UPDATE 1.25.2022: Things are getting choppy in the markets. Now more than ever is the time to focus on building a portfolio of income earning stocks and bonds that will help you weather the storm. If you need help with that, I would love to talk with you.
Originally posted September 30, 2021.
Look, I know a lot of you own Mutual Funds and ETFs, especially if you’re wrapped up with an advisor where you invest, he wins. Today, there’re maybe a handful of funds I’d put my own money into, and the same probably applies to yours. The problem is, once you set sail, it’s hard to change course. I get it. But don’t be fooled by past voyages.
Mutual Funds and ETFs are sold to you based on past performance. That’s like loading up the boat before a hurricane thinking, “well, the last trip went just fine.” Looking through the rearview mirror isn’t how you drive. But it’s absolutely how funds get sold to investors. It’s crazy.
Like annuities and life insurance, mutual funds and ETFs prey on your emotions, your fear, or greed, and yet most investors say they don’t invest this way. They make sound decisions. At least that’s what they tell themselves.
OK, then buckle up because it’s in times like these, when the water gets a little choppy, when they start looking back beyond the stern of the ship hoping to see some safety ashore. But this ship has already sailed.
Looking at NASDAQ from the trough of 2009 to today, it’s easy to forget how many investors jumped overboard. And I’m sensing the same type of panic right now as we end this quarter flat. Oh, the horror, “stocks don’t always go up?” they say. But it is horrible because three months is a long time for your lazy stocks to sit around all summer earning nothing, unlike dividend-paying stocks that actually pay you to invest. Imagine that.
Action Line: Don’t forget NASDAQ did nothing. That’s nothing, I repeat, for 15-years after the tech bust. That’s most of a retirement for many, and a result not many can afford to live with, never mind bailing out at the bottom.
