Great article by Lynn O'Shaughnessy, it starts:
"Just about every morning, I spend time at the gym. Many mornings I read The New York Times on the Stairmaster, which I hate. The Stairmaster, not the NY Times.
One of the regulars at the gym is an older man, who happens to be a multi-millionaire. He usually likes to kid me good naturedly about the fact that I have all my money in index funds. In contrast, he is a stock jockey, who is always searching for the next great four-bagger. He is always eager to share just how successful his best picks have been. I don’t hear much about the losers.
But early this week, when the market was swan diving after the Bear Stearns takeover, my buddy looked panic stricken when we crossed paths. He owns big positions in Wells Fargo and Washington Mutual and he was trying to wrap his mind around the possibility of losing hundreds of thousands of dollars in one day. And that’s what happened."
To read the rest, which is a great article, click the link above.
Scott Dauenhauer, CFP, MSFP, AIF