STREET DOGS: Why stock market investing is always going to be painful at times
The reason there’s market volatility is that some people get scared out of stocks, driving down prices
So, if we can put a man on the moon, surely we can improve financial education enough to convince all investors to stop making poorly timed, ill-informed, and emotionally driven investment decisions. Right? "Wrong," says Morgan Housel in a Motley Fool article. "It will never, ever happen — as a group, at least." Here is his explanation why. Two points, neither of which is controversial. The first is that stocks are a mess and they always will be. They have to be. If there were no booms and busts, no bear markets or wild bubbles, no unexplained sell-offs, and stocks casually drifted upward year after year, something inevitable would happen. Everyone would put all their money into stocks. If there’s no downside and stocks offer higher returns than cash or bonds, you’d be crazy to not put every cent to your name in stocks, plus mortgage your house to add more. As soon as that happened, prices would rise and stocks would get extremely expensive. And soon after they get expensive, histor...
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