Let The Good Times ...
roll ... end???
This content is for informational purposes only; this isn’t legal, tax, or financial advice. This isn’t advice or an invitation to buy or sell any securities or investment product. Duh.
I was recently poking around in my employer-sponsored 401(k) plan. I don’t do it much; I sorta do the whole “set it, and forget it.” You would think that the conventional wisdom is that a person should be me, watching and fiddling with investments constantly. I’ve had many a conversation with persons who do just that.
Not me.
To tell the truth, I feel a little vindicated … luck or wisdom; does it matter?
I’ve been investing since back in the olden days of Sharebuilder, which will date me. It was right before the 2007/2008 crash … I has learned from someone wiser and older than me about personal finances and investing. Being told to pay down debt and invest every penny I could, as often as I could … looking back now I’m grateful for that advice, and that I actually took it.
I would just set it and forget it. 401ks, Roths, Brokerage accounts … I had fun picking stocks back in the day. Looking for dividend payers, undervalued (in my view) companies. Sometimes I lost, sometimes I won.
When the financial crash of 2008 hit, it didn’t really bother me. I figured it was “stocks on sale” time, which indeed it was.
Today’s market.
It feels like it’s been a while since we’ve had a major correction, maybe I shouldn’t even care. If I learned one thing over the decades, it’s that I can’t foresee the future, and things go up, and things go down.
Timing the market is simply impossible and pure luck. I always find it amusing that some uncle of mine thinks he’s smarter than those billion-dollar hedge funds. Sometimes you just gotta smile and nod.
Anywho, back to the matter at hand.
When looking at my 401K for the first time in a while, the first thing that stuck out to me was the rate of return. 28.14%.
What a number.
What does that make me? An investing savant? Not at all. I suppose one could argue that, based on when you’re buying, it’s a roll of the dice and could just as well be the opposite. Not really, but you get it right?
I simply chalk it up to two very obvious things, generally accepted in the sane part of the investing world.
Vanguard
Consistency with ignorance
Whenever I see big gains like that, it does make a guy pause and wonder a little. What comes next? All that goes up must come down. Onward and forward, I guess.
You can time the market by simply doing the unthinkable. Set it, and forget it. Every month, without fail, ups and downs, just let’er roll. The last few years have been good to us, haven't they?
Will the good times come to an end? Yeah, at some point. Will things recover after that? Yeah, at some point. That is the way of the world, my friend.
The reason people don’t have any money now, or in the future when they retire or want to retire or scale back work … is usually not because of some market timing or distaster, although this is possible.
Rather, it’s the very basic fact that they didn’t set it, and forget it.
Most people fall prey to …
Not investing at all, or consistently.
Pulling in and out of the market
You won’t have any money if you don’t save money or invest money. If you insist on timing the market, changing investments a few times a year, get cold feet, or hot feet … than yeah, you gonna pay the price.
Don’t be a crypto bro.
Be a boring bro.