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Markets had a big drop today and have had a lousy year to date and a lousy last three months. This happens from time to time. It is part of being an investor in stocks. You should expect to pass through 5-10 bear markets (a 20% drop) in your investing lifetime and three times that many "corrections" (a 10% drop).
TSM (Vanguard Total Stock Market Fund VTSMX) is down from $53.86 a share in July to $46.48. That's a drop of 13.7%. It's actually a little less since it has paid two dividends (totaling 50 cents) in that time period.
I have no idea whether the market will go down or up from here, or if it continues down how far it will go down and when it will start going back up. But this much I can tell, it is highly likely that the market will be MUCH higher when I spend the money I am investing now.
If you invest in a taxable account, this is a great time to learn about tax loss harvesting. I invested $130K this Fall in a taxable account. It has lost about $15K. But I have also captured taxable losses of $7,000 for 2015 and $9,000 already for 2016. That's right- I lost $15K but get to deduct $16K from my income (although only $3K a year against earned income- but that can be carried forward indefinitely.)
There are many investing plans that are just fine. However, in order to be financially successful, you have to follow it in times like these.
Stay the course. If it is hard for you, console yourself with letting Uncle Sam share your pain. If it is still hard for you, start reading up on market history. When you realize how often this sort of thing happens, it makes it a lot easier to see that the world is not ending.
TSM (Vanguard Total Stock Market Fund VTSMX) is down from $53.86 a share in July to $46.48. That's a drop of 13.7%. It's actually a little less since it has paid two dividends (totaling 50 cents) in that time period.
I have no idea whether the market will go down or up from here, or if it continues down how far it will go down and when it will start going back up. But this much I can tell, it is highly likely that the market will be MUCH higher when I spend the money I am investing now.
If you invest in a taxable account, this is a great time to learn about tax loss harvesting. I invested $130K this Fall in a taxable account. It has lost about $15K. But I have also captured taxable losses of $7,000 for 2015 and $9,000 already for 2016. That's right- I lost $15K but get to deduct $16K from my income (although only $3K a year against earned income- but that can be carried forward indefinitely.)
There are many investing plans that are just fine. However, in order to be financially successful, you have to follow it in times like these.
Stay the course. If it is hard for you, console yourself with letting Uncle Sam share your pain. If it is still hard for you, start reading up on market history. When you realize how often this sort of thing happens, it makes it a lot easier to see that the world is not ending.
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