Alamak!
To every retail investor; theory and practical and reality on ground is so much difference.
How scary is the real cost and risk of cash to catch the next big Bear?
Once we track our investment portfolio and its cash flow generation; we will roughly know its real cost and risk of cash.
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Hi Uncle8888,
ReplyDeleteThe term FOMO seems to be misused in this article, or just having a strange meaning. I would think the more appropriate term is simply "Fear Of Losing Money".
The theory presented is simplistic .... but then this article is meant for beginners. It's kinda ok ... provided got 30 years (as indicated in the chart example) or "multi-decade horizons" as in the Buffett quote used ... and you are a psychopath with no heart or feelings.
The shortcoming of the article is that:-
(1) it completely disregards human emotions in terms of handling -20% to -25% common corrections, not to mention -40% to -60% bear markets;
(2) and that stock market returns are lumpy --- totally not like the nice "rocket-launch" exponential graph shown i.e. sequence of returns unpredictability.
But it's also good as this article shows that stock investing is still not back in the mainstream yet in S'pore (and probably in ASEAN too). Sentiments are definitely not like in 1996 or 1999 or 2007.
Whether & how much to invest also depends on risk tolerance (90% of people won't have), objectives, lifestyle required, level of income stream desired, safety of profession, job security, number of dependents, severity of dependents, timeline available, etc.
Many people can meet long-term objectives without investing --- it just requires certain tradeoffs.
A lot also discovered they can achieve comfortable retirement with just investing 20%-30% of their savings. Middle-class and upper middle-class are usually the ones. Again trade offs required.
May be FOMO is Read bite on hardcopy reading. Click bite on Internet. LOL!
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