It will happen. Not if, when. Here are three real falls, in euros, on your amount: how much you’d see on your screen at the worst, and what happened if you did nothing.
Pick a fall, put your amount
€10,000
2008, the big financial crisis. Banks in trouble all over the world. A world ETF in euros lost 37% in one year, and in early 2009 it went even lower.
Before€10,000
End of 2008€6,300−€3,700 on paper
End of 2013, if you did nothing€11,050
Sell at the worst and you keep €6,300: the €3,700 loss becomes real. Sit still and you were back above where you started during 2013, about 5 years later. At the end of 2013 you had €11,050.
Real numbers, not a promise. 2008: a world ETF (iShares MSCI World) in euros, year by year. 2020: the fall is the world index in dollars; the end of 2020 in euros. 2022: the world index in euros, dividends included. Before tax. Sources: zendepot.de, investingintheweb.com, chartrow.com.
The worst ever, said plainly
For someone in euros, the worst stretch of the last 25 years went from May 2001 to March 2009. Two crises one after the other. The world index lost 54%: €10,000 became about €4,600.
That’s why the money you need in the next 3-5 years stays in the bank. ETFs are only for money you won’t need for at least 5 years. The longer the better: over 15 years or more, historically, it has always gone well.
What to do when it falls
Nothing. A fall is a loss on paper. It becomes real only if you sell.
Don’t look every day. If the red numbers keep you awake, close the app for a few weeks.
Keep adding a bit every month. In the red months the same €100 buys more pieces of the ETF.
Keep the money you need soon in the bank. Then no fall can force you to sell at the worst moment.
Don’t listen to the news. Nobody knows when a fall starts or when it ends. Not even the experts on TV.
Questions
Can my ETF go to zero?
A single company can. For a world ETF to go to zero, about 1,300 big companies in 23 countries would all have to go bust together. And the money inside the ETF is held by a depositary bank, separate from the company that runs it.
Shouldn’t I sell before it falls, and buy back later?
You’d have to guess right twice: when to get out, and when to get back in. Almost nobody does it. The rises often come suddenly, when the news is still bad. If you’re out, you miss them.
I have a lump sum. All in now, or bit by bit?
Putting it all in at once did better about 2 times out of 3 (Vanguard research, 1976–2022), because markets go up more often than they go down. But if a fall right after would make you sell, spread it over 12 months: you sleep better, and on average the difference is small. See it with your numbers →
And if a fall lasts longer than ever before?
It can happen. History doesn’t promise anything. That’s why you never put in money you’ll need soon, and why you spread it over the whole world and not over a few companies or one country.
Now your plan
3 questions, and you see how much to keep in the bank, how much to invest in ETFs and how much to add every month.
Not financial advice. These are past numbers to help you understand. The future can go differently. Investing in ETFs means you can lose money too. Before any big decision, do your homework or talk to a professional. No ties to any bank or broker, no affiliate links.
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