Susan: I agree with everything you said, except for Mom and Pop. The average guy (not you or me) is still heavily invested. Most of them cost average through 401K/403B's at work. They continue to invest (buy), no matter what, because that's what they've been told (for many, many years)is in their best interest . And, statistically, they're not wrong.
During my days as an ordinary grunt (working for the man) I did the same. When I started getting into this swing/day trade thing, I started seeing things differently. I attempted to convince my relatives and co-workers to buy low and sell high, but they insisted that was not in their plans-they would continue the cost average discipline. They have all, with one exception, held through the decline, because, above all else, they fear that they'll miss the "next big move up" that will secure their wealth. Others fear that 10% penalty and, for 403B's, the taxes they would incur, should they sell.
Only one of my relatives has charted a different course. He began swing and day trading about eight years ago, doing what we try to do each day here. He's the only one who has now retired as a multi-millionaire. |
