(This is part III of a series of posts about Joe’s mission to find the perfect colleges for his daughters. Check out his first and second posts to catch up.)
The new millennium had started. The equity markets were soaring, new records were being broken daily and it appeared no matter what stocks or funds you purchased, you just couldn’t lose.
Then, in March of 2000, the bottom fell out. Stock market indices plummeted. One by one, companies that had been “on top of their game” just months before were dropping like flies – Enron, WorldCom, Global Crossing, JDS Uniphase, Nortel, Cisco and Corning. So much for a New Age. So much for it being different this time.
Courage
The tech bubble of the late 1990s and early 2000s decimated investment portfolios. Mine was no different. I suffered like everyone else and saw my growth fund decline slightly in 2000, another 19 percent in 2001 and then another 20 percent in 2002. Ouch!
In my profession, we preach buy-and-hold, diversification, and dollar-cost-averaging. It takes courage to say that in the face of a tsunami of bad news — whether it’s 2002 or more recently in 2008-2009.
Slip sliding away
Our college savings, hopes and dreams were sliding away. There’s a community college nearby. I’d often tell my girls when we saw the closing markets …How’d the stock market do today, Dad? I’d answer “It’s looking more like a community college rather than Harvard every day!”
Anyone who knows me understands I am a cautious investor. I understand that to make money, it takes “time-in the market” rather than “time-ing the market”. As such, I don’t make hasty decisions. While we preach buy-and-hold, an equine analogy can also come into play — “sometimes, it’s time to switch horses.”
More on our horse switch in the next post…
