Submitted 4 hours ago by Buttflapper@lemmy.world to mildlyinfuriating@lemmy.world
https://lemmy.world/pictrs/image/cc24d43f-71c1-42f0-83bd-6f2c710c9b3a.jpeg
My retirement fund that I just started was worth $15k in December of 2021. Then, May of 2022, our area was hit really hard. My retirement plan went down to $7k. Today, it’s worth $11k. I lost $4k on my retirement plan. It’s invested in total market funds, some tech, some big cap companies, and healthcare. But every sector has been ravaged by the stock market changes.
Tech is a wild ride.
Index funds are boring but not stable.
S&P 500 is always a good bet.
What this graph looks like to me is you made a really shitty bet, lost a bunch, sold at the bottom and then bought index funds and it’s been ticking up since.
Also you didn’t “lose” anything, assuming you didn’t sell. If this is a retirement plan, just keep your head on straight and stick with indexed and dividend funds
Not saying that’s not frustrating, but don’t fixate too much on the ups and downs of it if you’re not set to retire soon. What the stock market is doing now is barely going to impact the value of your retirement fund in 20, 30, etc years.
The OP is missing something. The two specific funds of his 5 holdings that he said he bought are both up. The 3 he didn’t provide specifics are up too.
$15k should be all in Vanguard total market index. Smaller funds are riskier and could take decades to show their greater returns.
Also, if they are look at the ups and downs, hopefully they invested when it hit the dip.
What kind of fees are you paying? That chart does not reflect the market. For instance, if you had invested in a low management fee S&P 500 index find you would expect to have seen a 50% increase over the same period. Image
Dude isn’t in index funds…nuff said. Mine has more than doubled since 2021
Check the vanguard target retirement income fund (vtinx) and other similar funds. There was a dip in 2021 that absolutely destroyed a number of retirements, my patents included, despite being low risk options. Total bond index funds also suffered for some reason, and those are as low risk as you can get. Every other fund I have is doing great, but the ones that are supposed to be safe are not doing great.
That drop was when the Fed was raising interest rates to stall inflation. Interest rates up, bond values down. But the drop in VTINX was only 20% over all of 2022, where OP is showing 50% in maybe the first quarter.
Incidentally, the sensitivity to interest rates is why I don’t like bond funds. If you buy actual bonds, you get the face value back at maturity, where bond fund are forced to mark them all to current market prices to calculate NAV. IMO, this negates the main “safe” factor in holding bonds.
I like to go a step further and do a target-date retirement fund. I think Vanguard funds are based on index funds, but they will reduce how aggressively they invest as you approach your retirement date. And the fees are very low.
If you’re really hands off these are a good choice. But if you are willing to rebalance a couple of times a year, it’s unnecessary to pay the extra fees associated with these funds.
The close to retirement ones suffered that year. The 2030 target lost 25% in less than a year recently and hasn’t recovered. Ironically, the high risk ones have been less risky during COVID than the low risk ones.
My Vanguard roth IRA is up 11% since 2020, and is up 30% just this last year. If you are investing into individual stocks yourself I would probably reconsider that strategy. Buying individual stocks is closer to gambling than investing.
Yeah idk what they’re doing, it sucks but relatively compared to a full retirement fund this seems more like a lesson than devastation. My retirement is up, and I have a modest risk portfolio. I don’t know what they set as their risk level (if it’s even managed tbh), but the market has generally grown since 2021. The only thing that makes sense with that is individual stocks, and there’s no way my retirement would ever run on individual stocks.
Look at Tesla, 4 years ago everyone said they were stable and a great way to grow money. Now they’re floundering in the EV market now that there’s a ton of competition. You just can’t predict stocks over the course of a retirement. You can predict the market, and essentially the only market bet we make with our retirement is that it will hopefully grow over the next 30 years
They likely were using a full retirement fund, like VTINX or Vanguard Target 2030 or something like that. All of them tanked in the end of 2021 up to target 2060. Even my shares in the Total Bond Index tanked then, and those are supposed to be as low risk as possible, literally.
I lost $4k on my retirement plan. It’s invested in total market funds, some tech, some big cap companies, and healthcare. But every sector has been ravaged by the stock market changes.
Its not your total market fund killing you, its your individual stocks. I don’t recommend picking specific stocks for your real savings. Save individual stock picks for money you can afford to lose. In your case it cost you $7,000.
I used your same data and here’s what it would have looked like if all of it was in your Total Market fund.
You would have $18,679. This would have been a gain of $3479 or a 22% return on investment in only 2 years. That is crazy good! Retirement isn’t a total scam, but unless you are VERY lucky, picking individual stocks is risky. You can successfully save for retirement with just one, two, or three funds: Total Stock Market fund, Total Bond Fund, and perhaps an International fund. I mainly focus on just the boring Total Stock Market fund and it performs fairly consistently well over time.
This this this. Op is a shit investor using his 401k to buy individual stocks.
Tldr; he’s doing it wrong.
Stop. The Vanguard retirement funds all did this if the target is before 2060. And those are invested in index funds by professionals. OP likely had the VTINX or a total bond fund, both of which did this that year and were recommended for during retirement. This is likely the more liquid portion of the portfolio, not the penny stock portion.
My brother or sister, invest in index funds, not in the stock market. And then forget about it for 30 years or more until you retire.
*Index funds with low management fees
broad market Index fund with low management fees
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My brother or sister, invest in index funds, not the stock market.
I mean, while I get what you’re saying and don’t disagree, I’d phrase it as “hold an index fund rather than stock in individual companies”. ETFs themselves are traded on the stock market.
You’re right. I wrote it quickly while on the go.
You can also do target date funds. Each one indicates the projected year you expect to retire. As you get older, it shifts more to safer investments like bonds. The idea is invest in the stock market when you are young and don’t expect to use the money soon. You are able to hold through downturns in the market and returns have historically always trended up despite the occasional drops. When you are near retirement and expect to be using the money you can’t always afford to wait it out so you should invest in things that are more stable but have lower returns like bonds. Target dates have slightly higher fees and you should always check what the fees are before you invest, but they are very set it and forget it.
All target date funds through vanguard tanked that year unless you have 2060 or later as the target. 2030 lost 25% and hasn’t yet recovered.
The stock market averages are only true if you look at it for a really long time, like 30-40 years. In 10 years, the value can definitely go down a lot, but if you view it for the long-term, it will still be an improvement.
I understand that looking at it like that is unnerving though.
Needing to choose when to retire based on whether the stock market is up or down is a dogshit system.
That’s generally why when you’re younger people tend to put their retirement funds into riskier investments and over time as you get closer to retirement you move portions of your money into less risky things that don’t have the potential volatility of the stock market so that by the time you retire you don’t have to worry about the stock market dipping and blowing out your retirement funds. At least that’s one way to do it; obviously this isn’t investment advice and you should seek your own professional investment advice.
You don’t have to choose, just keep saving and investing for 30 years.
I’m in a Vanguard target fund and I’m up 7.8% over the same period. There was a lot of red until December 2023, when it broke even. All gains are pretty much from this year looking at my returns chart.
Yeah there is something else going here. No domestic markets are actually down in this interval. OP must have bought some individual stocks.
Or be invested in managed funds with high fees that are performing poorly vs index funds. My 403b is definitely up over this same period, but I’m only in index funds
Which funds did you invest into? I’ve studied like 25 hours of investing. Haven’t found a good fund yet except FSKAX and VTI
You found the good ones. No need to go looking further.
I’m in BTC S&P 500 Index, BTC Russell 2500, BTC ACWI EX US IMI, and BTC US Debt and am at 11.93%, 3.6%, 3.87%, and -1.34% over the last 3 years. Over the last year though, it’s 36.36%, 26.36%, 25.22%, and 11.6%. My funds are Large Cap Blend, Small Cap Blend, Foreign Blend, and US Bonds at roughly 67/7/20/6 percent division of my portfolio.
I think you just got into the market at the height of the markets during COVID and are still digging your way back out. You could try diversifying a little bit in a similar fashion to spread the gains and losses out a bit over both large and small US companies and foreign markets.
If you have an account with Fidelity, FZROX should be a better choice than VTI. Unless you enjoy investing or want to really get into it, either do a target date fund for the easiest and lowest risk, or a total market fund like VTI, or an S&P500 fund like VOO. You really don’t need to overcomplicate beyond that, except to potentially start buying bonds when you are nearing retirement if you didn’t choose a target date fund.
I’ve put my ira into FNILX. Zero fees and consistently beats 10%
Mainly VFFVX, which is up 4.46% over a 3 year period, but I have about 20% in various other funds.
I let my bank’s financial advisor handle that. They have apps that calculate everything.
If your portfolio is down that much over that period of time, you are likely not making good investment choices. S&P500 is up like 50% since 2021…
Your losses or lack of portfolio growth isn’t really something to complain about online without more info on what your asset mix is. Unless your goal was just to complain, and not get any advice from helpful anons that are having more success in investment choices.
It’s invested in total market funds, some tech, some big cap companies, and healthcare
Tech, big cap, and healthcare are already part of the total market funds, so you’re over-weighting (taking excess risk) by investing that way. Assuming you’re pretty young based on time in market, you’d be fine with just the total market fund, until you have more experience with the market or just want a set and forget, for a while.
What specifically are you invested in? That chart doesn’t look right if you are investing as you describe.
Retirement is a financial state. Set a goal and work until you get there. Diversify your investments and basically just ignore the market.
Unless there is a total collapse of the economy you’ll be fine and if there is a total collapse it’s unlikely you were in a position to captialize on it anyway.
Yeah my 401k basically didn’t budge for years even though I was dumping money into it.
You need to revisit your allocations
If the market is down then you just get to buy more at a discount. It should pay off in a few decades
Are you not adding to it steadily?
What are the holdings and have you changed the allocations over time? Seems nearly impossible without major mistakes. Do you hold your own company’s stock? Mutual funds with high expense ratios? I’m very curious what’s going on here. It looks like something blew up in November 21 and never recovered. Were you holding lots of COVID technology plays like Peloton and Zoom Technologies?
I had a three fund portfolio. FSKAX total market index fund, blue chip large cap, and vanguard tech, with a really small portion of healthcare funds. The stock market seems to have totally dipped. Ant recommendations?
Yeah. Something doesn’t add up. The worst dip of what you mention is the blue chip large cap, but the curve you posted looks like VTINX or the vanguard 2030-2040 target date funds, not any of the funds you listed.
Not possible. There’s no way, just look at the performance of those parts over the past 5 years. I’d go look at your statements. Seems off to me. What kind of healthcare? Biotech is very volatile but broad healthcare hasn’t collapsed either.
Your results don’t make sense. What are all the specific funds because the ones you listed didn’t lose money.
You got in at a bad time and probably picked some subpar investments. You likely bought some big tech stocks at the worst possible time, and many of them never recovered because they were way over valued to begin with.
Stick with total market or sp500 fund like VTI or VOO. You’d be up right now if you had.
Also, it sounds like you invested once and then never bought more? The whole point is that you’re buying more every paycheck. You’d be way up if you’d kept investing through 2022 when prices were low.
Target date funds are also supposed to be set and forget, but this looks like the curve from Vanguards 2030 through at least 2040 target date funds.
My retirement account has roughly doubled between Dec 2021 and now, I basically only invest in mutual funds and ETFs with a medium risk, low fees, and high return according to Morningstar ratings (I’m not sure how reliable those metrics are but it’s what shows up when browsing funds on fidelity and it seems to be picking good options so far)
It’s fucked up for sure. Investing is akin to gambling in Vegas. Any one otherwise inconsequential detail could completely bankrupt you, and we’re expected to pin our elder years on this system.
Burn in fucking Hell Raegan.
Yeah, no, investing can’t be compared to gambling like that. Unless you’re picking stocks at absolute random, there are underlying market forces can be understood and used to make reliable investments.
OP made some shitty bets and is blaming the system
Sure, picking an individual stock is basically gambling, but investing in index funds is basically betting on the house. And the house always wins.*
*Unless Trump is running it at least.
A 401k isn’t mandatory. If you’ve got an issue with having a 401k, you don’t need to do so. I suspect, however, that you’ll be hard-pressed to find a route that will provide long-term returns as solid as regularly dropping funds into an index fund in a 401k.
One thing to consider. When the stocks that are part of a mutual fund drop… then your retirement contributions will be buying them on sale.
Assuming the mutual funds are spread out to minimize risk (1 of the funds companies folds, etc) overall you’ll be better off long term.
As you age you’ll start moving your investments to more stable options. Ones that won’t benefit from huge gains but also won’t be wiped out by massive drops.
In the meantime look at how your funds are doing over time. Not even year to year but maybe every 2 or 3 years.
What you talking about man if you just follow nasdaq it could’ve been positive
Kalkaline@leminal.space 6 minutes ago
You need to talk to someone about your risk tolerance. Clearly you’re not willing to accept short term losses and you’re going to be prone to panic selling and holding cash when you could be buying dips. Your risk tolerance does not match your portfolio.