A lesson in investing: It’s a lot like high school. There’s ups and downs. It can be an emotional roller coaster. But if you own your bonds and stocks outright and hang in there, then there’s a graduation date—your bonds mature, you collect dividends, and you move on to the next step in life.
As if it were that easy.
It’s not easy.
One spring Friday afternoon of my high school freshman year, Your Survival Guy got off the bus looking forward to the weekend only to find my dad at his desk looking over my report card.
“What’s going on at school?” he asked.
“Not much,” I said.
“I can see that,” he said.
I played soccer, hockey, and the snare in the marching band and was having a great time.
“Your grades aren’t good enough. Something’s going to change.”
And it did.
Sophomore year, at a private school in the next town over, I was a day student. That’s where I learned about being at the bottom of the ladder, again, like a fish out of water. My bond and stock prices were down. Maturity or graduation felt like decades away. But somehow, I don’t know how exactly, I got the work done, got into college, and moved on to the next stage in life. Tough love, I guess.
Investing, like high school, can be emotional. One second, you’re in a group here, and then you’re on your own. When you’re in a mutual fund or ETF, you’re in a clique of sorts. You’re at the whim of the groupthink. The manager has to sell to raise money for those exiting, and you may be stuck holding the bag.
And with social investing fads like ESG ruling the roost, it’s amazing fund managers get anything done. What’s the goal? To make money or to play politics?
I prefer to stay below the radar, which leads me to my 7th habit of the fairly wealthy. Investing is like high school. It’s an emotional time. Sometimes, we need a course adjustment.
Action Line: I understand if you don’t recognize the need for change. I didn’t. When you’re ready, let’s talk.
Read about all of the Top 10 Investing Habits of the Fairly Wealthy here.
