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Market Conversations with a Co-Worker

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"Have you Seen the Market Today?"

... That's how my co-worker started a pretty simple conversion about a week ago. She knew I was a personal finance blogger (I didn't tell her which one), so it was a completely reasonable question. Yet, I froze like a deer in headlights.

I remember thinking, "I should have seen the market today." I should have seen it yesterday and the day before. I should have at least seen it in the last week, right? Well, I hadn't. So I went back a month... Nope, nada, no clue how the market had been doing in that time.

My next thought, "I'm the worst personal finance blogger in the world." (Readers are frantically nodding their heads right now). "I should just hang up my keyboard and retire."

Before I go with that drastic action, I figure it's worth asking myself why I haven't been following the market. I came up with a two reasons why:

  1. I've reached a point with my financial situation where the market doesn't effect me much. If the market goes up or down 1,000 or 2,000 points today it doesn't really impact my lifestyle much. I'm fairly comfortable with my contracting gig, and the websites that I have on the side are not directly tied to the market. I don't know how to express that liberating that can be after being a software engineer in 2001 when jobs were few and I had no other income as a safety net.
  2. I've lost faith in the market. When I look at the market today, I see it almost exactly where it was 10 years ago. Sure there have been ups and downs in that time, but for the most part it is a lot of running in place. I know I'm in for the long haul, but it seems more and more that I can't rely on the stock market to double my money every 7-10 years. Maybe it will happen. Maybe it won't. As Angel said to Buffy the Vampire Slayer, "I'll start working on a second front. Make sure I don't have to use it."

In the end, my response to my co-worker was, "I hope the market went down. I want it to go real low so I can buy in for a recovery." Hey, what else would you expect me to say? I'm only 34 and not likely to be using that money for some time.

Posted on July 1, 2010.

This post deals with:

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Investing

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3 Responses to “Market Conversations with a Co-Worker”

  1. benjamin bankruptcy says:

    I hate all the chat about “what the markets doing” and the way the media commentates it like it’s sport. You don’t check the price of you house in real time 50 times a day? Who gives a sh%^ about the “market”. I’m kinda like Mr Buffet (not at all but I like this quote) “I buy share like I don’t expect the market to open again for 25 years”. Most of my shares I bought because I really liked the company and I thought they provided a great product or service and they were financially stable (ie they’d made a profit for at least 7 years). Then i don’t really care about what happens today I just want to be a part of it.

  2. I am a long term investor but I’m NOT getting any younger (and you know it…. ;) ). Well, to be honest, this market is being run by traders. Or it should be. It’s crap. As you say, it’s exactly where it is a decade ago. So long term investors have been shafted. But heck, if you’re a market trader, you should be in heaven. The volatility has offered you many opportunities to make glorious money.

  3. Rob Bennett says:

    You should never apologize for not knowing what the market has been doing lately, Lazy Man. You should brag about it. You should have said “I’m a personal finance blogger, I’ve learned never to pay attention to the stuff that the media focuses on.”

    That said, I agree with one change with SVB’s comment that long-term stock investors have been shafted. The change is that it would be more accurate to say that any long-term investors who invested in stocks at the prices they were selling at 10 years ago (and there were millions of us!) shafted themselves. It was virtually impossible that stocks would do well on a long-term basis starting from the prices that applied 10 years ago.

    The conventional media gets it 100 percent wrong. They obsess on the short-term, which is 100 percent unpredictable and thus would be better ignored. And they pay just about nothing attention to the long-term results we are likely to obtain starting from the various price levels, which is highly predictable and which is the one piece of information that every stock investor must have to invest effectively.

    I hope this blog entry encourages people who are giving thought to leaving the conventional investing advice behind to actually do so. It has failed us all big time, in my assessment.

    Rob

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