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Your ‘Set It and Forget It’ 401(k) Made You Rich. No More. — WSJ (apple.news)

submitted 1 year ago by [email protected] to c/[email protected]

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For four decades, patient savers able to grit their teeth through bubbles, crashes and geopolitical upheaval won the money game. But the formula of building a nest egg by rebalancing a standard mix of stocks and bonds isn’t going to work nearly as well as it has.

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[–] [email protected] 3 points 1 year ago

Welcome to a life of investing. I started investing in '08 and everything that was a once in a generation crash. And in '10 when the market recovered, so many thought it wasn't real. And as the market kept going up '11-'15, so many kept claiming the crash was coming so it was smart to change your investments. I saw so many run for the hills in the dips in '15 and '16 and then completely miss the run up over the next few years. I have some colleagues that panicked following the COVID19 dip, and never got back in and missed the recovery and new all time highs.

The truth is your entire lifetime of investing, it will always feel like this time is different. This time it's obvious we're about to crash or it's obvious we're about to go on a run or it's riskier than it's always been. I'm not going to tell you the market is going to be up in the next year, or next five years, or next ten. But since the late 1800s, a great strategy has been to just keeping investing over time and not trying to time the market.

Initially, your swings of hundreds of dollars will keep you up at night, but if you keep at it, eventually those swings will be in the thousands or tens of thousands and you'll be able to handle them better. I can't promise you you'll win with this type of set it and forget it strategy, but there has yet to be a period of a couple of decades in US History than you haven't ended up a winner if you have that long term horizon.