Investment Help

If you are seeking investment help, look at the video here on my services. If you are seeking a different approach to managing your assets, you have landed at the right spot. I am a fee-only advisor registered in the State of Maryland, charge less than half the going rate for investment management, and seek to teach individuals how to manage their own assets using low-cost indexed exchange traded funds. Please call or email me if interested in further details. My website is at If you are new to investing, take a look at the "DIY Investor Newbie" posts here by typing "newbie" in the search box above to the left. These take you through the basics of what you need to know in getting started on doing your own investing.

Thursday, July 10, 2014

Can You Handle Investment Risk?

Sometimes it isn't easy to take what's good for us. In the world of investments, volatility, especially on the downside, can be very beneficial if individuals can avoid jumping ship at the bottom and, in fact, keep investing on the downside.

Consider 2 graphs:



The first graph brings to mind the 2008 debacle followed by the subsequent rise to record stock prices. Graph 2 starts at the same spot and ends as well at record stock prices. Which produces the best performance for the long term buy and hold investor automatically buying into his 401(k)? Think about the buying in 2008,2009,2010 at low prices!

The point to think about is that the time path of  markets in Graph 1 that chases many investors away and into cash is in fact what the astute investor building a nest egg wants.

The whole argument gets stood on its head of course for the retiree. Having to liquidate in 2008 was a standard of living changing event for retirees.

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