It was a beautiful October
day in 1987 with sunny skies and a brisk hint of autumn chill in the air. I had been visiting people to
speak to them about the wonderful opportunities of investing when I heard on the
radio “THIS JUST IN. BREAKING NEWS. TURMOIL ON WALL STREET AS THE DOW PLUMMETS WITH A ONE DAY STAGGERING LOSS OF 25%!”
Oh My God, I said to
myself. How in the world am I going to
explain this to clients? I uneasily approached the home of Vince and Tina, two existing
clients. Vince approached the door with
a wry smile on his face and said, “Wow, you’re a brave soul.” We both chuckled as he opened the door.
We discussed the
advantages and disadvantages about investing on the day of such a devastating
loss. As Tina shook her head No, Vince cautiously
wrote a check for $10,000 for an all equity Growth mutual fund. I said to him you will never forget this
day. As I said to myself “I hope I am
right”, Vince chimed in saying “Let’s hope I will pleasantly remember this day!”
Two years and five months
later on a cold March day I called Vince and Tina. Their $10,000 investment had grown to
$27,503! It wasn’t an easy straight
ascent but they rode with it as I encouraged them to stay the course. That one moment gained them a total return of
49.88%!
This is a great example of
seizing an opportunity, buying low and staying with an investment over a
reasonable length of time. A good
philosophy to have with investments. It
is also a lesson to keep and use in today’s economy for there are many great
opportunities.