I've lost 18% on my investment portfolio!?

Question

It's actually a sizable chunk, from it's high to currently there's 18% missing. The portfolio now is worth less than the money I've put into it over the past 6 years.

Should I be freaking out, contacting my advisor, and restructuring my portfolio?

Answer 1

You have only lost that if you sold it.

The Dow hit 14000 last year.  Right now it is 11,250.

That is roughly 18%.

It sounds like your portfolio is well positioned enough.

Be thankful that you are not overexposed to sectors like the financials.  Right now they are 30% off of their highs and are falling further.

Just take a breath and go with the flow.  The markets will turn around.....They always do!

Good luck!

Answer 2

You haven't lost anything. Your positions have simply been devalued. What did you think would happen to it if the trend reversed? If you're paying an advisor I'll bet he's been making money and I'll wager he's pretty happy too. I'll also wager he never mentioned to you the idea of hedging those positions with PUT options either. Is your home insured? Is your car insured? Boat? Why didn't you insure your portfolio with PUT options in the index markets?

Answer 3

You are not alone, actually, adjusted for inflation, you have lost 36% of your money's value and if you would adjust for international buying power (if your portfolio is in USA) you have lost 74% of your money you put in 6 years ago.

The USA is 10 Trillion in debt, needs 4 Billion a day of outside money to survive and rages sense;ess wars in 3 countries (Kosovo, Iraq, Afghanistan) not to count 480 bases in 40 countries, which cost you every day 3$ Billion.

The USA buy every day 18 million barrel of oil, more then the rest of the world combined and has a 3 million prisoner population costing $46,000 annualy each.

How long do you think your investment will need to be worthless. Wright Bush and his voters a thank you note.

Answer 4

No you shoudlnt be freaking out, The market goes up and down not just up. Smart money is buying right now, but at the very least you should hold onto what you have right now. I am also down across the board but diversification and dollar cost averaging is minimizing the pain to less than ten percent.

Answer 5

I guess there's not much you can do right now, but walk away from the market, and forget about the value of your investments for now. It is only going to cause you pain and misery, which might lead to you making wrong decisions.

When the stock market goes down, the money shifts to fixed income securities. When demand for fixed income securities goes up, its yield goes down. That's why you see a lot of investors in pain right now. Their portfolio value is down, and the alternatives they see looks hopeless as well.

Do you have other sources of income? If so, start building up your asset base again. But this time, find an INDEPENDENT financial advisor to help you diversify your portfolio.

Look outside of the box. and considering all factors--learn to make investment decisions for yourself.

Hope this helps.

- Jim http://jsforex.blogspot.com

Answer 6

Have you seen the markets' behavior over the past 12 months?  Your portfolio is in line with the overall stock market.  Your "loss" right now is theoretical.  If you sell now, it becomes actual.  If your investment timeframe is long term, you should stay the course.

Answer 7

Sound like diversification could be an issue. I'm down over 23%...on only about a 10th of my overall holdings. I would say if you have been paying into this consisitnetly over the last 6 years, dollar-cost averaging is still on your side and everything is on sale now so keep it up - if you're in it for the long haul, that is. Suze Ormond(sp?) just had an article posted, I believe to Yahoo, yesterday that addressed a similar issue. Maybe you can dig that up.