Losing Money?

Discussion in 'Investing' started by Jason Pearson, May 13, 2021.

  1. Jason Pearson

    Jason Pearson New Member

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    Hi everyone,
    In March, at the advice of my bank, I invested my savings account into a Blackrock portfolio excited to see what might come of it. Previously, I had just thrown my money into CDs and watched the money slowly trickle in. So this was definitely something new.

    I could choose the risk level, and I chose nearly the lowest risk, labeled the 10/90 plan, which I was told meant that 90% of the money was invested in bonds and non-stocks. Average appreciation was 4% and in 2019 it actually hit 9%.

    I started on March 3 of this year, which of course, was a horrible week. I lost nearly $1,000 in two days! I battled back, and as of May 6, was about $900 in the green...but with the last two days, I'm a whole 100 dollars in the green and I am wondering how much longer I'll be in the green. I'm wondering if it's really worth it.

    Is this to be expected with any investment account right now? I expected it to be much more stable I guess...given it was a much lower risk...but it can vary as much as $500 in one day on the most extreme of days. I'd like to think I should keep the account going, even taking a temporary loss, like I did in March... but I am still unsure this was the best option and we seem to be on uncharted ground (or maybe we're not!). Are people pulling their investment accounts? Do I just have a crappy investment account? What's going on here! :p
     
  2. StockJock-e

    StockJock-e Brew Master
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    Investment = long term

    Every single one of those dips in the long term chart below, people asked "Is this to be expected with any investment account right now?"

    upload_2021-5-13_7-37-51.png
     
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  3. Jason Pearson

    Jason Pearson New Member

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    Thank you. I needed to hear that. I guess given I'm new to the investing accounts, I was questioning whether or not the type of account I had was worthwhile. When researching potential investments, I very rarely run into anything about portfolio's and such... So that was the main thing I was wondering about, if perhaps maybe I had the wrong type of account or whatever... but as you said, probably normal fears for someone new.
     
  4. StockJock-e

    StockJock-e Brew Master
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    If you want to be more involved in your investing and trading, put aside a few thousand and wait for a panic in the market. At least once a year or so there is some event which triggers a wave of selling.

    Buy on weakness, add to your positions when everybody else is selling.

    Also learn how to look at charts (tradingview.com) like the one i made above, its always good to visualize what is happening on different time frames.
     
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  5. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    Your investment is 90% bonds.
    With interest rates going up, bond prices are going down.
    However you should be okay with bonds because you get a coupon payment which is like a dividend for stocks. Usually a coupon payment doesn't come in until 6 months, and you haven't been in that long. And when the bond matures you will get your principal back. Basically don't worry about bond prices fluctuating, if you are going to hold til maturity. When you bought your bonds, you locked in your interest rate.
     
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  6. TomB16

    TomB16 Well-Known Member

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    Hi Jason.

    Here are a few thoughts:

    Not everyone is suited to exposure to fluctuating markets but I suspect you are going to be fine.

    90% bonds is wildly conservative for anyone under 70 years of age.

    Banks are some of the worst performing investment advisers out there, and that is saying a something in this world of atrocious investment managers.

    Balanced funds are fundamentally flawed, in my opinion. A few of us share this view but 99% of people advise balanced funds so don't just take my word for it.

    If you want to make your own decisions, start reading this site. There is a ton of good information here. I also recommend following the ideas set forth by John Templeton, Peter Lynch, Warren Buffet. Primarily, however, I suggest you watch everything you can by John C. (Jack) Bogle. Everything anyone needs is on YouTube but I certainly do not discourage you from reading any of his books. Jack Bogle is the best thing to happen to private investing.


    In closing, the answer you are looking for is, "Yes, this level of volatility is normal. In fact, volatility is abnormally low, right now. We have been seeing steady gains for years with only minor volatility recently. This is the nature of a market system."
     
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  7. Bridget Mallory

    Bridget Mallory Active Member

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    Thanks for the tips
     
  8. Jason Pearson

    Jason Pearson New Member

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    Great information here, thank you. When I say bank, I actually mean a credit union. Would a credit union be a better established place for an investment account than a bank, or would it basically be the same thing? I just get overwhelmed when I research all the available options out there. I have a lot of learning to do, obviously.

    Going to check out tradingview.com also!
     
  9. TomB16

    TomB16 Well-Known Member

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    I'm a CU guy but, for investing, banks have always been better. In fact, not just banks but the largest banks have been the best. You want to invest with a bank that has their own investment platform and clears their own transactions.

    Speaking of research, keep in mind that the vast majority of investment approaches do not work. Ignore self aggransizement and declarations of excellence. Nearly all grandiose declarations are entirely lacking in merit. This goes for both amateurs and professionals. Investing is an unusual case where nearly everyone is below average and only a tiny fraction are average with nearly no one above.

    And yet, no one wants to be average. I will tell you straight out it is my investing goal to be average.

    What's more, doing what everyone else is doing is nearly a guarantee of under performing the market.

    The ratio of people who believe their own religion is somewhere around 95%. There are only a couple of actively managed funds which managed to outperform the market in the last couple of decades, and yet they all declare their superiority. In the last several years, I am only aware of one fund that has outperformed the average. Despite easily accessible numbers objectively proving the opposite of their claims, legions of people join these actively managed funds.

    As objective proof, I encourage you to use Yahoo Fiance to compare the performance of any actively managed fund you are considering against VOO. Don't forget to use a number of time periods. As the length of time increases, the chance of an actively managed fund beating VOO become infinitesimal.

    If ever there was an industry where the majority of people were quick to adopt and endorse bad ideas, it is investing.

    As an example, I give you bond funds. I haven't found anyone else who does not like bond funds. The endorsement thought process seems to go: Bonds are a hedge against the market. Diversity reduces risk so the more bonds you own, the better. Therefore, we must all own bond funds.

    And yet, if you look at price histories of bond funds, you will see they dip when markets crash. Just when you need the hedge to buy companies at a discount, it becomes significantly less valuable. Clearly, people would do better with a small amount of cash. Clearly, people would do better still with no cash or bonds at all, as long as the time horizon is several years or more.

    On a more positive note, there is more than one approach that has objectively proven to do well with market investments. Finding these is a task for the reader.

    Lastly, how any one approach does, even losing approaches, varies with time. It is entirely possible an approach that has not been successful in the last 150 years could start working. Further, anything the vast majority of people are doing is going to perform below average. Math proves, not everyone can succeed. If I noticed a lot of people talking about using my approach, I would change it.
     
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  10. Stockman2015

    Stockman2015 Member

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    I feel you, Jason. It's been more bloody this week.

    Big institutions know why they're buying the dip. I think ways that public companies are making money right now are through either buying the dip or using other digital assets for their cash reserve instead of fiat.

    IDK if it's the same thing for $TSLA and $MSTR but $BTCS turned into ETH and had enough profits to survive this dip,
     
  11. MrMike

    MrMike Member

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    This has been my experience. Not that they're total garbage but they are no better than many other investors out there. As with every job, sometimes you get good employees and sometimes you get bad employees. AND people just assume that someone working at a bank knows what they're talking about but that's not always true.

    I went to open a RDSP with TD in January 2021 and we're still having issues to this day! They so rarely open RDSP that even the bank manager didn't know how to do it. Part of what is taking so long is that is the lag between fixing the issue, waiting 6-8 weeks for the CRA to get back to us, TD corrects it, then waiting another 6-8 weeks for CRA to get back to us. And there's been missed paper work or wrong form filled out after another :(
     
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  12. TomB16

    TomB16 Well-Known Member

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    Its not good and bad employees. They are coached on what products to push.

    I had the same issue with an rrsp mortgage, 20 years ago. Same bank, also. Total gong show. I watched in horror as the person doing it would stroke out fields like postal code saying, "They can look it up. Im not going to do their job for them.". My gawd.
     
    #12 TomB16, Jun 21, 2021
    Last edited: Jun 26, 2021
  13. TomB16

    TomB16 Well-Known Member

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    I'm one of these radicals who tries to gain proper knowledge of management, business, and market sector before buying a company. Lol!

    I worked my ass off for the money I made, during my career. I have no interest in gambling with it.
     
  14. ddebrazza

    ddebrazza Active Member

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    I am similar although my statistical analysis and ability,method of researching a company needs to be developed. I have been using Yahoo! Finance a lot. I really like the amount of information they have available (and for free).

    I was looking a "revenue per share," and "cash per share," and "book value per share,"- Interesting statistics each.
     
  15. jonebone

    jonebone Member

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    Losing money is the cost of learning they say. I first started dabbling in 2013 and wrote off $3k losses (max allowable) for a couple of years. Finally got profitable but I was only taking small swings and making a little and not playing much. This has been the first year where I'm really making good money and consistently though, just learn from your mistakes.

    You should let every single trade make you a better trader, both the wins and the losses. You need to understand why a trade went bad or why a trade went good. It's a combination of skill / luck and patience but you can take high probability entries to maximize your chances.
     
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