One of the things I dislike most about ING Direct’s recent integration with ShareBuilder is that every time I login to check something in my bank accounts, I can also see my poor little Roth IRA. It’s being pummeled about by the ups and downs of the market and some days it’s quite depressing.
Since this has been going on for months now, I’m becoming used to it. I’m even beginning to think that it’s a good lesson. In some ways, it’s a blessing to be young right now. Yes, the job market feels tight (don’t even get me started on county library jobs). And it’s very sad to see our little retirement portfolios dipping ever-downwards. And the debt clock is ticking ever-upward. I didn’t say it was a fun time to be young.
But living through the dot-com burst, the housing bubble, the subprime mortgage crisis, and the current fallout is a learning experience.
We’ve learned not to buy more house than you can afford—even if you get a great deal on the loan. We’ve learned that houses aren’t sure investments any more than anything else is. We’ve learned that no matter how good the market looks, we should still allocate our assets wisely.
There’s a reason to buy bonds as well as stocks, and we’re living it right now. There’s a reason that a retiree’s portfolio includes cash or cash equivalents as well as stocks and bonds, because sometimes the stocks take a dip.
If we remember this for the rest of our lives, these early blows will be as valuable as a spike in the market. I just hope things don’t get so bad that people from our generation avoid investing at all in favor of stashing it under a mattress.