Should I sell my index funds?

Freaking out wrote:

I'm freaking out. This year was my first time investing in a taxable account after maxing out retirement accounts. I've put extra money into an index fund whenever I had it, didn't DCA or anything. Turns out I bought at the peak. My account had about 65k a couple weeks ago, now I'm looking at a 7k loss if I sell. There seems to be no end in sight!

We are trying to save up for a house next year, but we just lost one month's worth of income. Should we sell to stop the bleeding? I know we should have sold a week or two ago but it's too late.

It's not a loss until you sell, problem solved buddy!

If this is a retirement account and you're young, then buy every dip you can because in 20 years you will be so rich you won't know what to do with it all. If it's a savings or personal investment account, then you should have seen the writing on the wall back in October, or at least November, and gone into bonds or something safer.

If this money was in any way supposed to support buying a house in 2019 then you should have never put it into an index fund in the first place.

Also you may have bought at a relative peak, but 5-10 years from now it most likely won't be a big deal. If you're investing for the long term then the best idea during this kind of market environment is to not check your balances or else you'll drive yourself crazy.

Invest in Tesla and facebook, they are getting cheaper every day.

Thanks for the feedback, like I said I know I should have sold before but I don't have a time machine. This is separate from our 401k and Roth IRAs, those I'm not worried about.

We plan to buy a house in 2020, I guess in the long run a 7k loss is relatively small. But I'm still freaking out.

I can't answer your question directly, but let me offer you some general help.

Republican administrations typically cut taxes without cutting spending. This leads to a market run up and inevitable crash. Always invest at the beginning of GOP rule, and then get out as soon as the chickens come home to roost. Never invest in the middle of GOP administration.

Why exactly are you freaking out?

Whether you like it or not, this money is no longer considered short term for you. You have to keep it in at least 5-40 years. Any shorter and you had no business putting it in an index fund anyways. Take this as a lesson and save for short term goals in safer areas. If this means you delay buying your house a year then oh well.

Sit tight. Q4 earnings will be out in a few weeks, and nothing to suggest that they will be terrible. Expect a bit of a bounce back

The rule is buy low, sell high. For some reason people do the opposite.

OP:

Can't take back what's been done, sure try and learn for going forward but if you dump now you could be selling at the bottom, but at the same time we could still go lower. I would ask yourself how you'll feel if you are down another 7K next month, or if you sell today and see the market go back up. It's largely a personal decision based on individual risk tolerance.

Don't sell. You will get your money back over the long term. But you will have to put off buying your house. Short-term investing is very risky now. Best to just hammer savings for your house.

Freaking out wrote:

I'm freaking out. This year was my first time investing in a taxable account after maxing out retirement accounts. I've put extra money into an index fund whenever I had it, didn't DCA or anything. Turns out I bought at the peak. My account had about 65k a couple weeks ago, now I'm looking at a 7k loss if I sell. There seems to be no end in sight!

We are trying to save up for a house next year, but we just lost one month's worth of income. Should we sell to stop the bleeding? I know we should have sold a week or two ago but it's too late.

Think about it this way, your retirement accounts probably have most of the same stocks as your index funds and the performance is basically the same. So you're just putting more money into a similar fund with less of a tax benefit. Anything happening to your taxable account is also happening to your retirement funds.

please do remember that if you decide to sell you have to sell them in the same order you bought them. this is why they are called Index Funds, they are indexed and need to be bought and sold in index order.

All the buy and hold suckers are telling you to continue to buy and hold. The financial advisors are saying buy and hold unless they recommend their clients sell. Stock market is a racket. A sucker is born every day.

Ignore the noise and stay the course. You should be buying stock funds right now and rebalancing with your bond index funds. Set an allocation (% years old in bonds is a good rough suggestion). Market zig zags are typical but the long term trend is generally upward.

Just think! Fifty more trading days in a row like today and this will all be over. It'll be like Mad Max by forty more trading days in a row like today.

Anyone notice, Federal Reserve is raising Over Night Feds Fund Rate through all this madness? The Fed just raised interest rates. The Feds are working for their favorite class of US citizens, Coupon Clippers. Coupon Clippers are trust fund kids, ex-wives of billionaires and widows of billionaires. All they want is 5% bond yields on US Treasuries. Since Coupon Clippers have both money and time on their hands, they boss around politicians. They donate to campaigns. Coupon Clippers rule this nation.

All the buy and hold suckers ... wrote:

Just think! Fifty more trading days in a row like today and this will all be over. It'll be like Mad Max by forty more trading days in a row like today.

Anyone notice, Federal Reserve is raising Over Night Feds Fund Rate through all this madness? The Fed just raised interest rates. The Feds are working for their favorite class of US citizens, Coupon Clippers. Coupon Clippers are trust fund kids, ex-wives of billionaires and widows of billionaires. All they want is 5% bond yields on US Treasuries. Since Coupon Clippers have both money and time on their hands, they boss around politicians. They donate to campaigns. Coupon Clippers rule this nation.

0/10

Ok I will leave my taxable acct alone and keep them long term, hopefully they go up.

Will save aggressively for a house in a separate savings account, at least they're giving out 2%+ now.

Bogleheads.org wrote:

Ignore the noise and stay the course.

Uhuh.

You should be buying stock funds right now and rebalancing with your bond index funds. Set an allocation (% years old in bonds is a good rough suggestion). Market zig zags are typical but the long term trend is generally upward.

Make up your mind. Stay the course, or sell and buy??? Actually the boogiedorks would rebalance by selling bond funds and buying more stocks.

compressed wrote:

I can't answer your question directly, but let me offer you some general help.

Republican administrations typically cut taxes without cutting spending. This leads to a market run up and inevitable crash. Always invest at the beginning of GOP rule, and then get out as soon as the chickens come home to roost. Never invest in the middle of GOP administration.

This is exactly what happened. Wish I'd known about this a few years ago.