And now I’m going to talk about a dumb guy. He opened a 401(k) when he was 25. But he was overly cautious, and put most of his contributions into money market and short-term bond funds.
He didn’t consider that time will smooth out stock market fluctuations. This dumb guy finally fully diversified into stock funds, but he wasted 8 years before doing that.
That dumb guy is me.
My wife will get ancy when the stock market performs poorly. You only lose if you panic and cash out. If you don’t sell, you still own the number of shares. If a person saw their favorite shoe on sale, they might pick up one or two extra pairs but when it comes to stock, they panic. Putting a consistent amount each paycheck guarantees dollar cost averaging where you’re buying stocks when they’re high and low.
It was me as well.
However—I put away so much money in my 401k (always the maximum) for so many years that it did not matter. I had plenty of money for retirement.
I could have been a lot wealthier if more of it was in stocks—but we own our home and vehicles free and clear and have no financial stress—so no big deal.