Four tips for riding a seesaw market by Laura Rowley
One of the best ways to handle market volatility is to have a good investment strategy – to understand that successful investing is based on the long-term gains of the market. Remaining focused on this idea, you should be less susceptible to irrational fear.
I just don’t want to be one of those people who buy stocks with unbridled enthusiasm when the stock market is doing well but sell out when stock prices decline. Logically, that’s the worst thing you could do. The slogan is not buy high and sell low – it’s buy low and sell high. Smart people can be stupid investors when they let irrational emotions rather than intelligence guide their decisions.
Nobody knows what’s going to happen in the future, but studies based on the past performance of the S&P 500 have found that since 1925, the chance of losing money over a year is 28 percent; over 5 years, 10 percent; over 10 years, 3 percent; and over 20 years, 0 percent.
Get off the spending treadmill by MP Dunleavey
Living below your means seems to be a crucial element in accumulating investments. If you spend so much money that you can’t invest, you will never have money work for you via the mechanism of compounding. In this article, Dunleavey discusses the temptation to spend money to keep up appearances with your peers. As mentioned in this article, several people have taken frugality to the extreme to break out of this spending spree.
Some of her suggestions are fairly obvious. Don’t be greedy and jealous. Don’t be superficial and let what other’s think of you guide your spending patterns. I am probably being a little more harsh than Dunleavey. Yet, it seems that a lot of the overspending mentioned in this paper is based on insecurity and greed.
Sadly, as retro and pathetic as keeping up with those mythical Joneses may seem, more people get themselves into financial hot water by coveting their neighbors’ flat screen (hello!) or fully loaded Mini Cooper than most of us are willing to admit.
The best financial advice ever by Liz Pulliam Weston
In this article on MSN, Liz Pulliam Weston shares the best financial advice from experts and readers alike. The one I really liked was… “Keep living like a broke college student for as long as you can.”
Maybe its because I am still in graduate school and still living like I did in undergrad. But as I think about this advice, it makes a lot of sense. I am comfortable living like a college student because I am used to this lifestyle. Once I get a taste of luxury, I would probably be disgusted with the way I live – my dinky rental house, my small TV, my 14 year old car. But since I am used to these things, I am satisfied with my current standard of living.
When I do get a job, maybe my goal should be to maintain my current grad school standard of living.
Garret Bonnema 