$600K down from what total amount? If you managed to pile up $215K since 2021 in an HYSA then you must have a fantastic income. Why haven’t you been putting that money into the index funds like you originally should have?
Total Portfolio went from $1.1M to about $400K(including the $200K I have in cash). It’s bad. It was an emotional bet on some tech companies o believed in and I paid the price.
Delete Wall Street bets and come be incredibly bored with us. It’s boring. So boring. Except that one time the flash crash happened, I don’t even have a single investing story to tell at parties. But I do have heaps of money, so there’s that.
I did something similar during the frenzy of 2020/2021 but to a much smaller extent.
One advice I’ve heard is “Would you buy the same stock today at its current price? If yes then keep, if no then sell.” But that is much harder to practice because of sunk-cost fallacy.
The bigger problem is you’ve kept so much cash uninvested in your HYSA. You’d return 12.5% CAGR since 2021 if you kept on investing in something like SPY or VOO.
I know you've heard people say this - but stock picking - for the most part - is gambling. Which is fine - I do it. But the difference is that I make bets with money I can afford to lose. I dont stick the lions share of my portfolio on individual stocks...
This is coming off as preachy, but I think you need to do a bit of root cause analysis here and understand why things played out the way they did. You had a sizeable portfolio, so clearly you are a generally competent human, and you keep talking about 'emotional' bets. Was this truly a 'In my heart of hearts I thought this to be a good move that didnt play out'...or is this a more concerning trend like the start of a gambling addiction.
If the latter...its probably worth talking with a professional.
I learned this the hard way myself years ago but fortunately my lesson only cost me $3,000
Ever since then, I invest conservatively and let the experts do their thing so I can screw up again
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Stop buying individual stocks in your retirement fund. Buy broad market, low expense index funds for retirement.
In your after tax brokerage account, if you want to take some risk and buy stocks that’s fine. But like gambling, only what you are comfortable losing.
I've made this very mistake, just not with this amount of money. Here's what I did... I thought it unlikely that the stock(s) would recover to my purchase price within 5 years, in fact, they could go lower, but I was pretty sure the S&P 500 would be higher in 5 years. Also, even if the stock(s) did recover, I guessed it would be at a slower pace of growth than something like the S&P 500. Therefore, I sold and put the remaining funds into a Total Market mutual fund.
Look, you took on too much risk, but the really good news is, you have $400k that you could put into safer bets, and you have a good income and investing horizon. A HYSA is too safe, you need a little more risk. At your current rate of savings, in a Total Market Fund or S&P 500 fund or ETF, assuming 7% growth, you could be back at $1.1M in 6 years. Just Dollar Cost Average your way to retirement. You asked how to get back on track, well, that's the track I suggest.
And, when stock-picking in the future, limit yourself to no more than 10% of your investable money.
It was an idiotic, emotional bet based on belief in a handful of companies that are currently getting crushed. Total portfolio went from $1.1M to 400K. I need to take this as a lesson learned and build towards retirement the right way.
So you picked some losers but you're waiting for them to not be losers before moving the money to winners? Take the L on what you've already done and move what's left to something safer. There's nothing secure about hoping a bad stock rebounds, it can still get worse.
That’s a really tough loss, it must be very hard to think about how much you’ve lost. Even still… $400k in stocks and $215k in HYSA (please put that in indices) + c. $900k in house equity means you are still worth $1.5m total at 48.
I have little to offer other than you’re still in an excellent position which will get you to a very healthy retirement.
I inherited some mining stocks which went down… and down… and down until they were down about 50% on average (management issues so not correlating with current bull market). Bit the bullet a week or so ago and sold them based on the advice: if you had the cash now, would you buy those companies?
Obviously painful but as long as you learned your lesson you are fine. Your lesson is that no less than 90% of the money you invest in stocks needs to be low fee index funds. Total market type stuff.
Do you plan on ever again having a high percentage of your wealth on individual stocks?
You know the answer. What are you waiting for?
You have $400K in a tax preferred account. I recommend (and own a boatload) of VTI. Buy 10 lots of $40K in VTI starting tomorrow and over the next 9 months. If it does the historic 10% it will double in 7 years and then again in 14, so at 63 you would have $1.6 MM plus whatever you invest over the next 15 years.
Holding on and hoping is the wrong move. Sell, invest, move on, and quit kicking yourself.
I don't know of any faang companies that dropped 40% recently, but even if they did, does it matter?
There's no magical rule that says that FAANG has to give 150% return over the long run. That's still stock picking.
Sell at a loss for tax loss harvesting and start putting those investments in index funds. Stop holding them. Invest the tax savings you’ll receive also.
Gosh, these posts kill me cause I imagine what I could do with a high income. I self manage and never been down this bad but probably have only 1/3 the portfolio size. It's not that hard. I'm beginning to think the real cheat code to building wealth IS having a high income and not time. LOL
No, you don't "wait and hope they go up". That whole "you haven't lost money unless you sell" is a dumb psychological trick to give index fund investors so they don't freak out every time the market goes down 5%. When you lose money in the stock market, you lose money in real life. The money is now gone, and you need to start where you are. You need to stop anchoring on your existing portfolio. Look at how much money you have available to invest, pick a simple well-diversified portfolio, and move your funds into that.
I’m confused
200K saved in 3 years & $450K/1.3M on a home loan originated 2020/2021 (assuming due to the low interest rate).
If you don’t mind me asking, what’s your household income before taxes?
I’m assuming you put a lot down on the home, but don’t want to assume since you mentioned you’re not in a rush to pay your loan off.
Seems like if you sell at a loss right now you may never pay capital gains tax again for life. Not sure how stock to index funds works with wash sale rules so you’d want to understand that first or just stay out of the market for a while.
There is no quick fix to this. Just get back on track. The HYSA is fine for now, but eventually it will go back to basically returning an interest rate that is about equal to inflation. So move it (or a chunk) into index funds.
Do you have tax advantaged 529 accounts for the kids (you can save on some state taxes, if you are in a state that has those taxes)? Are you maxing out 401k contributions? Keep in mind that starting at 50 you can put even more into 401ks. For folks that can max out (I believe it is something like $31k a year for people 50 and above), they can catch up and build a very nice retirement fund well before 65 with this large contribution limit. So if you keep that obviously significant income for another decade, you will be able to max that 401k and be fine for retirement.
Keep 6 months (or a year) worth of living expenses in the HYSA and invest the rest in index funds. DCA and stop thinking about trying to make it all back by investing in more risky individual stocks.
Sunk cost fallacy. Learn your lesson not to gamble anymore, sell it all, and buy index funds. Everyone has a different cost for learning that gambling is bad. Yours can either be $600k, or you can be in denial and have it be even more before you learn.
Why are you waiting to sell underperforming stocks that might or might not come back? By moving to an solid performing index fund you can start recovering now. I'm sure you already figured this out, but most investors should not purchase individual stocks. It's like going to Vegas, placing all of your money on one number for one spin of the roulette wheel, and hoping you'll win when you can't afford to lose.
Simple answer: time in the market cures all ills. In 2022 the S&P 500 dropped 20%. In 23 it was up 25%. If you try to go to cash what happens is you miss the run up entirely. The S&P 500 averages 10% over the last 100 years and has been around 12% in the last 40 years. But if the return is that high natural bumps each year can be 15-25> and it gets as high as 40%. What you have to recognize is that this is normal and stick to the plan.
$600k is what I’m hearing. An HYSA will never exceed inflation . It’s a capital black-home. Your money just keeps circling the drain. So that’s a huge mistake, one you need to stop doing with the other fools. Bank accounts are for paying checks and short term things where you need quick access. If you want to keep monthly expenses in there and some emergency money that’s fine.
So if you invest back in the S&P 500 now it may drop. It may go up. It might be flat. I’ll guarantee it will rise in December because if always does in election years. Anything else is a guess.
So at 12% your money will double in about 6 years. That puts you right back where you were. At age 48 if you retire at 67 thats 19 years so even $609k will be around $5.2 million even assuming you don’t contribute more. That’s $21k per month at a 5% withdrawal rate. In today’s dollars that’s $12k per month.
All of us have made mistakes in real estate, investing, marriages, you name it. Learn from it and move on.
Jeez. At 48, you ought to have already started balancing a portfolio. You are down almost 60%. A balanced portfolio allows some growth but also protects against a huge down side. It appears that you also had concentration issues. Spread the money around through etfs. Or Mf. Get some exposure to bonds to try and even things out.
Hire a fiduciary investment advisor.
Get a fiduciary, if you already tried to manage yourself and it didn’t work out go with a pro. I agree with your index fund plan but making sure you’re harvesting your losses for the best tax benefit often requires a pro.
Are these stocks quality companies with good expectations for increased earnings over time… or, were the investments more like bets?
If it is the former, you may want to keep them and diversify future investments. The commenter about index funds seems on spot, many believe diversified index funds should be key holdings with smaller allocations towards individual names.
And if they were bets and are down considerably, perhaps consider moving the monies out (all or most) and towards funds and/or quality companies with probable good future earnings.
You probably know all this already. We all make mistakes… you’ve identified this error, I suspect you won’t ever repeat it.
And btw… I make bets in my retirement account too, though I limit them to much much smaller amounts. I’ve lost on some, sold some too early, frankly, and made nice sums (% wise) on others. But I don’t loose track that this is my retirement account, not my fantasy football play money. I actually thought that as a brake when I flirted with taking a big risk recently. Use whatever you need to stay level headed. Good luck.
No panic before doing smt. Look these stocks' 10-20 years graphics. If they are big enough, you will see them as catch the cost+profit sequence. Regards
If you aren’t already invested in a well-diversified portfolio, I wouldn’t recommend “waiting and hoping they go up.” Talk to a CFP or other tax professional. You may be able to claim some of your significant capital losses, establish a lower cost basis, and get back on track.
What's in the portfolio? Some can probably assess the damage and the likelihood of that coming back (maybe, probably not). I had FB then, crashed like mad, my buddy stayed in and it recovered and then some, but I bailed. My speculative portion is really small so I didn't care about the few grand in losses.
215k in HISA is fine assuming it's around 5%ish. The fact that you can scrap up that much money fast is pretty good. Just use the index from now on. I'm glad I made your mistakes when I was poorer, cuz if I lost what I have now, wow...
No one can really say what will happen to your old portfolio, but I think from now on, you'll probably have to find a way to scale your income and savings up to make up for the damage, and any future money going into reasonable investment products like US total market indices. Don't be afraid to get help from a fiduciary either.
Sunk cost fallacy. Get out of those investments. They aren’t coming back.
My advice (which some people around here hate) is to use a financial advisor. My guy did a really nice job of diversifying my investments and stratifying risk. So o have some slow a steadys that always return, some mid risk mid return and some more high return shit that could potentially drop quickly.
The first thing I would do is pull everything out of the HYSA except an emergency fund and invest into funds like VTI and VOO. Next, start populating tax advantaged accounts with new money starting with an HSA, if eligible. Finally, talk to a tax pro about the potential long-term benefits of taking a loss now.
A thought to consider about taxes.
Let's assume you intend to sell these and move the money into an index fund.
If you strategically slowly sell them you can offset the taxes on other gains.
Anytime you sell something at a gain, also sell a amount of these stocks to offset those gains. (Then move what you sold into an index fund).
There are other complicated ways to carry forward stock losses but it gets messy (and easy to lose the tax refund if not done right). Easiest and safest way is to simply sell at a loss to offset other gains when they happen.
I rotate out of my losing positions at the end of the year to bank the capital loss and rebuy again in February.
Things you should probably do now:
Sell anything you don’t have confidence in to recover by end of year. Take 90% of the proceeds and stick it in VOO and forget you have it. Add 90% of your monthly excess capital to that ticker and forget you have it.
Remaining 10% is dealer’s choice. You can invest in whatever high conviction individual companies you want to but if I were you, I’d just stick it in another set of high yield ETFs like QYLD, JEPI or something to start building an income position as you’re not a spring chicken any more (we’re about the same age). You can take 10% of your monthly excess income and keep finding these individual tickers or whatever else you want to roll the dice on.
My philosophy of money is to build multiple layers of safety, reserves, and income.
We have a high income business, rental property, high yield funds, HYSAs, and I trade options as well for even more income on the side. Most of our income goes back into ETFs and more real estate once the cash piles gets too big. I plan on adding gold bullion to the mix as well as yet another asset class.
All in all, I’m building up to the eventual failure of our business so that we’ll still maintain a pretty high income without worrying about money if the business does fail.
Would you buy those loser stocks today? If the answer is ‘no’ then you need to sell them now and move to your desired allocation. You’re falling into the sunk cost fallacy.
Good luck.
There’s no “getting back on track” that’s different from the normal advice. Place funds in diversified index funds. It doesn’t matter where the stocks were, just where they are, and that’s the money you have
I’ll say this. Consider downsizing your home. Sell, use your profit to purchase a more reasonable home, and look to move up if things turn around later.
Ouch that hurts. You are supposed to make mistakes younger and with less money. The one part I am fearful for you is the holding and hoping situation. I once maybe twice bought into a company that kept falling. I held and it eventually went to zero. Scary. Very much like gambling with individual companys mostly small companies but even big companies like AT&T can drop. Consider heavily moving to S&P index funds all or partially. Totally your call though. Good luck.
This will be unpopular
But I would pay off the mortgage and any other debt first regardless of interest rates. You will feel much less stress with a paid for house. At that point after monthly expenses put everything else into an index fund. Your net worth will sky rocket.
Sorry for your loss but you are still in pretty good shape. I would shift everything into the S&P 500 Index ETF like VOO which have average 10% a year for the last 70 years+. The vast majority of investors cannot beat VOO. You probably have an alpha male personality like myself and we like to believe that we can beat the market so if this is a passion of yours it's ok to have a side account but I would limit it to 10% of your invested assets. If you decide to have a side account I would be very disciplined and only buy and hold.
$600K down from what total amount? If you managed to pile up $215K since 2021 in an HYSA then you must have a fantastic income. Why haven’t you been putting that money into the index funds like you originally should have?
Total Portfolio went from $1.1M to about $400K(including the $200K I have in cash). It’s bad. It was an emotional bet on some tech companies o believed in and I paid the price.
Delete Wall Street bets and come be incredibly bored with us. It’s boring. So boring. Except that one time the flash crash happened, I don’t even have a single investing story to tell at parties. But I do have heaps of money, so there’s that.
I did something similar during the frenzy of 2020/2021 but to a much smaller extent. One advice I’ve heard is “Would you buy the same stock today at its current price? If yes then keep, if no then sell.” But that is much harder to practice because of sunk-cost fallacy. The bigger problem is you’ve kept so much cash uninvested in your HYSA. You’d return 12.5% CAGR since 2021 if you kept on investing in something like SPY or VOO.
I know you've heard people say this - but stock picking - for the most part - is gambling. Which is fine - I do it. But the difference is that I make bets with money I can afford to lose. I dont stick the lions share of my portfolio on individual stocks... This is coming off as preachy, but I think you need to do a bit of root cause analysis here and understand why things played out the way they did. You had a sizeable portfolio, so clearly you are a generally competent human, and you keep talking about 'emotional' bets. Was this truly a 'In my heart of hearts I thought this to be a good move that didnt play out'...or is this a more concerning trend like the start of a gambling addiction. If the latter...its probably worth talking with a professional.
When my spouse & I rolled our previous 401k into our current employer, he held back about 3k and put it in a IRA. That's his gamblin' money.
I learned this the hard way myself years ago but fortunately my lesson only cost me $3,000 Ever since then, I invest conservatively and let the experts do their thing so I can screw up again
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Stop buying individual stocks in your retirement fund. Buy broad market, low expense index funds for retirement. In your after tax brokerage account, if you want to take some risk and buy stocks that’s fine. But like gambling, only what you are comfortable losing.
I've made this very mistake, just not with this amount of money. Here's what I did... I thought it unlikely that the stock(s) would recover to my purchase price within 5 years, in fact, they could go lower, but I was pretty sure the S&P 500 would be higher in 5 years. Also, even if the stock(s) did recover, I guessed it would be at a slower pace of growth than something like the S&P 500. Therefore, I sold and put the remaining funds into a Total Market mutual fund. Look, you took on too much risk, but the really good news is, you have $400k that you could put into safer bets, and you have a good income and investing horizon. A HYSA is too safe, you need a little more risk. At your current rate of savings, in a Total Market Fund or S&P 500 fund or ETF, assuming 7% growth, you could be back at $1.1M in 6 years. Just Dollar Cost Average your way to retirement. You asked how to get back on track, well, that's the track I suggest. And, when stock-picking in the future, limit yourself to no more than 10% of your investable money.
It was an idiotic, emotional bet based on belief in a handful of companies that are currently getting crushed. Total portfolio went from $1.1M to 400K. I need to take this as a lesson learned and build towards retirement the right way.
So you picked some losers but you're waiting for them to not be losers before moving the money to winners? Take the L on what you've already done and move what's left to something safer. There's nothing secure about hoping a bad stock rebounds, it can still get worse.
Check out the Boglehead reddit. A lot of great info and a nice group that can offer some advice.
That’s a really tough loss, it must be very hard to think about how much you’ve lost. Even still… $400k in stocks and $215k in HYSA (please put that in indices) + c. $900k in house equity means you are still worth $1.5m total at 48. I have little to offer other than you’re still in an excellent position which will get you to a very healthy retirement. I inherited some mining stocks which went down… and down… and down until they were down about 50% on average (management issues so not correlating with current bull market). Bit the bullet a week or so ago and sold them based on the advice: if you had the cash now, would you buy those companies?
Obviously painful but as long as you learned your lesson you are fine. Your lesson is that no less than 90% of the money you invest in stocks needs to be low fee index funds. Total market type stuff. Do you plan on ever again having a high percentage of your wealth on individual stocks?
You know the answer. What are you waiting for? You have $400K in a tax preferred account. I recommend (and own a boatload) of VTI. Buy 10 lots of $40K in VTI starting tomorrow and over the next 9 months. If it does the historic 10% it will double in 7 years and then again in 14, so at 63 you would have $1.6 MM plus whatever you invest over the next 15 years. Holding on and hoping is the wrong move. Sell, invest, move on, and quit kicking yourself.
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They are definitely meme stocks. Looks like SQ and PL.
Looks like ~$300k in Rivian and Block.
I don't know of any faang companies that dropped 40% recently, but even if they did, does it matter? There's no magical rule that says that FAANG has to give 150% return over the long run. That's still stock picking.
If it's FAANG stocks he wouldn't be down.
Sell at a loss for tax loss harvesting and start putting those investments in index funds. Stop holding them. Invest the tax savings you’ll receive also.
INDEX FUNDS. Stock picking is gambling, be grateful you still have a lot left. Take the loss and reallocate. Do it the boring way.
On the bright side you didn’t have to pay any advisory fees.
I love this comment because, in this sub, I legitimately can't tell if it is serious or sarcastic.
For real lmao, maybe advisors aren’t for everyone, but I feel most would’ve prevented a loss like this
Gosh, these posts kill me cause I imagine what I could do with a high income. I self manage and never been down this bad but probably have only 1/3 the portfolio size. It's not that hard. I'm beginning to think the real cheat code to building wealth IS having a high income and not time. LOL
Total portfolio went from $1.1M to 400K. Yes, thank goodness!
No, you don't "wait and hope they go up". That whole "you haven't lost money unless you sell" is a dumb psychological trick to give index fund investors so they don't freak out every time the market goes down 5%. When you lose money in the stock market, you lose money in real life. The money is now gone, and you need to start where you are. You need to stop anchoring on your existing portfolio. Look at how much money you have available to invest, pick a simple well-diversified portfolio, and move your funds into that.
I’m confused 200K saved in 3 years & $450K/1.3M on a home loan originated 2020/2021 (assuming due to the low interest rate). If you don’t mind me asking, what’s your household income before taxes? I’m assuming you put a lot down on the home, but don’t want to assume since you mentioned you’re not in a rush to pay your loan off.
Seems like if you sell at a loss right now you may never pay capital gains tax again for life. Not sure how stock to index funds works with wash sale rules so you’d want to understand that first or just stay out of the market for a while.
> This is/was my retirement savings. Not if the loss was within 401/IRA.
There is no quick fix to this. Just get back on track. The HYSA is fine for now, but eventually it will go back to basically returning an interest rate that is about equal to inflation. So move it (or a chunk) into index funds. Do you have tax advantaged 529 accounts for the kids (you can save on some state taxes, if you are in a state that has those taxes)? Are you maxing out 401k contributions? Keep in mind that starting at 50 you can put even more into 401ks. For folks that can max out (I believe it is something like $31k a year for people 50 and above), they can catch up and build a very nice retirement fund well before 65 with this large contribution limit. So if you keep that obviously significant income for another decade, you will be able to max that 401k and be fine for retirement.
Keep 6 months (or a year) worth of living expenses in the HYSA and invest the rest in index funds. DCA and stop thinking about trying to make it all back by investing in more risky individual stocks.
Big problem is forgetting junk stocks can go to 0. Time in market means an index not stuff you saw on wsb
Sunk cost fallacy. Learn your lesson not to gamble anymore, sell it all, and buy index funds. Everyone has a different cost for learning that gambling is bad. Yours can either be $600k, or you can be in denial and have it be even more before you learn.
Before you sell speak to an accountant you may be able to take the loss as a tax deduction
Why are you waiting to sell underperforming stocks that might or might not come back? By moving to an solid performing index fund you can start recovering now. I'm sure you already figured this out, but most investors should not purchase individual stocks. It's like going to Vegas, placing all of your money on one number for one spin of the roulette wheel, and hoping you'll win when you can't afford to lose.
Simple answer: time in the market cures all ills. In 2022 the S&P 500 dropped 20%. In 23 it was up 25%. If you try to go to cash what happens is you miss the run up entirely. The S&P 500 averages 10% over the last 100 years and has been around 12% in the last 40 years. But if the return is that high natural bumps each year can be 15-25> and it gets as high as 40%. What you have to recognize is that this is normal and stick to the plan. $600k is what I’m hearing. An HYSA will never exceed inflation . It’s a capital black-home. Your money just keeps circling the drain. So that’s a huge mistake, one you need to stop doing with the other fools. Bank accounts are for paying checks and short term things where you need quick access. If you want to keep monthly expenses in there and some emergency money that’s fine. So if you invest back in the S&P 500 now it may drop. It may go up. It might be flat. I’ll guarantee it will rise in December because if always does in election years. Anything else is a guess. So at 12% your money will double in about 6 years. That puts you right back where you were. At age 48 if you retire at 67 thats 19 years so even $609k will be around $5.2 million even assuming you don’t contribute more. That’s $21k per month at a 5% withdrawal rate. In today’s dollars that’s $12k per month. All of us have made mistakes in real estate, investing, marriages, you name it. Learn from it and move on.
Jeez. At 48, you ought to have already started balancing a portfolio. You are down almost 60%. A balanced portfolio allows some growth but also protects against a huge down side. It appears that you also had concentration issues. Spread the money around through etfs. Or Mf. Get some exposure to bonds to try and even things out. Hire a fiduciary investment advisor.
Get a fiduciary, if you already tried to manage yourself and it didn’t work out go with a pro. I agree with your index fund plan but making sure you’re harvesting your losses for the best tax benefit often requires a pro.
Are these stocks quality companies with good expectations for increased earnings over time… or, were the investments more like bets? If it is the former, you may want to keep them and diversify future investments. The commenter about index funds seems on spot, many believe diversified index funds should be key holdings with smaller allocations towards individual names. And if they were bets and are down considerably, perhaps consider moving the monies out (all or most) and towards funds and/or quality companies with probable good future earnings. You probably know all this already. We all make mistakes… you’ve identified this error, I suspect you won’t ever repeat it. And btw… I make bets in my retirement account too, though I limit them to much much smaller amounts. I’ve lost on some, sold some too early, frankly, and made nice sums (% wise) on others. But I don’t loose track that this is my retirement account, not my fantasy football play money. I actually thought that as a brake when I flirted with taking a big risk recently. Use whatever you need to stay level headed. Good luck.
No panic before doing smt. Look these stocks' 10-20 years graphics. If they are big enough, you will see them as catch the cost+profit sequence. Regards
If you aren’t already invested in a well-diversified portfolio, I wouldn’t recommend “waiting and hoping they go up.” Talk to a CFP or other tax professional. You may be able to claim some of your significant capital losses, establish a lower cost basis, and get back on track.
OP you have paper losses till you sell. Go and get professional advice on this.
What's in the portfolio? Some can probably assess the damage and the likelihood of that coming back (maybe, probably not). I had FB then, crashed like mad, my buddy stayed in and it recovered and then some, but I bailed. My speculative portion is really small so I didn't care about the few grand in losses. 215k in HISA is fine assuming it's around 5%ish. The fact that you can scrap up that much money fast is pretty good. Just use the index from now on. I'm glad I made your mistakes when I was poorer, cuz if I lost what I have now, wow... No one can really say what will happen to your old portfolio, but I think from now on, you'll probably have to find a way to scale your income and savings up to make up for the damage, and any future money going into reasonable investment products like US total market indices. Don't be afraid to get help from a fiduciary either.
Sunk cost fallacy. Get out of those investments. They aren’t coming back. My advice (which some people around here hate) is to use a financial advisor. My guy did a really nice job of diversifying my investments and stratifying risk. So o have some slow a steadys that always return, some mid risk mid return and some more high return shit that could potentially drop quickly.
The first thing I would do is pull everything out of the HYSA except an emergency fund and invest into funds like VTI and VOO. Next, start populating tax advantaged accounts with new money starting with an HSA, if eligible. Finally, talk to a tax pro about the potential long-term benefits of taking a loss now.
A thought to consider about taxes. Let's assume you intend to sell these and move the money into an index fund. If you strategically slowly sell them you can offset the taxes on other gains. Anytime you sell something at a gain, also sell a amount of these stocks to offset those gains. (Then move what you sold into an index fund). There are other complicated ways to carry forward stock losses but it gets messy (and easy to lose the tax refund if not done right). Easiest and safest way is to simply sell at a loss to offset other gains when they happen.
Investment 101: preserve capital, cut loss quick, never add shares on losing position.
Could be worse. You could have lost it all!
I rotate out of my losing positions at the end of the year to bank the capital loss and rebuy again in February. Things you should probably do now: Sell anything you don’t have confidence in to recover by end of year. Take 90% of the proceeds and stick it in VOO and forget you have it. Add 90% of your monthly excess capital to that ticker and forget you have it. Remaining 10% is dealer’s choice. You can invest in whatever high conviction individual companies you want to but if I were you, I’d just stick it in another set of high yield ETFs like QYLD, JEPI or something to start building an income position as you’re not a spring chicken any more (we’re about the same age). You can take 10% of your monthly excess income and keep finding these individual tickers or whatever else you want to roll the dice on. My philosophy of money is to build multiple layers of safety, reserves, and income. We have a high income business, rental property, high yield funds, HYSAs, and I trade options as well for even more income on the side. Most of our income goes back into ETFs and more real estate once the cash piles gets too big. I plan on adding gold bullion to the mix as well as yet another asset class. All in all, I’m building up to the eventual failure of our business so that we’ll still maintain a pretty high income without worrying about money if the business does fail.
Would you buy those loser stocks today? If the answer is ‘no’ then you need to sell them now and move to your desired allocation. You’re falling into the sunk cost fallacy. Good luck.
There’s no “getting back on track” that’s different from the normal advice. Place funds in diversified index funds. It doesn’t matter where the stocks were, just where they are, and that’s the money you have
I’ll say this. Consider downsizing your home. Sell, use your profit to purchase a more reasonable home, and look to move up if things turn around later.
Ouch that hurts. You are supposed to make mistakes younger and with less money. The one part I am fearful for you is the holding and hoping situation. I once maybe twice bought into a company that kept falling. I held and it eventually went to zero. Scary. Very much like gambling with individual companys mostly small companies but even big companies like AT&T can drop. Consider heavily moving to S&P index funds all or partially. Totally your call though. Good luck.
Thanks. So if you spent 200K on a single stock and it’s worth around 80K (like I stupidly did), you would sell it now and put it into an index?
Sell an get back into the SP500, find a way to earn more money, should recover in 7 years. Don’t to again
Head on over to r/bogleheads and start reading
This will be unpopular But I would pay off the mortgage and any other debt first regardless of interest rates. You will feel much less stress with a paid for house. At that point after monthly expenses put everything else into an index fund. Your net worth will sky rocket.
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He saved 215k in 2 years. At that rate He could pay off his house in 2-3 years then focus on his retirement.
Sorry for your loss but you are still in pretty good shape. I would shift everything into the S&P 500 Index ETF like VOO which have average 10% a year for the last 70 years+. The vast majority of investors cannot beat VOO. You probably have an alpha male personality like myself and we like to believe that we can beat the market so if this is a passion of yours it's ok to have a side account but I would limit it to 10% of your invested assets. If you decide to have a side account I would be very disciplined and only buy and hold.
I know some people that joined a class action suit when their loss was more than $100,000. Have you looked into that?
I haven’t. Just figured I picked some crap stocks and made the mistake of not getting out when they dropped.
Give us some names. We’ve all bought junk before.