01/22/2019
One of the biggest determinants to your Financial Success long term is your ability to focus on the things you can control (increase income & savings & paying down debt & Minimising taxes etc)
It's important to adopt a phylosophy of riding through the storm which could last 5+ years at a time.
Here are some Best Principles actions for dealing with volatile housing and equity markets:
1) check your emotions and don’t sell your investments when things are down
2) do the opposite to the media when things are bad ( buy when everyone wants to sell)
3) work your plan which sees you taking money off the table when you are approaching the timing of the purpose for which you are saving (e.g. within 3-5 years of Retirement taking on a larger percentage of fixed income)
Looking at the photos, if you had invested 100,000 in a portfolio following the top 500 companies in the US back in 2007
Your portfolio would have dipped to 50,000 in 2008!
You would have had to do nothing for 6 YEARSS!!!
until 2013 just to get back to the 100,000 you started with.
Just think of how much you’ve been through in the last
6 YEARS!! That’s a long time to have to ignore the media and friends telling you to sell……
Then over the next 6 Years from 2013 to 2019, your principle would have increased by 80% to 180,000.
That’s 12 YEARS!!!! in total though. Imagine if during the 6 years the market was down you ignored the noise and bought more units...…. while prices were low…… Magic!
Stick to your plan, focus on the basic principles and take massive action, you will be okay.
