That’s why it’s called a “market cycle:†it goes down AND up
Posted by: in Your BusinessIf you’ve been reading my posts, you know I’ve been talking with Bill Losey about retirement planning.Â
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.”Â
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 stated he was pulling out all his retirement funds. (He was and still is in his 50s.) He took massive losses. If he had left his money in, he would have recovered what he had lost and more.Â
Remember the fundamentals, folks: Purchase 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.Â
Warren Buffett’s words of wisdom on this subject:
Only purchase something that you’d be perfectly happy to hold if the market shut down for 10 years.Â
And
Our favorite holding period is forever. (Berkshire Hathaway?)
Tags: baby boomers, Bill Losey, market cycle
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