When I ask people, “What do you think about the stock market?” The most common answer is: “Oh, man, I lost a fortune in 2001 and it was even worse in 2008. The stock market is dangerous.”
It’s funny how human beings perceive the world. We naturally remember the bad stuff and edit out the good stuff. I guess we are hard-wired that way.
Yes. The S & P 500 was down 12% in 2001 and 22% in 2002. And yes, the S & P was down 36% in 2008. I don’t want to minimize that. (Source: http://pages.stern.nyu.edu/~
BUT, what about the other years since 2001? Let’s take out 2001, 2002, and 2008 and look at the other years.
2003 UP 28%
2004 UP 10%
2005 UP 5%
2006 UP 15%
2007 UP 5%
2009 UP 26%
2010 UP 15%
2011 UP 15%
2012 UP 16%
2013 UP 32%
2014 UP 13%
2015 UP 1%
Why doesn’t anyone talk about 2003? Or 2009? Or 2013?????
Why do our minds automatically gravitate toward the down years? I don’t know. I’m not a behavioral psychologist.
So next time someone asks you, “What do you think about the stock market?” you need to say, “Man, I made a ton of money in 2003, 2004, 2006, 2009, 2010, 2011, 2012, 2013 and 2014.”
People will probably look at you funny.
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