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Danger in the market. Got high, what to do?
Everything written below is not a personal investment recommendation, but rather a personal opinion inspired by yesterday's discussion of the comments. Thanks to everyone who commented. We will think about it further immediately. Write a conclusion for those who do not want to go into details. In yesterday's article, I looked at the process of capital accumulation. However, if you already have it, save it as a deposit, and at that moment the market will grow. All your friends brag about their earnings, but now you decided ... I looked at the period from January 2011 * (near the peak of the market at that time) to September 2024. The market is still growing very actively. Since December 2008, it fully meets our criteria. I think two years of growth will be interesting for everyone. Now the market is growing, and deposits are tight. For example, for a million rubles you buy the entire index. What will happen to your capital? *Unfortunately, reliable data for periods before 2009 could not be found, so only data from 2009 can be used in the calculations. The graph shows two versions: when you keep your capital in shares (including dividends) and when you keep cash. At the same time, as for deposits, I give you a head start on your deposits. Your money will be there every month at the highest average interest rates from the 10 largest banks. In the graph, taking into account inflation, everything is shown in nominal value, rubles. . This time, you will lose your deposit. But it is not as bad as the first four years. This is where the real thing is! From there, your capital decreases, and inflation burns out (not quite, but it will definitely hurt if you look at the number of applications from brokers every day). How can I tolerate this and wait for recovery? If you can hold on, even if you sell at the end of 2022 (the period marked with number 2 on the chart), you will still get the end result equal to your deposit. Getting kicked out of your house is not so bad. This is why smart people say you should have an investment horizon of at least 5 or 10 years before you can enter the stock market. They also say that selling at the bottom of the market is a bad sign. If this situation reminds you of what has happened since May 2024, so do I. Probably May 2024 = ~ January 2011. However, if you take into account inflation from now, you will not be able to look into the future on the same chart. Note: It's all textbook. In the long term, stocks provide the opportunity to increase capital. More than a deposit But this may be what you need in the short term. This is not relevant to the topic of the article, but for reference, we will provide, as before, a graph of capital accumulation in the amount of 10,000 rubles. Market or deposit. Graphs are not adjusted for inflation. This is not so painful. The worst four years almost matched the deposits, after which the deposits always exceeded the yield. What conclusion did I make for myself? ? If you want to invest large sums in the market, it is better to invest gradually and evenly.Large losses in profitability are rare, but the risk of getting caught is much lower. However, everyone chooses their own investment strategy and is responsible for its results. Thank you for your interest! The content written above is a personal opinion, not an individual investment or recommendation.