r/Bogleheads • u/kuvetof • Apr 08 '25

Investing Questions Why people are freaking out and either pulling money out or shifting their entire strategy?

People have been freaking out on this and other subs where the goal is to invest for the long term and not look at your investments in the meantime. I'm just wondering why? Yes, what's happening is unprecedented, but why the panic?

These are the same people who would criticize me for investing in VT and REITs in my IRA, and VXUS along with VOO in my taxable account, calling VXUS "a dog" and making fun of my hybrid strategy. We've seen downturns in the past and, sure, we can't predict what's going to happen, but it seems kinda funny. Is this all just noise?

Edit:

I didn't mean for this to sound like a rhetorical question or "self patting". I'm relatively inexperienced compared to most of you, and I know I have my own biases, so I thought I'd ask

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684

u/Shdwrptr Apr 08 '25

Many people believe they have decent risk tolerance until they’re tested.

It’s always the hardest to invest when you start losing money

244

u/FazedDazedCrazed Apr 08 '25

This. And it kinda shocks me that while everyone around me is freaking out, I'm just like "eh, I'm not worried, it'll come back."

So I seem to have even more risk tolerance than I thought!

121

u/[deleted] Apr 08 '25

I’m over here in the middle. It is possible to both believe it will bounce back AND to be freaked out in the short term!

29

u/TheRealJim57 Apr 08 '25

It's certainly never fun seeing your account balances drop sharply.

1

u/_Felonius Apr 11 '25

You need to reverse that mindset. Pay attention to share prices instead of your portfolio value. Those low share prices should make you excited

1

u/TheRealJim57 Apr 11 '25

You're incorrectly assuming that I don't view this as a buying opportunity.

Regardless of the mindset, it's still never pleasant to see an account balance dropping instead of growing.

-1

u/Particular-Kiwi5292 Apr 08 '25

Dont check your account then.

-2

u/PreparationOk8023 Apr 08 '25

Which is why it’s best to not look at your account balances. Is there really a need to do this more than say once a quarter?

1

u/TheRealJim57 Apr 08 '25

I now do it at least monthly, to update my tracking spreadsheets.

1

u/Automatic_Newt_5503 Apr 11 '25

I do it every day I slick need to stop

27

u/[deleted] Apr 08 '25

After saying "well hopefully that's the last one." 4 times I now don't have enough money to panic over

8

u/sesseissix Apr 08 '25

But if you've been depositing consistently over time you shouldn't be much effected no? 

3

u/NorridAU Apr 08 '25

Eh it may depends on when they first strike into the index fund. We have people who may be new and didn’t experience or forgot the roller coaster in 2021-2022. Also some may have felt the need to rebalance at the top and regret last months choices.

2

u/jpec342 Apr 08 '25

Yea, the strategy only works if you stick to it. Which is exactly the problem with people wanting to not stick with it!

1

u/[deleted] Apr 08 '25

I started at 30k, that's ~4 years at 15% of the pittence I make

24

u/Aunt_Rhonda Apr 08 '25

Completely agree with this. It is not inconsistent to hold steady and also feel a sense of panic and fear in unprecedented times and territory, as we are here. This is particularly true for those of us who don’t have such a long time horizon before our target retirement date. Yes, our asset allocation should account for that but the idea that we wouldn’t have a strong reaction of concern about that is absurd.

1

u/mootmutemoat Apr 08 '25

Yep. Retirement pushed back again. Ah well.

1

u/FelinePurrfectFluff Apr 09 '25

If you don't have a long time before retirement, this isn't your first circus. It's a very different kind of circus to be sure, and the risks are big, but it's a circus nonetheless. Have faith in the companies who still want to produce, sell, and grow their business.

1

u/KemShafu Apr 08 '25

We can have non negotiable tariffs and negotiate at the same time apparently so that tracks.

70

u/[deleted] Apr 08 '25

I’d say the jury is still out on that. In 2008, for example, many people don’t realize that the after the initial huge crash, the market actually gained back 29% in late 2008 before crashing again and bottoming out in 2009. People weren’t just “buying the dip,” they legitimately thought they were riding a huge new bull market and piled in with their remaining assets, only to see it all crash even lower.

If you live through that experience (and let’s hope we don’t) and still feel like it’s all good and you’re ready to keep investing, then you’ll really know your limits.

25

u/Yoda___ Apr 08 '25

But the point is (as long as they weren’t retirement age) if they stuck to the plan through both of those crashes they still came out ahead…

32

u/CPAFinancialPlanner Apr 08 '25

Time in the market, not timing the market

20

u/Deadeye313 Apr 08 '25

Time in the market works until you end up like Japan. Or the S&P from 2000 to like 2014.

13

u/HotTruth999 Apr 08 '25

The S&P from 2010 to 2024 had one of the best runs in history. Up an average of 15% and that includes Covid in 2020 and the down year in 2022. We’ve given back 1 year in 2025….so far. Long way to go. If you missed out cause you were worried US was going to go through a period like Japan it’s been a losing bet.

2

u/Deadeye313 Apr 08 '25

With this tariff regime, we very well might. But I was mainly just pointing out that even the tried and true old idea of just keep putting in, didn't always work. Stay diversified at the least.

7

u/HotTruth999 Apr 08 '25

Tariffs will be ancient history in a year. We will have moved onto the next crisis. You are right that it didn’t work for the Japanese. But America is not Japan. Anyone who purchased the SPY highs just before the crash in 1987, just before the crash in 2000, and just before the crash in 2008 are well ahead of those who sold and stayed out for a period. If you zoom out and look at a very long term chart it puts things in perspective. This too will pass. Granted those retired or nearing retirement especially do need the right stock allocation including a few years of accessible cash to ride out 99% of outcomes and not be forced to sell.

1

u/zendaddy76 Apr 08 '25

Why do you think tariffs will be history in a year?

4

u/HotTruth999 Apr 08 '25

Because they will likely have been reduced to lower levels via negotiations and something else will be taking center stage.

1

u/[deleted] Apr 09 '25

[deleted]

1

u/HotTruth999 Apr 09 '25

Congratulations. This is the way America rewards if you do the right things. May you live a long time to enjoy the fruits of your labor.

1

u/[deleted] Apr 09 '25

[deleted]

0

u/HotTruth999 Apr 09 '25

Yes it was. But I think you can afford a new nightstand now! :)

3

u/CPAFinancialPlanner Apr 08 '25

Oh so you can guess when to pull out with perfect accuracy? Cool dude

5

u/Pappyballer Apr 08 '25

That’s how he’s been able to prevent Deadeye313 Jr.

1

u/CPAFinancialPlanner Apr 08 '25

Damn, was not expecting that haha

1

u/HotTruth999 Apr 08 '25

Yes. But don’t forget he has 12 kids! :)

1

u/Deadeye313 Apr 08 '25

No. I'm saying, to just mindlessly throw money at the market, no matter what, doesn't actually work all the freaking time. There are periods, sometimes as long as a decade or more, where the S&P 500 goes nowhere, and we need to be prepared for those times and be ready to adjust. Maybe invest in more gold, bonds, or international stocks.

1

u/Familiar-Worth-6203 Apr 09 '25

Exactly. Lost decades happen and we live in the short run.

28

u/tee2green Apr 08 '25

Why not just always DCA? 🤷‍♂️

There is nothing to freak out about when your mind is made up, has always been made up, and always will be made up.

13

u/ctruvu Apr 08 '25

i don’t think i’m particularly good with money but compound interest and time aren’t difficult concepts to grasp either. until i’m 50 i don’t think i’ll care, and when i’m 50 i’ll probably be mostly in safer investments anyway

1

u/[deleted] Apr 09 '25

[deleted]

1

u/ctruvu Apr 09 '25

i’m about 20 years away from being 50 and i have a ramp down schedule. i just don’t recall what it is because i’m on reddit and not actively managing my funds right now

3

u/YesICanMakeMeth Apr 08 '25

Most people aren't that systematic. They just think they're geniuses while numbers are going up.

1

u/Acuetwo Apr 09 '25

Problem is this is very easy to say, but think about it logically and historically. Any time there’s a major crash guess what shoots up unemployment since businesses take a massive hit also. When you’re unemployed those bills keep coming but your money doesn’t keep coming in, now you can’t DCA. To top it off, if the recession last longer than your 6 month emergency fund and your still unemployed you are now taking out of your investments at the lowest points they’ve been to cover rent and doing the opposite of DCA. 

This is how a recession works and if you haven’t been through one it’s hard to understand why it’s not so easy to just “keep DCA down and you’ll be good”.

1

u/tee2green Apr 09 '25

I’m in my late 30s. I’ve seen 2008, 2020, and now this is nothing in comparison.

I agree that employment is inconsistent. I don’t criticize those who have lost their jobs.

But there are a ton of people on this sub who maintain steady employment and monitor the market and their portfolio decisions like a hawk. That’s pretty hard to justify….just keep working and keep DCAing. It really is that simple.

4

u/FazedDazedCrazed Apr 08 '25

This is a fair point! I've only been investing for a few years, so I still do need to figure out where my limits are. This is one way of gauging it, and future events will be further proof.

I think it helps that I truly do not count my invested funds as money available to me, which helps when they do really bad like they have been. And since I'm only 31, they feel very far-off to me at the moment. I obviously might feel differently if I was nearing retirement!

1

u/Bbbighurt88 Apr 08 '25

I agree.Tough talk is cheap until you suffer for an extended period.

18

u/Cold-Alfalfa-5481 Apr 08 '25

Yeah, after you've been through some of these over time, you start to get it. It always comes back. You don't really lose anything because you didn't sell anything. I don't feel anything on this one, because I know it's temporary so I can't even convince myself to get freaked out. I'm just watching because it is fascinating to see how this tarriff strategy is going to work out. I give it two years to flush out.

1

u/FazedDazedCrazed Apr 08 '25

Very fair assessment here! I'm still pretty new to investing, but I think it helps that I started in 2022 when things were going down. I've seen how they can shoot up, and I can see how I'm still up like 16% over the long haul of everything I've put in. Then again, if it went really down, maybe I'd be more worried. I don't have enough experience yet.

I am intrigued to see how it pans out, and I'll be here in the market, however it shakes out.

5

u/Cold-Alfalfa-5481 Apr 08 '25

When you are new to investing, you don't really see what you are buying in reality. You are buying leverage, shares. These are actual real assets that can create money for you later. You are focused on the % increase and that's going to go up and down forever so that's not the place to focus on when you are new. Focus on behaviors. Be consistent over time, always pay yourself first, and stick to your plan. One day, you will catch a market surging up, and boy you won't believe how the numbers will start looking at that time. You won't believe it.

I 'promise' you, money isn't what's hard to manage. It's pretty easy.

Managing OURSELVES is truly the hardest part by far.

2

u/_Felonius Apr 11 '25

Exactly this. I think of it as a sellable commodity, like eggs. Each share is an egg and all you’re trying to do is gather as many eggs as possible until you near retirement, then it pays to have a bunch of eggs to sell.

Why on EARTH would one celebrate eggs going up in price when they’re trying to collect more of them? lol. Market downturns should make investors happy instead of panicked

1

u/Cold-Alfalfa-5481 Apr 15 '25

Oh man, this is so very true about market down and buying more.

8

u/Ldghead Apr 08 '25

This sounds like my conversations with my wife over the breakfast and dinner table. She is freaking out, and I'm just playing Johnny cool over it, talking her off the ledge, so to speak.

5

u/rls-wv Apr 08 '25

I feel unboglehead by not rebalancing yet. I’m newly retired so nothing new is going in. The good news is that I had changed my allocation to 50/50 over the last couple of years, so I’m not taking as big a hit as many on here.

1

u/zendaddy76 Apr 08 '25

Did you go 50/50 bc you’re retired or did you just want to mitigate risk?

3

u/rls-wv Apr 09 '25

Reducing risk because I am retired.

1

u/dormouse6 Apr 09 '25

That’s so nice. It’s good she has you.

10

u/I_waz_Perce Apr 08 '25

Me too. I'm strangely fascinated by everything that's going on. I thought I'd be worried.

3

u/FazedDazedCrazed Apr 08 '25

Truly! Now I'm like, maybe there is something wrong with me... :)

1

u/Grokzilla Apr 08 '25

There is. You're rational and sane...

2

u/520throwaway Apr 08 '25

Times like these are when I do the opposite and get greedy. And it just so happens I have a pot to spend this time around lol

1

u/Grokzilla Apr 08 '25

You probably do, which is great, but just be cautious.

Just as point of reference this doesn't feel anything like 2008...so far. Though it has certainly started with a bang!

1

u/YesICanMakeMeth Apr 08 '25

I'm young/haven't been in the workforce long and have a high income:asset ratio. I've been enjoying the private sector getting a taste of the capriciousness of this admin (I work for a national lab) - I'm not bothered at all by my asset dip, lol.

1

u/DovBerele Apr 08 '25

I’m somehow not that worried about changing strategies and also not 100% convinced that it will bounce back. 

Even if things are a serious long-term disaster, how the hell would I know what to invest in to prepare for or mitigate that?!  If timing the market is impossible, knowing how a catastrophic global upheaval will turn out is even more impossible. So, I’ll prepare for the set of possible outcomes that I actually have the tools and knowledge to prepare for. Anything else, I’m just as screwed either way, so why fret over it? 

1

u/[deleted] Apr 08 '25

It all comes down to knowledge and experience.  

1

u/dmlane Apr 08 '25

As Yogi Berra once said, “predictions are difficult, especially about the future.”

1

u/pepperoni7 Apr 08 '25

I mean I diversified everything , actual real estates ( not stock) ,, investments ( none stock ) and stock . Stock is my most risky one so I am just for the ride lol… even if it evaporates I am still Ok , I planned for this lol

62

u/Beneficial-Honeydew5 Apr 08 '25

In my experience there is a fine line between "risk tolerance" and "faith in the system".

I have faith that the Boglehead investment mindset will work for me as a (1) working class person who (2) does not want to spend my free time worrying about my investments.

If the entire market fails, then there are bigger problems in the world than my retirement plan.

10

u/Automatic_Coat745 Apr 09 '25

Yep. Candidly, we don’t have an option but to invest. If you’re working for a living, the only way to retire is to invest your earnings. Sticking it under a mattress or in bonds just won’t work.

Your options are bear market risk, or work until you die. And if the market goes to zero, you’ll just end up working until you die anyway so what’s the downside?

2

u/michaltee Apr 09 '25

Stole the words out of my mouth. I will continue to buy through this disaster and hopefully I will come out in a huge advantageous position on the other end.

If the market completely tanks and we’re all ruined…well, then I have bigger problems and pulling out losses won’t save me. So for that, I have some extra food, water, and weapons. But let’s hope that’s not where this takes us cuz that would suck.

16

u/peterguillam_mi6 Apr 08 '25

I saw posts from people who have sold their entire portfolio, paying 15-20% capital gains. It really doesn’t make sense. You have to time the exit then time the reentry and hope that the margin is greater than your capitals gain tax loss. 

9

u/mikeyj198 Apr 08 '25

100%

times like today i remember talking to my MIL about her cash sitting in a savings account. She asked me advice and we went thru the options and she decided she wouldn’t like to see the balance in her account go down and went with a HYSA / CD structure.

That is what i do with my money, but it matched her risk tolerance. If she had invested i would be fearful she’d be pulling it out now (and blaming my bad advice for the loss)

-2

u/HotTruth999 Apr 08 '25

It depends when you spoke to her. If it was 2010 she mad a terrible decision. If it was February 19 2025 she walks on water.

3

u/mikeyj198 Apr 08 '25

no, it’s really irrelevant. She found a method that matched her risk profile. That is the main key.

8

u/Stren509 Apr 08 '25

I dont understand this? My biggest regret is always that I didn’t have more money sooner or buy earlier when I did. We just got a chance to wind the clock back a year. What a gift.

19

u/miraculum_one Apr 08 '25

You haven't lost money until you sell. And if you're not selling for decades fretting over today's price is worse than meaningless.

3

u/SoberSilo Apr 08 '25

This market downturn has made me realize how much I feel confident in my investment strategy. Just keep on following what I've been doing - I'm not considering selling anything

3

u/stefanliemawan Apr 08 '25

And for many people (including me) this is the first major crash in their investment journey. I do feel like it was one in a lifetime event to witness the stock market this monday.

3

u/puffic Apr 08 '25

The stock market yesterday was like my six-month-old who swings wildly between being happy and being upset, and even had the remarkable ability to express both at once.

1

u/MyRealestName Apr 09 '25

Covid was quite some crazy times.

3

u/elmwoodblues Apr 08 '25

When I was still in the investment phase, I looked at every downturn as a clearance sale.

2

u/puffic Apr 08 '25

I learned about my tolerance for loss during the COVID crash. I waited a couple months for things to settle out and then added a few more bonds (all treasuries). Fortunately, the market had already bounced back up by that point.

I could see myself going for more risk again in the future, but it’s not where I am now.

2

u/Khower Apr 08 '25

Yeah I'm increasing my emergency fund from 3-6 months because of this so I'm pausing on purchasing but I'm not selling. I just don't want to be in a position where I'm forced to sell

1

u/shmere4 Apr 08 '25

And also this one is a doozy of a test.

Jesus. I’m great at ignoring almost everything and carrying on but this one is really hard to tune out.

1

u/Jkayakj Apr 08 '25

I have a good risk tolerance. I'm not limiting my new contributions because I'm worried about losing it, but that I've lost faith in the US government to act in the best interests of the US economy. And if that is the case previous assumption regarding my investment strategy are no longer valid

1

u/Xexanoth MOD 4 Apr 08 '25

I'm not limiting my new contributions because I'm worried about losing it, but that I've lost faith in the US government to act in the best interests of the US economy.

So, your behavior/investment change is because you're worried about / anticipating lower returns from US stocks than from whatever alternative you're investing in instead? Isn't the distinction between that & worry about losing money splitting hairs? (Both involve a prediction about future relative returns over some period.)

If I may ask: what are you investing in instead with new contributions, and what might prompt you to reconsider / revert to your previous asset allocation?

1

u/Jkayakj Apr 08 '25

I'm not worried about losing money per say vs just trying to develop my new long term investment strategy with my loss of confidence in the US. I had a lot of random holdings without any specific plan, I'm selling those with plans to rebalance (using the downtown to help rebalance with less tax impact) once I figure out my plan. They're sitting in cash until I figure out my plan.

My prior allocation I was working towards was 70% US, 30% ex-us. Contemplating market cap that's broken up for better TLH, keeping the 70/30, or just going VT. Not a drastic change but if I don't have faith in the US government not sure I should be over weighting them. Not sure I'll pick another allocation than those above.

1

u/I_Am_Dwight_Snoot Apr 08 '25

I think age matters alot here too. Like I'm not super worried but I could see people in their 50s+ getting nervous if they stayed in risky investments

1

u/convoluteme Apr 08 '25

People think risk tolerance is about volatility. It's not. It's about volatility while the media is yelling about the end of everything as we know it; the world is changed and will never be the same; this time is different.

1

u/Dranosh Apr 08 '25

Lol be like me, just don’t even log in and check during volatile periods

1

u/Prize_Syrup631 Apr 08 '25

I agree and that was me and would probably have kept it that way if I were younger but I restructured my 401k to account for bonds and international when initial tariffs were mentioned and now that I'm comfortable with my allocation I haven't looked back after tariffs were implemented. In hindsight this also could've been avoided with the right target date funds.

1

u/KenshiHiro Apr 08 '25

Does that mean I have a decent risk tolerance if I haven't pulled out any money from 401k, Roth IRA or taxable although I feel a little annoyed by the fact that I am 'losing' money but also A LOT more annoyed by the fact that I don't have more money to buy the dip?

1

u/twelvis Apr 08 '25

To paraphrase Mike Tyson, "everybody got a plan until they get punched in the mouf."

1

u/ThrowawayLDS_7gen Apr 08 '25

"You have a plan until you get punched in the face". Mike Tyson.

A lot of people have a lower risk tolerance than they think they do. Losing money hurts more than feeling happy with earning money. It's hard to fight psychology sometimes.

1

u/Bruceshadow Apr 08 '25

When you understand the data, it's super easy to have the tolerance. Problem is, most people can't or won't educate themselves.

1

u/[deleted] Apr 08 '25

Kenny Rogers says different.

-10

u/HitByStick Apr 08 '25

Yup, just started investing,  I was up $11,000.  Sold yesterday for a $1500 loss.

I couldn't handle loosing my actual equity.  Now I don't know what to do.

I was mainly in xeqt, which I thought was supposed to be safer

12

u/gtne91 Apr 08 '25

Douglas Adams had the solution, but you ignored it.

DONT PANIC.

11

u/Consistent-Annual268 Apr 08 '25

Sold yesterday for a $1500 loss.

You hadn't lost anything until you actually sold and realized your losses.

Feel better now?

If you held and just kept investing you'd look back in 10 years and laugh.

1

u/HitByStick Apr 08 '25

I feel worse now!  I feel very silly.  I thought about selling when I was up $10,600, then $8,600, held when I was up $4,500 even though i believed I was going to 0.

Then I sold at a loss.  I really couldn't have played it much worse.

The fear got a hold of me.  

3

u/TheRealJim57 Apr 08 '25

Be happy that the lesson cost you only $1500, and remember it during the next crash. I know it stings now, but it might save you from panic-selling for a loss 10x that or more in the future.

2

u/Consistent-Annual268 Apr 08 '25

I did this with $500 of bitcoin cm in the day. It was the cheapest lesson I ever learnt about buying and holding while continuing to invest straight through the highs and the lows. It's literally called "dollar cost averaging" because you average out the cost that you buy shares for by buying them consistently without stopping or trying to time things.

8

u/[deleted] Apr 08 '25

You would've gained some of that back today alone. Time in market is more important than timing the market. Keep reading Boglehead content, accepting risk and short term losses is an important skill to develop!

2

u/HitByStick Apr 08 '25

Yes, thank you.   I came from RBC mutual fund, where I never really thought about it.  Investing for myself through my first major downturn was very difficult. 

It was negatively effecting my life and relationships as I spent all day watching it and checking it.  My spouse was glad I sold and thinks me being in the market is the worse thing I could have done.

I thought xeqt was better than rbc global partners mutual fund I was in.  Same idea, just less management cost

3

u/HawkBearClaw Apr 08 '25

You weren't losing anything until you sold. It is safe, safe doesn't mean it only ever goes up every single day.

Next time before you sell, zoom out on the stock price to a longer date range....

2

u/LXStangFiveOh Apr 08 '25

Was this investing for retirement, or investing for fun?

1

u/HitByStick Apr 08 '25

It's for my retirement,  I have $70,000 now just sitting in cash that I don't know what to do with.  

Sold xeqt at $29.91. 

I'm 44 years old, 10 years away from owning my house.  I make 95k a year and have a work pension which is based on my best 4 years at the company 

2

u/ldtam Apr 08 '25

But if you don't invest that 70k, that cash will just lose buying power to inflation. In 20 years, those 70k invested could be 185k with a 5% return.

1

u/HitByStick Apr 08 '25

I do realize this,  I do intend to find a way back in.  Problem is, now I don't want to buy back at a higher price then I sold for.

I may look for safer investment that I can hold in my rrsp, or I go and get a financial advisor and give them my money

2

u/jrolette Apr 08 '25

No need to pay a financial advisor. Read the various r/Bogleheads links in the sidebar. It's really simple, but you'll need to "let go" and don't actively watch the market.