light_bulb said:

---

EastTX_Aggie said:

---

lol same in a sense. I'm just now 4 years out of college and have a little money to invest.

I'm a casual to this stuff but trying to learn more.

But I'm just trying to time it right, because the market will eventually come back up to normal.
I'm thinking Amazon would be a solid buy during the dip

---

Early 30s here and my plan has been as follows:
1. Dollar cost average in my 401k and Roth IRA investments and let time in the market do its thing. I max out to the contribution limit.
2. Any money that I am investing that is not tax advantaged, I will be much more picky. I have a list of stocks and ETFs that I will track with respect to what I believe is fair value, and will only buy with an additional 10% margin of safety with respect to that value.

Best of wishes to you on your early journey. No path is the same.

---

Thanks for the advice, good luck to you as well!!

I retired a little over a year ago but I have about 2.5 years of my current expenses in cash/short term CDs and treasuries. So I should be able to go at least that long without selling any stocks, but if this goes on past this summer I'm sure I'll start cutting back and bet I can stretch the cash out 3 or 4 years especially when I consider dividends and interest from my other assets.

Lots of people where telling me cash is trash last year and I should have had it invested but now I am feeling way better about that decision. The fact it was all earning over 4% made it easier to keep so much in cash.

2girlsdad said:

---

Historically the markets always rebound, whether it be months or longer, so why would any person or institution sell if it'll be at a loss? Is it people who are overleveraged and don't have any liquid funds and rely solely on the markets?

---

I will use simple math for simplicity.

Stock A is selling at $100 a month ago. I own 200 shares, so $20k in equity. I sell it and bank the money.

Stock A drops to $50 a share. I spend my 20k from the bank at $50 a share and now I own 400 shares. Then the market rebounds (since you say it always happens) and I have twice as much money.

And here is where it gets even better... say the price rises to $200 a share. The guy who didn't sell now has 200 shares at $200 bucks, or $40,000. That is nice. But the person who sold and rebought has 400 shares at $200 a pop, or $80,000.

The same exponential growth/loss also affects the companies that split. Most NVIDIA holders have been through a few splits. So when NVIDIA loses a buck, they are losing $8 or $16 compared to their original investment.


While I chose simple terms to illustrate the point, once the sale is made then I am better off buying back in at any point down the road provided the stock has lost value. People keep saying that the seller has to be correct twice, but the second correct choice happens every moment in time provided the price has dropped.

We have a policy maker that is basically guaranteeing that the market will drop significantly. Why in the world would anyone not sell and buy back in once the lunacy stops? On almost every stock I sold a month ago I still love the company. I am not betting against them, I am betting against the economy and the policy.

Agreed. I just don't get how everyone is not doing what you described.