Some people when they first start investing become gripped by fear that something will go wrong. I think that you need to do your research and know what you are getting yourself into. Without being too emotional.

I heard someone say that investing really is a boring this. Because it is a simple formula, get a return on your interest and then re -invest that. Usually it just requires you to buy something and hold it for the next 20-30 years.

Nothing exciting about that, but the rewards are enormous

Young Investor

http://www.investmentrealty.blogspot.com

Apart from how poor I feel that the advice to pull out and wait until you feel confidant again is, I don’t see what gave you the impression that she is staying up at night worrying about her investments.

To me it sounds like she is knowledgeable and is considering a move that at first glance seems like a good way to improve your returns. If it’s not a good move then she clearly stated that she would “prepare herself to see the decline in value and wait patiently for it to begin to grow again.” That doesn’t sound like someone who is “too nervous to invest in stocks” at all. It sounds like someone who is rationally considering her options at this time.

To me, the obvious answer should have been a vote for option # 2. And it’s good advice for everyone at this time. Prepare yourself to see a decline in value and wait patiently for it to begin to grow again. Or even… take advantage of the low prices by making some extra investments.

And, whoa… Nickel is getting crazy…

Oh, is that what you meant when you said:

“If I were Lila, I’d move everything into a money market account for a while and sit on it for at least three weeks, then wait until I started feeling confident about the stock market again – or at least until I felt it was close to the bottom…”

So when you said “for at least three weeks” it was supposed to be clear to us that you were advising her to get out of stocks permanently?

Like others have said, instead of treating your readers as dumbasses that can’t comprehend the written word, you should own up to what you said, re-adjust your outlook, and then move on. It’s okay to be wrong, but you look foolish when you say something so clearly and then try so hard to deny it.

How did you know when it was time to sell your stock holdings “very near the market top?” What information led you to this conclusion?

Thanks for your site!

I sincerely hope Lily didn’t sell, but am reminded that for every seller, there is a buyer.

I’m not an expert by any means. But the whole *point* of investing for retirement is that you do so for the long term and you don’t worry about day-to-day market fluctuations. As an earlier commenter said, this is all going to be a blip in 20 years, when Lily (Lila? the original post uses both names) plans on retiring.

I think this is the perfect exception to “the instant an investment makes you nervous, you should pull back into something safer.” Instead of letting the nervousness control her, Lily should examine the nervousness and decide whether it’s justified. I contend that it’s not. Don’t let your emotions rule your financial decisions if you can help it.

You need to quit being such a prick in your comment responses.

Your article gives bad advise and instead of saying that your wording may have been misleading and not conveying what you intended, you made it seem like we couldn’t read or comprehend your post.

Also, your squirming around the issue is pathetic, there is no meaning to the post other than buy high and sell low because you are panicked.

I love your ideas for frugality but sometimes you act like an expert on subjects that you are lacking.

And Trent, around here, the foreclosed folks are losing brand new McMansions as well as tiny houses.

I’ve never tried to time the market before, but I think this is special circumstance. It has been a long time since I have heard such gloom and doom scenarios, and I think it is likely to get quite a bit worse before it gets better. I lost my hat and a** during the dot com bust, and I’m not happy to just go down with the ship again.
A couple of other points: corrections are usually swift and dramatic, while the recoveries are usually quite a bit slower. This is probably why market timing usually doesn’t work. By the time you pull the trigger on the down slide, its over. Also keep this in mind: if you loose 10% and then gain 10%, you wind up with less money. Therefore you have more to gain by attempting to avoid loss than sticking with it because you are afraid of missing out on increase.