Early this year, I had to make a decision about my retirement plan at my old job. Since the market has not really been very good lately, I lost 20% already just on this account alone. I checked again, just to make sure I have the right figures. There it is, 21.55%, in red font.
I had to pick one within the family of funds my husband and I had been putting into, to take advantage of breakpoints. I need to mind my costs as well, right? But I had to choose one different fund to avoid overlap. That's what they call diversification.
My decision to put it into a single fund was based on the ease of keeping track. One day, I want to look back and say, 'this is my (name of old employer) money.' The transfer was made last year so I'm done with tax reporting. But I didn't pick a mutual fund until January. Prior to that, it was on the way to bleak anyway. So I'm looking at the brighter side. I could have lost more.
Unlike daily life, wherein you put a little and take a little, I had to make a decision on the rollover only once - similar to getting married. I know some people will argue that you don't get married just once these times. But my point is, it's not a decision we have to make daily.
Investing a small fixed amount regularly allows you to buy more when the goods are cheap, and less if they are expensive. That's what they call dollar-cost averaging. In life, that's more of routine. We wake up at a certain time, put in a fixed number of hours at work but the outcome is different everyday. Some days are better than others. But when the day is not as good as we would have wanted it to be, we just say, tomorrow is another day.
So you have smaller gains or losses in the books but not yet realised unless you sell. It can drive you crazy if you check daily, with the NAV dropping continuously. And you have an election coming, which makes things more uncertain. Come to think of it, nothing in life is certain anyway unless you create your own future, which you do through hard work and perseverance in good times and in bad.
Ninety-nine percent of us won't win the lottery or receive any kind of windfall but life goes on anyway. We let go of wars we can't win. Most of us either never realize or just take for granted that today has always been better than yesterday. We have cumulative gains, learning a lesson or two here and there and move on.
Life is like the stock market. There is better chance of winning if you live your life a day at a time. The biggest gains happen during the worst times. In life, that's also the time when the best lessons are learned. And when you look back, that's also the most colorful. It's red for me today.
Like all decisions I have made, my rollover pick has consequences. I'm stuck right now but it's not going to hurt today. I am ----ty years or so away from retirement anyway so a lot of things can happen. I need to pay attention but I can't be looking back each time the market dips.
