Financial Lessons from Nature: A Follow-Up.
Posted by Richard Conniff on June 30, 2011
For some reason, a lot of visitors to this site seem to be checking out my NPR commentary that aired on November 18, 2008, about lessons learned from the natural world for dealing with the financial crisis. Here was my key piece of advice:
I saw forest fire ravage Yellowstone in 1988. It looked like the end of the world then, too. But when I went back a few years later, the blackened areas were flourishing with new growth. The same thing happens when financial markets go up in flames. Buck up your courage, buy some stock, and the grass can be green again for us, too.
So, to quote Sarah Palin, how’s that workin’ out for ya?
Next day the Dow-Jones Industrial Average closed at 7997. If you had suddenly realized–Eureka!–that Mother Nature is the master investor and put all your money into an index fund that day, you would now be up better than 60 percent. (The Dow closed yesterday at 12,261.)
So did I follow my own advice? A little. I invested some of my retirement funds around then, and it has paid off. Unfortunately, I have no clue what Mother Nature says about when to sell.