I’ve posted Entry #16 to my Investing: The New Rules column at the Death by 1,000 Papercuts site. It’s called Stock Price Drops Are Better Than Stock Price Gains.
Juicy Excerpt: Why then do we cheer price increases and boo price drops? We think of ourselves as seller of stocks rather than buyers of stocks. Our focus tends to be on the shares we already own. The owners of things being sold always want the highest prices possible to apply.
Evidence Based Investing says
You have made a great point Rob. Some writers have whined and complained about this last 10 years as a lost decade, saying that investors did not benefit from compounding of returns because the market has had 0% return over the last 10 years.
In fact this has been great for those of us in the accumulation stage of our investing career.
Rob says
Both things are so, Evidence.
The lost years of compounding have been a disaster for those who have been going with a high stock allocation.
But the lower prices do indeed help out those of us in the accumulation stage.
I sometimes get the feeling that I am playing my song in stereo and that you are listening in mono!
Rob
Evidence Based Investing says
You call it lost years of compounding, I call it loading up on stock before the next bull market.
Rob says
Fair enough, Evidence.
Rob