Sell Off emotional managment

[NW-Bound]

I am not an indexer, but I have to say this. If you hold value or income MFs, you should have no fear. If you hold balanced MFs, you will be OK too. Even if you are 100% in S&P, well, people who do this already experienced severe up/down, and they recovered in time.

People who hold individual stocks like myself have to pay attention to their holdings. When I buy a stock, of course I expect it to go up, but when it goes beyond my expectations, I trim back as a precautionary measure. Trees don't grow to the moon.

So, what are your holdings? If you are holding "hot" stocks, MFs, or ETFs, then you need to pay attention. Buy/sell/hold as one wishes, but you can't ignore them.

 

[Doolish1]

I am not an indexer, but I have to say this. If you hold value or income MFs, you should have no fear. If you hold balanced MFs, you will be OK too. Even if you are 100% in S&P, well, people who do this already experienced severe up/down, and they recovered in time.

People who hold individual stocks like myself have to pay attention to their holdings. When I buy a stock, of course I expect it to go up, but when it goes beyond my expectations, I trim back as a precautionary measure. Trees don't grow to the moon.

So, what are your holdings? If you are holding "hot" stocks, MFs, or ETFs, then you need to pay attention. Buy/sell/hold as one wishes, but you can't ignore them.

A mix of VO, VXUS, VOO, SCHD, VIG, VUG, OBSOX, a little STCE for fun, and some MO for dividends.

 

[TheWizard]

I do two things:
- I update every quarter.
- I only look at figures when it's at all time highs.

You can certainly do that, but if you have a growing taxable account, like a few of us do, you won't be able to Tax Loss Harvest effectively when markets are down...

 

[Diogenes]

Fortunately by the time I retired I was inured to big market drops that dwarfed my annual salary. ..

I'd personally not say "inured", but maybe "reconciled". Friday wasn't a huge drop, in market percentage terms, but yes, one occasionally experiences a day, where the day's losses are much greater than the peak of one's former gross annual salary... sometimes by a substantial multiple.

The remedy, to the extent that one exists, is to realize that large fluctuations are part of the bigger picture, of one's portfolio becoming untethered to one's actual life. The numbers on the screen simply have no relation to what one spends, one's bills and so on. It's as if the screen-numbers belong to a different person, or no person at all, but are dispersed across some amorphous generic Humanity.

 

[Sunset]

....
Just for advice:

But if you are retired, how do you, personally, emotionally reconcile the concept that you may have lost a year of spending (for me at least) in a day?

After being retired for over a decade, I've realized the market jumps up and down all the time. Sometimes I go up a years worth of spending, and sometimes down.

I don't pay attention, unless it goes down a huge amount of 10% or more or hits new highs (where I think do I need cash ? ).

I keep a few years in cash-like investments, so I can wait out a market recession.

 

[Kings over Queens]

After last Friday's sell-off, I lost maybe 40K in a day. I understand this is like 2-3% of a portfolio and a blip not a trend, etc. I know the market trends should be measured closer to decades not hours, etc.

Just for advice:

But if you are retired, how do you, personally, emotionally reconcile the concept that you may have lost a year of spending (for me at least) in a day?

I saw your list of stickers a few posts above. You'll be fine.

To your direct question, how do I stay emotionally reconciled? Well, I've seen this movie before and know how the care chase ends. I also have guard rails (cash in MM fund) should the chase last longer and be more violent than typical.

The tide goes in, the tide goes out. Sometimes the tide floods longer, sometimes you get a blowout tide.

I was up 350k YTD at the close on Wednesday, then Thursday gave back 12k of that and then Friday another 92k. So what. I'm still up 242k from 1/1/26.

I honestly don't sweat it when the market goes down. You're in good equities so neither should you.

 

[marko]

The GFC emboldened me greatly. Or at least the recovery did.

Terrified, (and just recently retired) I just white-knuckled my drop down. The subsequent recovery was spectacular.

Despite a 23% drop, my dividends--which is our income source--kept paying about the same.

Since then, my downturn strategy is 1) look for bargains, 2) look for TLH, 3) do nothing 4) collect dividends.

Answer to your question: just look at the market charts. Sometimes it takes a little time, but it has always recovered. In the meantime, there's opportunities.

 

[Mr. Tightwad]

I retired 19 years ago at the age of 45. Haven't pulled any money out of the market yet. It just keeps growing.

I live off rent collected from 3 tenants that thankfully wish to rent from me. Markets go up markets go down, but the rents keep coming either way.

A landlords favorite day of the month is the 1st.

 

[chemEguy]

I have a tracking spreadsheet that I update every Saturday morning. In 2026, the maximum decline in one week was $314k and the maximum increase was $237k. If you have been doing this long enough, (35 years my case) you eventually get used to wild swings.

Yep. Exactly.

 

[Al18]

1. I own mostly mutual funds and ETF’s
2. After being retired 7 1/2 years, I’ve changed my asset allocation to 50/50
3. I only check my investments on the 15th and end of the month

Retirement is not about sitting on your butt and watching what the stock market does. It’s about getting outdoors and pursuing your life interests.

 

[OldShooter]

But if you are retired, how do you, personally, emotionally reconcile the concept that you may have lost a year of spending (for me at least) in a day?

I have been riding Mr. Market since the 1987 excitement and never, ever, have sold into a down market. And ... every single time the market has recovered. Currently our investable assets comprise very serious 7 figures.

Warren Buffett: “The stock market is a device for transferring money from the impatient to the patient.”

 

[Doolish1]

I guess we are testing this theory again today with another AI/Interest rate sell off....

 

[OldShooter]

I guess we are testing this theory again today with another AI/Interest rate sell off....

Not even close. My personal expectation, somewhat optimistic I know, is for a 1000+point hit to the S&P at some point here.

 

[TickTock]

But if you are retired, how do you, personally, emotionally reconcile the concept that you may have lost a year of spending (for me at least) in a day?

I think of the portfolio as a big water tank. Rain adds to the level (markets up) or evaporation lowers the level (markets down), but the water (money) we draw off to live on is from the bottom of the tank. As long as there's sufficient level in the tank it doesn't matter what the last event was, because over time there's more rain than evaporation.

 

[Kings over Queens]

I guess we are testing this theory again today with another AI/Interest rate sell off....

You put a mush on the market. :lol:

 

[COcheesehead]

I guess we are testing this theory again today with another AI/Interest rate sell off....

These are good days to see what is green at the end of the day. Observe and ponder.

 

[sdawson]

how do you, personally, emotionally reconcile the concept that you may have lost a year of spending (for me at least) in a day?

1) Do not look at your portfolio every day.
2) Have a bucket of money allocsated outside of equities to use when stocks are down for a year or two or three, so one can wait it out.

 

[Dash man]

This is a big dividend month for me. That’s not changing. The fluctuations in the market come and go. My dividends just keep coming!!

 

[chemEguy]

I think of the portfolio as a big water tank. Rain adds to the level (markets up) or evaporation lowers the level (markets down), but the water (money) we draw off to live on is from the bottom of the tank. As long as there's sufficient level in the tank it doesn't matter what the last event was, because over time there's more rain than evaporation.

I hear you. But the volume up is more than just rain in, it’s rain in multiplied by some factor that is dependent on the starting volume of the tank.

 

[marko]

I guess we are testing this theory again today with another AI/Interest rate sell off....

If this much is rattling you, then maybe this is a test to see how appropriate it is for you to be in the market

 

[COcheesehead]

I must be on the fringe, but I look at my account every day. I don’t act on it, but it removes the unknowing. They are just numbers. Sometimes you even find great opportunities.

 

[NW-Bound]

A mix of VO, VXUS, VOO, SCHD, VIG, VUG, OBSOX, a little STCE for fun, and some MO for dividends.

These look benign to me, although I have to scratch my head about STCE.

Another thing to look for is how your up/down compares to the S&P. I do that all the time with my holdings. But again, I am a quite active investor and that comes with the job. I have said it's like running my own mini mutual fund, and MFs typically have a few hundreds positions. You would hope the active MF managers spend much more time than I do looking at the holdings

 

[gauss]

I look at the passive income I will receive along with fixed zero-coupon bonds for lumpy expenses. In theory market drawdown's should not effect the cash flow too much. Hopefully SS at age 70 will take it from there without too much impairment.

The equities are not expected to be drawn down on a nominal basis but rather to be sold during growing years to purchase more bonds to increase bond income to counter inflation.

I guess this is comfort derived by not viewing this as a total return framework.

-gauss

 

[NW-Bound]

I think of the portfolio as a big water tank. Rain adds to the level (markets up) or evaporation lowers the level (markets down), but the water (money) we draw off to live on is from the bottom of the tank. As long as there's sufficient level in the tank it doesn't matter what the last event was, because over time there's more rain than evaporation.

I don't like this analogy, because it does not work for someone in the SW like I am. We have not had rain in who knows how long. It's so dry even the bugs in the outdoor cannot survive. I have not seen a cricket this winter. We are all going to die of thirst here. I wish to be close to the ocean so I can run my own desalination operation with the abundant solar power. It takes so little to desalinate water compared to heating it up for shower.

Sorry for the diversion, but I cannot help it.

 

[CalBird]

In behavioral finance, it is called loss aversion. Research shows the psychological pain of losing money is felt about twice as intensely as the joy of making the same amount. This hardwired bias frequently causes investors to panic-sell during downturns.