In the theme of Holocaust Remembrance Day, which just passed, we will continue on our theme of investment advice from my grandfather, who was a holocaust survivor AND one of my first clients.
The power of optimism: The 2008-2009 Great Financial Crisis was one of the best learning experiences of my career. It taught me about risk, reward, human behavior, and the importance of establishing a systematic, rules-based approach to investing. It was during that time that I also learned an incredible lesson from my grandfather. While many people were panicking as they watched their portfolios fall dramatically in value, I distinctly remember how excited my grandfather got at the low prices of some of his favorite blue-chip stocks. During one conversation I remember saying “Zeidy, the market is crashing. Maybe we should keep more cash available in your account.” He said that approach was silly and insisted on buying more stocks because good companies were trading at a fraction of what they were just a few months earlier.
His optimism paid off. The crisis eventually got under control and the market went on to experience one of the longest bull markets in history. Buying the dip when the market crashes, as it did in 2022, is always the right approach. When it comes to investing, it’s important to be realistic but even more important to be optimistic. As long as you believe in human ingenuity, entrepreneurship, capitalism, and the power of market forces, you can build a meaningful level of wealth in the market over the long run.