Is It Time to Get Off the Train? (Stock Market?)
Sunday, February 1st, 2009
Suppose you have several transportation options for getting to work every day. One of the options is a new, high-speed train system.
According to its schedule, the trains can get you to work faster than driving in your own car or taking the bus. Driving your own car might be a little cheaper, but when you take the train, you don’t have to hassle with all the “ownership costs,” such as fuel, insurance and finding a parking space. You just pay for a ticket and ride. It sounds like a no-brainer. You start riding the train.
It turns out there’s a bit of difference between the projected performance of the train and reality. More often than not you get to work on time, but the trains rarely run according to schedule. (There are some days when you get to work early because the train is running so fast.)
Besides the slightly erratic schedule, there’s another nagging problem: Sometimes a train jumps the track. You’ve never been on a train that’s derailed, and so far, nobody has been hurt, but reports on the incidents are unsettling.
When the high-speed train was first introduced, some were hesitant to ride because of safety concerns. Both train company management and government overseers assured potential riders of the soundness of the system. “No system is entirely fool-proof” they said, “but we have every reason to believe the high-speed system will deliver as promised. Riders will reach their destinations faster, and at less cost.” You want to believe them, but some commentators are hinting that perhaps the risks are greater than reported.
Over the course of the next year, train service gets more unpredictable. One week, you’re late arriving to work four of five days. Frustrated by the uneven performance, several of your commuter acquaintances give up riding the train, and decide to start driving their own cars to work.
Then, one day, you are on a train that derails. Amid the noise, lurching cars, confusion, and jarring stop, there’s a sick feeling in your stomach. In the quiet that follows the shock, everyone does some self-assessment, checking for injuries and missing personal items. Fortunately, there are no major injuries.
During the two hours it takes to get everyone off the train and clear the track, there’s a goofy sort of camaraderie with your fellow passengers. You joke about the experience, wondering if appearing on the evening news will be enough to get you excused from showing up for work. You lament that it’s too bad the damage wasn’t greater, because there could have been a nice settlement and movie deal in works. But instead of heading on to work when a new train comes down the track, you just go home. You’re having second thoughts about continuing to ride the train.
Of course, the next day you go to the station. Most of your commuter buddies are there, too. “Hey,” one of them says with a laugh, “let’s hope lightning doesn’t strike twice, because how else are we gonna get to work?” Nothing happens on the way in - no delays, no surprises, everything is on time - but you are edgy the whole trip. Same thing happens on the way home.
As you step off the train and begin the short walk home, you ask yourself, “what’s it going to take for me to stop riding the train?”
LET’S RE-WRITE THIS ARTICLE:
Suppose you have several (accumulation) options for getting to (your retirement goals). One of options is a new, high-speed (stock-market investment program).
According to its (projections), the (stock market) can get you to (retirement goals) faster than (building your own business, real estate) or (anything else). Driving your own car might be a little cheaper, but when you (use the stock market), you don’t have to hassle with all the “ownership costs,” such as (employees, rent, insurance and finding a parking space). You just (buy some shares) and (go along for the) ride. It sounds like a no-brainer. You start (investing in the stock market).
It turns out there’s a bit of difference between the projected performance of the (stock market) and reality. More often than not you (make progress on your retirement goals), but the (stock market) rarely (performs) runs according to schedule. (There are some days when you get ahead because the stock market is booming.)
Besides the slightly erratic schedule, there’s another nagging problem: Sometimes (one of the investments) jumps the track. You’ve never been (in a stock) that’s (tanked), and so far, nobody has (lost everything), but reports on the incidents are unsettling.
When the (stock-market investing) was first introduced (as something for the average American), some were hesitant to (participate) because of safety concerns. Both (investment) company management and government overseers assured potential riders of the soundness of the system. “No system is entirely fool-proof” they said, “but we have every reason to believe the (stock market) will deliver as promised. (Investors) will reach their destinations faster, and at less cost.” You want to believe them, but some commentators are hinting that perhaps the risks are greater than reported.
Over the course of the next year, (the stock market) gets more unpredictable. One week, you (lose 10 percent of your account value) in five days. Frustrated by the uneven performance, several of your (investor) acquaintances give up (playing the stock market), and decide to start (managing their assets themselves).
Then, one day, you are (in a stock) that (bottoms out). Amid the (business page headlines, 24-hour TV news coverage and meltdown), there’s a sick feeling in your stomach. In the quiet that follows the shock, everyone does some self-assessment, checking (the magnitude of their losses). Fortunately, the (stock rebounds over the next few months).
During the two (days, weeks, months) it takes to (see if the stock will settle down), there’s a goofy sort of camaraderie with your fellow (investors). You joke about the experience, wondering if appearing on the evening news will be enough to get (a bailout from the government). You lament that it’s too bad the damage wasn’t greater, because there could have been a nice settlement and movie deal in works. But instead of (buying another stock), you (pass). You’re having second thoughts about continuing to (stay in the market).
Of course, the next day you go to your broker’s (web site). Most of your (investor) buddies are there, too. “Hey,” one of them says with a laugh, “let’s hope lightning doesn’t strike twice, because how else are we gonna (be able to retire?)” Nothing happens (in the market that day) - no delays, no surprises, everything is (quiet) - but you are edgy the whole (week). Same thing happens the (rest of the month).
As you (log) off the Internet and begin the short walk home, you ask yourself, “what’s it going to take for me to stop (investing in the stock market)?”