Remember those turbulent financial markets? Nah, that was sooooo last week. This is 2015 – the social media age. Big Media has already moved on to important topics like recapping the VMAs.
Since it was so long ago we think a quick refresher is warranted:
1) Nothing fundamentally changed
2) Financial markets sold off.
3) People lost their f***ing minds.
4) Big Media fed the hysteria.
5) Financial markets recovered.
Did we miss anything?
Along the way there was undoubtedly a contingent of investors speculators who thought it a good idea to live up to the “buy high, sell low” maxim. You know these people. You might even be one of them. At the first sign of instability there’s a move to the “safety” of cash. Reinvest? Sure, once the “all clear bell” is rung. (There is such a thing, right?)
Let’s pit two hypothetical investors against one another. Investor #1 represents the boring buy and hold approach. Investor #2 moves to cash whenever financial markets decline by 5% and proverbially dips his/her toe back into the waters after the “all clear” sign of a 3% recovery. This is what the carnage looks like.
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