The TV Ad That Illustrates Why You Suck At Investing

I was watching TV the other night, when a commercial came on that had me shaking my head in disbelief. Watch the ad below and see if you can see why I find it so incredible that this is currently airing all over TV…

No, it’s not that these nice “near-retirement” couples are using John Hancock to manage their money. I’m sure they’re as good as any other financial advisor. What really got to me is the sentiment of the commercial.

That these couples are just now coming out of their shells and thinking about getting back in the markets? And John Hancock is claiming “You’re not alone”?! I hate to break it to everyone involved, but you seem to be a little slow on the uptake! If you got out of stocks during the great recession and are just getting back into the market now, you’ve missed out on (most of) one of the strongest bull markets in history.

The S&P 500 has returned over 160% over the past five years, and at the time of this writing has been flirting with new all-time highs almost daily. So those couples in the commercial are doing it all wrong, they’re getting back in at the top of the market, and I’m sure they’ll be selling off and running for the hills near the lows of the next recession.  I’d also hope that their John Hancock advisors would have fought to get them back into the market near it’s lows, but something tells me that would have been a real tough sell to most investors if the advisor was keen enough to even pitch the suggestion to them.

The fact that people are prone to selling low and buying high is bad enough, but when the firms that are supposed to be looking out for those people and managing their money better than the people can themselves start advertising with that same bad logic, it doesn’t work out well for anyone. It’s just one of the many reasons I think people should manage their own money and not worry about trying to get in and out when the market is up or down. Just keep investing, and stay invested and you’ll do better than the majority.  If you’re like the couples in the ad above and still have your money sitting on the sidelines, open up an E*Trade account today and get started.

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10 Responses to The TV Ad That Illustrates Why You Suck At Investing

  1. Completely agree with you Jay – “Just keep investing, and stay invested and you’ll do better than the majority”.

    Most people would be better served not focusing on when, where or how much to invest, but on improving their own behaviours and overcoming fears, so that when they do learn to just keep investing, they can have a better chance of staying invested, and not making rash decisions to sell when the market wobbles.

  2. :o) I agree Jay. Investors are their own worst enemies. Just look at the stack of data from the universities or Vanguard’s of the world, and you know that investor timing is highly suspect. One of our human failings is that we all think we can “do it better”.

    Resist the urge to make erratic moves and you’ll end up just fine!
    -Bryan

  3. I graduated college the year of the crash so I benefited quite a bit. I got in right after and have enjoyed the growth.

  4. The best time to invest is now! Everyday you put off investing you are costing yourself compound interest. Forget about if the market is up or down, at a high or low, just invest and stay invested.

    When I worked for a financial advisor, we did our best to keep our clients invested. When the market was really turbulent during the summer of 2011, there were a few clients that wanted to pull everything out. We sat them down and talked them trough it. Once clearer heads prevailed, everything was OK and they stayed invested. But some still ran. We couldn’t stop them as it was their money after all. We did everything we could to keep them invested. but at the end of the day, it is their call.

  5. S Arun says:

    Luckly, I started to invest in 2010, and my porfolios (paper) returned more than 40% since then. I should not expect similar return, but I will keep my stocks for long term.

    Many of my friends still think that investing in stocks is gambling and they still keep file of cash in saving account with nearly 0% return after inflation.

    Cheers,

  6. The thing is, behavioral factor influences people’s decisions with their finances, and I think people who are more likely to hire a financial adviser are the ones who don’t pay attention that much with the finance world, and only invest based on their gut feeling. You as a personal finance blogger know that the key is keep investing your money for the long term benefit, but these people don’t, and they’re this company’s target market. Hopefully this company will give good advice…

  7. FI Fighter says:

    It’s amazing how fast sentiment changes, isn’t it? I think most people today have already forgotten about the great recession, and everyone is trying to pile in on stocks and real estate now… In the long run, it’ll probably work out, but the golden window of opportunity has since passed…

    I’m all for bull runs, but investing isn’t as fun as it was 2-3 years ago, not by a long shot.

  8. The perfect time to get is now! Daily you put off making an investment you are charging yourself substance attention. Ignore about if the industry is up or down, at a higher or low, just spend and remain spent.

  9. Although I do believe the market is overvalued compared to some metrics, I also don’t believe it’s a good idea to be timing the market. I think that the correct advice is to always stay in the market, especially if you have many working years ahead of you.

    Even at today’s crazy valuations, I don’t think it’s necessarily a bad idea for people to begin investing. Now is as good as any. The trick is to have enough courage to remain in the markets when the downturn comes.

    - Magister

  10. It’s crazy to me how many people think a head-in-the-sand approach to their finances will eventually be okay, and they will be able to retire in 3 or 4 years without issue. When you’re young, heck, especially when you’re young, and you’ve got a 30-40 year investment horizon, just get in the game and don’t try to time the market. DCA into some index funds and the rest will take care of itself.

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