How disconcerting is the market? I’d take 12% gains for the year, any year. But the same in the first quarter is something to think about. I’m hoping I’m mentally prepared when the next fall comes. I held on last march – in fact, I’m surprised how little it bothered me.
Much of that has to do with reading and watching enough Bogle, Buffett and the likes of them. We bet on American resilience. We realize that over a larger time horizon, a year or two of recession is a blip, an opportunity, a sale. Of course, one has to be prepared – an emergency fund, a secure job (make yourself as indispensable as possible), a prudent lifestyle.
We’re incredibly fortunate we’re participating in the market. Not every one is. I have friends and family who aren’t – either because they do not appreciate how incredible it is to have your dollars working for you, or because they simply don’t make enough to save.
But to a large extent, I think it’s because, and I heard this from a wise person recently, it used to be that Income – Savings = Expenses, now Income – Expenses = Savings.
On a more philosophical note, I really like this from Einstein:
“A quiet and modest life brings more joy than a pursuit of success bound with constant unrest.”
If you like this, you’ll like these as well.
When I first started this post, it was going to be about how I’ve noticed the market surge most mornings. VTI was up 0.41% within the first hour, having ended the prior day up by 0.36% (see VTSAX).
I actually like that VGT (the tech etf) fell as VTI rose. It tells me that the non-tech companies in VTI are doing well. Likewise, I also like VTI and VYM (dividend etf) outpacing the S&P500 index. They are indicative of small cap companies and value stocks doing better then the index.
Of course, all that changed a few hours later.
If this volatility is unnerving, it is perhaps best not to look at the individual companies that make up these funds.
Update, next morning: The market surges again, first thing in the morning.
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These are the funds we own (except VBTLX and VTIAX). We also own FXAIX, which is Fidelity’s version of VTSAX. I like seeing both VTSAX and VTI together because VTSAX shows me what happened the previous day, while VTI is live. I also like to see how bonds and int’l are doing so I have VBTLX (bonds) and VTIAX (int’l) on the watchlist.