Investing 102

[GregWeld]

So if you pay attention to the market -- and you've been watching this last couple days of 200 point selloffs... you might be saying OMG!! The sky is falling the sky is falling....

But - always a big butt - the DOW is still UP for the first six months of the year -- by about 13%. A GREAT YEAR would be if you managed to be up 10% for the entire YEAR... We're only halfway into the year.

Someone called me last night and was just about in a panic... as he said breathlessly - You (meaning me) must be just losing your ass!!

Uh - yeah - sure.... I said -- I was down around 100K today in the Schwab account (I only use one account to monitor how I'm doing) and I said - I'll probably be down another 100K plus tomorrow... BUT -- That account produces 58K PER MONTH in dividends. So big whoop. By the way - the caller had also completely forgotten how much capital gains have taken the account up... so if you're UP 15% and you go down 5%... SO WHAT! You're still up!

I'm just trying to put this day to day swing into some kind of perspective. That's the important thing in investing - you have to keep your perspective.

If a guy had a large apartment building and it's well financed and producing a positive cash flow... and suddenly the real estate market goes to hell.... SO WHAT -- he's collecting cash flow every month... what difference does it make if the building is worth slightly less -- or even slightly more from time to time. It's value is only important at the point he decides to sell. If he's not selling - it's not important.

The FED deciding to taper their bond buying -- is telling me that perhaps the economy IS finally getting better.... and when the economy does better - businesses do better... and that's a positive for me. Now -- down the road -- if interest rates climb WAY HIGHER than where they are right now -- that can have a drag on peoples balance sheets. But we're nowhere near that level.

That's my story and I'm stickin' to it!