Meltdown 2011

One year ago today the DOW closed at 14,164.53.

Today it closed at 8,579.19, a drop of almost 40%.

And people gave me indulgent “You’re such an idiot but I’m too polite to tell you to your face” looks last year as I yanked everything I had out of the stock market, mutual funds and 401Ks.

They voiced genuine fear for my financial future as I changed the allocations in my variable life insurance policies from the stock market to money market accounts. “Don’t you know the markets go up an average of 8% every year?” they said.

When, to my horror, I discovered I still had a retirement account actively in the stock market at the end of July, I ran to my financial advisor (a truly decent and trustworthy gentleman) to cash it out. “Scott,” he warned, “you’ll have to pay a 10% early withdrawal penalty and their are tax implications, too!”

I smiled and said, “Seth, that means if the stock market goes down another 10% from here I come out ahead. I’ll take that bet in a heartbeat!”

The market closed at 11,500 that day.

Looks like a good bet to me. It’s dropped 25% since then.