Billy always convinces me to buy and sell stocks at the perfect time. He must be a billionaire because he always asks me to give some of it up as he probably doesn’t need anymore. When there is a selloff in stocks, he tells me to follow because that’s probably when the market is at its bottom; while the opposite is true too because he always tells me to buy stocks when everyone is optimistic, signaling a top in the stock market.
A few years ago, 2003 to be exact, Billy told me “It’s time to sell your stocks. Look at your negative returns. Cash out your index funds because you should put your money somewhere else.” He is really good because the next few years turned out to be great for the stock market. A couple of days ago when everyone was selling stocks, he tries to convince me again to sell because we needed to join everyone else. He must’ve seen yesterday’s big move up coming.
Billy is truly my friend because he doesn’t want me to suffer the pain that I endure because my stocks are going down. So, when fear is at its maximum signaling a bottom, he convinces me that I should sell just to get me that temporary relief.
Today though, I decided to start ignoring Billy. Although I appreciate his friendship and advice for the past 20 some years, it is not making me rich. In fact, even though he’s a billionaire, I’m still working hard for a living. I have most of my life ahead of me, and I cannot keep listening to him anymore.
I need to think long term for my investments and ignore market fluctuations. I want to be wealthy, but not busy. I want to live happily, and not miserably. I need to stop being silly, and definitely not listen to Billy.
This is an entry for Moolanomy’s personal investing story book giveaway. Head on over to find out how to win one of five investment books.
Editor's Note: I've begun tracking my assets through Personal Capital. I'm only using the free service so far and I no longer have to log into all the different accounts just to pull the numbers. And with a single screen showing all my assets, it's much easier to figure out when I need to rebalance or where I stand on the path to financial independence.
They developed this pretty nifty 401K Fee Analyzer that will show you whether you are paying too much in fees, as well as an Investment Checkup tool to help determine whether your asset allocation fits your risk profile. The platform literally takes a few minutes to sign up and it's free to use by following this link here. For those trying to build wealth, Personal Capital is worth a look.