July 15, 2024

Bucks: Famous Last Words: No More Stocks Ever!

Carl Richards

Carl Richards is a certified financial planner in Park City, Utah. His sketches are archived here on the Bucks blog and on his personal Web site, BehaviorGap.com.

I think when we use big words like “forever,” “never,” and “always,” as many people did when responding to a Prudential Financial survey the company released recently (Hat Tip: CBS MoneyWatch), it’s a hint that we’re headed down a dangerous road. At a minimum, we should save those words for when we really mean it.

But if you really, truly have decided that you’ll never invest in stocks again, here are some suggestions to help you keep that promise to yourself:

1. Write yourself a little note. Even better, record a little video that expresses how you feel (or felt) when you made the declaration:

2. Tell your family, friends, accountant, etc., that you will never invest in stocks again. In fact, hire an attorney to draft an agreement saying that you have to talk to three people before you ever buy a stock or mutual fund again. List those people and then sign the document, and have them sign it as well!

It’s sort of like a pinkie promise, only for grownups.

3. Avoid CNBC.

Now, all kidding aside, this is a very important issue. It’s completely fine to avoid the stock market for the rest of your life if you can save enough money to meet your financial goals. In the last four years, most of us have learned important things about the emotional toll that living through a scary market can take. It’s not un-American to stick to certificates of deposit.

But please, please remember that there will come a time when you will feel like changing your mind again. When the market gains 10 or 20 percent in a short period or your favorite stock spikes, remind yourself why you swore you would never buy stocks again. Then, go shop for a better C.D. rate.

I promise that if you sold low (out of fear) and swore that you would never buy again, the moment you feel like changing your mind will be the wrong time to buy.

Article source: http://feeds.nytimes.com/click.phdo?i=b0264885bb07dad87faeb30c62ef7dc6

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