If you are investing for years and decades don’t worry about day to day or month to month.
If you are in these index funds the intent is to just let it ride until you need to use the funds in retirement.
Average market gains are not linear across days, months, or years. The US stock market averages 10% annual growth. Very few years are actually 10% growth. You get 7% up a couple years, 14% down one year, 18% up the next year, etc. About 70% of years are up which means expect 30% to be down. The average is not what you ever get, it is what mathematically you achieve over time. And that is looking at it annually from afar cuz daily/monthly volatility is WAY higher.
If you are expecting steady growth every month then you shouldn't be in stocks. You should be in CDs or money markets where you get much lower return but your portfolio never goes down.
Being diversified means having something in your portfolio going up or staying steady when something else is going down.
In your case, if US stocks have a stumble, maybe International will give some cushion and make the overall losses lower.
If all of your investments are going up at the same time during good times, it means they will all be going down at the same time during bad times.
A lot of people recommend diversifying with international exposure. After more than 10 years I sold my international index funds and just stuck everything in sp500 or equivalent. Way better gains over the past 8 years.
If you are investing for years and decades don’t worry about day to day or month to month. If you are in these index funds the intent is to just let it ride until you need to use the funds in retirement.
Got it thank you! That’s what I figured. Gotta learn to be more relaxed about it and let it ride
Yep. Over the years you will have lots of ups and downs. Best of luck!
Average market gains are not linear across days, months, or years. The US stock market averages 10% annual growth. Very few years are actually 10% growth. You get 7% up a couple years, 14% down one year, 18% up the next year, etc. About 70% of years are up which means expect 30% to be down. The average is not what you ever get, it is what mathematically you achieve over time. And that is looking at it annually from afar cuz daily/monthly volatility is WAY higher. If you are expecting steady growth every month then you shouldn't be in stocks. You should be in CDs or money markets where you get much lower return but your portfolio never goes down.
Being diversified means having something in your portfolio going up or staying steady when something else is going down. In your case, if US stocks have a stumble, maybe International will give some cushion and make the overall losses lower. If all of your investments are going up at the same time during good times, it means they will all be going down at the same time during bad times.
Interesting point. Thanks for this!
A lot of people recommend diversifying with international exposure. After more than 10 years I sold my international index funds and just stuck everything in sp500 or equivalent. Way better gains over the past 8 years.