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getting a good night’s sleep

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So Trent (the simple dollar) and JLP (all financial matters) had an argument about investing, on JLP’s blog caused by a post on Trent’s blog. Only in the geeky world of personal finance blogging should that ever be a big deal. In my honest opinion (and of course I am always right ;) ), what Trent meant to say and what everyone read him as saying are two completely different things.

What he meant to say, that “your investments shouldn’t keep you awake at night” is excellent advice. Because there are more important things than money. Like life, and a good night’s sleep. If you are that worried about your invesments, there are two possibilities..

  1. You are right to lose sleep over this investment. It is too risky for you, investing in it was a mistake.
  2. You are wrong to lose sleep over this investment. The level of risk it involves is sensible. You are losing sleep over this investment because you do not understand it.

The only way to determine which of the two categories your sleep-depriving investments fall into is to educate yourself on them. You will then either learn that your investment is fine and dandy, and you will no longer be worried about it. Or, you will learn that it is not a good investment for you, in which case you should probably (but not always) stop throwing good money after bad, cut your losses and move on to a more suitable investment. In any case, educating yourself should also help you work out which is the best way to proceed with a dud investment.

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14 comments for “getting a good night’s sleep”

  1. I really disliked their argument - it got a little bit too personal on the forum.

    If you invest in anything that makes you lose sleep, you didn’t do enough research in advance. I get nervous, sure, but I am confident in my strategy and won’t change it due to a correction. I have to have some confidence in my strategy which is the result of 15 years of being in the market. If I didn’t, I shouldn’t be in the market in the first place.

    Posted by Brip Blap | August 25, 2007, 1:19 am
  2. Right on, plonkee. Trent is a great writer, but I think sometimes his writing says a slightly different thing than what he meant to say.

    My advice to the lady would have been to reassess her allocation and exposure to stocks to fit her risk profile. This should have been done before she started investing, but she probably asked someone what to invest in and they said “You’re young, go aggressive!!!!!”

    In any case, I’m glad the heat is dying down.

    Posted by Brian | August 25, 2007, 3:55 am
  3. Plonkee, I’m sure Trent breathed a big sigh of relief that SOMEONE finally understood what he was saying!

    Posted by Chief Family Officer | August 25, 2007, 3:57 am
  4. I read the original article on Trent’s site as well as JLP’s post. I wasn’t overly impressed with Trent’s advice but I was less impressed with the fact that JLP wrote a post to complain about it on his own site. He should have just commented on the original post - no need to make a big deal about it. The advice wasn’t that bad!

    As far as Trent’s advice goes, I think that if you are invested in the market you need to be able to handle the ups and downs and should stick it out for the long run. On the other hand, if you don’t have a lot of experience and you find that after a minor correction that you can’t handle it - then that’s a good time to pick a new, more conservative asset allocation and hopefully stick with that.

    Nothing wrong with changing course mid-stream as long as you have a logical reason for it.


    Posted by FourPillars | August 25, 2007, 4:13 am
  5. Based on those links, it just looks like JLP has some sort of personal axe to grind against Trent and it looks pretty distasteful. Trent probably shouldn’t have taken the bait, but I can understand why one would want to respond to a broadside like that.

    Nice blog, plonkee. I found it from either Get Rich Slowly or The Simple Dollar, not sure which, but I’ve been reading for a week or two and I really like it.

    Posted by Tyson | August 25, 2007, 4:49 am
  6. In general, I’m not trying to fan the flames, but I genuinely think that what Trent was trying to say was good advice and so I’m stealing it ;)

    I’m glad you like the blog and I’m not a fan of personal confrontation either.

    Posted by plonkee | August 25, 2007, 9:17 am
  7. By the way, I changed ‘his’ to ‘her’ in my post, Plonkee.

    Posted by Brian | August 25, 2007, 1:20 pm
  8. I guess nothing on the internet is ever dead.

    That particular post by Trent really rubbed me the wrong way. Maybe I shouldn’t have posted my response like I did, I don’t know.

    Posted by JLP | October 1, 2007, 8:11 pm
  9. @JLP: I didn’t mean to resurrect this debate again, I was just redoing my categories and this must’ve updated again.

    Posted by plonkee | October 1, 2007, 8:18 pm
  10. Plonkee,

    Trent may have been trying to say something but he didn’t say it in the right way. Did he ‘fess up and admit his error? No. I’m just not smart enough to know when to shut up.

    Posted by JLP | October 1, 2007, 8:24 pm
  11. Dang! I didn’t even notice that this post from way back in August.

    Posted by JLP | October 1, 2007, 8:25 pm
  12. OK, I was afraid it was all stirring back up again, but it was just the mysteries of Wordpress.

    I still think Trent’s advice - while perhaps INTENDED in the right spirit - was wrong. JLP was right that advising someone to get out of the market until they feel comfortable getting back in is awfully close to market timing.

    That argument definitely ended up being an immovable object and an irresistible force going at it.

    Posted by Brip Blap | October 2, 2007, 10:14 am

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