Broker Check

Lessons Learned

| January 31, 2019


We all experience different feelings when things don’t go as planned.  It’s human to want to avoid pain and fear.  When it comes to investing, we all struggle with the fear of losing money, which is why we want to share some perspective.  If you don’t take it from us, take the advice of a 19-year retiring Wall Street reporter, Adam Shell, from his last article relaying the best lessons he’s learned over his career (Source: “Dow: The secrets of successful stock investing from veteran market reporter” 1/7/19). 

Respect the Market:  Shell’s first day on the job was just 10 days after the market high in March 2000, followed by 19 months of a bear market.  His conclusion after 19 years is that market up and downs are inevitable – don’t get caught up in market euphoria only to be blindsided by a whipsawing market.  By creating and sticking to a plan, you can weather the tumultuous seas and enjoy smooth sailing ahead.

Timing the Market Isn’t Easy:  Shell learned this lesson the hard way.  After, when he moved almost $80k of his 401k account into cash as a reaction to the flash crash on May 7, 2010, he never reinvested that cash.  As a result, he missed out on 10 years of bull market returns, and it cost him $123,000 in lost upside.  Timing the market requires that you be right twice – even lightening can’t do that consistently.  It’s time in the market, not timing the market that counts.

Don’t Let Your Investments Keep You Up at Night:  If each tick of the tape sends your pulse racing, causing you to worry about losing money, investing the majority or all of your portfolio in stocks may not be for you.  There is wisdom in aligning your asset allocation with how you tolerate market swings.  If you’re more wired for a conservative portfolio, accept your truth, invest that way, and move on with your life.  There’s no sense putting your emotional, mental, and physical health at risk for the latest and greatest “sure-thing.”

Beware of The Talking Heads:  The media is in the business of selling advertisements.  What would a news show be without the crisis-du-jour?  The sky can’t be falling every day, but the talking heads can make you feel that way.  The market pundits have to have a “shtick” to get air time – perma-bulls, perma-bears, markets don’t operate in absolutes.  No one has a crystal ball, so avoid the voices of doom by turning off the TV. 

What we learned from Mr. Shell’s article is that emotions can take over and mistakes happen.  In our lives, we all have examples of “Lessons Learned” on our journey to saving and investing for our future.  It is at those times that a professional advisor can be your calm and voice of reason, preventing you from making costly mistakes.  Whether you are a financial novice or an experienced investor, having a trusted partner to help you plan ahead for the unpredictable market ups and downs is a wise decision.  Life is a journey, navigate it wisely.

Reviewed & Approved: VN 1.22.19