As I write this post (on 8/7/19), the S&P 500 Index is 5.75% off its recent high. As I prepare to post this to our website (two days later, on 8/9/19), the U.S. market has rallied a bit, so that we are less than 4% off the all-time high for the S&P 500 Index. When you put it like that, it doesn’t sound too bad. But if you’re watching the news, it can feel a whole lot worse. And if you’re checking the value of your portfolio online each day (a really bad idea), it’s painful to see the declines in your portfolio – even if they are modest in the grand scheme of things.
Growing up, I was always intrigued by money. I liked earning it, and I really liked saving it.
In May 1997, about a month shy of my 14th birthday, I biked from our family’s home in Eden Prairie over to the Chanhassen McDonald’s – a one-mile ride. I went with a friend from the neighborhood. We both applied for jobs there on the spot, and I remember nervously wondering if they had any interest in hiring me.
Earlier this year, I took my daughter Evelyn to our first “Daddy/Daughter Dance” at Life Time Fitness. While I was merely an accessory as she twirled and twirled on the dance floor, it was a wonderful night for us.
Evie turns 4 next month. About a month before the dance, my wife Krista bought a dress with Evie at Costco to wear for the dance. Evie called it her “ballet tutu dress”, and she proudly wore that dress nearly every day in the weeks leading up to the dance.
Someday, I’ll be walking my little girl down the church aisle on her wedding day. [insert deep sigh] One of the habits outlined in Stephen Covey’s classic book The 7 Habits of Highly Effective People is to begin with the end in mind. With our daughter, that means looking ahead to the day she leaves us and joins her life to her future husband. While our roles as father and mother won’t end at that point, we want to be thinking now about the kind of woman we hope she will be on her wedding day – and about the kind of man we hope she will marry.
In his recent book Everyday Millionaires: How Ordinary People Built Extraordinary Wealth – and How You Can Too, author Chris Hogan sets out to prove “The American Dream is Alive and Available.” To write this book, Hogan’s team at Ramsey Solutions surveyed and/or interviewed more than 10,000 Americans over the past year.
His book follows the footsteps of one of The Wealth Group’s all-time favorite books, The Millionaire Next Door. Books like these are great at myth-busting the popular culture’s conceptions about millionaires in America. What most people think about millionaires in America is often incorrect.
You can’t time the market. At least I can’t. Market timing is an investment hypothesis that has been tried for the 240 years of stock exchange history in the United States.
The basic idea is to buy an investment when it is “low” or undervalued, and then sell that investment when it is “high” or overvalued. The problem is that I don’t know when the “low” or “high” has truly occurred. I know when investments are “lower” and “higher”, because those terms are always relative to some reference point in the past.