Imagine two well-off households, each with $100,000 in the stock market in 2007. A family that sold in 2009 after losing half its portfolio’s value may now have $50,000 in a savings account. A family that held on would now have about $130,000 in stocks. The inequality has yawned merely because of the investing decisions. In the long run, those savings accounts have a vanishingly small chance of outperforming stocks.
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Truth. Luckily I knew that – I took a small amount for emergencies, and I did OK. The real losers during the recession are people who had never had enough to invest in the first place, lost their jobs and their homes because of fraudulent loans and shady financial bets made by powerful Wall Street bankers..
Well stated. In the article the author says, “It’s best to purchase additional shares when the market corrects,” as if everyone has the wherewithal to do that.
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