Comments on: If You’re Too Scared to Invest… http://allfinancialmatters.com/2008/11/24/if-youre-too-scared-to-invest/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Sat, 11 Feb 2012 20:32:19 +0000 hourly 1 http://wordpress.org/?v= By: InvestorJones http://allfinancialmatters.com/2008/11/24/if-youre-too-scared-to-invest/comment-page-1/#comment-383964 InvestorJones Sun, 30 Nov 2008 06:13:51 +0000 http://allfinancialmatters.com/?p=2982#comment-383964 1st rule! DON'T FOLLOW THE SHEEP! This is what most people do creating a domino effect. I think its the perfect time to put your expendable income into stocks in the next couple of years especially in mining. As long as you have money to risk and don't mind losing it all then there will be no-emotion behind your investing! Thus making sure your having a clear head for which stock you want to buy! 1st rule! DON’T FOLLOW THE SHEEP! This is what most people do creating a domino effect. I think its the perfect time to put your expendable income into stocks in the next couple of years especially in mining. As long as you have money to risk and don’t mind losing it all then there will be no-emotion behind your investing! Thus making sure your having a clear head for which stock you want to buy!

]]> By: Money Maus http://allfinancialmatters.com/2008/11/24/if-youre-too-scared-to-invest/comment-page-1/#comment-383271 Money Maus Thu, 27 Nov 2008 20:54:50 +0000 http://allfinancialmatters.com/?p=2982#comment-383271 I am in my early 20's so I know I have time on my side. My roommate, who is in his mid-20's, pulled out the $10-15K he had in his 401k and put it into a money-market fund. He thinks he can time the market and will return it to stocks "when the market goes back up" - I said if he could time the market like he thinks he could, he would be working on Wall Street making A LOT more $ than he makes now... It's emotional investing and the psychology/behavioral finance behind it shows that this is the incorrect way to do it! I am in my early 20′s so I know I have time on my side. My roommate, who is in his mid-20′s, pulled out the $10-15K he had in his 401k and put it into a money-market fund. He thinks he can time the market and will return it to stocks “when the market goes back up” – I said if he could time the market like he thinks he could, he would be working on Wall Street making A LOT more $ than he makes now… It’s emotional investing and the psychology/behavioral finance behind it shows that this is the incorrect way to do it!

]]> By: Lindsay http://allfinancialmatters.com/2008/11/24/if-youre-too-scared-to-invest/comment-page-1/#comment-382645 Lindsay Tue, 25 Nov 2008 05:04:18 +0000 http://allfinancialmatters.com/?p=2982#comment-382645 Here's my question: if you're going to retire in 15 years, and the "experts" say it will take the market 5 years to recover, won't you be alright? Why worry about it? Here’s my question: if you’re going to retire in 15 years, and the “experts” say it will take the market 5 years to recover, won’t you be alright? Why worry about it?

]]> By: philip http://allfinancialmatters.com/2008/11/24/if-youre-too-scared-to-invest/comment-page-1/#comment-382548 philip Mon, 24 Nov 2008 21:06:21 +0000 http://allfinancialmatters.com/?p=2982#comment-382548 @Rich, if they follow the advice that is pretty standard then their change will not be drastic, when they retire they still have a horizon of at least 15 years or more hopefully. Therefore some of their funds should stay in stocks, and hopefully they have been slowly shifting over from stocks. If they are 100% stocks right now it is highly unlikely they will in 2 years convert it all to 100% bonds. Now try to time when they will be moving and what percentage, and how much is being replaced by higher earnings in the current generations, that hopefully are now seeing they need it. I know alot of people now do not expect to get any sort of retirement from work, and seriously doubt social security, so now we are saving a higher amount than they did, how are you going to take this into account? Then start considering the effects of inflation on the market, there will be more money available in time and to keep up with it you need to grow your money to match it. There are about a trillion other things that go into what happens, I do not have the time to study all that, or understand it, so I will go with the long term investment in mostly mutual funds. @Rich, if they follow the advice that is pretty standard then their change will not be drastic, when they retire they still have a horizon of at least 15 years or more hopefully. Therefore some of their funds should stay in stocks, and hopefully they have been slowly shifting over from stocks. If they are 100% stocks right now it is highly unlikely they will in 2 years convert it all to 100% bonds. Now try to time when they will be moving and what percentage, and how much is being replaced by higher earnings in the current generations, that hopefully are now seeing they need it.

I know alot of people now do not expect to get any sort of retirement from work, and seriously doubt social security, so now we are saving a higher amount than they did, how are you going to take this into account?

Then start considering the effects of inflation on the market, there will be more money available in time and to keep up with it you need to grow your money to match it.

There are about a trillion other things that go into what happens, I do not have the time to study all that, or understand it, so I will go with the long term investment in mostly mutual funds.

]]> By: Craig http://allfinancialmatters.com/2008/11/24/if-youre-too-scared-to-invest/comment-page-1/#comment-382543 Craig Mon, 24 Nov 2008 20:39:05 +0000 http://allfinancialmatters.com/?p=2982#comment-382543 Feat plays a large role in people's financial decisions. When trusted blue chip companies that people would normally keep long term investments in start failing, it's going to have an effect on your investing mentality. I am new to the investment game and new to the working world. I would like to get involved with investments since I am young and can put money aside for 10 yrs when the economy should get back on its feet. My question is where to specifically go into? Stocks, bongs, mutual funds? I don't know what the best course of action to go is or where to begin researching. Craig Feat plays a large role in people’s financial decisions. When trusted blue chip companies that people would normally keep long term investments in start failing, it’s going to have an effect on your investing mentality. I am new to the investment game and new to the working world. I would like to get involved with investments since I am young and can put money aside for 10 yrs when the economy should get back on its feet. My question is where to specifically go into? Stocks, bongs, mutual funds? I don’t know what the best course of action to go is or where to begin researching.

Craig

]]> By: Rich http://allfinancialmatters.com/2008/11/24/if-youre-too-scared-to-invest/comment-page-1/#comment-382532 Rich Mon, 24 Nov 2008 19:44:46 +0000 http://allfinancialmatters.com/?p=2982#comment-382532 Buy and hold is market timing! Presumably, you buy and hold for a long time like 20 or 30 years right then you're supposed to sell and convert to bonds aren't you? Isn't this a pre-determined market timing? We ALL know that 78 million boomers are going to retire over the next decade and we all know that they should be rolling their money over into bonds and away from stocks right? How stupid do you have to be to NOT realize this? Market timing isn't that hard to do if you pay attention. Buy and hold really is for losers.... Buy and hold is market timing! Presumably, you buy and hold for a long time like 20 or 30 years right then you’re supposed to sell and convert to bonds aren’t you? Isn’t this a pre-determined market timing?

We ALL know that 78 million boomers are going to retire over the next decade and we all know that they should be rolling their money over into bonds and away from stocks right? How stupid do you have to be to NOT realize this? Market timing isn’t that hard to do if you pay attention. Buy and hold really is for losers….

]]> By: matt @ Thrive http://allfinancialmatters.com/2008/11/24/if-youre-too-scared-to-invest/comment-page-1/#comment-382530 matt @ Thrive Mon, 24 Nov 2008 19:08:41 +0000 http://allfinancialmatters.com/?p=2982#comment-382530 While I think fear of actually getting into the market keeps a portion of the population out of the market, I'm not convinced that this is actually the thing that keeps them out most the time. That is, I entirely agree that once in the market, people behave irrationally and are reactionary to their fears. But prior to entry, I think lack of education and the overwhelming choice associated with entering the market are actually what drive the process. Indeed, one way to think about the fact that investors are under-performing is not that they are making bad trades, but that they aren't trading at all: a shocking number of people leave there retirement in money market accounts simply because the choice of mutual funds is overwhelming. Some great work by Sheena Iyengar and others shows this nicely and is worth a read. While I think fear of actually getting into the market keeps a portion of the population out of the market, I’m not convinced that this is actually the thing that keeps them out most the time. That is, I entirely agree that once in the market, people behave irrationally and are reactionary to their fears. But prior to entry, I think lack of education and the overwhelming choice associated with entering the market are actually what drive the process.

Indeed, one way to think about the fact that investors are under-performing is not that they are making bad trades, but that they aren’t trading at all: a shocking number of people leave there retirement in money market accounts simply because the choice of mutual funds is overwhelming. Some great work by Sheena Iyengar and others shows this nicely and is worth a read.

]]> By: Beth http://allfinancialmatters.com/2008/11/24/if-youre-too-scared-to-invest/comment-page-1/#comment-382522 Beth Mon, 24 Nov 2008 18:40:02 +0000 http://allfinancialmatters.com/?p=2982#comment-382522 Thanks for this post! It's helpful to have someone confirm what I've been thinking. Thanks for this post! It’s helpful to have someone confirm what I’ve been thinking.

]]> By: rubin pham http://allfinancialmatters.com/2008/11/24/if-youre-too-scared-to-invest/comment-page-1/#comment-382519 rubin pham Mon, 24 Nov 2008 18:23:38 +0000 http://allfinancialmatters.com/?p=2982#comment-382519 no one can time the market because no one can tell the future. always remember this when you invest your money. no one can time the market because no one can tell the future.
always remember this when you invest your money.

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