Hi
I am new to share investing and just experimenting first before I invest in larger amount.
I bought my first lot of shares last month and spent 1000 on VAS and 1000 on VGS shares. Of the 2000 now I have 1880 left due to what’s happening in the last few days as a result of China market. Is losing 5% normal. Would anyone in this situation keep them and wait for market to pick up or just sell now?
Thank you.
No Slel
This is very normal. If you look at trends over several months (and years) you do see regular drops between 0-5% that can occur, and this is fine. IF you look at the picture over time, you will see that the market always recovers and corrects. If this is a long term investment, hold in, and you'll make back your loses soon, and then continue upwards. It's just the way the market works - its a very common concern for first timers to panic sell at the first sign of loses but this is not what a savvy investor does.
Is constant growth based on market manipulation off the back of 5 rate cuts in just over a year a normal trend too?
The market was ridiculously overvalued before the coronavirus, what will China shutting down factories for a quarter do?
It all comes down to long term valuation. A 1 year inflation and subsequent correct means nothing in the scheme of 5/10/20 years. Look at the DOW from its inception and see some of the big drops (GFC, etc) and notice how even if you bought at the pick, you were making money again within 6-12 months. If your going to panic over changes in value like this, long term investment is not for you. consider day trading if thats the perspective you have, but the risks are much higher (as are the gains).
these vanguard etfs are for long term 5 - 10 years
Of the 2000 now I have 1880 left
Is losing 5% normal
don't think shares are for you
you'll have sleepless night every now and then
buy more and more and reduce your purchase price
when the anxious sell, you should buy
when people have fomo and start buying you could sell
I'm assuming that you can afford to lose some of your $2,000 (if the worse happens), and that you don't need the funds just yet?
I would hold on; it isn't a large amount and you will learn from the experience.
The market may continue to fall, bad time to sell, good time to buy.
i invested 10k while i was in uni in Santos expecting the oil price to go up. It didn't.
Saw my 10k become 4k over a year. waited and 4/5 years later finally made a profit on it.
Lesson, don't sweat the small stuff, if you get emotionally invested thats when you lose $$$.
So you want to sell when the market goes down? Wow.
Maybe just take your natural instinct and do the exact opposite and you’ll most likely be fine.
You get a 4% dividend so won't worry about it. In the long term markets always go up.
I was pondering the same thing…already lost 10% so might as well ride it out than crystalise my losses.
Buy high and Sell low! I mean… wait?!
Is losing 5% normal.
Yes. So normal that's it's not even something that registers with experienced investors.
While this is a bit of an aside, but it does put this in some context. If you bought $100 in Australian shares the day of the share market peak in 2007 (i.e. immediately prior to the GFC-crash) they would have fallen in value to around $52 … but today have recovered to around $205. The amounts are approximate as I've used a simple proxy for the overall share market value, but it does give you the context for (1) how far a market can fall, and (2) how a genuine long-term strategy can overcome market downturns.
Don’t sell, it’s an opportunity to buy more.
Flip into crypto, buy high sell low
Hi, I am guessing you meant you bought $2000 of those ETF's? Now is not a good time in general, market is losing 2-3% each day. I haven't looked, but am guessing today will be a recovery. Did you want to be in the market for the short or long term? better to wait for the prices to fall, then hold for long term IMO. Plus diversify with things like banks and utilities.
I haven't looked, but am guessing today will be a recovery
Nope, VAS was down 0.93% and VGS down 1.8%. It's a little bit pointless speculating on the short-term performance. It's just as easy to predict another fall tomorrow as it is to predict a recovery.
Yeah ok… don't see why it's pointless and it's not "as easy" because you are choosing a definite position either way. I did also say the ASX was down and it may have recovered not VAS. It will follow overall market trends closely anyway.
because you are choosing a definite position either way
Which indicates that they are equally easy to predict. Pretty much a 50% chance either way, as you've witnessed.
Sell! Sell when it's low!
Buy! Buy when it's high!
really depends on what your trying to achieve….
Vanguard is a good bet, but you need to allow time. put the dividends into DRP and forget about it for 10 years.
Don't worry, I own Vanguard too and yes, watching what has been happening recently can pull on your heart strings.
I just stop checking the share prices (unless you are planning to trade and buy some more) and within 2 days I've forgotten all about it until i read this post haha.
But i'm with most of the comments on this threat - hold onto them or pick up some more, you will be fine seeing as the ETFs you have purchased are long term investments and highly diversified.
The mind boggles.
When you bought the shares, did you think that they would only ever go up?
Someone told him they were just like real estate. :)
I'm loving this downturn. For the past few months, I've watched my portfolio underperform by 1-5 percentage points compared to the market. However, I'm currently 6.5 percentage points above the market and Selfwealth shows me in the top 12% (even higher after the market closes today). Let the good times roll :-)
k
Weather the storm mate
Definitely sell.
You should do what my FIL did. Gamble on the stock market (also do it with your super there are many DIY supers where you select your own stocks). Once this fails and you lose 50% get scared sell and put everything thing in term deposits.
Nah stay the course it’s only $2000 well $1800 in the game.
Pretty normal, expect a lot of pain this year but good shares will bounce back.
Ohh, did the prices drop?
What do we do on Ozbargain? When there's a sale, we BUY, BUY, BUY.
Why would you sell? Would you like to crystallize your losses?
I think now is a great time to buy (more).
Thanks
Can we post cheap stocks on OzBargain?
You can turn your 6% loss into a 3% loss simply by buying another $2000 worth.
Should be a 3rd option of Buy.
Definitely not the shares I would have purchased as my first ever share purchase. You're stuck with them now. Don't sell. They will come good but may take some time.
"Past performance is no guarantee of future results". The market goes up and down - that is normal.
If you want steady returns then you are probably retired or 'risk adverse' - so to do that you sacrifice potentially greater returns for guaranteed income eg rather than shares you get bonds that pay a fixed amount of interest. In times of trouble, people do tend to invest in gold so that's likely to go up, but frankly leave the money in there. Assuming you are relatively young, best thing is to try to set aside regular savings and keep investing that either into a fund like you have, or possibly also into one or more of the 'blue chip' companies.
Buy the dip
Sell them to me :)
You are out of your league. The only time private traders make money on shares is when EVERYBODY makes money on shares. Chuck the money into your super or some indexed funds - if you want to have access to it. Investing in the share market should be a 7 year minimum outlook or you are just in a casino. Every time there is a crash, Wall Street soaks up the rest of the world’s losses. Don’t believe me then have a look at the Dow Jones index over time and compare it to the ASX 200. It’s a mug’s game and you shouldn’t be doing it unless it’s your job and you get paid by somebody else to invest THEIR money. Read up on Warren Buffett and he will pretty much advise the same thing and nobody makes more than him because he only invests for the long term to capitalise on compound returns - much like your super fund and indexed funds. You may want to go Google a bit now if some of this is unclear and if it is unclear you shouldn’t have wasted your time investing on your own in the first place.
I imagine your GOAL had nothing to do with being a GAMBLER; there should be better controls over investing in the sharemarket however deep pockets may not think so.
The short answer is you are shark bait, get out of the water.
Claim your expenses/loss at tax time.
Put it down as a lesson learnt.
imho.
I don't have the answer and I am not good at share trading (in fact I lost 100K during GFC), but I have a question for those who suggest to keep the shares, how do we know this won't become a bear market, in which case I think sell will be a better option (alternatively wait until a bounce then sell)?
Hodl mate