Posted on Aug 3, 2022
The stock market can be an emotional roller coaster. It shouldn’t be.
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"There’s how you think about investment risk — and then how you feel about it."
The stock market can be an emotional roller coaster. It shouldn’t be.
Posted from vox.com
Investing
Risk
Stock Market
Posted 2 y ago
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Ride the waves. The losses aren't realized until the losers are sold. They will come back
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LTC Eugene Chu
..."Keep evaluating
How you think about risk in investing is something that’s probably going to change over time. How well you’re able to weather downturns might change, say, as you get nearer to retirement, or if you realize you want that money to buy a house. It’s also a good idea to check in on your investments — Myers suggests once a quarter — and consider if you want to make any changes. Check in with yourself about how you’re feeling about where your money is, and whether you’re letting those feelings guide you a little too much.
“It’s really just always about ruthless questioning of yourself at all times,” Myers said.
The hard truth, Teutsch explained, is that investing is supposed to be boring — and if you’re having fun with it, that might be reason to worry. A little speculation in moderation is fine, but it’s not the same as investing long-term with a plan. It’s exciting to watch the line go up, but at some point, the line’s going to go down, and you’re not going to be able to guess perfectly ahead of time when it will. “Investment shouldn’t be exciting,” Teutsch said.
The way to think about markets over the long run is that they’re sort of like walking up a hill with a yo-yo. If you look at the yo-yo, then you see it going up and down and up and down. But if you pay attention to the hill, then you see you still end up on top of it at the end.
Investing can be intimidating, especially the prospect of losing money. And in moments like the current one, when markets broadly are down, the entire endeavor can feel pretty bad. It’s important to remember things in all likelihood will not be like this forever. (If the stock market were to completely implode, we would probably have much bigger problems on our hands.) But it is also a good moment to think about risk and uncertainty in investing a little, how you feel about it, and make sure some of your feelings are leading you to make decisions you’ll later regret.
“What’s interesting about periods like this is if you’ve never been through it, it will teach you about risk taking,” Pompian said. It’s advice that might not make you feel better right now, but it is true."
..."Keep evaluating
How you think about risk in investing is something that’s probably going to change over time. How well you’re able to weather downturns might change, say, as you get nearer to retirement, or if you realize you want that money to buy a house. It’s also a good idea to check in on your investments — Myers suggests once a quarter — and consider if you want to make any changes. Check in with yourself about how you’re feeling about where your money is, and whether you’re letting those feelings guide you a little too much.
“It’s really just always about ruthless questioning of yourself at all times,” Myers said.
The hard truth, Teutsch explained, is that investing is supposed to be boring — and if you’re having fun with it, that might be reason to worry. A little speculation in moderation is fine, but it’s not the same as investing long-term with a plan. It’s exciting to watch the line go up, but at some point, the line’s going to go down, and you’re not going to be able to guess perfectly ahead of time when it will. “Investment shouldn’t be exciting,” Teutsch said.
The way to think about markets over the long run is that they’re sort of like walking up a hill with a yo-yo. If you look at the yo-yo, then you see it going up and down and up and down. But if you pay attention to the hill, then you see you still end up on top of it at the end.
Investing can be intimidating, especially the prospect of losing money. And in moments like the current one, when markets broadly are down, the entire endeavor can feel pretty bad. It’s important to remember things in all likelihood will not be like this forever. (If the stock market were to completely implode, we would probably have much bigger problems on our hands.) But it is also a good moment to think about risk and uncertainty in investing a little, how you feel about it, and make sure some of your feelings are leading you to make decisions you’ll later regret.
“What’s interesting about periods like this is if you’ve never been through it, it will teach you about risk taking,” Pompian said. It’s advice that might not make you feel better right now, but it is true."
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