My first big mistake came with my first foray into the market. It was 1986. I hired a financial advisor and gave him the little money left after my divorce. He’d send me the monthly statements, but I tossed them in the trash, unread.
Then, October 19th, 1987, the market crashed with a vengeance… the biggest market crash since the depression. I called my broker, told him to sell everything.
He begged me not to.
“Barbara, the market will go back up. It always does,” he assured me. “And you’re going to have capital gains taxes to pay.”
I didn’t know what capital gains taxes were, but it didn’t matter. I wanted my money out where it was “safe.” Big, fat, awful mistake. The market went back up and very quickly.
That fiasco taught me well. In the 20 plus years I’ve been investing, despite living through at least 8 crashes, not just correction (when market falls 10%) , but full on crashes (when the market plunges 20%), I’m proud to say, I’ve done very well for myself. Instead of panicking, I stayed the course.
The next time the market plunges, if you tend to panic, let me give you some sage advice. Turn off the TV. Unplug the computer. Don’t look at your investments. Ignore the naysayers. Get a massage and remind yourself that the market will go back up…because it always does
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