Stock Market

Take a moment and think back a few short years, its early 2007, things look great. Your house has never been more valuable, your retirement accounts have been humming along and you just got a promotion at work, then all heck breaks loose. Stocks drop by more than half, your job is gone and you fall behind on your mortgage. Maybe this didn’t happen to you, but it probably happened to someone you know. I want you to close your eyes and remember, how did you feel when that happened? Were you able to keep on going, feeling good about things and ignore what was happening in the markets, or were there sleepless nights and anxiety? Were you a seller or a buyer?

During my career, there have been several occasions where I have seen folks so nervous and confused over their investments that they start losing sleep. Or worse, they stop paying attention! There was the client in 2001who handed me a stack of statements from his Merrill Lynch account. There were over a year’s worth and none of them had been opened! Turns out he had lost almost half of what was invested there.

Summer is here and you are probably spending more time thinking about barbecues and vacations than retirement and paying for your kids college. Because of that, I understand if you don’t read this, but avoiding the signs on the wall could be harmful to your wealth.

In one of the early scenes in “The Wolf of Wall Street” Matthew Mc Conaughey takes Leonardo Di Caprio out to lunch on his first day of work as a stock broker and goes into an explanation of what his job is going to be. “The name of the game is to move the money from your client’s pocket into yours” and DiCaprio replys, “If you can make money for your clients at the same time it’s advantageous for everyone, correct?” to which Mc Conaughey replies, “NO”. He goes on to explain how they get clients involved with blue chip stocks to start with and then move on to high commission high risk issues and trades them until nothing is left.