Submitted by NoMoneyAnywhere t3_z7ust3 in personalfinance


I am a married 27M who has some questions/concerns.

For starters, I make anywhere between 70k-140k/year depending on how much time off I take. My wife makes 70k.

Our only debts are our house (220k left on mortgage @ 2.25% interest, currently valued based on two offers from people at 460k) and my wife has 6k left on her car loan (1.9%).

I do my own contributions to 401k/roth but haven't done any this year d/t the market. I know you cant time the market or whatever. But being semi-young, I thought I was doing very well with my 75k in 401k/roth. That 75k fell to 60k, then 53k and now it is sitting at 44k. Granted, I only had about 51k of my own money invested but to see a 31k loss hurts.

My issue now is I have $100k sitting in a HYSA right now making 3% interest. Not to mention another 10k in checking. My wife has about 28k in her checking. She contributes to her 401k & roth through work, however.

I'm just worried that anything I invest will just lose money. Any advice? I currently use fidelity



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amouse_buche t1_iy87g8l wrote

You haven’t lost any money.

The value of your investments has decreased. If this is in a retirement account that you don’t plan to touch for the next 30 years or so, it is practically inconsequential what has happened in the market YTD. This is like having tickets for an amazing vacation but staying home because your car needs an oil change.

If anything you should be considering investing as much as possible because the equities you will purchase are on sale compared to a year ago. Not to mention that your cash is losing value due to inflation.

Invest consistently and often, and don’t worry about momentary ripples in a multi-decade journey.


BoxingRaptor t1_iy872lr wrote

> I do my own contributions to 401k/roth but haven't done any this year d/t the market. I know you cant time the market or whatever. But being semi-young, I thought I was doing very well with my 75k in 401k/roth. That 75k fell to 60k, then 53k and now it is sitting at 44k. Granted, I only had about 51k of my own money invested but to see a 31k loss hurts.

You didn't "lose" anything. You don't realize a loss until you actually sell. What you ARE doing right now is missing out on buying stocks while they're on sale. If you're investing in target date/index funds, they will bounce back eventually, and you will have missed out on excellent gains.

You have a couple of decades until retirement, so you shouldn't be worried about some temporary dips and dives. I would get back to contributing yesterday.


Badroadrash101 t1_iy89206 wrote

When the share value drops in your fund, this is the time to invest more into the fund. The fund will recover and since you bought shares when they were cheap, you will see a greater return when the fund recovers.


TyrconnellFL t1_iy8edmv wrote

When the share value goes up in your fund, this is also the time to invest more in the fund. It’s going up!

Don’t time the market. Just invest.


Badroadrash101 t1_iy8hl2s wrote

Agreed. It’s that it is very common to see many investors to panic when their fund declines in value as has happened recently. In 2009-2010, my 401k dropped 60% and my coworkers were absolutely freaking out. I maxed out my contributions and benefited when the market recovered. This is a similar junction and if the OP has the ability to contribute more, then he should do so.


NoMoneyAnywhere OP t1_iy87yh5 wrote

Yeah you're right. But with the looming recession, wouldn't it be smarter to wait until they come down further? I get it, I am just gambling regardless, but with recession "96%" likely, wont the stocks just keep dropping?


BoxingRaptor t1_iy88ak5 wrote

Well now you're getting into "timing the market" territory. How do you know for a fact that the market will go down much further, and can you tell me where you bought your crystal ball, so I can get one? Just regularly contribute each pay period, and you will end up in a good place by the time you retire.


nolesrule t1_iy88t18 wrote

Recessions and market drops don't necessarily correlate. We may already have the market drop caused from an expected recession. And when a recession happens, people are often optimistic about the future of the market since "it can only get better" which will cause prices to rise.

Your relationship assumptions between a recession and market drops are questionable at best. Not to mention you have 30+ years to keep the money invested so right now will look like a tiny blip at that point in the future and won't make a material difference in the long term.


Rave-Unicorn-Votive t1_iy89ev2 wrote

> But with the looming recession, wouldn't it be smarter to wait until they come down further?

Come down further? They've been on an upward trend for 2 months.


iclimbnaked t1_iy89p6f wrote

Many people have thought a “looming recession” was coming just for it to not ever come.

What you’re describing is trying to time the market.

If it’s actually 96% likely a recession is coming then that’s already priced into the market today as investors would already know this and take money out now.

Just buy and hold. Time in the market always beats timing the market. Buy stocks and don’t look at their value ever.


Jaysons_Tatum t1_iy8bo78 wrote

The market has already priced in a recession a while ago which is a contributing factor to the poor market. Another major contributing factor is the uncertainty behind inflation. We have already seen a sign that inflation may be slowing per the last CPI report. If good reports continue the market will react accordingly. We are in a situation where bad news = good news for the market. A recession means a rapid deceleration in inflation which would be great news for the market. You’ve already payed for the recession within your 401k. Like everyone else is saying invest now, early and often and don’t try and fuck around. Don’t cancel your vacation cause you need an oil change.


Nagisan t1_iy8bez2 wrote

If you're the less than 10% that can consistently outperform the market via market timing, sure.

If you're like a vast majority of investors, investing early and often is better than trying to time it.


MikeWPhilly t1_iy8cp7z wrote

What happens when you miss rally? There are articles on this but most of hte big gains you see in stocks or investment accounts are from big single day rallies, those days where markets jump 3 or 5% after a string of losses.

You are literally trying to time the market. If it were that easy we would all be millionaires because everybody would buy stock when it is going to jump again. I literally lost a max year contribution 2 months after contributing it in 2022, I get it, But the point is we are young and you shouldn’t be looking at it that way. 401k is something you need to look 30 years down th e road. By not contributing not only are ou missing out on the match but you are missing out on compouning. So no it’s definitely not better to wait until post recession. Take a look at compounding articles and videos people really need to understand it. It’s why so many want out of SS.


_Nuba_ t1_iy87kda wrote

You know what they say, buy high sell low… the best time to invest is when the market is down and people are scared. You have technically not lost anything if you didn’t sell, and if you are worried about the volatility you should look at changing your asset allocation to something a bit less volatile where you would still be comfortable investing.


TyrconnellFL t1_iy8fd9a wrote

I agree… except your first sentence is backwards. Buying high and selling low is not a great strategy.


_Nuba_ t1_iy8g0le wrote

It was sarcasm, the point is no one bats an eye when they are buying high but then all of a sudden prices drop and people stop buying. Stocks are the only place people are more happy to buy high over buying low. People should always be buying regardless but many people don’t


akmco14 t1_iy87lu6 wrote

You should be following the flow chart in the wiki if you're trying to max out your net worth long term. Everything in the market is on sale right now and you don't need to take anything out of retirement for 30 years so this year's losses are, frankly, irrelevant.

The 20k you didn't put in your 401k this year cost you $94,869.82 in 30 years assuming a 6% return annually which is lower than what many calculators assume.


NoMoneyAnywhere OP t1_iy8l2ld wrote

> The 20k you didn't put in your 401k this year cost you $94,869.82 in 30 years assuming a 6% return annually which is lower than what many calculators assume.

This would be true if I never put 20k in. But if I would have invested 20k this time last year in a fund like FLCEX @ $24.05/share, I would now have $15.5k. After 30 years that is 89k (the calculator I used says 20k would be $115k not 95k like yours said).

Now lets say I put the 20k in right now. Again, after 30 years I would have 115k which > 89k. But I waited a year, so that 89k would now be 94k. So I will "make" more by waiting for this past year versus if I would have invested at the same time.


Rave-Unicorn-Votive t1_iy87q6e wrote

>I'm just worried that anything I invest will just lose money. Any advice?

Figure out a way to get over it. You're going to have another 6-10 recessions in your life, most of them before you retire. You need to figure out a way to invest for the long term without panicking. You missed some considerable discounts this year by staying out of the market.

>But being semi-young...

Did you choose the "aggressive" investment option due to your age? You either misjudged your risk tolerance or didn't understand that stonks go down, too.

My advice is to defer 100% (or the max allowable amount) of your Dec pay to your 401k, max out your 2022 IRAs now, max out your 2023 IRAs in Jan, and resume regular paycheck deferrals to your 401k in 2023.


Parking_Goal_3301 t1_iy8ad6o wrote

The best financial decision of my life was upping my 401K contributions to the max as a 20 something in the 2008-2010 downturn. I was making probably 80K so it was a squeeze but it’s put me far ahead of the curve in my early 40s. I have 5x what my spouse has in his 401K. He’s my age but was more scared of the market.


Rxpert83 t1_iy88cvx wrote

Nothing like locking in that loss by not being able to cancel some of it out with gains when the market goes up, right?


Rxpert83 t1_iy88g8g wrote

You're in your 20s. You want the market low. Your best case scenario is the market stays low for the next 20 years.

What the market does today, tomorrow, or 5 years from now should not impact your retirement planning.


ImJKP t1_iy8i2ab wrote

You are thinking about this in entirely the wrong way, and you will be poorer and worse off because of it.

Plow as much money into your 401(k) as you can every paycheck no matter what, but super extra especially while the stocks are on sale. Buy cheap globally diversified index funds. Stop monitoring and thinking about it, because that is how you make yourself poor.

Your balance doesn't matter for another 30+ years. Stop thinking about it and buy more.


SCR00GE-MCDUCK t1_iy87y50 wrote

As i’m sure you know already, the whole market is down this year. Provided you are able to, I would keep holding - you aren’t out anything until you sell. You have plenty of time to hold and, potentially, reinvest any additional amounts you may become comfortable with to add at lower costs.

S&P 500 has been beaten down nearly 17% in 2022…. Despite all this, the index is up over 50% still over the past 5 years.

Keep holding, consider adding more, be wise with your investment decisions and most importantly, be patient. Do what you’re comfortable with and focus on the long-term!


Coronator t1_iy8883s wrote

Start small. If you like having that $100k in cash, by all means keep the $100k in cash.

How much extra cash flow do you have per month? Start investing that bit each month in a total market index fund at a brokerage. You shouldn’t have to worry at all about what happens to that if you have your $100k in cash on hand.

Overtime if you get more comfortable with your risk tolerance, you can always start moving some of that $100k over, if you wanted.

Definitely don’t stop your 401k contributions. That’s money you won’t be touching for another 30 years+ - why worry about it?


2Obsequious t1_iy89c7x wrote

If you keep dollar cost averaging you will see gains in the long term. Don't try to time the market.


Ok-Ad6253 t1_iy8d2mo wrote

If you are really so worried then just keep it in HYSA. Doesn’t lose money right?


RHIT_Grad_1964 t1_iy8gez5 wrote

You feel good when investments go up, bad when they drop. That’s a typical response, you’re doing well, you’re young and have a nice nest egg started, you entered your first recession. When the recession is over stocks go up per quick, like housing after it rebounded.

I’d research/talk to advisors/look at funds with your risk level maybe and make more than 3% on your money. Of course leave some for actual emergencies, but if your job is stable, $100k is high IMO.

I know larger efunds are popular here. If you prefer that, that’s your choice. I’m a higher risk taker so keep smaller efund.


FinMinIndia t1_iy8jrmp wrote

ETFs are the way to go 🔥


throw-away-doh t1_iy9lf57 wrote

75k to 44k is a 41% loss. That is a lot more than the market as a whole is down YTD. e.g. the S&P500 is down 17%.

This looks like you were picking individual stocks rather than investing diversified funds. That is a lot of risk to take. It sounds like you want less risk in your portfolio. If that is so I suggest putting your money in something like a target date fund.


MinistryofTruthAgent t1_iy9lpd0 wrote

You don’t lose money unless you sell. Need to lose the scarcity mindset especially considering how good you’re doing financially.


barrycarter t1_iy86ti9 wrote

Different people have different tolerances for risk. If you don't feel comfortable investing in instruments that can lose money, stick to bank accounts (but remember the FDIC limit on protection), Treasury instruments, or other money insured by the government, and hope our government doesn't collapse any time soon :)


MikeWPhilly t1_iy8ct4c wrote

You still lose money in bank accounts. To inflation….


TyrconnellFL t1_iy8fi0z wrote

You don’t lose money. You can lose purchasing power, but the numbers in the account will always and only go up.


MikeWPhilly t1_iy8fwap wrote

Tomayto , Tomahto - it’s the same effect. I was pointing it out as acting like you aren’t hurting yourself by putting it in savings is a bad idea. Also while you want an emergency fund, just sticking money in savings and not investing is a very bad idea for long term wealth.


barrycarter t1_iy8xc19 wrote

You're correct, but that's like talking about opportunity cost. For anything I choose to do today, there's a chance there's something I could've done something I'd enjoy more. That doesn't mean I've "lost enjoyment": it simply means I don't 100% optimize my life, which I don't think anyone does.

I agree with that you lose money only in a metaphorical sense. I doubt agencies like the FDIC would reimburse you for "losing money" due to inflation