The stock market has generated substantial returns over the past decade. While some individual stocks have performed better than others, benchmarks like the S&P 500 and Nasdaq Composite have made many people happy.
However, some people missed out on the decade-long rally and are just getting started with buying stocks. It hasn’t been pretty for everyone.
A Redditor recently posted in the Stocks Reddit community about the time they told their parents to buy at the peak. The Redditor’s parents put $200k into SPY and $100k into Nvidia (NASDAQ:NVDA | NVDA Price Prediction) shares. Stocks entered a correction shortly after the parents put their money into stocks. The Redditor feels horrible and wants to reassure their parents that the market will recover. I will share my thoughts, but it is good to speak with a financial advisor if you can.
Never Give Investment Advice
The top comment came from a Redditor who suggested that you never give investment advice. You won’t receive much thanks for the gains and all of the blame for the losses. Other users chimed in and shared their stories of recommending stocks and receiving little thanks when things went well.
It’s also a bad feeling for the person who made the stock recommendation. The original poster is dealing with this right now, and other comments echoed the same sentiment. It never feels good when a stock you recommend goes down.
The Parents Still Made the Decision
While most of the comments leaned against offering financial advice, one commenter explained how it went well. This individual told their parents to diversify. The parents followed suit and proceeded to thank the Redditor because their stocks would have dropped by a lot more if they didn’t diversify.
Adults can make their own decisions. They decided to invest in the stock market and should have done their own due diligence. You can make recommendations, but an adult doesn’t have to follow them. While it feels bad to encourage investing and see a quick loss, the parents made a decision to buy stocks. It also sounds like the mother wants to be deep in a stock and choose Nvidia, while the original poster would have been content if they had just bought SPY shares.
Wait for the Market to Recover
One commenter said that the parents should hold and it is only bad if they sell their shares. That’s because a market recovery can bring SPY and Nvidia shares to all-time highs. There is still a lot of uncertainty with tariffs, but the market has dealt with this before. President Trump also imposed tariffs in 2018, and the markets didn’t take too well to those policies. However, the market rebounded sharply in 2019, and anyone who sold in 2018 now regrets it.
The stock market is meant to be a long-term wealth generator. Corrections are a part of the game, and they present great buying opportunities. For instance, many equities collapsed in the Great Recession, but buying that dip proved to be very beneficial for long-term investors.
The Redditor may feel bad now, but it can look a lot better within the next five years.
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