Investing Lessons from the Greatest Generation
I lost my dad about two years ago. The picture above is my dad, on the left, and my uncle, in 1945 after the end of World War II. As anyone who's lost a parent knows, the loss can feel fresh every time you think about it. Still, I was luckier than most. My dad lived until 96 1/2. Astoundingly, we are less than two years from what would have been his 100th birthday.
Let's get one thing out of the way before I go on. I'm no millennial, but I am not 70 years old either. I will turn 50 soon enough, though. My dad set his career in place after returning from the war in Europe, and started a family late. Funny thing is, we pretty much did the same thing - I only beat my father in becoming a father myself by five years.
Like many folks who grew up during the Depression, my dad was a saver for the rest of his life. Happily, his saving included investing. I think my father first invested in the stock market in the early 1950's. He didn't even have a broker for most of his investing life, he just purchased shares directly from companies, and he did it on a relatively consistent basis until he retired at 70 (he worked until I graduated from college). Do you want to know how many times my father sold stocks as a result of market disruptions? Zero. No times. None. Why? Did he know the statistics regarding the success rate for investors who try to time the market? Perhaps. He was an engineer, after all, but truth is, I never thought to ask him. What he did know, however, is that it can always get worse, and that even after it's bad, even really bad, life goes on. People figure it out, things change. Think about the historical events he saw from 1922 - 2018. He knew that previously successful companies may not have the same level of success, and that new and different companies will surprise with their ability to take advantage of the changing world. He understood the only way to participate in the process is to save, invest, and remain invested. In fact, I'm quite sure that the greatest, "losses," he experienced in his portfolio were a result of the fees he paid the investment advisor that I recommended he get after I started working on Wall Street myself. Mea culpa.
Hopefully, you've a prudent, well thought out plan in place. If so, your plan takes into account your age, goals, family situation, etc., AND the knowledge that market disruptions happen on a relatively regular basis. As a result, while you will be understandably concerned about the economic impacts of, in this case, COVID-19, and the health of your loved ones, you will know that your plan was designed to defend against one of the worst reactions we can make to market upheavals like what we're currently experiencing, which is panic selling & making decisions based on emotion rather than objective analysis.
I have no idea how long the economic effects of COVID-19 will be felt, what the governmental response will be, its timing, or what the market is going to do. But, as I mentioned in my previous post, I know that whenever I've tried to outsmart the market in the past, I've failed. My dad had that one figured out way before I did. #staysafestayhomestayhealthy
PS - One of the biggest blessings I've had in my life was for my father to get to know my son for five years.