"I lost $25K today"--Does it really feel like that?

[samclem]

Another down day on Wall Street, and people upset that they "lost" $XXX today."

I know many have deep "mark to market" allegiances, but when their accounts are down $25K, do they really feel the same sense of loss as if they had permanently misplaced an envelope with 250 hundred dollar bills? Or as though they had totalled an uninsured small car, sunk a boat, etc?

If anyone really felt that way, it's hard to believe they would invest in bonds or equities at all.

I seldom check my balances. This afternoon I own just as many shares of just as many companies as I had at the start of the week. The health of these companies is generally impacted little/not at all by the stock market, and I'll continue to get dividends just as before, and share prices eventually bounce back. I don't need to liquidate my shares tomorrow.

Maybe we just like to commiserate with others about decreases in account balances, and it sounds dramatic to say "I lost twenty-five thousand dollars today" but (to me) it hardly feels like the kick-in-the-gut of a more tangible loss of property.

 

[sengsational]

I'm with ya on your point there. Like my Dad says..."easy come, easy go". If you lost an envelope of cash, that would be "easy go, and fogettabout getting lucky enough to find someone else's envelope of cash"

 

[FI by 2024]

I know people that feel like that, but as far as I'm concerned I haven't lost a penny...

...I do feel like I just saw a "Clearance Sale" sign


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[marko]

The envelope with $250 in it is gone for good.
The $25K will return and likely pay dividends while you wait.

 

[Fermion]

Well, look at it this way. If you mailed in a check to buy $50,000 of stock and then it dropped 50% right after your purchase, would you call it a paper loss if your friend also mailed in $50,000 for the same stock but was delayed because not enough postage on the envelope? I mean, hey, you still have the same shares...but your friend has twice as many now.

 

[NW-Bound]

... when their accounts are down $25K, do they really feel the same sense of loss as if they had permanently misplaced an envelope with 250 hundred dollar bills? ...

Good comparison.

The difference is that this "stock" envelope is not proven permanently lost, and it actually feels thrilling because while people look for their misplaced envelope, they are hoping to run across the neighbors' envelopes too.

I am keeping my eyes peeled. But you don't know if you will find anything until you have it in hands. Heh heh heh....

 

[foxfirev5]

It's way too early for this discussion. Let's see how everyone feels when the market is down over 20%. Just say'in.

 

[FUEGO]

I know I feel the hurt from a lost $1-2 from a price mistake at the grocery checkout counter or losing $5-10 from letting an offer expire or misplacing a gift card. If I don't focus on actively forgetting those losses and putting them in context, they can bug me, maybe even the next day.

Today's $25k+ loss in the market? Pssshhhh... It goes up and it goes down. Still same # of shares. Still have well over a year's worth of spending money sitting in cash paying 1%. I might worry in another year or two but not today!

 

[NW-Bound]

It's way too early for this discussion. Let's see how everyone feels when the market is down over 20%. Just say'in.

Only 20%?

I went back, wanting to add that a "loss" of $25K in a day would not be traumatic, but when it drags on for a month or two, now you are talking real money.

And we were there in 2008-2009. Heh heh heh... Time to revive old threads?

 

[Katsmeow]

I have used that terminology. In fact, I used that terminology to my DH just today. He doesn't follow the market that closely so I walked in and said we lost $X today in the market.

The thing is that the word "lost" can mean different things in different contexts. He knew what I meant. The equities are still there but they lost $X in value today. (Yes, they can still go back up).

Did I think it was the same thing as permanently losing a physical item? Of course not. But, again, he knew I wasn't using the term "lost" in the literal, forever sense.

On the other hand, it didn't feel great to see balances go down that much. And it is a little harder now that we are so dependent on those balances for our life. It isn't like several years ago when we were both working full time and I barely paid attention to it.

Now, a large decrease in market value is one that theoretically could have impact on withdrawal strategies. A large enough decrease (not today's decrease or even a "normal" bear market) could affect portfolio survival. So, it is something I pay attention to now.

In this case, I simply assured my husband that I wasn't that concerned about the decline, that I actually thought a correction wouldn't be that bad a thing. And, I told him that we had the portfolio set up so that we could get through the end of next year (when our son graduates college so we have higher expenses right now) without selling any equities (we could actually go longer than that, but I was focused on that time period in the conversation).

So, am I panicked at the "loss" of $X today. No. Did it give me a bit of a pang? Yes. Will I change our plan or sell equities in response? No.

 

[NW-Bound]

Still have well over a year's worth of spending money sitting in cash paying 1%. I might worry in another year or two but not today!

Quicken says I have 37% in cash right now, and I can cut my expenses back to below 3.5% (based on current portfolio) and do not miss much out of life.

And SS is only a few years away.

Me worry? I can devote more resources to looking for people's misplaced $25K envelopes. Hope to find some...

 

[Gumby]

It's way too early for this discussion. Let's see how everyone feels when the market is down over 20%. Just say'in.

Most people here probably already know how they will feel and can predict what they will do. We suffered a 54% decline in the DJIA from October 2007 to March 2009, and we can recall exactly how we felt and behaved then. I see no reason to believe that people have changed all that much in 6 years.

 

[pb4uski]

I look at it as just giving back a portion of paper gains. No big deal and you expect these things once in a while. So for the portfolio, I move from a 15.8% aggregate unrealized gain yesterday to 13.9% today. Still a healthy gain overall. Que sera sera...

 

[NW-Bound]

By the way, my numbers are all in for today. I "lost" more than $25K (can't tell you the exact number ).

The consolation is my stock AA dropped only 2.07%, compared to S&P at 3.19%. So, how do I complain?

PS. Total portfolio down 1.33%, which compares favorably with Wellington for the same 60% stock AA. Wellington drops 1.91%. Wellington usually beats me when the market goes down, meaning going down less, but not today.

PPS. The most I have lost in a day is $80K. And that was back when I had less than today, but held high-beta stocks. And I was never 100% invested.

 

[hnzw_rui]

I know people that feel like that, but as far as I'm concerned I haven't lost a penny...

...I do feel like I just saw a "Clearance Sale" sign

+1. Wish I had more cash available to invest.

 

[NW-Bound]

I'd like to see "Liquidation Sale" or "Going Out of Business Sale" sign.

 

[redduck]

 

[Corporateburnout]

Most people here probably already know how they will feel and can predict what they will do. We suffered a 54% decline in the DJIA from October 2007 to March 2009, and we can recall exactly how we felt and behaved then. I see no reason to believe that people have changed all that much in 6 years.

I was working back then and buying equities on sale so I wasn't worried much. Not sure how I would feel now if we have a 54% decline in equities. But with a 50/50 AA and 4 years of living expenses in cash I'm sure I'll sleep well at night.

 

[Mulligan]

Most people here probably already know how they will feel and can predict what they will do. We suffered a 54% decline in the DJIA from October 2007 to March 2009, and we can recall exactly how we felt and behaved then. I see no reason to believe that people have changed all that much in 6 years.

Still, I bet for a newbie who just retired in the past month and isn't living off a pension, must find a sudden drop unnerving. When you are working it isn't as big as a deal, or if it isn't your first rodeo in retirement it is not as troubling. But to get that first punch in the mouth has to sting a bit I would think.


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[audreyh1]

Most people here probably already know how they will feel and can predict what they will do. We suffered a 54% decline in the DJIA from October 2007 to March 2009, and we can recall exactly how we felt and behaved then. I see no reason to believe that people have changed all that much in 6 years.

It's also hard to believe we would be subjected to another decline of that scale in only 7 years. Although - I guess that one was only 8 years from 2000, which wasn't as large of a decline, but took a lot longer to go down and recover, so it felt pretty bad too.

 

[aja8888]

Still, I bet for a newbie who just retired in the past month and isn't living off a pension, must find a sudden drop unnerving. When you are working it isn't as big as a deal, or if it isn't your first rodeo in retirement it is not as troubling. But to get that first punch in the mouth has to sting a bit I would think.


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Watching the "bloodbath" is always a bit unnerving for most folks. The thing to remember right now is the following:

1. No U.S. recession is looming.
2. The economy is growing slightly and steadily.
3. Unemployment is about as low as it can get.
4. Inflation is low.
5. Housing is pretty strong.
6. Commodities are in the toilet (low gas prices, cheap feedstock for plants)
7. No one is starving in the U.S.
8. Interest rates are at historic lows (cheap mortgages, loans, etc).
9. The restaurants are full and a one hour wait is common.
10. Discount Tire is selling tires like crazy.

And my final point is that hedge funds and mutual funds like this push down to make their quarter when they start bidding up stocks again.

Sleep well, my friends....

 

[Chuckanut]

Buy low, sell high.

 

[Senator]

I too, lost well over $25K.

I was tempted to make a purchase yesterday, as stocks were cheap. It would have been about two weeks ahead of schedule, as I make an after tax purchase monthly. I already maxed out the 401K and after tax IRA. It would have been a mistake.

I decided against it. I will put the order in ~8/5, as always, to buy some additional IVV.

If the market continues to go down, it will be cheaper in a month. That is better (in a twisted sort of way) than buying today.

If the market is making higher highs in a month, this blip doesn't even matter. In the long run, timing doesn't matter, being in the market matters.

So I am relying on 130+ years of market history. (And my regular job and the 24 rentals...)

 

[flyingaway]

It is a privilege to lose more than $25K today.

 

[bingybear]

I too, lost well over $25K.

+1
actual $ amounts are so variable among all the readers/posters due to differing assets and allocations. How about % of annual spending budget. That might give another perspective. This could be a good time to harvest some losses.