Thursday, August 27, 2015

Traveling a Rocky Virtual Road

The stock market road…


Recent news provided a change from the constant barrage of political broadcasts. Enough Trump, enough Hillary, is there anything else happening in the world?

Well, as a matter of fact, yes.

For a number of nail-biting, nerve-wracking days the alternative news was not upbeat.

The stock market plunged. Plummeted. Went down. A lot.

Most people are not stock market aficionados. I, on the other hand, spent 15 years in the financial field. Market data aired on my office TV throughout the day, performing its magic as colors changed from red to green and back again, and chart lines meandered up and down. Watching too closely made one dizzy.

As a retiree my days begin with a review of the local papers, New York Times and Wall Street Journal headlines, emails, and a Facebook scan. No different than many retirees’ early morning routine. However once the stock market opens, market headlines receive a once-over.

My philosophy has always been invest for the long term. As I age my horizon shortens, but remains focused on tomorrows.

I did not panic and sell during the financial crisis years ago. Most of the clients of the financial firm I worked for also took a deep breath and concentrated on the future, hoping the crisis was not going to deplete their resources forever. They were diversified enough to avoid becoming victims of immediate impoverishment.

It took years for the market to recover and move ahead, but it did.

Now, mainly because of events on the other side of the world, the market scared us again. It is difficult to avoid feeling panic-stricken while watching the numbers in almost real-time flash on electronic gadgets while serious-sounding, alarmed broadcasters add to our sense of fear.

Sometimes it is a good thing when not connected continually electronically. Do we really need to know in real time Trump’s position on immigration, or whether or not Biden is going to jump into the race, or how the world’s stock markets are performing? Are our lives enhanced with this up-to-the-minute information? Or does it simply fill our time and clog our brains?

I want to be connected and know what is happening, but wish to manage my need-to-know.

If I panic whenever the stock market reacts negatively to events, I should not be in the market. When I cannot afford the risk, or stomach the volatility, it is time to get out. Now I monitor investments, hope for the best but prepare for, if not the worst, a period of disquieting conditions.

And should the worst occur, I know where my kids live. 

8 comments:

  1. Meryl, your last paragraph is spot on! My husband has always been a conservative investor, and I have taken more risks. There have been times when my losses have nearly made me sick, but at the end of the day, our strategies have worked for each of us. Thank goodness! As we're heading into the sunset, we're choosing safer investments, but in the end, ya just cross your fingers and toes, and hope for the best. I'll share your back-up plan with my kids...

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    1. It is interesting that your husband is the more conservative one - mine is too. Conventional wisdom states men are more aggressive investment-wise, and many are, but I think the convention underestimates women...so what else is new!

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  2. I have already converted my annuities to a monthly income, which went down by hundreds of dollars a month in 2009. It could happen again, so I make sure I don't need every last dollar to live without fear. I hear what you are saying! :-)

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    1. Smart woman. The best philosophy is never put all your eggs in one basket!

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  3. If I didn't read your blog I would have been blissfully unaware of the market plunge, so...thanks? I make a New Year's resolution to pay attention to such things every year in the way some do for losing weight or daily exercise. It doesn't happen. I get my first report, look at it, and think 'oh, a page of numbers. La,la, la.'

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    1. Sometimes ignorance is bliss. Sorry I was the bearer of bad news!

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  4. So much noise! If only we had a computer app that filtered out the noise from what's important . . . now that would save us all a lot of time and agita!

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  5. Easy come, easy go. Got out of the stock market when I retired. Live on annuities today. I see it recovered. Good!

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