Okay, I’ll bite, why should you? Fact is you shouldn’t.
I keep reading about individuals in their 40s, 50s, even early sixties who feel their retirement has gone up in smoke because of the stock market gyrations in 2020. Get a grip folks.
A few surveys show people abandoning the stock market or shifting from stocks to bonds.
Yes, some people have faced a financial crisis, lost jobs with debt accumulating, but most will recover although it will take time. But for the bulk of Americans a drop in their retirement savings is not a crisis albeit a scary experience.

Let’s look at investing in the S&P Index over the last one hundred years. Assume in each year you started with $10.00 and invested only $10.00 each month (inflation adjusted). Here is what you would have in 2020 considering dividends and capital gains, inflation and taxes.
- 1920 $735,238
- 1930 $384,285
- 1940 $237,919
- 1950 $116,302
- 1960 $65,740
- 1970 $47,583
- 1980 $27,814
- 1990 $11,452
- 2000 $5,412
- 2010 $2,701
All for ten dollars a month (adjusted for inflation). These calculations come from the periodic reinvestment calculator.
Looking at a more realistic investing scenario, let’s say you started saving $100 a month (adjusted for inflation) at age 25 in 1955 and retire in 2020. You would have $812,561.
So, is there any time it’s not worth using the stock market. Well, you may say, what if the market tanks just before I want to retire? I’d say,
- As you get near retirement you should lower your stock investments by investing in bonds or similar investments to lessen your risk.
- You aren’t going to use all your money the year you retire (I hope) so there is still time to recover.
- Build an emergency fund so, if necessary, you can limit your retirement account withdrawals for several months.
I am a believer in LONG term investing in the stock market. The only time I abandon the stock market was my son’s college fund. My mother died in 1998. I put $10K in a growth stock index fund for his college education target date 2005. The broker understood this and he recommended a fund. Back in those days, investment research involved paper magazines. Several magazines highly rated this fund. First, the dot.com bubble busted followed by 9/11 taking the fund to 50% of what I invested. Finally, in 2003, I sold losing 30%. The reason I sold was I needed a hard number of how much was going to be left for his college. I supposed I could have gotten student loans and paid off the balance when the stock market bounced back, but then there was the banking / housing crisis in 2008 so maybe I did the right thing for that case only. It all worked out in the end with no student debt.
At the time, I just didn’t have enough money to spread around to fund his college. My retirement investments remained diversified in the stock market and has always recovered and done well. I just didn’t have enough time for his college fund.
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Only diversified portfolio can save the capital during the “black swan event”
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