Should I sell my index funds?

Freaking out wrote:

seattle prattle wrote:

And it is entirely possible that at some point you may wish you had sold when you were -9000. Like the rest of us, you just don't know...

Futures are sightly up today. If I break even I think I will sell, put it all in an Ally savings account for my house fund and then start to DCA $200 per week in a separate taxable account for the long term.

Sincerely glad it's working out for you and you didn't sell at the bottom. Let this be a lesson to you. Success in investing requires the balls to see one's money take big drops in value without letting fear take hold. It's the nature of the game. I too was down 8% or so for a while, and instead of panicking, I scrounged up money I wasn't planning to invest and put THAT into the market. I didn't time things perfectly, but I'm already up 8% on that investment from December bringing me to a net gain of about 1% on my 2018 investments. The market could drop again in 2019, or it could gain 9% like it does on average. Because I'm in it for the long game, it doesn't really matter to me. I bet on the December values being the low and bought the dip with everything I'm willing to invest, so now I have to wait awhile to accumulate before I can put more in, but in another 3 months or so I will start DCAing myself.

I think your plan is a good one. Personally, I think the market will continue to go up in the coming weeks and months, but if you don't like the risk of losing value again, you might consider selling now while you're close to even. That being said, I imagine you have a dividend coming at some point soonish too. You might hold off until you receive it, then cash out. No crystal ball can tell you what is best.

Thank you for starting the thread. It's fostered a lot of great discussion.

Freaking out wrote:

seattle prattle wrote:

And it is entirely possible that at some point you may wish you had sold when you were -9000. Like the rest of us, you just don't know...

Futures are sightly up today. If I break even I think I will sell, put it all in an Ally savings account for my house fund and then start to DCA $200 per week in a separate taxable account for the long term.

Grasshopper, you have now become a wiser man for all that angst. Patience is for those who learn how to acquire it. Good luck in your house hunting, but remember to be patient in that process too, and don't overlook anything.

The Karate Kid wrote:

Freaking out wrote:

Futures are sightly up today. If I break even I think I will sell, put it all in an Ally savings account for my house fund and then start to DCA $200 per week in a separate taxable account for the long term.

Grasshopper, you have now become a wiser man for all that angst. Patience is for those who learn how to acquire it. Good luck in your house hunting, but remember to be patient in that process too, and don't overlook anything.

He's thinking of selling now. He was thinking of selling when he was thousands of dollars down.

And he's being roundly congratulated.

What has he done besides put a lot of money at risk, avoided a pitfall of possibly selling at a recent low, and continue to keep his investment at risk. If he follows through, he may break even. If he does it.

What has he learned? I would be interested to know.

Sometimes waiting facilitates avoiding losses. Sometimes that period can be up to 10 years - probably longer than he could have afforded to wait.

And having been in these situations way more than i would like, i can tell you, that if i were him and sold now, I would feel like absolute sh!t when the index fund continues to climb and I look at thousands of dollars of gains that i could have had had i held on.

Again, what was learned?

To me, it looks like he currently feels relieved because luck would have it that he avoided one investing pitfall for the time being. Which is not to say that another one is not soon to follow. With a heavy emphasis on the luck.

I'll try to answer in the order of your questions/comments:

He eventually decided to wait. Congratulated? Well, IMHO, based upon all my input, he waited and was able to get back to about even after today. That process of waiting requires some conviction and a bit of guts. And, by the way, the Chinese/ US trade deal hasn't even materialized yet even though I believe there is more upside to come but that doesn't matter in his case. As long as he is happy to get back to breakeven then he can sleep soundly.

He now realizes that you don't put "house" money at risk when trying to buy a home. That is the lesson here, in addition to the lesson that you MUST be a long-term investor to play the game.

Let me ask you something; do you think Warren Buffett and others like him are LUCKY? To me, lucky is hitting a lottery ticket for $10 or more. The odds are astronomically against you. In stock investing, you have a higher chance of success due to the company/fund/etf research possible. Sure, sometimes you need to wait years but in the end you can reap the benefits.

In investing, you set goals. In this case, he was happy to get back to even so you have to move on and learn from the experience in your investing mindset. FWIW, I have lost thousands of dollars on speculative plays in my younger days. Now, from those experiences, I stay away from IPO's and early investor plays. On the other hand, I was an early investor of Microsoft and have made hundreds of thousands but in that case I had/have substantial data in which to evaluate.

This was really not an "investing pitfall." This guy just made a mistake: you save for a house; you don't invest for a house. Sure, he like anyone else, can make huge investing mistakes in the future. You develop a set of parameters and adjust them as necessary as you move on in life to compliment your life changes (ie. jobs, kids, college funding, retirement). Hopefully, your choices will reap the benefits you expected OVER TIME.

In the end, it's the averages over time that don't lie. I'll take 9-10% (adjusted to 7% for inflation) every day over anything else. Hedge fund managers can play the higher risk game for others.

You have a very nice imagination. That's story you tell. It's nice. Once upon a time there was a foolish investor who wanted to buy a big fancy house....

Dude, if it's not an entry on a balance sheet, it does not exist.

He bought, it dropped, he whined and wimpered, luckily it went back up, and he's still holding. If he got off his duff, he could possibly sell and avoid losing something. But the only person on here talking about learning anything is you! Not him. He hasn't said he will never do this again (let alone actually follow through on that promise, which he has not made, by the way). He hasn't sold. He hasn't defined any parameters going forward. And to all appearances, he still doesn't have a plan - at least not one he laid out here.

But don't let me detract from your pretty little narrative. A narrative, i may add, that's about real as you being some kind of martial arts aficionado.

Dude you sound frustrated. Are you mad that I didn't sell at a $9k loss? Sorry to disappoint you I guess. If anyone is whining and whimpering, it's you...

Still haven't sold, I take it. And your plan going forward?

I thought so.

seattle prattle wrote:

Still haven't sold, I take it. And your plan going forward?

I thought so.

Sold this week +$389, still can't believe it came back from -$9,000! I already told you our plan a few posts up. We will put it all in Ally 2% savings account for the house fund. We have approx 70k saved up now, and the goal is to have 140-150k in the house fund by spring 2020.

Separately, we will DCA $200/week in the brokerage account for the long term. And of course max out 401k/Roth IRAs.

S&P500 hit a new all time high yesterday. I'm up 18.5% on the money I put in in December. Buy and hold, baby. Buy and hold.

Jack M. wrote:

S&P500 hit a new all time high yesterday. I'm up 18.5% on the money I put in in December. Buy and hold, baby. Buy and hold.

Gee, I wonder how freaking out feels having sold months ago and missed out on this run up?

Too bad.

Jack M. wrote:

S&P500 hit a new all time high yesterday. I'm up 18.5% on the money I put in in December. Buy and hold, baby. Buy and hold.

Buy and hold for 5 months? Come on man, you can’t be preaching in regards to some funds you bought 5 months ago.

Yup. ^This.

Seattle, you're pretty much an ahole.

Come on, nonsense wrote:

Jack M. wrote:

S&P500 hit a new all time high yesterday. I'm up 18.5% on the money I put in in December. Buy and hold, baby. Buy and hold.

Buy and hold for 5 months? Come on man, you can’t be preaching in regards to some funds you bought 5 months ago.

I've been buying and holding since I first entered the market after graduating from college in 2012. I just put in a fairly large reserve of cash I wasn't really planning on investing with when the market dipped in December, right around the time this thread was in full swing and the OP was talking about selling. Obviously 5 months is too short to predict, but on average, the market increases over a timeframe of 5 months, and it turned out to be the case this time also.

You can read my other responses to see what my approach is on investing.

I saw this on the board again last week, which reminded me to post. I'm very glad this all worked out for you, and you were able to get your money back out. If you weed through some of the crap on this thread, there was actually a lot of interesting discussion. I personally learned a lot about ways to use gold, if you see a dip coming.

Anyway I decided to close out my own trade today, and move back to cash for awhile. (Sell in May and go away)

So here's the result:

Coty 12/24 6.20 to 4/26 11.25

Ford 7.70 to 10.40

Permian Trust 5.55 to 6.80

GE 7.05 to 9.55

Total 26.50 to 38.00 for a return of 43.4% + divs about 45%

Gold meanwhile has been basically flat going from $1265 to $1288 +1.8%,

while JNUG has dropped from $8.90 to $8.17. HOWEVER.....

JNUG did rise from 8.90 on 12/24 to 13.09 on 2/20/19 for a gain of 47% (as gold did make it to about $1330) had you exited at that point. (It also rose 9% just today), so gold stocks can be a way to play stock market fear. JNUG specifically is quite volatile, so it for me looks to be more of a short term trading vehicle - ie. jump in for a 10-15% move and get back out, but I will definitely now look at some other ways to use gold.

I don't like the current market - overpriced and a little too good to be true. If we get a 10% drop in the big indexes - S&P, Dow, NASDAQ, I would go back in with a similar grouping of beaten up value stocks + dividend. Could even include this group, as this trade most likely still has legs if you held on for 2 years, but more than likely I'd go a little different with something like AT&T, Pfizer, Kinder Morgan, and a Euro bank like Santander, ING, LYG.

Will check back in from time to time up til year end.

You know Diovin, we share the same thoughts. It's a very bad idea to keep assets for a long period of time. All the more because there are extra risks for keeping them.

Diovin1 wrote:

I' not against investing in index funds although I don't do it. Buying and keeping an asset for a long period of time (not being gold of property), it doesn't seem a good idea for me. Besides the two from the parenthesis, all the others don't seem stable to be. It's like saving money that will lose their value after a while. A lot of people did so when the Soviet Union collapsed by the way. I'm a CFD guy, where you don't own any asset, you just speculate on their prices. This way of trading cuts some of the risks also.

My CFD broker:

https://www.investous.com/

Hm, I guess that it's a risky business, so, please, buddy, be careful when you deal with trading in general, however, I've heard that people earn a lot trading...