W2R
Moderator Emeritus
That's it, folks. The moment we've been waiting for. W2R's "Whee!"
https://www.early-retirement.org/forums/f28/record-dow-whee-30317.html
Stock market fears over the past 10 years
- Thread starter MichaelB
- Start date
OP
OP
As of the market close last night, the sum of my portfolio and bank accounts is the largest that it has ever been in my entire life! I feel like I am living in some sort of crazy delusional fantasy, but there it is.
W2R, you’re asleep and dreaming .... soon it will be time to wake up and get ready for work ... oooohhhhhh ...... oooohhh noooooooo .....
W2R
Moderator Emeritus
Yeeeeeeeeeeaaaaaaaaaaaaaaaaaahh!!!! What a nightmare I just had! But it's all gone, now.
audreyh1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Freaky, as people were saying that in 1999 too.
street
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Nov 30, 2016
- Messages
- 9,533
I have so many friends that are scared to death of the stock market. I have asked a few through the years, if they have any mutual funds etc. and they think a person is crazy to have money in the markets.
I can't imagine not being in the markets. There is no way living of off CD's, MM funds can make you a enough to even live a few months on.
Some of them are young and some are in their 60's and all working full time. Some own ranches and some working for a wage.
I can't imagine not being in the markets. There is no way living of off CD's, MM funds can make you a enough to even live a few months on.
Some of them are young and some are in their 60's and all working full time. Some own ranches and some working for a wage.
- Joined
- Oct 13, 2010
- Messages
- 10,735
That was a scary rebalance. I wrote an essay at the time, imagining doing several things. The bottom line was that the feeling of not sticking to my guns and then having it go against me would be the outcome that I needed to avoid at all costs.One Mar 1 2020 we did have a 20% decline over Pandemic fears.
It didn't last long.
Markola
Thinks s/he gets paid by the post
Major Tom
Thinks s/he gets paid by the post
+1 to all of this. So many folk are scared of investing in the stock market, because they are fearful of it going down which, of course, it will do. Helping to increase the worry is data showing the fairly long periods during which the indices moved within narrow bands, the suggestion being that investing during these periods would have been pointless. However, these sorts of fears are only really legitimate for people who plan to put all of their money into equities at once, and withdraw it all at once, at a later date. Who does that?
Most would-be retirees invest into stocks gradually, over a long period. They also withdraw gradually, over (hopefully) a long period. This realization alone should help to negate any volatility fears a would-be investor might have. Even for people who begin their investing career with a fairly large sum, and who invest it all at once, they will still be withdrawing it gradually over a long period of time.
Just as many of us have inbuilt psychologies that tend to "set" our spending habits, our reactions to short and long-term investment volatility also seem to be baked into our personalities. I think it's possible, to a certain extent, to push back against some of these built-in tendencies. I've read stories here, from people who used to be spendthrifts, and have turned frugal. Likewise, over time, I think it's possible to get used to dealing with stock market volatility. I couldn't have retired without the stock market, and am glad I learned how to live with it's various idiosyncrasies and hissy fits. I do it mainly by ignoring them and thinking of the long-term*. Probably not too different from raising a teenager
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[FONT="]I've told the story before about my neighbor, that took all his $200k out after 9-11. We were setting at his kitchen table and he brought out his investment statement, and was wondering if things were all right. I looked it over, it was all in cash equivalents, I said, you don't have any stocks, he said yes, I took it all out of stocks after 9-11. [/FONT][FONT="]That was July of 2019. [/FONT][FONT="]I said you really should have some stocks! He was hesitant I said, just get your feet wet with $10,000.[/FONT][FONT="] He has since that kitchen table conversation, missed a 67% gain in VTSAX.[/FONT]
[FONT="] As far as I know he never did buy any staocks, but he did buy a new 4 wheeler for almost $10,000.
[/FONT]
[FONT="]Oh, he wasn't even keeping up with inflation with his cash equivalents. But he is safe! Except for the $600,000 he missed in VTSAX since 9-11. I think I forgot to add in dividends.
[/FONT]
[FONT="] As far as I know he never did buy any staocks, but he did buy a new 4 wheeler for almost $10,000.
[/FONT]
[FONT="]Oh, he wasn't even keeping up with inflation with his cash equivalents. But he is safe! Except for the $600,000 he missed in VTSAX since 9-11. I think I forgot to add in dividends.
[/FONT]
Markola
Thinks s/he gets paid by the post
[FONT="]I've told the story before about my neighbor, that took all his $200k out after 9-11. We were setting at his kitchen table and he brought out his investment statement, and was wondering if things were all right. I looked it over, it was all in cash equivalents, I said, you don't have any stocks, he said yes, I took it all out of stocks after 9-11. [/FONT][FONT="]That was July of 2019. [/FONT][FONT="]I said you really should have some stocks! He was hesitant I said, just get your feet wet with $10,000.[/FONT][FONT="] He has since that kitchen table conversation, missed a 67% gain in VTSAX.[/FONT]
[FONT="] As far as I know he never did buy any staocks, but he did buy a new 4 wheeler for almost $10,000.
[/FONT]
[FONT="]Oh, he wasn't even keeping up with inflation with his cash equivalents. But he is safe! Except for the $600,000 he missed in VTSAX since 9-11. I think I forgot to add in dividends.
[/FONT]
Sad. How can smart people not appreciate compound interest or inflation? There should be a See Dick Run level book on those two concepts for every kindergartner.
38Chevy454
Thinks s/he gets paid by the post
I don't know who said it but "Compounding is the eighth wonder of the world".
Or related "Those who understand compounding, gain from it; those who do not, lose from it".
It has been attributed to some nerd...
Albert Einstein is reputed to have said, 'Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it.'
steelyman
Moderator Emeritus
“The money that money makes makes money.”
There are many roads that can lead to wealth. Stock market, real estate, gold, Bitcoin, etc. But I do know this.
It really is possible to “save” yourself into the poor house. Due to inflation and other unexpected events, if you just have straight cash for years... then you will most likely not have much left over after you are done working.
Just a question of what sorts of returns are you looking for, how hands on do you want to be, and what sort of time frame are you looking at.
I remember years ago someone did a study and found that for any 30 year period, the stock market has always done better than any other investment, over that time frame. In shorter time frames real estate, precious metals, etc might have done better, sometimes WAY better.
