Daily Fluctuations

[txtig]

I’m amazed at the ups and downs in my investable funds. A few days ago, in one day I lost more than four times my annual salary at my first job after graduating from college. Over the past two days, I’ve gained two times, and then the next day, three times that starting annual salary. And, it really never really fazed me at all! Just glad that the overall trajectory has been positive.

 

[EastWest Gal]

I lost a regular year's salary a few days ago, and gained almost half of it back today. My YTD is about 2.5x my regular salary when I retired. The magic of ROI being a percentage as opposed to being an absolute number. It doesn't bother me at all either.

 

[Ready]

Yes, that’s pretty much how a roller coaster works too.

 

[NW-Bound]

Yes, that’s pretty much how a roller coaster works too.

Well, after the initial climb, a roller coaster generally goes down more than it goes up as it loses momentum, until the end when it is in dead stop.

I surely hope the stock market does the opposite.


PS. Or perhaps it would be like a roller coaster, if the Fed did not kick it in the butt every so often to get it going.

 

[38Chevy454]

It is true the magnitude of the daily fluctuations are now more than your past income. I also tend to believe volatility is higher recently which seems to magnify the daily gain or loss. Just teach yourself to ignore the daily fluctuations as anything more than passing interest as along term investor. It seems you have done this well as it has not fazed you. Separating that emotional response of the gain/loss is a skill that the smart investors have acquired.

 

[Koolau]

I rarely even look at my numbers. As my AA is a bit short on equities (1/3 or less) the whole thing is less volatile than most I would guess. My relatively small commitment to PMs causes some volatility, but since it's small, it doesn't change the whole stash much. Generally, the PMs are somewhat negatively correlated with equities, so there's that. I don't have the growth potential (or loss potential) of others here, but I have "enough" so that I just don't think of it too often. I guess feelings on daily fluctuations vary quite a bit here but YMMV.

 

[GenXguy]

No surprise at all, to me. I've been through this many times.

 

[target2019]

Capitalism is boom and bust, boom and bust.

 

[CaptTom]

If I don't like the day's numbers, I go to a one-week chart. Still no good? Look at the YTD chart. Keep going until you find a happy place, then close the browser. Ignore the headlines. We're in it for the long haul.

Oh, and the dollar amount is irrelevant. It's what that amount will buy that's important. As long as you're at or ahead of inflation, you haven't lost anything.

 

[OldShooter]

Multiple research efforts have shown that people who look at their accounts very often get poorer results than people who leave them alone. The shortest span I ever look at for prices is one year.

 

[audreyh1]

I’m amazed at the ups and downs in my investable funds. A few days ago, in one day I lost more than four times my annual salary at my first job after graduating from college. Over the past two days, I’ve gained two times, and then the next day, three times that starting annual salary. And, it really never really fazed me at all! Just glad that the overall trajectory has been positive.

I noticed this so much my last two years of working. It seemed ridiculous to even think about salary!

These days I don’t even bother looking at daily changes.

 

[jebmke]

Well, after the initial climb, a roller coaster generally goes down more than it goes up as it loses momentum, until the end when it is in dead stop.

I surely hope the stock market does the opposite.


PS. Or perhaps it would be like a roller coaster, if the Fed did not kick it in the butt every so often to get it going.

The dead stop is the investor, not the investment.

 

[Major Tom]

If I don't like the day's numbers, I go to a one-week chart. Still no good? Look at the YTD chart. Keep going until you find a happy place, then close the browser. Ignore the headlines. We're in it for the long haul.

From one Tom to another, this is exactly what I do. A benefit of being invested for a long time, is that you can always reference a time in the past when you had much less than you do now, regardless of the current state of the markets.

 

[NW-Bound]

Capitalism is boom and bust, boom and bust.

Boom is more fun than bust.

I look at my stash every day, unless I am traveling and have no access to the Internet. I am always looking for opportunities.

 

[NW-Bound]

Perhaps I should provide some clarifications to my post above.

I am an active investor, and have more in individual stocks than MFs. I do not look at my MFs daily, in fact totally neglect them even the active ones. For example, I have one MF that I have had for a few decades, and one day noticed that its return was a bit lousy as seen on my Quicken screen. I looked into it, and found out that dividend returns for the last 2 years were not posted, due to Quicken not being able to log onto the account to download the info. I fixed it, and instantly got some extra money.

It's my own stock picks that I have to pay attention to. What if I have something like GE among them? If I look at them once a year, there may not be anything left to look at one year later.

And speaking of GE, I recently bought a bit after deciding that their worst was behind them. Had a bit of gain so far.

 

[OldShooter]

... It's my own stock picks that I have to pay attention to. What if I have something like GE among them? If I look at them once a year, there may not be anything left to look at one year later. ...

Well, that's a whole investing philosophy thing. Day-to-day fluctuations mean nothing, whether stocks or MFs. So how long a period does it take to provide meaningful information? I think true investors would offer a number that is longer than a year. For traders, who basically trade on noise, it's much shorter.

 

[NW-Bound]

Well, that's a whole investing philosophy thing. Day-to-day fluctuations mean nothing, whether stocks or MFs. So how long a period does it take to provide meaningful information? I think true investors would offer a number that is longer than a year. For traders, who basically trade on noise, it's much shorter.

I only hold stocks which I think have good fundamentals. I then look at the short-term fluctuations to see if they make sense. If I am convinced they are noise, then I rely on the "reversion to the mean" principle to bet against the fluctuations.

My contrarian bets are not made by directly buying/selling the shares to add/subtract from my positions, but by selling calls/puts on them. This theoretically gives me an extra edge by gaining the option premium.

The goal of the option contracts is to set the price high or low enough such that they will expire worthless, and I keep the premium. In effect, I am constantly looking for opportunities to say "no, things will not get so bad", and "no, this stock is good, but not that good".

So far, I have the options exercised at a rate lower than 1/10.

 

[jebmke]

I noticed this so much my last two years of working. It seemed ridiculous to even think about salary!

These days I don’t even bother looking at daily changes.

Most of our accumulating years we only could see valuation of the bulk of our assets once a year. Made it quite easy to ignore the noise.

 

[TheWizard]

I have no individual stocks, just MFs and ETFs.
So I monitor things most weekdays to see how they are going.
I have a modest limit order open to buy more QQQ for the past few weeks, for instance, so I'm curious if that is close to executing...