I put an order in to sell my VOO shares. I just cancelled it. Hopefully nothing happens Monday. A slight drop is all.
It is really hard to predict the stock market because stocks like Tesla prove that we’re now in an entirely speculative bubble with their stock going up with a disastrous earnings report.
The stock market theoretically builds in bad events as soon as they’re confirmed but the Canadian and Mexican responses to tariffs (and even the US tariffs actually happening) was very uncertain on Friday.
It’s quite reasonable to expect some market fluctuation tomorrow.
It’s quite reasonable to expect some market fluctuation tomorrow.
If you expect variation but are unsure about the direction: make a hedge.
For VOO, this would just be a buying opportunity.
If you don’t have the nerve to hold a stock for 30 years through ups, downs, crashes and rebuilds, there’s a thing called a high yield savings account that may better fit your current stage of life better and risk tolerance.
And let’s all point to the sign:
“Only invest money that you don’t need right now, and could afford to lose.”
If Trump’s antics can make you sell, you should sell right now and not buy back in, because that’s money you should not have invested in the first place - by your own standards for peace of mind.
President Trump is far from the first or the last powerful person to wield massive global power that negatively affects the markets. Markets perform with strong returnsin spite of bullshit from world leaders, not because any world leaders are particularly competent (with some very rare exceptions).
It is scary right now. It really is. But that’s what investing is about. We risk some money we don’t need right now, in hope of some growth later. Pulling out when things are going down is statistically a guarantee to lock in losses. But peaceful sleep at night beats 2%-20% growth.
To answer your question: absolutely. Stocks are going to spend four or more years underperforming where they could have under better leadership. As they have done before, and as they will do again. That’s pretty much been true with every president during my lifetime, though, and through most of recorded history. Hindsight is 20/20, and all that. And anyway, democracies don’t, so far, tend to elect economists.
If you don’t have the nerve to hold a stock for 30 years through ups, downs, crashes and rebuilds, there’s a thing called a high yield savings account that may better fit your current stage of life better and risk tolerance.
While this is usually true, I personally am discovering that I may need to liquidate all my stocks to pay for an escape plan. If the stock market crashes, that will change what I can do to escape.
Usually, the recommendation is to have an emergency fund before you make investments. If you foresaw the potential need for an emergency plan, you could’ve bumped up that emergency fund up.
Of course, if your situation is unique and not “I need to escape Trump/a Red state” (like suddenly needing to escape from an abusive situation), then that’s much harder to anticipate.
What would qualify as a “high yield” savings account or money market in your book? High yield savings accounts unfortunately adjust to market interest rates.
“High yield savings account” is a specific product you can ask for at your credit union (or bank, if you’re a sucker).
A high yield savings account carries rules about how often you can move money in and out of it, but is still FDIC insured (in the US).
FDIC insurance means that if the market completely crashes and your credit union shuts down,
the Federal Reserve prints new money to replace your deposits, your money is returned to you out of previously paid insurance deposits up to like $250,000.00.It is widely believed to carry much lower risk, and so pays much lower interest, than average stock market performance of an index fund.
But if giving up 3% means sleeping well at night, it can be the best call. Everyone’s situation is different.
Edit: and high yield savings accounts historically perform much better than the average confused/frightened active investor who only buys during high markets and always sells during low markets.
FDIC insurance means that if the market completely crashes and your credit union shuts down, the Federal Reserve prints new money to replace your deposits, up to like $250,000.00.
This is not correct. The FDIC is self-funded through risk-based insurance premiums paid by the banks.
https://www.fdic.gov/resources/deposit-insurance/deposit-insurance-fund
Good correction. Thanks.
No one listen to this guy. There is zero need to be prepared to hold a stock for 30 years.
There is a tax penalty for selling stocks at a year, but only on the profits.
Never sell because a stock is down during a market down turn. Sell or buy on the position’s potential value.
Thanks for this.
Profit is made when you buy a stock, not when you sell. You only buy stock from a company you have researched and genuinely believe has long term potential. Things like this shouldn’t be altering your perception of the stock.
I’m paraphrasing but that was a major point in “common stocks and uncommon profits” by Philip Fisher.
What? You make a profit when you sell it for more than you paid for it. Any growth before the sale is unrealized gains.
Thanks for explaining how profits work lmao
Saying you make your profit when you buy the stock means you have a clear plan on when you’ll be selling the stock. A dip in your stocks is an opportunity to buy, not to sell.
You can have a great company, but if the government decides it’s illegal or something, then that’s still a problem.
Ofcourse, and stocks might fall over the short term, but thoroughly vetted companies have a much higher probability of bouncing back. Diversification and thorough vetting at the time of buying is what experts recommend, not panic selling.
A lot of market speculation is based on forecast profit. If new info = lower profits that means exit your position asap.
I don’t know. I might wait until the day begins. Most people aren’t going to sell right the opening of the market. They may sell midday.
If you have the money, when stocks go down buy don’t sell.
Vanguard trades occur at end of day.
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RemindMe! 1 day
If it drops my more then1%, I’ll buy more IUSA.
If it raises, I will do nothing.
