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Investing Lessons Provide Reasons to Be Thankful

Morningstar.com readers share their personal stories of events that helped make them better investors.

In honor of Thanksgiving, we recently asked Morningstar.com users in our Investment Basics discussion board to tell us what investment decision or decisions they were most thankful for having made. As usual, they did not disappoint.

Users shared stories of lessons learned, investing triumphs and tragedies, and successful retirements attributed to wise decisions made at a young age. Some users mentioned being thankful for having been introduced to the investing philosophies of living legends such as Warren Buffet and Vanguard founder Jack Bogle. Others mentioned deciding to invest on their own rather than paying someone to manage their money as a reason to be thankful.

To read the full list of user comments, click here. Below are some excerpts from the discussion.

'Starting Early and Sticking With It'
Among the themes mentioned most often was the value of starting to save at an early age.

Jomil wrote, "I am thankful that I participated in deferred compensation plans, began individual retirement accounts early, contributed to Social Security for 35-plus years, and earned a state pension that is sufficiently funded. These are among the decisions and opportunities that have led to a comfortable retirement without a fear of running out of money when I am old and gray."

User mwleach also commented, "There were some other specific good investment decisions my wife and I are very thankful for (as well as one or two of my brainstorms that we are decidedly NOT so thankful for), but nothing was as important as starting early and sticking with it. As tough as times are now, there will be another long-term bull market sometime in the future. When it comes, those starting now who stay with their plan over time are likely to be richly rewarded."

ColonelDan answered our question about what investing decision makes him most thankful this way: "That's an easy one. Starting my life of investing regularly as a brand new second lieutenant in 1973, educating myself rather than using a financial adviser, and sticking with it through all the ups and downs."

In the case of GregLee, a long-forgotten investment choice turned out to be one of his better moves. "About 1982 I started an IRA for my wife with $8,000 of
T. Rowe Price New Horizons (PRNHX). With two minor exceptions, I just let the New Horizons investment ride, and actually pretty much forgot about it. In 10 years, the initial investment had multiplied by 3, and then in the next 20 years, it multiplied by another 10 times, so my wife wound up with $240,000 for an investment she didn't even remember making."

'Tune Out the Noise'
For some of our discussion board posters, it was the timing of a decision that came to mind, especially those involving major market swings.

Blueh2o mentioned "going 100% cash in 1999 and being 100% cash in 2007. I missed a lot of the two subsequent upturns but all of the losses. I am 35% in cash going into this correction. Cash is the best hedge available to a small trader/investor."

Along with increasing 401(k) contributions and taking part in her company's employee stock purchase plan, dragonpat mentioned "going from a 100% stock portfolio in 1999 to a 60/40 stock/bond mix" as one of her most significant decisions.

Others were appreciative of the opportunities presented by steep drops in the market.

"I'm thankful that I was able to convince myself not to sell out in 2008-09," wrote roadking. "I continued to invest through my 401(k) and came out way ahead even with the initial losses. Set your goals, tune out the noise, only pay the lowest fees, and hang in there for the long haul."

"I'm very grateful that by complete chance I read some books about Warren Buffett and value investing," said mn56308. "Within that year, the market crash of 2008 happened. People thought I was insane because I was completely ecstatic! I recognized what Buffett and Charlie Munger were talking about. So I became very greedy when others were very fearful. Had I not read those books I wouldn't have known the opportunity I was lucky enough to be able to capitalize on. I invested our entire savings and quadrupled it. Thank you Buffett and Munger, and Morningstar (for the stock research numbers)."

PlantTheSeeds wrote, "I am thankful for two down periods, 2000-02 and 2008-09. They were wonderfully educational and really sharpened by investing instincts."

'Listening to My Father'
For some users, parental guidance proved to be among the most valuable investing lessons of all.

"When my father, another do-it-yourselfer, died right before the start of the Great Recession and I was suddenly responsible (at the exact wrong time) for a much, much larger and more complex set of investments than I was used to, I managed to fight the terror and kept most of his strategies," wrote PatrickBr. "That choice sling-shotted the new combined portfolio out of the abyss. Merging my propensity for moderate risk, well-diversified, high-quality investments and his for high-risk bottom feeding produced a portfolio with low volatility and great performance. It underscored for me the importance of incorporating other voices in my investment decisions. Thanks, Dad."

Galeno also pointed to advice from dad in recalling an important moment: 
"Listening to my father in the late 1980s during the 1987 bear market when I wanted to sell all my stocks. He told me to buy more stocks and I did despite the feeling I had that I was throwing money down a rat hole. I learned a very important lesson from that. I look at market declines very differently than most because they always go back up. The big question is: Do you have the time to wait for the ride back up? That's why even equity gunslingers should have more in fixed income when they get older."

'The Value of Patience'
For other posters, it was the simple lessons garnered from years of investing experience that left the biggest impression.

"I'm most thankful that I haven't listened to all the noise about the market's ups and downs," said BMWLover. "I just keep a long-term perspective by steadily investing in equities that I know will perform well and provide for a comfortable retirement."

Sniper66 was thankful for"investing the time to educate myself about investment fundamentals, establishing a well-diversified allocation plan consistent with my goals and risk tolerance, and sticking to it through good and bad times."

Finally, rforno shared a lesson any investor can appreciate. "Perhaps the biggest thing I'm thankful for from the markets is learning the value ofpatience," said rforno. "I learned this mostly through my futures trading activities, but the lessons are applicable to all sorts of other investments, too. In other words, let the trade or investment entry 'come to you' and don't force yourself into entering (or exiting) on impulse."

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