Reply #5: Giddy when the numbers go up [View All]

[Warpy]

and despondent when they go down, investment is not for the faint hearted.

Just realize that no matter what those numbers say, you own exactly the same thing whether they're up or down. Unless you're planning on using that mutual fund for collateral to go more deeply in debt, the numbers are largely meaningless at this point.

Selling in a panic when things are going down is just as foolhardy as buying when it looks like a bubble market is going to last forever. We're in serious trouble all over the world because too many people did the latter. Bubbles burst. Bear markets don't last forever (although it feels like it).

The market still has a lot of room to go down before we are rid of Stupid, and I think it will. While it's tempting to pull your money out now and stuff it into a mattress, don't forget you'll have to pay fees on the way out and on the way back in. You'll not only lose what you've lost in terms of paper value, you'll have lost real money in fees and that money in a mattress not only won't be earning anything in terms of interest, it's a thief magnet.

If you're still under 50, sit tight. If you're over 50, make sure you're well diversified and sit tight.