you have to take risk to earn returns. Sometimes that risk actually eventuates, and you have to either keep going, or take the loss.
That's why you must know the time horizon for your investments - if you know you need the money "soon", you cannot actually invest in the stock market.
You have to take calculated risks to earn returns. FOMO at your own risk.
If you are 30 and don’t need the money you put in SPY until 70, don’t sweat it. You’ll be fine.
But let’s not pretend blindly taking risk is OK because some return is expected. Time horizon and some relative valuation context is important.
Buying into the stock or housing market at extreme historic levels of valuations like those in late 2021 and now GREATLY reduces your expected return over 5/10 years.
If you don’t have the (extremely) long view, expect to lose some sleep watching your net worth over the next couple years.
> But let’s not pretend blindly taking risk is OK because some return is expected.
Exactly. I have seen this idea float around that just because they have taken a risky position they will be able get better rewards. Risk may be necessary for above market rate returns, but it is not sufficient. A proportionate amount of those taking the risk will be cleaned off the amount that was risked. Why do you think its not going to be you ! Of course when you use time effectively or use other hedges one can reduce the exposure.
That's why you must know the time horizon for your investments - if you know you need the money "soon", you cannot actually invest in the stock market.