Lost 23K on Monday

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market timer
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Re: Lost 23K on Monday

Post by market timer »

Whenever you have a situation where your asset allocation will deviate temporarily from your long term plan, e.g., due to a rollover, it is worth considering ways to keep risk constant during the transition. For example, in the case of a rollover where $500K will be in cash that would normally be invested in equities, one could buy S&P 500 futures to hedge against a rise in equity prices.
Marseille07
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Re: Lost 23K on Monday

Post by Marseille07 »

market timer wrote: Sun Oct 24, 2021 9:28 pm Whenever you have a situation where your asset allocation will deviate temporarily from your long term plan, e.g., due to a rollover, it is worth considering ways to keep risk constant during the transition. For example, in the case of a rollover where $500K will be in cash that would normally be invested in equities, one could buy S&P 500 futures to hedge against a rise in equity prices.
Yeah I saw another poster saying something similar after I finished my rollover :D

Not 23K but I lost some, it sucked. I could have pulled some tricks but didn't know.
Exchme
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Re: Lost 23K on Monday

Post by Exchme »

market timer wrote: Sun Oct 24, 2021 9:28 pm Whenever you have a situation where your asset allocation will deviate temporarily from your long term plan, e.g., due to a rollover, it is worth considering ways to keep risk constant during the transition. For example, in the case of a rollover where $500K will be in cash that would normally be invested in equities, one could buy S&P 500 futures to hedge against a rise in equity prices.
Yes, but you have to be careful that you know where the moving that is supposed to be moving actually is. A year or so ago, I was quitting my advisor and moving a big chunk of money. I "knew" that money was moving, so I put other money into stocks to compensate. Except the money that was supposed to move didn't; it was still sitting in stocks and the market decided to drop several percent while I was overexposed.

A week or so in, I realized the money wasn't moving and got in touch, but they played games with abject apologies and repeated promises of quick action. This went on for a month. By wildest coincidence, the money moved as the quarter ended, meaning they didn't have to refund any advisor fees. Of course stocks recovered in the days the money did finally move. Lost about $40k due to the overexposure.
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AnnetteLouisan
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Re: Lost 23K on Monday

Post by AnnetteLouisan »

Make her laugh by telling her about someone you know (moi) whose 401k has averaged 4.11 percent since 2011…… 🤨🙄
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martincmartin
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Re: Lost 23K on Monday

Post by martincmartin »

InvestingGeek wrote: Thu Mar 05, 2020 9:02 am Acknowledge and validate her emotions saying she's absolutely right and well-justified to feel mad and sad about losing such a huge amount - who wouldn't be. You can even add yourself to the list, and mention how 23k could have bought a car and so many things. She wants to grieve for the 23k lost so join her in the grief for a bit. This will put both of you on the same side of the problem, in her view. In my experience, once the emotions are validated, then the mind is free to focus on the logical aspect of it. You might need to revalidate the emotions multiple times if you've denied her this far if you just repeatedly explained to her that in the long run it doesn't matter (which is logically correct but emotions come before logic here).

In my non-expert experience: For men, helping someone feel better is about minimizing the problem, pointing out how it's not such a big deal. To women, this seems to come across as saying that what they're feeling is not justified and that their feelings are incorrect. In all my arguments with my wife, I focus on taking care of (acknowledge, validate) her emotions first and the rest ends up not being a problem.
This is really, really great advice.

Anybody else interested in this topic, the books by Deborah Tannen are good, e.g. You Just Don't Understand
esqu1re
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Re: Lost 23K on Monday

Post by esqu1re »

I think "the money guy podcast" put up a visual graph that showed if you lost out on like 10 of the best performing days over the last 30 years, your portfolio would be down by a larger amount than you would think. Those top performing days accounted for a decent portion of the gains----this was in support of "time in the market" being better than "timing the market."

I lost out on some of the gains this past week or so because of a technical difficulty on my end. Sigh.
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Plano
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Re: Lost 23K on Monday

Post by Plano »

Monsterflockster wrote: Wed Oct 20, 2021 12:21 am Since you bumped a 1.5 year old thread... I wonder if she’s still mad? 🤣
I am thinking no, because a week later all heck broke loose. It could have been much, much worse!
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Re: Lost 23K on Monday

Post by Marseille07 »

Plano wrote: Mon Oct 25, 2021 7:12 pm
Monsterflockster wrote: Wed Oct 20, 2021 12:21 am Since you bumped a 1.5 year old thread... I wonder if she’s still mad? 🤣
I am thinking no, because a week later all heck broke loose. It could have been much, much worse!
? That's actually bad for her, because she lost 23K before the crash, the money got deployed, then the crash came.
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Plano
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Re: Lost 23K on Monday

Post by Plano »

I am such a worst-case scenario visualizer, I envisioned a few days more in the wrong direction. But certainly in another direction this could have been great for her. Timing is everything.
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Re: Lost 23K on Monday

Post by spammagnet »

You didn't lose money, you lost potential money. Big difference.
Marseille07
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Re: Lost 23K on Monday

Post by Marseille07 »

spammagnet wrote: Mon Oct 25, 2021 10:52 pm You didn't lose money, you lost potential money. Big difference.
But the potential was realized had they not rolled over, so they still lost money.
redbarn
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Re: Lost 23K on Monday

Post by redbarn »

Tell her that a bunch of people on the internet have learned from her misfortune and will not lose money now in the way she did. I'm sure that will make her feel great.
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retireIn2020
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Re: Lost 23K on Monday

Post by retireIn2020 »

AnnetteLouisan wrote: Mon Oct 25, 2021 5:16 pm Make her laugh by telling her about someone you know (moi) whose 401k has averaged 4.11 percent since 2011…… 🤨🙄
Nothing to laugh at here, If someone gave me a guaranteed 4% I'd be all in and ecstatic about it! Especially after my 401k turned into a 201k and recovered :D
https://www.merriam-webster.com/dictionary/abide
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AnnetteLouisan
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Re: Lost 23K on Monday

Post by AnnetteLouisan »

retireIn2020 wrote: Tue Oct 26, 2021 10:06 am
AnnetteLouisan wrote: Mon Oct 25, 2021 5:16 pm Make her laugh by telling her about someone you know (moi) whose 401k has averaged 4.11 percent since 2011…… 🤨🙄
Nothing to laugh at here, If someone gave me a guaranteed 4% I'd be all in and ecstatic about it! Especially after my 401k turned into a 201k and recovered :D
Glad you stayed the course! Not for the faint of heart.
prioritarian
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Re: Lost 23K on Monday

Post by prioritarian »

MotoTrojan wrote: Thu Mar 05, 2020 9:52 am Nothing you can do about the past, but in the future there are options. If you held bonds in other parts of your tax-advantaged account you could consider the cash/check taken out of a transferred account as part of your bond/fixed-income/cash allocation and move those other bonds to equities until the transfer is complete. This way you are not out of the equity market for more than a few minutes, and any moves in the bond market (relative to the cash) will be quite minor.
Good advice. Even with my ~50% of net-worth rollover I could have mitigated some of the time out of the market (rollovers can take a long time).
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Re: Lost 23K on Monday

Post by Marseille07 »

I think the right way to look at it is to focus on the percentage lost, which is probably like 2~3% at most unless you're really unlucky. If the markets keep going up, this will be negligible.

Focusing on the notional amount is a mistake imo; as big as 23K was, once the money got deployed, the increase is also big. I'm sure she's all smiles now at SPX ATH.
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gobel
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Re: Lost 23K on Monday

Post by gobel »

Marseille07 wrote: Tue Oct 26, 2021 11:47 pm which is probably like 2~3% at most unless you're really unlucky. If the markets keep going up, this will be negligible.
Actually, it's the opposite. If 2-3% is significant to the wife now, it'll still be 2-3% no matter how high the market goes. Ie. let's say the rollover was 1m and she lost 23k which is 2.3%. If the account grows to 10m, then she'd have lost 230k. If the account tanks to 100k, she'd have lost only 2.3k.
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Re: Lost 23K on Monday

Post by fyre4ce »

Let's say there's 250 trading days in the year and you expect a return of 10% on your equities. That works out to about 0.04% per day, or $40 per $100,000 invested per day. I've run into this during rollovers where I have the option of standard processing of ~2 weeks, or expedited processing and overnight mailing in 3 days for, say, $30. I usually don't like to pay for expedited shipping for stuff, but in this case it would be worth it for even one day saved on a $100k rollover. This is how I would make decisions regarding timing of rollovers or having cash.

But around that "average expected return" of 0.04% there is a huge bell curve of possibilities. The market can go up, or down, by several percent per day easily. If it happened to go up a lot, well, that's the luck of the draw. I keep a high-ish international allocation and domestics have done better since I've been investing. It happens. Focus on the process rather than the outcome, and keeping the right thing.
Marseille07
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Re: Lost 23K on Monday

Post by Marseille07 »

gobel wrote: Wed Oct 27, 2021 1:55 am
Marseille07 wrote: Tue Oct 26, 2021 11:47 pm which is probably like 2~3% at most unless you're really unlucky. If the markets keep going up, this will be negligible.
Actually, it's the opposite. If 2-3% is significant to the wife now, it'll still be 2-3% no matter how high the market goes. Ie. let's say the rollover was 1m and she lost 23k which is 2.3%. If the account grows to 10m, then she'd have lost 230k. If the account tanks to 100k, she'd have lost only 2.3k.
Sure, if you keep tabs for decades. I think people will forget about it, with new contributions and what not. They can still get to 9.7M instead of 10M and probably going to be happy.
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Re: Lost 23K on Monday

Post by YRT70 »

Marseille07 wrote: Mon Oct 25, 2021 11:00 pm
spammagnet wrote: Mon Oct 25, 2021 10:52 pm You didn't lose money, you lost potential money. Big difference.
But the potential was realized had they not rolled over, so they still lost money.
That's entirely notional. In reality no actual money was lost.
Marseille07
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Re: Lost 23K on Monday

Post by Marseille07 »

YRT70 wrote: Wed Oct 27, 2021 9:56 am
Marseille07 wrote: Mon Oct 25, 2021 11:00 pm
spammagnet wrote: Mon Oct 25, 2021 10:52 pm You didn't lose money, you lost potential money. Big difference.
But the potential was realized had they not rolled over, so they still lost money.
That's entirely notional. In reality no actual money was lost.
Not sure what your intent is, but this is semantics.

If she didn't roll over, she would have had 23K more money than rolling over. Of course, this was unknown beforehand; but now the roll happened, that was the outcome.

Also, it's not notional because presumably she resumed the same investments after rolling over. In other words, the missed gains got locked in.

There's another thread of a poster lamenting selling 30K of TSLA in 2017 which would have been 500K today...that's notional. But in this case, it's not.
YRT70
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Re: Lost 23K on Monday

Post by YRT70 »

Marseille07 wrote: Wed Oct 27, 2021 10:08 am
YRT70 wrote: Wed Oct 27, 2021 9:56 am
Marseille07 wrote: Mon Oct 25, 2021 11:00 pm
spammagnet wrote: Mon Oct 25, 2021 10:52 pm You didn't lose money, you lost potential money. Big difference.
But the potential was realized had they not rolled over, so they still lost money.
That's entirely notional. In reality no actual money was lost.
Not sure what your intent is, but this is semantics.

If she didn't roll over, she would have had 23K more money than rolling over. Of course, this was unknown beforehand; but now the roll happened, that was the outcome.

Also, it's not notional because presumably she resumed the same investments after rolling over. In other words, the missed gains got locked in.

There's another thread of a poster lamenting selling 30K of TSLA in 2017 which would have been 500K today...that's notional. But in this case, it's not.
My intent was to inform you that spammagnet actually had it right.

The part "If she didn't roll over, she would have had 23K more money than rolling over. " is the hypothetical in this example. That scenario never happened, it's purely notional.
Marseille07
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Re: Lost 23K on Monday

Post by Marseille07 »

YRT70 wrote: Wed Oct 27, 2021 10:36 am The part "If she didn't roll over, she would have had 23K more money than rolling over. " is the hypothetical in this example. That scenario never happened, it's purely notional.
? It happened.
We sold at the Friday end of day price and then reinvested into similar assets on Monday end of day.
YRT70
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Re: Lost 23K on Monday

Post by YRT70 »

Marseille07 wrote: Wed Oct 27, 2021 10:38 am
YRT70 wrote: Wed Oct 27, 2021 10:36 am The part "If she didn't roll over, she would have had 23K more money than rolling over. " is the hypothetical in this example. That scenario never happened, it's purely notional.
? It happened.
We sold at the Friday end of day price and then reinvested into similar assets on Monday end of day.
The "if she didn't roll over" is the scenario that didn't happen. They sold at the Friday end price.

If they had stayed in the market they would have had more money. Sure. But that's not losing money. It's losing hypothetical money. Big difference.
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Re: Lost 23K on Monday

Post by Marseille07 »

YRT70 wrote: Wed Oct 27, 2021 10:41 am The "if she didn't roll over" is the scenario that didn't happen. They sold at the Friday end price.

If they had stayed in the market they would have had more money. Sure. But that's not losing money. It's losing hypothetical money. Big difference.
OK, then call it "a missed opportunity" if you want.
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Re: Lost 23K on Monday

Post by YRT70 »

Marseille07 wrote: Wed Oct 27, 2021 10:45 am
YRT70 wrote: Wed Oct 27, 2021 10:41 am The "if she didn't roll over" is the scenario that didn't happen. They sold at the Friday end price.

If they had stayed in the market they would have had more money. Sure. But that's not losing money. It's losing hypothetical money. Big difference.
OK, then call it "a missed opportunity" if you want.
Agreed. And it can be equally painful.
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Re: Lost 23K on Monday

Post by Marseille07 »

YRT70 wrote: Wed Oct 27, 2021 10:47 am
Marseille07 wrote: Wed Oct 27, 2021 10:45 am
YRT70 wrote: Wed Oct 27, 2021 10:41 am The "if she didn't roll over" is the scenario that didn't happen. They sold at the Friday end price.

If they had stayed in the market they would have had more money. Sure. But that's not losing money. It's losing hypothetical money. Big difference.
OK, then call it "a missed opportunity" if you want.
Agreed. And it can be equally painful.
As I was saying earlier, this seems like semantics to me. I don't think there's a big difference whether calling it money lost or a missed opportunity.
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Re: Lost 23K on Monday

Post by Marseille07 »

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YRT70
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Re: Lost 23K on Monday

Post by YRT70 »

Marseille07 wrote: Wed Oct 27, 2021 10:49 am
YRT70 wrote: Wed Oct 27, 2021 10:47 am
Marseille07 wrote: Wed Oct 27, 2021 10:45 am
YRT70 wrote: Wed Oct 27, 2021 10:41 am The "if she didn't roll over" is the scenario that didn't happen. They sold at the Friday end price.

If they had stayed in the market they would have had more money. Sure. But that's not losing money. It's losing hypothetical money. Big difference.
OK, then call it "a missed opportunity" if you want.
Agreed. And it can be equally painful.
As I was saying earlier, this seems like semantics to me. I don't think there's a big difference whether calling it money lost or a missed opportunity.
I can understand that but personally I don't agree that it's semantics. I believe it's actually a form of mental accounting (if I hadn't sold at that moment then ....).

At the moment we take money out of the market we (should) know we're not getting any of the potential gains or losses of the market. He was taking less risk (for the time he was out of the market) and he missed out of potential gains.
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Re: Lost 23K on Monday

Post by Marseille07 »

YRT70 wrote: Wed Oct 27, 2021 11:50 am I can understand that but personally I don't agree that it's semantics. I believe it's actually a form of mental accounting (if I hadn't sold at that moment then ....).

At the moment we take money out of the market we (should) know we're not getting any of the potential gains or losses of the market. He was taking less risk (for the time he was out of the market) and he missed out of potential gains.
But you're forgetting that the money got re-invested into similar funds after rolling over. As I said upthread, the TSLA person's case was notional because they sold 30K of TSLA and never bought a share. In this 401K rollover, the missed opportunity got locked in as they resumed the course.
tlk59
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Re: Lost 23K on Monday

Post by tlk59 »

AnnetteLouisan wrote: Mon Oct 25, 2021 5:16 pm Make her laugh by telling her about someone you know (moi) whose 401k has averaged 4.11 percent since 2011…… 🤨🙄
Good point, when I look back on when we were much younger, I recall that my DW's TSP was in the default 100% G Fund allocation her first few years, before I woke up and moved it to C Fund. Not a lot of growth in those early years, but pretty happy with the balance now that she's in retirement. I could be giving myself 10 lashes every day over what happened back in the 90s, but I'd forgotten all about it.
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Re: Lost 23K on Monday

Post by YRT70 »

Marseille07 wrote: Wed Oct 27, 2021 11:59 am
YRT70 wrote: Wed Oct 27, 2021 11:50 am I can understand that but personally I don't agree that it's semantics. I believe it's actually a form of mental accounting (if I hadn't sold at that moment then ....).

At the moment we take money out of the market we (should) know we're not getting any of the potential gains or losses of the market. He was taking less risk (for the time he was out of the market) and he missed out of potential gains.
But you're forgetting that the money got re-invested into similar funds after rolling over. As I said upthread, the TSLA person's case was notional because they sold 30K of TSLA and never bought a share. In this 401K rollover, the missed opportunity got locked in as they resumed the course.
I didn't forget that.
Marseille07
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Re: Lost 23K on Monday

Post by Marseille07 »

YRT70 wrote: Wed Oct 27, 2021 12:47 pm
Marseille07 wrote: Wed Oct 27, 2021 11:59 am
YRT70 wrote: Wed Oct 27, 2021 11:50 am I can understand that but personally I don't agree that it's semantics. I believe it's actually a form of mental accounting (if I hadn't sold at that moment then ....).

At the moment we take money out of the market we (should) know we're not getting any of the potential gains or losses of the market. He was taking less risk (for the time he was out of the market) and he missed out of potential gains.
But you're forgetting that the money got re-invested into similar funds after rolling over. As I said upthread, the TSLA person's case was notional because they sold 30K of TSLA and never bought a share. In this 401K rollover, the missed opportunity got locked in as they resumed the course.
I didn't forget that.
OK, then I don't comprehend why you don't see that they didn't really get out of the market, it was a temporary (forced) move during a rollover that caused permanent damage as their money got re-deployed. This is where the loss occurred.

If they stayed out of the market, then I agree it was notional.
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Re: Lost 23K on Monday

Post by Dottie57 »

yohac wrote: Thu Mar 05, 2020 11:37 am
Tigermoose wrote: Wed Mar 04, 2020 11:24 pm She feels that it was a huge mistake and is not able to be at peace. She keeps ranting about things that we could have bought or services received for that amount.
Unless she feels you should have predicted those market swings, it was just bad luck, not a "huge mistake". These things happen on transfers. There's nothing you can do now, except wait for those feelings to pass, which they will.

BTW, my DW never "rants". She expresses well-founded concerns. :wink:
I don’t have a crystal ball and don’t think anyone else does either. Agree that no mistake was made. Also, what happened , happened and just go on living one’s and let this go since you can’t change it.

I did have similar situation. My first 401k rollover took 5 days and both 401k and IRA were at Fidelity. I have no idea why it took so long but it did and of course the market went up during the five days.

My dad gave me a great piece of advice. Never regret a decision you made , forget it and move on.
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Re: Lost 23K on Monday

Post by YRT70 »

Marseille07 wrote: Wed Oct 27, 2021 12:51 pm
YRT70 wrote: Wed Oct 27, 2021 12:47 pm
Marseille07 wrote: Wed Oct 27, 2021 11:59 am
YRT70 wrote: Wed Oct 27, 2021 11:50 am I can understand that but personally I don't agree that it's semantics. I believe it's actually a form of mental accounting (if I hadn't sold at that moment then ....).

At the moment we take money out of the market we (should) know we're not getting any of the potential gains or losses of the market. He was taking less risk (for the time he was out of the market) and he missed out of potential gains.
But you're forgetting that the money got re-invested into similar funds after rolling over. As I said upthread, the TSLA person's case was notional because they sold 30K of TSLA and never bought a share. In this 401K rollover, the missed opportunity got locked in as they resumed the course.
I didn't forget that.
OK, then I don't comprehend why you don't see that they didn't really get out of the market, it was a temporary (forced) move during a rollover that caused permanent damage as their money got re-deployed. This is where the loss occurred.

If they stayed out of the market, then I agree it was notional.
As far as I understand they had the same amount of money at Friday 16:00 ET as they had on Monday 16:00 ET. So there was no money lost.
exodusNH
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Re: Lost 23K on Monday

Post by exodusNH »

YRT70 wrote: Thu Oct 28, 2021 3:59 am
Marseille07 wrote: Wed Oct 27, 2021 12:51 pm
YRT70 wrote: Wed Oct 27, 2021 12:47 pm
Marseille07 wrote: Wed Oct 27, 2021 11:59 am
YRT70 wrote: Wed Oct 27, 2021 11:50 am I can understand that but personally I don't agree that it's semantics. I believe it's actually a form of mental accounting (if I hadn't sold at that moment then ....).

At the moment we take money out of the market we (should) know we're not getting any of the potential gains or losses of the market. He was taking less risk (for the time he was out of the market) and he missed out of potential gains.
But you're forgetting that the money got re-invested into similar funds after rolling over. As I said upthread, the TSLA person's case was notional because they sold 30K of TSLA and never bought a share. In this 401K rollover, the missed opportunity got locked in as they resumed the course.
I didn't forget that.
OK, then I don't comprehend why you don't see that they didn't really get out of the market, it was a temporary (forced) move during a rollover that caused permanent damage as their money got re-deployed. This is where the loss occurred.

If they stayed out of the market, then I agree it was notional.
As far as I understand they had the same amount of money at Friday 16:00 ET as they had on Monday 16:00 ET. So there was no money lost.
The 401k was cashed out on Friday for $X for Y shares. On Monday, that $X went back into the market but was only able to buy Z shares, which was less than Y shares.

Had they not transferred the funds, the original Y shares would now be worth more than $X. In both dollars and shares, they would have more.

They permanently have less wealth because they have fewer shares than before. It's exactly as if they panic sold everything on Friday and then jumped back in at higher market at some point in the future. In this case, it was just one business day, but the situation is no different than those people who sold in March of last year and are still trying to figure out when to get back in.

Of course, there's nothing they can do about it except learn that in the future, it's best to make these changes during a less volatile market.

It was bad luck. It was just as likely that the market continued to drop on Monday, in which case they would have bought more shares and have been permanently more wealthy.
Marseille07
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Re: Lost 23K on Monday

Post by Marseille07 »

exodusNH wrote: Thu Oct 28, 2021 8:15 am
YRT70 wrote: Thu Oct 28, 2021 3:59 am
Marseille07 wrote: Wed Oct 27, 2021 12:51 pm
YRT70 wrote: Wed Oct 27, 2021 12:47 pm
Marseille07 wrote: Wed Oct 27, 2021 11:59 am

But you're forgetting that the money got re-invested into similar funds after rolling over. As I said upthread, the TSLA person's case was notional because they sold 30K of TSLA and never bought a share. In this 401K rollover, the missed opportunity got locked in as they resumed the course.
I didn't forget that.
OK, then I don't comprehend why you don't see that they didn't really get out of the market, it was a temporary (forced) move during a rollover that caused permanent damage as their money got re-deployed. This is where the loss occurred.

If they stayed out of the market, then I agree it was notional.
As far as I understand they had the same amount of money at Friday 16:00 ET as they had on Monday 16:00 ET. So there was no money lost.
The 401k was cashed out on Friday for $X for Y shares. On Monday, that $X went back into the market but was only able to buy Z shares, which was less than Y shares.

Had they not transferred the funds, the original Y shares would now be worth more than $X. In both dollars and shares, they would have more.

They permanently have less wealth because they have fewer shares than before. It's exactly as if they panic sold everything on Friday and then jumped back in at higher market at some point in the future. In this case, it was just one business day, but the situation is no different than those people who sold in March of last year and are still trying to figure out when to get back in.

Of course, there's nothing they can do about it except learn that in the future, it's best to make these changes during a less volatile market.

It was bad luck. It was just as likely that the market continued to drop on Monday, in which case they would have bought more shares and have been permanently more wealthy.
Thank you. Let's hope the OP comprehends this time. I already made several attempts.
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Re: Lost 23K on Monday

Post by clip651 »

Just a note - this thread is from 2020. OP hasn't logged in to this site in about a month.
YRT70
Posts: 1289
Joined: Sat Apr 27, 2019 8:51 am

Re: Lost 23K on Monday

Post by YRT70 »

exodusNH wrote: Thu Oct 28, 2021 8:15 am
YRT70 wrote: Thu Oct 28, 2021 3:59 am
Marseille07 wrote: Wed Oct 27, 2021 12:51 pm
YRT70 wrote: Wed Oct 27, 2021 12:47 pm
Marseille07 wrote: Wed Oct 27, 2021 11:59 am

But you're forgetting that the money got re-invested into similar funds after rolling over. As I said upthread, the TSLA person's case was notional because they sold 30K of TSLA and never bought a share. In this 401K rollover, the missed opportunity got locked in as they resumed the course.
I didn't forget that.
OK, then I don't comprehend why you don't see that they didn't really get out of the market, it was a temporary (forced) move during a rollover that caused permanent damage as their money got re-deployed. This is where the loss occurred.

If they stayed out of the market, then I agree it was notional.
As far as I understand they had the same amount of money at Friday 16:00 ET as they had on Monday 16:00 ET. So there was no money lost.
The 401k was cashed out on Friday for $X for Y shares. On Monday, that $X went back into the market but was only able to buy Z shares, which was less than Y shares.

Had they not transferred the funds, the original Y shares would now be worth more than $X. In both dollars and shares, they would have more.

They permanently have less wealth because they have fewer shares than before. It's exactly as if they panic sold everything on Friday and then jumped back in at higher market at some point in the future. In this case, it was just one business day, but the situation is no different than those people who sold in March of last year and are still trying to figure out when to get back in.

Of course, there's nothing they can do about it except learn that in the future, it's best to make these changes during a less volatile market.

It was bad luck. It was just as likely that the market continued to drop on Monday, in which case they would have bought more shares and have been permanently more wealthy.
Of course if you convert it to total amount of shares they were able to buy back less shares because the market went up. That's a no brainer.

My point is that they had the same amount of money at Friday 16:00 ET as they had on Monday 16:00 ET. They did not lose any money. They also didn't lose any wealth expressed in dollars, which IMO is the common way to express wealth. And if someone says that they lost 23K, like OP did in the title, I suspect they're talking about dollars.

Losing something implies having it first. They didn't have it (referring to the 23k).

It's only when we start comparing it to a scenario that never happened that they "lost" money. With that I mean this scenario:
Had they not transferred the funds, the original Y shares would now be worth more than $X. In both dollars and shares, they would have more.
To which I have already agreed previously. So yes they would have had more money if they hadn't done that.

Losing something however implies having it first.

Spammagnet expressed it well.
spammagnet wrote: Mon Oct 25, 2021 10:52 pm You didn't lose money, you lost potential money. Big difference.
exodusNH
Posts: 10350
Joined: Wed Jan 06, 2021 7:21 pm

Re: Lost 23K on Monday

Post by exodusNH »

YRT70 wrote: Fri Oct 29, 2021 1:12 am
exodusNH wrote: Thu Oct 28, 2021 8:15 am The 401k was cashed out on Friday for $X for Y shares. On Monday, that $X went back into the market but was only able to buy Z shares, which was less than Y shares.

Had they not transferred the funds, the original Y shares would now be worth more than $X. In both dollars and shares, they would have more.

They permanently have less wealth because they have fewer shares than before. It's exactly as if they panic sold everything on Friday and then jumped back in at higher market at some point in the future. In this case, it was just one business day, but the situation is no different than those people who sold in March of last year and are still trying to figure out when to get back in.

Of course, there's nothing they can do about it except learn that in the future, it's best to make these changes during a less volatile market.

It was bad luck. It was just as likely that the market continued to drop on Monday, in which case they would have bought more shares and have been permanently more wealthy.
Of course if you convert it to total amount of shares they were able to buy back less shares because the market went up. That's a no brainer.

My point is that they had the same amount of money at Friday 16:00 ET as they had on Monday 16:00 ET. They did not lose any money. They also didn't lose any wealth expressed in dollars, which IMO is the common way to express wealth. And if someone says that they lost 23K, like OP did in the title, I suspect they're talking about dollars.

Losing something implies having it first. They didn't have it (referring to the 23k).

It's only when we start comparing it to a scenario that never happened that they "lost" money. With that I mean this scenario:
Had they not transferred the funds, the original Y shares would now be worth more than $X. In both dollars and shares, they would have more.
To which I have already agreed previously. So yes they would have had more money if they hadn't done that.

Losing something however implies having it first.

Spammagnet expressed it well.
spammagnet wrote: Mon Oct 25, 2021 10:52 pm You didn't lose money, you lost potential money. Big difference.
We will need to disagree on this point. They now own fewer shares than they did before. They are less wealthy. This isn't a potential loss. They had X shares on Friday. They had Y shares on Monday, where X > Y. This is a realized loss. Since the way you get to the dollar calculation is via the underlying shares, they have less.

You are correct, of course, they they had $X in the market on Friday and $X on Monday.

I think we all agree, though, that this was just (bad) luck. They were as likely to gain as to lose. And in any event, there's nothing that can be done now.
Marseille07
Posts: 16054
Joined: Fri Nov 06, 2020 12:41 pm

Re: Lost 23K on Monday

Post by Marseille07 »

YRT70 wrote: Fri Oct 29, 2021 1:12 am Of course if you convert it to total amount of shares they were able to buy back less shares because the market went up. That's a no brainer.
Is it a no brainer for you? That's money lost, but you keep saying otherwise.
protagonist
Posts: 9279
Joined: Sun Dec 26, 2010 11:47 am

Re: Lost 23K on Monday

Post by protagonist »

The stock market is inherently very volatile.
It is not for the squeamish. One must adjust one's aggressiveness in investing based on tolerance for risk.
If one is to get very upset over day-to-day fluctuations it is probably not worth the anxiety. If a 5% dip is that upsetting what will happen the next time the market crashes?
Perhaps just keep the money in a relatively conservative balanced index fund and don't move in and out, if that would help.
Flyer24
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Joined: Sun Apr 08, 2018 4:21 pm

Re: Lost 23K on Monday

Post by Flyer24 »

Thread is 1.5 years old and has been answered. The topic has run its course.
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