Have you Lost all Confidence in the Stock Market?
Earlier this year, I decided to do a series of posts on getting started on investing – an investing 101 guide, of sorts. This all got started when I ran a personal finance class at work and asked the question, “how many of you invest outside of your 401K?”.
Out of a group of 30 twenty-somethings, zero people raised their hands. ZERO!
That shocked me, and I decided that I wanted to help readers overcome some of their big objections or fears on getting started investing.
The series included:
- Investing outside of a 401K: I polled readers on why they haven’t invested outside of a 401K.
- Should you pay off debt or invest? I took a look at where you should focus when you have discretionary income.
- How to start an online broker account: I discuss where to start your investment account.
- Getting over the fear of investing: I highlight the danger of not investing.
- Passive index investing: I discuss one of my favorite investment strategies for amateurs.
I’ve also covered some additional investing basics in the past:
- What is an ETF?
- ETF’s vs. Index Funds
- How to make a stock trade
- What is a mutual fund?
- How to buy a mutual fund
- Investing in a REIT
But one thing that I don’t think we’ve discussed enough is our confidence in the market.
Our generation has grown up watching the stock market lose money, as a whole, over the last 12 years. Before that, it was just expected that you could invest your money and pull in 10-12% annually, on average. Automatic, invest it and forget it, and retire a rich woman/man.
But those days are seemingly gone. Our stock markets have been heavily influenced by:
- the media
- war/terrorist acts
- institutional/professional investors
- energy prices
- political turmoil
- debt crises
- the global economy
- currency drama
- computerized trading
And watching all these manic fluctuations and no net gain in over a decade has really destroyed our confidence in investing in the market.
It just occurred to me as I was sitting and thinking about barriers to investing that this, possibly more than any other issue, is why our generation hasn’t jumped to be active investors.
So, I want to throw the questions out to you:
- Have you lost confidence in the stock market? (take the poll)
- Why do/don’t you have confidence in the market?
- What would it take for you to have more confidence in the market?