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Patience is of course easy when things are basically only going up, as in 2024.
What about a 50% drawdown?
What about a 50% drawdown?
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@Epi When everything is rising, it's easy to hold on. The real test comes at -50%: do I stick to my plan? Personally, I would continue and use DCA as long as the fundamentals are right. Fluctuations are part of it - and a drawdown can also be an opportunity to buy at a good price.
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@superheroman This will be a test for you! The problem is not so much a deposit level at -50%, but rather the path from -20% to -40%. When you see your deposits disappear over months in the first few days and it keeps going downhill with no prospect of improvement. This is psychologically tough. Very few people are familiar with the situation and know how to react.
I know that I don't tolerate them well and have therefore devised strategies to avoid them. In the end, we are smarter or richer, never both. 😬
I know that I don't tolerate them well and have therefore devised strategies to avoid them. In the end, we are smarter or richer, never both. 😬
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@Epi You're absolutely right: the gradual fall from -20% to -40% can be more nerve-wracking than simply looking at -50%. In the end, it is precisely this longer dry spell process that shows whether my strategy and risk tolerance really suit me - and whether I have the discipline to stick with it despite the red figures. I also try not to constantly look at the portfolio, but to rely on the long-term process. I've been involved in the stock market for around eight years, but have been out of it in between because I needed liquidity. I also had to endure longer negative phases in my 3rd pillar (pension option) - I've been building up my portfolio there since 2018. All of this has shown me that keeping calm and sticking to your plan is often the best way forward.
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