Benjamin Graham warned that investing and the pursuit of wealth through markets and publicly traded business ownership involved a very important contingency. Namely, it was non-negotiable that the investor would not put himself in position where he would have to sell stock out of necessity. Most financial analysis focuses on developing the temperament to withstand selling when the market is low. Equal time should be devoted to making sure that a forced sale does not occur due to an unexpected car repair bill, home expense, or some other life event that requires a withdrawal from your investment accounts.
If you have to make a hardship withdrawal from your 401(k) during a year like 2009, decades of accumulated wealth could be lost in an instant due to insufficient planning for adversity. I say that not as a judgmental statement, but rather, none of my articles on my investing will actually lead … Read the rest of this article!