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Thanks for the reply.
Yes, the advice in the book I'm reading on investing is to put most of ones money into a low cost index fund and to automate the adding of more per month. It's not particularly fun though, and the desire to "time the market" is coming up. But I'll do it, I think. I'll keep some money in cash (high % savings account with quick withdrawals) and perhaps bonds, for which to use to buy cheap stocks after the next crash. There's always another crash. Once every 6-12 years, I've read.
I intend to succeed in resolving the emotional issues around this, because I don't like the idea of giving up and accepting pains and limitations when they can be repaired, and because risk aversion and avoidance affects other areas of life too. I've worked through much bigger problems in the past. Meditation and CBT are great for me. Formal therapy less so, but maybe I was unlucky. I've started on CBT exercises prescribed in the book Woulda Coulda Shoulda and I'm softening the stress responses related to risk/loss by bringing them up in my meditations.
I've got time to put into learning about investments, economics, company analysis etc, so that's another motivation to get to a point where I can gamble a bit on individual stocks. :) Something like 10% of my savings will go to this.
The tale: Locking in losses, ouch, I did that too. Though in my defense I was very young and was wrecked by illness at the time. Investing is an area where "once burned, twice shy" can become very expensive through missing out on the recovery. Losing money seems to be very closely tied into starting up some serious stress, existential anxiety and poor thinking. It seems that even one major painful stimuli can establish a belief of "it'll crash again as soon as I risk money again, I just know it" or something like that.
Keep in mind that if you run some scenarios on holding bonds to buy cheap stocks during cyclic downturns you might find that timing the market (even optimistically doing so near optimally) might not pan out because of lost gains during all the years when stocks just did average.
You bring up another good point that I know some people do and I wish I did (or could do, now; I have a job that prohibits playing the stock game). Some people employ a strategy that’s like “90% boring index funds and assets based on standard investing advice” combined with “10% YOLO/WallStreet Bets/trying to beat the market”. Helps scratch the day trader itch and limits downside risk ruining one’s retirement.
Something like that, having a set level of risk, might help you edge away from the anxiety.
Sorry about the late reply.
I have thought about this. The old quote comes to mind: "The market can stay irrational longer than you can stay solvent." Even if there 'should' be a correction coming, the fed and others might kick the can down the road for a long time. Years of growth, so that the loss that comes from a crash might not even wipe out all the gains.
I've thought about the possiblity of selling non-callable bonds when interest rates go down. That makes them more valuable. But I'm not sure exactly how to buy them and how to sell them. And what if the markets crater without the interest rates actually going down? What if inflation is high at the same time?
Shrug
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