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Let's try a thought experiment. The Fairy Godmother wires $1B into your account at Fidelity. That's one billion dollars, just to be blunt. What are you going to do?
1. Should you invest that money into stocks (individual stocks, indices, managed funds,...) all at once? Or dollar-cost-average?
2. What are you going to do about taxes, such as on dividend distributions?
3. How are you going to feel if a month after this cash-infusion happens, your account will have declined by a mere 5%?
4. How are you going to feel if 5 years later, because of market conditions, your account hasn't budged from the initial $1B?
5. Even 0.1% of a billion is $1M. Your account might have daily fluctuations of well over $1M. How much do you earn every day at your regular-job? Every year? How would you feel about multiple years of gross salary, accumulating or evaporating in your account daily?
6. OK, so you eschew the stock market at put everything into long-term CDs, earning 1.5%/year. Years later, you survey your account, finding that (a) you paid enormous (relative to your salary) taxes, and (b) your portfolio has been lagging inflation. Despite all of that good stewardship and risk-avoidance, not to mention zero withdrawals, you have less money now, than you had at day-0. How would that feel?
To me it seems that such an "investor" would be utterly in thrall to market-conditions. He/she could do NOTHING about saving more, or earning more, to affect the outcome of his/her portfolio.
You actually have done much to solidify my point in re: your angst-ridden ‘it’s never enough’ attitude which states the more wealth one has, the less liberating it is. Nothing could be further from the truth. Those who don’t have money are those who worry about it. Low-risk investments are the best choice for those who are that wrapped and emotionally bound by what they are losing or gaining on a daily basis. It’s also advisable to take on a financial advisor when one has a difficult time removing their emotions from the investment equation.
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