Wednesday, June 2, 2010

Reporter's Notebook

Paul Leonard can be reached at

Investing for dummies

Last week, I did the unthinkable. I looked at my 401K statement.

For months, it was easy to ignore the pile of envelopes lying in a neglected pile in the box where I keep my least-cherished badges of adulthood – bills, insurance statements, the back issues of Harper’s Magazine that I will never have the time to read.

As a reporter, I’m curious by nature. However, this time, I had no desire to track the roller coaster ride of the financial markets through the darkened prism of my retirement – which by my reckoning, will occur not when I’m 65, but in 65 years or so.

In the end though, curiosity won out as I took a letter opener and went to work on my pile of envelopes – but more on that in a moment.

Instead let’s fast forward a few days, as I meet a friend (who just happens to be an investment advisor) at a local watering hole in Vancouver for a beer on a rainy evening. “It should be so easy,” I say, in regards to that often elusive task of growing one’s money.

We talk about the investment decisions people make and how those decisions are often tainted by emotion. We discuss how every business owner and worker wants to grow their wealth, yet so few seem to succeed, even after a lifetime of trying.

And then it occurred to me. As I thought about the pile of envelopes in my kitchen, each one a tiny window looking out onto my financial future, I realized what kept me from even taking a peek. Like many other investors, weary of the extreme market volatility of the past few years, I was afraid of what I might find.

I remembered my trepidation as I finally opened the statements, scanning the pie charts and percentages, catching up on more than a year’s worth of account activity.

Needless to say, the news wasn’t good.

But it wasn’t that bad, either.

After two-plus years of recession, I’m thinking there are many people still unable or unwilling to peek into an uncertain future. In living rooms, kitchens and mailboxes across the region, there are surely piles of envelopes like mine, waiting for their owners to digest their contents.

To those people, I say it’s time to rip the envelope open, deal with what’s inside – and most importantly – move on.


JFERG said...

I read somewhere the other day that while the stock market averages a 10% return that the majority of people average less than 3% because of the emotional knee jerk reaction often associated with riding the wave of emotion which is investing.