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View Diary: New IRS report confirms upcoming retirement crisis (95 comments)

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  •  Temporary decline doesn't always mean loss (0+ / 0-)
    And for those who DID save for retirement prior to 2008, they lost huge amounts in the bank bailouts and recession.  Yeah, they are not convinced that giving the money to wall street or to a bank is such a good idea any more.
    The DJIA, NASDAQ Composite, and S&P 500 index are all above their 2007/2008 highs and inflation has been low in the intervening years.

    Obviously in both good and bad times particular equities will go up and down, but a diversified portfolio invested in US equities should be above where it was in 2008 (esp. if one reinvests dividends).

    Unfortunately, some who didn't have cash around for a rainy day were forced to liquidate to pay their bills. But those that panicked and elected to bail out of the market when they had other options just got an expensive education in the cost of panicking.

    I think we can blame the education system in part for the stupid ways many people act in market declines. We need to teach more economics, finance, and probability and statistics and not grant HS diplomas to those that can't pass simple tests on such matters.

    As Warren Bufett is reported to have said:

    Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market.
    Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell.
    Lethargy, bordering on sloth should remain the cornerstone of an investment style.
    and, most usefully IMHO
    Be Fearful When Others Are Greedy and Greedy When Others Are Fearful
    •  All excellent advice, but (1+ / 0-)
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      it does not really matter how your retirement savings are invested if you do not have any, or have a grossly insufficient amount. And that is unfortunately the case for a lot of people in the Boomer generation who are now approaching or are in retirement.

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