Thursday, February 09, 2006

Financial Fairy Tales -- #2

Today's fairy tale: hold investments for the long term - everything will work out.

If we all just believe -- Tinkerbelle will come back.

It makes a great story --but is you retirement tied to wishful thinking -- do you just need to believe?

Those that use this lovely fairy tale to sell investments leave out a lot of the details.

Details hidden by fairy tales like these and the (reality they hide):

  • stocks always come back (even if it takes fifty years)

  • its different this time (its always different - but trees still grow - die - and fall)

  • the government knows how to control the economy (never has - never will)

  • this is a safe blue chip investment (blue chips are still gambling chips)

  • buy the dips (great in a bull - disaster in a bear)

  • buy more and your average price will be lower (think how many shares you can get at a penny each - just before they go to zero)

  • the price is down due to profit taking (who makes a profit on lower prices?)


Keep the belief in fairy tale endings for the fairy tales.

Think for yourself.

Markets do not always come back - within your lifetime. Even countries and societies eventually fail.

Mere investments are burning matches - don't hold one too long. Don't try to get that last 10%, look instead for a new speculation that has just taken off.

Use that pixie dust to fly with a new trend.


If you are to live happily ever after - prepare for sudden and long term change.


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2 Comments:

Anonymous Anonymous said...

Welcome to Panama, a country where the concept of exotic begins in its name, which means "abundance of fish and butterflies" in our indigenous language International Living in Panama: Real Estate, Beachfront Property ...Panama is an unparalleled destination for retirement, living, and investing. There is lots of excellent real estate and property, some of which is for sale, some for vacations and many for investing. Expartriates are flocking. Read about a mysterious medicine woman fifteen minutes outside of Panama City, Panama. It is a fascinating read.

9:35 AM  
Anonymous Anonymous said...

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9:52 AM  

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