“An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative. “
Benjamin Graham
The year was 2008, I was 25 years old at a Thanksgiving dinner with some family and friends. If you remember 2008 was the year the “Great Recession” took hold of the market and everyone started paying attention to the stock market. It was a very scary time and we were very close to going over the cliff in many respects.
I had just been promoted to portfolio manager at a small investment fund, and because of my mother, everyone at the dinner knew it too — thanks mom. This meant I was the one taking questions all day.
One person in particular caught my attention though. Little did I know it at the time, but it was a day I will never forget.
Uncle Howie was a fun loving guy. He went about his business and always tried to do the right things in life.
Howie was like the majority of Americans, Howie had some money socked away in his 401(k) and IRA from years of saving, and he even invested in individual securities from time to time.
I could tell by his hesitancy as he approached, that he was scared!!! He asked if we could speak in private, so we quietly escaped the party and we went outside where we could talk. As he sat down across from me, I could see thee white in his eyes.
He was frightened even more than I had imagined. He said “everything was great up until a year ago and his life savings were now cut in half. He didn’t know what to do.”
Before he could finish his next sentence, he started gasping for air and looked stone cold white. This very conversation triggered a panic attack, so I helped him get his breathing under control sat him back down calmly and said, “I’m not leaving here till we figure this out.”
Uncle Howie wasn’t the only person going through these physical, mental, and emotional issues.
Many do not understand the difference between investment and speculation but it’s a BIG DIFFERENCE. And it can be cause for big concern if you don’t understand who you as a person when you put money in the stock market (or anywhere for that matter).
