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"I lost $25K today"--Does it really feel like that?
Old 08-21-2015, 06:55 PM   #1
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"I lost $25K today"--Does it really feel like that?

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.
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Old 08-21-2015, 07:03 PM   #2
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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"
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Old 08-21-2015, 07:14 PM   #3
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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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Old 08-21-2015, 07:16 PM   #4
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The envelope with $250 in it is gone for good.
The $25K will return and likely pay dividends while you wait.
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Old 08-21-2015, 07:20 PM   #5
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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.
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Old 08-21-2015, 07:23 PM   #6
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Originally Posted by samclem View Post
... 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....
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Old 08-21-2015, 08:09 PM   #7
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It's way too early for this discussion. Let's see how everyone feels when the market is down over 20%. Just say'in.
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Old 08-21-2015, 08:10 PM   #8
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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!
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Old 08-21-2015, 08:12 PM   #9
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Originally Posted by foxfirev5 View Post
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?
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Old 08-21-2015, 08:16 PM   #10
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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.
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Old 08-21-2015, 08:17 PM   #11
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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...
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Old 08-21-2015, 08:19 PM   #12
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Originally Posted by foxfirev5 View Post
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.
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Old 08-21-2015, 08:20 PM   #13
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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...
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Old 08-21-2015, 08:40 PM   #14
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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.
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Old 08-21-2015, 08:45 PM   #15
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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.
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Old 08-21-2015, 08:52 PM   #16
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I'd like to see "Liquidation Sale" or "Going Out of Business Sale" sign.
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Old 08-21-2015, 09:10 PM   #17
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Old 08-21-2015, 09:17 PM   #18
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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.
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Old 08-21-2015, 09:19 PM   #19
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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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Old 08-21-2015, 09:48 PM   #20
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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.
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