Should I sell my index funds?

If you need to withdraw the funds in 2020, you should wait until late spring early summer 2019. There may be a brief recovery when the economy gets a boost from bigger tax refunds (although people in high tax states may not benefit). And I would anticipate some sort of breakthrough on trade with China. Trump cannot keep the trade dispute alive heading into the 2020 primaries. He could get beat in the Iowa primary by someone like Kasich. So, markets might rebound a bit in a few months. But do not expect to be back to 26,000. If you can get to 24,500, that would be a good spot to cut your losses.

yeah you shouldn't have been in these assets if you needed the money in such a short time horizon.

but for anyone who's going to be a net buyer over the next 5 years, the recent market performance is great.

One or more posters on this thread are bullish on US equities. One or more posters on this thread are changing names to give the impression many are bullish on US equities.

Yep, wait until there is blood in the streets, that is the time to buy. Accumulate when guys like the OP start jumping out of windows.

nagoya wrote:

No, idiot. This is when you BUY.

No— hell no. If you’re young and I’m sure you are or you’d know the answer to this question :), hold and buy more. Much more. As much as you can afford. You have a long time horizon and the long term trend will always be up.

Racket wrote:

[quote]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!

On My God are you guys still pushing that nonsense?

He had $65k a couple of weeks ago. He now has $58k.

He lost $7k.

philponderphoto wrote:

You have a long time horizon and the long term trend will always be up.

.

Really? Is that a law of nature? Physics?

Look at a graph of the Dow for the last 100 years and then you tell me. Of course if the United States ceases being a country, then all bets are off.

Never put one lump sum into any portfolio investment. You must have your risk management calculated before you invest. Master Traders go into a trade thinking that they are going to lose every trade that they make, that way their risk management is solid.

At 65,000, no way should you have invested the entire amount into stock or an instrument that is based on stock. You should have invested no more than 10 percent at the most, or you should have Dollar Cost Avg.

Also, smart traders get out of losing stocks quickly because the stock market is unpredictable, and the goal is to protect the majority of your capital or margin.

Example, the other the week I bought PIR ( Pier 1 Imports) at 1.17 a share. I did my research and realized that the company was basically at rock bottom and was in the process of redeveloping and restructuring their company, and based on their historical data they floor low and then go up by 4 or 5 dollars, and then drop again. I simply bought 100 shares (117.00 not even putting a dent in the majority of my capital) with the expectations of the investment just being a short to mid term investment ( in my opinion retail business is not for long term investment, just take advantage of the short gains and get out). ......I set my risk at 0.80 cents a share, meaning I was willing/expecting the stock to drop to 0.80 ( again , based on past data), which would have been a 37.00 dollar hit for me. Well, the other day, Pier 1 Imports 3Q earning were WAY off the mark, and then they fired their CEO. And just like that the stock dropped from 1.10 to 88 cents within minutes. I got out at 0.84, even ahead of my risk limit. I preserved the majority of the money for that particular investment and put it into another stock. MY MONEY LIVED TO SEE ANOTHER DAY.

Just don't sit their and let your losses pile up. YOU HAVE TO TRADE WHAT YOU SEE. If a stock drops by 50 percent, then that stock has to go up by 100 percent for you to break even!

When the market is going through a major pull back, especially during a period when the fed is trying to cap inflation, then investors are going to go to bonds to protect their profits, because bonds are less volatile. Once the market starts to recover, then they get back into the market. They just don't sit their and let their losses compound.

You have 7,000 left. The fed just raised rates by a quarter of a point, so there is not going to be a lot of spending, so the market will go through a lot of sideways movement or continue to drop, or there could be some growth. WE DON'T KNOW.

7000 is now your capital, so the goal is to protect most of it or all of it. If I were you, I would take out 5,000 and put it in my savings ( take advantage of the compound interests, and hopefully you're getting at least 2 percent interest). I would then take the remaining 2,000 and put it into an ETF. I'm not big on Index Funds because they are managed by a portfolio manager who decides what stocks will be in the portfolio. Get an ETF that is based on the top american companies, put the 2,000 into that, and dollar cost avg from her on out. Your money will grow over time ( with some losses her and there..but mostly growth).

Accept your loss and move on.

correction: you just had a 7,000 loss. I read it as if you only had 7,000 left. My mistake. But my strategy still applies. Get the majority of the money out of that fund. AT 58,000, I would put at least 38,000 into my savings to take advantage of the compound interest.

10,000-20,000 is more than enough to generate profits in the market. Risk Management comes first for every level of trading.

You should not have sold two weeks ago. You just should not have put $65K into anything that you are going to need in one year. Did you really think that the market overall was going to go up ANOTHER 25% in the time that you had that $65K invested?

Once this political turmoil is over the market may rebound. That may take a year though, or maybe until November 2020?

Scorpion_runner wrote:

correction: you just had a 7,000 loss. I read it as if you only had 7,000 left. My mistake. But my strategy still applies. Get the majority of the money out of that fund. AT 58,000, I would put at least 38,000 into my savings to take advantage of the compound interest.

10,000-20,000 is more than enough to generate profits in the market. Risk Management comes first for every level of trading.

The "compound interest" over the next year? The most he could hope to make on $38,000 would be 1.95% right now. Did you even read what he wrote? Please explain yourself?

Do you believe that there is a certain volume of money that will "generate profits in the market"? You realize that a mutual fund will generate an amount proportional to what you put in and you have no control over what that return will be? If you invest $20K you will get 20 TIMES THE RETURN that you would get from a $1K share? You get that right?

Probably not considering this is LetsRun.

Do you have some kind of recognized disability?

Scorpion_runner wrote:

Master Traders go into a trade thinking that they are going to lose every trade that they make, that way their risk management is solid.

Except they lose big time all the time.

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

On My God are you guys still pushing that nonsense?

He had $65k a couple of weeks ago. He now has $58k.

He lost $7k.

++++++++++++

I love it when people enter this circular debate.

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.

So was 2008-2009 the GOPs fault too?

Thanks for the couple of posts that gave advice.

The majority of the responses were "you should have sold" or "you shouldn't have put money into an index fund to begin with". Hindsight is 20/20. Like I said, I understand now but I don't have a time machine. I can't say I'm surprised to receive those responses though.

you sure about that wrote:

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.

So was 2008-2009 the GOPs fault too?

Let me respond to your question with another question. Between and including the years 2005 and 2010, when was the market peak?

compressed wrote:

you sure about that wrote:

So was 2008-2009 the GOPs fault too?

Let me respond to your question with another question. Between and including the years 2005 and 2010, when was the market peak?

The goal is to PROTECT his profits, especially when he is try to buy a house, so putting it into his savings will not only protect his money, but gain him some type of return even if its only 2 percent! So it is not about making money. It is about protecting his money during a major down trend. A gain is a gain, as opposed to massive losses. That's investment 101, which is why investors go to bonds when the market is crashing, not to generate profits, but to protect profits.

And I prefer ETFs because they are easier to trade, shares of etfs are traded on an exchange and can be purchased and sold freely. There are no minimum purchases, and most ETFs are commission free. Secondly Index Funds are illiquid compared to an ETF, you can't sell them quickly. And there are expensive to get out of. So if the market is tanking, you can't immediately get out of the fund, meaning more big losses will be incurred. Also when liquidating a Fund the value is based on a system Net Asset Value, which is not calculated until the end of close. With an ETF, the price of the share is the value, and I get that price when I sell it immediately.

That is why I said he should get out of that fund and over to an ETF -- more control of his assets.