“I lost all my money when the stock market collapsed in 2009″.
I can’t tell you how many times this story comes up in conversation. As a Dave Ramsey Financial Coach, the subject of investing comes up often as people are always looking for a quick way to gain some money.
The power of compound interest available in the stock market is an incredible tool to gain wealth, but you have to understand how it works, what to invest in and how long it will take to accumulate.
The hesitation and fear to invest in the stock market based on either bad personal experiences or so and so’s bad experiences is incredible, so I decided to explore this area a bit for you in case you face similar concerns.
2007 is the year that sticks out in everyone’s mind, but it was the very tail end of the year that saw the beginning of the drop off.
October 9, 2007 the market peaked at 14,164 points and by year end it was at 13,264. 2008 was a stressful time, dramatized by the national media.
There were ups and downs as it lowered to 11,143 by the end of September. That is when the bottom dropped out as it plummeted to 6,626 by March 6, 2009
Somewhere in the middle of that chaos, the investors panicked and began to sell what they had in the fear of losing it all.
Realistically, if you sold at the lowest point, you lost a little over half your money.
What if we had ignored the media and the panic and decided to buy into the market when everything was on sale – which is how you should view purchases in the stock market. You don’t buy your clothes when they are full price right? You wait for a sale.
March 2009 was a blowout sale!
By December 31, 2009, it was back up to 10,428!
It took a little over three more years for the Dow Jones to get back to the 14,000 point mark in February of 2013, but it has since raced forward ending 2013 at 16,576, and resting at a record high of 17,828 as of November 28, 2014.
Now there is no way you could have predicted the highs and lows and perfect times to buy and sell throughout this period. To throw your money around trying to guess how that would have come together would take some extreme luck in a game of gambling.
When it comes to your retirement investing, don’t try to guess what the market will do. Know that it WILL go up and it will go down. Stick it out. Continue to buy when the market is down and DON’T sell when everyone else is panicking ad you will reap the rewards that compound interest will bring.
If you would like more information on this subject, email me at firstname.lastname@example.org
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My name is Tim Parady and I am 36 years old. I was born in Connecticut, raised in Virginia, had a brief layover in Kansas which led me to Texas where I met my wife and best friend. We just celebrated 145years of marriage.
I have the best job in the world, which is to improve peoples lives. I teach people how to win in all areas of there money, which affects all areas of their lives.
78% of Americans live paycheck to paycheck, with no money in the bank and little knowledge of how to invest for their retirement. You can have a different future. You can win with money and I can show you how.
I am an independent Dave Ramsey Financial Coach,and Insurance Agent at Alkali Insurance and I am here to serve you. My goal is to provide knowledge and tools to change your life. To schedule an appointment to address your financial needs and goals, email me at email@example.com