I’m 42 and I’m eligible to retire at 52 but don’t want to really…so if I retire at 62 or 67, that’s 20 to 25 years from now! And, I’m only going to use some of the money in 20-25 years; if I live to age 97, some of my time horizon is as high as 55 years!

So what is going to happen to the markets over the next 20 to 55 years?

General market performance: in 97% of the roling 5 year periods, the market is up. In 100% of the rolling 10 year periods, the market is up. So I guess when I’m within five years of my planned retirement age, I’ll move the first year’s distribution into something safer. LOL

It is a rollercoaster going uphill. You feel the ups and downs in the short run, but over the long run you’re going uphill.

Time eliminates volatility as a risk. So never save short-term monies (within 5 years) in equities–too risky. But any financial goals longer than 5 years out, it’s too risky to NOT be in equities–because of the other risk that will eat your lunch–INFLATION.

As a young investor, the first up and down markets are really wonderful and scary. But once you’ve been through it once, you can be a placid cow of an investor and never act out of fear or greed, never follow the crowd, never time the market, but just keep sticking with it and stay in it to win it.

The 90s market runup was damned exhilirating…wow, that was fun to feel I was getting rich moment by moment. The worst bear market since the great depression happened right after that. I didn’t even look at my statements. Effective investor behavior is to BUY BUY BUY in the down markets! Don’t stop contributing, keep at it. Never pull your money out of your investments in a down market out of panic–you’re locking in your losses. You haven’t really lost money if you leave it alone, ready to get the gains again when the market recovers.

You CANNOT PREDICT which handful of days per year result in the market gains for that year. To pull your money out means you have to make another good decision about when to put it back in…if you wait until the news tells you the market has recovered, it’s too late, you missed the moment. You have to know before everyone else does.

Market timing doesn’t work. NONE of the market timing gurus/newsletters beat the market at all, much less other placid cow investors who just stay all in. Crystal balls don’t work.

Terrific book: Nick Murray, Simple Wealth, Inevitable Wealth. It will help you comprehend what you need to know to be an effective investor by controlling your own emotions and behavior and not sabotaging yourself. How to become that happy, placid cow. Short and sweet and non-technical plain English and a great pep talk for the tough times.

Good luck everyone!!!!

The important thing is that you have your money in there!

I don’t remember seeing this, but I’m guessing you have maxed out your 2007 Roth’s first. Obviously you would want to do that before 2008.