1,175 Points of Pain

I got pounded today.

Perhaps I should rephrase…

While I was very busy working today on a snowy and frigid Monday in the northwest suburbs of Chicago, my family’s investment accounts were being pounded, along with yours if you invest regularly, like you should.

I take little solace with the realization that it was not just me.  I know that many people lost far greater sums than I did as the Dow plunged 1,175 points.  I also realize that many people lost far less and many people did not lose a dime.

Not too long ago, I had calculated my family’s net worth, not having ever done so before.

It was more than I thought it would be and was largely fueled by the run-up in stock prices since Trump had taken office.

Primecap – up.  Wellington – up.  Capital Appreciation fund – up.  Blue Chip Growth fund – up.  S&P 500 Index fund – up.  College 2018 fund – up.

Well, today they went down, down, down, down and then down some more.

My Roth IRA alone lost over $1,500 today, and I cannot even look up the others.  Altogether, I estimate about five grand in losses, which is nothing to sneeze at for someone in our tax bracket.

Just as the Dow lost 4.6%, I suspect that our family’s savings declined by the same or more.

I had been hearing wise pundits warn of a possible “correction” for weeks and weeks while listening to the WBBM 780 Noon Business Hour  for some time now, but I have been hearing that for a few years.

A few weeks ago, I heard someone who is the head of investing at some major bank predict just this, that there would be a massive and panicky sell-off in the weeks or months to come.  But did I act on that?  Noooo.

In retrospect, I completely understand why not.  I have been investing with some of these funds for ten years or more, and if I sold them off after hearing somebody predict doom and gloom for the market, I would have sold them off twenty times already.

Also, it makes me wonder if this is a golden opportunity to purchase more. The wisest and most successful investor that there is advises to seek opportunities like the one being presented to us right now to purchase more while others panic.  And they are panicking!

I do not want to lose faith in the markets, but I also do not want to be the sucker who invests more before the Dow plunges another 5,000 points over the coming weeks or months.

I am not advising anything here, just wondering.

I certainly do not know what the market will bring in the coming months or years any more than you do or anyone else does.  If someone says that they do know, do not believe it.  I just agree that the market’s success was overblown and I also know that investment fever will take hold once again and rise higher than they are as of now.

I previously had some different posts in mind for tonight, perhaps something urging you to continue the slow, steady investing like I do.  Ironically, I had Paid Myself First a few nights ago and have additional investments in both the Blue Chip Growth fund (down 1.83% today) and the Capital Appreciation fund (down 1% today) transacting first thing tomorrow.  I also have a check in the mail to my wife’s Vanguard 500 Index fund which will transact in the coming days.

Is this just a temporary blip in the expanding economy or the beginning of the end?

If I knew, I might tell you but probably would not.

My inclination is to heed the advice of Mr. Buffet and to be greedy now that others are fearful.

If the Dow plummets again tomorrow, I might consider purchasing additional shares.

If it plummets again the day after that, all bets are off and it may be time to bury your money in a box in your back yard.

Leave a Reply

Your email address will not be published. Required fields are marked *