r/investing
An honest question about staying invested all along?
New investor questions the rationale for continued DCA into an all-time high market and asks about rebalancing strategies.
So I've been investing for a couple of months now, and how do you have the motivation to keep investing even when prices are up? Like I mean, for example, when I started investing into stocks and index funds, my avgs were down and now they've all gone up and so has my portfolio. But everything is expensive. And are we assuming it will always go up eventually over the new few years/decades? like to infinity? Or do u guys rebalance portfolio every once in a while(1-3 years) switching to different stocks? I have added newer stocks from what I had back in the day but still keep the previous ones(been adding more shares on those)
Stop watching. You have like what a 40 year time horizon? 60? Stop watching them. I automate transfers and look at them once or twice a year just to balance things and then go watch American Idol. Or whatever.
It has to be American Idol. Thats the rule
But everything is expensive.
I just buy whatever dollar amount of whatever assets I want according to my plan at whatever point in time, I literally couldn't care less what the price tag is because I'm not going to sell for at least a couple decades.
Your only job now is to accumulate as much as possible
So I've been investing for a couple of months now, and how do you have the motivation to keep investing even when prices are up?
If you think that's hard, try investing when prices keep dropping, year after year.
The key is to set up your investments automatically, increase your contributions as you can (especially around raises), and try to pay as little attention to the market as possible.
(By the 8th year of a down market, avoiding looking at your returns becomes pretty easy).
Keep in mind that the real risk is not having enough for retirement, and don't worry about whether your $20k investment could have earned an additional 1% if you had done X instead of Y.
If you think that's hard, try investing when prices keep dropping, year after year.
Which is ironic, because that's the best time to buy.
yep. during the lost decade (2000 - 2012 watching my investments just sit there made me wonder if a 401k would ever produce enough to have a chance at retirment.. Turns out it was just an extended sale period letting me buy in at a cheaper semi stable price, as the next decade was a rocket ship up.
Things will be a lot more expensive in 10 years. Rinse and repeat.
When invest in index you look at 20-30 years horizon. Do you see in 30 year the price be up or down? If it up then you'll profit no matter what.
And it will be up. There is no 20 year period in the last 120 years of the market where the price has been lower at the end.
ga2500ev
Auto-Buying fixed my emotions, try automating your purchases.
Up, down, doesn’t matter. You just buy steadily until you have enough to retire. There’s no “motivation” involved. Buying stocks is like breathing for me.
It really doesn't matter buying a stock +/- $1 today because in the future, the price will be much higher.
Assuming investments in something like the S&P500 averaging 10% return for the past 100 years:
1 year: 10% gain
5 years: 61% gain
10 years: 159% gain
20 years: 672% gain
30 years: 1,745% gain
40 years: 4,525% gain
50 years: 11,639% gain
Buy and sell however frequently you are comfortable with but never forget how powerful compound interest is.
It goes to infinity, but eventually they will reset the currency when it starts hitting absurd numbers. Like 10,000 'old' dollars will equal 1 Newdollar. Maybe even within our lifetimes. That's just how it goes with fiat money systems.
You're thinking about all the wrong stuff.
To get into the right mental space about investing first you need to stop thinking about the price of stocks and how much you expect your portfolio to go up. You should be focusing on the underlying businesses.
Second you need to do more research and understanding what investing really is and specifically what long-term investing is as that's what you are asking about.