08-18-2015, 09:13 AM
I saw that article too and admit it gave me pause. But then I remembered the single most important thing about reading financial news: NOBODY HAS ANY F-ING IDEA WHAT IS COMING NEXT. Nobody. Everybody, and I mean everybody, who tells you what is going to happen next is full of shit. It is all a bunch of guesses. If somebody guesses right, we (stupidly) think they are smart and we pay more attention to their next guess. But we shouldn't -- the next guess is just as much of a guess as the last one.
The market could triple in the next few years, or global extinction could begin tomorrow. Neither of those is probably very likely, but we can't rule them out. So what do you do? You make a plan that you think makes sense given the likely range of scenarios, and you stick to it as best you can. I think that there are credible studies showing that staying fully invested is the smart thing to do, but I nonetheless keep lots of cash. It lets me sleep well at night, and I will be ready to pounce in the next "collapse." In any case, your plan should contemplate occasional sharp down periods in the market. If you are not constitutionally able to stick to your plan during those periods, then you need to reconsider your whole intention of being in the market.
I agree with Jason -- if things get so bad that the guns and gold preppers were right, then we're going to have a lot more to worry about than our dividends. In that case, it will not matter whether your wealth is in cash or shares -- it will be meaningless. I'm betting that society will continue to function, and am with the rest of you. I'm going to continue to accumulate shares as opportunities warrant. And if a big swoon comes along, it will likely just make those opportunities better.
The market could triple in the next few years, or global extinction could begin tomorrow. Neither of those is probably very likely, but we can't rule them out. So what do you do? You make a plan that you think makes sense given the likely range of scenarios, and you stick to it as best you can. I think that there are credible studies showing that staying fully invested is the smart thing to do, but I nonetheless keep lots of cash. It lets me sleep well at night, and I will be ready to pounce in the next "collapse." In any case, your plan should contemplate occasional sharp down periods in the market. If you are not constitutionally able to stick to your plan during those periods, then you need to reconsider your whole intention of being in the market.
I agree with Jason -- if things get so bad that the guns and gold preppers were right, then we're going to have a lot more to worry about than our dividends. In that case, it will not matter whether your wealth is in cash or shares -- it will be meaningless. I'm betting that society will continue to function, and am with the rest of you. I'm going to continue to accumulate shares as opportunities warrant. And if a big swoon comes along, it will likely just make those opportunities better.