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Advice for quickly vanishing contributions

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  • #16
    Am over 50 and I'm hoping for a big correction. Does that make me a bad person?

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    • #17
      William Bernstein: "A twenty-five year-old who is actively saving for retirement should get down on his knees and pray for a decades-long, brutal bear market so that he can accumulate stocks cheaply."

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      • #18
        This is normal stuff for the stock market. It goes down about 1/3 of the time. In recent times it had been going up more than normal as the interest rates were zero and the government was handing out money like candy. We are now in a rising interest rate environment. Those rising interest rates are bad for stocks. It is fairly likely that stocks will continue to go down for a while longer. I stop checking my portfolio when the market is down. I will look again when things get better.

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        • #19
          Originally posted by burritos View Post
          Am over 50 and I'm hoping for a big correction. Does that make me a bad person?
          Better now than later!

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          • #20
            Originally posted by nephron View Post
            I put in some 60K in early January right after I was paid my bonus/profit sharing check only to watch my total vanguard accounts decrease by some 70K year to date. It is depressing. I had some experience in the 2008 financial crisis though where I would watch much smaller amounts disappear every time I deposited it into my 401K. I decreased my contribution rate at the time because I was tired of watching my money disappear. In retrospect, those dollars invested probably had some of the best rates of return I have ever invested. I don't know if this time will be different, but you have to remember- every financial crisis/downturn/etc is "different". If it weren't different, it probably wouldn't have happened again. Unless you need the money imminently, I would just continue investing and hope for the eventual best.
            Same here - I front loaded my employee 401k, Roth, HSA in January, and then got a lump sum employer profit sharing contribution in early Feb - bad timing, but should be okay in the long term.

            Lump sum beats DCA over time. I don't look at my retirement accounts anyways except when I update my spreadsheet, so no biggie.

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            • #21
              If you are just buying index, you should always be putting money in whenever you can (eg, first Monday of the month or whatever you pick).

              In more turbulent times, it is better to shorten the intervals (eg, every Monday).

              If you run into lump sum, put it in or DCA over a short interval.

              One strategy is that if you are putting money in on an up day, buy basic index (usually up less % than tech). If it's a down day, buy tech or tech index you want (they usually go down more % vs non-tech).

              If you trade, the volatility is a very good thing... it is basically your rare chance to dump or flip stocks and and obtain substantially more shares.
              If you index, I suppose it depends on how you view it.
              "Don't be concerned when the market is down, just be very glad that it goes up and down."

              As was said, you are buying shares, not dollar amounts. All I care is that I have more shares of SPY and GOOG and everything than I did before... and I do. Since the Russia war, MANY more. But there are definitely some rough patches along the way... make a plan and do it.

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              • #22
                Originally posted by SpacemanSpiff12 View Post
                William Bernstein: "A twenty-five year-old who is actively saving for retirement should get down on his knees and pray for a decades-long, brutal bear market so that he can accumulate stocks cheaply."
                amen.

                be nervous when others and aggressive and aggressive when others are nervous.

                also i know it doesn't feel like this but the DJIA is currently less than 10% off it's all time high, this isn't even a bear market it's a few months of what has statistically been a flat market. the dow could turn positive for the year by the end of next week, that's actually not even unlikely.

                this is one of the challenges of the WCI community, those of us who started following Jim have regularly seen double digit returns year after year, this isn't going to be the case ever year. now we get a chance to show that we've actually learned something.

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                • #23
                  If this feels like rapidly vanishing contributions, you would have really enjoyed Fall 2008. Every contribution I made that fall felt like stuffing money down a rat hole. I bought all the way down and all the way back up the other side. Guess what those shares I bought in November 2008 or March 2009 are worth now?

                  Just keep buying. Time heals all wounds. And quit looking at your accounts.
                  Helping those who wear the white coat get a fair shake on Wall Street since 2011

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                  • #24
                    Originally posted by xraygoggles View Post

                    Same here - I front loaded my employee 401k, Roth, HSA in January, and then got a lump sum employer profit sharing contribution in early Feb - bad timing, but should be okay in the long term.
                    For those in mid-late career even a large amount of annual savings, even lump summed, is still a very small percentage of our portfolio. We had a substantial first quarter savings tally for the same reasons as you but it is still just a tiny single digit percentage of our portfolio: normal ups and downs in the markets dwarf our contributions. It's just something you get used to. I never find myself thinking how much of my contributions just disappeared, though sometimes - like in 2008-09 - it is discombobulating to think about how many years of labor just vanished!

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                    • #25
                      Originally posted by CordMcNally View Post
                      Check back in 10-20 years.
                      Roger that. Advice = turn off news = noise. Pray for prolonged downturn and keep buying, then wake up 20 years from now with more than you can spend.

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                      • #26
                        Originally posted by sealion1 View Post
                        Any advice for dealing with contributions that vanish within 1-2 days due to stock corrections?
                        I put in 7K twice a month at set times into VTI in my taxable. Lately more often than not, the day after I put in my contribution, my portfolio is corrected back to pre-contribution level.

                        It's such a downer. Makes me want to just put money into cash or bonds though I know I should stay the course...
                        stop looking

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                        • #27
                          The short term always seems relevant.

                          I remember being sad in 2008.

                          I did not have much invested but it sure wasn’t doing great.

                          I also remember feeling like i missed out in 2014 because 2013 was amazing!

                          i had a lump sum to invest in 2014 and 2013 was a great year for stocks and I felt like i was buying at the top in 2014………..” I missed it!” “stocks are overpriced……..bad time to buy…..”

                          Seems pretty ridiculous in hindsight.

                          No one knows the future but if you don’t retire for >10 years from now you really should focus on anything else.

                          In the long run stocks win.

                          The short view is meaningless noise.

                          The long view is rosey.

                          Another thread similar discussion:
                          https://forum.whitecoatinvestor.com/...ing-the-course

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