
Lance's Takeaway from 'The Psychology of Money' by Morgan Housel
So I just started reading “The Psychology of Money” by Morgan Housel…
So I just started reading “The Psychology of Money” by Morgan Housel…
Lance Drucker, CLU, ChFC, President and CEO of Drucker Wealth, has been accepted into Forbes Finance Council, an invitation-only community for executives in accounting, financial planning, wealth and asset management, and investment firms.
I explain, in the excerpt below, a bit about my own financial plan and how I'm thinking about my own investments, time horizon, and future. Well, I'm writing this on March 24th, as the stock market has gotten relentlessly pounded for two weeks straight. It's brutal. Have I changed my tune from what you're about to read? Not even a little. Over the past two weeks, I've added MORE money into all of my investment accounts because I see this as an opportunity...great companies are on sale! Compared to 3 months ago- because the market is down so much- I'm able to buy more shares with the exact same dollar amount! So, (as long as I have the cash flow and don't need the money in the near term) Sign me up! Here's why time is on my side...
Many of us are living through our first REAL stock market meltdown. For myself & most of my 30-40 year old clients, we either weren't out of college yet or we weren't making enough money (and didn't have enough money certainly!) for the pain to really reach us on a physical and emotional level. So this all feels new...which makes it feel even scarier and more unnerving. I get it...and you're not wrong...it is both of those things! But, please, take the time to ask your parents what they did in 2008...and knowing what came after, what they would have changed in their investment behavior if they could? And read my post below...because, trust me, it seemed like the world was coming to an end back then...and then it didn't. This too shall pass.
People get into trouble when they let their emotions destroy their financial plans, like when they let fear push them into panic selling their investments during a stock market free-fall. This is similar to and related to the COVID-19 panic now disrupting lives and markets worldwide.