You Are Concerned With Your Financial Future, But Most Of You Will Do Nothing About It

I hate to bring bad news around the holidays, but your retirement is just wasting away in front of your eyes. This should not come as a shock to you because you’ve been watching this happen for months now. And maybe you’ve spent a little bit of extra time in the morning watching CNBC or Bloomberg during this global recession, or feeling knowledgeable because you can tell colleagues that OPEC is going to take measure to increase the price of a barrel of oil. Maybe you’ve even checked to see how your 401(k) or 403(b) is doing on a daily basis. But you’ve sat back and done nothing about it. Actually, that’s not true at all. You’ve listened to a bunch of analysts who have told you to just weather the storm, and told you that the bottom is near, or told you that now is a great time to buy. And through all of this you have become more confused and even more paralyzed. How many of you have thought that there is no point in really acting on your investments because they’ve already gone down so far that there is no reason to think that they will go any further. Or better yet, have you just given up and said that’s it’s too late now to worry.

This post might hit home a bit too hard for many readers, but it is to help you wake up and become proactive about your investments. And your investments are directly connected to your future retirement lifestyle if you haven’t noticed already. I bet the majority of you never realized how valuable cash can be as an investment when everything is going right. I bet those 6 month and 12 month CDs are looking pretty good right now in light of the recent financial downturn.

I have learned at a young age that there are no certainties in this world. And there are definitely no certain investments that once can set and forget like a Ron Popeil oven. That means diversification, or staying away from very long term investments might be the best way to go. And if you like to listen to all of these genius analysts who say that you should ride it out, and this happens all the time, then you are probably in for a very rude wake up call. The facts show that these market breakdowns are happening at an astounding rate. There was the great stock market crash of 1929, one in 1973, the tech crash of 2000, and then the recent crash, which is far from over when the dust settles. Do you think it is a coincidence that these crashes are coming with a higher frequency than in the past? I think only the naive, or those who don’t mind lying to themselves to ease the pain.

The real questions that I would love to ask to the readers are:

• How many of you have contacted your financial advisor to reallocate your investments?
• How many of you actually have investments outside of your work-sponsored plans?
• If you have investments that you manage, do you implement stop losses to preserve capital?
• Have you ever said to yourself, “So many other people are going through this too, we must all be victims”…?

I am not here to tell you that you are going to the poor house. You don’t need me to tell you that, you may already know. I’m here to open your eyes so that you realize that while the stock market was a cool safe bet and a great thing to talk about at Christmas parties in the past, the age of publicly traded companies as safe investments is on shaky ground. You need to start doing your homework and looking into every other type of investment possible, and cutting your losses no matter what your strategy.

The most successful investors of the future in my opinion are the ones who think outside of the stock market, and use all of the amazing tools the internet has to offer to spend their time empowering themselves so that they never have to pretend that they’re a victim. And while I won’t disagree that there are some ridiculously crooked people who made most of this happen, it is your job as the investor to cover yourself. It’s called insurance. Ironic, isn’t it?

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