Through the 1980's, and especially into the 1990's, I was diligent about putting savings away for retirement via 401K and IRA's, as well as taxable accounts. Knowing that over the long term stock market equities returned 10% to 12% on average this is where I placed the bulk of our investments. I researched mutual funds and narrowed my choices to those with low fees and good track records. I also invested in individual stocks.
I survived the 1987 market crash just fine, staying invested and reaping the gains that followed right away in 1988. The market drop in 1990 was pretty discouraging as well--I think it was about this time that I came across the quote that titles this post, and tried to stay upbeat about the market. In other words, I didn't give up and sell my stocks at the market bottom. Indeed, the great bull market that persisted the following decade was remarkable, and a boon to our net worth. I was convinced that I was a stock picking genius. I don't know if I realized that a monkey picking stocks randomly could so as well in such a market.
The next significant bear market began in 2000 with the dot com bust. Suddenly I wasn't such a genius anymore, and tried to remember that impulse was my enemy. I had to stay patient through the next decade, a tough time for the market, including the terrible recession and market drop beginning in 2008.
In retrospect, I have weathered all these stock market ups and downs, never giving up hope, staying invested, and doing just fine, thank you. I have stayed diversified and avoided wild speculations. As I approach retirement I have modified my asset allocation to be more conservative, at least for the amount of funds I would need for the first several years of retirement.
"Impulse is your enemy, time your friend." This applies to more than just stock investing. I think it is wise counsel for many aspects of our lives. Not only does time even out the bumps in the stock market, and lead towards historical positive returns, but time heals wounds and broken relationships. It erases or tempers unpleasant memories. Have you ever done something very hard, and declared afterwards you would never do that again, only to find yourself a few months later remembering the experience fondly, and planning for the next time? Speaking or acting impulsively can have so many negative and lasting consequences. Time is such a blessing in our lives.
I survived the 1987 market crash just fine, staying invested and reaping the gains that followed right away in 1988. The market drop in 1990 was pretty discouraging as well--I think it was about this time that I came across the quote that titles this post, and tried to stay upbeat about the market. In other words, I didn't give up and sell my stocks at the market bottom. Indeed, the great bull market that persisted the following decade was remarkable, and a boon to our net worth. I was convinced that I was a stock picking genius. I don't know if I realized that a monkey picking stocks randomly could so as well in such a market.
The next significant bear market began in 2000 with the dot com bust. Suddenly I wasn't such a genius anymore, and tried to remember that impulse was my enemy. I had to stay patient through the next decade, a tough time for the market, including the terrible recession and market drop beginning in 2008.
In retrospect, I have weathered all these stock market ups and downs, never giving up hope, staying invested, and doing just fine, thank you. I have stayed diversified and avoided wild speculations. As I approach retirement I have modified my asset allocation to be more conservative, at least for the amount of funds I would need for the first several years of retirement.
"Impulse is your enemy, time your friend." This applies to more than just stock investing. I think it is wise counsel for many aspects of our lives. Not only does time even out the bumps in the stock market, and lead towards historical positive returns, but time heals wounds and broken relationships. It erases or tempers unpleasant memories. Have you ever done something very hard, and declared afterwards you would never do that again, only to find yourself a few months later remembering the experience fondly, and planning for the next time? Speaking or acting impulsively can have so many negative and lasting consequences. Time is such a blessing in our lives.
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