[Sergio]

Rookie question…

[Jordan]

Don’t lose if you don’t sell.

[Aaron]

I think people are oversimplifying and misreading your question. They’re talking about a total loss of your investment. But you asked about impact. A massive bubble bursting means you’d lose a large percent of your investment equity. If assets are overpriced, due let’s say to inflation caused by massive global financial crisis and later covid stimulus, and the market reprices those assets, you’d lose value accordingly. Take the big tech stocks of late–Amazon, Google, Netflix, Facebook/Meta. They represent oversized portions of the NASDAQ. So, when they drop in value 30%, the NASDAQ responds accordingly.

[Otis]

You don’t lose “all” your money… at most you will have a 30-40% decrease in paper gains. You only “lose” money when you sell at a loss. If you have 20+ years until retirement then increase contributions and ride it out. In 2022 when the market was down 10-12% I increased my 401k to 27%. Buy these great companies while they are on sale. I won’t need the money for 25+ years. If you are under 10 years until retirement then your portfolio should be a little more conservative.

[Graham]

If you are investing over the course of several decades in equities, it’s almost guaranteed that at some point the value of your investment will decline by 20-30%. One of the trade offs for higher growth is higher volatility.

[Amber]

Since many index funds invest in the broad market, the whole market would need to go to zero for you to lose your entire investment. If that happens, we have bigger issues.

[Joel]

If the us economy collapses. If we lose our money in index funds we have a lot more to worry about than lost money.

[Ron]

If you are that worried about a bubble crisis, then diversify. Diversify into what, Real Estate, Gold, Commodities or the even harder one to diversify into…volatility as examples to diversify into.

[Jeff]

Total loss on something like a broad market index fund has only been realized historically when a country nationalizes their economy. Happened in Russia and China after their respective communist revolutions.

[Author]

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