I’ve posted a Guest Blog Entry at the Barbara Friedberg Personal Finance blog. It’s called What’s the Best Age at Which to Experience a Stock Crash?
Juicy Excerpt: For young investors who have established themselves in good careers before a crash hits, the crash can actually be a big plus. Stock valuations always go to one-half of fair value before the bear market comes to an end. When stocks are priced at one-half fair value, the most likely annualized 10-year return is 15 percent real. Young investors experience small dollar losses in a crash and are then positioned to experience huge gains in the years when they are earning enough to invest heavily in the market.
Kathryn C says
Hi Rob, thanks so much for including me in your blogroll!
Just read your recent post, great point on how a crash is best for young people. The only problem is that when people get burned early and then the just sit on the site line because they’re nervous, and, they of course don’t rebalance. I see this with a lot of my friends.
But I like the point about getting the crash out of the way around 35yrs old, hadn’t thought of that….great point. So really, assuming we have a good career before the crash, in some weird way my friends and I should be thankful this happened.
Maybe I should I write the Fed, the bankers and lenders a thank you note.
Rob says
Thanks for stopping by, Kathryn.
I got to meet a number of bloggers at the Money Bloggers Conference in Chicago. I believe you were on the list, but I didn’t see you. If you were there, I’m sorry we didn’t get a chance to meet up. I plan to go next year. So perhaps we will get to talk in person that time.
Rob
Kathryn C says
I missed it this year but will surely be there next in Denver. Looking forward to meeting you finally.
Kathryn
Rob says
That sounds super!
I’m glad to hear that I didn’t just miss you. I thought it might have been my fault since I was hiding in my room during some of the big social events!
Rob