First Person: It Seemed Like the Rise of the Stock Market Was Never Going to End

Yahoo Contributor Network

As a 48 year old baby boomer I was privileged to live in prosperous times. We were at the forefront of wonderful advances in every facet of life. Great strides were made in medicine, technology and entertainment. We bought nice cars and lived in big houses. I believe that the full effect of the American Dream was experienced by us.

It's too bad that my generation was blindsided by the Great Recession. It's not that there were no warning signs. The majority of us were deluded that the good times were not going to end during our lifetime.

Like lemmings we decided to partake of the latest investment trends. Why bother about the risks when over time everything was going to turn a profit. It is hard not to get heady when your mutual funds just made a 60 percent gain. Tech stocks were doubling in value in less than a year's time. We experienced some serious corrections but ultimately the market recovered. We were told by our brokers that this drop in the market was just another buying opportunity.

We bought into this line of thinking. We never thought about questioning the stability of our safety of our institutional safety blankets. So like a lot of my peers I lost a sizeable portion of my assets in the stock market.

I was keeping almost all my assets in stocks. Then the crash came and I had no plan to implement limits for my losses. As young people we earned money fast. With our money we bought luxurious trappings. The 401k lost seventy five percent of its value. Then the market tanked and I had no safe haven for my hard earned money. Added to these financial disasters, the value of our homes plummeted denying refinancing to try and save on our mortgage.

My biggest mistake was not being more conservative and saving for emergencies. The tenet that you should have at least 6 months of emergency funds was sorely inaccurate. The latest economic downturn lasted longer for most of us. I needed a stable vehicle in tandem with my stock investments. Looking back a percentage of my assets should have been in precious metals.

The lesson I learned is that one cannot safely have a lifestyle to the level of one's income. There always must be assets put away for a rainy day. Remember that ultimately we all have to prepare to age and grow old.

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