Don’t Give Up on Your Investing
Over the past twelve years we’ve seen our share of market doldrums. The 2000 dot-com bubble that burst, the 2008 financial crisis, and now the 2011 European debt crisis and double dip recession. In fact, it’s appalling to think that over the past twelve years the market has returned almost nothing! For any non-committed investors, and even for the most committed, these times have been very trying, demoralizing, and downright frustrating. It is easy to understand why many people have thrown in the towel on investing and parked their money in savings accounts or just plain stopped investing. After all, it’s been painful being an investor!
Well, don’t give up on investing. Rather, try to change your outlook from the past to the future. The fact that the market has been stingy for so long is actually a bullish sign. Only a few times in history has a market gone this long without yielding significant gains. And most of them were fueled by depressions, not recessions. And in each case, when the market came out of its funk, it did so with a vengeance, yielding years or decades worth of gains in just a short time.
It’s time to think about the future. Things aren’t as bad as people feel. Business growth and housing markets will resume again. And, with all the cash on the sidelines, investors want to get back in to stocks. The current crisis will work itself out and the markets will continue to grow.
With that said, this investing rule of not giving up applies to any investor in any market. There will always be times when you feel beat up and like you are a loser to the market. Don’t think about what could have been if you would have sold, or about what that lost money could buy now. Instead, think about the future and how it will feel good that you are an investor during the next long running bull market.
Also, appreciate that stocks are on sale. That’s right, they’ve gotten cheaper and cheaper and are on sale. You can buy more shares today than you could in the past. Keep buying, keep investing, and don’t give up. You’re entitled to feel beaten up, but don’t leave the fight. You’ll only win if you stick with it.
Also, look at the alternative. If you give up and sell your investments to wait for better times, by the time you know the market has turned, 80% of the gains will have already come and you’ll have only realized the losses and missed the gains. That is the worst thing that you can do and that is why you have to stick with your investments and keep a long term focus.
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