Is the Stock Market Down?
August 20, 2007
Did I hear someone say something about the stock market doing poorly lately? Okay, I know it’s been taking a beating but honestly I haven’t been paying that much attention.
Ignorance is Bliss?
I haven’t looked at the value of my investments since June, the end of last quarter. I haven’t checked out a chart of the performance of the S&P 500 Index in weeks. Every day I hear about another drop in the stock market on the radio but I haven’t logged into my accounts to view the damage. I know my portfolio is down but I’m not really that alarmed.
Long Term Investing
The reason I’m taking this non-chalant view of my portfolio’s performance is because I’m investing for the long term. It sucks to hear that some of our hard earned money is losing value but using history as a judge, it should eventually go back up. Markets can’t only go up forever; they will inevitably lose some of their gains. The hope is over 40 years time, they will still have an upward trend and we’re just in a little down blip.
Buying Opportunity?
As a matter of fact, we actually put more money into the market every two weeks through our automatic investment plans. Since we’re investing over a long time frame, we could actually look at this market drop as a buying opportunity. I don’t have any extra cash laying around to put into the markets but our bi-monthly investments are buying us some companies at a discount.
Investment Approach
I’m not saying that everyone should pay as little attention to the market drop as I have. Each person has their own investment approach and deals with market downturns in a different way. It’s helped that I’ve been pretty busy the past two months and so have had less time to stress out over the stock market. I just wanted to mention the fact that if you’re investing for the long term, the recent market troubles will hopefully just be a small dip in a stock chart looking back several years from now. Of course, I do hope it eventually goes back up : )
All posts by Ben Edwards
I don’t know if I’d say I’m not worried at all, I definitely don’t like my investments losing value. I guess the difference is I try not to let my concern effect my actions by selling my investments or checking their value every night. I just tell myself, I’m buying low and try and put it out of my head.
Nice to know that someone else is not worried about the ups and downs of the market. Some of my friends have looked at me like I have two-heads. It’s fun at the end of the day to see people scramble around on the news — I’ve had friends rush to the bank to pull money about of one investment and put them into another like CDs and stuff. I just shrug. I too, am in it for the long-haul. But then, I had the same attitude during the big dot.com slam. My friends were pulling money from their 401K’s because they lost 50% of the value and thought I was crazy because I just left it alone.
I wonder how they are doing with their 401K’s now. Hmm.
In fact, if more people were like you (not looking at their investment every day and contributing through a regular investment plan), the stock market would not look like a roller coaster right now! Unfortunately, too many people panic every time there is a bad news. The result is simple : too many people are selling, institutional traders are selling their position at the end of most day to save their loss (and obviously keep their job!) and market goes down for nothing!
It’s nice to hear from someone that isn’t worried about the problems in the market and really understands the long term picture.
I know you mentioned you don’t have a lot of money on hand, but adding to your portfolio at times like this can dramatically increase your return. It’s not a bad idea to look into the possibility of taking more out of your paycheck for only a month or so to add to your retirement account.