Trying to rationalize an irrational market is causing a lot of indecision and anxiety lately. Seems like many investors are having a hard time deciding whether to buy into the Bull or wait for the Bear. What are you going to do?
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Personally, I’m not selling, and I am only buying shares in my automatic investing plan for my employer’s 403b plan. I’m a little concerned about the market gains, but I’ve made a pact with myself to not sell anything for at least a year.
Posted 06 Aug 2009 at 9:01 pm ¶It’s too bad most people don’t give as much thought to managing their hard-earned money as you do Dave.
I read your blog post and agree that waiting a year to take advantage of the tax break is a good strategy. You’ll definitely reached your goal of a secure retirement, probably sooner than you think. It’s the other folks that I’m concerned about.
[on soapbox]
You’ve probably figured out by now that I tend to focus on behavioral finance and investor psychology when I watch the markets. It’s normal behavior for many individual investors to be gun shy after a bad recession, and have fears about getting back into the stock market.
When the financial media starts to put a bug into peoples head that short-term gains are irrational and unlikely to continue, it tends to worsen those gun shy investors’ anxiety, causing even more indecision.
In the long run, that indecision causes those individual investors, 401k plan participants, and other unsophisticated retirement plan contributors (my target audience) to miss out on buying stocks when they are at their lows, and perpetuate the oft-occurring mistake of buying high and then selling low.
Unfortunately, many of these individual investors give a high degree of credibility to those people specifically out to manipulate them. These investors can’t help but get caught up in all of the financial smooth talk, flashiness, gobbledygook, and abundance of titles designed to make it look like those manipulators have all of the answers.
So, I write these types of posts in order to entice them into thinking for themselves.
As you can tell by my most recent post on August 6th, what I have to say mostly falls on deaf ears. Although I’m almost always correct in my forecasts and assessments, since I’m an amateur individual not out to take anyone’s money, I guess I don’t carry much credibility.
[off soapbox]
Posted 07 Aug 2009 at 10:46 am ¶Post a Comment