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.
You must log in or register to comment.
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.
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
OP’s losses are more exagerated than just the Target Date fund experiencing a dip from bond exposure.
Here’s OP’s same initial investment on the same day but 100% in VTINX:
So instead of a $4k loss that OP showed, it would been a $71 loss. OP went picking individual stocks and got burned (assuming they liquidated their position after seeing their portfolio balance).
Yeah. You’re right. And their recounting of what they invested in makes no sense. I caught that later. So there’s definitely poor choices somewhere they aren’t mentioning.
BBY all in yolo!
deleted by creator
How did you manage this. The market has been up every single year since you started.
Yea, you made a shitty bet, lost your ass, sold at the bottom, then reinvested into index funds, which has been steadily creeping up. That’s on you, bub.
Dollar cost averaging, son. Good time to buy!
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.
You put 15k immediately in?
That sounds stressful.
If so, I feel it would be better to put 15k into your account but purchasing in 1k a month increments. It would have flattened that dip for you.
I started by putting a good amount of money in first with the goal to the the average later on.
I mean what should you do with spare 15k other then investing it somewhere.
Yes, yes you could diversify…
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
Yeah, this is FSKAX over 3 years. I have a lot of my portfolio in it and it does well. It’s up 24% over that period.
The 2030 target fund is still down 8.8% since that date.That’s messed up.
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
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.
Haven’t found a good fund yet except FSKAX and VTI
You found the good ones. No need to go looking further.
Mainly VFFVX, which is up 4.46% over a 3 year period, but I have about 20% in various other funds.
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 recommend FSKAX over FZROX. There are few minor differences. Yes FZROX has a lower expense ratio, but it BARELY lower when compared to FSKAX. My understanding is the biggest downside to FZROX is that you can’t hold that in any other brokerage. So if one day you decide you don’t like Fidelity you have to sell all your FZROX and then buy something else offered at the other brokerage. In a retirement fund this isn’t so much a big deal, but could mean you miss out on gains between the sale and the purchase of whatever else you replace it with.
If you’re investing in a non-retirement account this is a BIG deal, as any gains would be taxed at the time of sale. This can mean you pay 15%-20% on the gains just to switch brokerages. FSKAX doesn’t have that limitation, and you’d be able to simply do an “in kind” transfer of the securities to your new brokerage without any tax events/consequences. To me, that portability is worth the tiny different in expense ratio.
I let my bank’s financial advisor handle that. They have apps that calculate everything.
They do. And you can generally trust banks to try and sell you what’s most profitable to them.
They are fiduciaries.
Fiduciary is a legally defined term. Fiduciaries are expected to exercise a duty of care and a duty of loyalty to clients, and as a result, are “held to the highest standard of conduct.” Fiduciaries have a bond of trust with another person (called the beneficiary or principal) and have a legal obligation to act for the beneficiary’s benefit – not their own.
That’s all fine, but just be sure you know how much you’re paying them for that service. Before we switched to self-managed a number of years ago our guys were taking 1.4% off the top of the whole account just to pick a bunch of index ETFs. Market goes up 5% and I only see 3.6% of it. Not good. Plus the ETFs they picked had higher expenses than just going with a whole market choice.
They offered to get us on a plan at 1%. Ha, no thanks.
Yeah that’s bad. We’re with JP Morgan through our local Chase branch and their fee when all is said and done is averaged down to less than 1% of the total account balance.
That’s better for sure. Still too much for me. Our all-in investment cost is 0.05% now. That’s a lot of free compounded yield compared against guided investments which are themselves no better than the average market (on average).
Who are you with?
We are on Fidelity. But self-directed on all the big ones are no fee and free trades these days - Vanguard, Fidelity, Merrill and probably others. Just need to watch the fund/ETF fees to have a total cost.
I’ve put my ira into FNILX. Zero fees and consistently beats 10%
You should be continually contributing over time allowing you to benefit from the dips by buying low. This offsets the losses and is called dollar cost averaging,
Yep. Much like northbound travelers in the US South, when we see a low price we buy as much as our tank can carry.
I have no idea what anybody is talking about.
If you don’t know what you are doing, and still young, just set a low cost broad market index fund or ETF as the place your retirement funds go. An example would be VTSAX or VTI. Disclaimer: I am not an investment expert or advisor.
3 years is absolutely nothing in stock market terms. Check in a decade.
Also you should really just invest in a super broad index fund instead of your specific tech and healthcare and stuff.
If you had only invested in a broad stock wide index fund, your 15k would be 17k right now. A total market index fund minimises risk nicely.
What you talking about man if you just follow nasdaq it could’ve been positive
Because you invested in a shit plan or simply made your investments poorly. I know plenty of people who are doing well on their retirement investment plans, and I’m doing fine too. Don’t blame America, the country, for your shitty decisions.
This is what we call Survivor Bias.
LOL. Omg I’m such a survivor. I’m only a survivor because I survived this long. I would be a completely different person if I I just survived longer than this. 😝
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.
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.
*Index funds with low management fees
broad market Index fund with low management fees
Sp500 vanguard, if you dont do options. Lowest fees.
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.
I wrote this quickly while going on the toilet. Just thought I’d share.
I hope you had a good sense of euphoria after that.
What most of the commenters are missing is that the assumption that one has to know how to gamble in order to have a retirement is a broken and stupid USA thing. Nobody should be forced to learn these things in order to not end up on the street. OP clearly has no idea what they are doing-- and so many comments point this out with varying degrees of rudeness, smugness, and shitty attitude-- but the point should be that we are feeding naive investors like these to the lions and that is morally wrong and collectively shortsighted. We all suffer as a society because people like this are being required to make investment decisions and doing that really poorly.
He didn’t have to know, and he himself knew of the alternatives for people who don’t “know how to gamble”. Nobody in any country can stop you from using your own money in an unwise manner.
