They understand that they have a number of years before they will draw on the funds. They come to understand that stock picking and market timing are futile. They know that a successful retirement requires that they get out of CDs and money markets and stop letting inflation eat away at their purchasing power. They get that what is important are long term markets - 15 years from now - not the short term. They even come to see that the media thrives on spooking people. That's what the media does.
They grasp, it seems, that many people are, like them, in the camp of having a difficulty of getting off the launch pad and the solution may be to let an advisor do it for them.
BUT... when it comes to the bottom line, there's a "well now may not be the right time." They want to know what I think. They want me to say that the market is headed higher starting tomorrow. I can't say this. The market may drop 15% in the next three weeks.
My argument, based on history and an understanding of the economy, to look past the short run and think long term has difficulty standing up to "fiscal cliffs," "debt ceiling debates," a Europe that makes our debt problems look trivial, and, again, a media that thrives on hammering home any negative minutiae.
But today, maybe what they are looking for is coming. As the media has hammered home the negatives, getting the average investor or even a lot of professional fund managers looking in one direction, positive surprises (gasp!) have snuck up on the manufacturing front and on the energy front. Politicians have shocked the pundits and shown an affinity for kicking the can repeatedly down the road when their you-know-whats get closer to the fire.
So the worm has turned. CNBC has even started a countdown to the number of points needed for the Dow Jones Industrial Average (DJIA) to reach an all-time high. Imagine that headline. As the market continues higher, we know that fear will morph into greed. It will look like Wall Street is giving away money. This is the cycle. This is when the "failures to launch" get their nerve up. BUT, stocks have risen 16% in the interim. Instead of paying $100 for that jacket last month, they are now looking at a jacket that cost $116.
If the DJIA does reach an all-time high in 2013, you can bet people will flood into the market who have no business being in. And, very likely, they will feel smart for a while and give themselves high fives. This story is so old it must be in the Bible. Buy high/sell low.
But it isn't all bad. Advisors also have those they helped launch. And that makes it worthwhile.