The stock market took quite a tumble last week. I instantly flashed back to October, 1986, the first time I invested on my own. My broker would send me all these reports and statements, which I didn’t understand, so naturally, I threw them away.
A year later, October 1987, the market crashed…big time! I freaked out, called my broker, insisted he sell everything. He begged me not to.
“The market will go back up,’ he said, “It always does.”
Of course, I didn’t listen. I wanted my money in cash, where it was ‘safe.’ Sure enough, within days, the market rocketed back up. If I stayed put, I’d be a lot richer now. But I learned my lesson.
Fast forward, 10 years later. October, 1997. My book—Prince Charming Isn’t Coming—had been published. I knew a hell of a lot more about investing. The market crashes again almost to the day.
This time, I’m on the phone, first thing in the morning, calling Schwab. My now 2nd ex-husband was upstairs, pacing the floor. He got very nervous when stocks fell. My teenage daughter comes downstairs, sees me on the phone, asks me what I’m doing.
“I’m buying stock” I tell her.
“But Mom,“ she says, “The market’s crashing.”
“No, Anna” I say. ”It’s a sale!”
I had learned my lesson: Price swings only matters when you sell. Everything else is just ‘noise.’ You know, the sound of the market doing what markets are supposed to do… up, down, up, down, boing, boing, boing.
I finally understood that eventually the market would go back up. I didn’t know when, but I knew it would. It’s called the Rule of the Roller Coaster: You only get hurt when you jump off.
Has recent market action caused you to panic..or add to your portfolio? Leave me a comment below.
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