Personal Finance 101 for Young Lawyers

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Re: Personal Finance 101 for Young Lawyers

Postby BulletTooth » Fri Oct 12, 2018 1:06 am

AVBucks4239 wrote:
]I'm not stupid - I understand all of that. Obviously nobody can predict the market. But a) this is a profession in which people are laid off en masse whenever there is a downturn and therefore b) you may need that $$ sooner than you think. Liquidating stocks in a downturn is like catching a falling knife, and is definitely worse than parking some assets in other investments just in case. Also there is something to be said for holding some $$ to invest in the market when there is a downturn.

Just coming back to this. Market is down 5.3% in the past two days. If you're not in, you buying in now? Or do you think it will get worse, and you may be able to buy in cheaper? But what if it goes right back up -- did you miss your chance? Still going to be on the sideline?

And if you're in, are you going to sell to hedge your losses? Or maybe it will go back up tomorrow, and you should stay in to get your money back?

The active management strategy is just comically stupid when not applied in hindsight.

“To refer to a personal taste of mine, I’m going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the ‘Hallelujah Chorus’ in the Buffett household. When hamburgers go up in price, we weep. For most people, it’s the same with everything in life they will be buying — except stocks. When stocks go down and you can get more for your money, people don’t like them anymore.” Warren Buffett.

It's impossible to predict whether the market will keep going down or rebound. You should just keep buying stock at a consistent rate, definitely don't sell (if you can avoid it), and, if anything, start buying more as the market declines (within your means).

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