You want to do what you’ve dreamt about, right? Well, a client of mine is doing just that while on sabbatical, as he cleans up his gardening shed, and spends more time helping his parents get their estate in order. He’s doing the things we always think about but have a hard time actually doing. We laughed as I told him my clean garage thanks him for the inspiration.
One of the topics we covered during our conversation was “the greater fool theory of investing”—how investors believe someone will buy their stocks at a higher price. That’s a sucker’s game. That’s not investing, and right now as fears of the coronavirus infect the stock market, we’re seeing how many investors pray at that altar.
Instead of focusing on important tenets like Ben Graham’s “Margin of Safety,” the “believers” are leveraged to the hilt on margin and coming up empty.
Listen, investing isn’t supposed to be fun. It’s not supposed to be a game or a hobby or something you “pick-up” in retirement.
For many of you, your best investment has been in yourself and your career.
It boggles my mind that retirees believe they’ll pick-up investing when it’s never been part of their professional lives. Does the average retiree pick up law or dentistry?
Bad stuff happens in life. Whether it’s a coronavirus, the real estate meltdown, the tech bust, or what have you, stocks don’t always go up, up, up.
But, when you-know-what hits the fan, oftentimes, dividends continue to be paid, and you, the patient investor, can snap up more shares than you did the previous quarter.
I don’t look for the markets to do something. I don’t look to the future hoping stocks go up. There’s enough to think about today, and there’s plenty to learn from where we’ve been.
Before my client gets back to work in the C-suite running a Fortune 500 company, he’ll continue to add monthly to his stocks according to his plan—one he figured out well before he decided to clean up his gardening shed.
Read my entire series, Coronavirus Infects Stock Market here.
E.J. Smith - Your Survival Guy
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