Had a convo with my uncle Hank about index funds last weekend

He pulled out his phone and showed me his returns over 20 years, dude was up like 180% just sitting there. He said he never sold once even during 2008, just kept buying more. How do yall stop yourself from panicking when the market tanks and you see red for weeks?

3 comments

3 Comments

ray_miller841mo ago

Man, 180% over 20 years is solid but not exactly earth shattering for index funds. But the real question is how he stayed cool during 2008 when everything was dropping 40%+. Did he just turn off the news and stop looking at his account entirely, or did he have some kind of system to keep himself from selling at the worst possible moment?

the_max1mo ago

That line about "did he just turn off the news" hits close to home. I had a buddy back then who was pretty deep into index funds, and he told me something I'll never forget. He said he actually printed out his entire portfolio statement in November 2008, folded it up, and stuck it in his sock drawer. He told himself he wasn't allowed to look at it again until January 2010. And he didn't. He'd still buy more every month through his 401k, but he never checked the balance. When he finally pulled that paper out, it was back up about 30% from where he froze it. He said that was the best trick he ever did, just taking the emotional part clean out of the equation.

the_emery1mo ago

Did you ever try something similar yourself? For me, I set a rule during the 2008 crash that I could only check my retirement accounts on the first of every month. No exceptions. That way I saw the drops but they came in slow chunks instead of every single day panicking. It really helped me stay the course and keep buying when stuff was cheap.