Have you ever been in a bad situation that lasted over a period of time? Maybe it was a living situation, past credit card debt, or a working situation. Then as you were removed from it for a while you find yourself forgetting how bad that nagging credit card bill was? We normally do that when we're justifying putting something else we can’t really afford on a credit card or going back to a situation. Then some people subconsciously forget how bad the situation was. Have you ever heard the saying, “Time heals all wounds?”
Time has healed a lot of people’s wounds from the stinging effects of the last stock market collapse, but not everyone. We are finding that more people are waking to what is going on, and the processes for getting money out of the stock market are growing increasingly backlogged.
However, I want to spend some time on why people don’t get out of the stock market. The first reason people don’t get out of the stock market, especially when their money is in a 401(k), is because they have never held their money and they forget how much they lost in 2008 or 2001 or 1994 or 1987. Time healed the wound. Notice each crash comes seven years later.
The second reason we’ve found is people are not open-minded to changing what they’ve always done. Entrepreneur Elon Musk said, “Some people don’t like change, but you need to embrace change if the alternative is disaster.” Many investors are on the precipice of disaster, but when presented with the facts they can’t hear them. And I believe I have an idea why. People are desensitized. Our entertainment culture has essentially allowed us to see things with the click of a remote or mouse. It’s had a stinging impact. Nearly sixty years ago when “I Love Lucy” was on television, a man and woman could not be shown in a bed together. Think how far we’ve progressed. We’ve been desensitized to the point that when we are told bad things are happening, we often have a hard time believing any of it. Nothing is real life. We have found that when presented with the facts, people are often unable to understand them. Sure, it’s not always because of being desensitized, but I believe it plays a large role.
The next is people mistakenly believe that to make a decent rate of return they must be invested in stocks, mutual funds, or bonds. They are not aware of other options, and the Wall Street propaganda machine has successfully suppressed other options.
Wall Street lobbyists consistently petition members of Congress to make it more difficult for people to save and invest outside of the stock market and banks. Of course this is done under the guise of being “what’s best for the individual.” Limiting your choices and being told how and when you can access your funds is not how we believe people should have to live. Your money is your money and you should have control of it. After all, it’s yours.