
You sell at a bottom, buy back after a big jump, and then markets tank 15% again next month. Will you keep up the same patterns?
Market could also go up 15%, we just don't know. You need to invest like you understand that we just don't know.
You need an investment strategy you can stick with.
Read up here:
https://www.bogleheads.org/wiki/IPS
I got caught up in the fear of tarriffs and reading to much analysis online. It was the feeling that anything could go wrong and the market would never recover. My issue was the news and forums I was reading were so confident in their analysis in saying the US is done, the hegemony is voer, blah blah. Little did I know, they had no extra info.
Then Trump caved. It's all a dog and pony show. I just have not read any news since and I'm much better for it because even if there are problems, people are going to figure out ways to make money.
and my money is back in equities, where I wanted it. I think I also have a friend who I listen to that is just a more conservative investor than I am and hes still in bonds. I was losing sleep over being out of the market, even with the volatility, so now that I'm back I'm sleeping like a baby.
I also realized, since I have a fairly low cost of living, I didn't need that money yet anyway. I should stop letting the news and emotions of other investors scare me and stick to a plan that I want, which is lower my cost of living and take some equities on.
@wantstoinvest , my condolences on your rough learning experience. All of us had to, at least partially, learn the hard way.
Besides mistymoney's great advice on having an IPS, you should look at RWD's list of all the times people were SURE that the market/US/world was DOOOOOOMed.
Confidence in doomsaying is a vital necessity. Doomers are SURE, non-doomers are not as certain.
https://forum.mrmoneymustache.com/investor-alley/the-mother-of-all-dead-cat-bounces/msg3361112/#msg3361112. --- earlier in this very thread.
Also instructive is a on old blog post on "Bob, the world's worst market timer".
https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/Fortunately for me, there was so much "friction" in moving money around when I started, that I really didn't have much choice but to ride out:
Early 2001 or so (down 30%)
2008-2009 My 401K was worth less than all the money I put into it. --- My response was "too late now, just ride it out" and kept putting money in stocks.
My IPS said put 50% of available cash in stocks when the SP500 was down 20%, how could it go wrong :-) Minus 30% later, I was still dribbling money into stocks.
I'm proud of the fact that with my last few dollars of cash in March 2009 I bought 1 share of BRK.B, mostly for the shareholder meeting credentials, which I still have. BRK.B up 500% since.
2020 - Remember the Covid dip? --- it was a major, apocalyptic, crash at the time.
