Comments on: Three Investing Lessons Learned the Hard Way

By: Lazy Man

Lazy Man — Sat, 28 Mar 2009 03:26:31 +0000

http://www.lazymanandmoney.com/does-diversification-still-matter/

By: averageguy

averageguy — Fri, 27 Mar 2009 22:38:31 +0000

I am 60.

In less that two years, my assets declined 50%.

Save save save, then what? Reminisce about my old 401k statements?

By: Glenn

Glenn — Mon, 02 Mar 2009 21:22:57 +0000

My TSP is lower now too. I try not to look at it. They sent an update in February. Still, historically it is a good bet. I use the 2030 fund that automatically gets more conservative the closer you get to retirement.

By: Jon

Jon — Fri, 27 Feb 2009 15:33:41 +0000

I’ve felt the same way recently. My son is in the military, and has a TSP, plus some outside investments in a Roth IRA. Given his age, 21, both I and my financial planner recommended that he go very “aggro”. Unfortunately, timing wise, he began putting money away in these accounts at the peak of the market, and now it appears that he’s “lost” around 40% of the money he worked so hard to earn. I’ve encouraged him to stay the course, and let time and the economic recovery to come work its magic, but with all the doom and gloom in the media I’m having a tough time remaining convinced that this plan will work.

By: Writer's Coin

Writer's Coin — Fri, 27 Feb 2009 12:53:21 +0000

I think the most helpful thing I’ve used to help me get over the mental part of “losing” all the money that’s been lost is knowing a bit of history.

This has all happened before, only this time it’s happening to us. That has comforted me many a times. As much as the media spins it as this being catastrophic and life changing and “we will never recover,” it’s not true.

The market will recover and in 50 years maybe another event like this will happen.

That’s life.

By: plonkee

plonkee — Fri, 27 Feb 2009 12:28:02 +0000

I agree that your wife hasn’t really lost the money. Stuff like this is one of the reasons that I always avoid giving short answers when people ask what to invest in. And bite my tongue when they make choices that are too conservative for their life stage. It’s really hard to ascertain someone else’s risk tolerance without going into in in depth, and really easy to assume that they understand things in the same way that you do.

By: Manshu

Manshu — Fri, 27 Feb 2009 03:02:59 +0000

If you have age on your side then the current downturn shouldn’t be too much to worry about. I think in a few years time people who didnt invest at this point will regret.

By: thisisbeth

thisisbeth — Fri, 27 Feb 2009 00:52:30 +0000

I’ve lost thousands, and while I’m partly frustrated it, it’s tempered by the fact that I won’t be needing this money for 30+ years. In fact, I’m a little deflated that I might have to decrease my retirement contributions a bit in order to buy a house this spring. I’m trying to rearrange a budget that doesn’t require less into retirement, and will try to cut back nearly everything else before retirement. (I can’t cut back *everything*, because some things are still very important to me, like my charitable contributions. It’s a personal thing. Beyond that, I will need to have some fun, I’ll just have to cut it back.)

By: Eric

Eric — Thu, 26 Feb 2009 22:03:02 +0000

Great post Lazy Man. It can be very frustrating when everything you have been preaching momentarily comes back to bite you.

However, I would be cautious using the word “lost.” In reality, you and your wife still own the same thing (same amount of shares, etc) but the value has gone down. You haven’t actually “lost” until you sell it. Once the market comes back you will be right where you were.

By: Roger

Roger — Thu, 26 Feb 2009 17:14:33 +0000

Three very good lessons. I hope that your wife will stay the course, keep investing, and look back on this as a temporary set-back in your long term plans (or perhaps even a chance to get more shares of the stock funds at a cheaper price). Good luck to both of you.