Lost $2.18...

[rach]

So I just made my first foray into the stock market a few days ago (put 1K into Vanguard VTTFX) and lost $2.18 so far...  I'm not worried (buy and hold, just keep swimming, just keep swimming) but just wondered how other people felt when they first put money in.  Nervous?  Or completely confident that the value would go up?

[iamlindoro]

The trick is not to watch it closely, and when you do look at it, to see downward swings as a fire sale on more shares.  You've made a solid LONG TERM choice of fund... but remember, that's what it is-- a long term investment.  In the short term it may swing wildly, but the long term trend is to move relentlessly upwards. Go to Google Finance and click the chart for the market.  Set the time window to 1 month.  You would have barely broken even over that time (and seen some 4-5% swings down).  Now set it to 1 year.  OK, you made 15%.  Now set it to 15 years (about your retirement horizon) by dragging the slider to a start date of 1997.  You've made 85% in spite of the crash and the dot com bubble burst.

Remember, unlike lots of silly people, we're playing for the long run.  Short term trends mean nothing to us besides a great opportunity to stuff even more money in and maximize the inevitable upswing.  (I just squeezed a few hundred extra out of my budget today to add to my monthly investments while the fiscal cliff uncertainty continues-- Can't wait to see the relief rally when that gets resolved)

Edit: Of course here I'm using the market and not the actual performance of your fund, but the above was just for illustrative purposes about the inexorable upward movement of the market-- something you are taking advantage by choosing a broadly diversified fund that should follow a similar trend.

[JamesAt15]

In terms of how I felt when I first put money into investments, I had also read the books and advice about treating it like a long term game, don't fret the short term drops and variations and it will all work out in the long term. That said, I would still log into the broker site too often to check what the balance was and how they were doing, and when it was down, it was hard often to be as objective as I had told myself I was going to be.

Are you able to save and invest regularly, a fair amount every month? What I do now is keep a simple net worth spreadsheet that I update about once a month after payday. Since I am saving and investing a good chunk of every paycheck, that net worth goes up pretty much every month, which makes it easier to not worry too much about the investments going down a bit. If I am going to graph something, that's what I will graph to make myself feel good about how we are progressing.

I think making regular contributions to your investments will also help. If your habit is just to put x% of your paycheck into your investment account every month, then when the market takes a hit and drops it's easier to say, "ooo, market's on sale!" and congratulate yourself for getting more value from your monthly $y when you make your regular investment. If you contribute irregularly, then you may be more likely at that point to say "oh my, the market is dropping, maybe I should hold off and wait to see how this is going to turn out," and end up not buying when the market is cheap.

[tooqk4u22]

So I just made my first foray into the stock market a few days ago (put 1K into Vanguard VTTFX) and lost $2.18 so far...  I'm not worried (buy and hold, just keep swimming, just keep swimming) but just wondered how other people felt when they first put money in.  Nervous?  Or completely confident that the value would go up?

When I first started investing it didn't bother me....when I had accumulated a nice amount and saw it decline by 1/3rd with the financial crisis - that bothered me.  But I was sitting on some cash, part of the reason it only went down 1/3rd, and as the market tumbled I put my cash to work, which sometimes was early and went down further but held to it.  So maybe I was not bothered that much. 

If you work hard for your money and do the right things it still is hard when it goes down - just don't get to worked up about it.

[jrhampt]

My advice is to only check your balance when the market is up :-)

[sherr]

I was nervous. Time helps a lot; the longer you've had investments the more normal it will seem to you and the less you'll worry about it. I second the recommendation to only check your balance after you've made a deposit. It helps take the emotions out of it and keeps you from checking too often and worrying about it, neither of which will help in the slightest bit. :)

[James]

My advice is to only check your balance when the market is up :-)

This is true.  I don't watch TV news and don't follow the market closely, but it's impossible not to hear about bigger swings.  If I hear about the market going down I don't go check my accounts.  I simply shrug it off.  I check my balances at least monthly just to look at them, which doesn't serve much purpose since I don't plan on making any changes, but I notice them going both up and down.  I've checked the accounts and noticed I've "lost" $30,000, but I just smile and shake my head.  I've also checked and smiled because I've gained $30,000.  The trick is to smile either way.  It doesn't come naturally but I think it's important to smile either way. (even though one is in chagrin, somehow a smile keeps things in perspective)


If you own a profitable company in a town and have routine offers to purchase your business, would the amount offered each time be such a big deal?  If you got offered $150,000 one month and $130,000 the next would you think you lost $20,000?  If the underlying business is profitable then it doesn't matter what others are offering on a given day or month, it only matters that the company continues to improve over time.


You purchased $1000 in pieces of companies on a specific date.  You still have that same share of those companies, you didn't lose anything.  If you sold those pieces today you might not get what you paid, but you aren't selling today so that doesn't matter.  Smile because you own pieces of profitable companies that will likely increase in value faster than anything else on earth.  You made the right choice, don't second guess it.

[arebelspy]

That was a great post James.

Thank you.

[The Taminator]

My advice is to only check your balance when the market is up :-)

This is my habit as well.

[lauren_knows]

Over time, I've come to the realization that if you're investing in broad index funds on a regular basis for the long term) , it's much more personally rewarding to track how much you are able to invest each month rather than the investment gain/loss.

[grantmeaname]

OP, I bought $3000 of VTSMX on October 12th. It was me starting my Roth IRA and my stache. I've lost $5.96 since then. So I put more in. I know that I'm owning $4,500 of the US economy: strong, diversified companies that will produce value in the seventy years until I'm done with my money. Why should I be caring about how nervous investors are in the month and a half I've been invested?

[DoubleDown]

I'm surprised nobody has weighed in yet with, "You lost $2.18 today? I lost $21,800!"

Once when my company scaled back bonuses, and I complained to my boss that I was going to lose about $5,000 - 10,000/year, he told me "Don't feel bad, my bonus will be $300,000 - $400,000 less." It didn't work, I didn't feel any better, and I certainly didn't feel bad for him.

[smedleyb]

So I just made my first foray into the stock market a few days ago (put 1K into Vanguard VTTFX) and lost $2.18 so far...  I'm not worried (buy and hold, just keep swimming, just keep swimming) but just wondered how other people felt when they first put money in.  Nervous?  Or completely confident that the value would go up?

I remember in June 1998 taking all my available cash and investing every last cent into the market (Microsoft, Gillette, and Merck).  It was the most thrilling day in my life, and I've been hooked ever since.  Good luck, and enjoy.

[rugorak]

I admit I look at my investments fairly often. But for me just seeing I have money there gives me a good feeling. I more debt than I make in a year as of 7 years ago (and all of it consumer or student loans, no mortgage or anything like that) so to see that I have money to spare and to add to it is a reminder how well I have done (and how much more work I have to do before I can quit the daily grind).

If looking at your investment doesn't give you the good feeling like I get I would suggest only looking after you have learned something and want to see whether the decisions you made however many months/years ago still are the right ones. Hopefully then you won't be tempted to react to emotion and instead just to information.