Why You Should Keep Investing (Even When You’re Losing Money)

If Target announced everything in the store was 20% off tomorrow, people would line up outside the doors before they ever opened. But when the stock market goes 20% off, those same people, they run for the exits. It's one of the strangest things that we do with our money. We chase a discount on everything we own right up until the discount shows up on the things that actually build our wealth. And then fear takes the wheel. Now, the part that nobody tells you is this, is that the fear that you're feeling when your account is down, and maybe if your account's down now, you're feeling it right now, It isn't a signal that something's broken. It's part of the process. This is Building Your Money Machine, where we help you master your money, eliminate financial stress, and live a life by choice. And I'm your host, Mel Abraham. And I have paid that price on fear. And I'm going to talk about it here, but I'm going to make sure that you know what to do when that shows up, when the accounts drop, to make sure that you're building wealth the right way. So let's do this. So before we go one step further, we have to fix the words that you're using in your own head, because the word you're reaching out for right now is the wrong one, and it's about to cost you. So let's talk about this. Point number 1, down and lose are 2 different words. Yesterday you owned 1,000 shares. Today you actually still own 1,000 shares. Nothing about what you own has changed while you were sleeping. The only thing that changed is the price that somebody's willing to pay for it right now, this second, on a Tuesday, on a Monday, when everybody's scared. So let's do the math that your stomach refuses to do. 1,000 shares at $100 each, that's $100,000 on your statement. That's it. The market drops 20%, and now you have those same 1,000 shares, they're only worth $80,000. See, your app says that you're down $20,000 and your brain reads the number as, oh my God, I lost. But look at what really happened. You still own the 1,000 shares, the same 1,000 that you owned last week. The balance on your screen maybe moved. Your ownership though, it didn't budge. That $20,000 loss, if you will, only becomes real When you sell it, it only becomes a number you actually eat the moment you sell. That's it. See, until then, it's just a price tag, and price tags change. There's a world of difference between saying my account is down 20 grand and saying I lost 20 grand. If you haven't sold, those are not the same sentence. They're not the same sentence. It's not the same thing. Now, I'm going to be straight with you because This is where a lot of feel-good investing advice lies to your face. This only holds if you're built to hold. If a 20% drop forces you to sell because you need that money for the mortgage, for the food, because there's no cash cushion, because the whole thing was structured wrong to, to begin with, then this drop isn't just weather. It's a wound. It's a problem. And the market didn't do that to you. The structure did. Getting the structure right is the entire ballgame. And I'm going to show you exactly how do you do it? How do you build it before we get done? So if a down account isn't the real problem, what is? Well, it's the 6 inches between our ears. And I don't teach that from a textbook. Well, I learned it myself the most expensive way as a human being sitting in a hotel ballroom in 2000. You know, I had a scared voice inside of me and it cost me almost $3 million. Point number 2, the cost of fear. This is one where I was sitting in a ballroom listening to someone like me talking about the market, about the economy, about investing. And he was talking about all these things and literally saying Armageddon's coming, Armageddon's coming. And I'm sitting in this audience listening to this speaker just break it down and I'm freaking out. Dot-com thing was about to blow, all the different things. The economy was headed off a cliff. And the longer I sat there and stewed, the smaller I felt in my chair. And I need you to understand something about that moment, because the same thing is happening in you right now if your account's down and you're feeling those things. When I walked into that room, I was confident. I felt good about my money. I thought I was going to learn some things. 20 minutes later, I was terrified. And it's not a coincidence. It's literally a cycle. There's a whole version of it that is out there online. This confidence, the greed, the FOMO, buying at the top because everyone else is winning and you're trying to get in. That's a total video for another day. But what I do want you to understand is this psychological cycle on the downslope side, the fear, because that's the part that's running through your body when you watch your account go down. And I didn't even let this guy finish. I literally got up. I was in the middle of the, of the row, so I had to disturb everyone else. Walked out, got down to the foyer outside, and I called my broker and I said 3 words, get me out. And I wanna tell you why that felt so smart in the moment, because this is the part that'll save you. Fear doesn't show up and announce itself as fear. Fear shows up Sounding like the most rational voice in the room. It shows up sounding like intelligence. And that's the thing that, that gets you. And there's a reason for that. And it isn't weakness, it's wiring. See, loss aversion, behavioral research, it shows this. People feel the pain of loss way more intensely than the pleasure of the same amount of gain. There's studies by Fidelity and, and everything that really start to do this. Researchers have shown that we feel this in a completely different way when it's loss versus gain. And a $500,000 slide to $450,000 hurts worse than watching it climb back to $500,000. So when the number's dropping, your brain isn't watching and saying, oh, that's volatility. It's feeling pain. And the brain in pain, they want one thing. They want to get out of it. Make it stop. And that's when sell puts on a suit and starts calling itself a strategy. When the emotions go up, our financial intellect goes down. And I know that line cold now because I paid a price for it to learn it. Because the twist, that speaker, he wasn't wrong. He was right. Bad stuff was coming. The dot-com bubble burst. The market fell in 2000, fell again in 2001, got hammered in 2002. 3 losing years back to back. That's what happened. So he was correct. And a few years after that, the whole housing kind of market nearly came down in the financial crisis. I wasn't wrong about what was coming. I was wrong about what to do because of what was coming. Sit with that for a second, because it's the whole game. Being right that a storm is on the radar tells you nothing about the weather, and it certainly doesn't tell you whether you should burn down your house. And they're 2 completely different decisions, and I treated them like one because getting out wasn't the expensive part. See, the expensive part was what happened next. I stopped. I stopped investing for years. Fear didn't just rearrange my portfolio that afternoon. It rewrote my behavior for a decade. So while back, I looked at this and I said, what did that phone call really cost me? I had never really looked at it. And I'm gonna shrink my real numbers down a little bit because I had more going on. So it cost me more than what we're talking about. But I don't want this lesson leaning on some giant figure that lets you off the hook that you say, oh, that doesn't apply to me. No, it applies to you because it's the emotions and it's the actions and everything that goes on. So starting with $200,000 invested at the start of 2000, And I was adding $15,000 a year to my retirement, to my investments every single year. If I had left that $200,000 alone and kept feeding the $15,000 a year for 15 more years, tracking the S&P 500 with the dividends and everything reinvested, my total money would have been $425,000 totally invested. That's my total money in. How much I put away. Okay. That's not the value of it. Now, I would have also experienced the dot-com crash, the 3 down years, the 2008 crisis, COVID, the 2022 bear market, every ugly statement, every end of the world headline, every single moment that I would have wanted to run again. So what happened had I left it alone? $200,000, start of 2000. And just let it ride and put $15,000 in for the next 15 years, the S&P 500, that calculation at December 31st, 2025, I would've been around $3.3 million. This, I know I'm not talking about taxes and fees and, and all of that type of stuff, but I want you to hear something here. I would've had $400,000 put to work over that timeframe. Instead, I had $200,000 sitting on the sidelines. I would've had to ride the market up and down, do the things that I should have done, kept investing, and I would've been at $3.3 million by the end of 2025. Now, I'm not telling you I lost $3 million, but I did lose the opportunity to make that. The lesson isn't about the loss. The lesson is what fear interrupted. And that's the thing that starts to drive us when we start to think we lost money or our accounts are down. See, I was afraid of losing money and I was so afraid of it that I quit doing the one thing that historically built it. I made a 15-year decision based on a 15-minute emotion. So if fear is the thing that gets us, you'd think the smart move is to dodge the scary drops altogether, except the drops aren't the glitch. They're just the fee we have to pay. And the numbers on that are gonna stop you cold when you start to look at this. That leads me to point number 3, volatility. The ups and downs, the volatility is just the price of admission. It's not the alarm. Let me give you a number that should change how you see every scary red day for the rest of your life. Going back to 1980, the average deepest drop inside a single calendar year for the S&P 500 has been about 14%. They call it an intra-year drop. So the market typically goes down by around 14% on average during the year. 14%, top to bottom in a normal year. Now here's the number that sits right next to it that we sometimes don't realize. Over that exact same stretch, the average calendar year return was positive 13.3%. Since 1980, market drops 14% per year. During the year, but by the end of the year, on average, it's up 13.3%. Now here's the thing. When you start to look at this in a different realm, you start to realize that that's the game that we're playing. But what happens is that that short-term drop scares us out like it did with me. So the market can drop 14% somewhere in the middle of the year, scare the daylights out of everybody, and still hand you a positive 13% return by the time we get to the close of the year. The gut punch and the good year are the same thing. They coexist. They almost always coexist. And it gets blunter than that when you start to really look at it. In 93% of the years since 1980, the market fell at least 5% at some point along the way. 93%. Which means a drop isn't a warning that something is broken. A drop is just Tuesday. Wednesday, Thursday. It's the standard. It's recurring. It's fully expected. And it's a cost of playing the game. We just don't behave like it. And I got a live demonstration in my own house. That's the thing. Here's the thing. When you start to look at this, all I know is this. When things go on sale at Nordstrom, my wife and her friends, they're going into the store. They're running in the store. They're not running out of the store. No one's ever sprinted away from a discount on shoes. But a drop in the price on the one thing that actually builds the wealth and people run out the door. It's the same sale, just completely opposite reaction. And the only difference is one of them shows up wrapped in a scary headline. That's it. So when your account drops, the question isn't what went wrong. Most of the time, nothing went wrong. And if you have a diversified portfolio, if you built it properly, you'll be okay. You're just paying the toll every long-term investor before You has had to pay. Volatility isn't proof that investing stopped working. It's just a toll booth on the road to it working. That's the thing. So a huge chunk of the fear around this comes from one simple place, and I wanna hand you a fix for it right now. And part of that is not knowing what to do, not having your money in the right accounts at the right time to make it happen. And so to help you with that, if nobody's ever sat you down and explained how accounts and investments work, Under the hood, I built a free guide called Investment Accounts Demystified. It walks you through in plain English, no jargon, no finance bro nonsense. It's totally free. Go to melabraham.com/demystified and we'll make sure that we get it to you. All right, let's get back to it. Point number four: Getting out means that you're being right twice is the important thing. And here's what I mean by this: You need to look at this and say, "I am going to sell and make a valid decision on the sell side," but I also need to make a decision. To get back in. Now, I couldn't make a decision to get back in. I stayed out for 15 years. And the folks at Fidelity ran numbers on $10,000 in the S&P back in 1998 and looked at and said, if you just invested it and left it alone to the end of 2025, in other words, you just let it run, stayed fully invested, you didn't get scared out, you didn't buy and sell, you didn't try to find the sell on the highs and buy on the lows, which is impossible to do anyways on a long-term basis. That $10,000 becomes $616,000. Now watch what happens if you got scared and you stepped out and you missed 5 of the best days across 37 years. Not 5 best years, 5 best days. That same account lands at $380,000. You handed back roughly $236,000 by missing 5 days in nearly 4 decades. Now you think about it, what that does to you when it goes back. Now, if you kept trying to go in and out and in and out and time it, and you missed 50 days, 50 days over almost 4 decades, then you're only gonna be at $44,000. And this study is out there by Fidelity. Now you might be asking yourself, how does anybody miss the 5 best days? Well, easy. Interestingly enough, the best days live right next door To the worst days. They cluster together in the middle of the chaos. So when everything feels the most dangerous, that exact moment where your fears is at the highest, it finally talks to you and says, hey, you need to get out. It's the exact moment that the rebound is about to fire. Which brings us to the trap that nobody warns you about. See, selling doesn't solve your problem. It hands you a brand new one, which is what it did to me. Because now, like I said, you have to be right twice. You have to nail it when you get out. In other words, did I get out at the high? And then you have to nail it when you get back in. Did I get in at the low? And that second decision, it's brutal because the same fear that chased you out is still sitting there. It's why I sat out for 15 years. See, fear doesn't hand you a note and say, all right, all clear now. Safe to come back in now. The market doesn't wait for you to get comfortable before it recovers. It doesn't send you a text. It doesn't do anything. And by the time the headlines are Feeling good again, and you get a chance to settle down. Your gut finally unclenches. It's too late. You sold to feel safe, and the price of feeling safe was missing the recovery itself. So if you can't outpredict the drops, and you can't safely time your way around those and getting in, then what's left to protect you? In one word, structure. And this is the part I wish somebody had grabbed me by the collar and taught me. In that ballroom back in 2000. Point number 5, the anatomy of holding the line. Here's the thing that should give you hope. The version of me that panicked in 2000 and the version of me that sat completely still through 2008, through COVID, through 2022, watching millions swing around, that's the same guy. Nothing about my courage changed. What changed though was what I built underneath it. And every piece of it is something that you can build too. 4 things let me hold the line the second time around and allows me to continue to do that. And first is understanding. See, in 2000, I was staring at an account, an account balance. I didn't really understand it. I wasn't a student of the markets. I wasn't a student of the market history and how this stuff actually behaves under pressure. So when it dropped, it was a mystery to me, and fear feeds on mystery. By 2008, I'd done the work. I understood that I was— what I was looking at. I understood what was going to happen. A drop wasn't a ghost anymore that haunted me. It was a pattern that I recognized. And you can't be terrified by a pattern you've watched 100 times. So, the first is understand. The second is, and this is a big one, liquidity. The deepest peace that I have during any downturn comes from This one fact: I know that I'm not touching the money for a long time. I've got the cash set aside in a high-yield savings account, and it is there on purpose. So when the market wants to throw a tantrum, let it throw the tantrum. It changes nothing about how I pay for my life. And that's the difference between a drop being a weather and a drop being a wound. See, liquidity is what earns you the right to just hold on. And this is where time quietly does the heavy lifting. Look at the S&P 500 historically. On any single random day, your odds of being up are basically 54%, basically a coin flip. Stretch that same investment out to a 15-year window and the odds of a positive outcome jump to 98%. Same market. The only thing that changed is how long You gave it. Time doesn't erase the risk, but historically it's been completely rewritten because of what the market does, and it changes the way you experience it. Historically, S&P 500 on any single day drives 54% up or down. Third, I changed the question I was asking. In 2000, I'd look at my account and ask, how much did I lose today? And I would freak out. That question has no answer that calms you down. There's just no way. By 2008, I was asking a completely different question. And that question was, is this behaving the way it should, given what's happening in the economy? And am I still safe according to my plan? See, one question is emotional. It just pours gas on, on the fire. The other is structural, and it either checks out or it doesn't. And I've never buried my head in the sand, by the way, to do this. Ignoring your accounts isn't discipline. I know a lot of people say, well, it's down, so I'm just not going to look. No, no, no, no, no. I just look through a different lens. So that's number 3. Number 4 is this: I had an outside voice. I finally had an advisor who could give me perspective when my own head wasn't trustworthy. Not somebody to make the decision for me, but somebody that could smack me and keep my emotions at bay. You know, when they start to take control, when I find myself all of a sudden fear creeping up because I'm human, it creeps up. I still feel just the same. Maybe I can't see straight. And so they come with an outside calm voice and it's worth more than any prediction. Now, I know what some of you are thinking, Mel, you know, back in 2000 you had a lot of time and, you know, maybe you were, you know, I was 39 in 2000. So it's easy for you to talk about time. What happens if I'm 52? So I'm gonna be totally upfront with you because I think it matters. At 45, at 50, you still actually have 2 solid decades of runway. So the time element is still plenty. I'd love it if you were in the game earlier, but the bottom line is you can't just look at it and say, well, this only works if you have a bunch of time. You still have to navigate the fear and the market still does what it does no matter what your age is. The difference is this: the portfolio I had at 39 when all of this kind of transpired is not the portfolio I have today, even though it's grown many times over— multiples. And as you move towards 50, 60, 65, the structure of your portfolio changes. Liquidity goes up to give you the peace of mind. The mix changes. The plan bends to fit the fact that the money's job is changing from growing To spending, maybe. Younger? Yeah, time carries you. Older? Liquidity carries you. Same principle. You just have to move the levers a little differently. But that's the whole toolkit. That's the bottom line. Once you understand what markets do and how fear starts to dictate things, then you can start to eliminate the mystery because you've got understanding. So the drop isn't a mystery anymore. Liquidity that you build doesn't make the drop A threat anymore. And having the right question that you're asking, and maybe an outside voice so your gut doesn't take over— well, all of that is structure, and you can build it now while you're calm, precisely so you, you don't have to invent it later when you're scared. That's the game. So let me leave you with the truth that cost me the most to learn. See, the market Always recovers every single time. The dot-com crash, 2008, COVID, 2022, every one of them handed back what it took and then some to the people who stayed. My money would've recovered. My fear, that took a lot longer. That's the real price, not the drop. The drop was temporary. What the fear did was to talk me into making that drop permanent, at least for 15 years. By getting me out and keeping me out while the recovery was happening behind me. I was waiting for something, and it all happened without me. So the next time your account is down and that voice starts whispering that, oh, you should do something, remember what it costs. Your balance will move. Your emotions, they'll move. The headlines, they'll move. Your plan is the one thing in the whole equation that you shouldn't move Every time they do. So don't let a temporary market decline talk you into a permanent financial decision. I made a 15-year decision based on a 15-minute emotion. Take that lesson from my story so you never have to pay for it with yours, because earning more doesn't make you free. A money machine does. And if this reframed even one scary red day for you, do me a favor. Hit subscribe, share this with someone, because I make these to help you build the kind of structure that lets you sleep through the storms. Because storms are going to come, storms are going to go, but those are weather systems. That's not the climate we live in. I hope that this helps. I hope that you get a chance to look at this in a totally different way. And I can't wait to hear from you if this helped. Do me a favor, drop me a comment, drop me a DM. Let me know. Let's have a conversation. And let me hear from you. All right? Until I get a chance to see you in the next one, as I always say, always, always strive to live a life that outlives you. See you in the next one. Cheers for now.