A lot has happened since my last post in early October 2015. Less than a month later, my dad passed away after a 3-year struggle with cancer, but I had been fortunate enough to be able to spend a lot of time with him in those final months. (As an aside, if a person does not choose to do a lot of reflecting during times like that, trying to ignore the reality of death, then I would argue that he’s missing out on some monumental life lessons.) So yes, I had to ride out a personal storm, but I also learned and was reminded a lot about life in general.
It was certainly not a time when I reflected much on investing, at least unless I was forced to. It seemed so trivial to be thinking about money and possessions during that time – personal relationships are just so much more important – yet I had to be jerked back into the reality of considering what happens if one does not make proper financial plans before they die.
This happened not long after the funeral when my mom and I visited her investment advisor to remove my dad’s name from their investing accounts and to transfer his holdings into hers. My dad had never taken the initiative to take care of anything financially, and if it was not for my mom, they would have gone broke a few years into retirement. As we sat in that office, her advisor was showing us the investments that this advisor and my mom had selected over the years. I was impressed at how her patience during many a stock market storm had paid off handsomely for her and my dad. No matter what financial news was threatening to tempt her to jump ship over the years, she held on for dear life and a couple of investments in particular managed to multiply their money. She now lives off of a certain amount from dividend payments in addition to her government pensions, and without the former she would be living below the poverty line.
Another time that I was forced to think about investing was during the recent stock market storm that started to brew last fall and tossed the most sea-sick investors out of the boat in early February, at the storm’s peak. I won’t lie: I considered jumping ship myself a few times, considering the sale of a few stocks and even a couple of times considering selling it all, wondering why I was choosing to be a part of this insanity.
But having been sufficiently indoctrinated by the teachings of long-term investors, including the likes of Warren Buffett and The Motley Fool, I still felt like an idiot but held on anyhow, wondering how little I might have left on board once it was over.
Much to most everyone’s surprise, the storm died down in early February and the market started to make solid gains. This current earnings season has shown how rough the storm was for some companies whereas others proved how well they could endure. In the past few weeks, several companies on my radar have reached new 52-week and even all-time highs. Despite oil prices. Despite geo-political tensions. Conversely, some of them have reached new 52-week and even all-time lows. But it appears as though the winners are outnumbering and outgaining the losers.
So how about you? Did you ride out the recent stock market storm, reminding yourself that no storm lasts forever? It was by no means as bad as others that have happened, but it was hard for a lot of people since not much bad has happened in the market for several years. We’ve had it good, historically speaking.
If you managed to hold on, the reward has been what I have mentioned, several companies reaching new highs. But if you decided to jump ship and sell most/all of your holdings, how are you feeling now? Is this the first time you did this or is this yet another in a long string of failures? If the latter, what will you resolve to do differently next time? Or was it the same thing you resolved the time before but you didn’t stick to it because the waves looked too ominous?
If you did jump ship, take heart: for most people, there’s usually more time, another chance to do things right the next time. If this describes you, now’s your time to dry off, get your bearings, and hopefully this time educate yourself tenaciously about the merits of taking a long-term, hold-on-at-all-costs approach and staying the course instead of being swayed by the storms of life.