ostrich underground
I am willfully not looking at my IRA balance, especially on days like yesterday, when the market goes down almost 700 points. I just don’t want to look. I keep telling myself that I’m young, and I’ve got many years between now and retirement. That the market will eventually go back up once this correction/crisis/whatever-they’re-calling-it-this-week is over. That my shares have a long way to fall before they’re worth absolutely nothing. I keep trying not to think about how hard I worked to finally get up the minimum amount required to finally get my money out of a money market fund and into a stock-heavy mutual fund. I keep trying not to kick myself for not leaving my money in the money market fund, because I really did have no way of knowing that the nervousness in the market at the time was going to develop into an all-out global panic. This is where the rubber hits the road when it comes to the concept of "risk tolerance." When you’re a beginning investor, as I am, and you’re learning about how all this investing works, you’re advised to consider your risk tolerance as it relates to how long the time horizon is between when you invest and when you think you’ll be able to stop working. And when investors like me are young, you are virtually told that your risk tolerance is high if for no other reason than that your time horizon is long. "You have plenty of time" to absorb the fluctuations in the market and still make gains by the time you retire. So goes the conventional wisdom.
You know what scares me? According to the news and the markets, conventional wisdom doesn’t seem to be working lately.
And I don’t want to log on to look at my balance.
And maybe I should just put my little bit of IRA money into bonds, but wouldn’t that be "locking in" my losses? And isn’t that against the conventional wisdom? You know, the same conventional wisdom that isn’t working lately…
