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Thought It might be interesting to hear stories of how you got started investing for yourself and maybe share what problems you've encountered or struggles your currently dealing with when it comes to investing your own money.
Thought It might be interesting to hear stories of how you got started investing for yourself and maybe share what problems you've encountered or struggles your currently dealing with when it comes to investing your own money.
This comes up frequently on the Investment forum. The synopsis is, that reasonable people can train themselves to be patient and to refrain from rash or emotionally-driven decisions, such as selling into a bear-market. But even so, this feels awful.
The more money that one has, the larger the ratio of one's portfolio to one's income, and therefore, there's progressively less that we can do, to save more and to recoup market-losses by more assiduous savings. So, the wealthier that we become, the more dependent we are on the market, as opposed to our own wherewithal as salaried employees. This is nerve-wracking.
Also, with longer life-expectancies, even say a 60-year-old might need to plan for 30+ years in retirement (or longer). This means that we never quite reach an age where we can coast, rotating into low-risk/low-volatility investments.
None of this insinuates that success in investment is impossible, or a fool's game or attainable only to a select few. But it does mean that accumulation of money is NOT liberating at all! On the contrary, it elevates our angst.
When I was a child, my father suggested that I buy a few shares of Consolidated Natural Gas, as the dividends were greater than the interest in my savings account. After the share price declined over a period of months, I asked my dad what I should do. He said to buy more shares, as the price was low, so I did. The share price recovered, and continued to increase while the dividends stayed high. This initial experience may have been the key to my later investment success: buy low, sell high. If I had reinvested the dividends like my father, I would have done even better.
After I got a better job and moved back home to save money, I continued to buy utility stocks. I sold the stocks in order to buy land, where I later built a house. As I was paying off the mortgage, my research led me to putting money into an IRA, which I converted to a Roth IRA when that became available, and into Deferred Compensation. I went with 100% equities: S&P 500 Index Fund.
Problems and Struggles? There really weren't any. I kept contributing during the Lost Decade (2000-2009) while others were selling. As my net worth continued to increase, the dollar change due to stock market volatility increased. For instance, when the stock market temporarily dropped early in the Trump presidency, my net worth decreased by about $100,000. Did this bother me? No, not really, and it has more than recovered since then.
If you have the faith, then successful investing is really no different than running laboratory analyses (I did that for nearly 40 years before retiring). If you follow the instructions, you get the desired result.
...Problems and Struggles? There really weren't any. I kept contributing during the Lost Decade (2000-2009) while others were selling. As my net worth continued to increase, the dollar change due to stock market volatility increased. For instance, when the stock market temporarily dropped early in the Trump presidency, my net worth decreased by about $100,000. Did this bother me? No, not really, and it has more than recovered since then.
That it "didn't bother you" is a testament to your indomitable character, perhaps. Less well-composed people, such as myself, would definitely be bothered - even if our investor-behavior remains relatively healthy. If my net-worth dropped by $100K over a short time - and this has happened several times - I'd not exactly be feeling cheery, or even philosophical.
Quote:
Originally Posted by mshultz
If you have the faith, then successful investing is really no different than running laboratory analyses (I did that for nearly 40 years before retiring). If you follow the instructions, you get the desired result.
There are many ways to fail to run the lab analysis, even if you're well-trained and have good equipment. A blunder is always possible. Technical malfunction of the equipment. Impure ingredients. And the instructions are rarely perfect; they make assumptions, introduce imprecise qualifiers, misuse jargon, skip steps that the author deems to be obvious, but which ought to be articulated.
To give a practical example, consider the concept of diversification. A classical concept, no? One aspect of it, is international investing. If over half of the global stock market is outside of the US, then why should US-based investors ignored international stocks? But to have kept any significant international allocation over the past dozen years, would have resulted in substantial underperformance. The instructions were followed... with disastrous results.
Those who have done well, need to pause, and to acknowledge, that a large portion of their success has been pure dumb luck - a factor that's notoriously hard to replicate.
Thought It might be interesting to hear stories of how you got started investing for yourself and maybe share what problems you've encountered or struggles your currently dealing with when it comes to investing your own money.
are you posting this on all the senior forums ? this is on another forum too .
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Pains & Struggles of Investing
Thread starter
kylewright
Start date
Monday at 4:07 PM
#1
Hey Everyone!
Thought It might be interesting to hear stories of how you got started investing for yourself and maybe share what problems you've encountered or struggles your currently dealing with when it comes to investing your own money.
My mother is retired and has money, she just lets her financial advisor handle everything and she's happy as a clam.
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