Funancialism here! IF we hustle and save and invest…only to experience an 80% crash and then 25ish years to get back to original levels…What are your guys’ thoughts on this?
What if you’re already retired especially, then you can’t dollar cost average during the 80% crash.
If you’re retired you won’t be invested 100% in stocks, so a 80% drop in the market wouldn’t hurt you as much as it would a young person investing aggressively. If you’re retired you should have an asset allocation that is more conservative and invested in bonds so that you can safeguard yourself against major drops. Also, as long as you don’t sell everything and stay invested, the market always recovers and goes up over the long term, so even in retirement you should be able to recover.
Also, when you look at the history of the late 1920s the brokers and stock market in general basically ran wherever it wanted to unchecked by any kind of auditing body. Insider trading was writhe, the machines they had to generate the stock prices got way behind because of the high volume of trades etc and got completely out of control.
Also, lots of people had absolutely no idea what they were trading in (lots of it was based on past performance and word of mouth who the rich were buying) and didn’t realise the consequences of their actions if a stock were to go to zero, which many ended up doing. It was seen at the time as a way to make a quick buck and try to get out of the rat race, as Warren Buffet famously said, no one wants to get rich slowly.
In our day and age now, I think if you’re invested in the stock market or bond market etc and you have half a head piece on you, you’re doing very well especially to be retired on it. So what if the market did plunge 80%? Well you would have some things to think about but the general state of the world and life as we know would become very different and there would be people a lot worse off than you!
When you think of financial crisis, look at the housing crash of 2008, that should be been so much worse and many people should have gone to jail… and look what ended up happening there…