Looking At Life From A Stock Market Perspective

by golbguru on October 5, 2007

Since Monday evening, this week has been horrible for me in terms of how much crap life can hand over to someone in such a short amount of time. I don’t know how people tend to look at stuff, but right now, to me, it seems that getting your dreams crushed is far more depressing than any amount of financial loss. I am ready to give every penny I have to get back what I lost - but it doesn’t look like that’s going to happen.

Anyways, without making this a morose platitude, let me come to the point. Here are a few parallels that I have been drawing between life and stock markets - almost in a way as to comfort myself in this chaos.

  • In general, there are these daily ups and downs, there are these rare black days, and there are these occasional fears of recession; but on the whole, the hope is that things will tend upwards in the long term. So, it helps to not look at the daily volatilities and to focus on a 20~30 year perspective. For me, it has been nothing short of a melt-down for the last couple of days - but I am going to stick to my “hold” strategy (I am talking about life), think long term, and hope for better times ahead.

    my life index and current status

  • In life and in stock markets, smart decisions can help accentuate success and mitigate failure, but there are days of profound realization when the randomness becomes quite apparent and success becomes a game of probability. Makes us acknowledge a multitude of factors, beyond our control, that can affect future outcomes.
  • At times, we regret our past choices - “I wish I had that winning one” OR “I wish I didn’t have this losing one” - but no amount of regret can reverse what has already been done. The only thing you can do is to take it easy and think in terms of the future prospects.
  • Just like people start wondering whether their portfolio is balanced enough for their long term goals - right when the market hits the bottom - the last few days have made me contemplate on some balancing aspects of my life’s portfolio - why am I doing what am I doing and how am I doing it. Although I understand that, just like in a stock market, a depression is a bad time to rebalance one’s portfolio (think impulsive decisions), the very fact that I became pretty uneasy over these recent unpleasant events tells me that I probably didn’t have all the right equations to begin with. Rebalancing seems to be in order once the dust settles on the present issues.
  • DIVERSIFY -your dreams, your ambitions, and your approaches (think backup plans). Banking too much on any given aspect of life with a narrow focus is like betting all your money on WorldCom. Unfortunately, we become so cozy with specific things that work for us, that the importance of diversification is not felt till we sense the threat of an impending disaster. And usually, it’s too late by that time to do anything about it.

All said and done, for now, all I have to do (rather, all I can do) is focus on the big picture, suck it up, and give a fight till the good times return.

Unfortunately, there is no Federal Reserve for life that can boost your confidence by tweaking some interest rates; probably that’s why life’s a beach while the stock market isn’t.

life is a beach

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{ 13 comments… read them below or add one }

1 Frugal Frugalson 10.05.07 at 8:20 am

Sorry to hear that your personal life has got you down. Despite what’s going on in your life now, I think you’re on the right track by trying to focus on the long term.

Best wishes,

FF

2 stidmama 10.05.07 at 8:42 am

You are right to wait until things have settled before making any big (or permanent) changes, if you can wait.

Life often hands us challenges we could not have anticipated given the data available to us earlier. The trick is, to use new learning to help improve future predictions of risk and success.

I hope that whatever happened becomes such a learning event and soon less painful. Remember also that many people have gone through hard times in their lives — you may have “assets” around you in people who have literally been there, who can offer some insights, or at least an understanding ear.

3 Donald Mckenzie Jr 10.05.07 at 5:28 pm

The stock market is great and all, but I do not like how it is being manipulated these days.

4 mapgirl 10.05.07 at 8:57 pm

Sending good vibes your way. Sounds like there’s something getting you down and it’s more than market performance.

5 The Digerati Life 10.05.07 at 11:00 pm

I hope things perk up for the better soon. :( I wish you all the best, man. Really great analogy you put forth there too… Life IS a beach!

6 The Financial Blogger 10.06.07 at 2:42 am

Golb, I don’t know if it will help you, but I realized that when life is a beach, it’s only give you something better later on.

The challenge is to live through the life’s obstacle and gain something out of it.

I wish you the best of luck and a little bit of sun in this rainy period.

7 Super Saver 10.06.07 at 8:18 am

Golbguru,

Sorry to hear about the tough situation. Good luck in getting though it.

8 Just A Reader 10.06.07 at 3:27 pm

Actually a noob to your blog, have been getting caught up on old posts and just read this one today. Hate to throw cliches at you, but it WILL get better. Whatever it is. And you are right about the rebalancing strategy - if you felt uneasy, there was a reason. Trust yourself and do something good for yourself…

9 paidtwice 10.06.07 at 4:20 pm

Dang it. I hope it gets better soon. :(

10 Blain Reinkensmeyer 10.06.07 at 10:18 pm

Golb, sorry to hear that things have gotten rough man. Please let me know if there is anything myself and my readers can do to help out.

11 Mrs. Micah 10.07.07 at 4:31 pm

It sounds like you’re finding a healthy way to frame it. I hope these reflections comfort you emotionally as well as intellectually, or that you can find some emotional comfort as well.

12 MoneyNing 10.10.07 at 2:53 pm

Good luck on your life situation and hopefully it turns around for you. Just like the stock market, look for the long term and it generally trends upwards as long as you can work hard at it.

13 Patrick 10.11.07 at 6:47 am

Another analogy - The stock market always comes back stronger than it was before the dip. It may take some time, but as a whole, the stock market trends upward. So does life.

As you said, wait until the dust claers and rebalance.

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