# Worried About The Stock Market? Whatever You Do, Don’t Sell.



## none (Jan 15, 2013)

Link: http://fivethirtyeight.com/datalab/worried-about-the-stock-market-whatever-you-do-dont-sell/


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## dogcom (May 23, 2009)

For me I am holding mostly cash and short term bonds and that was since last October when I changed to about a 25 percent outright equity position.


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## Moneytoo (Mar 26, 2014)

The only thing I was trying to sell today was some gold (as it was the goal when we purchased it - sell during downturns to buy more equities) But people are not that easily scared anymore, so it didn't get to my limit price... sigh

But thank you, good reminder!


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## Pluto (Sep 12, 2013)

yeah, it must be true: when a ship is sinking never get on a lifeboat.


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## treva84 (Dec 9, 2014)

Pluto said:


> yeah, it must be true: when a ship is sinking never get on a lifeboat.


Buy high sell low, amirite?


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## Rusty O'Toole (Feb 1, 2012)

What does he want you to do, ride them all the way back down?


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## besmartrich (Jan 11, 2015)

treva84 said:


> Buy high sell low, amirite?


Haha, we will have to buy more now!


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## gibor365 (Apr 1, 2011)

none said:


> Link: http://fivethirtyeight.com/datalab/worried-about-the-stock-market-whatever-you-do-dont-sell/


Historically and on average author is right.... however, many big names never been even close to pre-crash price (like C or BAC in 2008-9)


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## james4beach (Nov 15, 2012)

If your losses in your stock portfolio are causing you pain, discomfort, stress, sleepless nights... that's an indication *you have too much money in stocks.*

And you absolutely should sell, to reduce your exposure to a point you are comfortable with. Everybody has a point of comfort, just find it and be comfortable.

For example if you felt pain when the TSX opened down 9% this morning, then don't hold so much in the TSX! Typical stock investors poorly estimate their risk tolerance and become surprised on days like today when they discover just how much they dislike losing money. The solution is really very simple: hold less stocks.

Don't want to sell today? Fine. Make a plan ... decide on what allocation you are comfortable with. Then open up your calendar and put reminders to sell, evenly spaced over the next 6 months. Problem solved.


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## Jaberwock (Aug 22, 2012)

Stock prices go up and down.

It is better to buy when prices are down and sell when they are up - a lot of people do just the opposite


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## james4beach (Nov 15, 2012)

Stock investment only gives good returns if you are able to stay invested long term, like 10 to 20 years at a MINIMUM.

You will have poor results in stocks if you occasionally pull money out because you need it, are afraid of declines, etc.

Therefore it is important that you adjust your stock exposure to a level you are comfortable with, so that you CAN stay invested long term without being stressed out. This is why I recommend reducing your stock exposure to a point you are actually comfortable with. You want to be at a level of stock exposure that won't stress you out if you just leave it there, say in the TSX for 10 years.

In the good times of a bull market, people get over-optimistic about stocks. So they put too much money into stocks and fail to e.g. keep cash on hand, rainy day funds, or keep fixed income. This just hurts them because in a few years, when the bear arrives, the losses are so great that they are forced to pull money out.


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## none (Jan 15, 2013)

james4beach said:


> If your losses in your stock portfolio are causing you pain, discomfort, stress, sleepless nights... that's an indication *you have too much money in stocks.*
> 
> And you absolutely should sell, to reduce your exposure to a point you are comfortable with. Everybody has a point of comfort, just find it and be comfortable.
> 
> ...


I don't agree with at all - I actually find it terribly naive.

Does it bother me that the TSX is down 10%? Sure - the trick is that I can control my actions and not sell.

I also disagree with the 10 year time horizon. Yes, if you are so simple minded that being above zero is an absolute must but if you are comfortable with your 10K being 7500 - 14000 after 5 years then that's good. it's all about how you deal with uncertainty.


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## gibor365 (Apr 1, 2011)

> Does it bother me that the TSX is down 10%? Sure - the trick is that I can control my actions and not sell.


 Agreed  I don't know even one person who wouldn't worry losing money (even on paper) .... who telling otherwise, mostly, just lying


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## Addy (Mar 12, 2010)

I'm not selling, I'm happy it's going down so I can stock up on a few Cdn dividend paying companies we like.


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## Oldroe (Sep 18, 2009)

Have to agree any arbitrary number of years is just bad thinking.

When I was buying bank stocks on small down moves and selling on up ticks sometimes hrs and days. Take my 2-3% and wait for the next.

Other times weeks and months on stocks like Onex, Suncor.

Stuff like TD that I started buying 20-25 years ago I die with.


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## Sampson (Apr 3, 2009)

Oldroe said:


> Have to agree any arbitrary number of years is just bad thinking.


The numbers aren't arbitrary, and it has been shown time and time again that over 10 year periods, investing in stocks does not always provide the highest returns and these returns can be negative. Actually the last 10 yr period where this happened seems like it is too long to remember, 1999-2009.

If people haven't learned anything from 2009, then no forum, investment advisor, or guru will be able to help them.


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## CPA Candidate (Dec 15, 2013)

I have most of my liquid assets in stock but this chaos doesn't keep me up at night. I'd be much more concerned if the businesses I owned had operational and/or financial problems and were unable to meet obligations and/or paid dividends. This probably reflects my background in accounting. I view investments on a granular level, bottom up, and don't see the earnings of any of the companies I own to be seriously affected or affected at all by the financial market swings or what goes on in China. So why sell and why panic? Valuations may bounce around wildly, but cashflow is real and it still accrues to me as an part owner.


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## mf4361 (Apr 11, 2015)

I find, for a pessimistic and cautious person I am, the problem of buying equity only up to the point where I feel safe is I might underinvest. If I let my feeling determines how much equity I take in, I could be ended up with less return than what I expected. That's why advisors and blogs on financial advice gives insight to how other people have done. And that's also in consideration of how I gauge my risk tolerance.


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## londoncalling (Sep 17, 2011)

james4beach said:


> if you felt pain when the TSX opened down 9% this morning...


What if I smiled so hard my cheeks hurt. Started to pick up some bargains. May go lower still but I definitely lowered my ACB and added to some positions that I have been waiting to add to for awhile. Gonna post in the What are you buying thread.

No problem for me. I am not in withdrawal phase. For those that are accumulating today should have been a good day. Haven't checked but I believe my dividend income is the same as it was on Friday as well.



james4beach said:


> Problem solved.


Cheers


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## lonewolf (Jun 12, 2012)

This is just a preview of what is to come I plan to let the profits run as the mother bear continues till @ least mid Oct 2015. Sharp rallies will be used to add short positions. Then short again perhaps on Dec seasonal strength.


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## Moneytoo (Mar 26, 2014)

Perfect - need to load up on XAW in my TFSA with mid-September and mid-October deposits - hopefully it'll stay under $20...


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## donald (Apr 18, 2011)

I am sure it has been said somewhere else but i think it is worth repeating
It is no easy task having cash and waiting and waiting...going to go lower going to go lower
I remember a few yrs back(when obama got in for 2nd term)
Market was similar than this(red/red/red-day after day after day)
it can melt up fast and bam just like that your still waiting with your di&k or tit lol in your hand
Not saying this is anywhere near the same but it is true!no easy task!


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## dogcom (May 23, 2009)

The market was done in 2011 and turned around when the Fed announced a huge QE that turned the market. I remember all the QE's and the end of mark to market and so on so we could get a completely fake bull market roaring. If the stock market keeps tanking the Fed may really go all out and then we may see DOW 30,000 or more but at what price and what sort of inflation will that be. The price since 2009 has been mind blowing and the debt and deficit can't be payed back in the US even with near zero interest rates so none of what we are seeing is a true bull market.


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## Oldroe (Sep 18, 2009)

Sampson I know you can pick 10 year periods and make lot's of case study's.

I bought these stocks for short term gain. Take profits and run. Was I perfect at it no Bombier comes to mine almost 4 years before I got tiny profit.

Don't buy stocks unless you staying 5,10,20,40 years is laughable CNN fodder.

No why you are buying and have a plan.


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## lonewolf (Jun 12, 2012)

Rusty O'Toole said:


> What does he want you to do, ride them all the way back down?


 Rusty if you missed selling @ top tick wait do not sell, Ride the coaster down @ least 50% more likely over 80% lower & then if you live long enough sell @ top tick @ the next historic market top. How many are going to get top tick ?


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## simplesimon (Feb 10, 2015)

donald said:


> I am sure it has been said somewhere else but i think it is worth repeating
> It is no easy task having cash and waiting and waiting...going to go lower going to go lower
> I remember a few yrs back(when obama got in for 2nd term)
> Market was similar than this(red/red/red-day after day after day)
> ...


+1


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## janus10 (Nov 7, 2013)

Somewhat surprisingly, my margin account is less than 3% off its high balance. I made several ($10k - $30k daily) purchases to add to or initiate new positions in the past few days. Cash in all accounts is down to perhaps 25% of total portfolio balance.


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