Your Biggest Investment Losses

Saga

It's always made very clear that investing isn't saving and your capital is always at risk.  What tends to be missing, for newbie/potential investors, are actual real life cautionary tales of ordinary everyday sensible people who have invested at an appropriate level of risk for them, not tried to beat the market, not panicked, played the 10+ year long game etc etc but who still lost a lot of their investment.

So do you fit the above description of someone who lost while investing?  Can you share your story and what you did next?

Aegis

A couple of my speculative punts have dropped by about 90%, and I held some shares in Patisserie Valerie when thy went bust.  Of course, some others have done rather better than this!

MX5huggy

Not investing for 20 years because “past performance is not an indication of future returns” 

Saga

MX5huggy said:

Not investing for 20 years because “past performance is not an indication of future returns” 

😢 well yes there's that

Albermarle

of ordinary everyday sensible people who have invested at an appropriate level of risk for them, not tried to beat the market, been diversified , not panicked, played the 10+ year long game etc etc but who still lost a lot of their investment.

If you add in the words in bold to the other conditions , then in fact the words in italics are unlikely to materialise ( not impossible but unlikely) 

jimjames

Albermarle said:

of ordinary everyday sensible people who have invested at an appropriate level of risk for them, not tried to beat the market, been diversified , not panicked, played the 10+ year long game etc etc but who still lost a lot of their investment.

If you add in the words in bold to the other conditions , then in fact the words in italics are unlikely to materialise ( not impossible but unlikely) 

Absolutely. That's a really key and very important omission in the original question. The sorts of investment that are likely to lose "a lot" of their value over the long term are not ones that should comprise the majority of your portfolio.

I lost money on split capital investment trusts in the 2007-2009 period but they weren't a big part of my portfolio so although that particular investment tanked it didn't affect the overall portfolio value very significantly. Obviously if you only had invested in split trusts then you would be seriously impacted but that sort of portfolio would be so far up the risk scale it would be very few people that would every consider it if they understood the risks.

Most people who claim to have lost money on investments seem to have either sold out within 10 years or not diversified so were too exposed to risky investments. I can't think of any situation in recent times where someone who diversified, didn't panic and held long term would have lost "a lot" of their investment so if anyone has done it would be very useful to know the details.

Saga

I can't think of any situation in recent times where someone who diversified, didn't panic and held long term would have lost "a lot" of their investment...

Sounds too good to be true 😊 Sorry, couldn't resist.

Bravepants

I lost about £3000 about 25 years ago messing with individual shares, thinking I could make a quick buck. I have since seen the light and invest more wisely and for the long term. Of course the advent of the Internet has really helped the learning process!

musehead

I invested a large lump sum in a selection of funds in 2007, my first investment. Planned to buy more every 4 or 6 months. The market crashed in 2008-9, and instead of investing more every few months like I had planned, I was concerned by the large-ish loss showing on my portfolio combined with the super-negative sentiment on forums such as this, and didn't invest again until values had begun to recover in 2010. Many people online were saying that this time was different and the stock market would NEVER recover. If I had continued to invest as I had initially planned, I'd be somewhat richer now!

With hindsight, I shouldn't have been so influenced by what people say on the internet.

strawb_shortcake

How would cautionary tales of loss help would be investors invest especially if those investors that lost seemingly followed what looks like basic rules of investment? 

I was only 21 when I had my eldest child, CTF came out and I was too Ill educated to make a decision to invest and went for a cash CTF. 
I was oblivious to inflation risk, but was convinced I made the right decision at the time.
How my opinion has changed 18 years later...

Surely providing a balanced education of financial vehicles to all would be preferable to tales of woe, let's face it no one that's on the fence about investing would hear anything more than the bad bits in these stories? 

ColdIron

Sometimes cutting your losses is the best decision that you can make