How often have you heard “the stock market is like a roller coaster ride?”
We hear it all the time.
The problem is, it’s a terrible analogy!
The only thing good about that analogy is the volatility. The market does go up and down.
Everything else is different.
First, roller coasters always start and stop at the same spot. They go high up a big hill at the start, and it’s all down-hill from there. They’re gravity-driven, people, and they take you right back to where you started.
The markets do just the opposite. During bull markets, we climb the “wall of worry” until everyone starts to think they can make easy money, and eventually the market hits new highs.
The end of a bull market, by definition, comes at a high point, not the low point.
You see, it’s just the opposite of the roller coaster!
Oh, and as I mentioned, roller coasters stop! They make it clear when to get on and off.
The markets never do this.
Studies show that most investors get into the markets after they’ve steadily climbed out of a recent bottom, with the biggest inflows coming very close to the market peaks. The same studies show that the opposite happens at the market lows.
In other words, most investors buy high and sell low.
Maybe that’s why they call it a roller coaster ride, they get off at the lows!
One last thought.
When you climb into the coaster car, there’s an entry-level employee, often a distracted teen-ager, with probably a couple hours of training, making sure that you are going to be safe while you’re on the ride. If you follow the instructions, you’ll probably survive.
Enduring Wealth Advisors®, we’re experienced and educated, passionate and compassionate. We can help you understand how much volatility you may experience to pursue your financial goals.
Reach out to us today with any questions you have about how your plans are tracking.
The opinions voiced in this material are for general purposes only and are not intended to provide specific advice or recommendations for any individual.
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