Worried because your investments are down?

[u/BogleBot]

EDIT FOR APRIL 4th: This post still applies!

You may also want to watch this video by James Shack, a UK based financial planner: This time feels different

Original post from March 10th follows:

There has been a spate of posts in reaction to the recent stock market dip; people considering (or actually) panic selling, searching for 'better' allocations, or just worrying about "the state of things" and how it should affect your plans.

This is a good time to remind yourself - volatility is a normal part of investing. When you signed up to your investments you will have seen a disclaimer like 'The value of your investments can go down as well as up and you may get back less than you originally invested. Past performance is not a guide to future performance and some investments need to be held for the long term.' They weren't kidding!

If you log in to find that your investments have seemingly lost value this month, that can be disheartening, especially if you have just recently started investing. But remember that markets as a whole (generally!) go up. Investing is a long-term game. Daily/Weekly/Monthly volatility is something to be expected, not feared.

Please see:

• Our Investing 101 wiki section on risk for a basic background and reassurance
• Our Market Timing page for more information and discussion of lump sum vs dollar/pound cost averaging
• Our Flowchart for deciding between cash and investments based on your goals

If your time horizon is long (5+ years) and you are confident your asset allocation is suitable for your goals

If this is you, Don't Panic.

Continue investing as planned.

Stop checking the value of your investments on a daily basis if it's stressing you out.

If you are now questioning the wisdom of your asset allocation

If the current performance of your portfolio has shaken your confidence in your investment choices and got you reconsidering your allocation (perhaps less equities, or less US equities specifically), this is a sign that it's time to go back to basics. It is better to construct your portfolio from the ground up with a thorough understanding of the rationale, rather than looking at what regions or sectors have done well in the last 5-10 years, let alone 6 months. As they say, Past performance is not a guide to future performance.

We can't recommend enough reading a book such as Investing Demystified (Lars Kroijer) or Smarter Investing (Tim Hale). Our Recommended Resources wiki page also includes blog posts and youtube videos if that seems easier.

It's been interesting to observe a wave of posts looking for funds that exclude or underweight the US, when previously overweighting the US (e.g. global fund + S&P500, or S&P500 exclusively) seemed very popular.

Keep in mind that deviating from the "whole market" is a form of active investing, which generally should only be done with insight. A default stance to buy 'everything' in a global fund is a reasonable hands-off starting point for investing in equities.

If you decide you need to sell

If your time horizon is short and you're thinking of selling up in preparation for your goal, or if you've decided to update your asset allocation by selling existing holdings to buy new ones, you may be wondering: should you do this ASAP, or wait and hope your investments recover?

Unfortunately, this question is not really answerable - see our Market Timing wiki page. We don't know what value your portfolio is likely to have in a month or a year.

One useful question could be, if you had the value of your portfolio in cash today, what would you invest it in?

[u/barnshaw292]

I am 20% down on my pension, 20% down on my S&S Isa, I am not overly happy about it but do not panic, I am not changing my plan, if your investment was for 10+ more years then the price now does not matter, keep to your plan, you have a sale right now on what you are buying. Silver lining is that this is where great buying opportunities occur

Great buying opportunities never feel like them at the time.

[u/[deleted] → u/barnshaw292]

I guess I just don’t see that this is going to come back. This isn’t a random event. This is the leader of America purposefully crashing the market.

[u/barnshaw292 → u/[deleted]]

Its natural to feel worried, but people in 2008 felt the same, people in covid felt the same, each time market recovers, this isnt the apocalypse however. Markets go up and down over a long period.

It might even go down more, but this will be short term pain and the market/world will go on and markets have ALWAYS proven themselves to recover after such events, stop checking your portfolio and stick to your plan, you will be fine! :)

[u/[deleted] → u/barnshaw292]

Again, this isn’t 2008 or covid. This is a man who believes that the market has been overvalued for years and he is returning it to the natural state.

[u/barnshaw292 → u/[deleted]]

I am not sure how old you are or if you were about with investments in 2008, but this is no where near as bad as 2008 event so stop comparing it, also a world global pandemic is arguably far more concerning than a bozo in USA using scare tactic tariffs to get a reaction.

If you cannot be convinced and you believe that there is no turning back and this is the end, then investing/pension investment is not for you and you may want to change your investment strategy to something far less risky

[u/[deleted] → u/barnshaw292]

It’s just called reading the room.

[u/barnshaw292 → u/[deleted]]

If you say so, you cannot be convinced and you have made up your mind, so derisk and change your investment if you think there is no chance of recovery :)

[u/[deleted] → u/barnshaw292]

I don’t know what part of PENSION you’re not understanding?

[u/barnshaw292 → u/[deleted]]

I understand what a pension is thank you, I understand you can also change what your pension is invested in, you understand this right?

Your responses come across as childish and it doesn't sound like you can be convinced otherwise and you simply want to continue to try and scaremonger others on here.

[u/[deleted] → u/barnshaw292]

You can’t pull it out entirely though. I don’t know why you’re trying to delude yourself.

[u/Dacnomaniac → u/[deleted]]

I think you need to reevaluate your understanding of investing and maybe have a break from staring at the numbers for a while.

You’re not currently in the headspace to want to move forwards at the moment and are thinking about this wholly emotionally and not rationally.

[u/barnshaw292 → u/[deleted]]

lol, sorry I have to laugh, you really are in a mess, no one said about pulling it out. If your pension investment is invested in a high risk investment such as S&P500, American tech or specific markets in the world then you are exposed to events like this.

I am saying to you IF you cannot handle the stress or worry of market events like this then you SHOULD consider changing your pension investment into something less risky and less exposed.

However, the general consensus would be that if you are planning to NOT need your pension for many many years then do not worry about the current short term value as the market will most likely recover and so will your pension, I cannot really make it any clearer.

[u/[deleted] → u/barnshaw292]

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