Had my first 5 figure daily loss!

[Mississippi Mudstache]

Just checked PC after today's drop. Looks like we're down $11,000 since 8/17, so that's definitely my first 5-figure loss in my investment accounts since I started keeping track. Now I'm wondering if I should go ahead and fund my wife's IRA for the year or wait until tax time, like I planned.

I'd stick to the plan.  Not because I can see the future, but just because any deviations from the plan are just opportunities to get burned.

Yeah, the more rational side of me agrees with you. I decided to just transfer $1000 into her account. That should be enough to satisfy the animalistic bargain-hunter dwelling within my INTJ exterior.

[DCKatie09]

We're down almost 20K, which is mostly depressing because we were so close to hitting 100K in our taxable acct. Sigh. Just added another 3K in today (we'd been planning on it, the drop is just an added bonus).

[thepokercab]

We took 40K out of our taxable account about 2 months ago because we thought we were getting ready to put an offer up on a house.  We never did put the offer on the house and the money has been in our savings account. I'm thinking i'll just re-invest it now because I am a market timing GENIUS!   

[Kansas Beachbum]

Congrats!  The fact that you had a 5 figure loss, or a 6 figure, just means that you have a nice stache built up.  Now, start looking for things to sell so you can invest!  Stuff's on sale :-)

[tiger002]

I'm really new to investing, so didn't lose much, but I'm excited to see the stock market fall by so much! Sadly I don't have enough money sitting around to put into the market now, and my TSP contribution isn't until next Friday. Oh well, hopefully the market will continue to go down this week.

[Cecil]

Yup... down another $17,000 today! That puts my total loss at nearly $30,000 in the last week. Told my wife the other day I was feeling kind of down and stressed about the thought, and she just said "Well how much do we have now? Oh, that much? That's a lot!"

I thought that was a really good perspective. We've only actually "lost" money when measured against what I had last week. Hell, I'm still +5% on the year thanks to the sinking Canadian dollar.

[Zamboni]

Si, el matador has finally put his sword through the heart of el toro.

<Moment of silence>

No idea how much I am down as of right his moment. Approximately $4K is going in as regularly scheduled tomorrow (or Wednesday, some of the allocations seem to go in later for some odd reason.) It's slightly bigger than the normal bolus dose, but that is just a coincidence of my irregular pay, not any attempt to time the buy.

[WGH]

Lost $10k in the last two days and it will probably be $15k when I check in the morning.

Just gotta remember that it's these dips that really make all the difference when it comes to dollar cost averaging.

[Zx]

People at work think I enjoy others' pain because every time I check the market and see that it's in free fall, I let out a whoop and celebrate.

The interest rates have been at or near zero since Obama took office and it seems like most people are forgetting that this whole "recovery" is built on those interest rates. If the Fed even hints of the smallest bump, the market does a swan dive into an empty pool. This is no recovery at all, as it's built on quicksand! I'm hoping for a serious crash, probably like everyone else on here. I wish I had a slug of cash to put into the market when it does go boom.

I've only lost a couple hundred bucks but I hope to lose more soon!

[Cressida]

Total on-paper decline:

-77,651

yeah. About $34K here in the same period. I'm so used to increases! :P  So clearly this is good for me.

DS did start the morning by shouting the news about the 1000+ point market drop, and then commenting that maybe he should start buying stocks now.

That is awesome.

[College Stash]

Bought in 10k at day end Friday, evidently jumped the gun there and regret it. Fortunately, I have 10k more to dump at some point this week. :)

[sol]

Bought in 10k at day end.. Fortunately, I have 10k more to dump at some point this week. :)

It's good to be rich.

[marty998]

People at work think I enjoy others' pain because every time I check the market and see that it's in free fall, I let out a whoop and celebrate.

The interest rates have been at or near zero since Obama took office and it seems like most people are forgetting that this whole "recovery" is built on those interest rates. If the Fed even hints of the smallest bump, the market does a swan dive into an empty pool. This is no recovery at all, as it's built on quicksand! I'm hoping for a serious crash, probably like everyone else on here. I wish I had a slug of cash to put into the market when it does go boom.

I've only lost a couple hundred bucks but I hope to lose more soon!

No, I think you're the only one. Most people here will look to take advantage of a fall, but I doubt there is anyone here taking delight in seeing hard earned money being incinerated (regardless of long-term view).

I have friends and workmates being margin called. They're good people who work hard and do their best to get ahead and are being shat on by the markets. They're not going to get the opportunity to buy the dips because they'll be putting it towards salvaging what is left of their equity.

When you express joy about this in front of your collegues of course they're going to be pissed at you. Do it privately or not at all.

[Mississippi Mudstache]

I have friends and workmates being margin called. They're good people who work hard and do their best to get ahead and are being shat on by the markets.

If they're buying on margin, it sounds like they're shitting on themselves.

[ingrownstudentloans]

Watching the news as the fiancee and I are getting ready for work today..."stocks were down almost 1,000 points yesterday closing down over 500". 

Fiancee asks how that can happen in one day.  I explain a little about how it is up so much over the past 5 years how corrections happen and that it is a good time to but more, etc.  She thinks for a second and says, we should try to buy more then.  She is coming around and I think starting to get excited about this whole investing/saving etc thing.  We are still in the 4 figure loss category, but someday I hope to lose more in one day :)

[lostamonkey]

People at work think I enjoy others' pain because every time I check the market and see that it's in free fall, I let out a whoop and celebrate.

The interest rates have been at or near zero since Obama took office and it seems like most people are forgetting that this whole "recovery" is built on those interest rates. If the Fed even hints of the smallest bump, the market does a swan dive into an empty pool. This is no recovery at all, as it's built on quicksand! I'm hoping for a serious crash, probably like everyone else on here. I wish I had a slug of cash to put into the market when it does go boom.

I've only lost a couple hundred bucks but I hope to lose more soon!

No, I think you're the only one. Most people here will look to take advantage of a fall, but I doubt there is anyone here taking delight in seeing hard earned money being incinerated (regardless of long-term view).

I have friends and workmates being margin called. They're good people who work hard and do their best to get ahead and are being shat on by the markets. They're not going to get the opportunity to buy the dips because they'll be putting it towards salvaging what is left of their equity.

When you express joy about this in front of your collegues of course they're going to be pissed at you. Do it privately or not at all.

If this small a market dip is causing them to be margin called then they are pretty stupid. It was inevitable that they would lose money.

[fattest_foot]

We were close. I think we lost somewhere around $7,000 yesterday. It's weird to feel kind of happy about losing that much. But it's just reinforcement that we're saving well.

[sol]

Wow, I should really learn not to check my account balances.

As of today, we've lost more than an entire year's worth of projected retirement expenses.  There have been some offsetting gains too, but there's a very large number at the bottom of my summary statement that was a whole lot larger last week.

What am I doing with this information?  Still buying as usual, but feeling slightly down about the prospect of having to work a few extra months.  Even though I knew it was coming at some point, it's kind of depressing to see your rapid gains evaporate.

[thingamabobs]

just checked all the accounts and yup, we're up to 5 figure loss as well. Haven't told DH about it, I have to keep reminding him about the overall upward trend of the market.

[sol]

Rather than looking at your dollar losses, what's your percent unrealized loss?

I mean it sucks that my account balances are down tens of thousands of dollars, but across my liquid investment portfolio I'm really only down 6.8% from my personal peak.  That seems more palatable, somehow.  Hooray for diversification!  Hooray for continued investment in the face of market declines!

[brooklynguy]

feeling slightly down about the prospect of having to work a few extra months. 

So I guess your proprietary cFIREsim/CAPE/voodoo forecasting system has now changed its prognosis?

[daverobev]

I usually rebalance on january, if my % goes way off in between january and december, should I rebalance again or simply wait till january when I do my annual rebalancing?

IIRC "they" say when you are more than a couple of percent out, rebalance. So if your US is down 3% and your CDN down 10%, rebalance. For US$ stuff remember to convert back to a single currency though! Your US stuff might be down 5% in US$ but actually be up in CAD :P

[kendallf]

I'm down over $50k.  I am ~8 years from retirement, and that date is set by a minimum retirement age so that I can get a supplemental pension and continued health care coverage, not by some asset value goal.  I don't need the money now and probably won't need it then.

Still, I'm far from elated.  For me it's hard to think about why I'm focusing on cutting $80 worth of monthly costs when my portfolio just lost half of my annual salary in a few days.  Stupid but I'm not a machine.

Probably the only material effect this will have is that I'm probably going to put about $7500 extra into the market this week (repaying a TSP loan I took when I bought a rehab house that wouldn't qualify for a mortgage).  I just opened a HELOC on that house and they require a $10k minimum draw to waive closing costs.  I could just re-deposit it but I think I'm going to kill that TSP loan and hopefully buy low.

[Trudie]

Down 75K -- more than I make in a year... but still investing.  Put another 5K in this week and will stay the course.

[Mississippi Mudstache]

I'm down over $50k.  I am ~8 years from retirement, and that date is set by a minimum retirement age so that I can get a supplemental pension and continued health care coverage, not by some asset value goal.  I don't need the money now and probably won't need it then.

Still, I'm far from elated.  For me it's hard to think about why I'm focusing on cutting $80 worth of monthly costs when my portfolio just lost half of my annual salary in a few days.  Stupid but I'm not a machine.

I think this is probably the biggest psychological factor for me. I do all sorts of things to make an extra $50-$100 when I can, and I'm constantly on the prowl for wasteful spending that can be nixed. Those effects get completely washed out when your net worth is primarily affected by external forces on a day-to-day basis, which makes them seem trivial (even though I know that they add up in the long run). I think it might be helpful for me to look at my cash accounts separately from my investment accounts, because my financial nitpicking has a measurable and immediate influence on my monthly cashflows, if not on my net worth.

[brooklynguy]

I'm down over $50k.  I am ~8 years from retirement, and that date is set by a minimum retirement age so that I can get a supplemental pension and continued health care coverage, not by some asset value goal.  I don't need the money now and probably won't need it then.

Still, I'm far from elated.  For me it's hard to think about why I'm focusing on cutting $80 worth of monthly costs when my portfolio just lost half of my annual salary in a few days.  Stupid but I'm not a machine.

I think this is probably the biggest psychological factor for me. I do all sorts of things to make an extra $50-$100 when I can, and I'm constantly on the prowl for wasteful spending that can be nixed. Those effects get completely washed out when your net worth is primarily affected by external forces on a day-to-day basis, which makes them seem trivial (even though I know that they add up in the long run). I think it might be helpful for me to look at my cash accounts separately from my investment accounts, because my financial nitpicking has a measurable and immediate influence on my monthly cashflows, if not on my net worth.

This concern is still just your lizard brain trying to override your higher order brain functions.  The fruits of your cost-cutting efforts are in no way being erased by market gyrations.  The "expense" side of the equation in the shocking simple math is just as important as the "net worth" side, and math is math.  Focusing on eliminating $80 of monthly waste is more important for the long-term dividends it pays in the form of permanent expense reduction than it is for the negligible boost it creates in your net worth.

[Mississippi Mudstache]

I'm down over $50k.  I am ~8 years from retirement, and that date is set by a minimum retirement age so that I can get a supplemental pension and continued health care coverage, not by some asset value goal.  I don't need the money now and probably won't need it then.

Still, I'm far from elated.  For me it's hard to think about why I'm focusing on cutting $80 worth of monthly costs when my portfolio just lost half of my annual salary in a few days.  Stupid but I'm not a machine.

I think this is probably the biggest psychological factor for me. I do all sorts of things to make an extra $50-$100 when I can, and I'm constantly on the prowl for wasteful spending that can be nixed. Those effects get completely washed out when your net worth is primarily affected by external forces on a day-to-day basis, which makes them seem trivial (even though I know that they add up in the long run). I think it might be helpful for me to look at my cash accounts separately from my investment accounts, because my financial nitpicking has a measurable and immediate influence on my monthly cashflows, if not on my net worth.

This concern is still just your lizard brain trying to override your higher order brain functions.  The fruits of your cost-cutting efforts are in no way being erased by market gyrations.  The "expense" side of the equation in the shocking simple math is just as important as the "net worth" side, and math is math.  Focusing on eliminating $80 of monthly waste is more important for the long-term dividends it pays in the form of permanent expense reduction than it is for the negligible boost it creates in your net worth.

Yeah, from a logical standpoint, I know fully well how important expense reduction is to long-term net worth. You can't discount the psychological importance of positive feedback on staying the course, however: I think it's helpful to visual the impact that each decision makes on you financial health. Software like Personal Capital (which is what I use) can be counterproductive to that goal, since it's got a great big net worth tracker front and center each time you log on. Seeing huge swings in the number from one day to the next makes it more difficult to visual the impact that an $80 monthly savings is really having; the signal-to-noise ratio is exceptionally low. I was just noting that focusing on more controllable factors and ignoring the noise might be more helpful for a psychological boost, especially in turbulent markets.

[brooklynguy]

Yeah, from a logical standpoint, I know fully well how important expense reduction is to long-term net worth. You can't discount the psychological importance of positive feedback on staying the course, however: I think it's helpful to visual the impact that each decision makes on you financial health. Software like Personal Capital (which is what I use) can be counterproductive to that goal, since it's got a great big net worth tracker front and center each time you log on. Seeing huge swings in the number from one day to the next makes it more difficult to visual the impact that an $80 monthly savings is really having; the signal-to-noise ratio is exceptionally low. I was just noting that focusing on more controllable factors and ignoring the noise might be more helpful for a psychological boost, especially in turbulent markets.

Yeah, totally agree, but my point was that focusing on the cost-saving's impact on net worth (even over long timeframes, when the noise is eliminated) is still missing the arguably more important half of the picture, which is the cost-saving's impact on the amount of net worth needed to sustain your life.  So the 80 bucks a month you're saving through cost reduction efforts may appear negligible when stacked up next to major short term portfolio losses, and its impact on long-term net worth may become more meaningful when compounded over long time periods, but its most meaningful impact comes from the 24 grand of net worth you no longer need to sustain those eliminated expenses.  That $24k figure never shows up anywhere on your balance sheet, no matter how far you zoom out on the time frame.

[kendallf]

For me it's hard to think about why I'm focusing on cutting $80 worth of monthly costs when my portfolio just lost half of my annual salary in a few days.  Stupid but I'm not a machine.

I think this is probably the biggest psychological factor for me. I do all sorts of things to make an extra $50-$100 when I can, and I'm constantly on the prowl for wasteful spending that can be nixed. Those effects get completely washed out when your net worth is primarily affected by external forces on a day-to-day basis, which makes them seem trivial (even though I know that they add up in the long run).  I think it might be helpful for me to look at my cash accounts separately from my investment accounts, because my financial nitpicking has a measurable and immediate influence on my monthly cashflows, if not on my net worth.

Mint does this for me; the summary screen has a nice cash and credit balance number that makes me think about my short term spending independently of my investment accounts.  Helpful.  The net worth number is way at the bottom of the screen where I can ignore it.  :-)

To brooklynguy's point, maybe it should have a portfolio "increase" via monthly expense reduction calculator..

[Mississippi Mudstache]

Yeah, from a logical standpoint, I know fully well how important expense reduction is to long-term net worth. You can't discount the psychological importance of positive feedback on staying the course, however: I think it's helpful to visual the impact that each decision makes on you financial health. Software like Personal Capital (which is what I use) can be counterproductive to that goal, since it's got a great big net worth tracker front and center each time you log on. Seeing huge swings in the number from one day to the next makes it more difficult to visual the impact that an $80 monthly savings is really having; the signal-to-noise ratio is exceptionally low. I was just noting that focusing on more controllable factors and ignoring the noise might be more helpful for a psychological boost, especially in turbulent markets.

Yeah, totally agree, but my point was that focusing on the cost-saving's impact on net worth (even over long timeframes, when the noise is eliminated) is still missing the arguably more important half of the picture, which is the cost-saving's impact on the amount of net worth needed to sustain your life.  So the 80 bucks a month you're saving through cost reduction efforts may appear negligible when stacked up next to major short term portfolio losses, and its impact on long-term net worth may become more meaningful when compounded over long time periods, but its most meaningful impact comes from the 24 grand of net worth you no longer need to sustain those eliminated expenses.  That $24k figure never shows up anywhere on your balance sheet, no matter how far you zoom out on the time frame.

Ah, I see the distinction you're making. I think I've already internalized that concept to such an extent that it almost goes without saying - but it's still a point that needs to be said. To be honest, my FIRE number is based more upon a feeling of "This is how much money I need to cover the basic costs for my minimum desired quality of life". I fully expect to continue earning money from various income streams that aren't accounted for in my stash, to cover any desired spending above my minimum threshold. My mental financial accounting is nearly as complicated as my actual finances since I started travel hacking, but that's a story for a different topic.

Alright, on with the regularly scheduled gnashing of teeth over precipitous investment decrescence and/or joyous weeping over discount equity acqisition.

[Travis]

I hadn't checked my actual balances until a couple minutes ago.  I dropped $30k over the last week which is around 5 months of contributions. It's a 7.65% drop since the 19th.  I'm expecting a rather large travel settlement (about half a month paycheck worth) any day now which I'll be putting almost all of right back in.

[2Birds1Stone]

I am down about 1 year worth of living expenses.

I too struggle with the idea of avoiding a fancy meal out when I see a 5 figure drop in NW over 2 weeks.

[wenchsenior]

I'm down over $50k.  I am ~8 years from retirement, and that date is set by a minimum retirement age so that I can get a supplemental pension and continued health care coverage, not by some asset value goal.  I don't need the money now and probably won't need it then.

Still, I'm far from elated.  For me it's hard to think about why I'm focusing on cutting $80 worth of monthly costs when my portfolio just lost half of my annual salary in a few days.  Stupid but I'm not a machine.

Probably the only material effect this will have is that I'm probably going to put about $7500 extra into the market this week (repaying a TSP loan I took when I bought a rehab house that wouldn't qualify for a mortgage).  I just opened a HELOC on that house and they require a $10k minimum draw to waive closing costs.  I could just re-deposit it but I think I'm going to kill that TSP loan and hopefully buy low.

This is about where we are too, both in terms of amount lost and timeline to freedom (maybe sooner if we're hardcore about it).

Meh...I'm just jazzed because in 2007/08, we had MUCH tighter cash flow and I couldn't take advantage of the drop. In fact, we cut way back on 401k contributions at that time because of unavoidable life events sucking up a ton of cash.  It made me CRAZY back then, and I've been waiting for a decent drop ever since, now that we have a lot more flexible cash flow.

[northernlights]

I'n down about $8,000 in the last week...and my portfolio is up 39% from when I started investing. I'm still playing the long game and I just dumped some extra money in.

[Sjalabais]

Not sure if I haven't read this forum long enough, but...why are you celebrating losses? Sort of a "coming off age"-ritual for the FI?

My wife and I sold our investments right before the markets tipped, and paid off our debts this week. As you can imagine, we haven't come that far on the road to FI. Yet, we are very happy to have come this far - and to have cashed in before significant losses.

[BBub]

Not sure if I haven't read this forum long enough, but...why are you celebrating losses? Sort of a "coming off age"-ritual for the FI?

My wife and I sold our investments right before the markets tipped, and paid off our debts this week. As you can imagine, we haven't come that far on the road to FI. Yet, we are very happy to have come this far - and to have cashed in before significant losses.

If you are a net buyer of stocks, a drop in prices is beneficial in the long run because you can buy more shares with the same number of dollars.  If you are a net seller, a drop is detrimental.  Most of us are net buyers.

Congrats on paying off your debts.  As for the timing - congrats on the good luck.  Try not to give yourself too much credit.  Dancing in & out of equities based on hunches about when the markets will crash or boom is a fool's errand.  Even history's most successful stock pickers (warren buffet, peter lynch) don't claim to have that kind of foresight.  Educate yourself & play the long game with your investments.  Then be patient.  You'll come out way ahead.

[zephyr911]

Yep, lost almost $20K while on a 5-day vacation and only found out Tuesday. This makes me happier than ever that I started slow with TSP this year and am sprinting to the finish... I'm buying $120 worth of indexes every workday, and now at discounted prices.

Am I peeved that NW is under 250 again? Well, slightly. I'll get back there fast, and I don't plan on selling anything for decades (FIRE Plan A involves living off rentals and PT work while stocks compound).

Not sure if I haven't read this forum long enough, but...why are you celebrating losses? Sort of a "coming off age"-ritual for the FI?

Markets fluctuate. The more you have in, the more you lose when this happens. The celebration is a function of "having enough invested to lose 5 figures".

My wife and I sold our investments right before the markets tipped, and paid off our debts this week. As you can imagine, we haven't come that far on the road to FI. Yet, we are very happy to have come this far - and to have cashed in before significant losses.

The next time around, when you have six figures invested and no good reason to cash out, what will you do? With your present attitude, I worry that you'd take a major loss and then lock it in by selling again. The rest of us have learned that this is merely a buying opportunity, and are looking for ways to accelerate our investments.

[Sjalabais]

I might have given off the wrong impression - I don't credit myself for the timing of selling stocks. It just fitted well. Also, trying to beat the market is a fool's errand, we can agree on that. Continuing to invest is absolutely in line with this logic.

Still, a loss is a loss. How does that not affect you? At least on a primal, emotional level?

[rubybeth]

Seeing the numbers be down about $10k this week in Mint was tough, but I didn't panic. Just told myself it's a great time to put some more money in the stock market, which we did automatically via payroll deduction. It's back up a few thousand today, plus it's payday, so that helps the overall net worth. :)

[BBub]

I might have given off the wrong impression - I don't credit myself for the timing of selling stocks. It just fitted well. Also, trying to beat the market is a fool's errand, we can agree on that. Continuing to invest is absolutely in line with this logic.

Still, a loss is a loss. How does that not affect you? At least on a primal, emotional level?

Knowledge keeps the losses from affecting me.  And perspective.  A loss is not bothersome because it's a risk I am fully aware of and expect from time to time.  In the course of a normal business cycle, every 7-10 yrs or so, you are nearly guaranteed to see your stock holdings decline by up to 33% at some point.  At least once or twice in my lifetime, I expect to see a 50% plus decline in stocks.  Often times the fall in price is greatly disproportional to the underlying fundamentals, but in a severe downturn the market is controlled primarily by fear, panic and margin calls.  I am willing to deal with that volatility in exchange for the large gains I expect over time.  Subjecting my balance sheet to that volatility was a conscious choice.  Since these wild fluctuations are sure to happen over time, the idea is to beef up the balance sheet to a level that can withstand the volatility over time.  The generally accepted level is 25x annual spending.  Once you have that amount, you have an overwhelmingly high probability of never again running out of money - assuming the money is properly allocated and drawn down.

Nearly all successful investors with the mindset required for a lifetime of wealth-building spend a significant amount of time studying history, learning how the markets work, and developing knowledge about their investments.  Most investors, however, don't do any of these things - which is part of the reason we have such violent swings in the first place!

[GuitarStv]

Stop looking.

[Frankies Girl]

I might have given off the wrong impression - I don't credit myself for the timing of selling stocks. It just fitted well. Also, trying to beat the market is a fool's errand, we can agree on that. Continuing to invest is absolutely in line with this logic.

Still, a loss is a loss. How does that not affect you? At least on a primal, emotional level?

Something it took me an embarrassing time to realize in the early days - the stock prices may fluctuate, but the amount of stocks/mutual funds I hold remains the same. I know they'll eventually recover and then surpass the current value. As long as I'm able to buy more at a steep discount, why on earth should I be that upset? Sure, it can be a bit scary to see the drops in the early days, but I am one of those people that track daily, and I've seen so much volatility over the years I've been checking that I'm desensitized to the on-screen $ dollar losses. And I do mostly get excited to see the market go down so I can come up with a bit more cash. It's a win/win for me - happy when they go up, and now happy when they go down since they're on sale.

I also know that I will never need every single penny in my investments at once - at most I'd need monthly (cut to the bone) expenses, so I know that most of my portfolio will remain intact and able to recover from just about any serious scenario since I'm an index investor (as long as there are no doomsday/zombie apocalypses, I mean).


I used to think like the average investor - confused at how it all works, sure I'd never be capable of handling my own investments, scared of losing everything, and thinking it's all best left to the financial gurus.

But I'm much better now. :)

[Sjalabais]

Hehe, I see your points, guys. One of the issues I have is that I don't have too much systemic confidence: I see stockmarkets as greatly overvalued currently, in large part due to the well-known QE-and-no-alternative-investments-arguments. So I expect it to go way further down. No less reason to invest now, but still a stress-factor.

The minute you depend on your stock investments, a decline in value will reduce the amount of "interest" you receive, at one point one may be forced to cut into the savings, too. So even if losses are expected, the prospects of another major crunch right now are a bit terrifying to me.