Are you worried? If so, you're not alone. The folks who run the "Wealth Hazards Worry Index" have just released their September results, and they show that the number of people who are afraid of being left behind by the economic recovery has shot up from 31% of respondents to 46% since August.
Why the sharp rise? Well, it could be that while we're finally seeing signs of an economic recovery, many people may not feel any improvement in their own lives. It could also be that people know they're sitting on the sidelines. Check out the following not-so-obscure companies, for example, and how they fared in 2008 and in 2009 so far:
|
Company |
CAPS Stars (out of 5) |
2008 Return |
2009 Return, Year to Date |
|---|---|---|---|
|
Corning (NYSE:GLW) |
***** |
(59%) |
64% |
|
Nike (NYSE:NKE) |
*** |
(19%) |
27% |
|
IBM (NYSE:IBM) |
*** |
(20%) |
47% |
|
Research In Motion (NASDAQ:RIMM) |
** |
(64%) |
69% |
|
Altria (NYSE:MO) |
**** |
(30%) |
25% |
|
Starbucks (NASDAQ:SBUX) |
** |
(54%) |
116% |
|
Coca-Cola (NYSE:KO) |
**** |
(24%) |
23% |
Sources: Motley Fool CAPS, Morningstar.
Clearly, there's some kind of widespread stock recovery in progress. And while some of us are benefiting from it, as we see our deflated 401(k)s and brokerage accounts start plumping up again, others sold out in a panic after the market imploded last year and have yet to get back in. Imagine if your $10,000 investment in Starbucks dropped to $4,600 after 2008, and you sold. You'd have missed seeing it rise all the way back to $10,000. Similarly, a drop in Corning from $10,000 to $4,100 would have corrected back to $6,600 -- for those who hung on.
How not to miss out
You won't miss out on the recovery if you participate in it. Long-term money has a good chance of growing significantly over long periods, if left in the stock market in funds or stocks you believe in. In the short run, yes, anything can happen -- but for most of us, it's the long run that really matters.
Be proactive elsewhere, too. Look into converting your retirement plans to Roth IRAs if it makes sense for you -- a rare opportunity is coming up. If you've been out of work, crank up your job-search efforts, because some companies are or will soon be hiring. Try to save and invest more, too, to take advantage of these extraordinary days, when so many great stocks are on sale.
Don't set yourself up to fail. Read what Paul Elliott has to say about the three things you need to overcome to succeed at investing.
