What Happens in the Market Stays in the Market

(Shared by Chris Bailey, Bank On Yourself Authorized Advisor)

It hit me the other day after talking to a friend of mine about stocks and the stock market just how similar it is to Las Vegas and the gambling world. Just think of the marketing involved – commercials during the news, Sportscenter and even Sprout (PBS Pre-School) promote both!

“What happens in Vegas…Stays in Vegas” is the slogan we all know. Because we see it all the time. We also see the investment groups and mutual fund companies bright and shiny ads, with so much fine print that I cannot read it on our 42” HDTV…Paused!

How about this example: Every month Clay goes into Atlantic City with 20% of his salary and plays blackjack for his childrens college fund. Sure he has won a few games, but he has lost dozens of times. What do you think Clay’s wife and friends would think about this “retirement or college planning”? You can bet it would not be favorable.

But what if Clay did this: Every pay check Clay takes 20% and puts it into his stock portfolio that includes some mutual funds and a few individual shares here and there. Very “diversified”! Sure Clay has lost his proverbial butt a few times, but he breaks even most of the time…(he thinks).

Now with this example what is his family’s response? It’s not his fault he is losing money, the market will come back right? But the real question is, will it be in time for his children to go to college?

Let’s get real here! Add waitresses with free drinks and buffets to option two and they are nearly identical. All that is different is the degree of public acceptance.

Stocks of course can have their place. But when you are counting on money for something that you know is GOING to happen (e.g. college, retirement, etc.) it’s important to know that you do have options. Safe and secure options. (You could even take a policy loan to go to Vegas if you really want to, then pay yourself back and build your retirement/college fund even more. Any winnings would just be a bonus.)

 

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