While the recent crash course in market downturns has been painful for advisors and investors, there are valuable lessons to be appreciated.
Lesson One: Who not to trust.
Like the expression, “Fool me once, shame on you; fool me twice, shame on me:” In the summer of 2008, “Smart Money” magazine shouted from their cover page, “Now is the time to jump into stocks and real estate.”
In December 2008, both Morningstar and TheStreet.com noted that the market is undervalued, implying a November ’08 market bottom. On October 31 2007, Jim Cramer encouraged viewers: “You should be buying things and accept that they’re overvalued, but accept that they’re going higher. I know this sounds irresponsible but that’s how you make money.”
Making (or losing) money is very serious, ask yourself: Who deserves the right to exercise any authority over your investment decisions?
Lesson Two: Don’t follow the crowd.