Key insights
- A new investor expresses concern about immediate losses after lump-sum investing $800k into ETFs. The post highlights the psychological impact of entering the market right before a downturn, especially without prior gains to offset the losses. While not directly predictive, it reflects potential investor sentiment and risk aversion, which can contribute to market volatility if widespread.
DISCLAIMER: Brand new investor here experiencing first but immediate drop in portfolio
I've avoided stocks for most of my adult life due to ignorance and fear. But I educated myself, and I recently sold a bunch of real estate. I was tired of being a landlord and I live in a blue state that seems determined to squash us out of existence, so I see that business only getting more difficult and more expensive. I ended up with around $800k and invested it immediately into ETFs, which conventional wisdom says is the best route to avoid the perils of individual stock bets.
A few weeks later and I'm finding myself feeling royally pissed off that all the advice and conventional wisdom seems to have been worthless due to my absolute terrible timing (not "market timing" because I wasn't trying to time the market, simply the date I put the lump sum into the market).
My biggest concern is not necessarily the money I've lost recently (although it *is* very distressing). My biggest concern is that these losses aren't simply a "down period" after years of double-digit gains. I never got those gains because I wasn't invested. I worry about how entering at this particular point is going to completely fuck up my long-term trajectory. Doesn't losing 10% immediately mean I'm going to have to gain another 20 just to get even? I can deal with losses, but I'm having a hard time psychologically ignoring the fact that I have no previous gains to "make myself feel better," i.e. I can't say to myself "sure, I've lost 10% this month but I'm up 85% over three years." This is strictly losses. There is no bright side.
I would like to hear from people who had a similar situation, i.e. the moment they lump-summed everything went to shit. I'm not looking to "cope," I just need some encouragement to stay in the market when it just cut my balls off pretty damn quickly.
I'm 45 and will need the money in 14 years.
Hope you're all hanging in there!
EDIT: I'm not "blaming democrats" for anything. I simply exited the real estate business because blue states do in fact make it much harder to be a small landlord and my other option was to move, which I don't want to do because I'm a democrat and I like everything else about living in a blue state.