I recently wrote a Guest Blog Entry for the Money and Such blog entitled We’re All Better Off As a Result of the Stock Crash.
Juicy Excerpt: If you have one-third less in your portfolio today than you had pre-crash, you have a better chance of meeting your retirement goal in 10 years than you possessed pre-crash.
Juicy Excerpt #2: We need to assure people to persuade them to stay invested in stocks. But we cannot assure them without letting them know how important valuations are to determining long-term returns. And doing that means undermining the argument for Passive Investing, the model for understanding how stock investing works that most experts have been promoting big time for three decades now.
The Greaney Goons made an appearance in the comments section. Shadox shut them down.
Juicy Excerpt: OK, guys. Take it outside please. You may not agree with the posts, but please be courteous to my guest posters.
The right stuff.
John Walter Russell says
Rob,
Thanks for the excellent article.
I wonder how many people are going to check out the numbers on the Stock Returns Predictor.
They should. Your numbers are an eye opener.
Have fun.
John Walter Russell
Rob says
This is huge.
The primary cause of the economic crisis is that people are afraid to spend. Recessions/Depressions are primarily a psychological phenomenon.
If people knew that the price crash was in an ultimate sense a good thing, they would not be so upset. If this information could be widely publicized, it would help bring the economic crisis to an end.
Every single person in Planet Earth should want to spread the word re the investing realities.
Rob
Kevin@OutOfYourRut says
Rob–I agree with your comment that price crashes are a good thing. It levels the playing field and gives “the little guy” a chance to buy at lower prices. That’s the beginning of recovery.
It’s too bad our system is so superficially vested in higher price levels as “evidence” of strength in the economy. That just prolongs the agony.
Kevin
Rob says
It’s too bad our system is so superficially vested in higher price levels as “evidence” of strength in the economy.
Thank for sharing your thoughts, Kevin.
I agree with what you are saying here. I don’t think it has to be that way. There was a day when people thought nothing of throwing trash on the ground. Over time, most of us came to believe that caring about the environment is important. Is there any reason why the same thing could not happen re our attitudes to our economic environment?
If we all come to care about our own retirements and about the retirements of our friends and neighbors and co-workers, we never again will see the sort of bull market we saw in the late 1990s. That means that we will never again see the sort of crash that we saw in 2008 or the sort of economic crisis that followed from it.
As is so often the case, it’s up to the humans. And we have a mix of bad and good in us. We can let this thing destroy us. Or we can view it as an opportunity to rise to levels to which we have never risen before.
I’m betting on the humans!
Rob