(10-14-2018, 06:36 PM)fenders53 Wrote: Good post rayray.
I am a GOV retiree and saw so many do exactly what you described. Take a six month beating in their 401K, then when it was too late move oll their money onto short term treasuries so they could feel "safe". Two years later they listen to their friends bragging they made $100K, then they want to move back into stocks. In one particular case an older friend invested in T-Bills for 20 years, then moved it into 100% S&P around 2007. Lost all his money, moved it back and was forced to retired with not much due to his age. It was hard to watch and I spent considerable time trying to get them on a better path. Sat them down one by one (voluntarily), projected out their personal balance in 30 years at various rates of return from 2% to 10%. Some listened, started contributing properly and allocating it correctly. Told them they couldn't cash out scared without calling me, even after I retire. (complete BS of course lol) It's a good feeling when I talk to them about 10 years later. Probably the most important thing I ever did for them in all my years of supervising. Somebody did something similar for me when I was very young.
We went to the Berkshire Hathaway shareholder meeting last year, and the biggest thing I took from the meeting was that they said most people fail at investing because they have too much emotion, one has to take all emotion out of the equation in order to succeed. Look at the numbers, only the numbers and as long as they're correct and not a lie if you buy based on the numbers a good company and hold for the very long term you can't loose, you'll make a lot of money, over the long term. Investing in the market is not a sprint it's a marathon.
Fenders, what you said, is exactly what my friend did...bailed in March 2009 and I know for a fact by 2013 he was still not in the market. And he has a finance degree from Penn State!! He tried to get me to sell too...I told him what's the point...lol
Oh...there's a good interview with Howard Marks of Oaktree Capital, he talks about emotion being very very bad for investors. I just read it yesterday. in fact, I'll read it again today...good read.