Dumb financial question
When my father died, I was left in charge of investing the family's money.
I did not do a very good job of it, apparently, because now, almost 10 years later, most of those investments have significantly lost value... I know right now is a particularly bad spell, but even beforehand... it took 6 years for the family's money I invested to come back to its original value after some particularly bad market crash.
I did everything by the book, though, I invested in funds, I spread the investments over various industries and types of funds, I researched the funds' quality and performance, and chose the ones that had proven most stable over long periods of time, even the riskier funds.
And still, most of those funds have lost money.
Did I just invest at a particularly bad time? As best I recall, I probably invested in 1999, and I think there was some sort of bubble happening then. Which burst, leaving our investments basically halved.
So this is what I don't get. All the "books" on investing say that stocks are long-term the best investment, beating any other form. I've now left the money in there for almost 10 years, but contrary to expectations, it did NOT gain value, most of them have lost value. What was my mistake?
Was it that I invested one lump sum at one particular moment in time (that happened to be at the height of a bubble?)
Is investment meant to be a process, not a single step like I did? Cos the only way I can figure I could have done anything differently was to have spread out my purchases, so as to "sample" both high and low prices as the market heaved about. Then the low prices could possibly have compensated for the high ones.
Was that my mistake?
I did not do a very good job of it, apparently, because now, almost 10 years later, most of those investments have significantly lost value... I know right now is a particularly bad spell, but even beforehand... it took 6 years for the family's money I invested to come back to its original value after some particularly bad market crash.
I did everything by the book, though, I invested in funds, I spread the investments over various industries and types of funds, I researched the funds' quality and performance, and chose the ones that had proven most stable over long periods of time, even the riskier funds.
And still, most of those funds have lost money.
Did I just invest at a particularly bad time? As best I recall, I probably invested in 1999, and I think there was some sort of bubble happening then. Which burst, leaving our investments basically halved.
So this is what I don't get. All the "books" on investing say that stocks are long-term the best investment, beating any other form. I've now left the money in there for almost 10 years, but contrary to expectations, it did NOT gain value, most of them have lost value. What was my mistake?
Was it that I invested one lump sum at one particular moment in time (that happened to be at the height of a bubble?)
Is investment meant to be a process, not a single step like I did? Cos the only way I can figure I could have done anything differently was to have spread out my purchases, so as to "sample" both high and low prices as the market heaved about. Then the low prices could possibly have compensated for the high ones.
Was that my mistake?