The year-to-date 2013 stock market gains have absolutely nothing to do with the investment management abilities of Minnesota stock market investors.
It is just human nature to think that your investment management ability had something to do with your stock market success. Tell the truth; you took complete emotional ownership of your multi-year high company 401(k) retirement plan account balance at the end of April.
The current record high stock market prices have reminded me of the old Wall Street adage. Wall Street adages are passed on from one generation to another because there is a great deal of truth in the spoken words.
“Don’t confuse brains with a bull market.”
That famous quote came from Humphrey B. Neill, who was an investment analyst and author. In 1954 he wrote a book titled, “The Art of Contrary Thinking.”
In that book, Mr. Neill also stated that, “The public is right during the trends but wrong at both ends.”
Individual stock market investors always enjoy the financial benefits of a rising stock market when it happens. Those same individual stock market investors then fail to realize when the stock market stops going up, and begins going down.
The stock market game has to be played on both ends. Stock market gains only become real when individual investors preserve those gains for the long term.
No individual stock market investor needs to be 100% invested in the stock market on the way down. You deserve a better investment fate.
Ric Lager
Lager & Company, Inc.
