Investment Panic Doesn’t Pay

I recall during the market and housing crash of fall 2008 that many savers were running from the stock market.  As panic ensued, the strategy of “buy high, sell low” became commonplace, and those who stayed the path of regularly saving and investing in equities were viewed as risky and idealistic.  This prompted me to write two publications on how people fared in various investments.  it turned out that by 2011 those who had purchased stocks instead of selling them recovered the best.  Now, five years from the crash, a video I came across from the Wall Street Journal could not have explained it any better.  Take a look: If You Invested $10K at Dow Bottom, Five Years Ago.

Comments (7)

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  1. Matthew says:

    Panic doesn’t pay indeed. Regardless of how low the market got due to the crash, it seems that the ones who were patient and didn’t sell right away (or even purchased) were the real winners.

    • Thomas says:

      The market is always going to bounce back eventually. It is just a matter of trusting that it will and not hitting the eject button too soon.

  2. Jay says:

    Very good explanation in the video. Goes to show that buying gold to put in your safety bunker doesn’t fare as well as the ones who purchased stocks.

  3. Dickson says:

    Being embedded into the stock market is just one option. There are many other ways in increasing personal assets.

  4. Simon C says:

    It was a safe bet investing in stocks, especially in vehicles as the S&P Index fund. These vehicles carry the risk of lots of the major corporations that are publicly traded making it less risky than other investments and a larger upside. Regardless of how bad the economy performs, these companies will eventually overcome those issues. In times of crises and during periods of recovery, it makes sense to invest in such instruments.

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