That’s why it’s called a “market cycle:” it goes down AND up
If you have been reading my posts, you know I’ve been talking with Bill Losey about retirement planning.
Today I received his Retirement Intelligence newsletter/blog with a good post on a subject I’ve been meaning to talk about: The cyclical nature of the market and he did a nice job of summarizing the ups and downs over the past 80 years. His post is titled “How Fast the Markets Recover.”
One of the benefits of being a baby boomer is that we have been through a few of these ups and downs. I remember the “Black Friday” of 1987, how everyone was concerned we were headed for another depression, and how the market rebounded. I remember talking to someone at the beginning of the 2000 - 2001 stock market fall. He said he was pulling out all his retirement funds. (He was and still is in his 50s.) He took big losses. If he had left his money in, he would have recovered what he had lost and more.
Remember the fundamentals, folks: Buy low, sell high. And also remember that, since 1929, the stock market has averaged an 11% annual gain. Yes, that’s including the “Great Depression.” So think, read, listen, wait.
Warren Buffett’s words of wisdom on this subject:
Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.
And
Our favorite holding period is forever. (Berkshire Hathaway?)
Tags: baby boomers, Bill Losey, market cycleRelated Stories
POSTED IN: Boomer Businesses in Difficult Financial Times, Business Quotes, Mindset
4 opinions for That’s why it’s called a “market cycle:” it goes down AND up
Sean Kelly
Jul 17, 2008 at 4:53 pm
Hello Jean:
(I first wrote “Hi Jean,” but that sounded too… antiseptic)
I wanted to point you to a story you might want to blog about, as many vending business opportunities, licensing opportunities and vending franchise opps target small business boomers. Especially those with well-known names, like red Bull, seem like very attractive propositions: Work at home, passive income, they place and service machines, you collect the money, etc.
Here’s an interesting story you may want to share with your readers both as a warning about vending or other scams that use well-known names to add credibility, and the damage a company’s reputation can suffer by associating with the wrong people. While Red Bull spends millions in advertising and sports sponsorships to create a positive image, a bad vending franchise program has ignited a controversy involving a very angry & vocal group of investors. Feel free to link to and or quote from the dozens of comments they are leaving on franchise watchdog site Unhappy Franchisee and Franchise Pick.
Have a great weekend!
Sean
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