You’ve spent years building a retirement nest egg, then the market takes a nosedive. You’re down $150,000, then $250,000 or more. Now you think maybe you should change how you invest or maybe investing isn’t for you. You are not alone in your thinking.
The financial adage says, “A recession is when your neighbor loses their job, a depression is when you lose your job.”
We all think we can handle loses in the market until it actually happens to us.
“A man who carries a cat by the tail learns a lesson he can learn in no other way.” - Mark Twain
Making financial decisions alone, especially during times of market volatility, can be especially challenging. It’s easy to make the wrong choices when you see hard-earned money disappearing. But when it comes to investing, having a steady head and hand is crucial. If you make spontaneous decisions based on emotion or the ever-present ebbs and flows of the market, then you risk turning your carefully invested funds into little more than gambling money.
How do you keep yourself from becoming a gambler?
When the stock market takes it on the chin, you really learn whether you are a gambler or an investor.
-Paul R. Rossi, CFA