I am 79 years old. USAA opened a conservative mutual fund portfolio for me. I didn't expect it to make much money but was led to believe it would be pretty safe. I figured the worst scenerio would be breaking even. Instead my portfolio lost $900 in less than 6 months. I bailed out with a big loss. A bummer of an experience.
Appreciate your comments. However, investing decisions are not black and white. For young people ,and under ideal conditions, your suggestions would work fine. Us old folk don't have the time to play the waiting game with a sour investment, hoping it will recover (we don't even read thick books or buy green bananas). My contention is, if you are in a bad investment, unload it and reinvest in something better. I was in a poor investment and bailed out.
For anyone else reading along, six months seems like a short timeframe for an investment. Especially for a mutual fund. And depending on how much is invested, being down 900 on an investment is pretty easy to accomplish. If you bought 100 shares of SPY on July 24th this year, by August 7th you'd have been down about 900 bucks. By Oct 15th things were much worse, and you'd have been down about 1800 on paper. Ouch.
The thing is, as investments go, SPY is pretty conservative do to its built-in diversification. Still it has been a bad three months. But where will it be in a year or more?
Well stated, Chris. Things could always be worse and often are for those who wait. I cringe when a broker tells me it's too low to sell or it's not a loss until you trigger the sale.