In the roaring 1990’s, when everyone was going to get rich betting on tech and day-trading sprouted its baby teeth, investment experts proliferated like weeds. It was when kindergarten teachers were schooling me with their high tech picks that I should have had that V-8 moment, picked up my marbles, and taken a time-out. Instead I stuck it out only to watch the NASDAQ crash and burn at the beginning of 2000. It was a time of investment irrational thought and action and the NASDAQ index hasn’t seen those pre-crash numbers since.
Before that happened the guy who printed my business cards postulated that the markets would never go down because too much money was being invested and the sheer weight of in-coming dollars was enough to provide perpetual growth. He never understood, nor would he listen. that what went up could come down. The concept of immediate liquidity was lost on him and countless millions of other investors.
From that time to this day in almost every business, factory, government building and job site there exists a self-proclaimed investment expert in which every other employee reaches out for counseling and advise. It doesn’t make any difference if this expert’s ideas are about as cockeyed as an Australian Emu race people take his or her words as gospel.
Some of the worst investment advise came out in 2008 when the markets collapsed. Even respected investment professionals were completely wrong. Just before the crisis escalated Jimmy (The Mouth) Cramer appeared on The Today Show and pleaded with a national audience to get into cash if they needed any money over the next five years. Five years!! In six months he was back on the same program proclaiming the crisis over and everyone should get back into the markets. And he wasn’t the only one. All across the country self-styled gurus were preaching from the same hymnal. Get out and stay out. Abandon ship. Climb back aboard. Nutty times.
We know for certain that those who bailed are still far behind and may take years longer to get anywhere near the asset value they had before the crash. Those that ignored the guru’s bleating are in much better financial shape than those that didn’t.
Which brings me to the point who you should listen to when times get complicated and you need to make a big decision. Who’s your guru?
Inside each and every one of us is a little germ called common sense who’s sole duty is to protect us from making too many silly decisions. Common sense has saved each of us a lot of grief. It’s that little voice that whispers in our ear. I don’t how it works but common sense has saved me from climbing a water tower tank and riding the big revolving light on top at midnight to not voting for Sarah Palin.
It’s an override switch that filters all the world’s horse poop and somehow makes us do things that eventually turn out to be the right things. Anyone who’s been to a high school or college reunion and seen their old boy or girl friend twenty years after graduation knows what I mean. What could have been and what was and we get a cold shiver just thinking about it.
Common sense doesn’t, unfortunately, work in a vacuum. In order for the germ to work at its optimum it needs to be primed with knowledge and experience. The good thing about common sense is that it doesn’t need a lot of education. In fact it needs just enough information to be able to ask questions. Questions and a little knowledge are like yeast for common sense. Somehow it makes things work better. Whenever some self-anointed water cooler swami crosses their arms, adjusts their turban and pontificates what you should be doing with your money or your life a little knowledge creates questions that your inner guru says need to be answered.
Nurturing your inner financial guru takes only a small amount of effort. Make time each day to read something about money, how it works, investments, mutual funds or Google a lesson on dividends or bonds. While its an infinite amount of information that neither you nor I will never be able to work our way through what we do learn will be enough to keep our common sense working at its optimal best.
Questions call Paul @ 877 783 7080 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.
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