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Newbie Panic Attack
Cameron Jake
Posted: 10 February 2018 12:31:13(UTC)
#1

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Soothing to read some of your content here.

You are the actual experts with your cash in the market.

I am brand new, a month in, and feel dreadful. So apologies if this makes you roll your expert eyes.

I read three top of the line books - did my research and bought 11 HL defensive long term funds and also a Vangaurd 20% Equity ( low risk )

Following advice I don't read the news, or check my balance, but today I noticed this "correction" on Google, or "crash"

Forgive my absolute idiocy here - I suffer from anxiety, but understand you got to be in the game to win it. I have no investments other than these (which appeared to be easier to understand, than property)

I am sitting on a global -5.8% loss which in terms of £x was enough for a beginner to feel a bit sick.

And so - as experts,

Is it - sit and wait?
or
Sell and re-enter?

I know that you can get back less than you invest and all that, but I have visions of loosing every penny I put in and having a zero balance!

Again my apologies - I expect losses but not 12 save funds to ALL loose at the same time.

dyfed
Posted: 10 February 2018 12:37:21(UTC)
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in general terms : sit tight!
but do u want to tell us in a bit more detail what you've got, how long till you retire and do you have enough other cash so you won't need to sell in a hurry?
Hank Elvis Dobbs (texan)
Posted: 10 February 2018 12:38:14(UTC)
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Go read the other thread ..Investment advice for beginner...and stop panicking ..anxiety kills....you will soon be feeling a lot better ...sooner than you think..x
3 users thanked Hank Elvis Dobbs (texan) for this post.
Captain Slugwash on 10/02/2018(UTC), Cameron Jake on 10/02/2018(UTC), Kernel_Panic on 12/02/2018(UTC)
Hank Elvis Dobbs (texan)
Posted: 10 February 2018 12:45:43(UTC)
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...You are very fortunate to have the reassurance of a lot of kind people on this site..In 1987 and prior...there was no such thing ...believe me I fully understand how you feel
2 users thanked Hank Elvis Dobbs (texan) for this post.
Fell Walker on 10/02/2018(UTC), Cameron Jake on 10/02/2018(UTC)
Cameron Jake
Posted: 10 February 2018 12:46:20(UTC)
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dyfed;56879 wrote:
in general terms : sit tight!
but do u want to tell us in a bit more detail what you've got, how long till you retire and do you have enough other cash so you won't need to sell in a hurry?



Thanks so much gentlemen - calming to get replies.


I have quite a bit of cash in reserve fortunately which is not invested. I have avoided property because despite doing hours of research I don't want to be a landlord or air b n b-er.

I bought

Vanguard 20% life equity with a large amount

and smaller amounts across

https://ibb.co/icC8fn

[img=https://ibb.co/icC8fn]Funds[/img]
King Lodos
Posted: 10 February 2018 13:00:02(UTC)
#6

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Have you tried the Headspace app? (available on iOS, Android, probably the website too)

I'm so bad at making it a habit, but the effect on mood and anxiety is obvious – not least in that I naturally find myself driving about 20mph slower on motorways.

Otherwise: magnesium supplements .. Most common deficiency in the western world .. I'm amazed far more ppl don't suffer anxiety, palpitations, hyperventilation syndrome, etc. as there's nowhere near enough in modern diets .. It's basically the calm switch in the body's chemistry lab.


Most important thing I think you can learn from this: Markets can and will always fall .. Any given month or year, you can have 70% wiped off stocks .. And that's the only reason stocks pay investors more than bonds, or a bank account .. It's just the willingness to accept instability .. The fact is you still own the same amount of those companies, and their prospects are nothing to do with what stocks are trading at this week, so unless you need to cash out tmrw: who cares?

But what I would recommend, strongly, is that you don't take more risk than you can handle .. Look at your finances today, and model what happens when stocks fall 70% .. If it's too much, then just hold more in NS&I bonds and saving accounts to balance the risk out.

The only way to REALLY lose money in stocks is if fear makes you sell when stocks have fallen .. A lot of ppl do lose that way .. So you need to avoid ALL instincts to sell – instead try to get in the mindset of buying cheap being a good thing – but only take as much stock market risk as you can handle .. If it's 35% in stocks, and 65% in cash, that's a lot less stressful, and if it makes it easier for you to stay invested, it will probably work out a lot better .. And just remember what Stocks do in the long-run, and how some of these blips were 60% falls (logarithmic scale), and how silly it would've been panicking about any of them

https://s.yimg.com/ny/api/res/1.2/fKDSNODQ0EBu5Lq6Ccw.aQ--/YXBwaWQ9aGlnaGxhbmRlcjtzbT0xO3c9NTU0O2g9NDA4O2lsPXBsYW5l/http://media.zenfs.com/zh-Hant-HK/blogs/william-lo/aan.jpg
4 users thanked King Lodos for this post.
Lucy O on 11/02/2018(UTC), Guest on 11/02/2018(UTC), Kernel_Panic on 12/02/2018(UTC), Samual Saunders on 20/04/2018(UTC)
Cameron Jake
Posted: 10 February 2018 13:08:45(UTC)
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Thank you!!!!

I use ASMR videos for meditation and that is helpful.

I do naturally then think that ALL my invested cash will end up at ZERO.

That being unlikely and yes - its only a loss if you sell. I get that!

I have all cash in Post Office, Ford Money, Santander, and Premium Bonds, some more in maxed out Banks and around 12% of my cash in ( dip toe in ) funds. I do have a ton in Virgin ISA which is FTSE - so I daren't even look at that amount.

Back in 2008 when it crashed. If you had kept your money in it, would it have balanced out by now? Or would you have lost everything and never got it back?

I suppose it was more of a shock to see EVERY SINGLE fund drop - but I guess that is due to the DOW correction - not that I even know what that is.

I have read Warren, Own the World etc and they all do say - stay in and man up a bit.

I suppose the older I get and the more anxiety I get, I tend to get a bit greedy with my cash and panic more than I should - as fear stands for false evidence appears real. I guess the "inexperience" of such massive drops.

Magnesium is good but mainly from foods, as it can interact with depression medication if you supplement but I should look again at that.


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King Lodos on 10/02/2018(UTC)
Cameron Jake
Posted: 10 February 2018 13:09:58(UTC)
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PS that graph is very telling! And probably the reason I got in - in the first place.

andy mac
Posted: 10 February 2018 13:28:36(UTC)
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just see it as down 2% because if you had used a wealth fund manager you would have lost an additional £% or there abouts

Sit on your hands isnt just about not selling but not buying or worrying
If you drop dead tomorrow it doesnt matter if you live for another 50 years it will not matter

So enjoy the day read a good book ( not about finance) or go to the theatre/cinema or art gallery

What you have done cannot be undone so look forward and as TP ( Tony Paterson) said we dont have a crystal ball so we dont know what will happen tomoeeow
Enjoy today
Cameron Jake
Posted: 10 February 2018 13:33:11(UTC)
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Wow thank you so much!
Sara G
Posted: 10 February 2018 13:33:33(UTC)
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Cameron Jake;56888 wrote:



Back in 2008 when it crashed. If you had kept your money in it, would it have balanced out by now? Or would you have lost everything and never got it back?





In 2008 there were broadly three types of investor...

1. Those who sold in a panic
2. Those who did nothing
3. Those who bought more while prices were low

I was fortunate enough to be in group 3 and did very well. (I have an odd mindset perhaps, but I tend to find rising markets with low volatility quite boring, so this current episode is a welcome diversion!) Clearly group 1 would have done worse than group 2, but I imagine that they have since come back into the market at some point and benefited from the market rises in the last few years - hopefully they have learned from what happened last time and will at least sit on their hands if the current correction turns into something more serious.

Hang on in there - and maybe go for a nice long walk.
2 users thanked Sara G for this post.
Mr Helpful on 10/02/2018(UTC), Lucy O on 11/02/2018(UTC)
King Lodos
Posted: 10 February 2018 13:38:35(UTC)
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I'm certainly a very big believer in diet's connection to anxiety and depression .. There used to 10x higher concentrations of minerals in fruit and vegetables a generation ago .. Also walking in the countryside .. Very big in Japan – do they call it forrest bathing? Very highly stressed population find huge benefit in walking and sitting with nature.


Actually I also have a huge neurosis about losing money .. I can barely tolerate a 5% loss .. And probably the UK's wealthiest hedge fund manager, Michael Platt, has exactly the same condition, and has done very well as an ultra-cautious investor.

Stocks have never gone to zero – apart from in Russia, when the Communist government seized assets .. I think if you'd invested in stocks just before the crash in 2007/08, you'd have broken even by about 2012, and now you'd be up another 100% .. I do know people who sold at the bottom of 2009, and never got back in – and they just lost money ... You *might* find, like me, the neurosis goes when you know more about what you're investing in ... I bought Apple stocks the other day – and I know Apple so well, and love the products, it actually felt good losing nearly 20% on them very quickly .. I immediately doubled my position .. Funds are a bit mysterious .. I am less anxious in individual stocks – just really big, stable ones .. The way I'd see it: the more of these companies you own, the wealthier you'll be .. So see shares themselves as a kind of currency .. The Pound isn't a great thing to own – it's lost loads in recent years
5 users thanked King Lodos for this post.
Guest on 10/02/2018(UTC), J Thomas on 10/02/2018(UTC), Jenki on 10/02/2018(UTC), Raj K on 10/02/2018(UTC), North Star on 10/02/2018(UTC)
Blue S
Posted: 10 February 2018 14:00:58(UTC)
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Also the graph below shows the yearly changes in the FTSE All Share.
Note that the graph is truncated so that 1974 is -55% and 1975 is +136%.
It shows that not many years have had large drops. Even 1987 was a positive year overall despite the crash that occurred during this year. So keep taking the long term view.

FTSE All Share
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Jenki on 10/02/2018(UTC)
gillyann
Posted: 10 February 2018 14:07:34(UTC)
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http://awealthofcommonse...s-everything-around-me/
Although a few years old, you might get encouragement from reading this.
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Captain Slugwash on 10/02/2018(UTC), Sara G on 10/02/2018(UTC)
Mr Helpful
Posted: 10 February 2018 14:22:28(UTC)
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Anxiety - Ideas

1. Try 'mindfulness'; any book by Jon Kabat-Zinn, if not already to hand.
His CDs are also quite useful.

2. Construct a plan, an Investment Plan, to determine in advance the response to be taken in any market movements.
Stock price weakness then becomes a friend, to help investment.
The action to be be taken is pre-determined by the Investment Plan.
All the worrying can then be completed when drawing up the plan, rather than at the worst possible time as the markets fluctuate.
My favourite book to get a grip on investing, 'The Informed Investor' by Frank Armstrong. Although written for the US market, portfolio construction principles travel well.
The only difficulty is that Frank is of the rigid passsive school, holding a Constant Ratio (Stocks : Defensives) at all time, rather than the Variable Ratio Formula Plan which adjusts risk levels in response to valuations.

Good comments in #8 from Sara G, but remember Sara had retained sufficient monies to take advantage. This is a key point to address in an Investment Plan :-
+ how bad could things get?
+ and how much money will then still be available?

All Best
Captain Slugwash
Posted: 10 February 2018 14:58:12(UTC)
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Providing your choices are sound, hold fast and top up periodically.

Whenever I am tempted to sell or tinker in general, I go and read a book on my 'to do' list.

The last one was A Wealth of Common Sense.

https://www.amazon.co.uk/gp/product/B00TWK3TX4/ref=oh_aui_d_detailpage_o02_?ie=UTF8&psc=1

Takes my mind off it, calms my nerves and adds a bit of knowledge.

EDIT....just seen gillyann's post.....great minds maybe?
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Cameron Jake on 20/02/2018(UTC)
Joe 90
Posted: 10 February 2018 15:01:31(UTC)
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I started investing 6 months before the 87 crash and foolishly got cold feet and sold too early. Hard lesson learnt. Stay calm and stay in. I also read that even if you had bought shares just before every correction since the war you’d still be well ahead. As they say it’s not about timing the market it’s about time in the market.
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gillyann on 10/02/2018(UTC), Samual Saunders on 20/04/2018(UTC)
Mickey
Posted: 10 February 2018 16:18:46(UTC)
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If you lost everything invested the chances are that this would be the least of your worries, imagine what would be happening in the world if stocks were to lose 100%
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Tony Peterson on 10/02/2018(UTC), Cameron Jake on 20/02/2018(UTC)
Cameron Jake
Posted: 10 February 2018 16:22:02(UTC)
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There was a passage in one of my books, and I may have misread it.

It talks about a Ostrich philosophy, that investors take when they wont accept they have lost and get out. It results in them loosing more money if not all of it - simply because they would not accept that they had taken a loss.

Is this case different? i.e. passive "safe-ish" funds?

When you say sit on hands, does this mean I pause the monthly investment set up that I have going into the Vanguard 20% fund, or would I be "averaging in" if I continue to buy when the market is low?

As the whole market seems to have had a little crash - would I be right to assume that you too all are in funds and too have lost a proportion of your pots also?

Sara G
Posted: 10 February 2018 16:41:45(UTC)
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Yes, I expect very few of use will have come out ahead in the last week... I am about 3% down overall (including cash in my investment pf's, so it would be a greater % loss on the funds themselves).

Opinions will be divided on whether the Ostrich philosophy is a good or bad thing... On the one hand, over the long term investors who ignore their investments tend to do better. On the other, many active traders will tell you to cut losses before they get too great. (Note the distinction there between investors and traders...)

For clarity, I take the term 'sitting on one's hands' to mean that regular monthly investments are continued regardless. Over the last year when markets rose significantly I did reduce my monthly contributions, but am now increasing them again.

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Lucy O on 11/02/2018(UTC)
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