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  • Writer's picture Treavor Dodsworth CFP®, CPA, CKA®

#116 - Are We Spoiled Investors?

Are We Spoiled Investors?

The S&P 500 is trading at or near an all-time high currently. I was just thinking how spoiled many investors have been.

In early 2009, the S&P 500 hit the trough for the subprime crisis. Since that point, the S&P 500 has not had a double-digit decline that took over a year to recover. In early 2020, there was a pretty significant drop but it was such a quick drop and recovery that many people didn’t have time to feel it.

Most people don’t start doing significant investing until they graduate college. If you graduated college in May of 2009, you are likely about 35 years old now (assuming a traditional school track). Are we getting spoiled?

I have often wondered how the timing of where drawdowns occur in someone’s life impacts their investment sentiment. For example, if someone graduated in May of 2019 and invested for a year and then experienced the big drop in early 2020, how does that impact their future investment decisions (subconsciously or consciously)?

This is not a doomsday post (though another downturn will come at some point). I do not believe in timing the market. My encouragement is to remember the principles regardless of what you have experienced thus far. For example, invest for the long term, know volatility will come and be mentally prepared for it, and don’t let fear or greed lead your investment decisions.


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