This Time Is Different

Recently I’ve had an inordinate amount of people say to me, “I am going to cash in all my investments.  Everything is crazy.  I don’t care if I miss out on the gains.  I just want to make sure I don’t lose any money.”

 

This might be a comforting move for you, but it is absolutely devastating to your long term financial wellbeing.  Things always seem crazy.  There is always a reason to sit on the sidelines.

 

To quote Sir John Templeton, “The four most dangerous words in investing are: this time it’s different.”

 

Robert 

 

The year was 1930.  Robert had $10,000 invested in the stock market.  He thought to himself, “We are in the middle of the worst economic Depression this country has ever seen.  This time is different. The markets are dangerous.” Robert took the money in cash and buried it in his backyard.  Ten years later in 1940, his $10,000, had he had kept in in the stock market, was worth $11,925.

 

Joan

 

The year was 1940.  Joan had $10,000 invested in the stock market.  She thought to herself, “We are in the middle of World War II.  I better start learning German. The economy is still a mess from the Great Depression.  This time is different. The markets are dangerous.”  Joan took the money in cash and buried it in her backyard. Ten years later in 1950, her $10,000, had she had kept it in the stock market, was worth $35,035.

 

Earl

 

The year was 1950.  Earl had $10,000 invested in the stock market.  He thought to himself, “The Communists have infiltrated our government.  I’m pretty sure my neighbor Bob is a Commie.  Nuclear war is inevitable.  More and more countries are developing bombs.  This time is different. The markets are dangerous.”  Earl took the money in cash and buried in it his back yard. Ten years later in 1960, his $10,000, had he had kept it in the stock market, was worth $44,694.

 

Paul

 

The year was 1960.  Paul had $10,000 invested in the stock market.  He thought to himself, “The stock market has been going up for nearly 20 years.  We are due for a crash. The Russians beat us to space.  We are dealing with the aftermath of the Korean War.  The new dictator Fidel Castro is a maniac and he’s a few hundred miles from our shores. This time is different. The markets are dangerous.” Paul took the money in cash and buried it in his backyard.  Ten years later in 1970, his $10,000, had he had kept it in the stock market, was worth $21,959.

 

David

 

The year was 1970.  David had $10,000 invested in the stock market.  He thought to himself, “This country is falling apart. Vietnam is a nightmare.  John F. Kennedy, Robert Kennedy, and Martin Luther King all were assassinated. The politics of this country are so polarized.  The Berlin Wall is going up. This time is different. The markets are dangerous.”  David took the money in cash and buried it in his backyard. Ten years later in 1980, his $10,000, had he had kept it in the stock market, was worth $22,555.

 

Tom

 

The year was 1980.  Tom had $10,000 invested in the stock market.  He thought to himself, “The Cold War menace is looming. Nuclear tensions are at an all-time high.   Russian paratroopers could descend from the skies at any time. Iran took American hostages and all those people were murdered at the Munich Olympics.  This time is different. The markets are dangerous.”  Tom took the money in cash and buried it in his backyard. Ten years later in 1990, his $10,000, had he had kept it in the stock market, was worth $36,813.

 

Wolfgang

 

The year was 1990.  Wolfgang had $10,000 invested in the stock market.  He thought to himself, “Saddam Hussein has us on the brink of war.  The AIDS epidemic is spreading everywhere. That nuclear power plant in Russia, Chernobyl, melted down. The Exxon Valdez spill destroyed our environment. We haven’t had a significant recession since the early 1970s.  This time is different. The markets are dangerous.” Wolfgang took the money in cash and buried it in his backyard.  Ten years later in 2000, his $10,000, had he had kept it in the stock market, was worth $49,907.

 

Bobby

 

The year was 2000.  Bobby had $10,000 invested in the stock market.  He thought to himself, “The tech bubble is bursting.  This time is different. The markets are dangerous.” Bobby took the money in cash and buried it in his backyard.  Ten years later in 2010, his $10,000, had he had kept it in the stock market, was worth $11,500.

 

Derek

 

The year was 2010.  Derek had $10,000 invested in the stock market.  He thought to himself, “We just experienced a decade with two historically awful recessions.  The economy is in ruins.  Terrorism dominates the headlines.  We are still recovering from 9/11.  It seems like there is a new attack each week.  This time is different. The markets are dangerous.” Derek took the money in cash and buried it in his backyard.  Ten years later in 2020, his $10,000, had he had kept it in the stock market, was worth $35,016.

 

Maybe this time isn’t different.  Maybe it’s time to embrace a financial vehicle that has an almost uninterrupted string of success for decades.

 

Be Blessed,

 

Dave

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