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What Joseph P. Kennedy and Bernard Baruch Had in Common

July 8, 2014

Joseph P. Kennedy was the father of a United States President and two Senators.  Bernard M. Baruch was an advisor to eight Presidents.  They had disparate backgrounds and each obtained notoriety in their own right.  They both made the bulk of their fortunes as stock market speculators.

 

One thing they had in common was that they liquidated their stock investments before the 1929 stock market crash.  Had they not gotten out when they did, it is possible we would have never heard any more about them.

 

They made enough and wanted the security that the wealth they amassed could provide and did not feel the gains from further risk taking would benefit them as much as potential losses could hurt them.

 

Assessing risk and rewards is not too hard.  You just have to be realistic about your needs and goals.  At some point you either have enough or are on track to achieve your goals; or you are off base.  If on track, then gains from excessive risk won’t substantially add to your future well-being.  If not on track, then perhaps greater risk can get you closer and should be considered – you can also consider making life style changes now that can help you get closer to your goals.

 

Investing is a means to accomplish the goal of being able to have a sufficient cash flow at some point to live securely.  Investing is not a hobby, dalliance, game or lighthearted activity.  It is a serious undertaking and wrong moves, excessive risk, or a failure to recognize the reality of your situation can be ruinous and detrimental to your future financial health.

 

Don’t be stupid!  Be smart. Be realistic.

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